How Do Companies Manage Innovation Processes Effectively?

Many innovation projects fail. That’s why it’s crucial to develop as many promising ideas as possible - so at least some become reality.

The Problem: Too Many Ideas Die Too Early

Companies often have more ideas than resources. The challenge is identifying and pursuing the right ideas - while ending the wrong ones early.

The Innovation Funnel

The innovation funnel is a proven framework for structuring the innovation process:

1. Ideation: Generate many ideas without judgment
2. Screening: Evaluate and prioritize ideas against criteria
3. Concept: Develop selected ideas into concrete concepts
4. Validation: Test concepts with real users
5. Implementation: Build and launch validated concepts

The Key: Fail Fast, Learn Fast

The earlier a weak idea is filtered out, the fewer resources are wasted. At the same time, you must be careful not to prematurely kill good ideas that just need more development.

Our Recommendations

• Define clear criteria for each stage of the funnel
• Establish regular review meetings with decision-making authority
• Get user feedback early and often - don’t build in isolation
• Allocate resources flexibly - double down on winners, cut losers

Common Pitfalls to Avoid

• HiPPO decisions: Don’t let the Highest Paid Person’s Opinion override data
• Sunk cost fallacy: Kill projects that aren’t working, regardless of prior investment
• Analysis paralysis: Move quickly through early stages; perfect is the enemy of good
• Innovation theater: Ensure processes lead to real implementation, not just workshops