Topic 7 / Post 1 – Evaluating Emerging Technologies, Innovations & Trends / Intrapreneurial Innovation Process

April 24, 2016 / Dennis Holinka

Topic 7 – Evaluating Emerging Technologies, Innovations & Trends

This week's posts go over the Evaluating Emerging Technologies, Innovations & Trends, the various perspectives, and related reflections in the blog.

Post 1 – Intrapreneurial Innovation Process

 The Innovation and Emerging Technologies and Trends process has been pursued during various points over the decades by many enterprises.  Many technologists have come to accept the disruptive nature of emerging technologies and their ability to be game changers for the companies that use them and the development teams that have to implement them.  The disruptive nature of innovations are that they bring about creative destruction as described by the economist Joseph Schumpeter in the 19th century.  That is, that the new makes way by destroying and improving on the old.  Such was the case of the car displacing horses and horse related business include state of the art technologies of the time.  So it is with emerging technologies whose ideas can be properly integrated to produce new value in an enterprise.  However, we must always remember the potential for the destructive acts that the new technology brings to the process.  I will discuss in another post how the innovation process can be tempered when combined with EA.  For now, we must analyze how to best assess emerging technologies including innovations whether in technology, organization, or management in a structured process.

Figure:  Creative Destruction Illustrated in IT

(from: https://media.licdn.com/mpr/mpr/p/2/005/0b4/2b6/1881547.png)

In the more than ten years in Enterprise Architecture, I have seen multiple failed attempts at evaluating emerging innovations that have burned through scarce company capital.  Many of the approaches were unstructured and described as just in time or agile.  But we must remember that in an attempt to be agile we don't make the enterprise FRAGILE in competitiveness.  Low maturity in many of the companies I have consulted for have been mostly unstructured and disconnected from the business.  As a recent example, I remember when one of the companies invested in an innovation process that was evaluating Google glass and another that was looking at drones prior to the licensing of such activities by the Federal Aviation Administration (FAA).  Yes, it would be great to have a way to evaluate Catastrophic Damages from Hurricanes and assess losses but was that the priority for the business.  Were there no more tangible revenue increasing or expense reducing opportunity that would materialize within the next 6 to 12 months?  The issues there appeared to be one where the image of being futuristic and ahead of the curve was counted more than the ability to be profitable or use the innovation as a business profit enabler.  The innovation will require that it displace the status quo at an improved economies of scale and return in investment by way of expense reduction and/or revenue improvement.

Figure:  Creative Destruction in Telephone Industry Example

(from: http://cdn.ttgtmedia.com/rms/onlineImages/mi_cio_edition_1013_page5_graphic1.png)

Several approaches to innovation and evaluation of emerging technologies have allowed for a highly active and furious rush to market with ideas culminating from multiple ideation access points in an enterprise.   An intrapreneurial innovation process should include the evaluation of ideas, the industrialization of those ideas to product, and the product deployment into useful sales or operation for full cost recovery.  When a company cannot provide a return for its innovations then the process or innovations it is producing should be held suspect and abandoned in favor of economic value that does.  As such, many innovations that have appeared to market, did not produce a profit that justified its creation.  As an example, financial instrument innovations, led to the what Warren Buffet called financial weapons of mass destruction and there was no creative aspect to them except to those believed them to be useful in specific contexts.  This points out that we must be careful to properly position innovations for their useful purposes and right fit for which they are being developed.

Figure:  Creative Destruction Innovations Must Create Value

(from: http://talesoftheenterprise.com/wp-content/uploads/2013/03/creative_destruction_sjpg1441-300x212.jpg)

 

Therefore, the definition of a generic process to structure innovation and the evaluation of emerging technologies becomes crucial to the contribution of value.  The process must incorporate several value stages in the value stream.  The process begins with the collection points of ideas from the business, external markets, trends, partners/supplier, and internal employees.  The ideas transition from collection to a discovery phase to determine what aspects of the ideas are worthy of pursuit by way of opportunities, surveys, and environment analysis.  Next, the innovation or emerging technology is evaluated against the full list of idea discoveries and place into a pipeline for prioritization based on risk and return.  The prioritized innovations are funded as projects in experiments from inception business case, architecture, design, and then implementation proof of concept.  The phases of progression of ideas to discovery to quality to experiment make up the proofing component of the process.  The next component of the process progresses into delivery with the phases of industrialization and rollout.  The industrialization is the moving of the business case and proof of concept to implementation and scale in order to make the implementation materialize.  The rollout and subsequent operational monitoring / tracking is realize benefits for resources expended and benefits expected from the innovation / emerging technologies.  The process completes but is not necessarily sufficient by itself without integration with EA which I will discuss in my next blog post.

Figure:  Generic Intrapreneurial Innovation Process

(adapted from ACME, Inc.)