The true meaning of innovation funnel

I was ending my previous article stating that Innovation is not an isolated initiative, where people get excited in good times and cut it in bad times, but it is a science to manage the risk associated to the future growth of the company and to make it (Innovation) robust against any kind of externality.?

First of all, Innovation is about the future and predicting the future is extremely tough. In front of such reality, we have invented the world “portfolio”. If you are investing in stocks, in order to mitigate the risk of the future value, you invest in a portfolio of stocks of different companies which are not correlated one with the other.??If you are in a Venture Capital and you are investing in start-ups, which by definition represent the essence of Innovation, you know that 95-98% of them will not deliver the promised results. So, in order to reduce the risk of the future exit, you invest in a portfolio of start-ups. The same logic is applied also in the corporation world, and more in general in any company which is approaching the Innovation. Corporations create Innovation programs based on a portfolio of ideas with the aim to kill the majority of them over the course of the validation process in order to keep alive for the launch in the market just the few most promising. This process is notably known as “innovation funnel”.

I am from a completely different opinion.

First of all, cutting 95% of the ideas during the validation process, in order to keep just the most promising ones alive, is a huge waste of energy, money and time and I strongly believe that a portfolio management, or if you prefer an innovation funnel, cannot represent the way to manage the risk. A risk management tool cannot be a tool which is creating inefficiency and waste like if this would have been the tax to pay to succeed in the Innovation Journey.?

What if you revert the equation and 95% of the innovation ideas enter in the market? Imagine how strong would have been your growth if you could make it real.

What we miss to make it real is the proper level of?professionalism?while assessing the plus and minus of the different ideas. Professionalism is not just competencies and skills but also the capability to access to the proper ecosystem to gather the information which are needed to assess an idea and validate it, an ecosystem that can be done of universities, research centers, clients, retailers, suppliers and subject matter experts. In my opinion?the level of success in the Innovation Journey is directly proportional to presence of the proper level of professionalism. Which means, Innovation Teams must be designed to have the proper mix of resources in terms of experience, competence, skills and access to the ecosystem. Every idea requires the creation of the proper team to assess it at the level of granularity which allow either to push it through or to kill it very early in the process avoiding the waste generated by the funnel. The point of attention is that while experience, competence and skills can be easily validated through the analysis of people previous assignments, the capability to access to an ecosystem is an intangible asset which is not easily evident. My recommendation is to invest time in understanding the latitude and the value of such intangible asset for every people in the organization in order to make it instrumental for the assessment of the innovative ideas and ultimately for a successful Innovation Journey. The more you are capable to create Innovation Teams based on professionalism the better will be your Innovation throughput, as well as your productivity.