International Conference on Industrial Engineering and Systems Management

IESM’ 2009 May 13 - 15, 2009 MONTREAL - CANADA

Controlling ideas and concepts generation stage for a better management of innovation portfolio: analysis of the Fugle® methodology’s funnel Visna NHIM a, Philippe RAUFFETa , Catherine DA CUNHAa, Alain BERNARDa, Wilhelm UYSb, Nick DU PREEZb, Louis LOUWb a

IRCCyN, Ecole Centrale Nantes, France, bIndutech, University of Stellenbosch, South Africa

Abstract From innovation management have emerged some methods and tools supporting it. Some are helping innovative design; some others are focusing on the propagation of a culture of innovation. However, it is also necessary to manage the reuse of ideas and concepts generated by these two sets of methods, by structuring knowledge, information and people during innovation projects. To remediate to this problem, the Fugle® method provides a global framework. This one aims at monitoring the idea/concept lifecycle and managing innovation portfolio, by selecting accurate and feasible concepts. This paper presents a detailed analysis of this method. Then it aims at understanding how people, informational resources and generated concepts are linked. Then a solution for automating the creation of these associations will be proposed, to improve the comprehension and the management of innovation projects. Key words: Innovation Management, Projet Selection and Planning, Process Modelling

1

Introduction

To stay competitive, an organization has to create value. A way to do this is innovation: innovate to get new market shares or even to improve its profitability. The innovation may concern products as well as internal processes; it may be continuous innovation, by inducing minimal and progressive modifications, or otherwise radical. Innovation is definitely part of the life cycle of an organization. However innovation does not always mean a creation of value and lot of innovative projects may have begun without being achieved; that induces financial losses for the organization. To avoid that, innovation has to follow a rigorous approach. Indutech has therefore developed a process which enables managing innovation initiatives, from the generation of ideas to the project exploitation. This process is called the “Fugle® methodology of innovation”. This one gives a managerial structure to frame innovation portfolio, but stays at a high and quite fuzzy level of description. So it is necessary to lead a further analysis, to make the method operational and usable in context. This article will present the “Fugle® methodology” relatively to strategies and tools of innovation. Then, a precise study of the main actors of its first three stages will be fulfilled in order to give a more practical view of its functioning. Also the analysis of these entities will allow discovering new ways for optimizing its use in a ground context, especially by supporting the exchanges of information and knowledge. A model will then be implemented in software, so as to illustrate and test the fulfilled development. Finally, the study will be discussed and perspectives will be opened.

IESM 2009, MONTREAL – CANADA, May 13 - 15

2 2.1

Background The innovation, a factor of growth

Innovation can be defined as the successful introduction of a thing or a method that is new or significantly improved. “It is the embodiment, combination or synthesis of knowledge in original, relevant new products, processes, or services”. This is done by an enterprise to “create added value either directly for the enterprise or indirectly for its customers” [1, 2]. Innovation is essential for an organization. It allows for an organization taking in consideration its internal and external environment. For instance for a company it means staying competitive against the concurrence. Indeed, “innovation is widely recognised by industry and academics as an essential competitive enabler for any enterprise that wants to remain competitive and survive and grow [3]. Generally, for an organization it allows improving its processes or its products to reduce costs and maximize the earnings. “Change is the very essence of business growth… (and is) inevitable and unavoidable” [4]. However, many innovation projects fail for different reasons, for instance because of a poor management and monitoring of overall process. This area relates to organizations “failure to control the entire process from idea generation to action implementation” [5]. It is therefore obvious that innovation must be managed so as to improve firms’ innovative skills and to optimize their innovation portfolio. 2.2

The Management of innovation, methods and strategies

Methods and tools emerged in order to drive innovation. Some approaches are supporting the innovation process, in showing some potential, innovative ways to follow. Some others are focused on the participation of all the employees, attempting to value the immaterial capital. 2.2.1. Methods for innovation Innovation is now supported by methods which drive designers in unused areas to solve apparently unsolvable problems. • In this sense, the method TRIZ [6] was developed in 1946 to provide a guide for innovation, to help designers to invent. Its author, the Russian Altshuller, spent some years to find out in what way the innovation had taken place. Starting from the observation that “inventing is the removal of a technical contradiction with the help of certain principles”, he built 40 principles of invention, several laws of technical systems evolution, the concepts of technical and physical contradictions that creative inventions resolve, the concept of ideality of a system and numerous other theoretical and practical approaches. TRIZ was also supported by further development, like ARIZ [7], an algorithm which exposes and solves contradictions, i.e. the problems. Together, this extensive work represents a unique contribution to the development of creativity and inventive problemsolving. • In the same way, the C-K method looks for opening designers’ “brains” in order to overcome barriers of problem solving. The theory “models the dynamics of design as a joint-expansion of a space of Concepts {C} and a space of Knowledge {K}” [8]. Using a “design square” composed by four operators, CÆK, KÆC, CÆC and KÆK, it enables to expand and enrich respectively the two spaces. For instance, knowledge can bring alternatives solutions, and new concepts are added to the knowledge field. These expansions are translated into arborescence, leading to an eventual design solution. Thus to solve the problem “build a seat without foot”, the solving of these apparent contradiction analyzes what a seat is (i.e. a tool which minimizes people’s effort in standing), and proposes finally a strap surrounding the legs and the back of people, insuring their equilibrium and their comfort. As we can notice, these two methods are thus guidelines to solve design problems and apparent contradictions. They intend to “unblock un-natural innovation’s areas” [9], by proposing structured methodologies of inventing, different from the empirical “experienced design” [10] and completing the insufficient natural level’s of creativity. However, they are rather focused on helping designers. They do not offer solutions for increasing people involvement within innovation strategies.

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2.2.2. Strategies of innovation To an accurate use of these inventive problem-solving methods, some efforts had to be made in order to improve the framework of innovation. Within the knowledge theory, the importance of socialization [11, 12] was emphasized in the creation process, and gave birth to some practices, like brainstorming and ideas boxes for instance. Furthermore, strategies were elaborated, in order to enlarge sources of innovation and to share innovative ideas. Participative innovation (PI) [13] is one of this kind. It aims at improving the involvement of all the employees and supporting their creativity. By involving every people, many different ideas may be generated in all the fields of competence of an organization, not only coming from the managers or the experts. Moreover by asking all the employees to generate ideas, this strategy reinforces their involvement in the organization. The participative innovation is defined by four characteristics: • Integrated in profession • Collective objectives oriented (the suggestion is individual, but the participative innovation allows collective working and especially the gains will be useful for most of people) • Animated by a network • The contributors are rewarded. This strategy was implemented in some French companies like SNCF1 and Renault2 with success. For instance, SNCF evaluates that the gain generated by its participative innovation strategy in 2006 is equivalent to one TGV’s (Very Fast Train) price. For the Renault’s case [14], participative innovation strategy was introduced since 1989, and now an employee in Renault generates 6 ideas by years, and the annual gain for the company is assessed about 70 million Euros. In order to study the impacts of this innovation strategy, the French association Innov’acteurs and the company Inergie Opinion realized a study [15] about Participative Innovation in September 2007 with 12 companies and 1100 employees. Their results underline some interesting points to improve in order to support an innovation initiative (Fig. 1). When the PI approach is known (% of positive opinion)

When there is no PI approach (% of positive opinion)

88%

The collaborators find their company innovative

72%

86%

PI allows the collaborators feeling more involved

57%

78%

The manager supports the expression of ideas

65%

54%

The collaborators know why an idea is selected or not

24%

67%

The contributors are given recognition

18%

44%

Companies communicate about gains generated by these ideas

12%

Fig.1. Survey on the impacts of Participative Innovation [15] This approach induces many positive effects: • Promote the image of an innovating company • Facilitate the expression of ideas • Convince the collaborator of his/her efficiency (productivity improvement) • Encourage the managers to listen

However, there are still some points to improve especially about: • The process of ideas selection • The information about the ideas exploitation • Capitalization and sharing of the ideas • Giving recognition to the contributors • The communication about the gains generated by the ideas

PI strategy provides some details about how creativity’s framework is managed and improved. As Renault and SNCF’s cases underline, PI has some impressive results. Nevertheless, as this current survey emphasizes, there are also some lacks in innovation strategies which may be filled. 1 2

SNCF is the French national train company Renault is a worldwide French car manufacturer

IESM 2009, MONTREAL – CANADA, May 13 - 15

2.2.3. Hypothesis The previous methods enable to improve firm’s innovative capabilities, by providing some guidelines to solve creatively the problems, and by implementing a framework promoting innovation culture. Nevertheless, there is a gap between these methods helping innovative design and the strategies propagating innovation culture. Indeed, these ones are rather focused on the way of innovating, but neither on the management of the idea selection nor, in some global extent, on the control of innovation projects’ portfolio. It is therefore necessary to propose a method to fill this gap, by canalizing the ideas flow around an operational structure of project, so as to take advantage of it or in contrary avoid the failure. 2.3

The Fugle® methodology, to manage innovation…’s projects

In order to fill the gap and propose an operational way to use ideas and concepts around projects, Indutech has developed its own process, called the Fugle® Methodology of innovation [16]. The Fugle® can be split in 3 parts: • The Funnel is composed of the three first stages (Ideas generation stage, Concept definition stage, Concept refinement stage). These stages are fuzzy but necessary to create the portfolio of innovation projects. They are the foundations of the current project. • Innovation Portfolio Management entails the holistic management of the enterprise’s innovation initiatives. This stage uses Concept Feasibility and Refinement Stage as basis for the prioritisation, scheduling and alignment of innovation projects. Furthermore, it also allocates resources, assigns responsibilities and monitors continuously projects, to ensure that strategic objectives are achieved. • The third part, the Bugle, is more practical and starts the project after the creation of the portfolio. It is composed of the deployment stage, the refinement and formalisation stage and the exploitation stage. We are now going to describe in detail this methodology.

Fig.2.The Fugle® innovation’s Model [16] The part called Funnel follows the idea / concept life cycle and is composed of 3 steps (Fig. 2): • The step of idea generation / identification stage defines some basic but essential operations: - First of all, Firms have to get an accurate structure of the information, it is to say the very crucial “seed and fertiliser” gathered about current problems or problem areas in the business, about competitors, clients and markets, technologies, or company strategies and objectives. - Once information collected, categorized and presented in a comprehensive form, collaborators can suggest ideas with the aid of this information, individually or collaboratively in workshops or brainstorming sessions. These ideas must also be collected and structured, so as to be shared and trigger new other ideas. - It is important to capture or frame ideas in their context, in order to communicate them to others and develop further into a concept [17]. Capturing ideas is also important in order to keep a history of new ideas, since many times ideas that are rejected due to current circumstances, can become more viable in the future. - Finally, Ideas are assessed and filtered, considering the firms’ strategies and the current context. Since it takes time and resources to develop new ideas into concepts and evaluate their feasibility, the trick is to intelligently

IESM 2009, MONTREAL – CANADA, May 13 - 15

filter new ideas while decreasing the probability of rejecting good ideas. Rejected ideas should however be captured and stored along with the reasons for their rejection. • The concept definition step is focused on the transformation of ideas into workable concepts. A concept could be developed from different combinations of different ideas. Once a concept has been defined and documented, some time should be provided to share the concept with different people in order for the concept to incubate and maybe refine some of the ideas. At the end of the definition stage another filtering process occurs to select those ideas that are most promising and require further evaluation in order to determine their feasibility. • The concept feasibility and refinement step makes further investigations of the generated concept, to overcome the potential limits of information during the previous steps. Additional information is collected to study the feasibility of the concept, and new filter of prototyping is done. The goal of the Funnel is to “fail fast and smart” [18]. The concept evaluation should be used as a learning experience. It is better and more cost effective to fail at this stage than later during the deployment stage. Iterative loops of concept refinement and evaluation will typically occur. At the end of this stage a funding gate is used to make the decision which concepts should be resourced and further developed. The outcome of this stage is therefore a list of prospective innovation projects. The Bugle part is more focused on the achievement of feasible concepts and is also divided in 3 stages (Fig.2): • The deployment stage involves the design, implementation, and testing of the innovation solution as identified, conceptualised and decided upon during the previous stages. It includes the detail project planning and management of the design and implementation projects. After the detail design, an implementation gate is used as a final design review before implementation. Implementation of the design involves the development and roll-out of the new innovation. • After the roll-out, the new innovation is in operation. Initially the new implemented solution will not function optimally. The step of refinement and formalization aims at monitoring, measuring, evaluating and refining the solution until it functions satisfactorily according to specifications. Once the solution is performing satisfactorily it can then be formalised in terms of operational documentation. • Once the solution has been formalised, this final stage of exploitation is reached where the solution is further implemented through new business models and markets. The aim is therefore to generate more value from the solution. Before this stage is entered, an exploitation gate needs to be passed where decisions are made regarding which solutions can and should be further exploited. Although this innovation process model appears to be a linear staged process, there are many iterative loops and overlaps between the steps within the different stages. Many of these steps (e.g. idea generation and idea capturing) also occur concurrently. Activities such as portfolio management and the managing of information occur throughout the process. The Fugle® methodology fills the gap between methods helping innovative design and strategies diffusing innovation culture and enlarging sources of ideas. It brings some responses to the missing innovation portfolio management, by controlling ideas and concepts selection and enabling to avoid early the potential innovative failures. Moreover, it can be combined with PI and innovative design, by gathering and structuring ideas accordingly to a project’s point of view.

Fig.3.The Fugle® method, filling the gap between innovative design methods and culture propagation strategies However, the proposition is at a high level of description, and might seem fuzzy in some extent. So the method must be analysed at a more granular level to be more practical.

IESM 2009, MONTREAL – CANADA, May 13 - 15

3

3.1

Propositions

Motivations

As the description above shows, the Fugle® methodology may be seen as: • a tool for monitoring and managing innovation process: that enables to follow the evolution of suggested ideas and concepts, and to create some indicators and some gates so as to filter them. Thus it will be possible to select the best innovation projects relatively to their relevance and the firm’s capacities, • a tool for managing knowledge: the model underlines the importance of the different flows of information and knowledge. That is therefore obvious it is necessary to store all the ideas and concepts generated even if they were not selected. Indeed a prospective use is not excluded in another context. So the Fugle® methodology also provides some keys to build a knowledge base during the whole idea life cycle. However, the methodology does not give any details about whom or what is involved in each stage. In order to define the requirements to make operational the Fugle® methodology into a project selection tool and a knowledge base, a more granular study must be done. Indeed determining which entities are involved will allow understanding how the process is generally followed by the different actors of an innovation project. Moreover, it appears that the 3 first stages of the Fugle® (Funnel part) are the more important during the process of projects selection and concepts emergence. Indeed they are the creative part of an innovation project generally called the « fuzzy » front end of innovation [19]. In these 3 stages the body of an innovation project, it is to say the concept, is defined. If project teams fail in its accurate definition, that will increase risk in exploitation stages, as well as the associated costs of failure. So following parts of this paper will only study innovation’s Funnel. Methodology will be detailed, by formalizing the entities involved in the process and their associations. Thus it will be possible to build a framework improving the success of the Fugle® implementation, by helping the management and by detecting prospective reasons of failure or potential success as soon as possible. 3.2

Analysis

The study is going to present a functional analysis of the Funnel. This analysis will provide the key elements involved in the process and the associations between them. By synthesizing all these data, we will be able to better characterize how the Funnel is working and to create a model supporting it. 3.2.1. Determining the information \ knowledge entities The functional analysis is given by the SADT as below (Fig.4). Formalizing the processes gave fundaments to understand how the “Funnel” may be applied and will also determine the main entities which may be involved. 4 aspects were emphasized in the model: • The idea life cycle, underlining the transformation of a suggested idea into a workable and feasible concept (blocks without lines) • The filtering gates, where ideas and concepts are tested and assessed (blocks with gridlines) • The gathering and the structure of information, ideas and concepts into a innovation knowledge base (blocks with horizontal lines) • The management of people, by identifying experts and assembling them into specific workgroup (blocks with vertical lines)

IESM 2009, MONTREAL – CANADA, May 13 - 15

Fig.4. Functional analysis of the Funnel stage The creation and the analysis of the SADT allowed determining the following entities that are summarized in the next table. The attributes associated with each entities are used later to define bounds between them. Entity Employee

Idea Information

Innovation team Knowledge Area Concept Workgroup

Attributes - Name of contributor: Identification of the contributor who wants to access the information. - Training: evaluation of the level of understanding of the contributor. - Language: Languages understandable by the contributor, both spoken and written. It determines which information can be used by the contributor, depending on which language he/she knows. - Position: contributor’s position allows him or not to access to some confidential information. It allows also identifying his/her place in the hierarchy and his/her relation with the other employees. - Curriculum: last positions. The last jobs of the contributor may reveal other fields of competences. - Idea Identifier: Title of the idea, which explains its main topic. - Creator: name of the contributor who created the idea - Identifier: Title of the information - Language: the language determines if the information is exploitable by someone depending on his/her listening or reading comprehension. - Members: the innovation team is composed with several employees which is useful to know in order to identify how the innovation is managed. - Project in charge: this attribute shows which project(s) this innovation team is working on currently. - Identifier: name of the knowledge area - Requirements: identifies which trainings or skills are necessary to be associated with this entity. - Name: Title of the concept - Creator: This attribute determines who or which team has created the concept. - Name: Name of the work group (for instance: department, project XYZ’s team…) - Members: List of the members of this group

Fig.5. Identification of the entities involved in the Funnel proces

IESM 2009, MONTREAL – CANADA, May 13 - 15

3.2.2. Formalizing the bounds After defining the entities, bounds between them were analysed and modelled. Each bound will represent a possible flow of information or knowledge. A class diagram has been chosen to draw and describe all the associations. Building a class diagram gives an approach which allows being exploited later for a computer implementation. Indeed, the comparison of the attributes of each entity can be used to create automatically the associations. For instance to generate the association “Employee creates Idea”, we should compare the attribute “name” of the entity Employee with the attribute “Creator” of the entity Idea. If they are equal the association may be generated. 3.2.3. Synthesizing the results: creation of the topic map In the last parts, we demonstrated the existence of several entities involved in the Funnel, as well as their associations. The SADT or the class diagram gives a detailed representation of these elements. However, in practice, all information is not always required. Therefore it would be better to choose a formalism which can show the required information clearly and which would be exploited quickly by everyone. The topic map formalism allows representing the entities and their associations in a scheme similar to a tree. Its comprehension is therefore easy and it allows showing quite very little information extracted from the class diagram and the SADT. Thus the entities and the associations will then be reported on the topic map in a softer version. Moreover, the class diagram will play the role of a reference for the building of the topic map. Firstly it was necessary to think about the organization of all entities in the same scheme. By analyzing the entities, we can notice that they may be separated in 3 groups with 5 subgroups. Group Resource

Subgroup

Entities

Collaboration

Employee

Information provided by the company

Workgroup Information Idea Knowledge area Concept Innovation team

Products generated

Knowledge

Management

Concept Management

Fig.6. Categorization of Funnel’s entities These groups of entities are then organized in a circle, in order to place the management of the innovation in the centre of the process. So will the topic map be read from the middle to the outside: the innovation team manage the innovation process, resources are exploited to finally define a workable concept (Fig.7, left picture).

Fig.7. General Funnel’s topic map and detailed idea generation’s topic map

IESM 2009, MONTREAL – CANADA, May 13 - 15

Once the entities organised, the bounds between the different entities were drawn in order to show the possible flows of information and knowledge. The associations had been defined in the class diagram, and are reported on a topic map, representing the main associations between the employee and other entities. That gives the required information and its different roles (generated ideas, assessed ideas…). There may be several different bounds between the same entities. Therefore the type of association showed in the topic map should be detailed. For instance, in the topic map of the ideas generation stage (Fig.7, right picture) can be distinguished: • the bounds between the entities “employee” represent the different types of collaboration (collaboration expert-expert to evaluate an idea, or collaboration contributor-employee to generate ideas) • the bounds between the workgroups and the knowledge area with the employee represent the potential sources of tacit knowledge • the bounds between the entity “information” and the entity “employee” represents the possibility for the contributor or the expert to access explicit knowledge. The building of the topic maps for the other stages of the Funnel occurred in the same way. 3.3

Results

To be used in practice, the topic map should be generated by computer software. In fact the model is very flexible and everyone is able to change it by entering new data. Therefore every employee from an organization should be able to be informed of the modifications in real time and a solution is to implement the model in software. In this practical case, two different types of associations have been distinguished: the automatic associations and the manual associations. Actually some associations may be done by a simple comparison of attributes. For instance to bind an idea with an employee, we need only to compare the name of the employee with the attribute “creator” of the entity idea. For other entities like two co-workers, that is not possible, because the collaboration is not explicit. So someone has to create this association manually after observing that they are working together. The following figure presents different kinds of bounds. In case that the association may be created automatically, a simple test based on the comparison of attributes is executed. This algorithm tests all possible associations and summarizes the bounds between entities in a textual window.

Fig.8. Automation of association creation in topic maps This demonstrator could be used in further works, to draw semi-automatically innovation projects’ information onto topic maps. For instance, in the current case, the different associations of the entity Visna1 are shown, helping to understand the skills, the Knowledge Area and the current project of this employee. By selecting another entity, the information may be of course sorted differently. That would give accurate information and right people for developing specific ideas or projects.

IESM 2009, MONTREAL – CANADA, May 13 - 15

4

Conclusion

The Fugle® method allows firms to have more control on the idea/concept life cycle, by defining some filtering gates throughout the different processes of innovation, by avoiding earlier the failure of the development of non feasible concepts and by structuring information and people into respectively an innovation knowledge base and workgroups. For this purpose, the detailed study of the Funnel part of the Fugle® methodology enables to better understand how people, information, and generated ideas and concepts are linked, in order to select and manage innovation projects. Moreover, the proposed topic maps give a quick and clear overview of the different actors and their associations during the 3 stages of the Funnel process. Indeed, a topic map is really simple to read, and provides a quick analysis of the associations, checking for instance the information whether an employee has access to all the required information to support his creativity. If it is not the case, corrective actions could be taken, to improve the innovation management. Nevertheless, further works must be added, in order to complete the proposed models and build some solution to support the management of innovation portfolio. For instance, it will be interesting to integrate the dynamics of expertise identification, workgroups creation, so as to enrich information included in associations between entities. The question of how people and firms can be taught to develop their potential of innovation must be also raised, considering the methods for managing organizational capabilities [20]. In this framework, the French research institute IRCCyN at Ecole Centrale Nantes and Indutech, a South African company created by the University of Stellenbosch, are continuing an ongoing collaboration. They are sharing their investigations in Knowledge Management fields and they are using the developed solutions from Indutech, like Organon, a topic map-like conceptual framework modeller, and CAT, a tool enabling automatic associations from analysis of documents corpora. 5

References

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