Did you know that over 40% of businesses have a dedicated, internal innovation group that follow a set process for the development and implementation of new, innovative products, services and processes?
What is the innovation cycle?
The innovation cycle is a four-stage process that allows businesses to drive continuous innovation.
Innovation is the process of discovering and developing new or improved ways to solve important problems with:
- Unfulfilled customer requirements
- New markets
- New technical solutions
It allows organisations to adapt to fast-changing environments and markets, helps them become more profitable, enables them to compete with their competitors and can even improve their internal workplace dynamics.
But for organisations to keep pace with market changes and competitors, innovation shouldn’t be seen as a one-off activity or project: It should be an ongoing, continuous cycle.
“Innovation should be never-ending. “Product-market fit” is fleeting. You need to keep rethinking and refining the solution, because new and better solutions and technologies are invented daily.” – Medium
The four stages of the innovation cycle provide organisations with a framework that they can use to navigate the uncertainty, risk, and complexity of innovation and ensure that they are continuously innovating their products, services or processes.
Why all businesses should use the innovation cycle
As we’ve established, emerging or over-saturated markets, fickle customers and increasing pressure from global competitors means that organisations need to constantly innovate to keep afloat and stay ahead.
But differentiation is hard. With the volume of competitors popping up, on a global scale, it’s not as easy as it used to be to differentiate a product, service, or process. Plus, the financial risk that comes with launching an innovative idea is high, especially in today’s rocky climate.
Businesses need a set process to follow that inspires them to think creatively whilst also allowing them to focus on their stakeholder’s needs and their bottom line.
The innovation cycle does exactly this: It provides organisations with the structure and systematicity they need to continuously come up with pioneering ideas for differentiation that are centred around adding value.
“The primary advantage of the process is that needs are defined early on. This allows businesses the freedom to be creative while also working toward their goals in a focused manner.” – Four Week MBA
It gives them a continuous cycle of steps to follow which encourages them to be creative whilst also forcing them to think about and mitigate complex problems and risks. It ensures that all ‘off-the-wall’ creative concepts aren’t simply whimsical pipedreams, but are solid ideas that are grounded in reality that have the potential to offer real value to the business.
What are the four stages of the innovation cycle?
The innovation cycle consists of four stages that cover how to generate innovative solutions and get them out to market effectively. The first two stages allow for creativity and the last two are practical, process-oriented and focused.
An innovation cycle always starts with the search for innovative opportunities and the derivation of ideas, which are then subsequently evaluated, tested and then implemented.
Innovation cycle stage 1: Ideas
Stage 1 of the innovation cycle is about generating innovative ideas. Ideas should emerge from looking at what the competition is offering, what the market is missing and what the consumers need. But these ideas should be driven forwards without any creative constraints; they need to be given the freedom to evolve and unfold naturally.
Asking questions such as Has anyone tried this before? If so, were they successful? Why or why not? Are there similar projects out there? will help to narrow ideas down to see which is worth pursuing.
Then, push that idea further and establish things like:
- How does it relate to the wider organisational strategy?
- What problem does it solve, or what need does it meet?
- Are there any budget or time-related constraints?
- Will it get approval from the decision-makers?
“The conclusion of the first phase makes the idea assessment. On the basis of defined criteria, the potential benefits and the feasibility of the company are evaluated.”
Innovation cycle stage 2: Concept
Once a core innovative idea has been established, it’s time to prove the concept in stage 2. This can be done through extensive analysis and screening to evaluate the feasibility of the idea and uncover its potential problems and benefits.
“Organisations must understand the difficulties involved in evaluating truly innovative ideas. Also, organizations need to build transparent evaluation and screening protocols.”- Alcorfund
Techniques such as the ones below can help prove the concept of an innovative idea:
- Market research: Will confirm the markets to target with the new idea.
- Consumer research: Will discover what unfulfilled needs the target market has, and how the innovative idea can fulfil them.
- Competitor research: Will determine what the competition is doing, where the gaps in the market are and if the innovation can fill those gaps.
- Risk and feasibility studies: Will uncover any potential barriers or risks like laws, regulations, or patents that might prevent the new idea from reaching its market.
Innovation cycle stage 3: Development & testing
Once the concept has been proven, it’s time to develop and test it before it goes out to market.
Create a prototype, test it out in market conditions on a handful of customers or end-users, gather feedback and iterate until the product, service or process is ready for launch.
This is a crucial stage of the innovation cycle because this type of vigorous testing and experimentation could throw up new ideas or unforeseen problems, and the feasibility of the original idea might change. This could affect the allocated budget and companies may struggle to financially support their innovative idea.
This is where the government-funded R&D tax credit scheme comes in handy. Open to any company, of any size, in any industry, this R&D tax credit incentive allows innovative organisations to claim up to 33% of the costs associated with the research and development of their innovative idea.
R&D tax credit specialists such as Myriad Associates, for example, can help make sure companies get the maximum amount of R&D tax relief possible. So, any of your innovative clients want to find out what R&D tax relief they’re entitled to, contact Myriad Associates on 0207 118 6045 or drop them a message.
Once the innovative idea has been thoroughly tested and approved for launch, marketing, implementation and distribution strategies can then be devised.
Innovation cycle stage 4: Market
“The last phase is about bringing the product to the potential customers. This includes procurement, production and logistics.” – Lead Innovation
Launching an innovative product, service or process requires the careful implementation of the marketing, implementation and distribution strategies determined in stage 3.
All marketing and sales channels must be activated, sales reps trained, and distribution logistics sorted. This gives the new product, service or process the best chance of survival in a competitive, overcrowded market.
“This is the most important step, of course, in your innovation program. If you don’t implement, then it’s not innovation.” – Innovation Management
As the innovation takes hold and becomes established, the innovation cycle should continue through regular ideation, evaluation of customer feedback, and quantitative market analysis.
This post is mainly sourced from here.