Sunday, September 6, 2009

Assessing capacity of innovation engine using CEO model

I wrote last week about the innovation engine here. Innovation engine is best understood by contrasting it with the delivery engine whose job is to fulfill current customer demand – efficiently and productivity. In contrast, innovation engine (1) anticipates and creates new demand and; (2) establishes business viability to fulfill it. Every organization has an innovation engine in some form or the other. Even your corner grocery store has one and hopefully someone there is thinking about how to protect its margins from the onslaught of organized retail stores and big malls. One important question is: Can you assess the capacity of your innovation engine? Is it more like 100cc or more like 300cc? Let’s explore this using the CEO model.

I wrote about the CEO model of innovation last year. Since then I along with my customers have been tinkering with it and making it more usable and robust. For example, I found that the metaphor of a 3 cylinder engine is more suitable than the factory metaphor used earlier. The picture above shows how it looks currently.

Here are a few observations about the engine:

  • Each cylinder has a capacity
  • All cylinders fire simultaneously
  • “Experimentation” is at the heart
  • “Communication” link is critical

Combination of Opportunity identification and part of experimentation (O + half-E) is typically known as “fragile front-end” of innovation engine. The remaining part: half-E + Commercialization is what I call: “fuzzy back-end”. Capacity of opportunity identification cylinder is measured in terms of number of insights gathered from market. Capacity of experimentation cylinder is measured in number of prototypes created. Capacity of commercialization cylinder is measured in number of products/ideas in market testing phase.

Now, one can start asking interesting questions like: Where does customer fit in this picture? And you say, wouldn’t he be the “petrol” without which the engine has no meaning? Then you ask – What would correspond to the gears that help engine go faster? And now the story starts becoming more interesting. This is what makes the engine metaphor a generative metaphor.

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