How you manage the period between when an insight is first generated and when a concept is judged ready for development is the key to getting discontinuous innovation off the ground. These are ideas that don’t fit the existing capabilities or the incumbent business model, don’t have an obvious business case, and carry a high risk.
In most cases it is an individual who takes the lead in developing a crazy idea, typically the person whose idea it is, usually with little or no direction from the organization. Unfortunately, in the majority of cases, the strong identification of the idea with the person means that it is politically vulnerable; few people have a stake in it and there are no clear processes on how to fund and advance it (unless is a CEO’s idea). In some firms the environment can be so unkind that people simply squash their value-creating insights out of fear.
Discontinuous innovations, then, are not only fragile but they also have no natural organizational protection and direction. Consequently they tend to die on the vine. How can companies fix this problem? Let’s look at two that seem to have found an answer:
P&G established a “Corporate Innovation Fund” (CIF) that provides seed capital to ideas that do not have a natural organizational owner. They target the “homeless” ideas within their organization. The CIF also plays a pivotal role in assembling the right team to take charge of the selected ideas. They identify and assemble the right mix of skills, “fishing” across P&G’s units. CIF investments are made independently of the traditional budget cycle, which saves high-risk ideas from competing for funds with more mainstream and easily justifiable projects.
Samsung Electronics has taken a similar approach. They have established a Value Innovation Program (VIP) Center dedicated to the review of discontinuous innovation ideas at Suwon, Samsung’s main manufacturing site, 20 miles south of Seoul. The Center is open 24 hours a day. It has 20 project rooms, 38 bedrooms, a gym, traditional baths, and ping pong tables.
Anyone with an idea can pitch it to the VIP Center and on average around 90 projects cycle through each year. If an idea is selected, the VIP provides organizational protection and a home to nourish it in the initial stage. Like P&G’s CIT, the VIP plays a pivotal role in assembling an innovation team composed of engineers, designers and marketers, who are supported part-time by the Center’s Specialists, who are expert in the tools and processes of strategic innovation and customer research.
A VIP project results in a detailed concept, including the value proposition, design blueprints, and the technical and cost specs. When completed, the project is passed to the standard product development process of divisions for further development. Since its creation, the VIP Center has been credited with generating a series of slick products, including Samsung’s Bordeaux TV, which has been instrumental in making Samsung a category leader in the TV business
P&G and Samsung found their ways to protect and nourish their individual “homeless” ideas. They have created organizational greenhouses to get them ready for mainstream development. With the risks and opportunities more clearly defined these off-the-wall ideas generally find homes in the product development arms of the various business units at P&G or Samsung and the regular processes can kick in.