One of the challenges to an effective corporate innovation program is the successful handoff from Front End to Back End Innovation. For this discussion Front End Innovation is the methods an organization uses to source and find innovation ideas and opportunities. Back End Innovation is the method by which ideas are validated, turned into prototypes, business cases, minimal viable products, etc.
How do you portfolio manage ideas that you move from Front End to Back End?
The Ansoff Matrix
To help with this question I use two models: A Business Model Canvas and a version of the Ansoff Marketing Matrix modified to show innovation strategy. A good example of Ansoff Marix modified for Innovation Strategy can be found here.
I use this tool to map an idea into Core, Adjacent, or Transformational categories. If an organization has all the business capabilities (R&D, Sales, Support, Distribution, etc etc) necessary to successful move the idea into market then it is a Core idea. If an idea needs to develop or significantly change one or two business capabilities then it is Adjacent. Finally, if multiple business capabilities need to change to then the idea is Transformational.
This mapping is important because it allows the innovation governance team and process to understand the scope and complexity of an idea. The categorization allows an innovation governance team to portfolio manage ideas based upon risk and complexity. The mix in your portfolio is dependent upon your corporate innovation charter and the risk your innovation program is willing to take. I often suggest to newer innovation organizations to have several Core and a few Adjacent ideas in the portfolio to lower the risk and get some early returns. But the goal is to build the capabilities to take on more and more Adjacent and Transformational ideas as your innovation program matures.
Creating a Business Model Canvas
The business model canvas is an excellent tool to help an innovator determine where to map the idea onto the Ansoff matrix. A business model canvas is a one page business model tool. The canvas helps an innovator flesh out the various business capabilities necessary for this idea. The process will help the innovator understand what existing business capabilities may be used for this idea and which need to be created or modified. It is also very beneficial in helping communicate the idea to stake holders in the Back End Innovation process.
The canvas can be found here.
Below is a picture to help visualize these two tools.
How does your Innovation program portfolio manage ideas? I would really appreciate hearing your methods and any feedback on my blog.