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The Innovation Process

03 May 2013

Taking an idea from a basic concept to a working product available in the marketplace is highly rewarding but involves a long and complex process. Recognising and understanding the process and navigating through it using the support available can mean the difference between success and failure.

The UK manufacturing industry today faces tough challenges in order to deliver innovative products and services to meet the needs of the technology-savvy consumer.

With demand and consumption of goods and services rising, inevitably UK manufacturing innovators are under increasing pressure to drive the industry forward and develop the technology for new and existing products.

However, there are many pitfalls for the innovation industry and the reality is that getting an idea, no matter how great, from the concept to market is fraught with problems, with many businesses failing at the development phase.

Therefore, a better understanding of the innovation process can help to overcome the obstacles that you may face and maximise the opportunities for success.

What is Innovation?

Firstly, before embarking on a journey to bring your ideas to life, it is important to make the distinction between an invention and innovation. An invention is creating something new that the market has not seen before. An innovation is taking an existing concept or idea and improving it, typically using a step-wise process of developmental stages leading to a commercially viable product.

The Innovation Challenge and the Valley of Death

If you are considering taking your idea forward, it is worth taking the time to learn about the challenges that you will inevitably face along the way, as knowledge is most definitely power!

We will look at the following challenges and how to tackle them next:

  • Getting into the correct mind set
  • Working with the right people
  • Identifying and securing the best financial resources
  • Managing your cash flow
  • Understanding your market place
  • Seeing your idea through prototyping
  • Setting the cost and value of the products correctly
  • Recognising the opportunities available

A very well publicised phenomenon in the innovation industry is known as the ‘valley of death’, where many new ideas going through the innovation process fail to progress any further and which can take anywhere between 5 to 10 years to work through.

In Technology Readiness Levels (TRL) terms, which are used by NASA and the UK’s Technology Strategy Board (TSB) to demonstrate the innovation process, the ‘valley of death’ or the innovation gap occurs between TRL levels 4 and 7 (see diagram below). It is at this stage where organisations like CPI can support you in assessing the potential feasibility and value of your idea and provide information and advice on the best way forward. It is equally important to help businesses make decisions to stop some projects, as it is to focus their finances on those projects with the best chance of success.

The valley tends to be at the point where a conceptual idea needs to be turned into a working prototype to demonstrate that it works, to assess production costs and outline the equipment and processes needed for manufacture.

As can be seen in CPI’s business model below, which is based on the TRL scale, our approach combines technology push with business pull to drive forward those ideas that universities and businesses are not equipped to develop themselves due to the high capital costs involved.

Investors will finance ideas to turn them into prototypes but there is a much higher risk involved and therefore a higher percentage of product ownership is usually demanded.

A business is in a far stronger investment position to retain value if it has a working prototype with IP protection and production data as the product offer. This is where an independent technology innovation centre such as CPI can help.

CPI and other industry-led catapult centres offer a wealth of expertise across a wide range of technologies and services, providing equipment to demonstrate the process/product and prove it is feasible before you invest substantial amounts of money in capital equipment and training.

This enables you to develop, prove, prototype and scale up your product, which can be demonstrated on paper, in the lab and in the plant before being manufactured at an industrial scale.

The Innovation Process

Remember – creating new ideas is invention, improving and finding new applications for existing ideas is innovation!

Step 1 – Identifying the goals or problems to be solved

The first step in the innovation process is to clarify what your business’s innovation goals are and why you want, or need to engage in this kind of innovation. It is important to involve a good cross section of the business in developing these goals, utilising the expertise within the organisation and even extending this to the customer and client network to get the market view.

Step 2 – Analysis

The second step consists of some real-world discovery of the current situation, customers, their needs, challenges etc. In addition to customers, it is vital to look into what the competition is doing, any trends which will impact on your business, and which innovations companies outside your industry are implementing that you can learn from. You should check inside your own company to determine what assets, resources and core competencies you have within your company that you can apply.

Step 3 – Development and design

Based on the information and thoughts gained during analysis, it is advisable to develop an ideas portfolio that includes ways you could innovate to meet these goals and problems. Once you have developed these ideas, an initial evaluation and prioritisation will lead to a portfolio of innovations you can test.

Step 4 – Conversion

The next requirement is to translate the ideas into practical innovation products that could be targeted towards the identified marketplace. The aim here is not to fully launch the innovative products but to test your ideas within a limited scope to determine whether customers like the innovation, accept it and are willing to pay. This means providing prototypes complete with some basis of costing and a rudimentary process to make or design them, and this is where innovation centres like CPI become involved.

This is a very important step, as innovations will probably have to be modified and changed in the light of customer or market feedback. Some ideas will work, others won’t; it can take some time experimenting to find the best ideas which meet the needs of a commercially viable market. Without a realistic, tangible product offer this step is very difficult. During this part of the work the importance of protecting your intellectual property is critical.

Step 5 – Commercialisation

The final step is where you take tested innovations and develop them to full-scale operations. This will require access to production facilities, routes to market, logistics etc. It is here where collaborative working across the business and in industries outside the business, partnerships and sub-contracting management can play an important role.

As you move through this whole process the risk decreases step by step as you build confidence in the products and gain a greater understanding of the technical and commercial issues faced. However, be mindful that the costs increase dramatically as you move from discussion through lab work to prototyping and finally to production.

Innovation requires the careful balancing of risk and reward at all stages and will be influenced by the organisations culture and view on when, and with whom to share this.