Thursday, March 31, 2011

The evolution of the innovation funnel

Today I want to examine a tool that has become a well-worn crutch for many firms, the innovation "funnel".  I'm going to argue that we need to rethink the funnel in fundamental new ways if we are to achieve our innovation goals.

First, let's get into the mood by recognizing what many people think about an innovation funnel, using a cartoon from Tom Fishburne.

Many times a funnel is simply a place to collect ideas, ignore them or hope they'll go away.

Remember that we innovators borrowed the idea of a funnel from the sales guys.  The analogies are fairly close however - you need many prospects to qualify to close a deal, and many ideas to evaluate to create a new product or service.  The first iterations of innovation funnels were simply that - a way to collect internally generated ideas and manage them through the innovation process to create new products.

Henry Chesbrough changed the concept of a funnel by making it permeable and porous.  With Open Innovation he argued that ideas could and should come from internal individuals and teams AND external customers and partners.  Further, ideas might enter the funnel from the outside and ideas may exit to third parties as well.  Here's a graphic that depicts the innovation funnel in an open innovation setting:

However, the funnel still seems too focused on ideas.  Our suggested revision to the funnel is outlined below.  This next iteration of the funnel incorporates opportunities, ideas, technologies and even products, considering "spin in" and "spin out".  Ultimately the funnel is a bridge between unmet customer needs and the solutions we offer.  The funnel should consider far more than just ideas.  After all, in an open innovation model, we can accept and exchange ideas, technologies or even products that may address a customer need or emerging opportunity.  Limiting the funnel to ideas reduces its capability and power and creates a very limited metaphor for innovation teams.

You can see a PowerPoint that provides more detail about our thinking at Slideshare.
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posted by Jeffrey Phillips at 5:21 AM


Blogger Ironick said...

I like where you're going with the innovation funnel. Let me add one more "enhancement". The current funnel shape implicitly suggests that the innovation coming out of the small end of the funnel is targeted at very specific issue or problem. But as we all know, the most fundamental innovations can be applied broadly, even in very unexpected ways. In fact, economists have a name for some such innovations, GPTs (general purpose technologies), see eg .

So I like to use the image of an hourglass on its side in some contexts. On the left side, ideas focus into realizations at the narrow waist, and these realized innovations then diffuse in an open ended way on the right side.

I got the initial idea of the hourglass from here: . I've been using it ever since: .

8:57 AM  
Blogger Paula Thornton said...

Funnel schmunnel. Pick a great innovation and lay it over any of these models: fail.

Models like this get you machine-generated (linear) output: algoritmic modifications, evolutions. Not emergence.

Indeed, your entire point about it not just being about ideas is the 'clue'. And yet so many businesses still rely on linear processes and linear thinking. Everything else is discarded. Then we wonder why business is struggling -- wasted potential.

9:07 AM  
Anonymous Anonymous said...

From my perspective, "opportunities" can flow from "outside" into the funnel, gathered through user research. "Ideas" for solving user needs or challenges can flow from outside as well, gathered through co-design. "Technology" seems to be a branch of "Product," or a means of building a product and feels different than the other three sections.
I like an innovation process consisting of "Identification" (of opportunity/challenge), "Ideation," and "Implementation" as the three core modes of innovation.

7:50 PM  
Blogger Unknown said...

Thanks a lot for this time sharing of innovation about THE EVOLUTION OF THE INNOVATION FUNNEL. This is really the best website about innovation i have ever read.
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7:34 AM  

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