To take the risk to innovate and be the disruptor or to wait to be disrupted is the dilemma most companies face. An historic evaluation of the adoption of some of the past decade’s trends such as smart­phones, multichannel, and other digital innovations reveals that a delay in embrac­ing innovation at the right time has spelled doom for various incumbent organizations such as Nokia and BlackBerry, while investing in adopting innovative technologies at the right time has created massive opportunities for organizations such as Google, Amazon, and Apple.

There is no prescriptive, single formula for an innovation management process. Each organization can decide and define what works. This Advisor provides a basic outline of the common elements/steps for a process to manage innovation with disruptive technologies:

1. Envision future. Designing solutions and business models for an unseen future using potentially powerful, yet-to-be-proven technologies involves a lot of ambiguities. An entrepreneurial visionary leadership with an adventurous spirit is required to envision the possibilities of the future, along with accepting the possible risk of failure, while leading internal and external stakeholders through a risky but rewarding journey, which must be undertaken for the organization to stay relevant in the market. The vision for innovation pursuits must link to realistic business objectives, outcomes, milestones, and course-correction mechanisms.  

2. Explore ideas. Establish a process to scan the external and internal environment and technology trends to identify relevant opportunities to explore further. Identify and select what technologies and application areas are most relevant to possible future business scenarios and how fast they need to be adopted.

3. Explore value. For a selected set of ideas, explore potential benefits from the application of the technology for future business scenarios. The key questions to decide value include:

   1. What “‘blue oceans” of new or niche value customer segments in the market can this idea open to create value or how can it benefit the existing core business?

   2. What value proposition and competitive advantage can it deliver?

   3. What is the risk of no action?

   4. What are the possible future scenarios of opportunities and threats and how can they be addressed using new business models, products, solutions, offerings, and so on?

4. Create business case to validate the potential of the idea. Use quantitative and qualitative insights from analytics tools to explore the potential of the idea and evaluate its feasibility based on business cases. 

5. Focus and decide on what to pursue. Choose a subset of innovative ideas to pursue based on the future potential supported by the expected value and business outcomes. Gain stakeholder commitment, obtain investment, and prepare an execution plan with milestones.  

6. Prototype, pilot, and test a selected idea. With innovation using disruptive technologies, the imperative is to adopt early and learn early from failures so that there is buffer time available for course corrections. Hence, for a selected idea, develop initial prototypes of application of the technology. Pilot and test it internally as well as with a sample market segment if feasible. A significant portion of the innovation process lies in this step in developing the required capabilities and in addressing the success factors and challenges.

7. Refine/implement and adjust. Based on results obtained from initial prototypes or pilots, make necessary refine­ments to the idea either to enhance it further or to address limitations observed. This could enable course corrections in the initial idea based on the detailed understanding of the technology and the business scenario of application that was developed during the prototyping process.

8. Explore the potential of ecosystem partners (e.g., customers, partners, research organizations, suppliers). The commercial success of an innovation is not just dependent on the ability of an organization to deliver on its own capabilities in time but also on the capability and willingness of its partners to deliver the complementary innovation capabilities. Thus, it is important to identify and work with the key partners who are part of the particular disruptive technology journey from inception to delivery and adoption by customers. It is important to identify and focus on the necessary ecosystem partners required to bring a disruptive technology innovation to market as part of the innovation management process.

9. Launch and market test. Once fully developing the first version of the idea, launch it internally (or in the market) and test for viability and adoption.

10. Scale if successful or shelve/change course if unsuccessful. Success and early customer adoption of an innovation require the organization to scale up to meet customer demand vertically in volume and horizontally in depth of functionalities/services offered in order to capitalize on initial success. This requires being ready with the appropriate organizational structure, talent, culture, and tangible/intangible capabilities to enable scalability of the innovation. At the same time, most innovations fail to become market successes due to various reasons, such as bad timing, lack of supporting innovation ecosystems, and an inability to deliver or attract customers. Based on initial market response, it is critical to go back and review from a strategic perspective the vision and business outcomes expected to see if it is worth continuing with the innovation or if course changes are required. Change of direction could include a review of the value proposition and the customer need it serves, finding new application areas, changes in the busi­ness model, or finding new collaborators to strengthen market position and relaunch in a more commercially acceptable configuration or design approach.

11. Manage change. Reconfigure organizational structures, value chains, culture, and other internal capabilities to facilitate adoption of the innovation in the organization.

[For more from the author on this topic, see “The Innovator’s Imperative.”]