Volume 1 · Number 2 · 200973
Clearing the “Fog of Innovation”:Evaluating Ideas Accurately by Recognizing and Controlling Perceptions
Joseph F. Dellaria
Perceptive Realities, LLC; www.PerceptiveRealities.com
The most innovative products often extend old markets or create new markets. Competition is limitedor nonexistent. This translates to higher profit margins and greater revenues for the near- and long-term.Innovative products, services, and processes can provide a segue to a sound financial future for companies who are able to do this consistently.That is the upside of innovation. The challenge lies in mitigating the risk required to consistentlydeliver innovation. Analysis of the success rates for discovering innovative ideas varies from one outof 3,000–6,000 ideas.
This is essentially zero and puts companies in a bind. Wall Street andstockholders demand increasing value on the short-term. Sorting through 3000–6000 ideas to find oneinnovation requires time and significant resources.
Unproductive efforts to deliver innovation easilycan consume the short-term growth demanded by Wall Street and stockholders.
How can these opposing needs be balanced to provide short-term growth and long-term innovation?Since most ideas do not work, one must develop means to quickly and accurately eliminate ideas thatcannot work. Doing so identifies the ideas that can work since that is what will be left. This articlepresents a new, paradigm breaking method, the Perception Versus Reality Analysis (PVRA), to identifyand develop innovative ideas. In addition, the concept of an Innovation Continuum is introduced. Thecombination of these can assist all involved in product development to capitalize on potential revenuesby accurately focusing on the strategies to optimize their opportunities.The PVRAwas conceived and developed after recognizing recurring decision-making patterns over nearly thirty years of involvement in research and development in both academic and industrialsettings. The author either performed or managed these processes as a Ph.D. scientist for over twenty-five years. The observed patterns were independent of the organization, and the educational or promotional level of the participants. Introspection revealed that the author has participated in most of the situations we will be addressing.It is necessary to review some basic elements of innovation to set the context for the PVRA. Startingwith the three basic types of innovation:1.Incremental/Evolutionary2.Associative3.Breakthrough/DisruptiveThe following provides a brief overview of each. This is simply to be clear on what is meant for eachin the subsequent discussion.
will be used to cover incremental and evolutionary innovation. It involvesdeveloping innovations, which perfect or extend an existing product in a well-understood market. Thisresults in one or more of the following: a higher performing product, more features desired by thecustomer, refined and more effective marketing, and cost reductions in all phases of the product(manufacturing, distribution, cost of goods, etc.).Competition is fierce in these markets. Those who innovate in this area enjoy a wealth of supportinginformation to guide and direct the effort. The market is more defined and well understood. Primaryand secondary market research techniques are primary tools for driving segmentation and niche
Stevens, G. A.; Burley, J. “3,000 Raw Ideas = 1 Commercial Success!”; Research, Technology, Management, May/June, 1977, pp. 16–26.
Informal polling of people who have successfully conceived and delivered an innovative product to market suggests that it requires 10–20 yearsto complete the process. Most responses were between 15-20 years.
Chapter one of “The Innovator’s Solution” describes how this tension was not resolved for two companies: Christiansen, C. M.; Raynor, M.E."
The Innovator's Solution
", Harvard Business School Press, Boston, Massachusetts, 2003.
The Truth About Innovation
, Pearson/Financial Times, 2008.