The Big Data Analytics Platform (BDAPTM ) that CIMS Executive Director Paul Mugge and CIMS Industrial Fellow Michael Kowolenko described in the Summer 2011 issue of CIMS IMR is being leveraged for specific industry-sponsored research projects. As this work advances, CIMS envisions utilizing this technology to help manage the transitions companies must make as they implement breakthrough innovation programs.
In this article, Prof. Kowolenko describes how CIMS plans to integrate the techniques developed from its TEC Renaissance project (1) with the technology of unstructured text analytics, “Big Data” and the managing of cultural transitions within industrial organizations.
Companies today are under extreme pressure to maintain competitive advantage in the marketplace. The rapidly changing business landscape has left managements trapped in dated paradigms that are unable to respond quickly to market pressures. The evolution of the international market enabled by the internet, the avalanche of information, and the immediate feedback from the marketplace via social media add additional complexity to the challenge of growing an organization.
The strategy of many companies is multi-faceted: grow organically through the core competency of the organization, identify opportunities to synergize with other companies that have complementary needs and wants — all while managing an asset base that may or may not support current market demands.
Given these challenges, the ability to innovate becomes a business paradox. The inertia of companies leads to incrementalism rather than to breakthrough changes in the business. Organizations need to manage the innovation process in a manner that allows for “controlled” disruption of the business model. Implementing the CIMS Idea Management System provides the necessary framework for managing that innovation process.
CIMS Idea Management System
The objective of the Idea Management System (IMS) is to provide an organization with the processes that can efficiently and effectively manage the transition of research and development ideas from “bench-top” to commercialization based on data that adequately address internal and external stakeholder needs, wants and concerns. Research performed by NC State professor Stephen Markham ( 2 ) has shown that organizations that have implemented processes that screen more ideas in less time will generate higher returns (see Fig.1) .
When the IMS is implemented completely it provides the innovation leader and management with a process and tools that allow them to better understand their market and their internal working environment.
The IMS consists of four modules: the output of the first results in an understanding of the current state of the business; the second module matches technical capability with market “needs and wants,” while the third provides a business process for managing the innovation project. The fourth module focuses on the cultural transitions necessarily associated with process change.
Module 0: Innovation Context and Environmental Assessment (Fig.2)
Development of an innovation process that will be accepted and, more importantly, used by the organization requires understanding the organization’s current operational state from both a capability and a social context.
The IMS utilizes a series of tools that can provide insight into the operations of the company: identifying challenges, opportunities and relative risk tolerance of the organization. This portion of the IMS focuses on senior leadership and the decision-making process. Ultimately, the innovation seeker must be able to present an innovation plan that can be implemented by the company. Stakeholder needs and concerns must be sufficiently addressed; therefore, they must be articulated.
Module 1: Business Intelligence and Ideation (Fig.3)
The development of a “good” idea is often based on a limited amount of information and intuition from previous experience. Once the development decision is made, a “stage gate” process is implemented.
Fundamentally, the process is valid, provided that conditions don’t change. Development does not occur in a static environment: market conditions change, the product itself can change, and the competition is often moving forward. The breakdown in stage gate is often the inflexibility of the system (or organization) as implemented. IMS requires that the R&D team along with the commercial organization perform multiple iterations of market assessment based on changes in business conditions or the product target profile.
The drawback to market assessments is the time and expense required to collect and filter information. IMS makes use of new technologies in unstructured text analytics ( BDAP) to expedite this process. The team can filter data from Web sources, internal documents and databases to enable data-driven decision-making. These, combined with other available tools, furnish management with information that leads to de-risking its decision-making process.
Module 2: Business Opportunity Development (Fig.4)
Differentiation of one opportunity from another centers on how well it fits with the organization’s strategic vision for growth (provided there is evidence that the strategy is based on valid assumptions). To differentiate, R&D in partnership with its various stakeholders must present a valid, data-driven argument for support of the proposed project.
IMS requires the development of objective criteria for evaluating the business potential of the product. Tools that are institutionalized in the process include the TEC algorithm, BDAP, and the Business Model Generation engine. The end product is a data-driven business case that provides senior management with relevant, objective information on which to render a decision.
Module 3: Adoption (Fig.5)
Implementing the IMS requires overcoming the social barriers that exist in every organization. Managing the transition from the way business decisions were made to how they will be made in the future requires a fully developed plan that addresses the compelling business case for change without trivializing the way business was performed in the past.
Organizations must tackle the cultural change in how innovation is managed from the top down and bottom up. Developing line-of-sight between the tactics of innovation and the strategic initiatives is key to success; that is, every employee must clearly see and understand how his or her activities align with the strategy of the company. All activities should be focused on a common and well-communicated goal.
The IMS process develops tools to assure that performance metrics are developed and reviewed by management. The rewards system must be aligned with the goals of innovation management.
In many organizations, informal agreements between departments lead to the development of a new product or service. Using an agreed-upon process as described above requires that management clearly state what the expectations and deliverables are for any given project. Objective decision-making can then drive the process and lead to more rapid resolution of issues as well as reinforcing line-of-sight operational philosophy.
Tools for Innovation
“If all you have is a hammer, everything looks like a nail.”— Bernard Baruch
Not all organizations face the same challenges when trying to manage innovation. The IMS has approached the challenge of innovation by developing a series of tools that provide both flexibility and structure to the process. Some tools, such as BDAP, can be used throughout the process while others are specific to a certain condition that must be addressed.
Below is a list of the tools available from CIMS and its Fellows to address the varied needs of an organization. A description of many of the tools can be found on the CIMS web site, http://cims.ncsu.edu.
Module 0: Innovation Context & Environment
-Project Portfolio Analysis
Module 1: Business Intelligence and Ideation
-Technology-Product-Market assessment (TPM)
-Product Target Profile (PTP)
-Value Proposition Matrix
Module 2: Business Opportunity Development
-Business Model generation
Module 3: Adoption
-Business Component Modeling
Resources are being stressed at every organizational level. Consequently, justification of breakthrough innovation programs and projects requires that the proposition be carried forward in a manner that clearly defines the program, process and deliverables. These must address stakeholder needs and be of significant enough priority within the company to warrant the funding necessary to meet the program objectives.
The social aspect of the IMS cannot be overstated; social contracts between departments are the “currency of the realm.” The agreement between different functions within an organization is implicit. Developing and following a process of innovation management leads to clear objectives and decision-making beyond that of informal agreements.
Successful projects have clear deliverables and fit within the strategic goals of the company. The workforce can see how their actions lead to a product or service that meets the profile and is aligned with corporate goals.
A process that drives innovation and is consistently followed and uniformly applied provides assurance to employees and management that all are acting in the best interests of the strategic goals of their organization.
1. Baker, Ted.“Crossing the Valley of Death Gets Easier.” CIMS Technology Management Report, Spring 2011.
2. Markham, S.K. “The Impact of Front End Activities on Product Performance.” Forthcoming in Journal of Product Innovation Management.
Michael Kowolenko, CIMS Industrial Fellow,
NC State University Virtual Cloud Lab