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The Innovation Lifecycle: Understanding Innovation from the beginning

Depending on which explanation you want to follow, an innovation can be divided into 4 or 5 phases. All approaches have two aspects in common: At the beginning there is an idea, which is to be brought to the market at the end. In most cases, the innovation process is described in a linear way. However, we see a significant error in this: Innovations do not run in a linear fashion. Like any other product, they have a life cycle, the so-called Innovation Lifecycle.

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The Innovation Lifecycle: A Definition

The term an innovation is widely known, even though it is often confused with Inventions. We have already explained the difference between the two terms in more detail in our post Innovation vs. Invention. So, we will focus on the life cycle. In business, it has now established itself as a standard and exists in the context of almost every product. But what exactly does it describe?

Basically, this is understood to be the observation of an object during time, whereby this is divided into different phases and runs in a bell-shaped manner. These phases mark the beginning and end of this period. If we refer to products, we mean that a product passes through these different phases.

But how can this be applied to innovations and form the innovation lifecycle? In this case, the beginning is the idea and the end is the market maturity of the innovation. However, not every innovation takes this path. Most attempts fail somewhere during this life cycle. So, the most common end is that the product doesn’t even make it to market. To avoid this, we are constantly thinking about how to improve the innovation process, because we need innovation. Today more than ever.

Innovation Lifecycle - The bell shaped curve

What do the phases in the Innovation Lifecycle look like?

We understand the Innovation Lifecycle as the described curve, which outlines the course of the innovation. But where on this curve do the individual phases show up? For this, we first need to look at what the classic approach to this topic looks like:

  • It all starts with an idea that is directly linked to an existing problem. This problem is to be solved by an innovation.
  • Various approaches are being developed for this solution, which are expected to provide a solution.
  • One of these solutions turns out to be the best, or at least is seen as such. Now they try to combine it with a suitable business case.
  • If the solution and the business case fit together, this results in an initial prototype for the product. Yes, prototypes also exist for services!
  • If this prototype works, it becomes a finished product that enters the market.

Phase 1: The idea and the setup

An idea cannot emerge without an existing problem. Problems are the basis for every innovation, and these can only succeed in the Innovation Lifecycle if the problem is really understood. In doing so, we have several ways to identify these problems. Among the classics are:

  • Unmet customer needs
  • Dissatisfaction with existing solutions
  • Potential new markets
  • Opportunities for new solutions through the current state of technology

These are just a few examples from a potentially endless list of opportunities for innovation. On our curve, we are now at the very beginning. The idea is discussed and tested for strengths and weaknesses. The effort that goes into this is relatively small compared to the other phases. Neither large sums of money are required and invested, nor does much time flow into concrete implementation. However, the further the maturation process of the idea progresses, the higher the associated effort becomes.

Phase 2: The problem and the solution in the Innovation Lifecycle

If the idea proves to be good, the next step is to try to turn it into an actual solution. This is where the first sharp rise appears on our Innovation Lifecycle curve. What is its origin? The idea itself was initially just a construct. It was captured as a sketch or thought, but without already being a prototype or MVP. In the solution phase, this state changes. The idea becomes tangible for the first time. All previous considerations are now brought into a first version of what is to offer the customer a real solution in the future.

The course of the curve is therefore determined by the time invested to first form a solution and the financial resources that must be raised for this. In this phase it is particularly important to question and iterate. It is worthwhile to bring external people on board who have an independent view of the idea and the supposed solution. They provide an unbiased perspective on the current state and can help uncover errors or misunderstandings. You can use the following questions to do this:

  • Do we really understand the problem completely, or are we missing something?
  • Does our solution address the underlying problem?
  • Are we solving the problem or just a symptom?
  • Is the solution in the interest of the user / customer?
  • Do we provide a complete solution, or do we create more problems with it?

These questions serve only as examplesand must be adapted and / or expanded accordingly in the context of the solution or product. This question catalog helps enormously in iterating. The more often this process is repeated, the more certain the team can be that it has found a real solution.

Phase 3: The solution and the market

The transition to the third phase of the Innovation Lifecycle marks the peak of the curve. At this point, an extremely large amount of time and money is invested to take the idea to the next level. And that is the right thing to do! We need to understand at which step we are now. It is no longer about having a good idea. Nor is it any longer about finding a solution. We are now at a point where we have to make our good idea and the right solution compatible for the market. This situation marks a neuralgic point in the Innovation Lifecycle.

Example: Google Glass

Many good ideas and even better solutions have failed at this stage. Let’s take one example. We will take a look at Google Glass (RIP 2015). At the time, Google wanted to launch a pair of glasses that would promise their wearer an “augmented experience” in daily life. What seemed like a leap into the future at the time (2010-2015) quickly turned out to be a mistake. In itself, Google Glass was in a very good situation: it combined future technology like augmented reality with the “technology improved lifestyle” at that time. But what happened?

The problems were neither with the idea, nor with the technical implementation of the solution. Starting with the price of 1500$, the product was very difficult to establish on the market from the beginning. Even though the idea was visionary, no one had asked for the solution. And for that Google wanted 1500$? But there were other criticisms besides the price. In order to work, the Google Glass needed a constantly running camera. Apart from the fact that this concept would have failed because of the European GDPR, for example, voices were also very loud in countries with softer legislations, calling for the end of privacy.

Now, we don’t want to accuse a company like Google of not scrutinizing an innovation closely enough. Nevertheless, it was not ready for the market in its former way and thus perished. What do we learn from this? It is essential to adapt your solution to the market. No matter how good it is, if the market and the product do not match, the innovation will not survive the Innovation Lifecycle and disappear.

Phase 4: Leaving the Innovation Lifecycle - Build & Scale the business

If the innovation has survived phase 3, we are on the home stretch of the innovation process. Now the last big challenge lies ahead: We must integrate the innovation into the existing business or build a new one. Of course, we are no longer talking about the business case. If this is not in place, the innovation has not made it this far. It’s about finding the right business model for our innovation and scaling it. At this point, we are no longer concerned with the actual development of the product, but we focus on marketing. Here it becomes important to use everything we learned about our product and our target group in the earlier phases of the Innovation Lifecycle.

There is no blueprint for perfect marketing, which is why we can’t make perfect recommendations here. What is important, however:

  • Be close to the customer
  • Learn from the feedback they give
  • Adapt your marketing to the target group and your product

One thing is critical to scaling your business: scale wisely. Everyone wants to aim high, but if their innovation is very specific, it won’t work. Become aware of the potential of your innovation and your product. Because one thing is clear: both wanting too much and too little will hurt your business.

The Innovation Adoption Lifecycle

Once all challenges have been successfully mastered, the innovation adoption lifecycle for the product begins. This describes the composition of the buyer base in the life cycle of the product. There is a model originally by Geoffrey Moore “Crossing the Chasm” used by different disciplines for this that divides them into different groups:

  • Innovators
  • Early adopters
  • Early marjority
  • Late majority
  • Laggards

In this case, too, we have a bell-shaped course of the innovation adoption lifecycle. The innovators are at the beginning, followed by the early adopters. These groups buy a product even if it is still very young. The process continues with the early majority and the late majority. The names of the two groups already imply when in the age of the product these customers will buy. The Laggards come last and signal that the product is nearing the end of its life cycle. Every innovation goes through these customer-based phases. As a company, it is important to recognize them and work on the next generation from the appropriate point in time.

Recommended reading: Industry standard approach on innovation

We have now looked in detail at what view we have of the Innovation Lifecycle. In our Innovation vs.Invention post, we take a look at the industry standard approach on innovation. Additionally, at Digital Leadership we have a number of other ground-breaking tools and models for your business!

These are available via our download link.


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