19 - 3 - 2021 - Expert blogs

Tools for fast strategic innovation: part 3

In this part of my blog series, I present in more detail the five-day process and methods I developed for strategic innovation to support idea validation and risk management. Read the previously published parts for more information on the risks and motives related to innovation behind the developed model.

DesignSoftware development

In the previous blog post, I discussed the risks and challenges in business innovation and presented suitable approaches for mitigation. Because those approaches (design thinking, Lean Startup, and Value Proposition Design) can increase the success rate and lower risks, I chose them as building blocks of the repeatable strategic innovation process.

Behind the created model

Value Proposition Design provides concrete tools that perfectly fit strategic innovation by introducing a clear and visual way for thoroughly understanding the customer needs, comparing value proposition to competitors, and analyzing the global environment. For my model, I picked the most suitable ones for the beginning of the strategic innovation process, providing information critical for succeeding.

To support the straightforwardness of Value Proposition Design with a more research-oriented approach, I wanted to include some aspects of design thinking into my model. Design thinking is an interactive process where the beginning of strategic innovation happens in the “research and define phase”: one needs to gather lots of information in order to understand what is relevant. The empathetic focus of design thinking helps to understand the real needs of actors such as the customer.

Image 1: At the beginning of strategic innovation, the focus is on the “research and define phase” of the design thinking process.

Design thinking methods are typically not inclined to fast-paced working. To support that, I built the process on the Lean Startup philosophy where the business innovation is considered a hypothesis that is to be validated fast, cheap, and as early as possible: in this case, within five days.

For the actual work (collecting, combining, and visualizing information), I warmly recommend using digital tools that make it easy to add and edit text, create and re-use visual elements such as post-its and images, and create PowerPoint-like presentations – all inside one space. My choice in this moment of time is Figma, but there are many other good options available.

Image 2: General view of the digital workspace (Figma) with the tools and methods used in the process.

Before the process starts

Before the actual 5-day process begins, one needs to get an assignment and collect the required related information. The target needs to be clear, and it should be backed up by all the relevant data that the company has to provide at this point. The assignment can be in the form of a hypothesis: “We believe that this idea has business potential.”

When the assignment is clear, the process can start to find an answer to the key question or to validate the hypothesis.

Research and define (the first 4 days)

In the process, there are four main phases for collecting and analyzing information:

  1. Market (overview, competition, typical business models, etc.)

  2. Customers (understanding the key customers, assessing value propositions)

  3. Competition (key competitors and their business model)

  4. Macroeconomic forces (markets, economy, customers, trends).

Each of the four phases is limited to one workday (7,5 hours). This forces one to be efficient: to constantly assess and focus on the work and give up on fine-tuning. The process allows an iterative way of working, and it’s encouraged to move between the four bases, adding information and insights as it builds up. Everything goes well when all of the four points of view are equally addressed.

Information gathering can be done by searching the internet – everyone has the skills. The collected data needs to be gathered and here, supporting tools and methods are needed. I suggest the following:

  • Forming the overview of the market with a customer journey map (source: design thinking)

  • Understanding the customer needs, pains, and gains and the value proposition that addresses those needs by filling Value Proposition Canvas (source: Value Proposition Design)

  • Understanding the competition and comparing value propositions by filling Strategy Canvas (source: Value Proposition Design

  • Understanding the macroeconomic forces by listing the key forces (points of view: markets, economy, customers, and trends) and visualizing the effect with pluses or minuses (source: Value Proposition Design

Summary of the findings (day 5)

The last day is all about collecting every bit and detail into a clear summary that focuses on key findings, conclusions, and suggestions for the continuation – or to drop the innovation process. This summary is the first validation point in the innovation process: now we have enough information that we can estimate if the idea will succeed or not.

After the 5-day innovation process

If the innovation is seen as viable, feasible, and desirable, the innovation process will most likely continue after the validation. In this case, it is to be remembered that the summary is most likely faulty in many ways. The work should continue in an iterative manner, defining and validating the information gathered during the initial process. It’s good to keep in mind that one risk mitigation method in product innovation is to collect information iteratively throughout the whole innovation process.

In the next blog post, I’ll consider process and methods from its user’s point of view:

  • How to use it effectively

  • Where and when to utilize it

  • The effectiveness and generalizability of the solution, and

  • The possibilities for developing it further.

I’ll also add some concrete examples and tips for using the tools presented in this post.

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