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SPRING 2007 V O L . 4 8 N O.

Intelligence

The Five Stages of


Successful Innovation
A brief synopsis of Crafting Organizational Innovation Processes
(University of Washington Information School Technical Report
#I4I-I3M-InnovProc-1, September 2006) by Kevin C. Desouza,
Caroline Dombrowski, Yukika Awazu, Peter Baloh, Sridhar
Papagari, Jeffrey Y. Kim and Sanjeev Jha

Please note that gray areas reflect artwork that has


been intentionally removed. The substantive content of
the article appears as originally published. REPRINT NUMBER 48306
INTELLIGENCE

INNOVATION

The Five Stages of Successful Innovation


Defining an innovation process increases companies’ future value.

Serendipity is not a strategy, yet that’s the weed out ideas that lack potential without
extent of most companies’ innovation plan- allowing stakeholders to reject ideas im-
ning. The importance of innovation to a pulsively solely on the basis of their
company’s future is unquestionable. Then novelty. The authors found that compa-
why do so few companies have a process nies had more success when the evaluation
for it? The authors of a September 2006 process was transparent and standardized,
working paper, Crafting Organizational In- because employees felt more comfortable
novation Processes, address that question. contributing when they could anticipate
Their underlying research comprised semi- how their ideas would be judged. For ex-
structured interviews conducted with senior ample, one software engineer from an
research and development, marketing and information technology organization
product management executives from more said, “One of the things I have struggled
than 30 U.S. and European companies in with is evaluations of my ideas. Some of
several distinct industries, supplemented my ideas light up fires around here, while
with data from annual reports. others are squashed. … Needless to say, I
The paper identifies five discrete and grow skeptical when [the executives] ask
essential stages of successful innovation. for ideas and then do not provide feed-
back as to why an idea was not pursued.”
Stage 1: Idea Generation and
Mobilization Stage 3: Experimentation
The generation stage is the starting line for The experimentation stage tests the sus-
new ideas. Successful idea generation tainability of ideas for a particular
should be fueled both by the pressure to organization at a particular time — and in
compete and by the freedom to explore. a particular environment. At this stage, it’s
IDEO, the product development and important to determine who the customer
branding company based in Palo Alto, Cal- will be and what he or she will use the in-
ifornia, is a good example of an organization
that encourages successful idea generation
by finding a balance between playfulness
and need.
Once a new idea is generated, it passes
on to the mobilization stage, wherein the
idea travels to a different physical or logi-
cal location. Since most inventors aren’t
also marketers, a new idea often needs
someone other than its originator to move
it along. This stage is vitally important to
the progression of a new idea, and skip-
ping it can delay or even sabotage the
innovation process.

Stage 2: Advocacy and Screening


This stage is the time for weighing an
idea’s pros and cons. Advocacy and screen-
ing have to take place at the same time to

8 MIT SLOAN MANAGEMENT REVIEW SPRING 2007


novation for. With that in mind, the mercialization aspects of the business. …
company might discover that although The end result was pain and more pain.”
someone has a great idea, it is ahead of its
time or just not right for a particular mar- Stage 5: Diffusion and Implementation
ket. However, it’s important not to interpret The diffusion and implementation stages
these kinds of discoveries as failures — are, according to the authors, “two sides
they could actually be the catalysts of new of the same coin.” Diffusion is the process
and better ideas. of gaining final, companywide acceptance
Washington Mutual Inc.’s recent inte- of an innovation, and implementation is
rior redesign provides a good example of the process of setting up the structures,
how successful experimentation works. maintenance and resources needed to
Instead of applying a produce it. A good ex-
new design to all its ample of a successful
branches, the banking C OMPANIES HAD MORE approach to diffusion
and insurance company, SUCCESS WHEN THE comes from Interna-
headquartered in Seattle, tional Business Machines
Washington, imple- EVALUATION PROCESS Corp., which involves its
mented the design in just WAS TRANSPARENT employees early in the
a couple of locations to idea-generation stage
AND STANDARDIZED,
see how it would be re- and conducts so-called
ceived. Subsequently, BECAUSE EMPLOYEES innovation jams, to
when customers re- which they invite not
FELT MORE
sponded favorably, the only employees but also
bank took its innovation COMFORTABLE clients, business partners
to the next level, apply- CONTRIBUTING WHEN and even employees’
ing the new design to families. IBM aids later
several other branches. THEY COULD ANTICIPATE diffusion by giving ev-
This way, the company HOW THEIR IDEAS eryone a stake in the idea
didn’t lose money and from the beginning.
time by applying a new WOULD BE JUDGED . The authors of Craft-
idea all at once without ing Organizational
knowing if it would succeed. Innovation Processes are Kevin C. De-
souza, assistant professor, Caroline
Stage 4: Commercialization Dombrowski, Ph.D. student, and Jeffrey
In the commercialization stage, the organi- Y. Kim, assistant professor at the Infor-
zation should look to its customers to mation School at the University of
verify that the innovation actually solves Washington; Sridhar Papagari and San-
their problems and then should analyze jeev Jha, Ph.D. students at the Department
the costs and benefits of rolling out the in- of Information and Decision Sciences,
novation. The authors make sure to note College of Business Administration at the
that “an invention is only considered an University of Illinois at Chicago; Yukika
innovation [once] it has been commercial- Awazu, the Henry E. Rauch Doctoral Fel-
ized.” Therefore, the commercialization low at the McCallum Graduate School of
stage is an important one, similar to advo- Business at Bentley College; and Peter
cacy in that it takes the right people to Baloh, Ph.D. student, Faculty of Econom-
progress the idea to the next developmen- ics, at the University of Ljubljana. For
tal stage. For example, one chief executive more information, contact the authors
officer said, “We learned a simple thing: through kdesouza@u.washington.edu.
Researchers and idea creators do not ap- — Alissa Mariello
preciate the nuances of marketing and
Reprint 48306.
commercialization. … In the past, we tried Copyright © Massachusetts Institute of Technology,
to get the researchers involved in the com- 2007. All rights reserved.

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