Innovation Project Management Handbook

Innovation
Project
Management
Handbook
Dr. Gregory C. McLaughlin

Dr. William R. Kennedy
https://t.me/PrMaB
https://t.me/PrMaB
Innovation
Project
Management
Handbook
https://t.me/PrMaB
https://t.me/PrMaB
Innovation
Project
Management
Handbook
Dr. Gregory C. McLaughlin

Dr. William R. Kennedy
https://t.me/PrMaB
CRC Press
Taylor & Francis Group
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Boca Raton, FL 33487-2742
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Contents
List of Figures................................................................................................... xi
List of Tables.................................................................................................... xv
Preface............................................................................................................. xvii
Authors............................................................................................................. xxi
1 Using the Handbook........................................................................... 1
Introduction......................................................................................................... 1
Innovation Primer............................................................................................... 2
Introduction..................................................................................................... 2
Defining the “Means” of Innovation.................................................................. 4
Innovation Comprehension Survey................................................................ 5
Scoring............................................................................................................. 7
Interpretation................................................................................................... 7
The Evolution of ENOVALE................................................................................ 8
Summary........................................................................................................... 10
References......................................................................................................... 10
2 Selecting an Innovation Project........................................................ 13
Introduction....................................................................................................... 13
Step 1: Needs and New Ideas............................................................................14
Step 2: Normalize and Nominate......................................................................17
Work Environment Survey.............................................................................17
Scoring............................................................................................................19
Values Survey.................................................................................................19
Step 3: Objectify................................................................................................ 21
Specific, Measurable, Achievable, Relevant, and Time Objectives.............. 22
Detail of Process (Item) Requirements......................................................... 23
Step 4: Validate and Verify............................................................................... 25
Evaluative Criteria for Assumptions/Limitations.......................................... 27
Outcome Impact and Success Evaluation........................................................ 28
Success, Risk Evaluation Matrix Analysis..................................................... 29
Step 5: Alignment.............................................................................................. 30
Expectations and Perceptions Survey...........................................................31
Acceptance of Change...................................................................................... 33
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Step 6: Tabulate and Track Performance......................................................... 35

Step 7: Execute and Evaluate............................................................................ 36
Summary........................................................................................................... 37
Discussion Questions........................................................................................ 37
Assignments...................................................................................................... 38
References......................................................................................................... 38
3 Building an Effective Initial Innovation Opportunity Profile.......... 39
Introduction....................................................................................................... 39
Establish the Organization Innovation Management System.......................... 42
Innovation Opportunity Proposal.................................................................... 44
Overview: Innovation Opportunity Profile (IOP) Form.................................. 44
Executive Summary.......................................................................................... 45
Core Competencies........................................................................................... 46
Sources of Innovation Opportunity................................................................. 47
Section I. Operational Profile Tracking........................................................ 48
Section II. Operational Systems Requirements Statement........................... 48
Section III. Customer Profile......................................................................... 49
Section IV. User Probability Profile.............................................................. 49
Section V. System Mode Profile.................................................................... 50
Section VI. Functional Profile....................................................................... 50
Section VII. Certification and Waiver Authority........................................... 50
Section VIII. Operational Profile...................................................................51
Section IX. Budget and Financial Profile......................................................51
Section X. Coordination and Approval Authority........................................ 52
Section XI. Appendices and Attachments.................................................... 52
Functional Needs Assessment.......................................................................... 52
Functional Solutions Analysis........................................................................... 54
Innovation Team Project Charter...................................................................... 56
Summary........................................................................................................... 56
Assignments...................................................................................................... 57
Reference........................................................................................................... 57
4 New Products/Services with Existing Resources............................. 59
Introduction....................................................................................................... 59
Evolution............................................................................................................ 60
New and Unique Innovation.............................................................................61
Develop the Concept.........................................................................................61
Step 1: New and Unique................................................................................... 64
First Stage Concept........................................................................................ 65
Second Stage (Feasibility)............................................................................. 65
Third Stage.................................................................................................... 65
Fourth Stage.................................................................................................. 66
Fifth Stage...................................................................................................... 66
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Rationalize the Concept................................................................................ 66

Step 2: New and Unique....................................................................................67
Alternative Consequence Evaluation Tool........................................................ 69
Scoring........................................................................................................... 69
Interpretation................................................................................................. 69
Step 3: Finalize the Design............................................................................... 70
Step 4: Verify..................................................................................................... 71
Step 5: Assess.................................................................................................... 72
Step 6: Test and Measure Performance.............................................................74
Step 7: Operationalize....................................................................................... 75
Summary........................................................................................................... 76
Implementation................................................................................................. 76
Introduction................................................................................................... 76
Step 1: Prepare the Infrastructure................................................................ 77
Step 2: Coordination..................................................................................... 78
Step 3: Install the Process............................................................................. 79
Step 4: Process Orientation and Training..................................................... 81
Step 5: Assess and Assignment..................................................................... 82
Step 6: Tracking Performance....................................................................... 84
Step 7: Implement and Control..................................................................... 84
Summary........................................................................................................... 85
Assignments...................................................................................................... 85
References......................................................................................................... 85
5 “New” Applications........................................................................... 87
Introduction....................................................................................................... 87
Step 1: Exploring the New Application............................................................ 90
Scoring and Interpretation............................................................................ 95
Brainstorming Rules (Hasso Plattner Design School at Stanford
University).................................................................................................. 97
Step 2: Reality Check........................................................................................ 99
Influence Matrix............................................................................................ 99
Example........................................................................................................102
Step 3: New Application..................................................................................103
Scoring and Interpretation.......................................................................... 106
Step 4: New Applications................................................................................ 106
Step 5: New Applications.................................................................................110
Step 6: Tracking...............................................................................................111
Step 7: Release..................................................................................................113
Summary..........................................................................................................114
Discussion Questions.......................................................................................114
Assignments.....................................................................................................114
References........................................................................................................ 115
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6 A New Approach..............................................................................117
Introduction......................................................................................................117
A New Approach—Seven Steps......................................................................119
Step 1: Reviewing Existing Approaches......................................................... 120
Scoring Guide...................................................................................................121
Interpretation....................................................................................................121
Example............................................................................................................122
Effectiveness Rating and Definition.............................................................123
Importance Rating and Definition...............................................................123
Replacement Potential Rating and Definition.............................................124
Step 2: Proposing New Approaches............................................................... 126
Consequence Scale..........................................................................................133
Severity Scale...................................................................................................133
Benefit Scale.....................................................................................................133
Step 3: Developing Objectives........................................................................ 134
Step 4: Validation............................................................................................ 136
Step 5: Alignment and Adaptation................................................................. 138
Step 6: Tracking Performance..........................................................................140
Step 7: Monitor and Control............................................................................146
Analyzing Data.................................................................................................146
Control Chart Types and Examples.................................................................149
Average and Range Charts...............................................................................150
Summary.......................................................................................................... 151
Discussion Questions....................................................................................... 151
Assignments..................................................................................................... 151
References........................................................................................................152
7 Incremental Innovation: Performance below Expectations.............153

Introduction......................................................................................................153
Scenario 1: Incremental Improvement in Manufacturing
and Production.......................................................................................... 154
Scenario and Machine Center (Equipment) Background...........................155
Step 1: Nominating and Negotiating...............................................................156
Innovation Team Task Assignment Tool.....................................................162
Step 2: Reasons and Requirements.................................................................166
Value Stream Mapping.................................................................................166
Cause and Effect (C&E) Diagram ...............................................................169
People (Manpower)......................................................................................171
Machine........................................................................................................171
Methodology (Process).................................................................................172
Materials.......................................................................................................172
Areas for Investigation.................................................................................172
Cause and Effect (C&E) Matrix ...................................................................173
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Contents ◾ ix
Step 3: Operationalization...............................................................................179
Step 4: Validation and Verification..................................................................182
Step 5: Adaptation and Alignment................................................................. 184
Step 6: Track and Tie to Performance.............................................................187
Step 7: Establish Controls.................................................................................190
Summary..........................................................................................................191
Assignments.....................................................................................................192
References........................................................................................................192
8 Incremental Innovation: Accelerated Performance..........................193
Introduction......................................................................................................193
Scenario 2: Performance Acceleration: Aircraft Communications..................194
Scenario: Airborne Communications Background..........................................194
Technological Convergence.............................................................................195
Incremental Innovation Process (Revisited)....................................................196
Organizational Culture.....................................................................................197
Step 1: Recognize the Opportunity.................................................................199
Service Level Matrix Tool............................................................................... 200
Step 2: Normalizing the Opportunity............................................................ 203
Step 3: Operationalization.............................................................................. 206
Step 4: Validate................................................................................................ 207
Step 5: Adapt and Align...................................................................................212
Step 6: Track to Improvement/Performance...................................................215
Step 7: Evaluate and Review............................................................................217
Summary..........................................................................................................218
Assignments.....................................................................................................219
References....................................................................................................... 220
9 Innovative Change: The Art of Replacement.................................. 221
Introduction......................................................................................................221
Step 1: Identifying Replacement Value........................................................... 223
Step 2: Review of Alternatives.........................................................................225
Scoring the Alternative Benefit Loss Ratio................................................. 226
Interpreting the Alternative Benefit Loss Ratio.......................................... 226
Step 3: Evaluate Repercussions....................................................................... 227
Alternative Repercussion Effects Analysis Worksheet Tool........................... 228
Step 4: Evaluate Repercussions........................................................................231
Step 5: Alignment.............................................................................................233
Step 6: Support the Decision.......................................................................... 234
Leadership....................................................................................................... 234
Step 7: Implement............................................................................................235
Summary......................................................................................................... 236
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Assignments.....................................................................................................237
Reference..........................................................................................................237
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List of Figures
Figure 1.1 ENOVALE process.............................................................................. 9

Figure 2.1 Needs assessment (Part 1)—step 1...................................................14
Figure 2.2 Needs assessment (Part 2)—step 1...................................................16
Figure 2.3 Normalize and nominate—step 2....................................................17
Figure 2.4 Objectify—step 3............................................................................. 21
Figure 2.5 Operationalize—step 3.................................................................... 23
Figure 2.6 Validate—step 4............................................................................... 25
Figure 2.7 Verify—step 4................................................................................... 26
Figure 2.8 Outcome impact and success evaluation........................................ 29
Figure 2.9 Success, risk evaluation matrix (SREM) quadrants analysis............ 30
Figure 2.10 Success, risk evaluation matrix (SREM) project analysis................ 30
Figure 2.11 Alignment and adaptation—step 5...................................................31
Figure 2.12 Tabulate and track performance—step 6........................................ 36
Figure 2.13 Execute and evaluate—step 7.......................................................... 37
Figure 3.1 Innovation opportunity profile—side 1.......................................... 40
Figure 3.2 Innovation opportunity profile—side 2.......................................... 41
Figure 3.3 Innovation opportunity profile flowchart....................................... 42
Figure 3.4 Innovation team project charter (basic)........................................... 43
Figure 3.5 S WOT (strengths, weaknesses, opportunities, and threats)
analysis.............................................................................................. 53
Figure 3.6 S WOT (strengths, weaknesses, opportunities, and threats)
analysis—example........................................................................... 53
Figure 4.1 Original ENOVALE process for new innovation projects............... 60
Figure 4.2 Updated process (ENOVALE to DRDOVATE)................................. 62
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xii ◾ List of Figures
Figure 4.3 New and unique—step 1................................................................. 64

Figure 4.4 New and unique—step 2..................................................................67
Figure 4.6 Testing reality of new products, services, or technology............... 71
Figure 4.9 Key performance indicator (KPI) creation process..........................74
Figure 4.12 Implementation process: New and unique..................................... 77
Figure 4.13 Implementation process: New and unique—(a) step 1
and (b) step 2................................................................................... 78
Figure 4.14 Implementation: New and unique—step 3..................................... 80
Figure 5.1 New application—7-step process..................................................... 89
Figure 5.2 Step 1—exploring new applications................................................ 91
Figure 5.3 Analytics information flow............................................................... 95
Figure 5.4 Step 2—reality check..................................................................... 100
Figure 5.5 Influence matrix example...............................................................101
Figure 5.6 Step 3—objectify.............................................................................103
Figure 5.7 Step 4—validate...............................................................................107
Figure 5.8 S tep 5—alignment...........................................................................111
Figure 5.9 Step 6—tracking..............................................................................112
Figure 5.10 New application—step 7.................................................................113
Figure 6.1 New approach seven steps (high-level model)..............................119
Figure 6.2 New approach—step 2.................................................................. 120
Figure 6.3 New approaches—step 2............................................................... 126
Figure 6.4 Approach benefits influence analysis worksheet...........................127
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List of Figures ◾ xiii
Figure 6.5 A
pproach benefits influence analysis worksheet—medical
firm example................................................................................... 128
Figure 6.6 Approach benefits influence analysis template..............................129
Figure 6.7 Approach benefits influence analysis scale for risk analysis........ 130
Figure 6.8 Small medical firm example...........................................................131
Figure 6.9 4-D thinking....................................................................................132
Figure 6.10 New approach—step 3...................................................................135
Figure 6.11 New approach—step 4...................................................................137
Figure 6.12 New approaches—step 5(a)............................................................139
Figure 6.13 New approach—step 5(b)...............................................................140
Figure 6.14 New approaches—step 6................................................................144
Figure 6.15 New approach—step 7....................................................................147
Figure 6.16 Control chart...................................................................................148
Figure 6.17 Choosing the correct control chart.................................................148
Figure 6.18 Repeat visits (number of return visits to customers in a month).......149
Figure 6.19 Example of average and range control chart.................................150
Figure 7.1 Performance below expectations—step 1......................................156
Figure 7.2 Innovation team project charter (basic)..........................................163
Figure 7.3 Innovation team task assignment tool............................................164
Figure 7.5 Value stream mapping—basic.........................................................167
Figure 7.6 Basic fishbone diagram (QI Macros 2015)......................................168
Figure 7.7 Flexo example—cause and effect diagram.....................................168
Figure 7.8 Cause and effect (C&E) matrix template........................................173
Figure 7.9 C
ause and effect (C&E) matrix example—Flexographic
machine center.................................................................................175
Figure 7.10 SMPA example.................................................................................176
Figure 7.11 SMPA template.................................................................................177
Figure 7.12 SMPA scale.......................................................................................178
Figure 7.13 Performance below expectations—step 3..................................... 180
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Figure 7.16 Storyboard—example (basic)......................................................... 186

Figure 7.17 Performance below expectations—step 6..................................... 188
Figure 8.1 Incremental innovation process......................................................196
Figure 8.2 Accelerated performance—step 1..................................................199
Figure 8.3 S ervice level matrix example—descriptions and service
requirements....................................................................................201
Figure 8.4 S ervice level matrix example—descriptions and service
requirements................................................................................... 202
Figure 8.5 Accelerated performance—step 2.................................................. 204
Figure 8.6 Test plan........................................................................................... 205
Figure 8.7 Accelerated performance—step 3.................................................. 207
Figure 8.8 E
xecutive airborne communication usage pie chart
(voice, video, and data).................................................................. 208
Figure 8.9 A
irborne communication system perfomance and reliability
rates bar graph............................................................................... 208
Figure 8.10 Accelerated performance—step 4................................................. 209
Figure 8.11 SMPA template example (routing issues)........................................211
Figure 8.15 Accelerated performance—step 7...................................................218
Figure 9.1 Replacement cycle.......................................................................... 222
Figure 9.2 Replacement cycle—step 1............................................................ 223
Figure 9.3 Replacement cycle—step 2.............................................................225
Figure 9.5 Alternative repercussion effects analysis template........................ 229
Figure 9.6 AREA template risk codes.............................................................. 230
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List of Tables
Table 1.1 Innovation comprehension survey....................................................... 6

Table 2.1 Needs analysis and rating tool............................................................16
Table 2.2 Work environment survey................................................................. 18
Table 2.3 Values survey...................................................................................... 20
Table 2.4 Detail of process (Item) requirements............................................... 24
Table 2.5 Functional, user relationship matrix.................................................. 24
Table 2.6 Evaluative criteria for assumptions/limitations.................................. 27
Table 2.7 Evaluation of assumptions/limitations............................................... 27
Table 2.8 Impact versus success evaluation...................................................... 28
Table 2.9 Success, risk evaluation matrix (SREM) analysis............................... 29
Table 2.10 Expectations and perceptions survey................................................ 32
Table 2.11 Acceptance of change survey............................................................ 34
Table 3.1 User probability profile...................................................................... 49
Table 3.2 C
urrent airborne communication system delays
(improvement opportunity)............................................................... 54
Table 3.3 Operational priorities matrix............................................................. 55
Table 4.1 Idea/needs decision tool.................................................................... 63
Table 4.2 COCO evaluation scale...................................................................... 68
Table 4.3 Alternative consequence evaluation tool........................................... 68
Table 5.1 Workaround/modification simple example....................................... 92
Table 5.2 Competitor assessment to objectives (outcomes) tool....................... 93
Table 5.3 Customer/user unrealized needs....................................................... 96
Table 5.4 Acceptance criteria for new application projects.............................. 98
Table 5.5 Objective discrepancy evaluation.....................................................104
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xvi ◾ List of Tables
Table 5.6 Project expectations survey..............................................................105

Table 6.1 Review of an existing approach.......................................................121
Table 6.2 Review of an existing approach—example.....................................122
Table 6.3 New approach key attribute rating and ranking..............................123
Table 6.4 Rating and ranking (R&R) tool—example.......................................124
Table 6.5 Acceptance criteria............................................................................125
Table 6.6 Alternative/consequence evaluation.................................................132
Table 6.7 Reconciliation tool.............................................................................135
Table 6.8 Reconciliation tool example............................................................. 136
Table 6.9 Data description and tool selection for verification........................ 138
Table 6.10 External evaluative measures............................................................142
Table 6.11 Human measures...............................................................................143
Table 7.1 RACI model table (project example).................................................160
Table 8.1 Organizational culture assessment matrix........................................197
Table 8.2 Expectations evaluation tool............................................................ 204
Table 9.1 SNIFF test.......................................................................................... 224
Table 9.2 Alternative benefit loss ratio............................................................ 226
Table 9.3 Alternative repercussion effects analysis worksheet....................... 228
Table 9.4 IMPACT statement test.......................................................................232
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Preface
This book represents a maturing of our knowledge, experience, and practice in

innovation, and focuses on innovation opportunity project success. There are
numerous texts on innovation management—what it is and why it is important.
That said, there are few on how to implement innovation at the macrolevel, and
more specifically, at the microlevel within an organization. This handbook is a
compendium of our own and previously developed and widely known innova-
tion process support tools. The new tools and processes we have developed in
this book are a result of the decades of work in the field of innovation. In tan-
dem with established tools created by other pioneers, we have also tested them
successfully in actual field conditions. Each tool and process is described in detail
in an “easy to follow” format and complemented with actual application sce-
narios and exercises. We feel this format best serves innovation leaders, teams,
and professionals in implementing or commercializing an innovation opportunity
within their organization.
In a world of constant change, we continue to build upon the knowledge
shared in our prior books. The seminal difference from this book and our previ-
ous writings is that we have included many new innovation tools, such as the
innovation opportunity profile (Chapter 3), and revisions to a few of the first-,
second-, and third-generation tools. We also provide a more detailed process for
innovation project success. We introduced the term “innovation opportunity,”
which broadly acknowledges the reality that innovation success is truly a favor-
able combination of key performance parameters associated with an unfulfilled
need, time, actionable information (data), and the human element. By design, this
is truly an Innovation Project Manager and Practitioner Handbook, a “how to”
guide on identifying, selecting, and managing a successful innovation opportu-
nity project resulting in sustained success.
We acknowledge there is a wide spectrum of innovation tools, approaches,
and methodologies already in use today, both in the private and public sectors.
Some of the tools from legacy methodologies such as Six Sigma, Lean, Agile,
continuous process improvement, project, and change management method-
ologies, incorporate and share some of the same or very similar processes and
tools. We also acknowledge this handbook is not intended as a stand-alone
resource or tool bag for the N2OVATE™ methodology and sustained innovation
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xviii ◾ Preface
success. Subsequently, we suggest the reader to first examine A Guide to

Innovation Processes and Solutions for Government as a prequel to this book.
The government book was designed to introduce a new alternative methodol-
ogy (N2OVATE™) to what many perceive is a very bureaucratic, complex, and
industrial age requirements definition and acquisition process that literally ham-
strings the timely pursuit of any type of innovation in the government. Although
the book introduced a tailorable, flexible, and timely approach for government
agencies and private sector entities working with the government, it is certainly
applicable to any type of organization seeking a roadmap to sustained innovation
opportunity success.
As a precursor to embarking on any innovation opportunity project, it is criti-
cal to first develop an enterprise innovation strategy that will set the tone across
the organization and ensure a receptive culture and environment conducive to
innovation. Organizations that repeatedly succeed in identifying and capitaliz-
ing on innovation opportunities embrace innovation as a core value or part of
the culture and organizational DNA. These organizations support innovation not
only in spirit, but they repeatedly pass the litmus test by investing the necessary
resources (financial and human) with tenacity, commitment, and determination.
Fundamentally, we believe innovations come from human needs that remain
unsatisfied. Over time, these unfulfilled needs are either met by the organiza-
tion or competitor, remain undiscovered, or eventually usurped by another more
compelling need. Individuals performing the work or those receiving the product
or service can best identify, define, and articulate these needs. Appropriately, we
use the information generated by individuals to define the innovation opportu-
nity projects and develop the potential outcomes. Numerous examples provide a
platform for describing tools and demonstrating principles and practices associ-
ated with the N2OVATE™ process. We identify seven unique processes, based
on innovative outcomes. We recognize that each outcome has its own unique
circumstances. Subsequently, the reader can tailor the processes and associated
tool sets offered in this handbook to the needs of their organization and situa-
tion. After selecting one of the seven processes that fit your desired innovation
outcome, follow the detailed process maps provided in the applicable chapter to
achieve a desired outcome. Worthy of note, the processes and example scenarios
in each chapter cover the common types of innovation projects. Our approach is
to innovate incrementally rather than to rely on discovery or chance.
Innovation will continue to evolve in organizations and new tools, better
facilitation, and more controls will emerge to maintain and strengthen existing
innovation processes and methodologies. Economic conditions will change and
the slide rule of time will continue to move, opening windows of innovation
opportunity and eventually closing others. New tools and processes will surface
and legacy approaches will be replaced. The human resource and organizational
culture will also evolve, adding to the number of unique innovation opportuni-
ties. We encourage you to use, adapt, and improve on the tools and techniques
offered in this handbook to achieve a positive innovation outcome and add value
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Preface ◾ xix
to your organization, customers, stakeholders, and shareholders. As we continu-

ally employ these tools in our own consulting practice, we remain committed
to evolve not only our methodology and tools, but also the innovation body of
knowledge. Finally, we hope you find value in our book and encourage those
interested in innovation to use these processes and tools with an eye on continu-
ously improving and modifying them for universal application and adoption. We
also enjoy feedback, so please share your experiences and outcomes (good or
bad). We are always willing to help and invite you to follow our progress at our
web site, www.ipsinnovate.com.
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Authors
Greg McLaughlin is a managing partner at

Innovation Processes and Solutions (IPS), LLC. Greg
brings a broad set of technical and practical expertise
in quality improvement, innovation, and data analy-
sis. Beginning as an analyst, he progressed quickly
to the director of research at a Fortune 200 company.
Refining his skills in continuous quality improvement,
he worked for Dr. W. Edwards Deming as an instruc-
tor/consultant. Greg authored a book for research
and development in organizations (Total Quality in
Research and Development, 1995) committed to qual-
ity improvement. He was an early adopter of Six
Sigma and worked for many years as a Six Sigma
Senior Master Black Belt, saving organizations over $300 million. Many projects
resulted in innovative products and services. His most accomplished skill is in
interpreting data, finding a practical application. He can look beyond the num-
bers to find a solution to complex problems. His skill set organically transitioned
into developing innovation strategies, deployment, and sustained success as
evidenced by the creation of the ENOVALE™ and N2OVATETM methodologies.
He maintains a leadership role in developing training, tools, books, and publica-
tions for both practitioners and scholars. His latest publications are Chance or
Choice: Unlocking Innovation Success (2013); and Enovale: Unlocking Innovation
Project Success (October 2013); Leading Latino Talent to Champion Innovation
(2014); Unlocking Sustained Innovation Success in Healthcare (2014); A Guide
to Innovation Processes and Solutions in Government (2015); Innovation Project
Management Handbook (2015); Innovation Processes and Solutions for Innovation
Project Success: A Workbook (2015); and Dubai: The Epicenter of Modern
Innovation (2016).
His educational achievements include a doctorate in business administration
(DBA) from Nova Southeastern University, a master of science degree in statis-
tics from the Florida State University, and an undergraduate degree in meteorol-
ogy from the Florida State University. Greg was the director of doctoral research
at Nova Southeastern University and was instrumental in creating an innovative
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xxii ◾ Authors
dissertation process for the DBA degree at Capella University. Since its creation,
the DBA program is the largest and most profitable doctoral program in Capella
University history.
William R. “Buzz” Kennedy is currently an inde-

pendent consultant and primary managing partner
at IPS Consulting. He is an internationally renowned
award-winning organizational leader and author with
over 30 years’ experience in the public and private
sector. Buzz has an extensive background in leader-
ship and management with a proven track record of
success leading world-class business strategy develop-
ment, organizational culture, and change management
efforts across multiple industries. He is considered a
subject matter expert in executive and organizational leadership, government and
aerospace program and project management, information technology and aircraft
platform management, acquisition, and international procurement. He has led
several pioneering strategy and innovation development initiatives in the aircraft,
manufacturing and production, and maintenance management disciplines (using
Six Sigma, Agile, Lean manufacturing, and Lean supply chain management meth-
odologies) and has designed, developed, and published a series of research stud-
ies, reliability-centered maintenance, professional sales, and business development
training courses and programs. His latest publications are A Guide to Innovation
Processes and Solutions for Government (2015), Innovation Project Management
Handbook (2015), and Dubai: The Epicenter of Modern Innovation (2016).
A highly decorated United States Air Force combat veteran with a global
perspective, he has lived abroad for over 20 years garnering firsthand interna-
tional business experience across Asia, the Middle East, and Europe. This diverse
experience coupled with his natural ability in developing tailored innovative
solutions to difficult situations. In tandem with his exceptional communications
and human relations skills, his lengthy history of establishing high-performance,
result-oriented teams have led multiple organizations to achieve world-class per-
formance. His educational achievements include a doctorate in business admin-
istration (DBA) from Capella University, a masters degree in secondary education
from Grand Canyon University, and a bachelors degree in business management
from the University of Maryland.
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Chapter 1
Using the Handbook
Introduction
This book, or more appropriately handbook, is a complete revision of the book,
ENOVALE™: How to Unlock Sustained Innovation Project Success (McLaughlin and
Caraballo, 2013a). This book revises the original process including new tools and
a distinctly improved, better-defined process for successful innovation opportu-
nity projects. This does not negate the original material rather “evolving” it to a
better and more adaptive state.
Designed as a handbook, this book provides a systematic and validated
approach for conducting innovation projects. The intention is not to teach inno-
vation per se, but to provide a detailed approach and process for creating innova-
tive products, service, or technologies. In any case, effectively capitalizing on the
innovation opportunity requires a disciplined project management approach if
that innovation is to reach and deliver value to the consumers. In this handbook,
we present seven unique, process-derived approaches (we will explain how we
achieved this number) for the innovation team and organizational leadership to
consider, each of which has a very different objective.
Unlike other techniques that have a common purpose, for instance: audits
(for compliance), quality (to reduce defects), or accounting (for debits/credits); the
innovation opportunity processes offered in this discussion are agile but predic-
tive and disciplined in approach. The business or organization can accomplish
multiple objectives by innovating, depending on the type of innovation desired.
Improvement is one objective, discovery another, and competitive advantage a
typical third goal or objective. Given that innovation can accomplish multiple
objectives, it is easy to comprehend the outcome of following just one imple-
mentation method for every innovation opportunity can greatly diminish the
chance of success. If the leadership of an organization needs an agile or flexible
approach to innovation then following one method seems unrealistic and waste-
ful. That is not to say that a single methodology or approach can accomplish
great success, as it is certainly possible. However, the caveat to the last statement
1
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2 ◾ Innovation Project Management Handbook
is we feel there is not a single “catch all” method sufficient to achieve an organi-
zation’s complete complement of desired innovation objectives.
The handbook begins (Chapter 1) with an innovation primer, for those who
need a refresher on innovation. Next, we discuss how we evolved the original
model (ENOVALE) to N2OVATE™. Chapter 2 provides an overview on how to
select a project for each type of innovation opportunity. Chapters 3 through 9
describe in greater detail an appropriate implementation process depending upon
the identified innovation type (described in this chapter).
Innovation Primer
Introduction
For many, innovation remains a misunderstood or poorly understood concept.
Innovation as a concept conjures up a litany of personal experiences that frame
each individual’s understanding of innovation. Many people consider only discov-
eries and inventions as pure innovations, while others see innovation through a
different lens. Of the 60+ accepted definitions of innovation, there appears to be
no one definition that captures the essence of what innovation means. Therefore,
we encourage every reader of this discussion to try this simple exercise to help
them gain better insight on their personal understanding and perspective of what
innovation is.
1. What do the differences say about and to the group?

2. Are there similarities—what does this indicate?
3. Is it possible to develop (agree) on a single definition?
EXERCISE 1.1
Gather a group of people within your organization into a room. This may
be a diverse or specialized group. Ask them to write down their own defini-
tion of innovation. Keep the definitions in the context of the individual (i.e.,
what does innovation mean to me?). Provide the group 10 minutes to think
about the proposition and then another 10 minutes to capture their thoughts
in writing. Allow each individual to read their definitions aloud, capturing the
key words on a flip chart or white board. This exercise works well electroni-
cally as well so it can also be useful with geographically separated innova-
tion teams. As a group, examine the key words with an eye on defining the
intended meaning of each term or word—the deeper meaning of the defini-
tions. Use the following questions to synchronize the team’s understanding:
Our experience tells us that it will be difficult to agree on a single definition

of innovation that captures everyone’s input but this is a normal and expected
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Using the Handbook ◾ 3
result of this exercise. It is natural to find that some participants will try to con-
vince others that their definition or their understanding (recognition) of innova-
tion is the most appropriate (again, a normal response to this exercise). Herein lies
the Holy Grail when it comes to arriving at a common agreement on a definitive
understanding and judgment of innovation. How do you convince others (such as
customers, employees, stakeholders, etc.) that your product, technology, or service
is truly innovative, if everyone recognizes innovation differently?
It is prudent to acknowledge at this juncture that innovation, as a concept,
has many different definitions, each with its own meaning. The Merriam-Webster
Dictionary defines innovation in terms of the words “new” or “novel.” The more
compelling question is whether an innovation can be something more than
something new or novel.
Baregheh, Rowley, and Sambrook, (2009) reported 60 individual defi-

nitions of the word “innovation.” Obviously, innovation means many
things to different people. Some see innovation as a novel idea, a
new and unique product, or new technology. Innovation occurs when
humans employ a creative process to meet a particular need; innovation
begins at a very human level. You could even call this the “organic”
level. Therefore, a correct definition should include how individu-
als view and judge innovation. Humans address a need and how that
need becomes a reality is the process of Innovation (McLaughlin and
Caraballo, 2013b, p. 8).
Therefore, the essence of the term “innovation” requires a broader definition;

one that transcends (defines) what the innovation opportunity will accomplish.
Baregheh et al. (2009) decided to examine the “means of innovation” (p. 1334),
to understand how innovation “transforms ideas into new, improved or changed”
(p. 1334) outcomes, and how this impacts products, services, or people. The
resulting definition would not restrict innovations to only “new” outcomes but
includes innovation opportunities that improve or change products, services, and
technology. We support the notion that focusing on innovation outcomes facili-
tates a better definition of how innovation opportunities can transform products,
services, processes, and technology. Subsequently, this frame of reference will
better serve to clarify how individuals perceive (understand) innovation oppor-
tunities. At the fundamental level, we use our knowledge and experience of a
product, service, or technology (which we refer to as an “item”) and its perfor-
mance to judge whether it is innovative.
The three main descriptors are new, improved, and change that
describes how the product, technology, or service is transformed. In
other words, how the product, service, or technology is “transformed”
into something we define as innovative, as it better meets (satisfies) our
needs. There is a distinctive and different strategy for each of the three
descriptors. When customers or users experience a product, service or
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technology that exceeds their expectations, it is innovative (McLaughlin

and Caraballo, 2013b, p. 9).
Although ideas can initiate innovation, it must be in tandem with a need. This
is why we continually question the process of collecting only ideas from employ-
ees for future innovation opportunities. There is a possibility of finding a “gem”
of an innovation opportunity (over the long haul the odds are about 10%) but that
leaves a 90% chance of finding nothing worthwhile (Dahl et al., 2011). Selecting
and pursuing innovation opportunities becomes a numbers game—creating a large
number of ideas and then following a disciplined process of identifying the “win-
ner” that we expect will add value to the shareholder, stakeholder, and/or cus-
tomer. While we welcome ideas, innovation typically begins when a need persists.
For those organizations with an innovation opportunity or “idea” entry process, we
suggest that the process be modified to capture both the need and the idea. If the
need is not compelling or possible, the idea is shelved, cataloged, or forgotten until
such time both the idea and need (often referred to as a “requirement”) align.
Innovation is both real and imagined. Innovation can begin with an idea that
leads to a discovery, invention, or breakthrough product, service, or process. As
a concept, innovation involves both tangible and intangible elements. The tan-
gible elements are simple to define as they fall in the categories of new features,
improved performance, and a substitute for an existing item. Innovation offers an
intangible perspective as well which manifests itself in feelings of satisfaction and
general perceptions. Innovation also consists of both experience and knowledge.
However, we all experience innovation from a different perspective, so we tend
to know innovation when we experience it (McLaughlin and Kennedy, 2015).
This underlies the message that innovation opportunities begin and end
with an individual—a topic found in all the books in our series on innovation.
Without humans, innovation would exist only at some base level. People create
the idea (innovation opportunity), based on a specific unsatisfied need. This phi-
losophy guides us throughout the book. If you, the reader, have read any of our
books, you can easily skip this chapter. For those unfamiliar with our philosophy,
this chapter should orient you well to our philosophy and unique methodologies.
Defining the “Means” of Innovation

The process of transformation is what a producer, manufacturer, or designer seeks
to achieve and the user (customer) then judges as either innovative or not. Given
that the innovation opportunity can manifest itself in many forms, the “means” of
innovation describes how it differentiates itself from the product, service, or tech-
nology it replaces. We used available research (Zhuang, 1995; Zhuang et al., 1999;
Baragreh et al., 2009; Caraballo and McLaughlin, 2012) to decide on three trans-
formations (“means”) that can occur as new, improved, and changed. Innovation
can be “new” (unique) or improved (better than its predecessor) or changed
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(replaced). Think of these as three distinctive transformations of accomplishing

the same goal, innovation. For example, consider that stocks, bonds, or commodi-
ties are methods (means) to invest money. All accomplish the same intended goal
and are classified by the type or category of investment. Each investment type
requires a unique (and often unrelated) strategy, even though the end goal is the
same. Innovation opportunities follow the same pattern satisfying new or existing
needs by offering something better than its predecessor offered.
There are three means (or ways of) innovating. We often refer to these
“means” as themes or (descriptors):
Theme 1: New (something new, novel, or unique)—normally we think of an

invention or discovery.
Theme 2: Improvement (improving the performance)—this relates to products,
processes, or services. Performance measures the amount of value added
or improvement. For those products, processes, or services that are under-
performing or those where increasing performance would yield additional
competitive advantage.
Theme 3: Change (replacing what currently exists with something d
ifferent)—this
greatly affects people both physically and emotionally. Innovative change is
positive change benefitting the individual and the organization (McLaughlin,
2012).
An innovation opportunity reveals itself in the performance delivered. “New”

items have innovation characteristics that provide an enhancement or add value
to an existing item. Thus, improved innovation increases the performance or
value of an existing item; and change replaces the existing item with an item that
has additional or better characteristics than its predecessor.
Individuals are the best judge of whether something is innovative or not.
Where we differ from most authors, scholars, and/or researchers, is that innova-
tion is more than a new product, service, or technology. It is a means to satisfy
a need (or requirement) with something better than what presently exists. Each
innovation opportunity type is distinctive, yet interrelated, as all innovation types
need the individual to initiate the innovation. What is markedly different is how
the individual perceives the innovation opportunity.
Innovation Comprehension Survey

To determine how an individual perceives innovation, have prospective innova-
tion team members complete a simple set of nine questions (Table 1.1). Have
each team member check the response in Table 1.1 that best agrees with the
statements that best define how each individual team member understands inno-
vation. The definitions relate to how innovation transforms a product, service, or
technology. The objective of the survey is to identify which of the three classifi-
cations best describes how each individual perceives innovation.
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Table 1.1 Innovation Comprehension Survey
Instructions: Check the Box That Best
Statement Matches Your Understanding of How Poorly Marginally Well My
Number Innovation Is Defined by Each Statement Undefined Defined Defined Defined Defined Choice
1 A new discovery 1 2 3 4 5
2 New or novel (unique) products and services 1 2 3 4 5
3 Making something better 1 2 3 4 5
4 Replacing what does not seem to work 1 2 3 4 5
5 Improving products and services over time 1 2 3 4 5
6 Improving something to make it better 1 2 3 4 5
7 Changing what does not work 1 2 3 4 5

8 A new invention or patent 1 2 3 4 5
9 Improving on something that already exists 1 2 3 4 5
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10 Changing for the better 1 2 3 4 5
Totals Scores New #DIV/0! Improved #DIV/0! Change #DIV/0!
Totals Scores New 0 Improved 0 Change 0
Interpretation
Enter a number in the “My Choice” column that represents your perception. Use the following formula to construct an average
and range value.
New: Average: (Statements 1 + 2 + 8)/3; Range = Max–Min
Improve: Average (Statements 3 + 5 + 6 + 9)/4; Range = Max–Min
Change: Average (Statements 4 + 7 + 10)/3; Range = Max–Min
The largest average value (with a range less than 1.5), indicates the innovation type the individual. Large ranges indicate
inconsistency.
The three dimensions (concepts) are:
◾◾ New types of innovation: Statements 1, 2, 8

◾◾ Improved innovation: Statements 3, 5, 6, 9
◾◾ Change innovation: Statements 4, 7, 10
Calculate the average and range for each concept. The larger the average, the
more that person will perceive (and purchase) that type of innovation. Large range
differences indicate inconsistent or changing perceptions. Although an individual
may favor one type, there is ample evidence that some individuals (approximately
20%) understand different types of innovation and can respond favorably to all types.
Scoring
Assign a numerical score to each response—1: strongly disagree; 2: disagree; 3:
neither disagree nor agree; 4: agree; or 5: strongly agree. Calculate an average
and range of the following descriptions:
New average: (statements 1 + 2 + 8)/3; range = Max–Min

Improve average: (statements 3 + 5 + 6 + 9)/4; range = Max–Min
Change average: (statements 4 + 7 + 10)/3; range = Max–Min
Interpretation
Whichever of the three components of the innovation comprehension score,
the highest average is the preferred method of recognizing innovation. In other
words, you are looking for a range value that is less than 1.5. A higher range
value indicates mixed feelings or opinions. Responses from this small survey are
not conclusive but will provide an initial understanding of what the respondent
perceives (understands) about innovation. Low average scores suggest little or
no interest in innovation. Individuals with like scores (those that share similar
sentiments regarding innovation) will work best on an innovation team. Excel
Spreadsheet available from Innovation Process and Solutions, LLC by request.
EXERCISE 1.2: INNOVATION COMPREHENSION SURVEY

Conduct a survey with a minimum of 20 people to determine their innovation
comprehension score. Calculate the scores and interpret the data. What does
the diversity of responses say about people’s perception of innovation?
Transformation can take many forms. It could be a very new technology, a vastly
improved product, or a significant change to personnel. The process of trans-
forming an outcome is required for an understanding of its requirements (both
functional and user), the objective it will accomplish, and what the item will
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become. It is not enough to “make something better,” it often requires the prod-
uct, technology, process, or service meets more than existing needs. Customers
typically respond (by purchasing) when producers satisfy their needs.
The Evolution of ENOVALE

As with aspects of innovation, even the basic process must evolve as learn-
ing and experiences increase. This is true with the innovation process called
ENOVALE, which was introduced in the book titled, Chance or Choice: Unlocking
Sustained Innovation Success (McLaughlin and Caraballo, 2013b). ENOVALE is
the first letter of a seven-step process.
1. E— Envision the need

2. N— Nominate the best people
3. O— Objectify
4. V— Validate
5. A— Align
6. L— Link to performance
7. E— Execute
These seven steps (Figure 1.1) help identify if an innovation opportunity

project is capable of producing sustained innovation success.
The evolution from the ENOVALE flowchart to the N2OVATE™ flowchart
(Figure 1.1) represents a strategic and phenomenal leap in innovation knowledge
and experience. Clients require detail that is more specific and this handbook
provides that level of detail. Previously, there were seven steps for each type of
innovation (new, improved, and changed). For innovation opportunity projects
classified as “new,” there are three distinctive characteristics (outcomes):
1. Products, services, or technology that are unique (truly a new item)

2. Products, services, or technology that are a new application (new uses)
3. Products, services, or technology that take a new approach (new markets,
reformulation)
For example, there are three steps for all “new” types of innovations, which
include the three distinctive outcomes (new/unique, new application/use, and
new approach). Except for some modifications, each of the three outcomes
employs the same process. Upon further analysis, each innovation type truly
requires its own specific process. It is simpler to keep each new type of innova-
tion opportunity distinctly separate. Three chapters of this book are dedicated to
new types of innovation opportunity outcomes.
For improvement, we developed two processes (sharing some common steps).
Improvement is either associated with increasing performance (which exceeds
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Needs and
idea analysis
Nominate and Adapt and

normalize align
Tabulate and
Objectives
track
operationalize
performance
Verify and Evaluate and

validate execute
Figure 1.1 ENOVALE process.
performance standards to meet expectations) or bringing performance back in-line

to meet its original set of expectations. Finally, the change innovation opportunity
type recognizes that replacement is a viable option. Each of the seven processes
build on the N2OVATE™ methodology platform. We expect and encourage our
clients to develop their own proprietary processes, as not every substep within the
N2OVATE™ methodology may apply to their particular industry, business, or orga-
nizational culture. We maintain that our methodology will foster a change in mind-
set that will ultimately lead to the creation of an innovation-supportive culture.
Innovation is not just about meeting or exceeding needs, it is also about meet-
ing or exceeding performance standards and expectations. At times, we will find
that people will identify innovation which is purely “performance-driven” as the
objective is to meet all critical needs. We also know that individuals identify with
improvement when needs are met in a realistic timeframe. It is best to under-
stand that people perceive something as innovative because it exceeds the per-
formance of something with which they have firsthand experience or knowledge
about. Again, for the businessperson, it is not important to try to make everyone
recognize that what you offer or sell is innovative. What is more important is to
understand that the organization should be addressing what a customer or user
needs, and how the product, service, or technology that they produce can deliver
value and better performance.
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In the next chapter, we will review the process of selecting a project using
the N2OVATE™ methodology. The tools used reflect our philosophy that innova-
tion emanates from the individual. Selecting an innovation opportunity project
involves more than process tools, it requires an adequate assessment of needs,
wants, and desires of the customer and user. Combined with the process and
tools is the need for evaluation and assessment. It is critical to know your busi-
ness, core competencies (what you are good at), available resources, and orga-
nization’s strategic objectives that support your business strategy and plan.
Therefore, screening of the innovation opportunity projects before implementa-
tion is tantamount. Innovation projects that fail the screening process will not
produce benefit or sustained success. The N2OVATE™ processes provide a level
of screening excellence that justifies its use. Once an innovation opportunity
project has passed the screening criteria, a 30%–50% reduction of implementa-
tion time is a distinct possibility that reduces risk, waste, and resource allocation
requirements.
Chapter 2 describes the project selection process prior to implementing an
innovation opportunity project. Chapter 3 introduces our innovation opportu-
nity profile (IOP) template used to collect relevant information necessary for
providing timely and actionable empirically based data to the organization’s key
decision makers for innovation project selection and approval. In Chapters 4
through 9, we provide discussion and examples for seven complete implemen-
tation processes for each of the seven types of innovation, based on a desired
outcome.
Summary
Innovation begins and ends with the individual. Needs drive innovation; and a
growing population will require additional needs, thereby requiring more innova-
tion. Of course, meeting all needs is impossible. Innovation brings about oppor-
tunity to businesses and organizations. Those who meet needs (those of today
and in the future) with innovation will have sustained success and competitive
advantage. Those who innovate infrequently will achieve some success, but they
remain at the mercy of their competition. The path is open to those who inno-
vate and those who do not. Innovators will continue to add value to society and
reap the benefits of their labors.
References
Baregheh, A., Rowley, J., and Sambrook, S. 2009. Towards a multidisciplinary definition
of innovation. Management Decision, 47(8), 1323–1339.
Caraballo, E. and McLaughlin, G. 2012. Perceptions of innovation: A multi-dimensional
construct. Journal of Business & Economics Research, 10(10), 1–16.
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Dahl, A., Lawrence, J., and Pierce, J. 2011. Building an innovation community.
Research—Technology Management, September–October, 19–27.
McLaughlin, G. and Caraballo, E. 2013a. ENOVALE: How to Unlock Sustained Innovation
Project Success. Productivity Press, Boca Raton, FL.
McLaughlin, G. and Caraballo, E. 2013b. Chance or Choice: Unlocking Innovation
Process. Productivity Press, Boca Raton, FL. ISBN: 9781466581869.
McLaughlin, G. and Kennedy, W.R. 2015. A Guide to Innovation Processes and Solutions
for Government. Productivity Press, Boca Raton, FL. ISBN: 978-1-4987-2157-8.
Zhuang, L. 1995. Bridging the Gap Between Technology and Business Strategy: A Pilot
Study on the Innovation Process. Management Decision, 33(8), 13–19.
Zhuang, L., Williamson, D., and Carter, M. 1999. Innovate or liquidate—Are all organi-
zations convinced? A two-phased study into the innovation process. Management
Decisions, 37(1), 57–71. doi: 10.1108/00251749910252030.
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Chapter 2
Selecting an Innovation Project
Introduction
There has been little uniformity in how to select an idea or need for a possible
innovation project or opportunity. Some organizational leaders and decision mak-
ers repeatedly rely and seek the suggestions on innovation opportunities from
their research and design (R&D) or engineering departments, while others rely
on their marketing department, and others remain wedded or enamored with
their own personal knowledge and experience as a method of choosing an inno-
vation project or opportunity. This process incorporates the best of intentions,
but it is often hit or miss, very random, and wide open to chance and a nega-
tive outcome. Choosing an innovation opportunity project first requires a true
understanding of the need, and balancing that need with the company’s core
competency requirements, validating its strategic objectives, and considering its
assumptions and limitations.
The N2OVATE™ methodology and baseline process provide the template from
which to judge innovation project and opportunity success. N2OVATE™ acronym
stands for:
Step 1. N: Needs and new ideas

Step 2. N: Normalize and nominate
Step 3. O: Objectives and operationalize
Step 4. V: Verify and validate
Step 5. A: Adapt and align
Step 6. T: Tabulate and track performance
Step 7. E: Evaluate and execute
In order to help the reader to better understand this methodology, we offer a

hypothetical case study as an example using all seven steps in the N2OVATE™
methodology. The case study will follow an innovation project or opportunity
from idea generation to acceptance or rejection. This initial phase develops and
13
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validates an innovation opportunity project that can produce true value (profit)
and performance improvements. A discussion of the actual implementation phase
and the associated steps begins in Chapter 3. However, the first step in any inno-
vation opportunity is ensuring you have a clear and concise understanding of the
needs or requirements that are driving the innovation opportunity.
Step 1: Needs and New Ideas

The first step begins with identifying and focusing on the needs that drive the
innovation opportunity. Figure 2.1 details the subprocesses associated in iden-
tifying and characterizing the need assessment. To help illustrate this selection
process, we will use the case study described in the next paragraph.
The case study begins with a need and at least one objective that has quantifi-
able value. Assume the need is critical but unsatisfied. For this example, the need
is for a more effective (efficient) aircraft parts procurement system to replace an
existing legacy system initialized in the early 2000s.
Identify
Scarcity of needs and
resources values
Focus
the Ideas
need
Formalize
Internal External
the
sources sources
needs/values
Assign
priority
to the
needs No
Do the
Establish needs meet
objectives the
objectives?
Yes
Move to part 2
Figure 2.1 Needs assessment (Part 1)—step 1.
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Selecting an Innovation Project ◾ 15
The logistics and life cycle management requirements are for the associated
hardware and software specifically for the Boeing 737 aircraft platform. The 737,
which first hit the drawing boards of Boeing engineers in 1964, did not reach full
production and the commercial airline industry (passenger and cargo transporta-
tion) service until 1968. For this scenario, we have excluded airborne avionics
instrumentation, navigational and meteorological aides, and crew and passenger
communication systems. Thus, the parts associated with this case study are not
high risk and limited to those material items used for general maintenance and
sustainment of Federal Aviation Authority (FAA) airworthiness requirements and
standards. Key performance objectives for this scenario are that the platform
replacement parts:
1. Arrive on time
2. Meet FAA airworthiness standards
3. Meet form, function, and fit standards
4. Meet planned and programmed sustainability costs
The objectives are the innovation success measures, which meet the require-
ments of the Needs Assessment—Part 1.
Part 2 (Figure 2.2) provides the process step to evaluate the identified needs.
For the case study scenario, data analysis has shown that simple high-wear parts
replaced during the recurring safety and quality checks required every 500-flight
hours of service reduce the percentage of overall unscheduled maintenance
activities. Historical evidence provides that unscheduled maintenance activities
reduce platform availability and utilization rates. Parts often take a lead time of
60–90 days to acquire from supply chain sources. Based on the part order lead
time, this requires additional inventory be stored at forward supply points, which
are often at a sunk cost and added expense for storage and acquisition. Coupled
with high-failure-rate parts, the cost of maintaining acceptable availability and
utilization rates complicates the sustainability picture. In sum, the need exists for
a more agile, responsive, efficient, and effective procurement/inventory manage-
ment system.
Needs must meet three criteria—viability, capability, and sustainability.
Viability refers to usability of the item, capability refers to the meeting of objec-
tives consistently, and sustainability refers to the overall life cycle management
of the item (McLaughlin and Kennedy, 2015). For this particular procure-
ment management system case study example, the three criteria (needs) are
defined as:
◾◾ Viability: Changes would improve performance and reliability

◾◾ Capability: System must be cost effective and function within stated
parameters
◾◾ Sustainability: Procurement system must be valid and timely, and add more
value than the previous process (McLaughlin and Kennedy, 2015)
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Identify innovation type
New Improve Change
Viability:
Viability: Viability: ongoing
distinguished adaptation failure
reproducible problem- status-quo
solving challenges
Capability:
Capability: Capability: efficiency
outperform robustness effectiveness
reliable minimal instability
costs
Sustainability: Sustainability: Sustainability:

long life-cycle system-wide value
safety/legal root cause timely
environmental analysis
Refine the yes

Further
need with Criteria no Move to
refine the
innovation- met? step 2
need
type criteria
Figure 2.2 Needs assessment (Part 2)—step 1.
The process begins by identifying those characteristics that define viability,

capability, and sustainability. Start by rating the characteristics on a numerical
scale from 1 to 5 (with 1 being the weakest rating and 5 the strongest). Table 2.1
uses the aircraft procurement example discussed previously.
If the identified criteria are acceptable and meet the overall objective(s), the
project can proceed to the next step.
Table 2.1 Needs Analysis and Rating Tool

Measures of Measures of Measures of
Viability Rating Capability Rating Sustainability Rating
Wear 3 Meets specs 5 Record accuracy 5
Replacement 4 Access time 4 Order time 5
Amount of turns 2 Robustness 5 Delivery time 4
Processing time 4 Flexibility 4 Wait times 5
Minimize costs 4
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EXERCISE 2.1: NEEDS ASSESSMENT RATING TOOL

For a potential innovation project or opportunity, complete a needs assess-
ment and rating tool. What do the ratings suggest about the needs? For multiple
needs, how does the project selection team ensure that all needs (sometimes
called requirements) are satisfied?
Step 2: Normalize and Nominate

Step 2 involves selecting the right individuals for the project or opportunity by
examining their perceptions of the work environment (Figure 2.3).
Work Environment Survey

Presented in Table 2.2 is a work environment survey. For the innovation project or
opportunity your innovation team has selected, have each innovation team candi-
date complete the survey by checking the box that best matches their perception, in
Distribute and
analyze
assessments
Work
Innovation Values
environment
Scoring and Scoring and Scoring and

interpretation interpretation interpretation
Normalize
scores
Select
Select
team
individuals
leaders
Assemble Move to
team step 3
Figure 2.3 Normalize and nominate—step 2.
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Table 2.2 Work Environment Survey
Instructions: Select the Number That Best Describes Neither
Statement How Much You Agree with Each Statement and Strongly Disagree Strongly My
Number Recording That Number in the “My Choice” Column Disagree Disagree nor Agree Agree Agree Choice
1 The work environment supports creativity 1 2 3 4 5
2 I have confidence in my own abilities to solve problems 1 2 3 4 5
3 My workplace provides me with challenges 1 2 3 4 5
4 The workplace enables me to be creative 1 2 3 4 5
5 The work environment is open to new ideas 1 2 3 4 5
6 There is a sense of cooperation among employees 1 2 3 4 5
7 Management rewards improvements 1 2 3 4 5

8 Work demands are not overburdening 1 2 3 4 5
9 My workplace encourages change 1 2 3 4 5
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10 Trust is valued in my workplace 1 2 3 4 5
Total Average scores DIM 1 #DIV/0! DIM 2 #DIV/0! DIM 3 #DIV/0!
Total Range scores DIM 1 0 DIM 2 0 DIM 3 0
Calculation
Category 1 score = Confidence, challenges, and trust − statements (2 + 3 + 6 + 10)/4; Range = Max–Min
Category 2 score = Creativity − statements (l + 4 + 5)/3; Range = Max–Min
Category 3 score = Perception of work environment − statements (7 + 8 + 9)/3; Range = Max–Min
Interpretation
Choose the component (item) with the largest average score. The higher the score the more the individual values a particular “value” of
innovation. Large ranges (greater than 1.5) indicate inconsistency and therefore reduces reliance on a particular value.
terms of agreeing or disagreeing with the statement as it relates to the work envi-
ronment. Transform the response into a numerical rating (1—Strongly Disagree, 2—
Disagree, 3—Neither Disagree nor Agree, 4—Agree, 5—Strongly Agree).
Scoring
Concept Structure Statements
Concept 1: Confidence, challenge, and trust 2, 3, 6, 10
Concept 2: Creativity 1, 4, 5
Concept 3: Working conditions 7, 8, 9
Calculate the average scores for concepts 1 through 3 for each individual and
then calculate the range. Highest averages indicate greatest amount of agreement
to the concept. We also recommend the innovation team pursue additional and
more sophisticated analysis of this data, if possible, especially if trying to com-
pare groups and build the correct team composition.
EXERCISE 2.2: WORK ENVIRONMENT SURVEY

Distribute the work environment survey. Choose 20–30 individuals randomly.
Calculate the averages and ranges for each concept. Compare the 20 pairs.
With what concept do most individuals align? Look for differences in gender,
age groups, and position.
The values survey (Table 2.3) is scored in a similar way, except that there is
only one concept. Therefore, calculate an average and range for all questions.
The larger the average, the stronger the set of values demonstrated.
Values Survey
The time has come to assemble the innovation project selection team, name the
team leader(s), and assign responsibilities (operating within the available resource
constraints). Once team members identify with a particular innovation type
(Chapter 1; or combination of types), they are selected based on their perception
of innovation to best achieve the innovation project or opportunity objective.
Individuals (team members) who score the highest on the “improve” dimension
(based on the case study) would be considered your primary candidates. By
choosing candidates with similar perceptions, the team leader encourages par-
ticipation and productivity, focusing energies on improvement and the project or
opportunity objective(s). Adding team members occurs when a particular experi-
ence or knowledge set is missing. Use those not aligned with the “improvement”
philosophy as resource members or subject matter experts at the appropriate
time and place in the innovation opportunity project.
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Table 2.3 Values Survey
Instructions: Check the Box That Best
Statement Matches Your Understanding of How Poorly Marginally Well My
Number Innovation Is Defined by Each Statement Undefined Defined Defined Defined Defined Choice
1 A new discovery 1 2 3 4 5
2 New or novel (unique) products and services 1 2 3 4 5
3 Making something better 1 2 3 4 5
4 Replacing what does not seem to work 1 2 3 4 5
5 Improving products and services over time 1 2 3 4 5
6 Improving something to make it better 1 2 3 4 5
7 Changing what does not work 1 2 3 4 5

8 A new invention or patent 1 2 3 4 5
9 Improving on something that already exists 1 2 3 4 5
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10 Changing for the better 1 2 3 4 5
Totals Scores New #DIV/0! Improved #DIV/0! Change #DIV/0!
Totals Scores New 0 Improved 0 Change 0
Interpretation
Enter a number in the “My Choice” column that represents your perception. Use the following formula to construct an average
and range value.
New: Average: (Statements 1 + 2 + 8)/3; Range = Max–Min
Improve: Average (Statements 3 + 5 + 6 + 9)/4; Range = Max–Min
Change: Average (Statements 4 + 7 + 10)/3; Range = Max–Min
The largest average value (with a range less than 1.5), indicates the innovation type the individual. Large ranges indicate inconsis-
tency and indecision.
For this case study scenario, choose a team size of five to seven individu-
als with emphasis on knowledge and experience in supply chain purchasing
and inventory systems management. Building a diverse team and workgroup is
critical, so consider adding personnel who can “think outside of the box” while
focused on your ultimate objective.
Step 3: Objectify
The third step (Figure 2.4) begins the process of defining the objective. What
will the project accomplish, what is expected, how long will it take? Defining an
objective comes only after the finalization of the needs and requirements. This
also assumes that organization’s management selects the best individuals rather
assembling a team of diverse employees. Important to note here, poor alignment
of team members derails many innovation efforts.
Finalize the
needs
and values
Select the
best
individual
Identify Goals and
an objective directives
Specific
Is the measurable
objective attainable
“SMART?” relevant
timely
Develop Formalize the

operational objective
definitions
Check Evaluate
Go to
compatibility with
part b
with needs requirements
Figure 2.4 Objectify—step 3.
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Identifying the objective is the next step. Most innovation projects and
opportunities have multiple objectives (values), focused on use, purpose, and
intent.
Specific, Measurable, Achievable, Relevant, and Time Objectives

To develop an objective, use the specific, measurable, achievable, relevant, and
time-based (SMART) criteria. For this example, there are three SMART objectives
for this scenario’s procurement process, based on a set of established values:
1. In-place and operational within 60 days

2. Cost effective (within budget)
3. Flexible and reliable
All of these descriptions (of the objective) require an operational definition.

An operational definition is one that describes the word and identifies param-
eters and measures. The term “cost effective” requires an operational definition.
For this scenario and innovation opportunity project, a cost-effective procure-
ment system (process) is one that is, at minimum, capable of operating within
budget and is at a cost of 10% less (maintenance, personnel, distribution, ware-
housing, etc.) than the current legacy system. That is, the total monthly (and
quarterly) costs are 10% less than the previous approach and version. Similar
definitions for flexibility and reliability must occur. A flexible procurement system
may be one that can accept parts with partial or missing part numbers, provide
some minor diagnostics, tag and identify problematic parts, etc. Reliability (con-
sistency, repeatability) of the replacement parts is a major quality issue and has
serious implications if the availability of parts is affected by catastrophic events
requiring unscheduled maintenance activities. Assessing these objectives requires
more than identifying their outputs. It also requires an assessment of intent.
Often, this is one of the first tasks of the team. For any objective, use the SMART
criteria: poor or inaccurate measures will have a major effect on project success.
EXERCISE 2.3: SMART OBJECTIVES

Create a set of SMART objectives for a potential innovation project or opportu-
nity within your organization. Indicate how each objective meets each of the
five SMART criteria. Comment on the results.
Finally, verify that the defined objectives are compatible with the need.
Obviously, the procurement system must be a dramatic improvement over the
existing process to satisfy the need. If not, then return to searching for the sys-
tem that meets the needs (or requirements) of the agency or organization.
The next step is to verify and validate the project (Figure 2.5).
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Evaluate with
requirements
Functional/ User
operational customer
requirements requirements
Operational
User/customer
requirements
requirements
dependent on
dependent on
innovation
innovation type
type
Identify
outcomes
Yes Are No
Outcome requirements Refine and
created met? evaluate
Move to
next step
Figure 2.5 Operationalize—step 3.
Detail of Process (Item) Requirements

Upon completing the objective, define the requirements (both functional and
user; Table 2.4). Here, the word “requirements” relates to the operational setting
and controls. At the innovation project or opportunity selection phase, these can
be high-level requirements.
As the project unfolds, develop a more definitive set of requirements. An
ongoing challenge is to understand the relationship between user and functional
requirements. Table 2.5 provides a mechanism for evaluating these relationships.
Strong or medium-sized relationships require full exploration (Table 2.5). A rela-
tionship exists when a functional and user characteristic change one another.
A change in a functional requirement could influence the user, and vice versa.
The strength of these relationships may directly influence the innovation project
or overall opportunity outcome.
For example, consider the aircraft parts procurement scenario case study (Table
2.5), where functional and user requirements are an issue. The team wants to
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Table 2.4 Detail of Process (Item) Requirements

User or Functional Requirements Established Parameters
Functional Integrated Interfaces with existing
systems and hardware
User Simple to operate Minimum training required
and navigate
Windows-driven
Accessible help screens
Functional Easy to track Parts tracked by purchase date
Functional Reliability indicator Tracks time between failures
Estimates failure rates
User Maintainable Internal IT personnel certified
evaluate how three success factors (associated with the objective—viability, capa-
bility, and sustainability) relate to these functional concerns. This matrix provides
a method of examining relationships from a basic and personal perspective.
Finally, the outcome (the objective matched with its requirements) is estab-
lished. If there is a mismatch, the potential innovation project or opportunity
becomes highly questionable. For the case study example, if the system is not
fully integrated, simple to use, and easily maintainable then the project may not
satisfy its objectives. If the team reaches an unsatisfactory conclusion, then the
project may require further refinement or be considered incompatible with stated
Table 2.5 Functional, User Relationship Matrix

Customer or User Characteristics
Functional Maintainable Navigate Ease of Use
Reliable S S S
Simple to track S M S
Interfaces M M S
History W W M
Detail S S N
Comprehensive S S S
Adaptable S M M
Auditable W W S
Accuracy S S M
Start up M S S
Note: Assign priorities: Strong relationship—”S”; Medium
relationship—”M”; Weak relationship—”W”; Negative
relationship—”N.”
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objectives. If the assumption is that the innovation project or opportunity meets

its objectives, the team can proceed to the next step.
EXERCISE 2.4: DETAIL OF PROCESS (ITEM) REQUIREMENTS

Consider a potential innovation project. Using Table 2.4, identify a list of cus-
tomer and functional requirements and then rate those requirements using
Table 2.5 as an example.
Step 4: Validate and Verify

Once the outcome is accepted, it is time to validate and verify. Making a rash
decision, based solely on an outcome may eliminate potential innovation projects
or opportunities while increasing risk and failure. It is best to enter into this step
with the mindset and goal of determining if the outcome is truly worth the overall
investment of time, resources, and effort. The beginning stages of this step require
an objective evaluation of major assumptions and limitations (Figures 2.6 and 2.7).
Evaluate
outcomes,
assumptions, and
limitations
Assumptions Limitations
innovation- innovation-
type type
dependent dependent
Refine
Evaluate and
Evaluate
re-evaluate
Is the Is the
assumption No No limitation
applicable? applicable?
Yes Yes
Impact of outcome Impact Success
score score
Verify
Figure 2.6 Validate—step 4.
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Success Detailed
evaluation: defined risk
in terms of evaluation
Outcomes
40% Estimate chance Estimate chance 60%

of failure of success
Reasons for failure

and consequences Final success 85%
probability
Success criteria No
Innovativeness Risk Gain
Value minimized? +25%
Efficiency Yes 15%
Effectiveness
Establish Re-evaluate chance
alternatives of failture
Assign risks
for use with
SREM tool
Go to step 5
Figure 2.7 Verify—step 4.
“A limitation is that which prevents, deters, or interferes with performance”

(McLaughlin and Caraballo, 2013a, p. 102). Limitations restrict performance and
therefore any innovation opportunity potential. A potential limitation for this
example is that the original system works but is based on legacy or antiquated
technology (circa year 2000). We offer that even the most robust supply chain
systems are subject to limitations and may encounter compatibility and system
integration delays.
Assumptions, at this stage, are essentially an intangible, based on available
information, perception, fact, and opinion. Future performance will validate all
assumptions (but not their impact or influence). The more assumptions an inno-
vation project or opportunity requires, the greater the need for viable alternatives,
given the higher risk of failure. Considering the case study scenario, a typical
assumption is the ease of which employees will learn a new process. We assume
a short training and acclimation period, but what if that assumption is flawed. If
the innovation team misses or incorrectly identifies critical assumptions, the delay
could be devastating and/or costly. The team needs to identify the assumptions
for evaluative purposes. It is imperative that the innovation team checks each
limitation and assumption for validity. In addition, limitations and assumptions
may vary over time as the process changes.
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Table 2.6 Evaluative Criteria for Assumptions/

Limitations
Determinants of Effect Measures of Importance
Strong Critical
Moderate Moderate importance
Weak Unimportant
Limitations restrict performance and therefore may act as a barrier to the inno-
vation project or opportunity. The innovation team will need to determine the
boundaries within which the item operates. Limitations also define future oppor-
tunities such as how a new technology or process can overcome the existing
limitation. It is best to know what you can and cannot do before implementing a
project.
Evaluative Criteria for Assumptions/Limitations

Check whether the assumption or limitation is viable and determine its overall
influence on the outcome. You can accomplish this by objectively evaluating all
assumptions and limitations. Evaluate each critical assumption and limitation
(team and management can decide which fits this criteria) (Table 2.6). Detail
how the assumptions or limitations are measured (or determined), even if it is an
opinion or perception. Evaluate the objective effect on the assumption or limita-
tion. Reach a final decision on its importance and document all positions across
your innovation team’s membership. By reviewing assumptions and limitations
(use Table 2.7) and applying evaluative criteria, the innovation team can reach
a level of consensus on the state of the outcome. Again, this is a time to decide
whether to move forward, revise, or scrap the potential project. It is simple to
demean or dismiss this step; but the information gained will far outweigh the
time invested.
Once you complete an evaluation of both assumptions and limitations, con-
sider the overall impact on the innovation outcome.
Table 2.7 Evaluation of Assumptions/Limitations

Effect on
Effect on Effect on Objective
Assumption/ How It Is 60-Day Cost Flexibility and Overall
Limitation Measured Timeline Effectiveness Reliability Importance
L—Older Date of Strong Strong Moderate Critical
technology inception
A—Ease of Perception/ Strong Strong Strong Critical
use mistakes
and failures
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EXERCISE 2.5: ASSUMPTIONS AND LIABILITIES

Consider the assumptions and limitations of a project. Compare at least one
limitation and one assumption to the SMART objectives developed in the pre-
vious exercise. Evaluate the impact, using the logic developed for Table 2.7.
Finally, begin the process of determining the overall impact of the innovation
outcome (Figure 2.7). Assessing the impact on the expected outcome requires an
estimation of the chance of success and the risk of failure. Success and failure
are not mutually exclusive—one aspect can succeed, another fail. This is why the
innovation team needs to maximize the chance of success.
Outcome Impact and Success Evaluation

Outcomes are a tangible statement of results which meet some (if not all) of the
stated objective(s). Suppose the team arrived at three outcomes, listed in Table 2.8.
In addition, the team evaluates the overall impact and success using a rating scale
of 1 (low) to 5 (high) (Table 2.8). The team can convert these numbers to a chart
(i.e., outcome impact and success evaluation) to identify the best possible choices
(Figure 2.8). Worthy of note, the size of the “bubble” is proportional to the ratings.
Score using the impact versus success evaluation table with the following
r ating scale:
1—Low or no impact; 1—Low chance of success
2—Minimal impact; 2—Small chance of success
3—Moderate impact; 3—Medium chance of success
4—High impact; 4—Good chance of success
5—Superior impact; 5—Excellent chance of success
EXERCISE 2.6: CREATE AN OUTCOME IMPACT

AND SUCCESS EVALUATION GRAPH
For each outcome, identify one or more unique impacts. How does that impact
affect overall success?
Continuing the validation stage requires further verification. Validating out-

comes require a detailed risk analysis and evaluation. Evaluating risk takes on a
Table 2.8 Impact versus Success Evaluation

Impact of Outcome Overall Impact Chance of Success
Customized solution 1 5
Off the shelf purchase 3 3
Upgrade of software/hardware 4 4
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Outcome impact and success evaluation

High impact
1
Low chance High chance
2
of success of success
Low impact
Figure 2.8 Outcome impact and success evaluation.
complexity that exceeds the purpose of this book. Yet, to evaluate an innovation
opportunity project, the innovation team must evaluate risk from a basic, if not,
more complex approach. Risk accumulates as the potential for failure (reduced
performance) increases. One excellent method is the use of failure modes and
effects analysis (FMEA), described in another book in this series, ENOVALE: How
to Unlock Sustained Innovation Project Success (McLaughlin and Caraballo, 2013b)?
Success, Risk Evaluation Matrix Analysis

Another, simpler approach is to assign a probability of success and failure, as
shown in Figure 2.9. Finally, an alternative approach is to create a success, risk
evaluation matrix (SREM) diagram (Table 2.9). Locate the particulars on this tech-
nique in our text—Chance or Choice: Unlocking Innovation Success (McLaughlin
and Caraballo, 2013a). Extract those successful outcomes from the impact success
evaluation and complete the SREM format.
The SREM quadrant analysis (Figure 2.9) exposes success measures (determi-
nants) to various and critical risks. The SREM quadrant analysis can evaluate mul-
tiple risks versus an outcome success to assist in deciding whether to continue
to pursue the project. Figure 2.10 details the preliminary results of the analysis
Table 2.9 Success, Risk Evaluation Matrix (SREM) Analysis

Success Risk Quadrants Number
Upgrade of software Incompatible technology—Low Strength 2
Customized solution Time to implement—High Weakness 4
Off the shelf software Cannot handle special or unusual Status-quo 3
situations—Moderate
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The evaluation model
High
success
Strengths Portals
Low High
risk risk
Status-
quo Weakness
Low
success
Figure 2.9 Success, risk evaluation matrix (SREM) quadrants analysis.
The evaluation model
High
success
2
4
Low High
risk risk
3
Low
success
Figure 2.10 Success, risk evaluation matrix (SREM) project analysis.
suggesting that the upgrade of software and hardware may be the best solution,
given the three unique objectives.
Step 5: Alignment
Upon accepting the outcome, the team examines the human impact of the pro-
posed project. Examining the human impact involves a determination of how well
the project aligns with the organizational (individual) goals and values. Alignment
begins with the ability to associate the innovation project or opportunity with
organizational values, culture, and scope (Figure 2.11). Overall, attaining value
for the organization and user is the ultimate prize. If the project can demonstrate
value and competitive advantage over time, it is a project worth pursuing.
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Align team
to
validated
outcome
Assess
project
values
survey
Score and
interpret
Assess
expectations
versus Realignment
perceptions
survey
No
Are
Score and Align
expectations
interpret project team
aligned?
Yes
Go to
step 6
Figure 2.11 Alignment and adaptation—step 5.
One efficient method to measure individual and organizational alignment is

through perceptual surveys, interviews, or focus groups. The expectations and
perceptions survey (Table 2.10) measures these concepts for overall alignment.
There are five pairs of data (1, 2), (3, 4), (5, 6), (7, 8), (9, 10) and five concepts:
project objectives, project performance, management contribution, team perfor-
mance, and project outcomes (Table 2.10). Respondents either agree or disagree
at varying levels with the paired statements provided in the survey tool. The des-
ignated responses are labeled as: 1 = Strongly Disagree, 2 = Disagree, 3 = Neither
Disagree nor Agree, 4 = Agree, or 5 = Strongly Agree. Subtract the even num-
bered statements from the odd numbered statements.
Expectations and Perceptions Survey

For example, select the project objective statements (statements 1 and 2,
from Table 2.10, Expectations and Perceptions Survey). If an individual scores
Statement 1 a “4” and Statement 2 a “2” then the score is “ −2,” if expectations
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Table 2.10 Expectations and Perceptions Survey

Instructions: Check the
Box That Best Matches Neither
Your Agreement Disagree
Statement (Disagreement) with Strongly nor Strongly
Number Each Statement Disagree Disagree Agree Agree Agree
1 I expect the project
outcome to remain the
same
2 The project team is
performing well
3 The project continues to
perform as expected
4 Individuals are committed
to the success of the
organization
5 I expect my support to
remain unchanged
through the project
6 Team members contribute
to the project’s
performance
7 I expect to contribute to
the project’s success
8 There have not been any
major changes to the
project outcome
9 The project team has
performed as expected
10 The project is successful
up to this point
greatly exceeded perceptions (reality). This indicates that the individual was
expecting more than what truly exists. This would signal an alignment prob-
lem. Negative values indicate that the individual’s reality does not coincide with
their overall expectations. Averaging the responses will only remove the natural
variation. Do examine the frequency of the scores. Aligned teams should score
between zero and +1. A poorly aligned team with negative scores indicates disap-
pointment with reality as compared to their original expectations. Misaligned
individuals can disrupt a team and its progress.
The process of realignment helps team members to adapt to project and pro-
gram realities. We recommend that all team members recommit to the project
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outcomes/objectives. One useful suggestion is to place the outcome/objective in

a conspicuous space, so that team members can constantly realign themselves
to this concept. Use it as a header or footer on all e-mails. A focused team is
aligned and adaptable.
Since innovation is often a “learn as you go” endeavor, adaptive individu-
als make the best team members. Adaptive individuals are ones who can easily
adjust to changing realities. Often what seems reasonable one day may seem
ludicrous the next day. Changing priorities are to be expected. That said, those
individuals who can easily adjust to change would accept innovation w illingly,
especially if the benefit is obvious. The acceptance of change survey (Table 2.11)
recently validated and proven reliable provides one way of evaluating an indi-
vidual’s perception of how well they accept change.
Acceptance of Change
When change takes place, people need to adjust, align, and adapt (see Table 2.11).
Change can be painful or pleasing, depending on the situation and the people
involved.
◾◾ Acceptance of change is a measure of acquiescence—accepting the change

as something permanent is accomplished when:
– Minimizing obstacles and barriers
– Developing opportunities for growth
– Developing a new “role” for employees
– Minimizing fear, anxiety, and a feeling of loss
Respondents either agree or disagree to some level with the statements

presented in the acceptance to change survey instrument. To score the sur-
vey instrument, assign a numerical response as follows: 1 = Strongly Disagree,
2 = Disagree, 3 = Neither Disagree nor Agree, 4 = Agree, or 5 = Strongly Agree.
To obtain a change acceptance score:
◾◾ Calculate an average (range) for statements 1–4, 10 = Organizational change

◾◾ Calculate an average (range) for statements 5–9 = Personal aspects of change
◾◾ For each individual’s average score <3.0; they have problems adjusting to
change
◾◾ For each individual’s average score >4.0; they openly accept change
Examine the range for each innovation team member’s (individual) overall
score. High variation indicates a poor agreement between individual responses.
This suggests that change has been an upheaval for individuals, due to varying
feelings.
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Table 2.11 Acceptance of Change Survey

Instructions: Check the
Box That Best Matches
Your Agreement Neither
Statement (Disagreement) with Strongly Disagree Strongly
Number Each Statement Disagree Disagree nor Agree Agree Agree
1 When change occurs, I
am one of the first to
embrace it
2 When my company
announces a change, I
believe it will be
positive
3 The outcomes of
change are generally
positive
4 My organization does
not create barriers to
change
5 My organization helps
its employees to
accept change
6 Change can be positive
when barriers are
reduced
7 I would accept change
if there were additional
opportunities
8 Accepting change can
me made easier if
management
communicates
9 If change reduces stress
and anxiety, I would
accept it
10 People who embrace
change quickly are
better adjusted
Those resistant to change will often find innovation to be frustrating. Yet,

innovation requires an open mind, dedication to empirical evidence, and an
ability to maneuver around obstacles and barriers. Most employees or associates
have this ability, when guided properly and trained, to deal with ambiguous situ-
ations. The ability to deal with changing priorities and prosper from these situa-
tions is a key trait for adaptation.
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EXERCISE 2.7: ADAPTATION SURVEY

Choose either the expectations/perceptions survey or the acceptance of change
survey. Distribute to a group of 20–30 individuals, score the instrument, and
interpret the findings by looking for similarities and differences. Remember
these surveys are for a quick evaluation only.
Step 6: Tabulate and Track Performance

A critical aspect of any innovation project is whether it can deliver a decent
payback over time. Organizations invest in innovation for a specific reason, for
example, cost efficiency, value, or effectiveness. Every project must yield a benefit
so that its value is established. For profit-driven businesses, return on investment
(ROI)—what is invested is a fraction of the benefit obtained. Profit is generally
driving the project. Additionally other benefits received may also support and help
to implement the project. The project may provide additional benefits (both tangi-
ble and intangible). Any estimate is generally an educated guess and the accuracy
of that guess depends upon the history and experiences with similar processes.
Figure 2.12 describes the process for tabulating and tracking performance. Since
the project is still in the formative stages, it is critical to establish the performance
measures (recall the discussion of success factors) that define its identity. At this
stage, we estimate the benefits and those financial, operational, and strategic mea-
sures associated with the project. For this hypothetical case study, this includes mea-
suring the benefit, projected costs, and unique measures that define the project.
EXERCISE 2.8: FINANCIAL INDICATORS

Establish three to five financial indicators that relate directly to performance
(or value). Describe the process of measuring these variables. What are the
characteristics that make these capable and sustainable? Will these measures
provide the financial information on a real-time basis?
The team, with management support, reviews the performance measures.

Establish the goals that constitute success. Additional work should clarify these
measures and establish operating guidelines and appropriate systems to capture
the benefits of success.
For this example, we use the three objectives and establish a measure of recur-
ring benefit for predictive purposes. The efficiencies gained with the procurement
systems should outweigh present difficulties. Some reasonable payback period
is part of the overall solution. Benefits should be observable within 3–6 months;
therefore, the accounting systems need to be robust enough to track and docu-
ment this progress. Calculating a benefit depends upon the ability of the account-
ing and financial systems to track performance on at least a quarterly basis. If the
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Identify
performance
Internal External
measures
measure measure
unique to
innovation
Operational Financial Strategic
Evaluate
performance
measures for
applicability
Track
Are Yes performance
measures once
validated? project
approved
No Link
financial
systems for
Re-evaluate audit and
measures review
Figure 2.12 Tabulate and track performance—step 6.
team and management feel that the improvement is possible and the outcome/
objective attainable, then decide to go ahead with the project. Before executing
the project, the team and management will need to devise a reasonable set of
expectations regarding benefits value, ROI, payback, and/or resource allocation.
Step 7: Execute and Evaluate

Finally, at this stage, management will make a final decision (Figure 2.13). Plans
can begin to implement the project. This is an excellent time to review the
project outcomes, objectives, and to create a plan for implementation. It is espe-
cially important to review and solidify those project measures used to identify
benefit in step 6 (tabulate and track performance). More than likely, a new team
is required to move the project forward. Decide what type of innovation works
best. For this example, an improvement type is warranted. The process uses a
modified version of N2OVATE™, especially designed for the type of innovation
and the client organization.
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Evaluate
project
positives and
negatives
Render a
decision
Refine and Execute or

re-evaluate refine
Execute
Figure 2.13 Execute and evaluate—step 7.
Summary
This chapter introduced an operational process to select an innovation project.
Generally, the process takes 1–2 days to complete. Selecting a project generates a
tremendous amount of valuable information concerning the project and the next
(implementation) phase. This chapter was an overview of the project section pro-
cess; those who want to investigate the methodology in more detail can contact
the authors. As with any innovation project, the process flowcharts are a place to
begin. We expect some modification for each project submitted for acceptance
based on agency or organizational culture and propensity toward innovation.
These flowcharts give the reader a detailed process in which to select a project.
Given the amount of knowledge gained, this entire process is worth executing
each time a macro (large) project requires approval.
DISCUSSION QUESTIONS
1. Choose a term and define it operationally. Note: an operational definition
is one that describes its criteria, measurement, and decision. An example is
“hot temperature”—which is defined as the observation made when reading
a thermometer that exceeds 95°F.
2. Discuss 3−5 needs that your organization or businesses faces today. Is there
any potential for any of these needs to be an innovation project?
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3. Discuss the concept of risk, as you understand it. How does risk become a
factor in evaluating (selecting) an innovation project?
4. Discuss when, where, and how management will interface with the
N2OVATE™ process.
5. Discuss the importance of individual contributions to an innovation project.
Which steps rely heavily on human contribution?
ASSIGNMENTS
1. Discuss the process of validating a set of needs (requirements). Remember,
at this point requirements are product specific, based on a contract or agree-
ment. Use an example to do through the process.
2. Choose an objective (be sure it is measurable), apply the SMART criteria to
the objective and discuss the results. How much did the objective change?
3. List those financial measures that a project must address to be selected for
implementation.
4. Discuss how the N2OVATE™ process could be used by an individual to
select an innovation project. What steps would be eliminated, what others
would be added?
References
McLaughlin, G. and Caraballo, E. 2013a. Chance or Choice: Unlocking Innovation
McLaughlin, G. and Caraballo, E. 2013b. ENOVALE: How to Unlock Sustained Innovation
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Chapter 3
Building an Effective Initial

Innovation Opportunity Profile
Introduction
Before describing how to implement an innovation opportunity, we first need to
evaluate the opportunity at hand. An unsatisfied need can lead to an innovation
but the need alone might be insufficient to initiate a project. As we have men-
tioned in prior discussion, stakeholders, shareholders, and consumers (or users)
must recognize the need as a priority and be willing to act on it. They must be
willing to pay for the innovative item and that item must be of sufficient quality
(or reputation) to attract and keep the customer’s interest. The process from need
definition to the realization of an actual product, process or service may require,
(1) a great deal of creativity, (2) significant resource and capital investment, and
(3) commitment across the consumer base and enterprise. The process can be
complex and convoluted, so tracking and monitoring its progress may be beyond
the capability of the organization. Innovation opportunity profile (IOP) is both
a guide and tool for undertaking an innovation opportunity project. Unlike a
project charter that monitors the process of implementation, the IOP is a manage-
ment tool for assessment, decision making, and benefit evaluation.
The IOP form (Figures 3.1 and 3.2) provides a single document for convert-
ing an innovation opportunity into a potential innovation project. This is not a
standalone tool, but one that can be employed across the spectrum and types
of innovation opportunity projects. We encourage organizations and innovation
teams to use the IOP tool as you begin to investigate the merits of the potential
innovation opportunities available to your organization. Figure 3.3 describes the
process of organizing the information needed before a project begins.
This chapter describes how the IOP instrument is used and how the informa-
tion can best prepare an organization for an innovation opportunity project. Of
course, simpler projects may not need to complete all sections of the IOP and may
require only the innovation team project charter (Figure 3.4), briefly introduced in
39
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Figure 3.1 Innovation opportunity profile—side 1.
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Building an Effective Initial Innovation Opportunity Profile ◾ 41
Figure 3.2 Innovation opportunity profile—side 2.
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Initiate
innovation
opportunity
Establish and define

innovation opportunity
SOPs, ROE, guidelines,
and expectations
Align Identify KPPs

organizational Identify, baseline and KPIs key
goals and prioritize core attributes and
objectives with competencies critical
core competencies success factors
Publish the core

Track innovation
competency baseline
opportunity ideas and
(with KPP, KPI, and
proposals
critical success factors)
Train organizational
Review and align
Complete innovation Submit for resources (shareholders,
innovation opportunity
opportunity proposal organizational review stakeholders, and
to core competencies
customers)
Figure 3.3 Innovation opportunity profile flowchart.
this chapter to achieve a positive innovation outcome (the project charter is cov-
ered in more detail and an example provided in Chapter 7). More, complex proj-
ects may require an extended version, available from the IPSinnovate.com website.
Completing each process (and subprocess) step in order will result in a com-
pleted IOP form. The remaining information in this chapter will help build the
document, explaining each element of the form.
Establish the Organization Innovation Management System

Within an organization, it is advisable the organization develops and evolves
a repeatable and sustainable innovation management system (processes, pro-
cedures, guidelines, and expectation). This approach should be wired into the
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Figure 3.4 Innovation team project charter (basic).
organization’s DNA and culture with recurring training and awareness sessions,
leadership buy-in and support, and subsequently formalized and recognized as
an organization best practice. In sum, everyone in the organization should be
familiar with how to submit an idea or innovation opportunity. After identifying
an innovation opportunity, the organization’s established management system
should facilitate the training, initiation, tracking, determination, implementation,
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and follow-on phases of sustaining the potential opportunity. We must reiterate

that training and awareness should also focus on shareholders, stakeholders, and
customers, and include feedback services as an essential tool throughout all steps
of the innovation process.
This book will provide essential tools for implementing innovation. We pres-
ent new tools and an example provided to assist in associated exercises. The first
of the new tools offered to support identifying (and capturing) an innovation
opportunity is the IOP tool (Figures 3.1 and 3.2).
Innovation Opportunity Proposal

Developing an internal procedure for soliciting, identifying, and submitting inno-
vation proposals internal to the organization is an instrumental tool regardless if
the organization has a closed or open innovation culture. This process does not
have to be complex in nature but there are some key areas important in recog-
nizing and validating any innovation opportunity. Figures 3.1 and 3.2 display the
IOP (side 1) and the IOP (side 2), respectively. Completing the form is relatively
straightforward and each section is self-explanatory.
Overview: Innovation Opportunity Profile (IOP) Form

In Section I, Innovation Champion (Initiator) and Contact Information, the individual
who is proposing the innovation opportunity (need/idea) or a sponsor (supervi-
sor, someone knowledgeable of the process, etc.) will provide their specifics. The
assignment of tracking numbers is the responsivity of the organization’s innovation
management point of contact (this may vary by organization). The next step is to
complete Section II, Innovation Opportunity Proposal, which should provide as
much detail as available on the proposed improvement or gap, the goals and objec-
tives, assumptions, limitations, and known constraints. For our airborne communi-
cations scenario in this chapter, some example assumptions and limitations are:
◾◾ Aircraft will use commercial beyond-line-of-site and ground entry points

(GEPs) necessary to reach their home domain
◾◾ Sufficient bandwidth will be available across the global information grid
(GIG) to support semiautonomous and autonomous access to worldwide tele-
communication networks, upgrading the current aircraft communication
systems will improve maintainability, reliability, and availability
Some additional examples of constraints might be aircraft or airframe type

(i.e., space, weight, and power capabilities), interoperability with GEPs during
international travel, standardization, and interoperability in the GIG.
Identify information as objective (i.e., factual, source from, reference, etc.)
or subjective (i.e., perceived, estimated, no specific reference available, etc.).
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Consider continuation sheets and attachments are included as required. In

Section III, Key Shareholders, Stakeholders, and Customers, list all those
instrumental to this specific proposal. Management can add members to the
continuation section (Section V) or as an attachment. Key players are typi-
cally executives (C-Suite), department heads, process owners, clients, suppliers,
etc. In Section IV, the IOP is validated with the assigned or owning spon-
sor of the proposal reviews the previous sections and all supporting materi-
als and makes a determination on whether to pursue the proposal (i.e., move
toward establishing an innovation team lead and members). The sponsor/
owner then may request additional supporting materials or further review by
another source (i.e., key stakeholders, shareholders, or customers), or simply
decides not to p ursue the proposal and closes it out. Section V, Continuation, is
self-explanatory.
As previously mentioned, tracking, recording, and reporting innovation p roposals
are an essential step in the innovation process. If it is determined, the proposal is:
◾◾ Not a requirement
◾◾ Will not add significant improvement
◾◾ Does not reduce waste
◾◾ Does not add assessable value at the time it was submitted, it may
be worth considering later and filed for future reference
Further, as with other forms and tools offered in this handbook, this tool can
be automated online (Internet or intranet) or placed in convenient location (hard
copy) throughout the facility.
Executive Summary
The executive summary highlights key information from the ensuing 10 sec-
tions in the profile. It provides a high-level discussion on recommendations with
supporting benefits considerations, exceptions, limitations and assumptions,
associated risk matrix or factors, and identifies any associated appendices and
attachments. By necessity, the executive summary builds as the ensuing sections
are populated and information becomes available. In essence, it should be the
final piece of the profile before submission for review and approval.
As an example lead-in for the executive summary, consider the following:
Business travelers today require a full spectrum of communication services when
traveling by air. An executive summary for this potential innovation project may
be similar to the following:
With the dynamic nature of the world and international business envi-
ronment and the emerging movement towards a net-centric environment,
senior executives and their support staffs require the same information
interchanges while traveling as they have in their primary offices and
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operations centers. Meeting the growing communication capability needs

of across an organization must include an airborne environment, consist-
ing of voice, video, and data support to Business Enterprise (BE) com-
munications systems, shareholder, stakeholders, and clients.
The executive summary provides a mechanism to define the project and its
potential outcomes. The executive summary frames the subject in terms of the
expected outcome.
The dynamic nature of the environment reinforces the immediate need for
information and decision-making superiority. While fulfilling the organization’s
strategic policies, business, and goals throughout the spectrum, senior lead-
ers oversee, evaluate, decide, and direct the full range of government and joint
military operations to ensure national security. The remainder of the executive
summary would capture the key takeaways of the aforementioned considerations
and supporting documentation in a short concise manner.
EXERCISE 3.1: INITIATE THE DRAFT OF

THE EXECUTIVE SUMMARY
Using the definition and example above, initiate the build of the executive sum-
mary. This exercise will be ongoing throughout the chapter. Consider accuracy,
brevity, and clarity when building this summary. At the end of the chapter and
when your summary is complete, share your draft with your class members.
Core Competencies
Core competencies represent the strengths, competitive advantage, and profit poten-
tial of businesses or organizations. The business or organization excels at these
tasks. These businesses hold a distinct advantage over their competition. The orga-
nization must recognize these core competencies and use these to its advantage.
Core competencies have several key elements that assist leadership at all levels
bind their resources toward common goals and objectives. They also help pro-
vide a means of prioritizing the most important functions (products, services, and
processes) where innovation opportunities might prove to carry the best value
added when adopted and implemented. Some of those key elements are key per-
formance parameters (KPPs), key performance indicators (KPIs), critical success
factors (CSFs), and key attributes (KAs). A brief definition and an example relative
of our airborne communications scenario presented in this chapter follow.
◾◾ KPP—Identifies key operational and performance requirements in terms of

measurements or ranges (thresholds and objectives) that support measures of
performance or measures of effectiveness. In our airborne communications
scenario, examples of KPPs might fall in the categories of system engineer-
ing, open architecture and seamless interoperability across multiple domains
(architecture), information assurance, and analysis
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◾◾ KPIs—Critical measures that assess how a product, service, or process

performs. These are primary concern in step 3 (Operational Assessment)
and they should assist the innovation team in answering questions of how
something is happening, what is happening, and why it is happening. In our
airborne communications scenario, an example might be how a new com-
ponent changes the equipment configuration and measurements taken to
assess the performance against a KPI
◾◾ KAs—There are measurable and testable criteria a product, service, or pro-
cess must have and are best captured or displayed as key steps in a process
map. They also are instrumental in supporting KPPs, KPIs, and CSFs. In our
airborne communications scenario, example attributes of the system and
components could be operated in global environment by effectively transfer-
ring data between sender and receiver, and supported in basic communica-
tion requirements for all business elements
◾◾ CSFs—Unique to each organization, these are critical factors that defined pro-
cedures, processes, or activities that a business depends on for survival and
are typically directly linked to the organization’s core competencies. They are
also instrumental to achieving the organizations goals, objectives, business
strategy, and plan. A possible example for our airborne communications sce-
nario is the improvement of overall communication system performance and
reliability while continually reducing the space, weight, and power (SWaP)
requirements that limit cargo and passenger size for smaller tube aircraft
EXERCISE 3.2: IDENTIFYING CORE COMPETENCIES,

KEY PERFORMANCE PARAMETERS, KEY PERFORMANCE
INDICATORS, AND KEY ATTRIBUTES
Using the definitions and examples above, identify one core competency
within your organization. After identifying the core competency, identify
three KPIs, and three KAs.
Sources of Innovation Opportunity

As you might imagine, there are many sources both internal and external to your
organization that can generate potential idea and candidates for improving capabili-
ties that already meet or exceed the organization’s expectations or defined standards
for performance. By no means a complete list, we provide the following sources for
consideration (based on your organizational climate and innovation culture):
◾◾ Shareholders, stakeholders, and customers (internal and external to organization)

◾◾ Expos, consortiums, and industry trade shows
◾◾ Professional organizations, memberships, and training events
◾◾ Cross-industry relationships and knowledge shares (short-/long-term strate-
gic, operational, and tactical agreements)
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◾◾ Alliances, mergers, or acquisitions

◾◾ Genba walks, bug walks, or Kaizen events
◾◾ Professional and academic research, reports, and publications
EXERCISE 3.3: SOURCES OF INNOVATION OPPORTUNITY

Using the above sources as a starting point for identifying innovation opportu-
nities, build your own list as it relates to the industry and organization where
you work. What can be added to the list above? Prepare to discuss your find-
ings in a group setting.
Section I. Operational Profile Tracking

This section captures the operational profile tracking number, title, team lead
(key team members by department and roll; also include contract and third-party
support [by company]), project start date, estimated completion date, sponsor
information, audit agency, and date of recurring audit. Examples related to our
aircraft communications scenario in this chapter would be the executive traveler
and their support staff, aviators and their support staff, and home office or orga-
nizational support entities.
EXERCISE 3.4: IDENTIFYING OPERATIONAL

PROFILE TRACKING INFORMATION
Using the definition and example above, identify the following for a project
you are working within your organization: team lead (key team members by
department and roll; also include contract and third-party support [by com-
pany]), project start date, estimated completion date, sponsor information, audit
agency, and date of recurring audit. If all are applicable, simply enter an “N/A”
for not applicable. Share the statement with your class members.
Section II. Operational Systems Requirements Statement

In this section, you are looking to capture the operational system requirements
statement (also include KPP, key performance measurement [KPM], KPI, and
CSF) for your innovation improvement opportunity. An example for our scenario
in the chapter could be “Deliver a scalable, modular, interoperable, survivable,
and integrated voice, video, and data communications system for commercial-
derivative and specially equipped executive support aircraft to support all orga-
nizational mission areas of responsibility while they are traveling by air.” First,
second, and third tier (priority requirement) KPPs, KPIs, KPM, and CSFs are those
required, and desirable elements and factors that improve the existing perfor-
mance elements and factors meeting expectations.
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EXERCISE 3.5: IDENTIFYING OPERATIONAL

SYSTEMS REQUIREMENTS STATEMENT
Using the definition and example above, complete a system requirement state-
ment for a project you are working. Consider accuracy, brevity, and clarity
when building this statement. Share the statement with your class members.
Section III. Customer Profile

In Section III, the customer profile (customer types), your goal is to capture all
individuals, groups, or business units operating or using the system or capabil-
ity. You will identify the intended use by each user identified. In our example,
potential individual users could be the chief executive officer, chief financial
officer, department head of business unit, or C-suite official within the group or
organization. For an example of the group, this could be the collective lead man-
ager’s of each group within the organization of perhaps special groups assigned in
different departments that are organized in a matrix to achieve a certain goal or
objective that require communications capability while traveling by air transport.
An example for a business unit could be marketing, business development, or the
sales business unit as they often find themselves traveling to meet with clients or
attending trade shows which may require airborne communications capabilities
and access to the organization’s business enterprise (BE) communication systems.
EXERCISE 3.6: BUILDING THE CUSTOMER PROFILE

Using the definition and example above, complete a customer profile table
for a project you are working within your organization. Share the results with
your class members.
Section IV. User Probability Profile

In identifying an effective user profile for the set of user types identified in
Section III, Customer Profile, the goal is to identify who will use the product,
process, or service and the probabilities of them using the product, process, or
service. An example for our airborne communication system scenario is provided
in Table 3.1. For our airborne communications scenario, estimates on probability
Table 3.1 User Probability Profile

User or Customer Type Probability of Use
Executive travelers 0.98
Executive support staff 0.90
Employees within the organization 0.45
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of use of voice, video, and data communications can be typically be acquired

from the organization’s IT department or the contracted individual service pro-
vider servicing the organization. Targeted organizational surveys and interviews
can also be used to assess probability estimates.
EXERCISE 3.7: BUILDING THE USER PROBABILITY PROFILE

Using the definition and example from Table 3.1 complete the user (customer)
probability tables for a project you are working and share your work with
class members.
Section V. System Mode Profile

Per Musa (1993), the system-mode profile defines the way the product, process,
or service can operate. An example for our scenario in this chapter could be the
manner in how the airborne communication system supporting voice, video,
and data communications can operate in the autonomous or semiautonomous
mode to ensure services are provided. Depending on your selected project and
concentration (product, process, or service), your modes of operation may vary
significantly.
EXERCISE 3.8: IDENTIFYING THE SYSTEM MODE PROFILE

Using the definition and example above, complete a system requirement state-
ment for a project you are working. Consider accuracy, brevity, and clarity
when building this statement. Share the statement with your class members.
Section VI. Functional Profile

In this section, the innovation opportunity lead and team will evaluate each sys-
tem mode identified in Section V with a focus on functionality testing, efficacy,
and purpose. There are a number of tools discussed beginning with the next
chapter that will help define and build the innovational opportunity profile.
Section VII. Certification and Waiver Authority

In building the certification and waiver authority profile, the goal is to identify who
will certify your functional profile findings and to what established standards and
expectations. Further, identifying any potential waiver authorities for your current
product, process, or service performance standards when expectations are not met.
For example, in our scenario on the airborne communication system, this could
manifest itself in system configuration requirements to meet storage capability and
airworthiness testing, and proposed system configuration changes that do not meet
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standard practice for airborne platforms. For our scenario in this chapter, certifica-
tion and waiver authorities could be the Federal Communication Committee, the
Federal Aviation Authority, any recognized a irworthiness certification agency, etc.
EXERCISE 3.9: BUILDING THE CUSTOMER PROFILE

Using the examples cited above, identify potential certification and waiver for
standards and guidelines that apply to a project you are considering.
Section VIII. Operational Profile

In this section, simply identify any elements, architecture and engineering draw-
ings, guiding requirement documents, and test plans associated with the innova-
tion opportunity you are considering. Referring to our example in this chapter,
examples could be:
◾◾ Current and proposed airborne system architecture drawings

◾◾ System operations, user and maintenance manuals
◾◾ Electrical and communications systems schematics, engineering changes
or modification proposals that impact the structure or airworthiness of the
aircraft platform
◾◾ Quantified SWaP requirements and associated drawings, etc.
EXERCISE 3.10: BUILDING THE OPERATIONAL PROFILE

Using the examples cited above, complete as much of the operational profile as
possible on your own for a product, process, or service innovation opportunity
you are currently working or a new proposal. After completing this exercise, did
you find a need to revisit any prior sections on the form to add fidelity or change
previously documented information? If so, what actions did you take and why?
Section IX. Budget and Financial Profile

As most innovation opportunities are measured in value added against cost or
resources committed to achieve the innovation, the need for budget and finan-
cial estimates are significantly important. In our example scenario, the objective
was to capture the proposed cost to perform the upgrade or modification, recur-
ring costs to maintain proposed performance improvements—one-time cost or
recurring (monthly, quarterly, semiannual, or annual basis); estimated cost of
maintenance and sustainment (annual), percentage increase on current system
or performance cost and the difference pursuing the proposed improvement.
Remember, budgetary estimate profiles can be an ongoing affair, as they often
require significant coordination with shareholders, stakeholders, and customers
to ensure accuracy.
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EXERCISE 3.11: BUILDING THE BUDGET

AND FINANCIAL PROFILE
Using the examples above from our airborne communication system scenario,
develop a budgetary and financial profile estimate for a project you are work-
ing on or may propose.
Section X. Coordination and Approval Authority

Achieving a smooth coordination and approval process through the right authori-
ties can also be a lengthy process. As your IOP is routed through the organi-
zation (also include sections requiring shareholder, stakeholder, and customer
buy-in or approval), questions for additional information might certainly arise at
any level in the routing process.
EXERCISE 3.12: ROUTING YOUR IOP FOR APPROVAL

Consider a project or IOP you are working. Identify three primary leaders,
decision makers, or business units within your organization you feel are semi-
nal to the decision on your project or proposal. Why did you cite these indi-
viduals or business units? Explain their purpose in achieving an approved
innovation opportunity.
Section XI. Appendices and Attachments

The final section on the IOP form is self-explanatory. This will be your essential
reference list for all supporting documentation and correspondence that sup-
port your case for approval. This section should also identify any dissenting or
alternative positions and comments received during the routing process. Further,
alternative views should also be captured in the executive summary so when
you reach this stage, we suggest you revisit your executive summary and ensure
these comments are included and the owning individual or business unit identi-
fied in each statement. Conversely, you should also consider adding a list or com-
ment capturing the key individual(s) and business units that are in full agreement
with the profile as presented.
Functional Needs Assessment

In its basic sense, the functional needs assessment (FNA) is a process that helps
identify capability gaps between existing and desired wants or requirements
(needs). The focus is to capture the wants (perceived and expressed) and needs
(requirements). An example of a common FNA is the strengths, weaknesses,
opportunities, and threats (SWOT) analysis (Figures 3.5 and 3.6).
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Strengths Weaknesses
• Strength 1 • Weakness 1
Opportunities Threats
• Opportunity 1 • Threat 1
Figure 3.5 SWOT (strengths, weaknesses, opportunities, and threats) analysis.
Strengths Weaknesses
• Meets reliability expectations • Space, weight, and power

• Meets maintainability (SWaP)
expectations • Seamless, semi-autonomous,
• Meets availability expectations not autonomous
• Limited access to
communications (voice, video
and data) at take-off and
landing
Opportunities Threats
• Technology refresh • Cyber (global) infrastructure
• Technology insertion security
• Technology expansion • Quality of service
• Physical security
Figure 3.6 SWOT (strengths, weaknesses, opportunities, and threats) analysis—example.
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Functional Solutions Analysis

The functional solutions analysis (FSA) is an important step in identifying poten-
tial innovation opportunities and helps construct the operational profile. The
FSA will also help the innovation team identify if there are material and/or non-
material opportunities for improving the current products, services, or processes
that meet or exceed expectations. Relative to our scenario, Tables 3.2 and 3.3
provide two examples of charts and tables that contribute to the overall opera-
tional profile.
The focus is on improving reliability, maintainability, and availability posture
of the airborne communication systems supporting voice, video, and data com-
munications for executive travelers on a small-tube aircraft platform.
EXERCISE 3.13: FUNCTIONAL NEEDS ASSESSMENT

Consider a project or IOP you are working. Use the SWOT analysis example
in Figure 3.6 as an example and build your own basic SWOT a project you are
working or might propose.
The FSA, for our example scenario, indicated that there were no nonmaterial
approaches that would significantly improve or resolve these capability gaps. Most
systems considered are tactical in nature and do not provide the quality of service
required by the executive leaders to/from and aboard the aircraft. Additionally,
although it was concluded that organizational changes will have little impact on
reducing the identified communication gaps, restructuring roles and responsibili-
ties for communications support may have administrative benefits.
In some cases, delays are a function of the aircraft’s configuration and the lack
of equipment needed to support a particular type of organizational-level com-
munication service request. Where equipment is available, the average delay is
Table 3.2 Current Airborne Communication System Delays (Improvement

Opportunity)
Delay to Be Expected in Minutes
Voice Data
Types of Aircraft Communication
Delays Minimum Maximum Minimum Maximum
Executive request processing ≥1 ≤16 ≥1 ≤9a
Nonsecure equipment availability ≥0 <8 ≥0 <5a
Secure equipment availability ≥0 <8a ≥0 <5a
Bandwidth availability ≥0 <5a ≥0 <4a
Total ≥1 <29a ≥1 <18a
a Equipment necessary to support this communication service is not available on all
aircraft platforms.
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Table 3.3 Operational Priorities Matrix

Airborne Communication Services—Operational Priorities
Home Domain VTC Commercial
Position Voice Data Networking P2P Broadcast Internet TV
Executive 1 2 3 4 5 6 7
Executive staff support 2 1 3 NR NR 4 5
Mid-level supervision 1 3 2 4 5 6 7
Employee 1 5 2 4 3 7 6
Note: 1 = Highest priority, 7 = Lowest priority, NR = Not rated by survey participants.
due, in part, to flight attendant, deck crew, and ground operator interventions
currently required by the equipment and the equipment/system configuration.
The operator (i.e., attendant/flight deck, ground) delay is compounded by cur-
rent equipment limitations aboard aircraft platforms and the type of bandwidth
supporting the communication process to/from the aircraft.
The conclusions derived from the analysis are that:
◾◾ Current equipment does not allow for sufficient bandwidth management to

support executive or organizational-level communications adequately
◾◾ Some aircrafts do not have any executive-centric communications capability
installed, forcing the travelers to rely on limited flight deck communications
◾◾ Executive communications should be automated as much as practical to
reduce delays in communications
◾◾ Automation will improve the quantity and efficiency of airborne
communications
◾◾ Current equipment will not support increases to traveler communications
automation
◾◾ Some executive communication systems aboard the aircraft are also labor
and knowledge intensive for travelers to operate (e.g., International Maritime
Satellite [INMARSAT])
For our scenario, the potential approaches for adding value for improving
service capabilities specific to voice, video, and data communications in this
innovation opportunity are determined as material (i.e., technology refresh, inser-
tion, or expansion) versus nonmaterial (i.e., policy, organizational, management
or personnel, education, training, etc.). Example material approaches include:
◾◾ Technology refresh: Modifies the existing system to the greatest extent that is
practical. Senior leader communication operations remain essentially the same
◾◾ Technology insertion (minimal on aircraft communications equipment):
Installs the most practical amount of equipment/systems compatible with
ground equipment/systems, providing travelers with required communication
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capabilities. The services provided and the quantity of services will be

dependent upon the size of the aircraft (in our scenario, the small tube or
7–15 passenger size capabilities)
◾◾ Technology insertion (airborne switching): Replaces equipment with ground
network compatible secure/nonsecure voice/data switches and bandwidth
management devices. Ground-based networks are extended directly to the
appropriate terminals aboard the aircraft. Communication operations, for the
aircraft traveler, are partially integrated with their permanent ground office
infrastructure
◾◾ Technology expansion (autonomous traveler): Replaces the existing system
with a ground network compatible secure/nonsecure voice switches, secure/
nonsecure Internet protocol (IP) servers, commercial cable television equip-
ment, and a bandwidth management device. Aircraft traveler communication
operations are integrated with but dependent on their permanent ground
office infrastructure but capable of distributed operation
EXERCISE 3.14: FUNCTIONAL SOLUTIONS ANALYSIS

Consider a project or IOP you are working. Use the SWOT analysis example
in Figure 3.6 as an example and build your own basic SWOT a project you are
working or might propose.
Innovation Team Project Charter

The innovation team project charter (ITPC) is a common project manage-
ment tool that can help identify, synchronize, monitor, and report innova-
tion team efforts (i.e., objectives, responsibilities, and outcomes). The ITPC
is briefly introduced in this chapter as the tool can be employed in support
of any type of innovation opportunity, we present throughout this handbook
(see Figure 3.4).
In Chapter 7, we provide an example scenario from the manufacturing
and production industry that helps further clarify the purpose of each s ection
within the tool. Further, additional tools and exercises are provided that walk
the reader through the major steps in developing their own charter for an
innovation opportunity project within their organization.
Summary
In this chapter, we briefly introduced two tools that can be employed across the
spectrum of innovation opportunities—the ITPC and the IOP tool. We described
how the IOP instrument is used and how the information can best prepare an
organization for an innovation project. To reiterate, simpler projects may not need
to complete all sections so the reader must use their best judgment as not to
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bring unnecessary complications that can slow the innovation opportunity deci-
sion. When the process becomes complex and convoluted, tracking and moni-
toring its progress may be an important function that should not be overlooked.
The IOP is both a guide and tool for undertaking an innovation project. Further,
unlike the ITPC that monitors the process of implementation, the IOP is a man-
agement tool for assessment, decision making, and benefit evaluation. Finally,
consider using the IOP tool as you begin to investigate the merits of the potential
innovation. More, complex projects may require an extended version, available
from the IPSinnovate.com website.
1. Following the IOP flowchart (Figure 3.3), select an innovation opportunity
project within your organization and pencil down some initial thought as
the project relates to each step.
2. Name two (2) innovation opportunity tools from this chapter’s discussion.
Explain their use and discuss the three (3) key elements in each tool. How
are the elements you chose important to the innovation opportunity perfor-
mance acceleration process?
ASSIGNMENTS
1. Identify a process, product, or service that has the potential to become an
innovation opportunity project. Using the information gathered during the
exercises, complete the IOP executive summary section and submit your final
product to another class member for review and feedback. Discuss the feed-
back in a short discussion and update your executive summary accordingly.
Reference
Musa, J.D. 1993. Operational Profiles in Software Reliability Engineering, IEEE Software
Magazine, March 1993.
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Chapter 4
New Products/Services with
Existing Resources
Introduction
New products, services, and technology are the readily identifiable innovation
opportunities to recognize. These innovation opportunities are unique, yet meet
an unsatisfied need (requirement), and are usually one of a kind. This perception
of new can vary by generation (age) group, job function (technical vs. nontechni-
cal), and/or gender (Caraballo and McLaughlin, 2012). As previously mentioned,
“new” types of innovation opportunities are subdivided into four categories:
◾◾ New discoveries and breakthroughs (may or may not use existing resources)
◾◾ New unique and original (uses existing resources)
◾◾ New application or uses
◾◾ New approaches
Because of our intended project focus, new discoveries and breakthroughs

are outside the scope of this discussion but are manageable with repeated suc-
cess using the N2OVATE™ methodology. Further, discoveries and breakthroughs
often come from the organization’s creative process but are extremely rare events
compared to incremental innovations which most companies are most familiar
with. They are also often discrete and unplanned events considered creative in
nature. The goal and objective of this handbook, focuses on categories 2–4 above,
as these are much more common, predictable, and within the span of control of
the organization to act on with a better chance for innovation outcome success.
Finally, the types of innovation opportunities we discuss are proactive and sup-
ported by an established innovation management strategy to develop and pursue
innovation opportunities in an organized, empirical, and repeatable manner.
In Chapters 4 through 6, we provide established project plans (processes) for
implementing aspects of new innovation opportunities, beginning with those
59
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innovation projects or opportunities that require more development time. The

project scenarios throughout this handbook employ the N2OVATE™ process
(since this methodology establishes high-level or first pass objectives, outcomes,
requirements, limitations, and assumptions). If not then the innovation team will
generate this information during the early phases of project implementation. We
will use a simple example to lead the reader through each of the new types of
innovation opportunity projects. There are new tools, embedded exercises in
the text, and a more extensive set of flowcharts to assist the reader in applying
the N2OVATE™ methodology though an innovation project of their choosing. We
begin with a discussion of how these concepts have evolved over time.
Evolution
The materials published in 2013 (Caraballo and McLaughlin, 2012), represent
a high (strategic) level approach to innovation. Figure 4.1 describes the initial
seven-step process that continues to evolve, as it is applied across multiple indus-
tries and situations. The only different step was that of originality, which distin-
guished the three new types of innovations. Operating at strategic level did not
prepare the organization to implement the innovation from concept to finished
product, service, or technology. This is not to insinuate the ENOVALE™ process
was lacking, but rather, to strengthen and enhance and evolve its capabilities
to the system and culture levels. Consider Figure 4.1 as an enhancement of the
ENOVALE p roject selection criteria (McLaughlin and Caraballo, 2013).
The evolution and significant modifications to the ENOVALE methodology for
innovation opportunity projects begins with the realization that the seven-step
process must adjust to the cadre of different innovation opportunity types. Words
such as “validation” or “verify” (value building) are appropriate no matter what
innovation opportunity type your organization is considering. The N2OVATE™
project implementation process begins after the project selection process is com-
plete. We realize that many will want to skip this front-end process, so we begin
Originality—
Align and adapt
New and unique
Evolve the
concept
Originality—New Verify Link to
application value building performance
Negotiate the
concept
Originality— Execute and

New approach operationalize
Figure 4.1 Original ENOVALE process for new innovation projects. (From McLaughlin,
G. and Caraballo, E. 2013. ENOVALE: How to Unlock Sustained Innovation Project Success.
Productivity Press, Boca Raton, FL. With permission.)
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New Products/Services with Existing Resources ◾ 61
by capturing, classifying, and analyzing needs or requirements. Clearly identify-

ing and defining the needs (or requirements) is so critical that it is the first letter
of our new methodology (process). For each letter, there is corresponding con-
cept with its own process. However, each new type of innovation opportunity
has its own version of N2OVATE™. Thus, each with a tailored emphasis which is
more than a generic process as is featured in Figure 4.1. We feel the changes and
additional tools we have developed specifically for the N2OVATE™ methodology
will assist our clients and customers achieve repeated innovation outcome suc-
cess, more frequently, and in a much shorter cycle time.
This chapter describes the process of creating a new type of innovation from
existing materials and resources. This innovation type is common to many orga-
nizations, since it introduces a new product, service, or technology not previ-
ously seen as a unique offering to customers (users) at present. It also satisfies an
unmet need (requirement). Of the three new types presented (Chapters 4 through
6), this is the most complex of the three. It is also the riskiest of all three types
since there is a possibility the best plans might possibly lead to a dead end or a
decision by the organizational leadership not to pursue or invest in a particular
innovation opportunity at this moment.
EXERCISE 4.1: N2OVATE™ METHODOLOGY

What key principles (concepts) does N2OVATE™ adhere to in terms of innova-
tion success? Why do the three middle initials (OVA) rarely change?
New and Unique Innovation

This is truly an original innovation, using existing resources, as it is something
that no one has experienced previously either internally or externally to the
organization. These types of innovation opportunities not only satisfy a need
(requirement), but one that is outstanding and game changing. For example,
manufacturers have been striving to invent a battery that can both hold a charger
longer while delivering consistent performance without the need for exotic mate-
rials. This is an example of this particular type of innovation and that would be a
boon to whoever devised such a battery. Figure 4.2 details the seven-step pro-
cess transforming ENOVALE into DRDOVATE™ (a derivative of the N2OVATE™
process). Notice that the most comprehensive stage is the first stage. Each step
further divides into a mini or subset of more definitive processes.
Develop the Concept

The first step requires an understanding of the main drivers (or inputs) for the inno-
vation opportunity. This type of innovation requires a modification to the N2OVATE™
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Prioritize Consolidate Develop Limited

unfulfilled the the knowledge
needs ideas/needs concept experience
Idea Rationalize
generation the concept
Concept
finalization
Verify
Assessment
Test
Establish
operational
parameters
Figure 4.2 Updated process (ENOVALE to DRDOVATE).
process. After presenting the seven-step process, we introduce an innovation project

implementation strategy designed specifically for this type of innovation opportunity.
To date, it is the only innovation type requiring a modification of the N2OVATE™
process. Therefore, the process begins at the “unsatisfied needs” stage.
Unsatisfied needs for this stage may not be evident and therefore the idea/
need generation may provide an excellent opportunity to expose potential needs
(requirements) not previously known or understood. Ideas, alone, will not pro-
vide sufficient information to make an innovation opportunity decision. Thus,
developing “idea/needs” pairs are critical components at this particular stage.
There are numerous idea-generating methods already available in the business
community today. Choosing the best method is a topic left for others to address.
We suggest the organization choose the method that best suits their current
business operating style, protocol, and the needs (requirements) vetting process.
That said, we feel the best approach is to gather as many idea/needs pairs as
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Table 4.1 Idea/Needs Decision Tool

Needs Technically Customer Existing Cost
(Requirements) Possible Appeal Resources Concerns Benefits Decision
No chemical Unknown Medium Uses some Many Sig Major
reaction concerns
Safe (no risk of Yes Very Uses some Many Sig Some
fire) strong concerns
Does not Yes Strong Uses few Some Many Some
overheat concerns
Holds a charge Not at this Very Uses some Sig Sig Major
for 24 h time strong concerns
Fast Not at this Very Uses many Many Sig Minor
charge—15 min time strong concerns
Dimensions— Yes Medium Uses all Few Some Go
1″ × 1″ ″0.25″
Weight, <1 kg Yes Strong Uses all Few Some Go
possible. Consider the idea of a new battery that holds a charge for 24 hours; it is
safe (no risk of fire) and chargeable in less than 15 minutes; and it is comparable
in size to present batteries. Table 4.1 describes how to examine the idea/needs
pairing and whether it holds promise as a future innovation project.
EXERCISE 4.2: IDEA/NEEDS IDENTIFICATION

Use the idea/needs decision matrix on a possible innovation (could be macro or
micro in size), determine whether the innovation is worth further consideration.
At this stage, it is prudent to note, decisions made represent a “best guess” esti-
mate, given the large number of unknowns. This is why knowledge and experi-
ence are useful contributors since these represent the human side of innovation.
In the early development stages, there is a great need for human intuition,
based on organizational knowledge and experience. Many of the innovations we
simply cannot live without today were born out of an idea based upon a gut feel-
ing, an observation, a suggestion, or a complaint. Humans rely on their internal
beliefs and values, developed through their knowledge and experiences. These
internal beliefs, values, knowledge, and experiences then become the catalyst
that can drive innovation at this stage. As a cautionary measure, temper the ideas
with sound, objective reasoning, and intuition. If an idea meets an unsatisfied
need (requirement), it is capable of being economically produced or created, fills
a gap or adds significant benefit (value), and then it is an innovation opportunity
candidate. Subsequently, do not let a single criteria or individual influence your
innovation opportunity decision process.
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Step 1: New and Unique

Developing the concept (Figure 4.3) begins with assembling the innovation team.
Seek to identify those candidates who perceive new as the most identifiable (recog-
nizable) type of innovation opportunity as team members. This is a key element in
aligning the innovation team to the task at hand. Next, create a developmental plan
for the concept. Primary elements of the developmental plan include (at a minimum):
1. First stage concept

2. Feasibility (sustainability, capability)
3. Second stage concept verification
4. Confirmation
5. Approval to move to next phase
Develop the
concept
Nominate Create a
team developmental
members plan
People First Benefit

resources stage value
cost concept technology
Is concept End or
feasible? refine
Drawings Second
first piece stage
simulations concept
Concept No
Reevaluate
conforms to
or
expected
refine
outcome?
Yes
Rationalize
the concept
Figure 4.3 New and unique—step 1.
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First Stage Concept

Begin with expanding the idea/needs decision matrix (Table 4.1), includes the
following:
◾◾ People
◾◾ Resources
◾◾ Various fixed and variable costs
◾◾ Benefits (intangible)
◾◾ Value
Again, the purpose here is to evaluate using the knowledge and experience
of the organization’s work force (i.e., shareholders, stakeholders, and possibly
the customer). Of course, any data collected and interpreted can also add to and
enrich the first concept review. Think of the first concept as an initial decision
point to pursue this potential innovation opportunity. For example, when plan-
ning a holiday (vacation), you consider the needs and wants of the family but in
context with the amount you are willing to spend. It is truly a balancing act. Just
to recap, no firm arrangements have been made and nothing yet reserved as this
is a preliminary stage—no final decisions yet made. The first stage enables the
team to become comfortable with the concept and examine its potential innova-
tion opportunity from a very human perspective.
Second Stage (Feasibility)

Next, the innovation team must consider whether the idea/need is feasible from
both a customer and an internal organizational perspective. There is always a
risk that the feasibility could have a short life cycle and not be a viable candi-
date for innovation. In addition, it is easy to comprise compatibility if the orga-
nization, its resources, and funding are not well matched to the organization’s
strategic or operational goals and objectives. Finally, sustainability is a key for
competitive advantage or lasting value. Three seminal questions to ascertain or
estimate up front:
◾◾ How long will it take the innovation to payback on the initial investment?
◾◾ What is the estimated return on investment?
◾◾ When will competitors have a viable alternative?
Third Stage
Please note the time between these stages will vary depending on the innova-
tion opportunity (product, service, or process). Depending upon the item’s DNA
(i.e., process, service, technology, etc.), the stage involves creating everything
from a first piece (for a product) to a drawing (flowchart for a service, CAD/
CAM output for a product, etc.), or simulation (for technology or service). The
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preliminary point is to bring the concept “to life,” enabling the innovation team
to use their knowledge, experience, and objective senses to experience, evaluate,
and reach a decision on the item’s viability (feasibility).
Fourth Stage
Fourth stage is the confirmation stage. This stage focuses on evaluating the item
from a human perspective. This stage compares differences between expecta-
tions and what actually occurs (at least from a first piece/pass perspective). If the
item meets or exceeds expectations, it is worthy of moving forward; if not, then
the project ceases to exist or requires further modification.
Fifth Stage
Fifth stage is the decision stage. The innovation team and organizational leader-
ship decide whether to pursue development, reevaluate, or end the project. The
innovation opportunity decision occurs from the results of the first piece analysis
(includes results from drawing, simulations, etc.). It should combine both empiri-
cal information with human intuition and experience with the goal of providing
actionable information in a timely manner to the right level of decision making
within the organization.
The completion of all five stages results in a rationalization of the innovation
opportunity concept. If the decision makers agree, the concept passes from idea
to reality. At times, this is the greatest hurdle, other times the most disappointing
is when a good idea fails to produce sufficient benefit. Never discard the idea/
needs pairs, as there are numerous incidences of where timing and packaging
become an issue. The impossible can become the possible when timing and
packaging remain fluid and responsive.
EXERCISE 4.3: DEVELOP THE CONCEPT—STEP 1

Consider one of the five stages discussed in this section. Prepare a detailed
plan to address this stage. Include recommendations and suggestions to check
for validation.
Rationalize the Concept

Figure 4.3 describes the process steps in this second phase. This step brings the
concept from proposal to reality. This step involves evaluation, negotiation, and
finally a reality test. Concepts that cannot pass these criteria must either disap-
pear or reappear in a different form. After accepting a concept (e.g., a drawing),
there are often many modifications and adjustments made that produce a num-
ber of alternatives to consider.
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Step 2: New and Unique

The COCO tool, described in, ENOVALE: How to Unlock Sustained Innovation
Project Success (McLaughlin and Caraballo, 2013), is an excellent method to eval-
uate some closely aligned alternatives (Figure 4.4). Should conflict arise in reach-
ing a decision, apply the COCO (Table 4.2) dimensions for comparison purposes:
◾◾ “C”—Clarity: Full and complete understanding of how the concept will apply
to perceived need
◾◾ “O”—Originality: Originality of concept; ability to stand apart and fend off
competitors
◾◾ “C”—Customer demand: Meeting/exceeding the needs of the customer/user
over the entire life cycle
◾◾ “O”—Objectives met: Meets profit and financial objectives
Perform
Rationalize
COCO
the outcome
analysis
Examine
alternatives
Conflict Yes
Reassess and
with
reevaluate
concept?
No
Negotiate
Consider Examine
the
consequences risks
details
Use Test Apply

sensory against customer
skills reality criteria
Requirements:
Develop Limitation
customer
the and
and
objective assumptions
internal
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Table 4.2 COCO evaluation Scale

COCO Criteria SMART Chip Zero Inventory Supplier Control
Clarity Neutral Neutral Favorable
Originality Favorable Favorable Neutral
Customer demand Favorable Neutral Neutral
Objectives met Favorable Neutral Favorable
To update this technique, the authors added a scale to assist in differentiat-

ing the concepts. The scale measures expected performance based on each of
the four dimensions. For example, if clarity was better than expected, then the
concept feasibility would increase. Conversely, if customer demand is less than
expected, the project is reevaluated or halted.
There are three simple situations: better, as expected, or less than expected
performance.
Favorable: Better than expected

Neutral: As expected
Unfavorable: Less than expected
Further, a team or management differentiates the instrument with additional

criteria and a scale that reflects more detail or refinement.
EXERCISE 4.4: COCO EVALUATION SCALE

Complete a COCO analysis for any concept that you are considering or have
considered in the past. Does this thought process help you to realize the dif-
ferences between concepts? Explain.
Next, examine alternatives (Table 4.3). Alternatives consist of any enhance-

ment, modification, replacement, or substitute for an existing concept. However,
any alternatives carry with it a consequence and require a simultaneous rating.
We use the hypothetical battery example described previously.
Table 4.3 Alternative Consequence Evaluation Tool

Alternative Benefit B Score Consequence C Score Ratio
Graphene New technology 5 Added cost 1 5.0
battery Availability
Extended Uses existing 4 Heat 5 0.80
capacitor resources Needs fan
Replacement
Solar battery Existing technology 1 Slow 2 0.50
High price
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Alternative Consequence Evaluation Tool

Scoring
Benefit score (1–5): 1—No benefit; 2—Minimal benefit; 3—Some benefit to the
outcome; 4—Benefits the outcome; 5—Maximum benefit to the outcome
Consequence score (1–5): 1—No consequence to the outcome; 2—Minimal
consequences affect the outcome; 3—Some consequences affect the outcome;
4—Consequences affect the outcome; 5—Severe consequences affect the outcome
Ratio = Benefit score (B score)/Consequence score (C score)
Interpretation
If the ratio >1, the potential innovation is viable, a ratio <1 requires reconsidera-
tion. Only choice 1 is viable at this stage.
After calculating the ratio, reevaluate and reassess for completeness. Carefully
assess all concepts, alternatives, and consequences looking for conflicts and
discrepancies, especially at this stage. Negotiate with all concerned parties. The
timeline can vary from very short to very long for this stage. It depends upon
what is at stake for acceptance (negotiable items, consequences, and/or risk).
Better to solve problems now than during the operational (production) phase.
EXERCISE 4.5: ALTERNATIVE CONSEQUENCE EVALUATION TOOL

Consider some alternatives (characteristics, functions, appearances, outcomes,
etc.) to an existing innovation and their associated consequences. Be sure that
performance is clearly identified (measured) and apply the risk that the con-
sequence will affect that performance.
Finally, test for reality. The seven functions involved in any test for reality (for
a new concept) are:
1. Management buy-in (leadership)

2. Finance and accounting (money people)
3. Customers and stakeholders (who we must satisfy)
4. Operations (who must make this work)
5. Human resources (training, new hires)
6. Sourcing (resources)
7. Competitive assessment (who we must outperform)
Do not try to attempt your reality check too early in the process. Ideas can
fool even the most pragmatic people. Use your intuition and experiences to
evaluate the product, service, or process.
Formalize the objective(s) (include customer internal and external require-
ments, assumptions, and limitations)—all key elements of N2OVATE™. Recall that
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for this particular innovation type, we needed to revise the original process to
account for the design and development of a new concept.
Step 3: Finalize the Design

Finalizing the design (Figure 4.5) is the objective of step 3. This is the time to add
features, highlight certain attributes, evaluate risk, and consider the more esoteric
features. The key factor is the value of the resulting product, service, or tech-
nology while maintaining or increasing customer appeal. Finally, the product is
prototyped, displayed, and fully accepted. The time to prototype may be long or
short, depending upon the item complexity. A prototype is a working or func-
tioning item. The prototype is a true necessity for innovative products.
For those businesses with a detailed process, then consider the finalization
with the use of a storyboard or simulation. Storyboarding a potential service
innovation may provide an opportunity to see the service in action before sched-
uling an actual attempt to test the service. In any case, a simulation provides
an overall evaluation, acting like a prototype. Please note the innovation must
perform in a realistic setting.
This step requires a great deal of customization dependent upon the item.
The reality check for a service innovation is far different from a reality check
for a new technology. Use the simple flowchart (Figure 4.6) to help decide the
additional steps needed. Some reality checks are simple; others can be very
Design
finalization
Finalize the
unique
attributes
Customer
Finalize the Value
appeal/
outcome added
demand
First Prototype
Storyboard
piece and
simulation
patent preview
Verify
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Internal:
External:
Resources
Customer demand Define the
Capital
Environment attributes of
Culture
Pricing reality
Strategy
Competitors
Efficiencies
Life cycle
ROI
Define boundaries Simulate

Establish the real-world
and
reality conditions
inputs
outcome
Create the
reality Evaluate
(item efficacy
dependent)
Use the
simulated
reality to test
outcomes
No
Refine and Are the results

reevaluate acceptable?
Yes
Implement
Figure 4.6 Testing reality of new products, services, or technology.
complex. Begin with understanding and modeling the environment in which the
innovation exists. Focus on the issues related to the innovation (such a purchas-
ing demand/behaviors, available alternatives/substitutes, performance, overall
value, unsatisfied needs, etc.). Create a simulation (via computer is only one type
of tool) closest to reality (for the key issues) and observe the outcomes (results).
Push the boundaries to determine the capability of the item. Obviously, the
better the simulation, the better the information and value added.
Step 4: Verify
The next step is verification (validation) and very similar to the validation phase of
the N2OVATE™ or ENOVALE processes (Figure 4.7). During this phase, the team/
management verifies outcome performance. Validating performance requires an
understanding of risk as influencer and possible game changer. Verification (used
interchangeably with validation) must lead to a sustainable o utcome. Chapters 5
and 6 provide a number of techniques for validation.
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Verify
outcome
Meets
expectations Simulate Evaluate
and performance risk
objectives
Examine the Examine the

strengths weaknesses
Refine, No Success
reevaluate
sustainable?
or end
Yes
Assess
EXERCISE 4.6: TESTING REALITY OF NEW

PRODUCTS, SERVICES, OR TECHNOLOGY
Devise a plan for testing a prospective innovative item using the “reality”
approach. How do you define reality; how do you test this reality; how do you
choose the conditions that define efficacy?
Step 5: Assess
Step 5 (Figure 4.8) again evaluates the outcomes, using the results from previous
steps (such as the reality and value checks). After the assessment stage, adapta-
tion and alignment begin. Managers and employees must begin adapting to this
new item and aligning themselves to the new reality.
EXERCISE 4.7: DEVISE A PLAN FOR SIMULATING PERFORMANCE

FROM A NEW TYPE OF INNOVATION
Explain the environment in which the innovation will need to exist; identify
potential strengths and weaknesses. Comment on sustainability.
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Assess
Assess
value
Investment opportunity?
Technology restrictions?
Resource availability?
Availability of expertize? Assess
Is process capable? reality
Innovative?
Alignment
Project
Leadership and
management
advocacy
Political infighting
Evidence-based decision
Yes Frequent manipulations
making No
Conflict or Inefficiencies
Open communications
disruption? Delays
Employees treated as adults
Lost productivity
Positive suggestions
Errors and mistakes
Realign and
Monitor
readjust
environment
values
Finalize
measurement
KPAs CSF
Changes that affect performance goals and expectations require strong lead-
ership and management support. Adaptation is a business-wide activity to com-
municate and align the business to the new standards of performance. The
proposed modifications may require input from other sources and therefore a
process of consensus may follow. After initiating the adaptation process, further
changes should be simpler to implement. Adaptation is then both an internal and
external process (McLaughlin and Richins, 2014, p. 101).
Alignment concerns the team, customers (users), and the organization.
Consensus must exist before recognition of any improvement. Alignment is com-
plete, when the innovation is understood as meeting a new set of standards, a new
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level of success. Communication is fundamental to informing users that the item

now consistently meets their expectations. Alignment is “people oriented” and it is
successful when achieving consensus (McLaughlin and Richins, 2014, p. 105)
Although hardly ever planned, conflicts do arise and may result in a signifi-
cant amount of productivity. Conflicts are either conceptual or human driven,
dealing with tangible or intangible items. The bottom line—expects conflict and
creates a process to detail this process. The goal should be to: (1) identify the
process, (2) recognize its implications, (3) deal with conflicts, and (4) remedy the
situation. Realignment is a strategy that organizations need to practice to keep
employees, managers, and customers fully aligned.
Step 6: Test and Measure Performance

The major objective of this step (Figure 4.9) is to identify measurement points
related to performance, which define success. These key performance metrics
or key performance indicators (KPI) align to project objectives (McLaughlin and
Richins, 2014, p. 136). Five traits of these measures are (Todorvic et al., 2013):
1. Fully accountable (easy to understand), practical

2. Timely, accurate
3. Actionable
4. Relevant
5. Predictive
Creating these metrics is a stepwise process. Step 6 involves both creation and
validation.
Step 6 also addresses the number of items to sample and the integration of
metrics into existing financial and organizational reporting databases. Locate
further information in Chapters 3 and 4 (Figure 4.10).
EXERCISE 4.8: KEY PERFORMANCE INDICATORS

Devise a plan for selecting and testing metrics (KPIs) that evaluate perfor-
mance characteristics of the new type of innovation. Explain how the process
sustains a quality (performance) level over time.
Customer Establish Develop Define value

Select metrics Select KPIs Validate
requirements targets measures metrics
Figure 4.9 Key performance indicator (KPI) creation process. (Adapted from M. Todorvic,
Z. Mitrovic, and D. Bjelica. 2013. Journal for Theory and Practice Management, 18(68),
41–48.)
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Test
performance
measures
Financial Project
Operational
(outcome) ROI
Assess
Validity
Applicability
Determine
selection
and
sampling
criteria
Reformulate
No or
characterize
Sustainable?
Yes
Match to
existing
systems
Do these No Identify
Test and
meet and
evaluate
expectations? improve
Yes
Formalize
metrics
Step 7: Operationalize
To complete the last step (Figure 4.11; establish operational parameters), the
team finalizes operational parameters on metrics and places these near the top
in terms of importance and meaning to the project. Finally, the project can be
moved to commercialization.
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Establish
operational
parameters
Institute
checks and
balances
Move to
commercialization
Summary
Developing a new concept certainly follows the basic tenants’ of the
N2OVATE™ process. The process begins with meeting unsatisfied needs and
ends with validating the outcome. Due to its unique characteristics, the concept
moves from initialization through a testing phase, and then a rationalization
phase, to prove its worthiness. Its unique qualities may require some additional
in-depth work.
Implementation
Introduction
After validating the design (the results are sustainable), the decision to move
forward involves commercialization. This commercialization is identical to the
implementation stages, discussed with the other innovation outcomes, based
on innovation type. The next process is operationalization (producing the item
or developing the process for the service), or as some say, implementation
(Figure 4.12).
The process begins with preparing the infrastructure and ends with a moni-
toring (evaluation) step. A description of each step in the process (and its sub-
process flowchart) follows this introduction. This project implementation process
aligns well with the N2OVATE™ derivatives in other chapters. Due to the exten-
sive up-front assessments, evaluations (validations), metrics, and critical success
factor development associated with the concept, the authors present a substitute
implementation process. We recommend this substitute implementation process,
as an alternative, given that the N2OVATE™ derivative selection process preceded
implementation. Many of the phases are identical to a N2OVATE™ process for
implementation. Phase 1 (Figure 4.13) begins the process.
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Prepare
the
infrastructure
Coordinate Assemble
within the and assign
organization measurement
Track
Orientation
output
training
quality
Verify and Implement

install and monitor
Figure 4.12 Implementation process: New and unique.
Step 1: Prepare the Infrastructure

When rolling out a new product, service or technology, access the resources,
personnel, financial, and operations supporting the rollout to ensure a smooth
implementation. These organizations (and agencies) must coordinate the rollout
with these infrastructure items. One key element of the infrastructure is the coor-
dination of human resources and precisely, the implementation team. For a new
type of innovation project, the implementation team is generally different from
the innovation or design team. Therefore, the team should consist of those who
best understand new combined with experienced project management personnel.
This team’s objective is commercialization. Management needs to assemble the
best team to meet the goal of commercialization in the shortest timeframe.
With any new project, personnel need to be oriented to the objective and
receive training in whatever tools seem appropriate. Do not forget that this train-
ing must include skills on communications, negotiations, conflict management,
and alignment. Orientation can begin as resources come together.
Finally formalize the specific and detailed plans required to execute the proj-
ect. This step is second nature to any good project manager. The key point is to
prepare the infrastructure before launching the project.
EXERCISE 4.9: PREPARE THE INFRASTRUCTURE

Describe any additional detail needed prior to project launch? Which element
of the infrastructure will change most (least) and why?
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Step 2: Coordination
Once the preparations for the resources and within the organization are com-
pleted, the next phase is coordination with leadership, employees, customers,
and stakeholders (Figure 4.13).
Coordination begins with leadership (management) and culminates in the
preparation of a master implementation (execution) plan. The master imple-
mentation plan integrates the four elements (resources, personnel, financial,
and operations) into a cohesive working architecture. With the team in-place and
management coordinating, the assignment of responsibilities can begin. This is a
critical step, with experiencing and knowledge playing a key role.
(a) Prepare
the
infrastructure
Personnel/ Financial Operations

Resources
training purchasing facilities
Select the
team
Begin
orientation
Formalize
layout
plans
Begin the
coordination
process
Figure 4.13 Implementation process: New and unique—(a) step 1. (Continued)
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(b) Coordinate
within the
organization
Identify
leadership
Personnel
HR Accounting:
customer finance
user purchasing
Prepare
master
plan
Operations
Resources
facilities
Assign
responsibilities
and
activities
Install
the
process
Figure 4.13 (Continued) Implementation process: New and unique—(b) step 2.
Step 3: Install the Process

For the sake of simplicity, we subdivide product and services processes in Figure
4.14. These processes will differ in both the effort needed to make each success-
ful and the time elapsed to complete. Both require certain resources, a master
execution plan and coordination between the team, management, and leadership.
We will discuss these separately, although realize that many innovative items
have both a product and service component.
For products (technology), construction of the process, handling, and storage
facilities will most likely require a major investment or expenditure. Construction
may take several weeks to several months depending upon various concerns.
This could easily entail real estate, refurbishment, or relocation. Next, estab-
lish a set of checks and balances with the master execution plan, schedule, and
actual workload; and attempt to determine “pain” points and/or slippages in
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Install
the
process
Products Services
Materials Coordinate Stage

personnel the Leadership the
resources services service
Materials Implement
Begin
personnel and Leadership
construction
resources verify
No
Performance Identify
Checks and specific
meet
balances components
expectations?
Yes
Address
problems, Operationalize
alternatives
Implement Document
solutions and solidify
Complete Complete
installation installation
Figure 4.14 Implementation: New and unique—step 3.
performance. Address these problems with alternative courses of action, being

aware of the emphasis on consequences derived from using an alternative. Use
this process to implement solutions, on as continual basis, until the installation is
complete.
For services, stage the service by coordinating resources, personnel, and man-
agement (leadership).
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Two key questions to consider during this phase are:
1. Does the service meet expectations?

2. Is performance an issue?
Ensure the service can return repeated outcomes. If expectations satisfy the
consumer, operationalize the process, document performance, and control fea-
tures resulting in the installation of the process.
EXERCISE 4.10: CHOOSE EITHER A PRODUCT

OR SERVICE APPLICATION
Compare an installation you are familiar with to the process described in (Figure
4.14) were there any differences, which would affect successful and why?
Step 4: Process Orientation and Training

Step 4 now orients (trains) those responsible for operating the process, selling
the product, service or technology (Figure 4.15). The complexity of the item will
Orientation
and
training
Determine
the need
and extent
Develop
Communicate
materials
Develop
Conduct
message:
sessions,
intent
learning
desired
outcomes
outcome
Evaluate Evaluate
Complete
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guide the amount, intensity, and diversity of training required or made available.
Note: Training and orientation are central (key) to any new type of innovation.
Finally, evaluate the training for efficiency and effectiveness.
EXERCISE 4.11: COMMUNICATIONS PLAN

Describe a communication plan that will be proactive versus reactive, relaying
a clear, cogent message to all involved with the project.
Step 5: Assess and Assignment

Step 5 involves assessment of the project and the assignment of key measure-
ment to evaluate performance. Figure 4.16 details this fifth step. As with the
Assemble
and assign
measurement
Initiate
data
collection
Preliminary
analysis
Effect Patterns
Variation
and and
control
influence trends
Develop
operating
limits
Baseline
measurement
Implement
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N2OVATE™-derived processes, data collection and analysis are the keys. With
the process functional (which we referred to as installation), this step reevalu-
ates all measures (especially those related to the KPIs identified for performance)
through data collection and data analysis. The results of the preliminary ana-
lyzes, examines key product attributes (KPAs) such as consistency (variation),
effect and influence, control and predictability; all necessary features for sus-
tained performance.
From these calculations come control points, baseline measurements, and
a profile to maintain sustained performance. A number detailed description of
these measures is provided in Chapters 5 and 6. This step is a combination of
the verify and analyze phases in N2OVATE™ strategy. As a reminder, there is no
single approach to accomplishing innovation. Certainly, phases and steps overlap
Track
performance
and quality
Align with
accounting
systems
Calculate
ROI
or like
measure
No
Can project
Find a better
ROI be
method
distinguished?
Yes
Establish
quality
objectives
Establish
audit
criteria
Implement
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as needed, yet the N2OVATE™ strategy (in its many forms) is definitely the foun-
dational building block of project selection and implementation.
Step 6: Tracking Performance

Step 6 is reminiscent of the “T” step in the N2OVATE™ strategy. Figure 4.17
recounts the need to align project tracking with existing systems (accounting,
purchasing, quality, etc.) to maintain sustained success. Only the reader can
determine if these systems align and provide real-time performance information.
Failure to align these systems will doom a project, or worse, become strikingly
evident that critical items affecting performance were overlooked and may sur-
face after full implementation. More information is available in Chapters 5 and 6.
EXERCISE 4.12: DEVISE A STRATEGY FOR IMPLEMENTING

A TRACKING PERFORMANCE SYSTEM
What key elements would you control? What concerns you most about main-
taining consistent performance?
Step 7: Implement and Control

Again, this step (Figure 4.18) is reminiscent of the “E”-related process used in our
methodology. The project is now complete and ready for handoff to operations.
After meeting all the criteria, the “new and unique” item is now a viable product,
Implement
Specification Backup
Establish
and and action
controls
requirements plans
Corrective Control Contingency

action FMEA plans
End
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service, or technology. This step monitors the performance and establishes effec-
tive controls. Further, audit the process on a recurring basis to maintain consis-
tent performance.
Summary
This chapter provided a method for developing a new and unique concept and
then provided a second process for implementation. These types of innovations
are time consuming given the need to understand and rationalize the concept.
Forcing the concept early to meet a set of realistic expectations highlights the
need for innovation. Bypassing steps may save time but will lead to problems
down line that may prove to be unsolvable. It is best to develop the concept
with the objective of sustained performance rather than hope this is an end goal.
Flexibility is required in any innovation project and we have provided that flex-
ibility throughout the process.
1. Why is innovation that has never existed before, so difficult to implement?
2. What advice would you provide to management if your department were
attempting a new and unique innovation?
3. Given the high percentage of failure, what would you suggest to do prior to
a decision to move forward on a project?
ASSIGNMENTS
1. Take a recent innovation and determine if it would be viable using the alter-
native consequence evaluation tool.
2. Consider an idea that you have (or have seen recently)—what are the steps
needed to turn this idea into reality?
3. Discuss the importance of intangibles in making a final decision.
References
Caraballo, E. and McLaughlin, G. 2012. Perceptions of innovation: A multi-dimensional
construct. Journal of Business & Economics Research, 10(10), 1–16.
McLaughlin, G. and Caraballo, E. 2013. ENOVALE: How to Unlock Sustained Innovation
McLaughlin, G. and Richins, S. 2014. Unlocking Sustained Innovation Success in
Healthcare. Productivity Press, Boca Raton, FL.
Todorvic, M., Mitrovic, Z., and Bjelica, D. L. 2013. Measuring project-success in project-
oriented organizations, Journal for Theory and Practice Management, 18(68), 41–48.
doi: 10.7595/mangament.fon.2013.0019.
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Chapter 5
“New” Applications
Introduction
It is difficult for most businesses and organizations to produce unique prod-
ucts or services on a regular basis. Limiting factors, such as the time, cost, and
resources required to pursue innovation opportunities tend to eliminate these
types of projects. Businesses (organizations) must search for an alternative that
enables these entities to offer new products and services to maintain a techno-
logical or competitive advantage. To accomplish this goal many organizational
initiative strategic alliances with another company or organization, intellectual
property agreements or acquisitions of companies capable of filling the capability
and knowledge gaps to pursue the innovation opportunity. Others innovate by
introducing a new product or service application without the expense of design
and development costs, time requirements, and additional resources. This “new”
offering utilizes existing resources and applies a unique approach not yet avail-
able in the marketplace.
In this chapter, we offer an innovation strategy for introducing a new product
or service without the design and development costs, time requirements, and
additional resources. What is proposed is a process that develops new uses or
applications for an existing product or service. Consider the following example:
Proctor and Gamble’s (P&G) product “Tide” has gone through many
iterations, adjusting to its ever-changing consumer set of needs,
appealing to new customers, rebranding itself for improved sales. Yet,
detergent is just that, detergent. Its main use is to help in the process
of cleaning the fabrics and refreshing the laundry. It has accomplished
this purpose since its inception. However, to their credit, P&G has
continued to offer new uses and applications of the product (bleach
added, softeners added, dies removed, color changes, different scents,
etc.). Each new iteration identifies a distinctive application. The
product continues to be “New and Improved.” In fact, some of the
87
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iterations are in fact innovative, since they met unsatisfied consumer

needs. This is an example of what we mean by a new application, or
if you prefer a new use.
Some Innovations (new applications) or “firsts” for Tide (Kattan, 2012):
1. The first detergent to advertise on TV

2. The first to provide new samples inside washing machines
3. The first US detergent formulated with enzymes to thoroughly breakdown
protein and carbohydrate stains
4. The first without perfumes
5. The first detergent with color-safe bleach
6. The first compact powder and liquid detergent
These “innovations” enabled Tide to maintain brand recognition and leader-

ship in a highly competitive marketplace. Identifying these attributes (except
for # 1) as “New and Improved” provided the manufacturer the opportunity to
identify the innovations, meet a presently unsatisfied need, and excite the con-
sumer to make a purchase decision.
This chapter will highlight the process of implementing such a project. The
assumptions is that the proposed product or services has been selected using the
N2OVATE™ or ENOVALE™ processes. Otherwise, the information generated by
these selection processes (requirements, objectives, limitations, and assumptions)
forms the basis upon which to build the final stage of implementation.
The purpose of Chapter 5 is to introduce the process for implementing proj-
ects with new applications or uses. New uses for products is one means to keep
ahead of the competition, one means to achieve technical superiority. The diffi-
culty arises when your competition may be pursuing a similar strategy. New uses
can provide improved profit margins and a longer product life cycle. Of course,
once introduced, the competition may pursue a similar strategy. Therefore, the
strategy provided develops a means of evaluating products and services in their
present states and determine, what, if any, opportunity exists.
For new uses (applications), we suggest a seven-step implementation process
(Figure 5.1)
The process highlights the need for scanning the existing business and com-
petitive environment. The need (consumer demand) must be strong enough to
drive the application throughout its development and implementation stages.
This new type of innovation requires quality input including customer, user, and
information that express the need or desire for such an item, even if it does not
yet exist. Those organizations with access to market research or to customer ana-
lytics (informatics) will have an advantage. Without such information, businesses
would require customer feedback that expands beyond what most businesses
regularly collect and analyze. A functioning analytics department may be the best
source of information to determine the efficacy of a new application or use.
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“New” Applications ◾ 89
Explore
new
application
Align
Reality
and
check
adapt
Objectify Track
Validate Release
Figure 5.1 New application—7-step process.
The first stage of the process is dedicated to exploring new applications or uses
for those products and/or services where management feels there is an opportu-
nity for customers or users to identify the new application as innovative. The pro-
cess to explore new applications involves both customer feedback, extracted from
market research and analytics, as well as information that salespeople intuitively
extract from the customer. Companies without large market research organizations
or departments may use focus groups to gather information on ideas, wants, and
desires that customers may express. However, the customer may not directly tell
the business what they want but it may come from an integration of ideas, needs,
and desires that customers express they had access to for their own personal use.
Here, the project selection (and assessment and diagnostics) are critical to under-
standing where an organization stands in terms of acceptance of a culture that
supports innovation. It is our opinion, that businesses and organizations should
institute a program of regular feedback from sales and marketing personnel to
discuss pertinent issues. That is, any customer-facing employee must understand
their responsibility in collecting information on what the customer wants, needs,
or desires. Interestingly, our experience has also shown us that organizations with-
out this candid customer feedback often miss or lose value from the innovation
opportunity most new applications can provide those that do.
Second step is one based upon a firm understanding of the reality of the organi-
zation, its capability and access to resources. Customers may want or desire some-
thing and it is impossible for the organization to deliver given its previous record of
accomplishment in developing new use replications for products or services. The
reality check is a critical part of this “new” type of innovation as it stands to evalu-
ate potential benefit (value) of the product before commencing implementation.
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The third step is the opportunity to develop the project objective. The objec-
tive addresses aspects of benefit and profitability to the business or organization
given this new potential innovation. This is never a simple task given the com-
plexity of trying to predict so many unknown factors. The success of such a new
use or application depends upon factors such as:
1. The customer’s perception of innovation and appetite for new application

2. The obvious needs that are satisfied with the product or service
3. Cost and overall appeal
4. Profitability, based upon present costs and availability of resources
The fourth step is similar to previous iterations of ENOVALE™ and N2OVATE™

in that it validates or verifies that the product or service can deliver what is prom-
ised. This chapter will discuss how to validate or verify a potential new applica-
tion or use based on prescribed set of criteria. This particular step is consistent
throughout the entire process. Validation is critical as it involves an evaluation that
looks at innovation opportunities at various levels of perception and depth.
The fifth step provides guidance on implementation, that is, the rollout of the
product or service. The key is to align employees, management, customers, and
suppliers to the new application as it offered to the customer. Again, given the
strong emphasis of perception, the innovation must satisfy a need and deliver
superior performance while remaining competitive with other similar products.
The sixth step involves tracking the product requiring both a strong internal and
external set of measures or metrics (i.e., key performance indicators, key perfor-
mance measurements, and critical success factors). It is not only critical to dem-
onstrate the benefit and value of the innovation opportunity, the innovation must
also demonstrate how it meets a need which remains unsatisfied up to the point
in time in which this product or service becomes available. The final step is roll-
out to the customer or user.
Step 1: Exploring the New Application

As mentioned previously, this step involves a great deal of gathering and analyz-
ing information to determine the true need for the application. Figure 5.2 pro-
vides a systematic process flow chart for this step. Exploring new applications
requires an evaluation of four inputs:
1. Customer and user needs (What existing needs remain unsatisfied?)

2. Existing workarounds or substitutions with a positive impact (may become a
future standard)
3. Competitive information—(Are outcomes easily achieved?)
4. Acceptance criteria—in the form of performance standards in which to judge
performance
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Customer Existing
user workarounds
needs substitutes
Explore
existing
applications
Supplier Internal
competitor capability
External Identify
Internal
data unrealized
data
analytics needs
Apply Identify Fits

acceptance potential company
criteria applications profile
Compare Prepare IOP

Apply the and contrast or
ACT tool with project
objectives charter
In scope No
Refine or
with
reevaluate
objectives?
Yes
Refine
potential
applications
Figure 5.2 Step 1—exploring new applications.
Existing and outstanding customer (user) needs should be frequently

reviewed as opportunities for new applications. We advise applying three crite-
ria to determine if an outstanding need is worth considering. The three criteria
are viability, sustainability, and capability. For a more detailed description, refer
to A Guide to Innovation Processes and Systems for Government (McLaughlin
and Kennedy, 2015).
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Table 5.1 Workaround/Modification Simple Example

Workaround/ Value to
Item Modification Benefit Failure Organization Substitute Decision
Tide Add bleaching Brighter Faster New Powered GO
ingredient colors fading applications bleach
wear alternative
Tide Add special New Scent Product Fabric GO
scents applications wears extension softeners
off
Reviewing existing workarounds or modifications requires a more compre-

hensive evaluation. Obviously, Table 5.1 is a simplified version of a set of criteria
used to evaluate existing plans. This coordinates with critical input number 2), as
the ability to execute a new application must be within the ability of the organi-
zation. What is critical is that a workaround may be a candidate for this type of
innovation opportunity. Often, specialized or customized effects may provide an
opportunity for a new application. Table 5.1 can be used as a way of initiating
ideas and opportunities. This table is a simple example showing how Tide intro-
duced a color-safe bleach alternative and removed scents as a marketing tool—
both of which are “firsts” for the industry and met the criteria for innovation.
Both examples satisfied a need, provided a benefit and were “new” to the indus-
try. Consumers saw the value and purchased the product. Was it innovative from
a discovery perspective, no, but it did meet the criteria for being innovative—and
greatly benefitted P&G.
EXERCISE 5.1: EVALUATING WORKAROUNDS/SUBSTITUTIONS

Pick a product you are familiar with that has undergone at least one “new”
application or use change. Construct a simple table, using the template from
Table 5.1.
This is a simple approach to creative problem solving. Each workaround/mod-

ification project is a potential micro innovation project.
The third and fourth elements focus on internal systems (capability) and
culture that support two-way communications with customers and suppliers.
Communications must be proactive (eliciting suggestions, improvements, and
recommendations. It is normal and essential to listen to all stakeholder commu-
nications. However, there is a need for a system capable of collecting/analyzing
customer and supplier communications. One way to capture that information is
with a focus group.
A focus group is a small set of individuals (could be suppliers or customers)
led by discussion by a skilled moderator (Guidelines for Conducting a Focus
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Group). The purpose is to obtain unbiased information relating to a topic or

concern. Structured questions provide the mechanism for collecting the data.
Discussion is free flowing. The moderator, who presents 12 or fewer ques-
tions, leads the group. Questions should be (Guidelines for Conducting a Focus
Group, 2005):
1. Short and to the point

2. Focused on one dimension each
3. Unambiguously worded
4. Open-ended or sentence completion types
5. Nonthreatening
6. Worded in a way that they cannot be answered with a simple “yes” or “no”
answer
A recorder carefully captures both the vocal and nonvocal responses. Analysis
involves both verbal and nonverbal cues that help describe completeness and
truthfulness. The purpose is to gather information that other competitors fail to
capture, monitor, or react to when conditions change.
EXERCISE 5.2: FOCUS GROUP

Design a set of questions for a focus group. Use the theme of new applications
or uses. Be prepared to defend the “theme” that the questions are built upon.
Using focus groups and interviews, as well as supplier perceptual surveys,

often provides the information needed to assess the present state of affairs and
determine unmet needs (what is possible).
Gather competitive information. Analyze the data; look for distinc-
tive patterns and trends. Identify opportunities, research competitor activi-
ties and build competitive profiles. Predict future competitor action; assess
against the present state of existing options; be willing to take action before
the c ompetition reacts. Table 5.2 compares unique service offerings (Tide
Table 5.2 Competitor Assessment to Objectives (Outcomes) Tool

Unique Key Brand Objective Objective
Attributes Competitor Cost Leadership Recognition 4 5
Tide with Many 1 3 2
bleach
Liquid Tide Many 1 3 2
Small Few 3 3 2
packet
Tide
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Example) versus existing competitors. Construct Table 5.2 by identifying

unique attributes of the service that distinguishes the innovation from its com-
petitors. Identify the Key Competitors and their offerings that could challenge
the new application. Rate these against the objectives (or outcomes) estab-
lished for this project. For the Tide example, we use Cost, Leadership, and
Brand Recognition as three potential objectives. With this tool, use the follow-
ing scale:
3—Competitor value exceeds MT case study objectives (outcomes)

2—Competitor value equals MT case study objectives (outcomes)
1—Competitor value less than MT case study objectives (outcomes)
This simple tool will quickly highlight difficulties or potential opportunities.

Do not be afraid to challenge the status quo. Understanding your competitor is
more than half the battle of trying to develop a competitive advantage. Yet, many
businesses relegate this analysis to a minor role.
Data analysis, whether it be simple or complex (Analytics) should uncover
opportunities for the business or organization. Figure 5.3 details the process of
collecting and analyzing analytical information on suppliers, customers, and
competitors, using Analytics. Analytics is useful for collecting and analyzing con-
sumer information, patterns and behaviors. For innovation, gathering information
on unmet needs is critical.
Figure 5.3 details the process of collecting and analyzing analytical informa-
tion on suppliers, customers, and competitors.
Those organizations without this information (or the capacity to gather such
information, i.e., small businesses) can easily brainstorm unrealized needs or use
focus groups and surveys to gather this information. Focus group sample ques-
tions would consist of:
1. What are your purchasing criteria for a new product or service?

2. If an item is new and innovative, will you purchase it automatically?
3. If the item meets a need, like no other presently available, will you purchase
the item?
4. How do you define a need?
5. How do you know if the need is satisfied or not?
6. Would you consider purchasing an item that meets a need?
7. Are you more comfortable with the next generation of an item or would you
rather have something that no one else has access to at this time?
Table 5.3 is an example of such a perceptual survey. Answer each statement

by selecting a response that best meets your agreement or disagreement with the
statement provided and placing the response in the “My Choice” column. Needs
are defined as something wanted or desired. Often requirements may take a
similar role as needs.
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Black boxes—multiple entities

Marketing and Medium gray boxes—data analyst
Dark gray boxes—data scientist
sales
Light gray boxes—data strategist
Customer Analyze and Evaluate

Identify sources
request define needs availability
Link, sort, and

Data mining Access
collate
Filter Classify Analyze Interpret
Customer
Prepare report
presentation
Figure 5.3 Analytics information flow.
Scoring and Interpretation

To score the Perceptual Survey, convert all statement scores into one of three
score categories:
◾◾ 1—When the respondent scores a positive response—Agree, Strongly Agree

◾◾ 0—When the respondent scores a neutral response—Neither Disagree nor
Agree
◾◾ −1—When the respondent scores a negative response—Disagree, Strongly
Disagree
EXERCISE 5.3
Determine a plan (strategy) for collecting in customer, supplier, and competi-
tive information using an “Analytics” or Focus Group/Survey approach.
Try to develop a profile of the statements that received a rating of 1. Examine

the variation between those statements that score a 0 and especially −1. This indi-
cates a more complex purchasing process. The purpose of the survey is to deter-
mine how needs factor into innovation purchase decisions. In addition to these
questions, we suggest adding statements directly related to your product or service.
Finally, the remaining critical sections are finalizing opportunities for iden-
tifying potential applications. Use some form of acceptance criteria to evaluate
these opportunities. Choose criteria from a broad spectrum of evaluation and do
not just focus on financial or cost benefit. Criteria must evaluate the innovation
opportunity potential (i.e., sustained success or satisfying a need) and then scale
each response in terms of its importance or how it meets some other established
performance metric. Begin building the IOP or Project Charter. Begin with the
process to choose the criteria. Brainstorm a list of criteria.
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Table 5.3 Customer/User Unrealized Needs
Neither
Strongly Disagree nor Strongly My
Unsatisfied Needs Disagree Disagree Agree Agree Agree Choice
Services associated with my treatment always meets my needs 1 2 3 4 5
When something I need cannot be easily met, the staff searches for 1 2 3 4 5
alternatives
Information regarding patient’s needs should be accessible 1 2 3 4 5
Patients should be able to suggest potential needs 1 2 3 4 5

Needs are better voiced through the Internet rather than face-to-face 1 2 3 4 5
encounters
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When a service meets my needs, I automatically voice my appreciation 1 2 3 4 5
I only consider returning if my needs are fully satisfied 1 2 3 4 5
I am more comfortable purchasing a medical procedure, such as in 1 2 3 4 5
Dubai, with which I have some experience
If my need is impossible to fulfill, I would still be satisfied 1 2 3 4 5
I base my decision to purchase based on whether my needs are satisfied 1 2 3 4 5
Brainstorming Rules (Hasso Plattner Design

School at Stanford University)
1. Defer judgment: Separating idea generation from idea selection strengthens
both activities. For now, suspend critique. Know that you have plenty of
time to evaluate the ideas after the brainstorm.
2. Encourage wild ideas: Breakout ideas are right next to the absurd ones.
3. Build on the ideas of others: Listen and add to the flow of ideas. This will
springboard your group to places no individual can get to on their own.
4. Go for volume: Best way to have a good idea is to have lots of ideas.
5. One conversation at a time: Maintain momentum as a group. Save the side
conversations for later.
6. Headline: Capture the essence quickly and move on. Don’t stall the group
by going into a long-winded idea.
Remember to keep track of all ideas. Once complete, use a filtering technique
such as 10-5-1 Voting. Each person gets 10 votes; they can vote for 10 items
each with one vote; they cannot assign more than 5 votes per criteria; they must
choose a minimum of 3 criteria and assign no more than 5 votes to a single
criteria.
EXERCISE 5.4: BRAINSTORMING

Design a set of criteria to evaluate a potential application. Think critically
(using Brainstorming) as a tool. Think from the perspective of the customer—
How would you want the item to perform? What need is satisfied, can you
confirm an innovation?
Apply the Acceptance Criteria Tool (with rating scale), such as the example
shown in Table 5.4. This is an example for the Tide with Bleach Alternative.
This tool uses the experiences and knowledge of employees to examine a
product, service, or technology. It is meant to capture the ideas and thinking of a
wide range of employees. Given that, individuals decide what is or is not innova-
tive (this tool can capture criteria often overlooked or not considered). The more
individuals that recognize the innovative characteristics of this item, the greater
the opportunity to reach this audience and generate sustained success.
External influences, used to judge or purchase innovation are needs, customer
appeal, and overall affordability. Customers use multiple criteria before select-
ing a new product, service, or technology. Individuals use numerous criteria
(unequally weighted) to evaluate innovation. This tool (Figure 5.5) attempts to
rate a set of typical criteria a consumer would use to judge innovation and initi-
ate purchase. Individuals judge the criteria by evaluating whether the criteria
equal, fall short of, or exceed expectations. Since each person creates his or her
own expectations, the tool captures the amount of influence the consumer will
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Table 5.4 Acceptance Criteria for New Application Projects

4CT-Acceptance Criteria Evaluation Tool
Less than Greater Easy to
Acceptance Criteria Expected Expected than Sustainable Implement Why
Uniqueness X L S
Acceptable profit X M S
margin
Resource capable X M S
Customer want or X L S
desire
Perceived as X L S
innovative
Brighter colors X M S
Better value X M S
Improved X S M
competitiveness
Controllable costs X M M
Instructions: Develop a set of Acceptance Criteria. Select a “new” application, opportunity or
feature. Evaluate the feature against each acceptance criteria and determine whether
overall performance expectations would be less than expected, expected, or greater
than expected.
Sustainment: Evaluate the sustainability of the feature or opportunity, using the following
scale:
Limited (L) = Less than 1 year
Marginal (M) = 1–3 years
Superior (S) = over years
Ease of Implementation: Evaluate the ease of implementing such an opportunity, using the
following scale:
Difficult (D) = Involves many departments, requires additional resources, affects many
employees
Moderate (M) = Involves 1 or 2 departments, minor resources needed, affects patient
positively
Simple (S) = Involves only department, minimal resources, positive impact for patients
use in their purchase and innovation assessment decision. In addition, the team
evaluates the sustainability of the new application and its ease of implementation.
The authors predict that a strong relationship between expectations, sustainabil-
ity, and ease of implementation and the amount of influence exerted adequately
defines whether a person will decide to purchase or not. The scoring attempts to
capture this changing perspective. Rather than capturing an average score, exam-
ine the number of items in the Acceptable and Strongly Acceptable categories.
These criteria drive consumer behaviors.
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EXERCISE 5.5
Compare and contrast like products (e.g., the Apple I-PAD and Microsoft
Tablet). List three to five criteria and rate each item. Remember to be unbiased
in your evaluation or better yet, get someone else to complete the ACT Tool.
The last elements of Step 1 compare and contrast these ideas (opportuni-
ties) among a set of objectives. Create objectives using the SMART criteria (see
McLaughlin and Kennedy, 2015). Usually the previous version’s established objec-
tives will work for the new version of the product, service, or technology. SMART
objectives are metrics (measurements) that drive the business or organization.
These are not tactical nor operational measures, but strategic measures used in
decision making. If these measures are positive, then management may imple-
ment this opportunity. If not, then the opportunity may require further evalua-
tion, refinement, and modification.
If the “New” application meets and completes Step 1, then move on to Step
2 called the “Reality Check” phase. This phase verifies what we know about the
“new” application.
Step 2: Reality Check

Step 2 is a critical step as opportunities are vetted, evaluated, and checked for real-
ity. Prior to reality checking the innovation opportunity, the first evaluation begins
by understanding how the new application will influence all elements of the busi-
ness or operation. From Figure 5.4 both internal and external influences affect the
“new” application. Internal influences include (but not limited to) funding, resources,
and existing priorities. External influences include competitor practices, overall
appeal and affordability. The authors developed a new tool to help in assessing the
amount and degree of influence. Interchange the word influence with the word
“impact” as many influence elements affect the decision whether to proceed or not.
This tool has numerous uses, not just at this stage but anytime a number of influ-
encers may modify a decision, but also to “think” in more than the 2-dimensions.
Influence Matrix
The team can begin with the external or internal influences. Rather than looking
at these in a linear fashion, consider both a linear and an interactive approach.
To begin, consider the internal influences of resources, funding, and priorities
on the outcome. Consider the one-dimensional influence separately and then
begin to consider two of the influencers together as a contributor. Does prior-
ity influence the funding or resources allocation? If this interaction is present,
which it is, how does it affect availability? Answer these questions and you can
begin to understand the degree of interrelatedness and complexity needed before
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Refine
potential
applications
Needs Availability
Applying the
External Internal
Appeal “influencer” Differentiation
influences influences
test
Affordability Newness
Perform
reality
check
Refine the Limitations

Requirements
application assumptions
Is the No The
application expenditure
worth is not End
pursuing? justified
Yes
Begin
developing
objectives
Figure 5.4 Step 2–reality check.
reaching a final decision. Think of these influencers, not individually, but in the
context of how these interact with one another (Figure 5.5).
To begin, operationally define attributes (characteristics) that consumers (pur-
chasers) will use to evaluate the product. Consider the following general terms:
Definitions:
Needs: Ability to meet (satisfy) customer or user needs

Applicability: A measure of value and use
Price: Determines sustained profit (ROI) potential
Availability: Supply and demand issues
Differentiation: The degree of difference between the product (service) the
application replaces or updates
Newness: Perception (or novelty) of “newness” by the customer or user
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Figure 5.5 Influence matrix example.
EXERCISE 5.6: ACCEPTANCE CRITERIA FOR

NEW APPLICATION PROJECTS
Create a set of criteria known to influence a potential innovative application.
Devise a scoring rubric that enables a measurement of influence of these
criteria.
Using this tool (Figure 5.5), the team identified key “influencers” that could
or would affect the decision. Figure 5.5 lists the Influencing Matrix evalua-
tions with scoring defined. The largest score suggests the influence element
that greatly affects how consumers will choose to purchase the product or
service. These general influencers all affect purchase (use) decisions. Every
item is unique, so criteria and scoring will vary. Use a low score when the
amount of influence is weak. The authors suggest a value less than parity
(1.0). Near parity for moderate influence and greater than parity, the influ-
ence is strong. These criteria could easily come from a perceptual survey or
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focus group. Rather than asking the customer or user what they like, ask them
what do they need, want, or desire. Ask them to define how they know when
they are satisfied and capable of making a decision. The Influence Matrix
considers each influence component and then determines a score based on
criteria.
Example
Consider the next-generation i-Pad or tablet device. Assume that this device
can convert from pocket size to full size with a lightweight rollout screen,
cloud-based computing, and acting as an “all in one” unit with phone, laptop,
and entertainment/media center. Rather than being something very new, this
is a new application or new use. Assume the criteria previously developed are
applicable with this new product. Figure 5.5 lists the influence elements, for this
example.
The results, although simulated, say that ease of use and functionality are the
driving influencing factors. These factors (elements or components) represent
the loci of attention for the application to be successful. Implementing this tool
within the Marketing and Sales functions may provide a unique set of insights
into the customer or user desires or feelings. Similarly, using this tool with sup-
pliers may provide a unique vantage point in better understanding their perspec-
tives and approaches. This tool applies whenever factors or elements influence
the result or decision-making process.
EXERCISE 5.7: INFLUENCE MATRIX

Create a set of criteria based on a hypothetical application. Associate scoring
of the influence factors to correspond to the tools objectives. Identify which
element scores the highest and why it is critical for success.
The Influence Matrix is the last of the reality checks that started with
Step 1. Once completed, the team begins to review requirements, assump-
tions and limitations. This is not identical to the requirements developed in
the Project Selection stage (which examine the overall characteristics of the
opportunity). These requirements, limitations, and assumptions have a distinc-
tive operational emphasis used to refine the application. For example, buying
a suit is the first stage, fitting the suit the second, wearing the suit the third.
At this point, a decision concerning the viability of the project is forthcom-
ing. Finally, is the project worth continuing? The information collected and the
performance observed should predict an outcome from the step. An application
worth pursuing is one that generated benefits in spite of the general business
environment.
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Step 3: New Application

Step 3 continues the process of evaluation, this time the emphasis is on the
objective and whether the project remains a viable option. Recall that in the proj-
ect selection phase, the team and management choose objectives for the project.
The team validates those objectives and they become a focal point for the project
as it proceeds to implementation. There is a constant need for proactive review
and reevaluation, as displayed in Figure 5.6. During the implementation phase,
the objectives again come under scrutiny. There is a constant need for proactive
review and reevaluation, as we emphasize in Figure 5.7. Step 3 reviews objec-
tives and expectations but also aligns to form project outcomes. The alignment
between outcomes and objectives is direct; outcomes include a combination of
requirements and assumptions/limitations. If outcomes are not yet developed,
use existing project objectives. Meeting or exceeding objectives (outcomes) define
the measurement of success for a project. Over time, objectives (requirements)
may change to reflect new knowledge or the business environment. Therefore,
it is critical to understand why these discrepancies exist and what remedies are
possible to bring these objectives into alignment.
Review
objectives
Customer Refine Internal

or user expectations performance
Translate to
final
objectives
Do
application No
objectives Consider
meet business reevaluating
needs?
Yes
Establish
objectives
Figure 5.6 Step 3—objectify.
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Construct the Objective (Outcome) Discrepancy Evaluation tool (Table

5.5) to determine the causes and potential remedies for aligning old and new
objectives (outcomes). Begin with the existing outcomes (objectives) and evalu-
ate these with the modified or new outcome. Describe the discrepancy that
exists and identify the reasons for the misalignment. Determine a remedy (or
solution) that brings the new outcome into alignment with the requirements
and assumptions and limitations of the existing objective. If no discrepancy
exists, then skip the tool. Figure 5.6 provides a blank template. Finding a rem-
edy for the discrepancy reduces the risk of misalignment and project failure
(Table 5.5).
The purpose of this step is to reach an agreement on the outcomes as the
project implementation continues. Failure to address these issues could result in
destructive behaviors if disagreements exist and are not resolved. Moving for-
ward requires an examination of expectations as well. Individuals use expecta-
tions to develop their beliefs and attitudes that become long-term predictors of
behavior.
To understand how consumers rate or evaluate an innovation requires an
understanding of expectations as a key for success.
EXERCISE 5.8: OBJECTIVE DISCREPANCY EVALUATION

Analyze a set of established objectives versus a new or revised set of
objectives for a project (should be an innovation project). Determine how
the differences or discrepancies affect the outcome. Discuss remedies to
standardize.
To measure expectations, have customers fill out this short survey.

Complete the short survey to determine if team members and managers have
the same expectations profile (Table 5.6). Differing profiles suggest variation in
response. Variation in responses suggests inconsistency while a lower average
response indicates that negative expectations prevail.
Table 5.5 Objective Discrepancy Evaluation

Replacement or Discrepancy Found;
Original Objective New Objective Identify the Causes Remedy
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Table 5.6 Project Expectations Survey
Enter the Numerical Value (1–5), in the My Choice Neither
Statement Column, that Best Describes How You Agree Strongly Disagree nor Strongly My
Number (Disagree) with the Statements Provided Disagree Disagree Agree Agree Agree Choice
1 The project is expected to meets its objectives 1 2 3 4 5
2 Implementation is expected to complete on time 1 2 3 4 5
3 No delays are expected in meeting the timelines 1 2 3 4 5
4 The project is expected to be successful 1 2 3 4 5
5 Support for the project remains unchanged 1 2 3 4 5
6 Performance is expected to remain at similar levels 1 2 3 4 5
7 Expect that customers or users will perceive item as 1 2 3 4 5
innovative
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8 Expect that few changes will be made to the project 1 2 3 4 5
9 The project team has performed as expected 1 2 3 4 5
10 Expect management to continue support for this 1 2 3 4 5
project
Total Scores AVG 0 AVG 0 Difference 0
perceptions expectations
Total Scores RANGE 0 RANGE 0
perceptions expectation
Examine the difference between the Perception (odd-numbered) and Expectation scores (even-numbered). If perceptions exceed expectations
(a positive difference), then the person is satisfied and the reality is better than expected. If the Expectations exceed perceptions (a nega-
tive difference) then the person is not satisfied and the reality is less than expected. These persons will not align well with the project.
Scoring and Interpretation

Assign a numerical value to each of the five survey responses, placing the value
in the “My Choice” column. Average these over the 10 statements. Keep track of
the range of the responses per individual. Interpret the results as follows:
◾◾ Average = 5.0 or better—Positive expectations (formed a positive outlook)

◾◾ Average = 2.8–3.8—Medium (neutral) expectations (requires some form of
alignment)
◾◾ Average = 0–2.6—Low expectations (could lead to negative consequences)
A low value indicates disagreement between project expectations and per-

sonal expectations, regarding the outcomes. A positive value indicates both
agreement and satisfaction with the project outcomes.
If there is a large amount of difference between the averages, this suggests
that inconsistencies exist between respondents. This could be as simple as those
who “touch” and those who “manage” the process. This requires some form of
alignment to bring both sides to a place (space) they can come to an agreement.
Finally, use the information recently captured in the previous exercises
to refine outcomes and expectations. Outcomes (objectives) and expecta-
tions support the business case for this project. These are measures not typi-
cally associated with project management and yet individual differences can
lead to infighting, delays, replacements, and even cancellations. Remember
the human element is critical in innovation project management. This step
considers the team dynamic and the role it plays in overall project success.
Failure to address these concerns may adversely affect the overall outcome
and influence sustained success. Assuming that agreement on the goals (set
by the team) and outcomes (set by management) is always positive or at best,
neutral can easily comprise the integrity of the team and its ability to achieve
success.
After aligning outcomes (objectives) and expectations, move on to Step 4.
Step 4: New Applications

Validation begins with a formalization of objectives (outcomes) and elements that
define the new application. For the Tide example, the objective that meets profit
targets and captures market share must coincide with the application (Color-safe
Bleach or Bleach Alternative). If the objectives and key components of the appli-
cation are compatible, then the process can move forward.
Validation is a similar phase (see Figure 5.7), for all project implementations,
no matter what the type of innovation. It is the final step before full implemen-
tation begins. This step begins by matching outcomes to application elements
and assuring these coincide and reinforce one another. Formalization involves a
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Validate
New
Objectives Formalize application
elements
Resources
Cost Review for
People strategic fit
Plan
for
evaluation
Success/
performance Focus
criteria groups
key Evaluate perceptual
performance and surveys
indicators test
No
Were the
test results
satisfactory?
Yes
When? Prepare
Where? for
How? implementation
Figure 5.7 Step 4—validate.
review of the outcomes for relevancy and applicability. To meet these criteria, the
outcome must include:
1. A consensus (the objectives continue to be relevant and predictive) among

management, stakeholder, and consumers
2. Verification via empirical evidence (both from descriptive and inferential
statistics)
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3. A historical precedence (past similar projects using identical or similar

outcomes)
4. Success criteria that is competitively driven (using standard performance
information); regularly utilized by competitors)
Often it is a combination of 3–4 of these characteristics; however, empirical

evidence should be the top choice since it is bias-free. Helpful tools to view and
understand this information include:
◾◾ Run charts (ENOVALE: Unlocking Sustained Innovation Project Success;

McLaughlin and Caraballo, 2013b)
◾◾ Descriptive (Exploratory) analysis:
Exploratory Data Analysis (EDA) is an approach/philosophy for data analy-
sis that employs a variety of techniques (mostly graphical) to maximize
insight, uncover underlying data patterns, detect outliers and anomalies,
test assumptions, and develop operational settings. (http://www.itl.nist.gov/
div898/handbook/eda/section1/eda11.htm)
◾◾ Control charts (described in Chapter 6)
◾◾ Inferential statistics (Statistical analysis)
◾◾ Risk analysis (suggest @Risk as an excellent addition to Microsoft Excel)
◾◾ Pattern and trend analysis (ENOVALE: Unlocking Sustained Innovation
Project Success; McLaughlin and Caraballo, 2013b)
Keep the empirical analysis simple, but instructive. This serves as a predictor
of future performance and success; it also serves as a mechanism to detect and
act upon change.
The next minor step is the review for strategic significance. Management and
leadership reexamine the objectives and application to determine an overall fit
with the company or organization’s business plan (strategy) and alignment with
core competencies. This final decision-making phase permits an overall review
of how the objectives align with and support strategic goals and vision. It is an
opportunity to judge the project’s worth and overall contribution. It is also time
to communicate and prepare the workplace for this new product or service line
extension. This permits leadership, the time to examine the real value to the
company (business), and begin the mechanism needed to communicate and
support such an effort.
The “test” portion of the Validation phase involves “proving the concept.” By
collecting data on the actual “experience,” the team (management) can evaluate
performance, customer satisfaction, and potential alternatives that increase effi-
ciency and effectiveness.
1. Conducting an observational study or a “dry run” by selecting 5–10 samples

to “experience” the product or service in action, while carefully monitoring
the results
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2. Designing and testing using a more efficient experimental approach to

evaluate all components of the product or service “experience”
3. Simulating the process to evaluate its capacity and its ability to perform
Designing and planning for such an evaluation is an entire topic on its own.
Contact us at IPS for further assistance in conducting such a test.
In concert with testing and evaluation, revisit and rethink, the strategy
employed to implement this new application. Management and leadership must
reexamine the outcomes and application to determine an overall fit to the busi-
ness plan (strategy) and alignment with core competencies. This final decision-
making phase permits an overall review of how the outcomes align with and
support strategic goals and vision. It is opportunity to judge the project’s worth
and overall contribution. It is also time to communicate and prepare the work-
place for this new application. This permits leadership the time to examine the
real value for the organization and begin the mechanism needed to communicate
and support such an effort.
Now the verification process begins. Create an execution plan that details
each action that is required for final approval (revisit the IOP and Project Charter
templates with updates). Consider plan elements that verify:
1. Objectives
2. Benefits (profits/ROI)
3. Costs (fixed and variable)
4. Performance (compared to a set of norms)
5. Resources
6. Personnel/Communications
7. Competitive response
Begin the final evaluation process. Use a variety of methods to collect and
validate the data. Use various techniques described in this book combined
with techniques that capture perceptions, beliefs, and attitudes (Interviews and
Surveys).
Test and evaluate success and performance criteria, using empirical tools.
Balance these with attitudinal studies (focus groups and perceptual surveys)
that capture the intent and meaning customers will attribute to your product
or service. Determine if differences exist and how best to evaluate these dif-
ferences. If the results meet criteria, and test to be satisfactory, then operation-
alize the project. If not, conduct “5 Why” sessions (asking “Why” numerous
times until a specific set or single reason or cause [could be more than 1]
is identified). This is the time to address and fix problems, rather than after
launch. If a project reaches this stage, the chance of disapproval should be
slim. Regardless of outcome, document your activities and file for future refer-
ence in case the innovation opportunity decision is not favorable or the proj-
ect delayed.
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EXERCISE 5.9
Describe the rationale for validating a project. What value does verification
bring to the decision-making process? How does data provide an unbiased set
of results that assists in the decision-making process?
Step 5: New Applications

In step 5, full operationalization is in progress. Alignment refers to the process of
“getting everyone on the same page” to rollout the innovation. For this innova-
tion type, alignment focuses on:
1. Communications (the message)—both externally and internally

2. The effect on internal operations (including space allocation, resources/mate-
rials, facilitation, process, planning, etc.)
3. Policy and strategy concerns
Communications are the fulcrum for success. Communicating how the applica-
tion meets an unsatisfied need, how it adds value, and how it outperforms simi-
lar products, services, and technology that are all critical from both an innovation
and sustained success perspective. You want your customers or users to readily
appreciate its innovative capabilities, identify how it exceeds their expectations,
and how it will drive them to purchase (Figure 5.8).
EXERCISE 5.10: PRODUCT, PROCESS, OR

SERVICE MARKETING MESSAGE
Design a message that will inform customers of a new application-oriented
type of innovation. Pick an existing product or one you are familiar with and
determine its appeal to customers and users.
Finally, there is the message that must reach the consumer (user). The
message must be unambiguous (clear), accurate, and timely. The message
is more than advertising, more than media, more than word-of-mouth; it
is direct and uncomplicated—meeting an unsatisfied need (requirement)
with value to the customer. To deliver the message requires a marketing
approach that highlights the value and benefit the innovation will deliver;
it most appeals to the consumer segment most interested in this product,
service, or technology.
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Alignment
Resources
People Policy
actions
communication strategy
materials
Develop
simple
message
Include
objectives and
application
Yes Is the No Reach

Message message consensus
unclear unambiguous? and
alignment
Concentrate
efforts
Customer
implementation
Figure 5.8 Step 5—alignment.
Step 6: Tracking
This process is reminiscent of our previous Step 6 suggestions. It may seem
redundant to continue discussing tracking and monitoring various performance
and financial metrics, yet this is a topic that ranks lower in importance, given
the need to market or implement the application. A functioning measurement
system is both real time and forward-looking. It is sustainable, repeatable, and
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can judge the existing process and provide information on trends and devel-
oping patterns. The process (Figure 5.9) provides the empirical feedback and
actionable information necessary for the appropriate decision makers to make
critical decisions.
This step (Figure 5.9—Step 6) begins by refining (or establishing) tracking
metrics for the application. For the Tide example, it could be additional sales,
improved customer satisfaction ratings, test results, etc. Refining these mea-
sures may be as simple as tracking product types by sales and preferences.
The key takeaway is to examine the present system and look for additional
opportunities.
These metrics (Key Performance Indicators) must link to the companies or
organizations accounting and financial systems capable of tracking the new
Large-scale
implementation
application
Refine
tracking
measures
Link to
accounting/
financial
measures
Track
Revisit financial Revisit
measurements performance expectations
and benefits
Analyze
financial
results
No Yes
Go back Do results
Continue
to step meet
evaluation
3 expectations?
Figure 5.9 Step 6—tracking.
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product, service, or technology. Antiquated systems may provide only “after the
fact” or less detailed information required to accurately measure the innovation
implementation. At this stage, during the evaluation, consider the quality of the
metrics and their ability to provide accurate and reliable information. Perform
the same review on expectations and perceptions of profit and p erformance.
Determine if there is a gap between what is expected (promised) and the real-
ity of what is possible given the marketplace and existing conditions. Gaps here
indicate potential problems when results do not meet expectations.
The more the organization tracks performance the easier it will be to
address problems (identified quicker) and provide a solution to these problems.
Combined with Step 5, after testing and evaluating the service, it should be obvi-
ous if the product or service will meet or exceeds its stated outcomes.
Chapter 6 provides a more detailed explanation as the “new” types of innova-
tion share these last two steps.
Step 7: Release
Finally, the remaining step is consistent throughout all project implementations.
The purpose is to evaluate and monitor (see Figure 5.10). Items such as toler-
ances, specifications, guidelines, and directives are defined and refined. The
emphasis now is control and reaction. Control is required when the process
Evaluate
and monitor
Specifications Backup
Establish
and plans
controls
requirements action plans

action FMEA plans
Project
ends
Figure 5.10 New application—step 7.
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varies or drops below expected values; reaction when you need to bring the pro-
cess back to acceptable performance levels. This will include back-up plans, and
contingency plans to handle developing problems so as not to disturb longer-
term sales patterns. This monitoring should also provide valuable information on
process changes that could lead to product, service, or technology reevaluation.
Releasing the process opens the portal for more innovation as micro projects
can improve elements of the process on a daily, weekly, or monthly basis. Use
this step to monitor and adjust the “experience” as needed.
In summary, this step is critical for sustaining and maintaining long-term
performance. Because of its long-term perspective, it is common for manage-
ment and leadership to overlook the importance of this step (particularly when
developing a new product or service application) or undervalue its necessity.
We recommend that managers or leaders be required updating their skills. As a
reminder, applying sufficient time and resources will ensure the viability of this
step. Capable managers enable the organization to react to circumstances that
could derail the application of cause and lead to its early demise.
Summary
This chapter describes the process of introducing a “new” application that meets
the criteria of being innovative. New applications (uses) provide a business or
organization strategy that keeps that business at the forefront of innovation,
providing ample competitive advantage. The process to create, develop, and
implement is much shorter than that associated with a new discovery or inven-
tion. Although a reduction in it is possible, a more likely scenario is that profits
and ROI may greatly exceed expectations. Developing this strategy is a key to
remaining both competitive and a leader in the field.
1. List the advantages and disadvantages of this approach. When would con-
sumers reject innovation as a desirable trait?
2. Which outcome (the innovativeness, value, performance, etc.) would you
expect that customers would want before purchasing a new application? List
the outcomes in order of importance.
ASSIGNMENTS
1. Propose a new application for an existing product, service, or technology.
Use the seven steps to outline your plan. Estimate a general timeline for
completion (based on best guess estimates).
2. Perform a “reality check” (Step 2) on a recent or proposed new application.
Would the application pass this test? Identify any missing components and
propose a method to address these.
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References
Brainstorm Rules (Hasso Platner Insitute of Design Stamford University. http://e145.stan-
ford.edu/upload/handouts/brainstorming.pdf March 31, 2015.
Guidelines for Conducting a Focus Group Eliot and Associates. 2005. https://assessment.
trinity.duke.edu/documents/How_to_Conduct_a_Focus_Group.pdf March 30, 2015.
The Tide Story: Storytelling to Reinforce Market Leadership, Omar Kattan | November 10,
2012 | Brand Stories | No Comments, http://www.brandstories.net/2012/11/10/the-
tide-story-storytelling-to-reinforce-market-leadership/ March 30, 2015.
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Chapter 6
A New Approach
Introduction
The last of the three “new” types of innovation types is that of creating a “new
approach.” A new approach uses existing resources (technology, products, pro-
cesses, and personnel) to offer an alternative to what presently exists. Stated
differently, “a new approach is one where the new aspect is a new approach for
an item within the scope of existing technology” (McLaughlin and Caraballo,
2013a, p. 41). Developing a new approach is similar to extending the life cycle
of the existing item through incremental innovation opportunities. The new
approach “breathes life” into the product, service, or technology. “This new
approach could have a very short life cycle before duplication or superseded
by existing competition” (McLaughlin and Caraballo, 2013a, p. 41). Typical new
“approaches” include:
◾◾ New features
◾◾ New “feel” or “look” (emotional response—any of the five senses)
◾◾ New process (offered in a different way)
◾◾ New outcomes
This method provides a new element or approach without cost or time delays.
A new approach or new feature might open up avenues of opportunity for an
existing item, process, or service. For example, many banks are beginning to
move from full service to limited services (few, if any tellers) with the introduc-
tion of new, more automated service offices. This is definitely, a new approach,
but at what cost to their older customers, who do not want to participate in the
technology. Therefore, for one demographic group the approach represents a
positive, for another a negative.
As with any innovation opportunity, a need (requirement) must be sat-
isfied before the consumer perceives it as innovative. Therefore, the new
approach must first seek to meet an unsatisfied need. In addition, the fact that
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competition can easily replicate or duplicate these efforts limits the overall
effectiveness of this particular type of innovation opportunity. The business or
organization must use a wide swath of information related to perceptions and
attitudes (all necessary elements of customer purchase behavior). When adver-
tising or marketing this concept, its unique or new approach message must
reach the customer. “In simple terms, communicate to the user what is new,
what needs are or will be satisfied, and how the item performs better than its
predecessors do” (McLaughlin and Caraballo, 2013b, p. 42). Consumers will
comprehend the benefits especially those influenced by the aspect of new, as
innovative.
Clearly specify this new approach with its requirements in detail. What dis-
tinguishes this new element from existing items is that it fills unsatisfied needs or
capability gaps. Therefore, rather than focusing on design and development, the
focus transitions to perception and attitude. Realizing that the consumer may be
confused trying to determine what constitutes a new approach, communicating
the message takes precedence. In this innovation opportunity, articulating the
differentiation is the key to success. Rather than stressing only the new approach,
stress the improved performance, value-added (benefits), and/or specific needs
satisfied. Consider the example of a large pharmacy chain that decided to offer
greater than 30-day prescription refills. Perhaps for economic or convenience
reasons, the need arose since patients did not want to make such frequent trips
to the pharmacy. Subsequently, the pharmacy in cooperation with the care pro-
vider decided to offer 60- and 90-day prescriptions for some classes of prescrip-
tion drugs not controlled or monitored closely by the Drug Enforcement Agency
(DEA) and the Food and Drug Administration (FDA). To “sell” this feature
requires precise, specific communications and compliance with FDA and DEA
guidance and law. This met an unsatisfied need, it was innovative, and it fits the
category of a new approach. The bulk of the money spent will be on the process
of marketing or advertising the new approach.
The difficulty arises in convincing consumers/users that the new approach
is innovative and handling the reality that not all drug prescriptions would
qualify for this innovation opportunity. However, businesses can easily adjust
components, packaging, or service settings. Consider the ordinary “mixer” used
for baking. Simply by adding a new attachment, the machine can now knead
dough and with that attachment, this innovation becomes a new approach. The
manufacturer does not need to change their production schedule, resources, or
equipment; they need only to add a new attachment or perhaps change their
production and manufacturing process in the area of packaging. Of course, there
is a time required to develop, design, and test such an attachment, but consider
the extended life cycle and the ability to advertise such a new product. Now,
by adding a shredding device, the mixer has further extended its life cycle and
usefulness. As previously discussed, differentiation is again a key variable so that
communicating that innovation or increased capability to prospective buyers is
all part of this new approach.
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A New Approach ◾ 119
A New Approach—Seven Steps

As with all ENOVALE™- and N2OVATE™-derived processes, there are seven
steps to complete from development through implementation (operationalization).
Figure 6.1 details the seven (high-level) steps.
The process begins by reviewing and evaluating the new approach, then
moves to validation and alignment and finally to operationalization. The final
three stages are comparable to those steps described in Chapter 4. This chapter
elaborates on these three steps in detail.
The letters associated for this new type of innovation opportunity are:
◾◾ R— Review existing approaches

◾◾ P— Propose new approaches
◾◾ O— Objective development
◾◾ V— Verify/validate
◾◾ A— Adapt/align
◾◾ T— Track performance
◾◾ E— Evaluate and monitor
The focus is on creating approaches based on the experience and knowledge

gained previously (step 1, review existing approaches). After establishing a foot-
hold, ideas for new approaches have a mechanism for evaluation and review
(step 2). Moving ahead from step 2, the team can then decide upon one or more
objectives that will serve as project outcomes (step 3). Steps 4 through 7 are
similar to that described in Chapter 4. This chapter details steps 5 through 7, also
applicable for those steps in Chapter 4.
Review
existing
approach
Propose
Align
new
and adapt
approaches
Objective Track
development performance
Evaluate
Validate and
monitor
Figure 6.1 New approach seven steps (high-level model).
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Step 1: Reviewing Existing Approaches

The decision to begin by reviewing existing approaches originates from the
fact that creating a new approach is similar to activities used to extend the life
cycle of a product or service (Figure 6.2). The major difference is that innovation
begins with a need. Evaluate each new approach based on the criteria listed in
Table 6.1. Consider each “new” addition or modification as an “element.”
Review Review the Customer

customer existing attitudes,
analytics approach expectations
Rank and Research Duplication

rate feasability short
attributes alternatives life cycle
Apply Identify Clearly

R&R unique specified
tool attributes requirements
Evaluate
Acceptance
new
criteria
approaches
No
Accept a new
Develop End
approach?
criteria
Yes
Assess
project
POS
Evaluation Proceed
NEG
Reevaluate
Figure 6.2 New approach—step 2.
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Table 6.1 Review of an Existing Approach

Empirical
Element Expectations Experience Knowledge Attitudes Evaluation Decision
Begin the process by reviewing existing or proposed approaches. Use a set of

criteria that examines customers or user’s perceptions, attitude, knowledge, and
experience (Table 6.1). Consider a unique aspect or dimension of a new approach.
Each new approach has potentially many elements that defines its unique
character. An element refers to each unique characteristic of a new approach. Rate
each element, using five criteria, as a means of evaluating the new approach.
Expectations: What the customer (user) would want or desire?

Experience: What were customers experiences using the product, service, or
technology?
Knowledge: What is their level of understanding with the element?
Attitudes: Prevailing feelings and beliefs about the element
Empirical evidence: The results of specific and focused data collection
Decision: (Not a criteria) A determination of whether to continue to explore,
refine, or end the opportunity
Before using this tool, review the scoring guide for each of the five criteria.
Scoring Guide
Expectations: None (N); Low (L); Medium (Me); High (H)
Experience/knowledge: Low (L); Minimal (Mi); Needs Upgrading (U); High (H)
Attitudes: Nonexistent (N); Poor (P); Good (G); Excellent (E)
Empirical evidence: Inconclusive (I); Poor (P); Marginal (MG); Compelling (C)
Decision: No change (NC); Reevaluate (RE); Accept with condi-
tions (AC); Accept w/o conditions (AWC)
Interpretation
This is a simple evaluative technique, easily distributed to team members for their
input. It is useful in any environment, especially where the team is virtual. Score
each element based on the respondents understanding of the new approach and
its unique characteristics. Apply a critical thinking mentality to evaluate each
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element/criteria pair to help reach a decision on whether to pursue the existing

approach opportunities, refine the approach, or search for a new opportunity.
Evaluate the number and ratio of positive responses. The number of positive
responses should exceed all other responses for a final decision to implement.
The alternative is if there are no incidences similar to a new approach; then
begin with examining the unsatisfied needs or identified capability gaps.
Example
Consider the simple example of offering a 90-day supply of a prescription as
an alternative to a 30-day supply. Consider the following elements of this new
approach (Table 6.2).
The result of the exercise is that the offer (communication to the patient) and
cost are critical to patient’s acceptance. Packaging is not an issue. The decision
involves beginning the testing of the concept.
EXERCISE 6.1: REVIEW OF EXISTING APPROACH

Consider a product (service) you are familiar with for this exercise. Develop
a new approach for this product. Test and identify which element of the new
approach is most critical to the overall decision process. Construct a simple
table, using the template from Table 6.1.
The next step is to determine the feasibility of alternatives to the existing

approach. Issues such as duplication and shorten-life cycle will always be of
concern. Any alternative that can extend the life cycle or provide benefit (value)
to the organization and the customer (user) is worth considering. Consider using
the AREA (alternative repercussions and evaluation analysis) template approach,
described in Chapter 9 (McLaughlin and Kennedy, 2015). An alternative to the
more detailed AREA is the use of the rating and ranking (R&R) tool (Table 6.3),
which evaluates key attributes (KAs) of the proposed alternative. KAs are charac-
teristics of an approach that influence consumer behavior in terms of recognition
of the approach as being innovative. Rate each attribute as either negative, posi-
tive, or neutral. A positive rating suggests that the business is e xecuting a KA in a
way that positively affects the business.
Table 6.2 Review of an Existing Approach—Example

Empirical
Element Expectations Experience Knowledge Attitudes Evaluation Decision
Repackaging N N H Md MG NC
Offer H H H H C AWC
Cost H H H H H AWC
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Table 6.3 New Approach Key Attribute Rating and Ranking

Needs
Effectiveness Rate Adjustment or
Key Attribute Rating Importance Replacement Ranking
Unlike KAs variables from the IOP (Innovation Opportunity Profile) such as KPP
(Key Performance Parameters) and KPIs (Key Performance Indicators), which are
known, assume that these KAs achieve performance levels that meet expectations.
In most instances, the information regarding KAs is scarce or unknown. Therefore,
be prepared to make some assumptions based on both experience and knowledge.
Next, rate the importance of each KA and activity. This will begin to focus the
team on what items need the greatest attention. Finally, give a quick summary of
what needs adjusting (or in some cases replacement). This simple tool provides a
mechanism for discussing alternative approaches, yet incorporates the combined
wisdom and experience of the team. This “active” type of data (since it is real
time) is always useful for innovation opportunity projects.
This tool examines the KAs of a new approach by e xamining the effective-
ness, importance, and replacement potential. The rating scales for each of these
three criteria are as follows.
Effectiveness Rating and Definition

Positive (+): A potential positive to the business or organization
Neutral (N): Potential is limited or the attribute lacks effectiveness
Negative (−): Attribute has a negative effect
Importance Rating and Definition

Major: Major importance, has significant effect on customer (user)
Medium: Importance is limited; has a minimal effect on the customer (use)
Low: Low or nonexistent importance
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Replacement Potential Rating and Definition

Yes: Easily replaced with a substitute of equal or greater value
No: Not easily replaced with a substitute of equal or greater value
Next, when a rating is lower than expected, assess whether the KA requires
adjustment or replacement. Finally, rank the KAs in terms of the ratings, if there
a number of attributes that have similar ratings. Use the ranking column as a way
to differentiate attributes that could lead to new approaches or result in innova-
tion opportunities.
Consider the following example. A small medical office wants to grow its nutri-
tional business (healthy foods and nutritional supplements), but lacks the knowledge
to market the business. They have been offering this business for the last 10 years
and need a new approach to increase traffic into their offices. Table 6.4 lists poten-
tial new approaches.
All of these potential activities could lead to a few new approaches. The obvi-
ous key is the message, which would take first priority and the presentation of
the message as the second priority.
EXERCISE 6.2: RATING AND RANKING (R&R) TOOL

Consider a new approach. Describe the unique attributes of this new approach.
Use the attribute rating and ranking tool to evaluate each attribute. Assign a
ranking scale to determine the effectiveness of the attribute. Use Table 6.3.
Once a potential unique approach is identified, consider the specific require-

ments (assumptions and limitations) needed to make this approach a reality. For
the example, an improved message (regarding the nutritional business), includes
the following characteristics: a description of content, clarity, depth, length,
Table 6.4 Rating and Ranking (R&R) Tool—Example

Effectiveness Rate Potential
Activity or Attributes Rating Importance Replacement Ranking
Improve Web Site Design + Medium No 4
Improve Web Site “Message” + Major No 1
Change Brochure “Appearance” N Medium Yes 5
Change Brochure “Message” + Major Yes 2
Free Advertising + Medium No 7
Social Media approach + Medium No 6
Social Media “Message” + Major No 3
Social Media Audience + Major Yes No ranking
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intended audience, wording, and action-orientation wording. A unique approach

may seem appropriate but its associated requirements (limitations and assump-
tions) may be difficult to implement. For example, there is a need to revise the
web site for this small medical firm, but with no one to do the web site revision;
it may not be a viable or a workable solution. Use this step to identify these
unique approaches, however, temper your judgment by the reality of its require-
ments, limitations, and/or assumptions.
This next step is to evaluate the performance of the key or unique attributes
(and approaches). Use any of the evaluative techniques already discussed in
this handbook to determine efficacy. Decision criteria should be based upon:
empirical evidence (data analysis—internal and external), critical thinking, col-
laborate tools, experience, knowledge, and past performance. One method is
to use the acceptance criteria, discussed in the next paragraph, as information
needed for an informed decision. Hasty, ill-informed decisions lead to waste and
inefficiencies.
Now, it is time to establish or revisit the acceptance criteria. Acceptance crite-
ria are those performance measurements, that when met, judge whether the new
approach is successful. These measures provide a standard from which to judge
an outcome and whether it will or will not offer benefit. Coaching is important
here since the client often wants to achieve goals that may be unrealistic without
changes in philosophy or culture. Focus on establishing criteria (and acceptable
limits or ranges) jointly. A surprise this early in the process can be devastating.
Estimate as well as you can since no one is omniscient. Acceptance criteria and
critical success factors (CSF) provide a method of framing success. Acceptance
criteria provide a quick and simple review of planned activities and enable the
team to judge whether an activity is worth the expenditure of money, time,
and talent. Consider the small medical facility that wants to expand its nutri-
tional business. The criteria in Table 6.5 represent a “best guess” estimate and
these provide a set of criteria in which each of the attributes of a new approach
Table 6.5 Acceptance Criteria

Measurement Minimum Maximum
Implementation time 3 months 6 months
Overall costs < $1000 < $3000
Advertising costs $500 $1000
Marketing costs $200 $400
Video costs $300 $600
Number of patients 10 30
Office disruption 0 1 h
Patient satisfaction Moderate Exceptional
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must meet. Failure to meet these criteria may cause the removal of a particular
(unique) attribute from consideration.
EXERCISE 6.3: CONSTRUCT A SET OF ACCEPTANCE CRITERIA

Using a blank version of Table 6.5, determine those measurements that define
success. Which KAs do you think meet or operate outside of the criteria?
The final step will determine whether the different KAs of the approach meet
the acceptance criteria or need further revision. A decision to operationalize ends
this step.
Step 2: Proposing New Approaches

When it is clear what needs accomplishing, then examine alternative approaches to
achieving an existing outcome(s). The complexity tends to increase with the number
of outcomes. Each component of an alternative is essentially a solution. Proposing
new approaches (Figure 6.3) is more than brainstorming a list of ideas; it requires
an understanding of the expected outcome (acceptance criteria), its contribution
(the benefits and value it generates), and its ability to satisfy the need (designated
as a “success”). It may seem simplistic, but the thinking required is three-dimen-
sional (company, customer, and components). The components are elements of
the approach. The Approach Benefits Influence Analysis (ABIA) tool is one that
Propose
new
approaches
Define
Define ABIA
sustained
benefits analysis
success
Apply
Alternatives decision Consequences
criteria
Yes Is the No
Next step approach Reevaluate
viable?
Figure 6.3 New approaches—step 2.
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encourages critical thinking about potential approaches. Based on the principle sur-
rounding the Failure Modes and Effects Analysis (FMEA), the tool, used in a team
setting, integrates thoughts, experiences, and ideas into a cohesive response.
To use the tool, complete the ABIA worksheet (Figure 6.3). Consider each new
component of an approach as a proposed solution. Brainstorm those elements
worth implementing. Determine the benefit, its influence (the approach element)
and its effect on sustained success. Then, determine what could cause this element
and benefit to loose influence (or even fail). What preventative controls (actions)
could essentially alleviate the loss of influence, thus leading to sustained success.
To begin, the team needs to define the benefit and its overall influence on sus-
tained success. Use the worksheet (Figure 6.4) to develop the basic information.
1. Identify the unique element(s) of the new approach
2. What benefit(s) does it bring (the needs that are satisfied, or improved per-
formance, etc.)
3. Assess the influence of the benefit on sustained success
4. Potential cause or reasons why the element (and resulting benefit) could lose
influence
5. Actions needed to sustain the benefit
Figure 6.4 Approach benefits influence analysis worksheet.
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Figure 6.5 Approach benefits influence analysis worksheet—medical firm example.
For example, consider the small medical firm that wants to increase their
nutritional business, how could the ABIA worksheet help in determining which
new approach to implement (Figure 6.5).
Once the worksheet is complete, the team can transfer the information to the
full template. The full template (Figure 6.6) also assigns probability to the occur-
rence of certain events. There are three probabilities (IP, OP, SS) estimated:
1. Influence probability (IP)—the influence the element has on the benefit.

2. Frequency of occurrence (OP)—how often does a negative effect influence
the benefit?
3. Chance of sustained success as an estimate of success (SS).
4. Success priority number (SPN)—A calculated value, the greater the value,
the better the element, or component delivers on success (makes the new
approach successful).
Take the information from ABIA worksheet and transfer this into the full
tool, then apply the probability values (obtained from Figure 6.7) to the table
to calculate the SPN. A small portion of small medical firm’s ABIA is pre-
sented. Figure 6.8 presents some preliminary results. The SPN scores assist in
determining the elements of a new approach that can provide sustained suc-
cess, while preventing the element from losing influence and providing less
benefit.
Use Figure 6.7 to determine the risk score involved with each approach, the
excel worksheet will calculate the SPN. The greater the SPN, the more critical the
element to implement. Consider low success priority numbers as an indicator of
an alternative.
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Figure 6.6 Approach benefits influence analysis template.
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Figure 6.7 Approach benefits influence analysis scale for risk analysis.
Figure 6.8 Small medical firm example.

To validate, collect empirical evidence (both active and passive) data, exam-
ine for patterns and trends, and determine if variation (inconsistency) decreased.
Sustained (success) is a key for innovation. Note: AC = Alternative element/com-
ponent; B = Benefit; P = Performance.
EXERCISE 6.4: CONSTRUCT ABIA

WORKSHEET FOR A NEW APPROACH
Transfer the worksheet information to the ABIA template and complete the
analysis. List the findings and describe the results.
The remaining portion of this step is in validating the results of the ABIA tool
and deciding how to proceed. The decision rests with the results of the ABIA
and acquisition of confirmatory information. This could come in the form of
1. Empirical evidence (experimentation and simulation are great methods to

estimate benefits and life cycle maturity)
2. Past experiences (including those of competitors) that proved highly successful
3. Specific customer/consumer needs collected either through interviewing/
focus groups or analytics to determine needs, wants, or desires
4. The creative minds of employees, partners (suppliers, stakeholders), and
management
To evaluate the new approach, consider alternatives and related consequences.

Think of alternatives and consequences as the simplest law of Newtonian phys-
ics—for every action there is a reaction; for every alternative, there are conse-
quences (and benefits). This process moves critical thinking to a higher dimension
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Table 6.6 Alternative/Consequence Evaluation

Key Attribute
Component Alternative Consequence Severity Benefit
(4-C) (company, customer, component [attribute], and consequences). There are

consequences with any choice, the goal is to minimize these consequences and
deliver increased benefit or value. If a choice is to select a new approach, then
what are the consequences (these can be negative, neutral, or positive)? This
requires combining the 4-C approach with time (to determine severity). List the
components (KAs) that constitute the new approach. Brainstorm a list of alterna-
tive approaches and related benefits. Indicate the type and value of the benefit
and define the measurement. To determine how the alternative(s) will change the
outcome of sustained success, use the 4-D thinking (customer, company, compo-
nent, and consequence). When developing Table 6.6, use the 4-D thinking (Figure
6.9) to influence your thinking. Next, evaluate the c onsequence as to its severity.
(Note: Consequences with a small or negligible severity are an optimal state. You
weigh severity with benefit to make a final decision.)
Component
(key
attribute)
Alternative Customer
Company Consequence
Figure 6.9 4-D thinking.
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List the consequences of each alternatives (remember, the consequence can

range from positive to negative). This exercise may expose a new alternative or you
may consider a different alternative due to the consequences, severity, and benefit.
Table 6.6 summarizes the information derived from the 4-D thinking process.
Consequence Scale
◾◾ Positive— Adds to or creates a new benefit
◾◾ Neutral— Does not add discernible benefit
◾◾ Negative— There is no benefit or a negative effect is present
Now rate the severity of the consequence, based on long-term success of the
benefit.
Severity Scale
The influence exerted by the consequence requires consideration. If the team
chooses an alternative, for example, to save cost (benefit), what are the long-term
consequences and can these reduce, eliminate, or create a negative effect on the
benefit?
◾◾ Major influence— (positive, negative effects)

◾◾ Marginal influence— (limited positive and negative effects)
◾◾ Minimal influence— Neutral response—consequence does little to change
benefit
◾◾ No influence— Benefit consequence pair is inconsequential
Benefit Scale
◾◾ Major benefit
◾◾ Marginal benefit
◾◾ Minimal benefit
◾◾ No influence
Consequences have a major time dependency as well. Consequences may

hide or have little effect in early stages of the product or service design but
reveal its effect in the future. Choosing an alternative based on traditional
thought processes, rather than 4-D thinking, may significantly shorten the
life cycle of a new approach. The warning here is to be cognizant of the conse-
quences and develop contingencies to address identified consequences. In sum-
mary, choosing an alternative approach may seem simple, yet in reality, the
choice may have compound effects that can ripple through the organization long
after adopting the new approach as a standard practice.
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EXERCISE 6.5: COMPLETE AN

ALTERNATIVE/CONSEQUENCE EVALUATION
You can choose either a work or personal example of time when you decided
to choose the alternative rather than your initial choice.
Finally, the team should have enough information to judge viability and decide
which new innovation opportunity or approach to implement. Because new
approaches do not require infrastructure changes or modifications, the approach
requires far less time to implement. The evaluations will quicken when a new
thought process takes charge. Innovation is just not about the latest gadget or
technology; it requires a change of mindset at the organizational level. When the
benefit is sustainable over a period and the consequences determined minimal,
the implementation occurs rapidly, and the approach perceived as innovative.
Step 3: Developing Objectives

After completing the decision to move on the new approach, the next step is to
synchronize objectives. The development of preliminary objectives occurs during
the innovation opportunity or project selection phase. If not completed during this
phase, then objectives must be set for the new approach. Figure 6.10 details the
flow assuming some preliminary objectives exist. The main purpose of this step is
to reconcile the objectives, based on the latest version of the new approach.
Convert the benefits from the previous step to outcomes for this step. The
outcomes become objectives when the item is properly staged (benefits, require-
ments, assumptions, and limitations). Remember to apply the SMART criteria
when building any objectives. Objectives need a defined time line and must link
to some existing performance (generally financial) measure.
Compare those objectives created during the project selection phase with the
acceptance criteria developed during this process. Use the reconciliation tool to
examine differences and apply modifications. Typical success measures include:
◾◾ The customer’s perception of innovation and appetite for new approaches

◾◾ Acceptance criteria developed to measure performance and success
◾◾ Cost and overall appeal
◾◾ Profitability, based on present costs and availability of resources
These high-level success measures are criteria to measure objective effective-

ness. It is possible that objectives generated at the project selection phase can con-
vert to innovation project objectives as the project progresses. Project objectives
must transform into a set of more realistic objectives used to track and monitor
(performance) success. Use the reconciliation tool (Table 6.7), to revise and modify
project objectives to longer-term performance metrics, used to judge success.
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Use
Develop
Benefits SMART
objectives
criteria
Revisit
objectives
from
N2OVATETM
phase
Do these No
Reconcile Confirm
objectives
differences with client
agree?
Yes
Formalize Apply
with reconciliation
client tool
Move to
validate
phase
This is a simple tool to reconcile any differences or modify an objective using

the most recent information. Consider the following example: Small medical firm
(with two offices) trying to diversify outside of their traditional chiropractic prac-
tice. Table 6.8 details the example.
Table 6.7 Reconciliation Tool

Does It Meet
New Approach Existing Success Does It Add
Element Objective New Objective Criteria? Value?
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Table 6.8 Reconciliation Tool Example

New
Approach Existing Does It Meet Does It
Element Objective New Objective Success Criteria? Add Value?
Nutritional Add-on to more More holistic Yes, focuses each Yes
guidance traditional approach: office, more
services—2 separate space/ effective use
months office, 3 months
Social Face book Hire web No, but required to Unknown
media presence—1 manager, 1 manage message
month month and “hits”
New Complete within Similar Yes Yes
brochure 1–2 months
New Review and New message Yes, convince Yes
message validate combined with customers new
message, 2–3 new marketing, approach is
weeks 1–2 months innovative
Only the new brochure was proposed originally in its same form. Items,
such as social media exposure and the message content underwent an objec-
tive change, adding time to accomplish the task. This is a useful tool for align-
ment, especially if the team has not met recently. The tool demonstrates the fluid
aspect of objective creation and adjustment. In addition, it asks a simple set of
questions—does it meet the organization’s success criteria and does it add value.
These two criteria grow in importance as the project continues. As the third step
ends, management and the team reach consensus on the objectives. As the proj-
ect evolves, objectives will change. This tool assures that the objectives meet the
success criteria and adds value.
EXERCISE 6.6: RECONCILIATION TOOL

Create and use a Reconciliation Tool, check again a set of objectives created
in the past. How does time affect the objective?
Step 4: Validation
Figure 6.11 documents the validation stage for a new approach. Obviously, plan-
ning such an event is a huge undertaking. It is important to mention that plan-
ning takes different forms throughout the N2OVATE™ process. Planning at step
1 focused on evaluation and review; planning at this stage involves testing and
verification. Identifying the test and data needed begins the process. Important to
note, the results of the data analysis at this stage must support the objective and
meet the acceptance criteria. We recommend that the team consider both quan-
titative data (numbers) and descriptive data (perceptions, feelings, likes/dislikes,
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Validate
New
Objectives Formalize approach
elements
Resources Assemble
Cost new
People approach
When?
Plan
Where?
for
How?
evaluation
Who?
No
Evaluate Did test
Acceptance
and achieve
criteria
test objectives?
Yes
Prepare
for
implementation
etc.). Consider that quantitative data can come from numerous sources (especially
since the product remains the same). Descriptive data (preferably that of active
data—data collected through the interaction of receiver and provider) provide
real-time analysis for decision making. (Note: Passive data are a lagging variable
with time dependencies, for example, quarterly financial data.)
Determining the data permits an evaluation or test for verification. Using the
small medical firm described previously, examine the data collection description
and possible tools that could be used to support test and evaluation. Based on their
acceptance criteria (copied from Table 6.8), the team assigned a description of the
data needed to evaluate the new approach. Table 6.9 also includes a tool or tools
that analyze the data, permitting a verification of the process.
EXERCISE 6.7: ACCEPTANCE CRITERIA AND TOOL SELECTION

From the acceptance criteria table developed previously, describe the data and
try to determine a tool you might use to evaluate the measure.
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Table 6.9 Data Description and Tool Selection for Verification

Acceptance Criteria Data Description Possible Tool
Implementation time Counts—Passive Simulation
Overall costs Accounting—Passive Forecasting/risk analysis
Advertising costs Accounting—Passive Forecasting/ risk analysis
Marketing costs Accounting—Passive Forecasting/ risk analysis
Video costs Accounting—Passive Forecasting/ risk analysis
Number of patients Counts—Passive Simulation/forecast
Office disruption Descriptive (active) Surveys, interviews
perceptual
Patient satisfaction Descriptive (active/ Surveys, interviews,
passive) perceptual focus groups
Although presented at this phase, it would be far more beneficial to complete

at step 1 (for future projects), given a fuller understanding of the process, using
this information to evaluate and verify the progression from initialization to full
implementation. This then concludes step 4.
Step 5: Alignment and Adaptation

Step 5 has two unique elements, one for adaptation (Figure 6.12), and other for
alignment (Figure 6.13), the process of acclimating to the new process and set of
outcomes.
Adaptation involves elements of performance, human expectations, and accep-
tance. Performance is not restricted to a traditional definition but here defines
the ability to accept and acclimate. One such measure is adaptation time that
measures initiation to full implementation. Adaptation time permits employees to
adjust and modify their behaviors to the new reality. Other measures of perfor-
mance at this stage:
◾◾ Adoption time—Time from full implementation to full committal (stake-

holder buy-in)
◾◾ Adoption cost—Total cost to full committal
◾◾ Achievement time—Time to achieve (meet) objectives (financial, process,
quality)
◾◾ Achievement cost—Total additional costs incurred to meet objectives
◾◾ Effectiveness time—Time to reach and maintain a stable state (process oper-
ates without frequent adjustment or monitoring—output is consistent)
◾◾ Effectiveness cost—Additional costs required to achieve steady state
Next step is to determine whether performance measures meet expectations.

Often, planners do not consider time and cost expenditures to reach full capacity as
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Introduce
new
approaches
Use Monitor
acceptance performance
criteria
Is Yes Is
performance Continue success
meeting evaluation sustainable?
expectations?
No Yes No
Adapt
existing
approaches
Move to Reconsider
alignment advantages
No
Does the
adaptation
meet
acceptance
criteria?
Yes
Figure 6.12 New approaches—step 5(a).
a legitimate expense and the project suffers as it struggles to meet established expec-
tations. Careful planning will alleviate this concern. When reality meets expectations,
this step is nearly complete. Consider adaptation as the nonhuman component; align-
ment is the unique process of accepting and internalizing the change.
EXERCISE 6.8
Complete a cursory review of a project alignment performance measures. Is
the expenditure of time and cost above or below your expectations? Explain.
Figure 6.12 details the alignment phase. Its focus is on people as they adjust
to a new reality. Achieving alignment requires that all inputs (resources, mate-
rials, etc.) match up with all human actions, promoted strategies, and outputs
(outcomes). The most tangible portion of the alignment phase is the message that
is distributed. Customers need to believe (and accept) that their needs are satis-
fied and the product, service, or technology is innovative. Therefore, develop
a simple message that includes objectives and expected outcomes that must be
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Alignment
Resources
Actions People Policy
Materials communication strategy
Develop
simple
message Customer
implementation
Include
objectives
and outcomes Concentrate
efforts
Yes No Reach
Is the
Message consensus
message
unclear and
unambiguous?
alignment
Figure 6.13 New approach—step 5(b).
unambiguous, clear, and sincere. For new approaches, this is the most powerful
mechanism to get the item into the hands of those who want to understand it
as innovative. Do not tell your customers it is innovative; rather show them how
your organization has satisfied the need while maintaining a fair price (excellent
value). Enable the customers (users) to want the item!
EXERCISE 6.9
Consider a product, service, or technology that has successfully introduced a
“new approach.” Create a message that would attract prospective buyers to the
product and identify who might want the item.
Step 6: Tracking Performance

Performance measures will vary from one organization to the next. Identify meas
ures of performance into two categories: tangible and intangible. For an organi-
zation that produces products and technology, the number of tangible measures
will exceed the number of intangible items. For those organizations that provide
services the opposite will be true.
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For many, innovation remains only within the realm of technology develop-
ment. These types of innovation are easy to track and generally easy to measure
improvement. Services, on the other hand, are difficult to measures and yet easy
to determine if successful. This is due to a large number of intangible measures
that are difficult to measure, but simple to observe. Service innovations are
generally quicker to implement and are also easier to copy and replace.
Therefore, those in service businesses may choose a new approach as their most
frequent innovation type. This then would require service providers to rely on
intangible performance measures as a critical source of feedback. Service perfor-
mance measures such KPPs and KPIs that would more often be combinations of
both tangible and intangible measures.
Defining and classifying service performance requires categorizing by inter-
nal and external measures as well as categorization into tangible and intangible
metrics. For innovation, the focus is on the external as the human customer is
the judge of innovation. This judgment will include both tangible and intangible
measures to evaluate product, service, or technology performance. The key take-
away is that you need to measure both tangible and intangible measures, espe-
cially when dealing with service innovation.
The list (Table 6.10) provided is only a place to start given the differences
within each organization. Some measures are “universal” for businesses (i.e.,
these measures apply to Service (S), Product (P), or Technology (T) offerings).
Process measures are unique to each business or organization. Who benefits
from the measure depends upon whether it is internal (Organization/Business,
O/B) or external (Customer/User, C/U).
For external measures: For the CSFs, KPP, and KPI measures, establish speci-
fications or expected levels of performance. Usually accomplished at the project
selection phase (of the N2OVATE™ process); performance tracking can also occur
at this phase as well. Avoiding the project selection phase would cause this infor-
mation to be finalized at this stage.
Now if an organization misreads or improperly identifies the needs of the
customer/user, they risk the customer or user not recognizing the product or
service as innovative. This happens all the time—consider the accident avoid-
ance devices on high-price luxury cars which have become commonplace just as
air-conditioning did 40–50 years ago. The accessory has gone from being innova-
tive to now routine (expected). The manufacturers need to introduce innovative
improvements just to keep the interest of the customer/user.
The most difficult challenge is keep introducing new and “better” innovations
that keep the consumer wanting more. A reduction in costs and increases in profit
are measures of performance, but if the customer/user never experiences these
benefits, they may not judge the item as innovative. The customer measures per-
formance based on their use and the resulting experiences they encounter. This
measure of use has a tangible and intangible component. There are a number of
caveats, though. Small innovative projects do not require the attention to measure
that large innovative projects demand. This is why innovation is not an everyday
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Table 6.10 External Evaluative Measures

External
Product/Service Measure of
Technology Beneficiary Performance Tangible Intangible
S/P/T O/B, C/U Costs X
S/P/T O/B Market share X
S/P/T O/B Profit X
S/P/T O/B, C/U New business X
S/P/T O/B, C/U Growth rate X
S/P/T O/B, C/U ROI X
S/P/T O/B, C/U Image X
S/P/T O/B, C/U Reputation X
S/P/T O/B, C/U Satisfaction X
S/P/T O/B Company—CSR X
S/P/T O/B, C/U Meeting needs X
S/P/T O/B, C/U Processing time X
S O/B, C/U Delivery time X
S/P O/B, C/U Wait time X
S/P/T O/B, C/U Functionalitya X X
S/P/T O/B, C/U Reliability X X
S/P/T O/B, C/U Dependability X X
a These include all measures of usage and expected performance.
business or operation. Business and organization need innovation—but not all the
time. To capture these human measures, consider the following list (Table 6.11).
Many businesses or organizations consider the intangible costs, as the cost of
doing business. If these costs were small and had little impact, then this would
be a reasonable assumption. However, most businesses and organizations con-
sider these “annoyance measures” and either do not measure these effectively or
estimate these measures far below their actual importance. Consider a restaurant.
It offers both product (food) and services (serving the customer). One can easily
measure the cost of food, employee salaries and benefits, rent, utilities, etc. How
does the establishment measure customer satisfaction? Poor service kills a restau-
rant as quick as poor food or presentation. These measures are equally impor-
tant. Focusing on one and not the other is “suicide” for the business. It happens,
unfortunately, all the time with service businesses.
Customer complaints frequently beset cable companies. Customers leave for
a “better deal” with another provider, only to lave again for the next best deal.
The amount of profit (and goodwill) lost by the cable companies is enormous. It
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Table 6.11 Human Measures

Internal
Product/Service
Technology Beneficiary Measure of Performance Tangible Intangible
S/P/T O/B Job satisfaction X
S/P/T O/B Stress X X
S/P/T O/B Motivation X X
S/P/T O/B Productive hoursb X X
S/P/T O/B Time to finish taskb X
S/P/T O/B Task accomplishment X X
S/P/T O/B Wait timeb X X
S/P/T O/B Functionalitya X X
S/P/T O/B Performance X X
S/P/T O/B Honesty X
a Meets all functional requirements.
b Effectiveness—communications, decision making, follow-through, etc.
seems to be a management mindset that this is a normal behavior. Not measur-

ing or addressing the intangibles can lead to a great loss of potential profit. If you
do not measure this loss, you will never know your company’s profit potential.
With innovation, leadership is looking for both tangible and intangible ben-
efits. More often, the tangible benefits are the deciding factor for innovation
projects. This can be effective for products and technology but indecisive for ser-
vices. Nonetheless, there is a need for establishing the return on investment (ROI)
of any innovation project.
One of the provocative questions focuses on how a business or organization
truly measures project ROI? That is, if a business invests $50,000 in innovation
training and project support, what can they expect in return? A simple ROI calcu-
lation is, ROI = (Gains from investment Costs of investment)/Costs of investment.
This is the definition usually specified in the finance community. A less-used ROI
calculation uses net present value, which appears better suited for service appli-
cations. There are pros and cons in using annual nominal dollars versus current
(NPV) dollars. Using NPV typically results in more conservative and less optimistic
ROIs. In the opinion of the authors, NPV calculation is best. Avoiding this approach
could lead to an incorrect ROI and could result in a bad investment decision, espe-
cially when longer-term benefits are increasing over a longer-time horizon.
This would result in the ROI equation (Thanks to Joe O’Donnell in a personal
e-mail, dated June 22, 2015):
ROI = (NPV of benefits − NPV of costs)/NPV of costs
Expect both tangible and intangible benefits (be sure that both are measured
and analyzed) as both contribute to the bottom-line. Consider a value-added ROI
approach, applying value to the intangible components.
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Figure 6.14 provides the framework for analyzing (tracking) performance measures.
All innovation projects must deliver benefit to the customer and to the organi
zation. Using the above measures, the most natural measures are revenue, cost
reduction, market share plus a variety of intangible measures (this depends upon
the classification type—product, service, or technology).
Begin with an appropriate ROI (say 10%). The difficulty is in assessing intan-
gible benefits—what is a happy customer worth? Most businesses truly never
address these measures in detail. For services, this is a key measure requiring
some form of evaluation and estimation. Another difficulty is assessing overall
market share improvement. Is this increased product or services sales? On the
other hand, is there a longer-term component to market share. What about com-
petitive advantage—is this market share?
Much of the intangible information comes from interacting with the customer
or user. The key is measuring this with your customers. Every X percent of cus-
tomer satisfaction is equal to Y percent increase in sales. Remember, though, that
Large-scale
implementation
approach
Establish
tracking
measures
Link to
accounting/
financial
measures
Track
and benefits
Analyze
financial
results
No Yes
Go back Do results
Continue
to step meet
evaluation
3 expectations?
Figure 6.14 New approaches—step 6.
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innovation meets some needs that have previously been ignored (or abandoned)
and this should be worth a Y percent increase in sales/profit/market share, as
well. As with any customer, there is also “the hassle” effect. Meeting a specific,
unfulfilled need may greatly reduce the “hassle effect” (repeated customer com-
plaints (e-mails, paperwork, etc.), problem solving, lost time, and productiv-
ity). What is this worth to the company? For some customers, reducing their
complaints (inquiries) is worth a 10% or more improvement in efficiency and
productivity.
Many of these intangible measures come from a survey (or focus groups) and
are estimates. These surveys are useful for assessing needs as well. Never under-
estimate the information gained from this approach, nor undervalue its informa-
tion content.
CEOs want to see bottom-line improvements (which is understandable) but it
may not be possible if the cost accounting systems (cost improvements mixed in
with losses) cannot account for the intangibles and provides only lagging rather
than leading information.
We recommend the following:
1. Evaluate internal accounting systems to determine if all costs have a direct

impact on profits. Remember tangible costs are only one measure of perfor-
mance and not the entire domain.
2. Determine the appropriateness of intangible measures—what is their cumu-
lative effect on overall costs and profits?
3. Use a survey (telephone, e-mail, or secure link) or interview (focus group)
to collect information on customer needs, what satisfies the customer and
make that customer recommend the business.
4. Create a scale of success (profitability). Rank the top intangible measures.
Determine (estimate) how the intangible measure increases (decreases) sales,
improves market share and competitive advantage. This is an estimate, but
a critical measure of success. If you do not ask, you will not truly know!
Consider an intangible such as customer satisfaction.
a. Create a scale for customer satisfaction (with 1 = small improvement,
5 = large improvement), for example:
Scale Sales Improvement (%) Profit (Bottom-Line)

0 0 $0
1 1–3 (Depends on the business)
2 4–6
3 7–8
4 9–10
5 Over 10
b. Create a similar scale for market share/competitive advantage, etc.
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5. Identify tangible costs (training/development, resource costs, project costs,

wages and benefits, lost time, etc.) + Intangible costs (lost opportunity,
waste, inefficiencies, ineffectiveness, etc., of present process).
6. Identify benefits (customer satisfaction, increased sales and market share,
efficiency improvements, effectiveness, productivity improvements, employee
satisfaction).
7. ROI = ($ Benefits – $ Costs). This will be an estimate (any time intangibles
exceed tangible measures).
EXERCISE 6.10
Create a scale that links an intangible measure to a success measure. Estimate
how much an increase or decrease will affect the measure of success.
Innovation benefits should easily exceed costs for a project to be profitable.

Relying on just tangible measures will inaccurately identify opportunities and
increase failure (due to lost opportunities).
Developing and implementing these measures is beyond the scope and
intent of this handbook. It is a developing topic, given the rise of analytics and
big data. These intangible features contribute much to the success of an item.
Avoiding these will result in lost opportunity.
Step 7: Monitor and Control

The final step is initiating a monitor and control mechanism. This will be similar
for step 7 in Chapter 5. The purpose is to create a mechanism for monitoring and
control, which also serves to highlight problems before these cause significant
damage. This process is critical for maintaining the success level achieved during
early stages in the development cycle. Figure 6.15 details this monitor and control
phase. However, this step requires a new set of analytical techniques, developed
specifically for evaluation and monitoring purposes. This flowchart is identical
to that described in Chapter 5 so no further discussion is necessary. Rather, we
present a description of the use of control charts as a control mechanism.
Analyzing Data
The key is to analyze the data, look for warning signals, react when there is a sig-
nal, and leave the process alone when there is not signal. This is true for any type
of continuous (the data exist across a continuum) data, such as financial data,
processing speeds, temperatures, etc. Discrete data are a snapshot of the process,
very useful for intangible data. Discrete data require a standard or requirement
from which to judge the data. Errors are discrete data, collected over time. For
something to be in error, there must be a standard from which to judge the item.
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Evaluate
and monitor
Establish
and plans,
controls
requirements action plans

action FMEA plans
Project
ends
Figure 6.15 New approach—step 7. (Excerpt taken from McLaughlin, G. and Kennedy,
W.R. (2015). A Guide to Innovation Processes and Solutions for Government. Productivity
Press, Boca Raton, FL. ISBN: 978-1-4987-2157-8.)
Identify the critical measures (CSFs, KPIs, and KPPs) to evaluate. For tangible
measures, use run charts or control charts. Find a description of run charts in
the ENOVALE: unlocking sustained innovation project success (McLaughlin and
Caraballo, 2013b). In contrast, control charts (Figure 6.16) provide a unique
opportunity to control long- and short-term variation (volatility) and may help to
define pattern, trends and cycles as well as explain expected long-term behavior.
Control charts explain common and special cause variation. Common cause vari-
ation is random, everyday variation (consistency or volatility); special variation is
unpredictable, due to one or more specific causes. Control charts identify special
from common cause variation. You can only predict or forecast when common
cause variation is present. Common cause variation is generally that variation
between the upper (UCL) and lower (LCL) control limits. Common variation is
innate to the process.
Special cause (you could call this disruptive) variation results in a process
change and is present when a data point is “out-of-control.” An out-of-control
condition exists when any point is:
1. Outside of the control limits (control limits are based on actual process data)
follow the assumption that the process is normally distributed.
2. There is a distinguishing pattern to the data set, exhibited in the chart.
3. There are cycles or trends in the data, exhibited in the chart.
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UCL
characteristic
Monitored
Center line
Plotted data
LCL
Data plotted over time
UCL = Upper control limit = Center line + 3σ

LCL = Lower control limit = Center line – 3σ
Figure 6.16 Control chart.
An out of control process means the entire process is shifting and is unpre-
dictable. Control charts use either individual points or statistics (small group aver-
ages (medians), ranges, or standard deviations) to track a process shift. Control
charts use ranges (max–min data point) or moving ranges (ranges based on pres-
ent and past data) to track process consistency (volatility).
Control charts exist for both continuous and discrete data. Our discus-
sion focuses only on continuous data, using only the most common control
charts.
Figure 6.17 details a flowchart to assist in choosing the best control chart for
the available data.
Variable Discrete
What type of data?
Data collected in Counting

groups or individuals? specific defects or
defective items?
Groups Individual
(averages) values Specific Defective
(n > 1) (n = 1) types of items
“defects”
X-bar R Individuals
X-bar S moving range Is the probability of If you know how many
a defect low? are bad, do you know
No
how many are good?
Note: X-bar S is appropriate Poisson distribution Binomial distribution
for subgroup sizes (n) of > 10
Yes Yes
Individuals
moving range
Area of
Constant
opportunity constant
sample size?
in each sample
size?
No Yes No Yes
U chart C chart P chart NP chart
Figure 6.17 Choosing the correct control chart.
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Control Chart Types and Examples

Individual control charts (Figure 6.18) are the most frequently used control charts.
Some characteristics are:
1. Present information in time order, using consecutive individual data points

2. This chart assesses the stability and predictability of the process average
(often used to predict future behavior)
3. Moving range chart (Figure 6.18) describes short-term variation in the pro-
cess, assessing long-term process volatility
4. The moving range is the difference between consecutive data points
The interpretation of this control chart consists of:
1. The process has not changed; however, repeat visits can vary from 11 to 70
per month.
2. The moving range (measures day to day) is as high as 36 visits and as low
as 0 visits. Each return visit, costs on average, $500.00.
3. This process could use improvement. Note: Apply innovative techniques to
“in-control” processes.
For control purposes, the process is stable (in control), it needs only moni-
toring. Yet, the technique could be helpful for determining why the number of
repeat visits is so large.
I-MR chart for repeat visits
UCL = 70.09
60
Individual value
–
40 X = 40.98
20
LCL = 11.87
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Observation
40
UCL = 35.76
30
Moving range
20
––
10 MR = 10.94
0 LCL = 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Observation
Figure 6.18 Repeat visits (number of return visits to customers in a month).
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Calculation (formulas) of control limits and “out of control” situations are

detailed in “Understanding Statistical Process Control” (2010, 3rd edition, SPC
Press) by Don Wheeler.
For data that can be collected in small numbers, an average and a range
(maximum value–minimum value) is the best choice. Each small group (2–10
samples) is a rational subgroup. If a business samples within the span of time of
1 lot, 1 day, 1 h, then the sample can examine volatility on a much smaller scale.
Average and Range Charts

Averages and ranges of samples are plotted on the chart. Control limits reflect
expected variation in averages and ranges of size n.
◾◾ Average of subgroup averages

◾◾ Average of subgroup ranges
Each point on the X-bar chart (Figure 6.19) is based on the average (X-bar) of
a rational subgroup of data points.
A rational subgroup is a subset of data defined by a stratifying factor or time.
The purpose of rational subgrouping (average and range control charts) is to
identify and separate special cause variation (within group variation) from com-
mon cause (between group variations).
Xbar-R chart of e-mail send time

0.45 UCL = 0.4477
0.40
Sample mean
–
X = 0.3631
0.35
0.30
LCL = 0.2785
0.25
1 4 7 10 13 16 19 22 25 28
Sample
UCL = 0.2129
0.20
0.15
Sample range
0.10 –
R = 0.0827
0.05
0.00 LCL = 0
1 4 7 10 13 16 19 22 25 28
Sample
Figure 6.19 Example of average and range control chart.
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The range chart exhibits variation from 0 to 20 s. The average chart shows
an out-of-control point at sample average point 21. This suggests a special cause
took place. On the positive side, these charts clearly demonstrate that the pro-
cess improvement is possible. If this was used for control purposes, the business
would want to examine what occurred at point 21. The formula for this chart is
located in Appendix.
Control charts enable both process evaluation (monitoring) and control,
but serve a purpose for real-time analysis. After plotting the data, the inter-
pretations are made, and the team can then go on to evaluate the FMEA con-
trol phase (described in Chapter 5). Using what is described in Chapters 5
and 6, we have the two greatest control tools that permit a fixing a problem
identified.
Summary
This completes the third chapter on new types of innovation. Rather than just
focus on the extraordinary new types of innovation projects, this chapter focuses
on everyday issues that still can meet the criteria of be new without the develop-
ment costs. Consumers are often attracted to new products, services, or technol-
ogy because of both its unique and special characteristics and the capability of
participating in a product or service’s evolution. Although the new approach may
have the shortest life cycle, it promises to meet or exceed expectations when
encountered by the public.
1. Discuss strategies it would require to accept the concept of selling a new
approach.
2. Discuss how a reality check in your organization would work. Can you
identify simple opportunities outside the existing scope of your business
today?
3. Identify and discuss personal new approaches in your job that you can
implement today without a massive research effort.
ASSIGNMENTS
1. Consider a new approach for a product, service, or technology within your
company or organization. This could be as simple as something you would
do differently or a new approach to an existing process that you know
needs innovation. Develop an approach, using steps 1 and 2.
2. How would you “sell” an idea on a new approach to your business associ-
ates? What triggers would it take to capture their interest and support?
3. Choose an element of a new approach and apply the control FMEA. Can
you assure that this element will never sway off target again?
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References
McLaughlin, G. and Caraballo, E. 2013a. Chance or Choice: Unlocking Innovation
Wheeler, D.J. and Chambers, D.S. 2010. Understanding Statistical Process Control,
3rd edition. SPC Press, Knoxville, TN.
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Chapter 7
Incremental Innovation:
Performance below Expectations
Introduction
Perhaps one of the most prominent and familiar meanings people tend to asso-
ciate with an innovation is the improvement on a particular product, process,
or service. In this chapter, we focus on the necessary steps to implement a
project focused on improvement. Once you receive approval for your project
to implement, the steps and examples presented in this discussion are crucial
for your innovation team. One precursor for your team to understand is that
with any innovation project, conditions, and situations may change as you pro-
ceed through the steps either prior to or during the implementation process.
Subsequently, be open to change and flexible to the evolving nature of innova-
tion. It may require periodic and recurring negotiations and evaluations as you
move from concept to reality.
In this chapter, we introduce how the seven steps of the N2OVATE™ process
is applied to an incremental innovation situation focused on improving perfor-
mance in the manufacturing and production environment. Most specifically, we
introduce steps associated with:
1. Nominating and negotiating an innovation opportunity focused on improv-

ing performance
2. Identifying reasons and requirements for achieving that improved performance
3. Operationalizing the outcome of the innovation solution
4. Verifying and validating the innovation solution
5. Adapting and aligning your organization and stakeholders, shareholders, and
customers successfully implement the innovative solution
6. Tracking and tying the innovation to performance
7. Establishing the necessary controls to maintain and sustain that desired
performance
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The case study scenario and examples in this discussion will focus on incre-
mental improvements in the manufacturing and production industry, most
specifically, the manufacturing of corrugated boxes, which are representative of
one of the more stable packaging segments within the United States.
Scenario 1: Incremental Improvement in

Manufacturing and Production
Although a significant amount of manufacturing and production have been out-
sourced or transferred to other countries primarily to reduce the cost and increase
profit margin, this has not always resulted in a positive outcome for some com-
panies. In essence, off-shoring or near-shoring efforts have sometimes resulted
in a reduction in quality, increased defect rates, public scrutiny on adherence
to increasing demands for corporate social responsibility (CSR). That said, some
companies have experienced a “win–win” scenario where these companies have
achieved their financial objectives, improved the quality of their product, and
effectively led the way in introducing CSR initiatives in other countries that directly
improved the quality of life in other companies and served as models for CSR.
In regard to defining characteristic or critical element associated with innova-
tion, an incremental improvement is performance. If the performance is substan-
dard, then the innovation team’s purpose will focus on raising performance to the
levels that exceed expected objectives. Further, if performance currently meets
the expected objectives but leadership’s desire is to add more value by increasing
production or improve efficiency, we would also contend this qualifies as an incre-
mental improvement. In the case of manufacturing and production of packaging
products, if a Flexoprinter and Folder Gluer machine center (hereafter referred to
as “Flexo”) has an advertised capacity to run some 5000 sheets per hour (objective
or expectation) and it is only running 4200 sheets per hour (actual realized perfor-
mance), there is an opportunity for incremental improvement. For this example case
study, the performance is not meeting standards at present by some 16% from the
objective. For this example, we offer the following modification to our N2OVATE™
process which involves the following steps for the innovation team’s consideration:
1. N: Nominate and negotiate

2. R: Reasons and requirements (needs)
3. O: Operationalize the outcome
4. V: Verify and validate
5. A: Adapt and align
6. T: Track and tie to performance
7. E: Establish controls
To best illustrate the use of the NROVATE process, we will offer an example
scenario of an actual incremental innovation improvement project from the
manufacturing and production industry. Please keep in mind, the term “process”
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Incremental Innovation ◾ 155
in this discussion can also be synonymous with product or service performance

improvements.
Scenario and Machine Center (Equipment) Background

To help set the stage for our example scenario, the segment of the manufacturing
and production industry we use to illustrate the incremental improvement pro-
cess of NROVATE will be in the corrugated packaging segment. More specifically,
our discussion focuses on the Flexo. We assume the equipment configuration for
our Flexo has the following:
◾◾ A three-color printing capability (blue, green, and red)

◾◾ A feeder unit and conveyor capability (where stacks of precut sheets from a
corrugator are loaded to feed the Flexo)
◾◾ Stacker (stacks the finished products)
◾◾ Strapper or bundler (applies strapping tape around the bundles for loading
on a pallet for shipping) that feeds the conveyor system thoughout the plant
The machine is capable of running single and double wall-corrugated wall-

board in B, E, C, and EB flute configurations with a maximum capacity or format
of 650 × 1500 mm and a maximum of 650 × 2100 mm.
The typical shift staffing for the Flexo is two operators (one fully trained lead
operator and one temporary operator). The lead operator handles the program-
ming specifics (i.e., graphics and printing requirements, size and parameters of
the product, color selection, recurring product quality checks, safety and compli-
ance, data collection and entry of production numbers throughout the shift, and
supervision of the temporary employee). The temporary employee, typically a
term employee, is usually sourced from a temporary job agency and has minimal
knowledge of the equipment. Their focus is to ensure sheets are stacked properly
at the feeder section and check the bundles are properly stacked on the pallets
for transportation to the shipping and receiving point.
The Flexo is scheduled to operate three 8-hour shifts a day, 5 days a week
(Monday through Friday) to meet the current customer demands. Further, work-
ing Saturday and Sunday requires overtime pay for both the maintenance and
operations departments, which if pursued would significantly impact the profit
margin per unit produced. The plant sales staff and customer service department
are in the final stages of securing a new client who requires the Flexo to produce
a minimum of 600 additional units (boxes) per hour to meet the new customer
demand and the expectation of the Director of Operations.
Currently, the availability rate of the Flexo over the past 12 months has averaged
90% (available to run corrugated sheets and produce box products) and the 10%
is downtime attributed to unscheduled maintenance (6% due to unplanned equip-
ment faults breakdowns and scheduled or preventive maintenance activities and 4%
due to replacement of high wear parts and required alignments/operator cleaning
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requirements). The average uptime rate over the past 12 months has averaged to
64% (the machine is actually producing boxes). Further, the terms “company” and
“plant” are used interchangeably but equate to the same organization.
Step 1: Nominating and Negotiating

In the first step, Figure 7.1, we suggest a team lead is assigned and begins with
identifying members for the innovation team. The team lead should complete
an initial assessment of the expected outcome and determine the start develop-
ing the preliminary list of resources required while drafting initial expectations
(objectives) defined my leadership and management. This initial gauge will help
guide the team selection process. In actuality, these activities should set the stage
for the steps identified in step 1, Nominate and Negotiate, and occur prior to the
start of implementation. Keep in mind, as you progress through the steps identi-
fied in this stage, negotiations with management will continue to refine objec-
tives, requirements, and success factors.
Nominate
Innovation
team
opportunity
members
Assess the
improvement
Processes or
Staff Resources
activities
Cost Review
benefit success
analysis factors
Review the
improvement
No Potential Yes
Continue to Implement
benefit
negotiate the project
?
Figure 7.1 Performance below expectations—step 1.
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Nominating the right complement of team members can be one of the most
complicated steps a team leader will face in this process. Often times the resources
you feel will be the best fit for your project are not available or are already over-
tasked with their primary responsibilities. Request senior leadership’s full support
and cooperation as competing interests will truly have a significant impact on your
ability to achieve the very objectives you seek to achieve. Be prepared to have a
backup or alternative list of resources in case your primary choice is not available.
Some primary considerations in selecting team members for this example scenario
are knowledge of the equipment (Flexo), standard operating procedures, training,
qualifications for running the equipment, maintenance concepts, preventive main-
tenance (quality) and recurring cleaning requirements, production scheduling or
orders, and daily performance and data collection requirements for starters.
After identifying your team requirements and securing the support of senior
leadership and management, ensure your team and management understands the
schedule meetings and time requirements you will require from each member on
the team. Publish an initial schedule that you, as the team lead, will need to share
with the team and management. Keep in mind that your initial schedule will be
evolutionary in nature with changes shared at all levels within your plant or facility
as you move through the steps of your innovation project. Nominating and selecting
your team will be a challenge. In our example scenario for this discussion, you will
need to consider representation from the following departments (at a minimum):
◾◾ Operations
◾◾ Maintenance (in-house or the contractor representative if your equipment is
maintained under warranty or contract support)
◾◾ Quality assurance and safety
◾◾ Customer service (and possibly accounting)
◾◾ Scheduling
◾◾ Shipping and receiving
◾◾ Facility manager
◾◾ On-site contractor support and key suppliers (partners) involved with the
machine, process, or service your project focuses on
If you have a reliability manager or an engineer on staff, they might also be

a consideration since they typically are your process improvement leads and
have an enterprise-level perspective on your facility’s operations. Once you have
narrowed your list of potential team members down, review all the steps in the
NROVATE process with the goal of assigning when each of the areas identified
above are required in your process flow. This will help you better estimate the
time requirements and specific tasking’s your team will need to project the worth
in pursuing the project after assessment. Depending on the initial assessment
of the complexity and value added that your project can provide in achieving
performance improvements in the Flexo production capability, you may want to
perform an initial personality compatibility assessment.
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The next step is to make your team member selection. Although acquiring
valuable information and inputs from all the aforementioned players (depart-
ments) is important in achieving buy-in and surfacing potential negative impacts
on the anticipated outcome(s) from an innovation project objective or purpose,
the innovation leader must remain cognizant of the ultimate goal or objective.
In this case, resolving the performance disconnect between the advertised or
expected capability of the Flex and the Director of Operations desire to improve
that level of performance to support the new clients requirements.
Selecting team members can be a challenge. You want to avoid assigning
members to your core team based on:
◾◾ Position or title
◾◾ Past successes (which don’t directly translate to the project objective)
◾◾ Known competing interests and hidden agendas
◾◾ The simple desire to be part of the project for personal recognition or gain
For an innovation project, the goal is not to assemble a diverse group of rep-
resentatives from every department or that hold different views on innovation.
The goal is to assemble a team of “like-minded” individuals who understand,
define, or see innovation through the same lens. Consider the results of the
innovation comprehension survey (from Chapter 2), if the need is for incremen-
tal innovation improvement, then choose team members who best understand
this type of innovation. Consider the results of the values and work environment
surveys (Chapter 2) as a guide for selecting team members.
Many might argue that the traditional business philosophy would dictate that
building a team of different minded professionals with varying views on innova-
tion would provide the best opportunity for success. This is not the approach we
advocate. One thing to keep in mind from our perspective is that the objective
is to identify core members of the team as previously stated and identify poten-
tial “consultants” with diverse views within your organization that can be called
upon at various stages in the project when their expertise, views, and inputs can
add value to the project’s success.
Further, like-minded core team members stand a better chance to handle
attend all meetings and accept all responsibilities for ongoing tasks and deliver-
ables throughout the NROVATE process. Consultants provide support that is spe-
cific and timely in support of the core member’s assigned responsibilities. Once
you have nominated and secured your core innovation team members, it is time
to introduce your team to your initial assessment of the project and the objective
of what you hope to accomplish. You should schedule your first meeting with the
following goals in mind:
◾◾ Ensure a member of the senior leadership team or management is present to

share their thoughts and emphasize their support for your project
◾◾ Introduce yourself and have your core team share their specific skill sets and
thoughts on innovation
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◾◾ Outline the rules of engagement and initial meeting schedules and assignments
◾◾ Conduct a team building to help secure buy-in from all team members
◾◾ Present your initial assessment of the objective(s) and expectations set and
approved by management:
– Key areas you want to focus on are the staff, processes, and activities,
and the current and required resources
◾◾ Gather initial inputs from the team on your initial assessment
◾◾ Share contact information for each of the team members
◾◾ Assign someone (not typically the team lead) to take minutes and publish
those minutes in a timely manner
◾◾ Determine the best day and time for follow-on and recurring core team
meetings
Once the team leader has the core team members selected, assigning responsi-
bilities, accountability, support networks, communications requirements, and touch
points are required. We recommend the innovation team lead and members then
build a charter to assist in developing buy-in and support from the organization’s
leadership, management and decision makers. A basic example of a charter follows
in Figure 7.1. Beyond the development of the team charter for the innovation proj-
ect, coupled with the organizational chart with contact information, a useful tool
for this step is the RACI or RASCI model. In essence, this essential step outlines:
◾◾ Responsibility—Who will own the activities, problems, or goals associated

with the innovation project?
◾◾ Accountability—Who is the decision maker or approval authority for the
work at each level building up to the final implementation of the innovation?
◾◾ Support network—Who can provide the necessary support through-
out the stages of the project and ultimately the success of the innovation
implementation?
◾◾ Consultant support—Who has the knowledge and information necessary to
support your project throughout the steps toward implementation?
◾◾ Information requirements—Who in the chain of command or leadership
hierarchy is notified at agreed when inch and milestone as the project moves
through the NROVATE process steps?
EXERCISE 7.1: RESPONSIBILITY, ACCOUNTABILITY,

SUPPORT, AND INFORMATION (RACI) MODEL EXERCISE
In this exercise, build a table with headings of responsibility, accountabil-
ity, support, and information like the completed example given in Table 7.1.
Please keep in mind that your goal is to capture as much fidelity as possible
in the initial version of your RACI matrix.
Once you have completed Exercise 7.1, please keep in mind that your goal
is to capture as much fidelity as possible. However, the RACI table is also
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Table 7.1 RACI Model Table (Project Example)
Current
Responsibility Accountability Support Network Information Status/Date
Identify team lead and team members • Jim Smith • Jim Smith (General • Joe Johnson Closed
(General Manager) (Operations Manager) 15 Aug 2015
Manager) • Joe Johnson • Jaime Diaz (Plant
• Joe Johnson (Operations Manager) Superintendent)
(Operations • Innovation Team • Department leaders;
Manager) Members’ names and Innovation Team
position Member names and
• Department leaders positions

Develop project plan: Identify project • Jan Smith • Jim Smith (General • Joe Johnson Open
deliverables; identify risks and develop risk (Team Lead) Manager) (Operations Manager) 7 Sep 2015
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management plan; direct the project resources • Joe Johnson • Jaime Garcia (Plant
(team members); scope control and change (Operations Manager) Superintendent)
management; oversee quality assurance of the • Innovation Team
project management process; maintain all Members, department
documentation including the project plan; player names, and
report and forecast project status; resolve positions
conflicts within the project or between cross-
functional teams; ensure that the project’s
product meets the business objectives; and
communicate project status to stakeholders.
Note: Each task above can be tracked
individually on the RACI matrix (i.e., identify
project deliverables).
(Continued )
Table 7.1 (Continued ) RACI Model Table (Project Example)
Current
Responsibility Accountability Support Network Information Status/Date
Identify project deliverables (specific goals and • Jan Smith • Jim Smith (General • Joe Johnson Open
objectives) (Team Lead) Manager) (Operations Manager) 12 Sep 2015
• Joe Johnson • Jaime Garcia (Plant
(Operations Manager), Superintendent)
Innovation Team
Members; department
key player names and
positions)
Identify subject matter experts (SME) that will • Jan Smith • Jan Smith (Team • Joe Johnson Open
provide advice and information support during (Team Lead)— Lead)—Jim Smith (Operations Manager) 15 Aug 15
the certain phases of the innovation project. Jim Smith (General Manager) • Jaime Garcia (Plant
SMEs provide expertise on a specific subject. (General • Joe Johnson Superintendent)
Responsibilities include: Maintain up-to-date Manager) (Operations Manager) • Owning department
experience and knowledge on the subject • Joe Johnson • Innovation Team leaders; SME names
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matter; and provide advice on what is critical to (Operations Members (by name)
the performance of a project task and what is Manager)
nice to know.
Flexographic (Flexo) Printer Performance Improvement Innovation Project—Project # 031-2015.
evolutionary as new tasks and responsibilities develop and these will com-
pile as you move through each stage of the NROVATE steps. Version control is
extremely important so maintaining an accurate status is normally an innovation
team leader’s responsibility. Version control typically logs by date and version
(i.e., “Version 1” or “V1” for short). Most corporations place version control in the
footnotes section, while the project title (name and project number) is identified
in the header section. We recommend placing this information on your company
intranet and Internet for ease of updating and access.
While creating your RACI model matrix, create your innovation team project
team charter (Figure 7.2). The charter is a seminal instrument that helps set the
stage for a successful innovation project. The project team charter is your initial
declaration of the sponsor and key players; the project’s description, objectives,
identified assumptions and limitations, the perceived impact and benefits state-
ment, business plan and operational impact, roles and responsibilities, required
resources, risks, and measurements of success. You can append additional topics
to the charter but remember to include those topics addressed in Figure 7.3.
EXERCISE 7.2: INNOVATION TEAM PROJECT CHARTER EXERCISE

Utilizing the RACI model matrix you created in Exercise 7.1 and using Figure
7.2 as a guide, develop your team’s draft charter for your project.
In the innovation team project charter (Exercise 7.2), utilize the RACI model
matrix you built in the previous exercise to help populate the areas in your draft
charter. Note, examples and descriptions of the content for each area identified in
the charter are provided (by section) in each section of the example provided in
Figure 7.2 for your reference. When building your initial draft charter, incorporate
the inputs of your organization’s resources (shareholders, stakeholders, and cus-
tomers). Seek key player buy-in prior to presenting your final draft to the spon-
sor for consideration and approval. Remember, the charter remains in draft form
until signed and approved by the sponsor.
Innovation Team Task Assignment Tool

In a fast moving or complex incremental innovation project, tracking team mem-
ber responsibilities, accountability, assignments, and reporting requirements
can be a challenge. A simple and effective tool to track task assignments is the
(Figure 7.3) innovation team task assignment tool. Place a task assignment list with
appropriate categories you want to track on a common access drive within your
intranet or accessible through a handheld device like a mobile phone or tablet
as the optimal way to proceed if your organization’s IT supports this capability.
However, there are organizations where some members involved in your project’s
success have minimal or one-time roles or do not have access to IT resources on
a regular basis. In our Flexo scenario, shift work is common in the manufacturing
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Figure 7.2 Innovation team project charter (basic).
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Figure 7.3 Innovation team task assignment tool.
and production environment. Personal contact is not always given and you may
go a week or more without achieving contact with an employee who has been
assigned a specific task and associated “complete by” date.
EXERCISE 7.3: INNOVATION TEAM TASK ASSIGNMENT TOOL

Using Figure 7.3 below, design your own task assignment tool for use by your
innovation team.
This may appear like a primitive form of communication, but it has proven
effective when teams encounter difficulties in getting timely and actionable infor-
mation from employees within the organization. The task assignment tool can
also serve as visual reminder to this employee that you require their input by a
set date and its importance to the success of the project. There is no exercise for
this tool due to its simplicity. We suggest you have these preprinted and available
for meetings to help track assignments as well. We also recommend you accom-
plish these in duplicate so you can file them in a folder (by date).
Returning to our discussion on the innovation team project charter, we feel it
is important to reiterate—the charter also sets in motion a deeper dive into the
benefits your project will provide and the overall contribution (value added) it
will make to the agency or organization. Updating the charter at this point might
also be worth considering at this point. We term this next phase in step 1 as
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assessing the “cost-to-benefit ratio.” This will focus on gauging the initial return
on investment (ROI) measured by a review of the success factors identified by
the plant or company’s senior leadership team (shareholders, stakeholders, and
customers). This is considered a critical review focused on evaluating not only
the cost and benefits in light of the success factors but most specifically, a review
of the anticipated improvements (in this case, an increase of at least 600 sheets
per hour).
This process also includes negotiation if the projected ROI and assessed
improvement do not lead to a clear potential benefit that would trigger the
next step or project implementation. Once the team determines the cost-to-
benefit ratio is favorable and the potential benefit deemed positive, it is time
to move to Figure 7.4. Please note that it is common for the team to arrive at
Identify
Cause and
reasons and
effect tools
causes
Assess
Link to baseline
specific measurements
components
SMPA
Identify
analysis/
effects of
assess
under-
incremental
performance
improvement
Select
elements that
should
perform
Determine well
new
requirements
Evaluate
existing
Available requirements
human
resources
Yes No
Benefits Is
Go to step 3 self- improvement
sustaining recognized?
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some immediate reasons why the performance of the Flexo is not meeting the
manufacturer’s advertised capability. Ensure you capture these thoughts the
innovation team initial meeting notes, as you will be revisiting them in the
next step.
Step 2: Reasons and Requirements

In the next step of the NROVATE process (reasons and requirements), the inno-
vation team will determine reasons and causes for the lack of performance,
allocating resources, and determining overall requirements. We have developed
and provided several existing tools (success modes and performance analy-
sis [SMPA], run and control charts, failure mode and effect analysis [FMEA],
Ishikawa or fishbone diagram, root cause analysis [RCA], process and value
stream mapping, etc.) for use in this stage and they are described in great detail
in our text, ENOVALE: How to Unlock Sustained Innovation Project Success
(McLaughlin and Caraballo, 2013).*
This is a lengthy stage, given all the components that must come together
to understand the causes, effects, and reasons for underperformance (cur-
rent performance at the plant of 4200 sheets per hour versus the manufac-
turer’s advertised capability of 5000 sheets per hour). Even though the team
may have identified some possible solutions in step 1, it is now time to
revisit these initial thoughts on reasons why performance is lacking. Further,
the results from this step may result in modifying the project’s objective(s)
and e xpectations, based on the empirical evidence your team will collect
and diagnose in this stage. In incremental innovation (improvement), under-
performance requires a more thorough understanding of the process. This
requires a great deal of active versus passive data collection, analysis, and
interpretation.
This step uses several tools with examples and associated exercises.
◾◾ Process (value stream) mapping tool (Figure 7.5)

◾◾ Cause and effect diagrams (Figures 7.6 and 7.7)
◾◾ Cause and effect (C&E) matrix (Figure 7.8)
◾◾ SMPA tool (Figure 7.9)
Value Stream Mapping

Value stream mapping provides a great opportunity to identify current process
performance by means of systematically investigating the waste, value, or ben-
efits opportunities in each step (functional block) of a process to add value to the
customer. The real value is in reducing the waste (i.e., unnecessary transport of
* A revision of this text is due for publication by CRC Press by the end of 2015.
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Operator# 2
Operator# 2
reviews order
At start of job checks print
Flexoprinter Precheck: sheet details
order, operator plate
lock-out (LOTO) procedures (customer,
#1 performance, requirements.
and print plate mounting— quantity, size,
quality, and Acquires print
initial start ink colors and
safety checks plates from
number of units
supply rack
required)
Operator# 1 Operator# 1 and Operator# 3 Process to

notifies # 2 perform checks and Flexoprinter
operator# 2 LOTO verifies if the printer plate
they are ready to procedure and LOTO removal and
perform LOTO their locks to the procedure was replacement
of Flexo power panel, completed loading
machine center check verify correctly procedure start
Operators# 1 No Yes
and # 2 review Procedure
Procedure complete
procedure with correct?
operator# 3
Figure 7.5 Value stream mapping—basic.
materials, overproduction, wasted time, excess inventory, defect, and unnecessary

movement) in our manufacturing and production scenario. The primary focus
is on underperformance, we see potential value in incorporating this tool into
this particular incremental innovation project. Again, we are not advocating you
should use all the tools presented in this handbook for every innovation project.
We provide the tools for your innovation tool bag so that you can achieve
a successful outcome.
In Figure 7.5, we have provided an example of what an initial process map
might look like as it relates to our Flexo underperformance scenario for the
reader’s consideration. When considered in its entirety, the associated processes
would take volumes and chapters to cover. Our intent here is to introduce the
reader to the concept and run a basic exercise. If accomplished correctly, this can
be a time consuming but valuable tool not only for innovation teams involved
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Materials Process/methods
Why?
Why?
Why? Why?
Why? Why?
Why? Why? Problem statement
Why is the Flexo

machine center
Why? underperforming?
Why?
Why? Why?
Why? Why?
Why? Why?
People Machine
Figure 7.6 Basic fishbone diagram (QI Macros 2015).
Manpower Machine
Maintainer
Preventive maintenance
Training Equipment
Quality repairs? Low utilization
rate
Operator
Management and
Scheduling
supervision
Inadequate
Sales tools
Why isn’t the Flexo not
meeting expected
production capabilities?
Corrugated Unscheduled
sheet quality? maintenance
Strapping Training program
Ink
Sales
Materials Methods
Figure 7.7 Flexo example—cause and effect diagram.
in an innovation project, as it can also support continuous process improvement

projects that do fly under the radar or are simply outside the scope of incremen-
tal innovation.
The three major steps in process (value mapping) are investigation, analysis,
and identifying improvement opportunities.
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EXERCISE 7.4: VALUE STREAM MAPPING TOOL EXERCISE

Using the process in the previous section and example value stream map
provided in Figure 7.5, select a short process you are very familiar with and
run the sequence of steps and diagram those steps in the format provided
in Figure 7.5. With an eye on the seven common waste sources (unnecessary
transport of materials, overproduction, wasted time, excess inventory, defect,
and unnecessary movement), build your own inventories for each step (start
to finish or process output) in the process you have selected.
In Exercise 7.4, we suggest you revisit the Flexo scenario provided earlier in
this chapter. Using the process in the previous section and example value stream
map provided in Figure 7.5, select a short process you are very familiar with
and run the sequence of steps and diagram those steps in the format provided
in Figure 7.5. With an eye on the seven common waste sources (unnecessary
transport of materials, overproduction, wasted time, excess inventory, defect, and
unnecessary movement), build your own inventories for each step (start to finish
or process output) in the process you have selected. Investigate the process for
a lack of flow or excessive waste. These are opportunities for improvement and
change, which can generate value while reducing waste. This is not an exer-
cise in reducing the number of steps. Adding steps where there is a lack of flow
might add value to your process. Concentrate on the value each step in the pro-
cess provides. Once you have mapped out the process and built your inventory
lists for each step, share what you have found with a peer and get their input on
your results.
Cause and Effect (C&E) Diagram

In this discussion, the terms C&E, “fishbone,” or “Ishikawa” diagram are used
interchangeably and indicate the same tool. Based on its resemblance to a fish’s
skeleton, the C&E diagram, is referred to as the fishbone diagram. Another name
is the Ishikawa diagram, after the name of its creator, Professor Kaoru Ishikawa,
for the main purpose of continuous quality standard improvements. The diagram
is a powerful tool for gaining common understanding across the organization
and concentrating on ferreting out the root cause or the potential cause(s) for a
given event or problem. This tool is essential in RCA and resulting action plan
development (identifying the “who, what, when, and how” to get the perfor-
mance back on track) to get the performance back in line with the key perfor-
mance indicators (KPI). For example, in our Flexo scenario, we are focused on
finding the root cause for underperformance of the Flexo machine center output
(number of units produced per hour).
The steps of completing the diagram are straightforward. The first step is to
draw the fishbone diagram. There are several ways to accomplish this with your
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team. If you have access to a large erasable whiteboard in your conference room,
draw the base diagram with the problem or issue you want to determine the root
cause at the head of the diagram (refer to Figure 7.6). Identify each major cat-
egory at the end of each line (i.e., 4Ss, 4Ms, 4Ps, 5Ms, etc.). Major categories that
are popular across multiple industries are
◾◾ 4Ss—Suppliers, surroundings, skills, and systems

◾◾ 4Ps—People, policies, procedure, and place
◾◾ 5Ms—Machines, material, measurement, methods, and management
Choose your major categories as the problem or challenge you wish to resolve
dictates. Next, provide each member with ample number of sticky note pads
for their thoughts or ideas. Team members can use these note pads to identify
causes (inputs) for the fishbone diagram. An option for geographically separated
team members is to accomplish this online (electronically), as there are multiple
software capabilities available on the Internet that have user-friendly fishbone
templates already built.
Your next step is to populate the diagram with the thoughts and ideas of the
team under each category to produce subfactors. The primary focus is to ask the
group, “why is this happening?” In our example, we are repeatedly asking, “what
is causing the Flexo machine center to produce less units per hour than it is
capable of performing (underperforming)?” Label additional segments under each
specific factor (these are essentially, “subfactors”). Continue the same line of ques-
tion (why?) until the team can no longer provide value-added or useful inputs
(information).
The next step is to cycle through each note placed under each category and
combine the duplicate comments and ideas in the same category from your
team (e.g., simply place one sticky note over the other if you are using this
approach). Note: it is common to have duplicate inputs in multiple categories, so
do not remove or combine these unless the team is in full agreement. Once that
is accomplished, assess all the inputs with the overarching question and thought
of, “why do we see happening?” At this point, the team will analyze the results
of the fishbone after they all are in agreement there is an adequate amount of
fidelity (detail) provided under each category. Now that you have consensus, it
is time to start looking for those items appearing more frequently in more than
one major category (or subcategory). View those that occur more frequently as
the initial list of “most likely” candidates for causation (i.e., the causes of why
the Flexo is underperforming in our scenario). As a team, prioritize the most
likely causes and label the highest priority by team consensus as the “most
probable” cause. The final step—often forgotten—document the team’s actions,
decisions, and the resulting fishbone diagram. If there are any team members
with differing views, which does occur, ensure to capture, and document those
views.
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EXERCISE 7.5: C&E DIAGRAM EXERCISE

Using the Ishakawa or fishbone diagram (Figure 7.6), gather your team and use
a large erasable white board and draw out a fishbone using any of the major
category approaches or headings you feel best fit your objective (the defined
problem or issue statement you are trying to resolve). As a reminder, the
most common major categories across multiple industries are 4Ss—suppliers,
surroundings, skills, and systems; 4Ps—people, policies, procedure, and place;
or 5Ms—machines, material, measurement, methods, and management.
In summary, when using the C&E tool (Figure 7.6), focus on identifying the
potential reasons and causes for why the Flexo is not performing at the manufac-
turer’s advertised capability. We have selected this tool to introduce the reader to
others tools presented in the text associated with this handbook. For Exercise 7.5,
your team’s goal is to provide potential or contributing causes that fall under any
of the four to five components that team members feel could be possible contrib-
uting factors as to why the Flexo is underperforming. Follow the steps provided
in the discussion above on the C&E diagram.
We have provided some example contributing factors (by component) the
innovation team might find useful as they complete this exercise (Figure 7.7).
People (Manpower)
◾◾ Paper machine operators
◾◾ Corrugator operators
◾◾ Converting operators
◾◾ Forklift drivers
◾◾ Field assembly
◾◾ Field drivers
◾◾ Storage handlers
◾◾ Over packing
Machine
◾◾ Paper machine—Toledo
◾◾ Corrugator
◾◾ Converting
◾◾ Forklifts
◾◾ Bagger
◾◾ Cascader
◾◾ Hydrocooler
◾◾ Squeeze
◾◾ Forklift
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Methodology (Process)
◾◾ Cooling time
◾◾ Cooling
◾◾ Trucking
◾◾ Cutting dies
◾◾ Print plates
◾◾ Bagging/wrapping
◾◾ Dunnage
◾◾ Product packing
◾◾ Field palletizing
◾◾ Squeeze handling
Materials
◾◾ Paper
◾◾ Pallets
◾◾ Ink
◾◾ Starch formulas or type (used for bonding)
◾◾ Wax cascade
◾◾ Recycled content
Areas for Investigation

◾◾ Paper mill data (source of paper for corrugated sheets)
◾◾ Adhesive
◾◾ Resin
◾◾ Corrugator setup (production machine center for the source sheets)
◾◾ Converting setup (how Flexo is set up and programmed?)
◾◾ Pallets, palletizing, and wrapping
◾◾ Climate and conditions throughout system (and plant)
◾◾ Trucking (shipping, receiving, and transportation of product to customer)
◾◾ Field assembly, packing, and palletizing
◾◾ Field hauling
◾◾ Hydrocooling and cooler
There are many approaches to completing the fishbone exercise, but some
of the most popular are having your team members write directly on the white
board or providing them a stack if sticky notes to write on and then post in the
associated component or designated area on a whiteboard. Using the sticky notes
will facilitate the grouping of like terms as you seek to narrow down the top
three general causes that are most popular with your team during this first exer-
cise. After logically grouping the causes, take a picture of the completed fishbone
diagram and include it in your final minutes for the session. You may also want
to use specialized software to transfer this information for storage electronically.
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Cause and Effect (C&E) Matrix

Another value-added tool for rating the C&E to customer needs or project objec-
tives in the C&E matrix (Figure 7.8). The C&E matrix sets the stage for the
FMEA process and can help innovation teams prioritize the requirements when
Figure 7.8 Cause and effect (C&E) matrix template.
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competing interests or leadership positions differ on what is the most important

need or requirement for the team to focus on. When each of the output variable
(project objectives) is not correct, that represents the potential “effects.” When
each input variable is not correct, that can represent the “failure modes.”
Completing the C&E matrix is relatively straightforward:
1. List the key needs or requirements (type each of these in a separate needs/
requirements cell). There are the Ys.
2. Rate each variable on a 1–10 scale to importance to innovation perfor-
mance, or sustained value, competitive advantage—Choose only one and be
consistent.
3. List key process steps or causes identified with the fishbone diagram
(Choose either the process steps or causes). These are the Xs.
4. Rate each process step or cause in relationship to a particular need/
requirement. Align the need/requirement (Y) with each X to evaluate
the relationship between the process step/cause and the need require-
ment. Use a rating scale of 0—no relationship, 1—minimal relationship;
3—marginal relationship; 9—strong relationship.
5. Using the Excel template, it will rate the strongest relationship between the
Xs and Ys. The strongest relationships contribute most to innovation s uccess.
These KPI and KPPs (CSF) will become the basis of the improvement efforts.
6. The total row (at the bottom of the chart) indicates the importance of (Y).
Using our example with the Flexo performance challenges and example of
a completed C&E matrix is provided for reference in Figure 7.9.
The value of the C&E matrix is that it will help you identify true priorities
at the completion of the process. In the next step, it is essential you remain
objective when assigning (rating) each variable (process step or cause) on a scale
of 1–10 as that importance relates to the desired improvement. Next, list the
key input process variables for each key step identified in your first step.
EXERCISE 7.6: C&E MATRIX TOOL EXERCISE

Using the example C&E matrix provided in Figure 7.8, complete a C&E matrix
for an innovation team project of your choice.
Once you have identified the key potential causes your team feels are logical
starting points or causes for underperformance, develop a strategy to establish
baseline measurements to further verify and clarify the potential causes. You can
now consider using the SMPA tool (Figures 7.10 and 7.11), to help track the results
of your measurements and responses. Here you focus on surfacing elements that
should perform well and while evaluating those results against existing require-
ments. The key question here is “are you seeing noticeable improvement(s)?”
If not, return to the SMPA phase and rerun the process steps until you see
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Figure 7.9 Cause and effect (C&E) matrix example—Flexographic machine center.
noticeable improvements. Ensure you capture the data points generated with
each run through the action loop. Once you achieve noticeable improvement(s),
proceed to the next stage, which is determining the new requirements.
Figure 7.10 displays an example of the SMPA template. The need is for improv-
ing customer wait time on the telephone (at a call center). Figures 7.11 and 7.12
display the SMPA template and rating scales used for estimating the chance
(probability) that a success mode affects performance.
In identifying, the links to the specific components that contribute to the
underperformance of the Flexo is central. This information provides a frame-
work to select elements capable of undergoing modification to ensure improved
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Figure 7.10 SMPA example.
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Figure 7.11 SMPA template.
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Figure 7.12 SMPA scale.
performance. The SMPA tool is a method to define successful performance as

a function of those elements that sustain that performance over the life of the
product, process, service, or technology (Figure 7.11). The example (Figure 7.10)
demonstrates how to improve Flexo hourly throughput by examining elements
that directly influence this performance measure (i.e., training, machine center
alignments and run speeds, etc.).
Two elements that directly affect performance are operating training and
machine quality checks. These would require additional actions to prevent a loss
of performance. This tool is an excellent brainstorming tool used in a face-to-face
environment or completed virtually. This tool can assist in determining the best
measures (empirical data) to control the loss of performance. The SMPA tool also
involves employees in the problem-solving process. Clients find this tool useful
for planning and operational purposes. This contributes to the C&E analysis and
subsequent data collection and analysis phase.
EXERCISE 7.7: SMPA TOOL EXERCISE

Using the example SMPA matrix provided in Figures 7.10 through 7.12,
complete an SMPA matrix for an innovation team project of your choice.
Finally, identifying the reasons for a lack of performance provides a frame-

work for requirements testing, evaluation, and/or establishing new requirements.
With new requirements comes a new round of data collection, baseline mea-
sures, and new measurement systems. The idea is to continue the iteration pro-
cess until performance has exceeded expectations and is operating at a validation
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and verification (new level of sustained performance). As with all ENOVALE-

based methodology, the next step is verification with empirical evidence. Data
collection should not be a burden. We recommend you collect only “enough”
data to detect a change in the process. Be aware that calculations, such as aver-
ages, hide information, and not good measures for detecting variance. Your goal
should be to watch and monitor the variation. This statistic best describes the
consistency (repeatability) of the process. We define an inconsistent process as
one that is impossible to repeat and to forecast.
Finally, when determining new requirements, it is imperative that you
ensure you reflect back on the original objective(s) the team was chartered to
resolve or achieve. Once you have assessed, quantified, and documented the
new requirements, you will need to reassess your staffing requirements and be
prepared to report hose changes to the decision makers and senior leadership
(as well as your findings to date). Included in this report to the decision maker
is your team’s determination on whether the findings and benefits you have
arrived at are self-sustaining and beneficial to the plant (shareholders, stake-
holders, and customers). Once you have briefed the appropriate parties and
received support and concurrence to continue, it is time to move on to step 3,
Operationalization.
Step 3: Operationalization
In operationalizing the outcome, your first steps are to initiate data collection
to determine the effect of influence, prediction versus chaos, and the identi-
fication of best practices (often captured in SOPs) across departments within
the plant environment (Figure 7.13). Once the innovation team has categori-
cally collected data for each of the three aforementioned areas; the next step
is to analyze the data and make an objective assessment on whether the
Flexo is still underperforming and if so, how much so in light of the projects
objective(s) or expectation(s). If the feedback or results have shown no marked
improvement in the current throughput numbers of 4200 sheets per hours, the
team adjusts the process and reinitiates data collection efforts to determine
the effect of influence, prediction versus chaos, and the identification of best
practices. This cycle repeats until reaching an acceptable level of sustainable
improvement.
As stated in our previous book, A Guide to Innovation Processes and
Solutions for Government (McLaughlin and Kennedy, 2015),* a common mistake
organizations make during incremental improvement projects is to short-change
the data collection and analysis steps. This occurs when organizations rush to
implement or operationalize an innovation, due to the misconception that it is
easier to implement and then confirm performance improvements versus under-
* A Guide to Innovation Processes and Solutions in Government (McLaughlin and Kennedy, 2015).
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Initiate
data
collection
Analyze for
Analyze for Analyze for
predictability
effect and trends and
versus
influence cycle
chaos
Future
performance
Is the item
Continue No Yes Verify
still
data cause and
under-
collection effect
performing?
Baseline
performance
Establish
operational
parameters
Establish Develop
best effective
practices controls
standing those improvements prior to implementation. We contend it only takes

a short amount of time and a small amount of data to help verify operational
parameters if they are functional and descriptive.
We cannot emphasize enough that pursuing nonfunctional operating limits
will cause frequent adjustment, slowdowns, and increased losses. Even for pro-
cesses that are human focused, the innovation team must be intimately knowl-
edgeable of the parameters (guidelines and requirements) in which they must
operate. Ensure you estimate, document, and then verify these operational
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limits (boundaries). Innovation team leaders should anticipate that this step
will take time and should not be rushed or overlooked as inconsequential. If
executed improperly, it will not only elevate the risk factors associated with
success but induce inherent difficulties in convincing senior leadership and
management (the decision makers) of its importance. More specifically, tak-
ing short cuts will increase the risk of failure due to vague operating (require-
ments) which can limit results by inducing frequent adjustments (attention),
repairs, and increased maintenance costs. Determining operating limits (and
specifications) is both a science and an art. To summarize, consider these items
as necessary:
1. Processes normally operate within a range, so do people.

2. The range needs to define the process operating limits while remaining with
the requirements (limits and specifications) nearly 100% of the time.
3. Specification limits are customer or user driven.
4. Limits are set based on empirical evidence.
5. Process can run (operate) outside of limits (for a short time) but with
increased risk of failure.
6. There should be a one-to-one relationship between operating limits and
user or specification limits—operating limits must ensure that the product,
service, or technology meets specifications 99.7% or better.
Once an acceptable level of achievement is realized, the team will need to

verify and document the resulting C&E, baseline the performance parameters,
and establish and publish the new operational parameters. It is important to
include these documents in your project file. Establishing and publishing the
new operational parameters should be recorded and reported (in our sce-
nario an increased production capability of at least 600 units [sheets] per hour
under normal operations and the scheduled work week of three 8-h shifts per
day, 5 days a week). For example, if a potential contributing factor this should
have been accomplished already or underway while your innovation team
moves into the final phase of step 3, analyzing the data collected during your
test runs.
EXERCISE 7.8: OPERATIONALIZE THE OUTCOME EXERCISE

Using the operationalization (step 3) process map in Figure 7.13, walk through
each step and anticipate potential key tasks associated with each step using
the discussion in this section as a starting point. List your thoughts under
each step.
As a general note, processes and services are not different. Generally, oper-
ating limits are not part of the conversation when developing incremental
improvements to services. However, when applied, these ensure nearly flawless
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execution. The provided flowcharts work well for product (manufacturing and
production in the packaging industry) or services improvements. That said, for
services, incremental innovation requires a change in mindset and recognition
that a service is essentially a process by nature. In the past, theorists referred to
this mindset as systems thinking (today, we also consider this as “critical think-
ing”). There are three basic elements of critical thinking—“function, structure,
and process” (Ing, 2013, p. 528). In common terms, systems thinking is “the
outcome, the inputs and components, and the sequence of activities” (Ing, 2013,
p. 528). In services industries, for example, they contain all three of these ele-
ments and therefore can be designed (and developed) to exceed expected per-
formance. Much like services, our example in the manufacturing and production
of corrugated boxes with the Flexo apply these same criteria to develop more
efficient and effective operations while providing an environment for incremental
innovation.
Step 4: Validation and Verification

The next step (Figure 7.14) is one of verification and validation (a central theme).
The first stage in step 4 is data analysis. When performing analysis on the data
your team has collected during the innovation project, we suggest you approach
this effort by keeping it simple statistically (the KISS principle). Visible repre-
sentations, such as charts and graphs (some mentioned in step 2, Reasons and
Requirements), will go a long way in readily providing decisions makers with the
right information at the right time to make timely decisions. They can also serve
as status checks for the entire team and condense difficult messages and con-
cepts you are trying to share with others. Keep in mind, there are a host of other
automated tools widely available in today’s business community and we recom-
mend you leverage these capabilities to augment our process and to help inter-
pret the data your team has collected.
Validation is the verification of key operational parameters previously
identified and documented in step 3, Operationalization. Using established
requirements to verify the documented operational parameters your team has
identified or have been provided, prepare your organization and leadership
for initiation of your proposed innovation solution. By developing policies
and procedures from your validated operating limits, you want to ensure you
make a concerted effort to inform, educate, and secure buy-in from your share-
holders, stakeholders, and also your customer if the situation warrants their
participation.
The next step is one that is often neglected. In this step, the attempt is to
focus attention on adapting (aligning) all employees to the innovation improve-
ments. It is time to celebrate but also prepare those responsible for their new
duties. Here consensus is key and leadership’s role critical. Communication is
vital, especially for those with new or additional responsibilities. It may also be
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Initiate
trial
operations
Collect and
analyze
data
Keep
it Use the Descriptive
simple KISS charts and
statistically principle graphs
Team
Interpretation member
collaboration
Requirements
Validation definition
Operating Policies and

limits Rollout procedures
Go to step 6
time to communicate with suppliers and users (customers), especially if affected

by the improvement. There multiple ways to accomplish achieving buy-in from
essential players in your innovation rollout. In our Flexo performance improve-
ment example, this effort expands the pool of key players you will need to
inform, educate (train), and gain support and buy-in from include, but are not
limited to:
◾◾ Plant general manager

◾◾ Plant director of operations
◾◾ Plant operations superintendent
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◾◾ Plant and Flexo shift supervisors

◾◾ Flexo operations leads and team members
◾◾ Maintenance (in-house or the contractor representative if your equipment is
maintained under warranty or contract support)
◾◾ Quality assurance and safety managers
◾◾ Customer service (and possibly accounting) representatives
◾◾ Scheduling supervisor
◾◾ Shipping and receiving supervisor
◾◾ Plant facility manager
◾◾ Any on-site contractor support and key suppliers (partners) involved with
the machine, process, or service your project focuses on
Further, new or modified requirements are instituted prior to full rollout

(implementation). You may recall, in the operationalization step, your team pre-
pared the product, service, or process for implementation. If this step is skipped
or diluted, the risk of failure increases due to unplanned or untested conditions.
The less you know about a process the greater the chance of errors, mistakes,
and miscalculations. Prevention is always the best cure!
EXERCISE 7.9: OPERATIONALIZE THE OUTCOME EXERCISE

Using the operationalization (step 3) process map in Figure 7.14, walk through
each step and anticipate potential key tasks associated with each step using
the discussion in this section as a starting point. List your thoughts under
each step.
In addition, consider aligning the employees to the new realities as crucial

for success. As innovations become more commonplace, it will become easier to
adapt to new outcomes (Figure 7.14). Alignment and finalization of benefit and
cost savings (reduction) will enable the speedy implementation. With any innova-
tion, there is a comfort factor (zone) that needs to be reached with employees,
customers (users), and suppliers.
Step 5: Adaptation and Alignment

The next step is your quest for a successful incremental innovation effort to
improve performance in adapting and aligning your organization with your
new approach (Figure 7.15). As a point of reference, this step is one that is often
neglected. The focus in this step should be on adapting (aligning) the plant’s
or organization’s employees (shareholders, stakeholders, and customers) to the
improvements which you introduced in step 4 (Validation and Verification),
which essentially set the stage for enterprise-wide adoption.
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Adaptation Alignment
Identify Adapt teams

modifications leadership
Refine
Consensus on outcome
Team
Leadership performance to include
members
strategy proposed
improvements
Consensus
Communicate
on
success
success
Follow-up
Solidify
and
benefit
monitoring
This step also begins by reviewing your proposed incremental innovation

process and measures for both relevancy and use. At this step, improvement in
overall value is the key. If efficiencies, effectiveness, or cost savings improve there
must be an associated value. Once reviewed, determine whether the value mea-
sure links directly to associated process measures. A change in value can signal a
change in performance. As well, subtle changes in performance can easily indicate
movement in value. Although we promote celebrating success in a timely manner,
your work is not quite finished as preparing those responsible for their new duties
requires a culture-driven approach. Each organization has its own culture, values,
and SOPs and the tone of organizational culture is typically set by leadership.
We contend that gaining consensus is paramount in instituting sustained
change and that also starts with leadership buy-in and support. Organizational
leaders have a seminal and critical role in supporting your team on innovation
specialists continue to reinforce the new or additional responsibilities through
open and transparent communication, education, and confirmation. Do not forget
to include your shareholders, stakeholders, and customers—such as suppliers,
embedded contractors, and users, who are affected by the improvement. A com-
prehensive list of shareholders, stakeholders, and customers should be included
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in your innovation project charter and a schedule of recurring contacts devel-

oped, tracked, and documented for historical reference. We also recommend that
these contacts be formalized by having training and knowledge shares docu-
mented and confirmed by some means such as a signature by each individual
who have had their responsibilities change with your new innovation. This also
confirms buy-in and affirms acknowledgment that the individual clearly under-
stands their new responsibilities and the associated performance expectations.
Revisiting key takeaways from this step (Figure 7.15), aligning the employees
to the new realities is crucial for success. As innovations become more common-
place, it will become easier to adapt to new outcomes. Alignment and finalization
of the realized benefit and cost savings (reduction) will enable the speedy imple-
mentation. With any innovation, there is a comfort factor (zone) that needs to be
reached with employees, customers (users), and suppliers. Reaching or achieving
this comfort zone achieves a level of acceptance, which is critical for sustaining
success.
As operations come “online,” outcome performance (financial, operational,
and strategic) measures must begin functioning as well. These should be shared
with the organization as a whole. We recommend you identify a high traffic area
where all employees and visitors can readily see the performance improvements
metrics your team has collected. Now is the time to start developing tools that
support sustainment of your new innovation process or best practice. The story-
board is a useful tool that can share the organization’s journey. Although this is
something you will share after the final step (establishing controls), you can start
the processes of assembling the needed pieces for your storyboard (Figure 7.16).
Project title, problem objective, or Project team (sponsor), role, and department
definition
Process analysis (potential impact) Affected domains (business areas,

departments, etc.)
Results Process control plan Next steps Team meetings/notes
Figure 7.16 Storyboard—example (basic).
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Storyboards not only deliver your message, but they can also help promote a
culture of continuous innovation and acceptance of change as an organizational
cultural norm. When designing your storyboard, we suggest you focus on open
and transparent communication in a visual format. Basic components of the story-
board include an introduction (the new process, product or service and its innova-
tive nature, benefits, or cost savings), organizational authority (devoted leadership
supports for the innovation project), application and customer benefits (testimony
of how the innovation changed or improved employee or customer satisfaction
or performance), future vision (outline the opportunities for future incremental
innovation projects and performance increases), and a summary (restate the key
message you want your organization and customers to take away from your incre-
mental innovation project). Other elements you might add to the storyboard are
the plan and problem definition, supporting data and data analysis, actions taken,
study results, and actions taken to standardize or adopt the new activity/process.
EXERCISE 7.10: STORYBOARD EXERCISE

Using the example storyboard provided in Figure 7.16, identify key elements
for a storyboard your innovation team and organization would find useful in
sharing your innovation journey.
We also recommend you do not focus on providing minute details that

distract from your message. Also avoid signaling out specific individuals for
praise—this is a time for celebrating your success, so we recommend you focus
on team contributions, successes, and acknowledgement of the new best practice
or performance improvement results. Finally, keep in mind, depending on the
robust nature of your organization’s IT capability, sharing the storyboard on your
intranet or Internet might be a more effective option to complement the posting
of the storyboard in company break rooms or high traffic areas. The next step in
establishing a sustainable, value-added incremental innovation process, project,
or service, is tracking and tying the effort to performance.
Step 6: Track and Tie to Performance

If the project continues to offer, the benefits identified in phase 1 of step 6
(Figure 7.17), then continue to pursue a successful outcome and focus on set-
ting the stage for sustainment. In the first phase, your innovation team will
focus on linking your incremental to measurable, validated, and verified value.
Measures unique to innovation efforts are new (internal and external), improved
(internal and external), and change (internal and external). Since this discussion
focuses on improved performance, your team will concentrate on measuring
the e lements of efficiency and effectiveness, productivity, risk and reward, user
acceptance, satisfaction, and ultimately success.
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Target value
and
benefit
Improved
internal/
external
Establish or
revise
measurements
Performance
below
expectations
No
Metrics
needed?
Review
performance
measures
Yes
Identify
and
No implement
Functioning
as
expected?
Establish Formalize
revise performance
measurements measures
Yes
In our example with the Flexo’s performance disparities, examples of the

measurements that the team may focus on:
◾◾ Efficiency and effectiveness—Improved machine center uptime and

availability rates
◾◾ Productivity—Increase in number of units produced per hour
◾◾ Risk and reward—Improved reward (units per hour) at no increased
safety risk
◾◾ User acceptance—Decreased number of quality defects cited by
customer
◾◾ Satisfaction—Client (customer) feedback
◾◾ Success—Sustained increase in production (units per hour); new best
p
ractice/performance standard
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EXERCISE 7.11: MEASUREMENTS EXERCISE

Using the example categories cited above (efficiency and effectiveness, pro-
ductivity, risk and reward, user acceptance, satisfaction, and success), provide
examples from one of your innovation team projects for each category. Share
them with your team.
Once your team has reviewed the performance measures and methodologies,
determine if they are effectively measuring the events you desire and providing
useful data points to assess benefit and performance. If your team concurs the
measurements and are achieving the level of fidelity (parameters) you have estab-
lished (documented) in your incremental innovation team project charter, then
formalize the performance measurements and decide what metrics you want to
collect, analyze, and publish as benchmarks for implementation. If the measure-
ments do not provide the level of fidelity that meet your established require-
ments, revise, and establish new measurements.
For our Flexo performance improvement example, we are assuming the mea-
surements meet our requirements and the metrics we are collecting to quan-
tify, analyze, and track will verify and validate value-added benefits (measures
and indicators). Further, performance improvements can exist at multiple stages
in the process implementation. For example, some of the performance factors
or measurements for our Flexo scenario might entail measuring, tracking, and
analyzing (by hour, shift, day, week, month, or quarter):
◾◾ Machine center uptime rates (via run chart)

◾◾ Machine center availability rates
◾◾ Units produced
◾◾ Sheets fed into the prefeeder
◾◾ Waste percentage—number of quality or deficient units identified
by machine center operators or customer
◾◾ Machine center operator feedback
◾◾ Customer feedback
As these are an incomplete list on potential measurements, they do represent

the common elements that are important to Flexo performance. Not mentioned
above but intimately associated in any manufacturing and production environ-
ment are safety, reliability, and quality. When increased throughput demands are
placed on an inherently human-centric operation, an increase in pressure, stress,
and pace often are by-products. When operating heavy e quipment and machin-
ery, the risk of injury is present. Always consider safety first whenever imple-
menting any innovations. The reward is simply just not worth the risk!
As critical as safety is to the process, both reliability and quality is key to
sustained performance. Reliability is associated with performance as measured
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by wear, rates of failure, and use. Quality measures performance to requirements.

Both elements are part of any process, whether service or manufacturing. Both
directly influence the customer’s view of innovation.
The final element before establishing controls is to include and fully align your
measures to financial and accounting parameters associated with the incremental
innovation project charter. Once you complete this phase, the project becomes
reality and it is time to establish your system of controls and feedback procedures.
Step 7: Establish Controls

Although the final step in the NROVATE process (Figure 7.18) appears simple and
straight forward, it actually requires an innate amount of discipline and rigors.
In essence, this step ensures your prior efforts culminate in sustained perfor-
mance of the new process and plants the seeds for follow-on product, process
or service improvement opportunities. Further, at this point, the discussion and
process flow is complete.
Implement
Establish plans
and
controls action plans
requirements

action FMEA plans
Product,
service
technology
release
Monitor
performance
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The final phase (Figure 7.18) is similar to that detailed in the previous
chapters. The phases in this final step are full implementation of the new
process. The critical elements include:
◾◾ The formalization and establishment of the recurring system of controls or pulse

checks that will produce the measures and metrics required to monitor variance
◾◾ The tools (i.e., control FMEA) to assess variance if it breaches the established
upper control limits and lower control limits established in your plan to
monitor performance
As with every process, there are far too many unknowns to have a “one
size fits all.” Each process is unique, yet fundamental issues remain constant.
This process deals with these issues that leaders and executives must manage.
Failure to do so increases risk, waste, and the failure.
EXERCISE 7.12: ESTABLISHING CONTROLS EXERCISE

Using the discussion and process map provided in Figure 7.18, walk through
each step and identify and list two to three important measurements and/or con-
trols that you feel are tantamount to achieving an effective monitoring process.
Summary
One precursor for your team to understand is that with any innovation project,
conditions and situations will likely change with each innovation team project.
Subsequently, these processes are guideposts and the example tools provided
deployed or implemented as the each situation dictates. In this chapter, we intro-
duced how the seven steps of the NROVATE process applied to an incremental
innovation situation focused on improving performance in the m anufacturing
and production environment. From introducing steps associated with nominat-
ing and negotiating an innovation opportunity focused on improving perfor-
mance to ultimately establishing the necessary controls to maintain and sustain
that desired performance, the process is proven and effective when the team
remains d isciplined, follows the steps without short cuts, and remains focused on
stakeholder, shareholder, and customer requirements.
1. After running the process maps and tools provided on one of your organi-
zation’s incremental innovation projects, gather as a team and discuss the
following:
a. Exercise results. Share your results from each exercise and discuss your
answers.
b. What step in the NROVATE methodology did you find most beneficial to
you project or event?
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c. What tools offered in this chapter provided the best value added to your
project or event?
2. If you had the opportunity to evolve the NROVATE methodology for incre-
mental improvement when performance was substandard, what area(s)
would you recommend changing? Are there any other tools or process steps
you feel would add value to an incremental innovation project or event?
Were there any tools you found added more value to your project or event?
Share your thoughts with your innovation team in open discussion.
ASSIGNMENTS
1. Identify a problem that needs improving. Discuss why performance is below
expectations and what are the reason and causes for this problem. Construct
a basic fishbone diagram.
2. Select the primary causes and use the C&E matrix to identify which causes
have the strongest effect on Y. Select a set of needs and requirements associ-
ated with the problem. What does the relationship between the causes and
effects suggest about a possible innovation project?
3. Think about a process that you wish could perform better. Use the SMPA
to identify which characteristics, if properly modified and controlled could
deliver the performance you desire.
References
Ing, D. 2013. Rethinking systems thinking: Learning and coevolving with the world.
Systems Research & Behavioral Science, 30(5), 527–547. doi:10.1002/sres.2229.
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Chapter 8
Incremental Innovation:
Accelerated Performance
Introduction
A common theme throughout this handbook is that innovation, regardless of
its impact or magnitude of impact can be categorized as new, improved, or
changed. In this chapter, our goal is to build on our previous work by provid-
ing additional tools to compliment those previously provided in our preceding
books on the innovation body of knowledge. In considering incremental innova-
tion focused on continuously improving processes, services, or products, we are
assuming that readers will have varying levels of experience and understanding
of well-known Lean Six Sigma tools that support continuous process improve-
ment (CPI) efforts. The performance acceleration process combines Lean Six
Sigma tools with specialized tools (described in this chapter) and additional tools
previously described in earlier chapters. Of paramount importance to consider
here, the performance acceleration process aligns best with small- to medium-
sized projects, including a specific target set (defined goals and objectives).
With minor adjustments throughout the process steps, there are striking
similarities between the RNOVATE™ (process acceleration) and the N2OVATE™
methodology and process.
1. R: Recognize the opportunity

2. N: Normalize the performance
3. O: Operationalize
4. V: Validate
5. A: Adapt
6. T: Track to improvement/performance
7. E: Evaluate and review
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An outline of the RNOVATE performance acceleration process is provided and

explained in this chapter along with associated process maps for each step.
Scenario 2: Performance Acceleration:

Aircraft Communications
With the complex and dynamic nature of the world’s net-centric environment, the
increasing demand to be “virtually connected” with both home and business net-
works 24 hours a day, 7 days a week, 365 days a year, is fertile ground for con-
tinuous innovation opportunities across the international business landscape. For
this scenario, we are focusing on airborne communications—identifying incre-
mental and game-changing innovation opportunities, where the current capabil-
ity meets or exceeds identified performance standards.
In regards to defining characteristics or critical elements associated with inno-
vation, the focus is on incremental improvement as it relates to performance. If
the performance is substandard, then the innovation team’s purpose (goal or
objective) would focus on raising performance to the levels that meet or exceed
expected objectives. If this is the case, please refer to Chapter 7. If the current
performance or capability meets expected objectives and the innovation team’s
focus is on adding value by increasing capabilities or improving efficiency (effec-
tiveness), the RNOVATE process steps are designed to achieve this goal.
For this example case study, the performance meets established requirements
(needs), but the team’s objectives are improving or optimizing an airborne com-
munication system’s performance through improved scalability (size, weight, and
power requirements) while providing improved reliability and efficiency. To illus-
trate the use of the RNOVATE process, we will offer an example scenario of an
actual incremental innovation improvement project from the aviation or airborne
communications industry segment. Please keep in mind that the term “process”
in this discussion is synonymous with product or service performance improve-
ments. Further, the terms “platform” and “aircraft” are interchangeable terms.
Scenario: Airborne Communications Background

To help set the stage for our example scenario, we have narrowed the airborne
communications project to the day-to-day services required of business enter-
prise communication systems on airborne platforms (voice, video, and data
services and capabilities). Since most executives and senior leaders use commer-
cial-derivative small body (7–12 passengers) to medium body (15–25 passengers)
size aircraft, we will focus our discussion on small body aircraft in this scenario.
Further, while fulfilling the organization’s strategic objectives, senior leaders and
their staffs seek net-centric capabilities and must have unfettered access to real-
time, high-quality, and reliable communications while airborne (or in transit)
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to address the full range of their organization’s assigned responsibilities. These

communication requirements often entail seamless (transparent), reliable and
robust voice, video and data communication services and capabilities. The cur-
rent capability meets the established requirements but we provide this system
(end-to-end, sender-to-receiver) currently leverages private and commercial, ad
hoc and stove-piped terrestrial (or ground-based systems) and satellite network
infrastructures to deliver its current services. However, information superiority
and real-time access to an organization or enterprise’s knowledge base (share-
holders, stakeholders, and customers) to support a timely decision process
requires delivering actionable information in a timely manner to any decision
maker in the enterprise.
Some specific areas where there are potential areas for identifying incremental
innovation improvements to an airborne communication system are:
◾◾ Enhanced communications quality, service, and security (voice, video, and

data)
◾◾ Enhanced situational awareness through real-time access
◾◾ Improved infrastructure access and performance (increased bandwidth and
data transfer rates or managing bandwidth effectively)
◾◾ Global seamless, autonomous, and reliable communications operations
throughout all phases of flight
◾◾ Communications equipment space, weight, and power (SWaP) requirements
◾◾ Agile communications capabilities (ability to upgrade, augment, or replace
communication components without degrading performance or lowering the
baseline standards for the same)
Please keep in mind, these are only a few examples of potential target areas
for incremental improvements in this scenario and we encourage you to identify
others as you work through the exercises in this chapter. Unlike the scenario pre-
sented in Chapter 6, which provided metrics for performance, this discussion will
lean more toward capability improvements in a narrative fashion. Baseline capa-
bilities will be provided in the discussion and random improvement objectives
offered through each step as tools are introduced or referred to from previous
chapters. Further, employing the RNOVATE process, each step has a comple-
mentary process map for the reader’s consideration as they seek to improve
performance that already exceeds expectations. Finally, three additional subjects
relative to this scenario we feel are important to mention are technological con-
vergence, incremental innovation process, and organizational culture.
Technological Convergence
Telecommunications and network architecture are the tapestry of technologies
(hardware and software) weaved into a convergent technological mesh built
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around a set of task or capability requirements. In our scenario, the voice, video,
and data capabilities required to support airborne communications leverage ter-
restrial and satellite-based networks, which are required to work together to get
these services from sender to receiver. Although the hardware and software sys-
tems supporting these capabilities may employ different approaches in achieving
how they support the network, they do not all provide the same quality, effi-
ciency, or reliability levels and are typically in an evolutionary state that follows
the path of evolutionary convergence.
Incremental Innovation Process (Revisited)

As a precursor to the first step in the RNOVATE, recognizing the (innovation)
opportunity, we offer a short introduction to the incremental innovation pro-
cess map (Figure 8.1). This process was introduced in our prior work, A Guide
to Innovation Processes and Solution in Government (McLaughlin and Kennedy,
2015), and we encourage the reader to review and have this text available as they
work through the chapter and associated exercises.
It is expected that each organization will have its’ own unique innovation
identity or culture. Subsequently, they develop their own innovation DNA or
fingerprint that is engrained across the organization typically through strong
leadership buy-in and an established and distinct set of innovation processes and
solutions.
Incremental innovation
Innovation Requirements Customer/user

readiness and needs analytics
Assessment Diagnostics Diversity/culture

and environment
Consensus- Innovation Collaboration

building strategy decision-making
Dynamic
capabilities N2OVATETM Certification
Value-added
outcomes
Figure 8.1 Incremental innovation process.
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Successful organizations concentrate on evolving tailorable innovation pro-

cesses and solutions that assist the organization in fostering a corp of human
resources that consistently generate new innovation opportunities. Conversely,
there are also a significant number of companies and organizations that simply
do not have any organized or documented innovation processes or guidance in
place to identify innovation opportunities for identifying opportunities. These
organizations struggle with any type of innovation and often lack the capability
to capitalize on value-added innovation opportunities for their processes, prod-
ucts, or services.
Organizational Culture
We have mentioned organizational innovation culture throughout this workbook
and in several cases, the text that this workbook supports. Accelerating perfor-
mance requires a different culture that is associated with improving performance.
To determine whether the organization meets the cultural readiness criteria, we
suggest an exercise that assesses what kind of climate and culture your organi-
zation is currently operating in. We identify three major types of organizational
cultures: innovative (entrepreneurial, creative, risk taking), bureaucratic (focus
on rules, regulation, and efficiency), and supportive (employee–customer centric;
Berson et al., 2007). Identifying which of the three organizational types (criteria)
your organization best aligns with can help provide a basis to judge and deter-
mine the influence of an organization’s culture on its shareholders, stakeholders,
and customers. To assess an organization’s culture, we provide the organizational
culture assessment matrix (Table 8.1).
Table 8.1 Organizational Culture Assessment Matrix

Major
Characteristic Subcomponent Dominance Significance History
Innovative Entrepreneurial
Innovative Creative
Innovative Risk taking
Bureaucratic Playing by the rules
Bureaucratic Regulatory
Bureaucratic Efficiency focused
Supportive Employee focused
Supportive Customer/user focused
Supportive Cooperative
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In completing the organizational culture assessment matrix, there are three

measurement criteria that will help evaluate the general state of the organization:
1. Dominance—how frequently does the organization reflect this behavior?

2. Significance—how important (prevalent) is the organizational attribute?
3. History—how long has this attribute been part of the organizational DNA?
In evaluating dominance, use a three-point Likert scale (as defined below):
◾◾ 1—Minimal
◾◾ 2—Occasional
◾◾ 3—Frequent
In evaluating significance, use a three-point Likert scale (as defined below):
◾◾ 1—Not important
◾◾ 2—Marginal importance
◾◾ 3—Very important
In evaluating history, use a three-point Likert scale (as defined below):
◾◾ 1—Long history of practice (over 5 years)

◾◾ 2—Moderate history of practice (2–5 years)
◾◾ 3—Short history of practice (0–2 years)
To get a balanced score, try for a sample of 30 or more individuals (in various
positions throughout your organization). Average the scores and look for patterns
in position title, age, education, and years’ experience. Compare with like orga-
nizations in the same sector. For accelerated performance, the culture must be
innovative (creative entrepreneurial and risk taking).
EXERCISE 8.1: ORGANIZATION CULTURE ASSESSMENT

Using the matrix in Table 8.1, complete a quick assessment of your organiza-
tion’s innovation culture. Prepare to discuss your findings in a group setting.
Largely, knowing your organization’s culture and affinity toward knowledge

and information sharing is an important precursor on possible approaches to
identifying or recognizing the innovation opportunities that “push the envelope”
of performance and value improvement. This section will not cover innovation
cultures in-depth, it is simply to introduce the reality that organizational cul-
ture has a significant influence on how the organization reacts to, supports, and
fosters innovation opportunities in general. In simple terms, if your culture is
closed-ended (one entry point and one exit point for innovative ideas), you will
likely trend toward looking internally to your organization’s own assets for identi-
fying potential innovation ideas and opportunities.
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Conversely, if your organization freely shares intellectual property and busi-

ness intelligence through agreements such as joint ventures or alliances, you are
more likely working in what Henry Chesbrough refers to as a, “culture of open
innovation.” In summary, there are multiple schools of thought on innovation, but
central to all is the notion that organizational culture plays a big role in how the
organization identifies, develops, responds, and approaches an innovation oppor-
tunity. If the organization’s work force embraces change and views change (inno-
vation) as a nonthreatening essential cultural norm, the innovation opportunity
typically delivers improved value to a process, service, or product. The first step
in improving a process, product, or service that is already meeting or exceeding
standards is to recognize the opportunity.
Step 1: Recognize the Opportunity

The first step in improving on existing performance is recognizing that there is
always room for improving the status quo (Figure 8.2). Seminal to this step is
acknowledging that identifying innovation opportunities that lead to enhancing
current performance of products, services, or processes is understanding the type
of innovation environment you are operating within your organization.
Business Recognize Customers

environment the Stakeholders
culture opportunity Shareholders
Profit/value
Core Competitive Recognize
Market share
competencies advantage the potential
Risk/reward
Operational Service
Evaluate
readiness level
options
logistics matrix
Team Formulate a
selected decision
No Reevaluate
Proceed?
or end
Yes
Normalize
the
opportunity
Figure 8.2 Accelerated performance—step 1.
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When you understand your culture and climate, you will then need to clearly
define and prioritize your core competencies (what your organization is good
at and what makes your business successful) at the strategic (organizational),
operational (system), and tactical (process) level. Next is determining the value
and benefit potential and can this innovation opportunity be profitable? Further,
is it possible to sustain a competitive advantage before the competition offers a
different solution? In the early stages of this step, the team and management do
their best to define these key attributes (KAs) and determine whether accelerated
performance is worth the additional investment in resources (cost, staffing, and
time). The word “recognize” is used more to mean acknowledgment, as at this
stage, a distinctive benefit was identified previously. This is the time to reevaluate
the benefit and determine its worth and sustainability.
Core competencies have several key elements that assist leadership at all lev-
els. One of these elements strategically aligns resources toward a set of common
goals and objectives. Core competencies also help provide a means of prioritizing
the most important functions (processes, services, and processes) where inno-
vation opportunities might prove to carry the best value added when adopted
and implemented. Some of those key elements are key performance parameters
(KPPs), key performance indicators (KPIs), critical success factors (CSFs), and KAs.
When reexamining the benefit (value added) and/or risk/reward, it is use-
ful to evaluate options, before choosing a desired path or direction. Accelerated
performance will likely require new operational parameters, training, realloca-
tion of resources, and a litany of logistics support changes. In fact, too many
modifications would be a negative, given the ratio of cost-to-benefit. Therefore,
evaluate the options before deciding to proceed. A cursory analysis should pro-
vide enough information to determine whether to abandon or proceed with your
innovation opportunity.
Service Level Matrix Tool

Shifting our focus to the airborne communication systems scenario for this chap-
ter, there are many options for tracking requirements and factors essential in
making a decision to pursue an innovation opportunity. In support of our sce-
nario for improvements to existing airborne communication services that meet
or exceed current expectations on the small tube aircraft, a service level matrix
(SLM; Figure 8.3) example is provided. The SLM tool captures key service level
requirements for customers (executives, supporting staff, and employees), level
and type of service required, requirements and performance parameters (per-
centage of usage, reliability/availability rates, quality of service, and quantity of
service). It is common to see KPPs, KPIs, KAs, and other CSFs find their way into
service level matrices. These types of matrices can support your team’s functional
needs assessment and functional solutions analysis in step 3 and can also be
updated and tailored to meet the innovation team’s needs in selecting the right
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Figure 8.3 Service level matrix example—descriptions and service requirements.
tools for measuring, tracking, and reporting in step 6, Track to Improvement/

Performance.
EXERCISE 8.2: SERVICE LEVEL MATRIX

Using the example as a guide, build an SLM to support an innovation oppor-
tunity proposal or project submission within your organization. Share your
results with your supervision, peers, and employees (where applicable). What
are their thoughts on suggested changes to your initial matrix?
Shifting our focus to the airborne communication systems scenario for this
chapter, some primary considerations for innovation team members could entail:
◾◾ Knowledge of the equipment (i.e., airborne communications, satellite and

telecommunications, terrestrial, and ground-based communications)
◾◾ Standard operating procedures (i.e., communications operators, aeronautical
engineering, and maintenance)
◾◾ Training
◾◾ Qualifications for running the airborne communications equipment,
operations, and maintenance concepts
◾◾ Preventive maintenance and recurring cleaning requirements
◾◾ Production scheduling or orders
◾◾ Daily performance and data collection requirements
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Figure 8.4 Service level matrix example—descriptions and service requirements.
After identifying team membership and assigning initial responsibilities, begin

the process of developing the requirements (goals and objectives) and securing
senior leadership (management) support. Schedule meetings and time require-
ments you will require from each member on the team. In our airborne commu-
nications scenario, reflect back on the SLM (Figure 8.4). Your goal and objective
is to improve overall voice, video, and data capability (reliability and perfor-
mance) beyond the published expectations captured in this matrix. An accom-
panying objective is to improve the SWaP profile or requirements if possible.
Further, nominating the right complement of team members can be one of the
most complicated steps a team leader will face in this process. Senior leadership
buy-in, support, and cooperation are essential.
Finally, making a decision to move forward is the last deliverable for this step.
The evidence should suggest the best course of action. You will know when
this occurs when the amount and intensity of internal discussion significantly
reduces over time. As management and the team acquiesce, the objective will
become clearer and better defined. Therefore, the decision is either to proceed
or halt discussion on the topic. This, then, is a major milestone as a rejection
shuts down the project.
Other tools mentioned in previous chapters important to consider are the
innovation team project charter (Figure 8.3) and the RACI or RASCI (responsibil-
ity, accountability, support network, consultant network, and information require-
ments) model (Figure 8.2). Combined, they are synergizing tools that assist the
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innovation team in maintaining focus on the objectives and goals of the project.
Most specifically:
◾◾ Who will own the activities, problems, or goals associated with the innova-
tion project (responsibility)?
◾◾ Who is the decision maker or approval authority for the work at each level
building up to the final implementation of the innovation (accountability)?
◾◾ Who can provide the necessary support throughout the stages of the proj-
ect and ultimately the success of the innovation implementation (required
support)?
◾◾ Who has the knowledge and information necessary to support your project
throughout the steps toward implementation (consultant support)?
◾◾ Who in the chain of command or leadership hierarchy is notified at what
stages or milestones as the project moves through the process steps (infor-
mation requirements)?
Before moving onto the next step (step 2), we feel it is important to reiter-
ate to the reader there are additional tools that can help an organization identify
innovation opportunities to complement those offered throughout this workbook.
Hence, we will assume the proposal received approval to move to the next step.
Step 2: Normalizing the Opportunity

In this step (Figure 8.5), the team will develop a method for testing whether the
accelerated performance is sustainable and identify the expectations regarding
performance. Further, key expectations (both present and future) are critical to
defining the achievable limits.
Table 8.2 lists the requirement and type (customer, SOP), present day (reality),
and future performance (expectations), and the final column lists the decision
reached on whether the expectations, as expressed, are accepted or denied. Of
course, the expectations are just presumptions until the next stage is completed.
During this stage, we would expect both negotiation and compromise to be criti-
cal elements of the final (future) expectations. We must caution that presuming
(or hoping) to meet an expectation with some sort of prior validation is often a
waste of time. Presume that the future expectation is possible, but not sustain-
able. This, then, sets the stage for the testing.
EXERCISE 8.3: EXPECTATIONS EVALUATION TOOL

Develop a set of expectations for a product, process, or service that would
benefit from accelerated performance. Consider the present expectation and
develop future expectations. Discuss among the team if the future expectation
could be a reality.
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Normalize
the
opportunity
SOPs Expectations
Evaluate
customer evaluation
expectations
perceptions tool
Test Tools
Simulate Design the
Software
Predict test
Resources
“Push the
envelope”
Descriptive
Evaluate the
Inferential
results
Experimental
Yes
Results
Reevaluate
sporadic?
No
Operationalize
Table 8.2 Expectations Evaluation Tool

Requirement Type Present (Reality) Future (Expectation) Decision
Connectivity Customer 70%–75% Coverage 95%–100% Approved
Coverage
Download SOP 5 Mb/s 50 Mb/s Approved
speed
No. of Customer 10 downtime <1 downtime event Denied
downtime events per million per million miles
events miles flown flown
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Testing whether the accelerated performance level is possible and then deter-
mining if it is sustainable requires designing a test plan. Begin with the informa-
tion contained in the IOP document regarding, KPPs, KPIs, KAs, and CSFs or use
these factors to help develop and refine the future expectations described in step
1. These IOP factors will help develop the test parameters used to accelerate and
sustain performance. Figure 8.6 details a typical test plan.
Figure 8.6 Test plan.
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Test plans can be as simple as designing a test run or as complex as designing

an experiment or simulation. Various methods of testing are possible.
◾◾ Direct testing of the product, service, or process (varying variables, collect-

ing data, plotting performance, recommend control charting)
◾◾ Experimental design involves very small samples and a minimum of two
variables to modify, while observing performance. This method permits an
estimate of variation (controllable) and prediction
◾◾ Simulations that involve constructing a model of variables tested at various
settings while observing performance. Note: Experimental designs function
well within the simulation environment
EXERCISE 8.4: TEST PLAN

Complete a test plan for a fictitious process, have each team member prepare
a preliminary plan and then compare results. Discuss why the similarities and
differences exist.
Testing is critical for “pushing the envelope” maintaining these levels of acceler-
ated performance. Once the test is complete, evaluate the results using a descrip-
tive, inferential (testing hypotheses), or experimental approach. If the results are
sporadic, then reevaluate. If not, then move to operationalizing the process.
Step 3: Operationalization
In this step, we incorporate the learnings from step 2 into a new set of require-
ments, SOPs, and quality standards. The purpose of this step is to develop new
operational procedures for maintaining a new level of performance. Figure 8.7 is
the flowchart for this next step. The step begins with the test results from step 2
and builds these into a new set of standards that will facilitate accelerated per-
formance. Using the empirical evidence from step 2 provides a level of assurance
that the process will adjust to the new standard of performance.
The test data alone are not enough to make a final decision. Operationalize
the decision within the capability of the organization to sustain and support the
innovation. Changing the performance characteristics requires a new set of stan-
dards whether these are process oriented, customer oriented, or quality oriented.
This step involves updating manuals, additional training, and new controls to
assure consistency. Also, consider the resources needed and how suppliers will
meet the requirements for a significantly changed process. Accelerated perfor-
mance is truly innovative in that it meets an unsatisfied need (requirement) in a
way attractive to the user or customer.
To develop these new standards, modify the existing information based on
the new targets and goals achieved. Include new quality procedures and controls
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Test results
Initiate
Core
standards Requirements
competencies
modification
Resources
Customer Process
suppliers
Develop
Objectives
“new” Quality
Targets
operating standards
Goals
standards
Implement
operating
standards
Verify
based on the performance desired. Consider alternatives as a way of coping with

changing conditions. Test and evaluate the new standards before implementing.
Be careful not to introduce additional uncertainty or inconsistency to the process.
Monitor the process carefully at start up and for at least 1 month after initiation.
If the process remains consistent, then consider the standards as compliant. Use
the month period to verify and validate the standard, using the stages in step 4.
EXERCISE 8.5: STANDARDS

Design a test plan for implementing a new set of standards for an accelerated
performance innovation. Consider the present state and discuss what needs
to change to meet the new performance guidelines. Describe how targets and
goals influence the standards.
Step 4: Validate
The step 4 steps in the RNOVATE process, validate, adapt, track improvement/
performance, and evaluate and review, are very similar to the last four steps in
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18%
40%
Voice
Data
Video
42%
Figure 8.8 Executive airborne communication usage pie chart (voice, video, and data).
the improvement process described in the previous chapter. In this section, we

address the validation step (Figure 8.8) and it begins with analyzing the data
the innovation team has collected to validate the new process. When perform-
ing analysis on the data your team has and will collect during the incremental
innovation opportunity processes, we maintain the innovation team should
retain the focus of keeping things simple statistically (KISS Principle: keep it
simple statistically). Although data analysis may use inferential statistical tools,
simple descriptive analysis often serves a similar purpose. An example of this
visible representations for tracking actual perfomance data in support of the
validation and data analysis effort provided in Figures 8.9 and 8.10 are provided
to reflect examples used in support of our airborne communications sceanrio.
EXERCISE 8.6: BUILD A USAGE PIE CHART

Consider a project or innovation opportunity proposal you are working on
within your organization. Using the example in Figure 8.9, build your own
basic usage pie chart for one KPP or KPI identified in Section II, Operational
System Requirements Statement, of the innovation opportunity profile (IOP)
you built in the previous exercises.
System performance and reliability rates

100%
90%
99.2% 99.99%
80%
70%
60%
64.2%
50%
40%
30%
20%
10%
0%
Voice Data Video
Figure 8.9 Airborne communication system perfomance and reliability rates bar graph.
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Validation
of improved
process
Data
KISS collection
principle and
analysis
Team
Interpretation collaboration
Requirements Policies and

Validation
established procedures
Operating
Rollout and
limits
initiation
confirmed
Step
complete
EXERCISE 8.7: BUILD A BASIC PERFORMANCE

AND RELIABILITY RATE BAR CHART
Consider a project or innovation opportunity proposal you are working on
within your organization. Using the example in Figure 8.10, build your own
basic performance and reliability bar chart for one KPP or KPI identified in
Section II, Operational System Requirements Statement, of the IOP you built
in the previous exercises.
The headings and content of charts and graphs supporting your data analy-
sis efforts will obviously change based on the product, process, or service
innovation opportunity. We encourage you to explore those mentioned in
previous chapters of this workbook as they can be very useful tools for readily
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providing visual summations for decision makers. In improving performance

through incremental innovation opportunities, the significant objective is pro-
viding the right information at the right time to make timely decisions. Further,
they can also serve as status checks for the entire team and condense difficult
messages and concepts you are trying to share with others. As previously pro-
vided in this chapter, there are a host of other automated tools widely avail-
able in today’s business community and we recommend you leverage these
capabilities to augment our process and to help interpret the data your team
has collected.
In Figure 8.11, validate and verify key operational parameters and indica-
tors (KPPs, KPIs, KA, and CSFs) identified in your IOP developed in Chapter 4,
Operalization, are required. Using established requirements to verify the
operational parameters your team has identified or have been provided, help
expand and mature the proposal and prepare your organization and leader-
ship for inititation of your proposed innovation solution. By developing policies
and procedures from your validated operating limits, you want to ensure you
make a concerted effort to inform, educate, and secure buy-in from your share-
holders, stakeholders, and also your customers if the situation warrants their
paritcipation.
The validation and data analysis step is often neglected as innovation teams
race to meet deadlines or implement improvement-centric innovation opportuni-
ties. Never overlook the need to adapt or align the organization’s human element
(employees) to the incremental innovation improvement. Effective communication
is vital function for those key to implementing improvement opportunities when
the product process or service already meets or exceeds standards and expec-
tations. Ensure you keep shareholders, stakeholders, and customers involved
(those outlined in Sections I, III, VI, VIII, and IX of the IOP) even if they are not
directly related to the innovation opportunity. Buy-in and support from champi-
ons, support staff, and other key players is paramount as you prepare to roll out
your innovation opportunity for adoption. In our aircraft communication capabil-
ity performance improvement example, key players this effort expands the pool
of key players you will need to inform, educate (train), and gain support and
buy-in from include, but are not limited to:
◾◾ Executive and support staff travelers

◾◾ Flight (aircrew) and ground crew operation members
◾◾ Flight operations and airfield management
◾◾ Aircraft and IT maintenance (in-house or the contractor representative if
your equipment is maintained under warranty or contract support)
◾◾ Quality assurance and safety managers
◾◾ Customer service and certification/waiver authorities (FCC and FAA)
◾◾ Supporting organizational business units, groups, and personnel
◾◾ Any on-site contractor support and key suppliers (partners) involved with
the machine, process, or service your project focuses on
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Figure 8.11 SMPA template example (routing issues).
EXERCISE 8.8: KEY PLAYER LIST

Using the key organization business unit, group, and personnel list provided
above, build a quick key player list for a project or proposal you are working
or might propose. Consider the entries made in the innovation opportunity
form. In what sections are your key players identified?
You may recall in the operationalization step, your team identified and pre-
pared the new or modified requirements prior to full rollout and implementa-
tion of the product, service, or process. If the validation and data analysis step
is skipped or diluted, the risk of failure increases due to unplanned or untested
conditions. The less you know about a process the greater the chance of errors,
mistakes, and miscalculations. Further, consider aligning the employees to the
new realities your incremental improvement will bring as a CSF and cruical for
success. As innovations become more commonplace, the organizational culture
and employee attitudes toward innovation will become better prepared to adapt to
new outcomes. Alignment and finalization of the innovation opportunity’s benefit
and value will lead to new baseline perfomance standards and expectations.
The SMPA tool is a method to define successful performance as a function of
those elements that improve performance over the life of the product, process,
service, or technology. Two elements that directly affect aircraft communication
systems performance are routing problems and software. This holds true in our
aircraft communications scenario. The example demonstrates how to improve
routing issues by examining elements that directly influence this key perfor-
mance measurement. This tool is an excellent brainstorming tool used in a face-
to-face environment or completed virtually. This tool can assist in determining
the best measures (empirical data) to control the improvement in performance.
SMPA also involves employees in the problem-solving process. Clients find this
tool useful for planning and operational purposes.
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EXERCISE 8.9: SMPA TOOL EXERCISE

Using the example SMPA matrix provided in Figure 8.8, complete an SMPA
matrix for an innovation team project of your choice.
Step 5: Adapt and Align

Adapting and aligning your organization with the incremental improvement
opportunity is of tantamount importance (see Figure 8.12). The processes in
this step are very similar to those identified in the N2OVATE™ process, so we
recommend reviewing the discussion in Chapter 7, Implementing a Successful
Improvement Project—Performance Below Expectations, to complement this
discussion. In adapting and aligning the organization, the innovation team must
clarify and identify the changes or modifications as well as articulate the new
set of benchmarks, expectations, and/or standards. New expectations and stan-
dards should be shared through training, published or documented procedure
and guidelines, policy change notices, and face-to-face meetings at the group
or individual level. Gaining concesus on perfomance strategy from leadership
Adaptation Alignment
Adapt teams
Identify
and
modifications
leadership
Refine
Consensus on
Team outcome
Leadership performance
members to include
strategy
modifications
Communicate Consensus
success on success
Follow-up
Solidify
and
benefit
monitoring
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and team members is also essential as it can result in the perpetuation of new
knowledge and ideas on how to better improve the recommended changes
(innovation opportunity) you are seeking to gain from the innovation oppor-
tunity. Consensus building reinforces an incremental innovation and change
mentality which enriches the organization’s acclimation and attitudes toward
innovation opportunities which are essential for enterprise-wide adoption and
success.
Some of the tools the reader may find useful in this section are appli-
cable to our aircraft communications scenario. As these tools have been
presented in other chapters throughout this workbook, they are mentioned
below and their potential use are provided for the reader’s reference and
convenience.
◾◾ Storyboards (track, share, and publicize the innovation improvement oppor-

tunity throughout the organization)
◾◾ Graphs, charts, and worksheets (track and monitor usage rates, performance,
accounting, and financial metrics)
◾◾ Feedback forms and processes (provide avenue from shareholders, stake-
holders, and customers to gain valuable insight and status on how the inno-
vation improvement opportunity is performing; and ideas and suggestions
on potential improvements, etc.)
EXERCISE 8.10: ADAPTING AND ALIGNMENT TOOLS

Considering the tools mentioned above and throughout the workbook, pick
one tool and apply a set of adapt, and alignment goals for your organiza-
tion’s assets to achieve a positive outcome for a project or proposal you are
working on or might propose. Are there any additional tools not identified
that you feel could help you accomplish your goals and objectives in this
area? Name one tool not listed in each area (adapt and align) and provide
a short discussion on how they would be used and what information they
would provide to help you achieve a positive outcome for your project or
proposal?
Some of the key objectives and questions the innovation team should seek to
answer in this step are:
◾◾ What is the initial gauge on efficiencies, effectiveness, or cost saving

improvements that bring benefit and value?
◾◾ Does the performance benefit or value-added link directly to associated pro-
cess measures?
◾◾ Have you achieved the appropriate level of buy-in from leadership and the
workforce (shareholders, stakeholders, and customers)?
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◾◾ Do leaders and employees understand their new roles and

responsibilities?
◾◾ Have the appropriate leaders and personnel affected by the innovation
improvement opportunity been trained?
◾◾ Do leaders and employees understand the new requirements, expectations,
and standards?
◾◾ Does the team have a well-known performance feedback and monitoring
process in-place for capturing performance changes?
◾◾ Does the innovation team have a well-defined and understood feedback
mechanism in-place for fielding comments and/or suggested changes gener-
ated by the new process from leadership and the workforce (shareholders,
stakeholders, and customers)?
As a final comment for this step, we reiterate that gaining consensus through-
out the organization is paramount in instituting sustained incremental innova-
tion improvements. This typically starts with leadership buy-in and support.
Organizational leaders have a seminal and critical role in supporting your team
as innovation evangelists continue to reinforce the new or additional responsibili-
ties through open and transparent communication, education, and confirmation.
Do not forget to inlcude your shareholders, stakeholders, and customers—
such as suppliers, embedded contractors, and users, who are affected by the
improvement.
Revisiting key take aways from this step, aligning the employees to the new
realities is cruical for success. As incremental innovation opportunities become
more commonplace, it will become easier for an organization to continuously set
new benchmarks and standards that continuously elevate the performance and
outcomes even when they currently meet or exceed expectations and established
standards. The next step in establishing an organization focused on generating a
sustainable, value-added incremental innovation culture is tracking and tying the
effort to performance.
EXERCISE 8.11: KEY OBJECTIVES AND QUESTIONS

Using the list of potential key objectives and/or questions mentioned in this
section, identify three that you feel are most important in adapting and align-
ing your organization’s assets to achieve a positive outcome for a project or
proposal you are working or might propose. Discuss why you chose these
questions. Are there any additional questions not listed in this section you
feel are important considerations in achieving the objectives of this step? If so,
what are they and why do you feel they are important to a positive outcome
for your project or proposal?
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Step 6: Track to Improvement/Performance

If the project continues to generate benefits identified in the initial phase of
step 6 (Figure 8.13), then continue to pursue a successful outcome and focus on
setting the stage for evaluating and reviewing your innovation implementation.
In the first phase your innovation team will focus on linking your incremental
innovation opportunity to measurable, validated, and verified value. Measures
unique to innovation efforts are new (internal and external), improved (internal
and external) and change (internal and external). Since this discussion focuses
on improving performance that already meets or exceeds standards and expecta-
tions, your team will concentrate on measuring the elements of efficiency and
effectiveness, productivity, risk and reward, user acceptance, satisfaction, and
ultimately success.
Tools for tracking improvement and performance should all you track
performance, detect performance, and quality of service issues, and should
help you address or fix issues and verify the results in a timely manner
(Figure 8.13). Areas to track in our example of aircraft communications capa-
bility could be:
◾◾ Efficiency and effectiveness—Service and system level performance for hard-

ware and software (ground and airborne environments); fault detection and
diagnostic tools
◾◾ Productivity—Voice, video, and data transmission, capacity and utilization
rates
◾◾ Risk and reward—Return on investment or cost versus improvement value
and benefits
◾◾ User acceptance—Traveler surveys and questionnaires
◾◾ Satisfaction—Customer feedback, service quality levels, and reliability report-
ing systems
◾◾ Success—Software and hardware reliability, maintainability, sustainability,
and availability; cost and accounting changes of external service providers
and services
EXERCISE 8.12: ESTABLISHING CONTROLS EXERCISE

each step and identify and list two to three important measurements and/
or controls that you feel are tantamount to achieving an effective monitoring
process.
Once your team has reviewed the performance measures and method-
ologies, determine whether they are effectively measuring the events you
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Link to value
Improved
internal/
external
Establish or
revise
measurements
Performance
exceeds
expectations
No
Metrics
needed?
Review
performance
measures
Yes
Identify
and
No implement
Functioning
as
expected?
Establish/ Formalize
revise performance
measurements measures
Yes
desire and providing useful data points to assess benefit and performance.
If your team concurs the measurements are achieving the level of fidelity
(parameters) you have established (documented) in your IOP, then formal-
ize the performance measurements and decide what metrics you want to
collect, analyze, and publish as benchmarks for full adoption and organiza-
tion-wide implementation. If the measurements do not provide the level of
fidelity that meet your established requirements, revise, and establish new
measurements.
This is a short list on potential measurements; they do represent the
common elements that are important to aircraft communications perfor-
mance. In completing this step in the process, your final step before estab-
lishing evaluation and review controls is to include and fully aligning
your measures to financial and accounting parameters associated with the
incremental IOP.
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Large-scale
implementation
approach
Establish
tracking
measures
Link to
accounting/
financial
measures
Track
and benefits
Analyze
financial
results
No Yes
Go back Do results
Continue
to step 3 meet
evaluation
expectations?
Step 7: Evaluate and Review

Although the final step (Figure 8.15) in the RNOVATE process appears simple
and straightforward, it actually requires an innate amount of discipline and rigor.
In essence, this step ensures your prior efforts culminate in the sustained value,
benefits, and performance of the new process, product, or service. Further, at
this point, the discussion and RNOVATE process flow are complete.
The phases in this final step are full implementation of the new process
or launch of the new product or service in conjunction with the formalization
and establishment of the recurring system of evaluation controls and periodic
reviews. The evaluation controls and periodic reviews should measure the met-
rics necessary actively and passively monitor variance. Tools such as failure mode
and effects analysis or cause and effect matrix assess variance if it falls out of
range of the established upper control limits and lower control limits established
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Evaluate
and monitor
Specifications Establish Backup

and quality plans
requirements controls Action plans

action FMEA plans
Project
ends
in your test plans to monitor performance identified in Section VII of your IOP
discussed in Step 3, Operationalize, of the RNOVATE process.
EXERCISE 8.13: ESTABLISHING EVALUATION CONTROLS

AND PERIODIC REVIEWS EXERCISE
each step and identify and list three important measurements and/or controls
that you feel are tantamount to achieving and effective monitoring process.
Consider their use in a project or proposal you are working at present. If you
are working in a group course room, be prepared to discuss your thoughts
on the three tools you selected (i.e., why they are important to evaluating out-
comes and reviewing the results).
As with every process, there are far too many unknowns to have a “one size
fits all.” Each process is unique, yet fundamental issues remain constant. This
process deals with these issues that leaders and executives must manage. Failure
to do so increases risk, waste, and the failure.
Summary
In this chapter, our goal was to provide you with additional tools to comple-
ment the RNOVATE performance acceleration process focusing on improving
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performance, value, and benefits when a process, product, or service already

exceeds standards and/or expectations. Remaining in the realm of incremental
innovation focused on continuously improving processes, services, or products,
we assume that readers will have varying levels of understanding and use of
well-known Six Sigma tools that support CPI efforts. To add to those tools, we
have presented several innovation opportunity tools, most notably the innova-
tion opportunity proposal (short form) and the IOP (long form—request from
the authors). By design, these two forms support the innovation philosophy
by capturing the central information and data elements leaders and decision
makers require to make a strategic determination on pursuing or not pursu-
ing an innovation opportunity. Finally, although many projects and programs
are focused on incremental innovation improvement over the short term,
these tools will assist organizations in establishing a sustained and repeatable
approach to their innovation opportunities if implemented with consistency
and discipline.
1. Following each letter of the RNOVATE acronym below, provide the name for
each step the letter represents. For the each step in the process, define the
key process elements (or sub-steps) in the blanks provided following each
letter.
a. R: ________________________________________________
b. N: ________________________________________________
c. O: ________________________________________________
d. V: ________________________________________________
e. A: ________________________________________________
f. T: ________________________________________________
g. E: ________________________________________________
2. Name two (2) innovation opportunity tools from this chapter’s discussion.
Explain their use and discuss the three (3) key elements in each tool. How
are the elements you chose important to the innovation opportunity perfor-
mance acceleration process?
3. What is the importance of the recognizing and confirming the innovation
opportunity?
ASSIGNMENTS
1. Identify a process, product, or service that has the potential to acceler-
ate its performance. Explain why this is critical for sustained innovation
success.
2. Using the information you gathered during the exercises, complete the IOP
executive summary section and submit your final product to another class
member for review and feedback. Discuss the feedback in a short discussion
and update your executive summary accordingly.
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References
Berson, Y., Oreg, S., and Dvir, T. 2007. CEO values, organizational culture and firm out-
comes. Journal of Organizational Behavior, 29(5), 615–633, July 2008. doi: 10.1002/
job.499.
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Chapter 9
Innovative Change: The

Art of Replacement
Introduction
The idea that change is innovative may be hard for some to accept. Change is
often experienced as an “out with the old, in with the new” radical approach.
Yet, at times, change is the only alternative as nothing but a complete revi-
sion is required. As with all innovation, there must be a need and a signifi-
cant decrease in performance to spur action. This chapter is a refinement of
Chapter 10 in our book entitled, A Guide to Innovation Processes and Solutions
for Government (McLaughlin and Kennedy, 2015). Given the diversity of mean-
ings associated with change as it relates to an innovation opportunity, we have
refined the focus to be that associated with “replacement.” If a product, pro-
cess, or service required a small or incremental change, we suggest you con-
sider using the improvement strategies to implement the modification versus
replacing what is already in place. However, if after deliberation, your manage-
ment desires or needs a complete change, we recommend using the methodol-
ogy presented in this chapter.
Replacement seems simple. We replace items every day without problems or
concerns, yet when dealing from an organizational perspective, replacement can
lead to a waterfall effect and a wide variety of outcomes the innovation team
must consider. Thus, a positive outcome would be innovative if it met the pre-
vailing need. However, the opposite is true as well as a negative outcome can
cause serious disruptions and often leads to dissolution. We would expect that
similar outcomes exist for the replacement course of action. Further, defining
replacement is critical to understanding its true value. Replacement involves any
if not all of the following activities (processes):
1. A complete overhaul of an existing process

2. Replacement of an existing process
221
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3. Offshoring/outsourcing of a process
4. An existing process with new outcomes
Replacement certainly covers a variety of change states. We contend that

replacement is also inappropriate for partial changes, changes in personnel
only, or changes due to technology advancements. The key is process change
(Figure 9.1).
Replacement provides a strategy that enables a fresh start. As with any change,
there needs to be a clear set of unambiguous communications, a clear objective,
and a desire for alignment with the organizations key business strategy, objec-
tives, and/or core competencies. The seven-step process offered in this chapter
provides a mechanism (methodology) to replace a process, product, or service
with maximum benefit and minimal disruption.
Evaluate
replacement
Alternative
review
Overview the
repercussions
Verify
Align to
the decision
Lead the
effort
Embrace the
change
Figure 9.1 Replacement cycle.
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Innovative Change ◾ 223
To ensure sustained innovation success, companies and organizations need a

long-term plan that is consistent over time and resistant to frequent modifications
and changes. The objectives must be measurable, and the plan logical in order to
succeed. The organization must commit to a long-term strategy combined with
the desire to ensure that the innovation effort succeeds.
Step 1: Identifying Replacement Value

The next logical step after assessment and diagnostics is the development of
an innovation management strategy. In simpler terms, innovation must be a
corporate (executive) strategy, accepted, and promoted by management, who
operationalize it on a daily basis. The central purpose of step 1 (Figure 9.2) is to
review the potential change by asking the “why change” question and ultimately
Why
change?
Identify
reasons for
replacement
S—Simple or complex
N—New or recycled No
Can it
I—Integrated or reactionary pass the
F—Fact or emotion SNIFF
F—Final or tentative test ?
Yes
Replacement
Benefits Reconsider
potential
Evaluate
Consequences
risk
No Yes
Initiate
Consequences Determine
change
negative? impact
process
Figure 9.2 Replacement cycle—step 1.
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determining if the replacement value warrants the time and resources the organi-
zation will invest. The first tool to consider is the SNIFF test.
S: Simple/Complex: Evaluate the difficulty in implementing the change

N: New idea/Recycled: Is this a new or a recycled approach?
I: Integrated or Chaotic: How well will the organization incorporate the change?
F: Fact or Opinion: Reasons for the change based on fact (data) or emotion?
F: Final or Tentative: Is this permanent or temporary?
Consider, as an example, a restaurant that wants to replace their existing food

ordering processing (which relies on servers) to hand write orders with a new
electronic system. Orders are entered into the peripheral device (handheld tablet or
register keyboard) and moved to the kitchen for processing, eliminating the need
to hand carry orders. The electronic device automatically calculates the price and
signals the server when the order is ready. The value proposition (outcomes) is sav-
ings in time and cost. Before purchasing this system, use the SNIFF test to deter-
mine whether there is potential value added to the current mode of operation.
To complete the SNIFF test table, first list each element of the SNIFF acronym
as provided in Table 9.1. Next, assess each component for use and applicability.
Examine each outcome influence of the assessment and state the influence on
the objectives. Finally, list the longer-term consequences.
This tool provides a simple but integrated approach to assess change before
making a final decision to proceed to the next step. This tool is flexible and
agile, so feel free to add different or additional elements that apply to your
innovation opportunity. Worthy of note, the administrative component typically
occurs at the executive (director) and above level within the organization; and
the operational component functions as a project management strategy dedicated
to achieving sustained innovation success.
Table 9.1 SNIFF Test
SNIFF
Component Assessment Outcome Influence Consequences
Simple/complex Complex early, Cost: High More server time
simple after Time: Low spent with patrons
initial use No handwriting
problems
New idea/ New idea (server) Cost: Low (to offer ideas) More cooperation,
recycled Time: High (training) less friction
Integrated or Chaotic 1–2 weeks Cost: Low Few, if any negatives
chaotic highly integrated Time: Loss at first
Fact or opinion Fact Cost: (Profit) higher More use of
customer satisfaction technology
Time: Less time
Final or tentative Final
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After completing the initial SNIFF test, if the consequences are negative, then
determine the impact, evaluate the risk, and reconsider the general intent of the
project. In sum, accomplishing the SNIFF test is an instrumental component in
accomplishing this step.
EXERCISE 9.1: REPLACEMENT CONSIDERATION

Consider a replacement that occurred at work (either recent or in the past).
Apply the SNIFF test and create a table such as Table 9.1. What did you learn
from the exercise?
Step 2: Review of Alternatives

The next step in the replacement process is a review of alternatives (Figure 9.3
and Table 9.2). Assuming that the most obvious or recommended choice is
always the best choice; we recommend an evaluation of alternatives. As with any
alternative, there is a positive (benefit) and a negative (consequence). Identifying
an alternative generally initiates a consequence.
Overall
impact of
replacement
Review the
alternatives
ABLR
Benefits Consequences
score
Alternative
Positive Negative
approach
Select
Step
alternative Repercussions
complete
choice
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Table 9.2 Alternative Benefit Loss Ratio

Alternative Benefit Score Loss Score Ratio
We recommend the innovation team examine a number of alternatives with

the objective of identifying the benefits and losses, while examining and deter-
mining the overall impact (influence) of each alternative. If an alternative has
fewer losses and has much more benefit, it may be the best choice. To reiterate
an earlier point, an individual plays a seminal role in identifying the alterna-
tives, benefits, losses, and repercussions. The author’s experiences have been that
when management wants to innovate and has established a position on a partic-
ular benefit, potential loses are often overlooked and never considered. Table 9.2
helps the innovation team and organization keep their focus on potential losses.
Scoring the Alternative Benefit Loss Ratio

Benefit score: 1–5: 1—no benefit; 2—minimal benefit; 3—some benefit to the
outcome; 4—benefits the outcome; 5—maximum benefit to the outcome.
Loss score: 1–5: 1—no loss to the outcome; 2—minimal loss affects the out-
come; 3—some loss affects the outcome; 4—losses affect the outcome; 5—major
loss affecting the outcome.
= Benefit score (B score)/Loss score (L score)

Ratio
Interpreting the Alternative Benefit Loss Ratio

If the ratio is >1, the effect is positive (adequate benefits with a reduced threat of
losses). If the ratio is <1, reconsider the alternative as its consequences affect the
outcome in a negative manner. Values close to zero are indicative of a situation
where benefits and consequences have an equal effect.
EXERCISE 9.2: CONSTRUCT AN ALTERNATIVE

BENEFIT LOSS RATIO TABLE
What learnings did you or your innovation team find interesting?
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Step 3: Evaluate Repercussions

In the next step (Step 3; Figure 9.4), the innovation team reviews the alterna-
tives and evaluates the benefits and consequences of potential alternatives. The
alternative approach involves the dynamics of implementation. Selecting the
alternative requires further analysis (and a decision) that may reveal positive and/
or negative aspects. Implementation will have either a negative or a positive
effect on the outcome. Negative effects require an examination of repercussions.
Positive effects permit the implementation to proceed immediately.
Consider an example where a large organization wants to outsource their pro-
curement department. The organization conducted research and determined that
an Asian country would be the most cost-effective location to conduct procure-
ment affairs. The research results showed an established benefit, which subse-
quently drove the implementation. However, the research effort never considered
the risk involved in moving an entire department to a foreign country or whether
a better alternative existed. The organization took action and moved the depart-
ment to Asia only to discover the new personnel in Asia received inadequate
training and lacked the required experience to effectively run a procurement
process. In fact, rather than saving money, the cost of the department doubled.
No one considered the consequences that can occur in moving a complete
department from one country (or culture) to another. Finally, the organization
Evaluate
and monitor
Specifications Establish Backup

and quality plans
requirements controls Action plans

action FMEA plans
Project
ends
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had to reverse course on their decision and moved the procurement business
back in-house to its original location. This is a perfect example of what can hap-
pen when an organization fails to consider both consequences and repercussions
when fully researching potential alternatives.
Alternative Repercussion Effects Analysis Worksheet Tool

Completing the alternative repercussion effects analysis (AREA) worksheet begins
with identifying all alternatives and repercussions (Table 9.3). The innovation
team’s focus should be on determining the effect of the alternatives on the out-
come and the reasons and cause for the repercussions. The repercussion (what
can go wrong) can be a limiting factor (LIMFAC) or a failure point associated
with the alternative. Once the worksheet is complete, transfer the information the
innovation team has collected to the AREA template (Figure 9.3). The next step
involves a risk assessment of each alternative (Figure 9.5).
When completing an AREA risk assessment, there are generally three mea-
sures of risk: severity (SEV), occurrence (OCC), and detectability (DET). To
evaluate the effect of risk (Figure 9.6), use a scale from 1 to 10. SEV measures
the effect of the repercussion on the outcome. OCC measures the frequency
of the repercussion (the failure), and DET measures its overall effect. A final
assessment is the risk priority number, which evaluates the overall viability of
the alternative. When replacing a process, product, or service, evaluate poten-
tial alternatives as a method of making the best decisions and right choices.
Figure 9.5 demonstrates the use of the AREA tool. For this example, a health-
care innovation team was trying to determine what the best alternative to
collecting patient satisfaction data is. The AREA tool suggests less problems
with Focus Groups as compared to the use of Interviews for collecting patient
satisfaction data.
Table 9.3 Alternative Repercussion Effects Analysis Worksheet

Process Potential
Step or Failure
Item Alternative Repercussion Effects Potential Causes Current Controls
What is What is the What can go How do the What are the What are the
the alternative? wrong? reper causes or existing controls
actual cussions reasons for the and procedures
item? affect the repercussions? that minimize the
outcome? repercussion?
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Figure 9.5 Alternative repercussion effects analysis template.
Figure 9.6 AREA template risk codes.
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EXERCISE 9.3: ALTERNATIVE CONSIDERATION

Consider an alternative to an existing process. Run this one alternative through
the AREA template, focusing on the repercussions (the failure points) and its
impact on the outcome.
The purpose of this tool is to highlight alternatives and possible repercussions.

The innovation team will begin the process by choosing the consequence of a
particular action. Next, identify possible alternatives and repercussions. Follow by
identifying the impact (influence) on the consequence. Next look for reasons and
root causes. Finally, determine what controls are in place to prevent the repercus-
sions from influencing the consequence (outcome) and what controls may need
to be in-place that currently are missing. Understanding what affects the conse-
quences will have can assist the innovation team in choosing and recommending
or not recommending a viable (best) alternative.
Step 4: Evaluate Repercussions

After reaching a preliminary decision, the process of developing and testing
the alternatives can begin (Figure 9.7). The elements are in place to formulate
the change. Create a value stream or process map, identifying value-added and
nonvalue-added steps. Be cognizant that alternatives can provide a solution for
nonvalue-added steps. Also consider the presence of waste (scrap or a repeated
process), inefficiency, and delays.
Identify activities (who, what, when, and how). Conceptualize the process
before trying to implement and then be faced with fixing the oversights later.
Finally, be sure to include (or develop, if needed) the requirements (operating
limits, specifications) for the alternative(s). Once completed, finalize the decision.
With the alternative finalized, it is time to examine and evaluate the new pro-
cess. Previous chapters have discussed methods to validate processes. An addi-
tional evaluation is the IMPACT statement test (Table 9.4). The IMPACT statement
test was designed to examine various characteristics of the process. In fact, using
this test at the beginning and ending of the process may give an additional per-
spective. We suggest this tool at this point, as there may be little data available
to evaluate the process. In addition, use this tool in a team setting to explore and
address differing opinions.
To use the tool, define the six “IMPACT” terms for a particular project. Determine
the present state and future state providing reasons why performance, for example,
is less than expected. This is a good tool for alignment purposes as well. Precision
is not the key, rather getting stakeholders aligned and adapted to the new reality
(the replacement). Do not confuse the simplicity of the tool with its intended pur-
pose. At this point, agreement and consensus are the acceptable outcomes.
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Finalize the
change
Evaluate the
change
I—Disordered, avg., ordered

M—Poor, avg., strong
P—Reduced, static, accelerated Can it
A—Resistance, SQ, acceptance No Reassess
pass the
C —Negative, neutral, positive the
IMPACT
T —>180 days, 60 days, 30 or less change
test ?
Yes
Risk
Final
reward
assessment
assessment
Consensus
agreement
Table 9.4 IMPACT Statement Test

Response 1 Response 1 Reasons
Response 1 Less than Expected Greater than for the
IMPACT Expected or Typical Expected Choice
Integration Disordered Average Ordered
Managed change Poor Average Strong
Performance Reduced Static Accelerated
Acceptance Resistance Status-Quo Acceptance
Communications Negative Neutral Positive
Timeliness Greater than 180 days 30–60 days Less than 30 days
Instructions: Choose an innovative outcome that you expect to occur. Determine
the effect of the innovation using the IMPACT criteria. Choose one of
three responses, based on what you expect to occur, and then give a
reason for that choice (optional).
Integration—Expected results of incorporating the innovation
Managed change—How well the innovation is managed/supported
Performance—Expected output versus present standards
Acceptance—How well (users) embrace the innovation
Communications—How well information is received and understood regarding the
innovation
Timeliness—When the improvement from the innovation expects to begin
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EXERCISE 9.4: IMPACT TEST

Use the IMPACT test to evaluate an alternative. Try adding different (more
specialized to the problem) criteria. Discuss how the criteria interact and how
a failure in one criterion will influence the outcome. What can be done to
ensure a positive introduction of an alternative?
Step 5: Alignment
Once the decision is made and the choice validated, it is time for alignment to
begin. The alignment step (Figure 9.8) consists of aligning all personnel and stake-
holders to the new reality. As with change there will be resistance, the process
management uses to implement the replacement is either a positive, a neutral,
or a negative experience. The entire field of change management addresses these
strategies and this book is not the venue to debate the best approach. Rather, the
discussion is on innovative change—change that yields positive results.
Alignment of
personnel
Align to the Process of

decision acceptance
Allot Employee Emotional

time for concerns/ attachments
acceptance issues
Work
Open
with
forums
resistors
Communication
is the
key
Acceptance
of
change
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Alignment involves both people and process. Change requires time,

patience, and an open forum (communications) to flourish. Management must
work with people who resist as they offer a unique perspective that should
always be considered. People who resist must bring evidence (data and infor-
mation) to the table, not a set of feelings and emotions. Allow time for people
(stakeholders) to adjust as change, especially that perceived as negative, can be
a life-altering event for those who are new to or do not adapt to change easily.
Communicate honestly and do not be afraid to admit mistakes. Conduct open
and unbiased forums, provide opportunities, and keep the lines of communica-
tion open at all times. Try to gather the people to discuss the change, objec-
tives, and values.
Consider the acceptance of change survey (Table 2.11) to evaluate acceptability
of a particular change. The survey gives a quick overview of employees percep-
tions about a particular change (be sure to indicate the change element before
distributing the survey). If resistance is high, consider an alternative.
The acceptance of change instrument meets validation and reliability criterion
and has performed well in both scholarly (peer reviewed) and practitioner appli-
cations. Further work may center on expanding the number of questions or in
introducing one or more additional components (dimensions).
EXERCISE 9.5: ACCEPTANCE OF CHANGE

Distribute the acceptance of change survey to employees. Ask them to con-
sider a previous change they encountered or one presently underway in their
companies or organizations. Compare and contrast the answers.
Step 6: Support the Decision

The leader should always solicit input from stakeholders in whatever decision
involves change especially that associated with replacement. Allow time for
acceptance and support to return (Figure 9.9). Change is similar to the grief pro-
cess in that at first it is a shock, then denial, and after sometime understanding
and finally acceptance.
Leadership
The last two steps are those assigned to management. Leadership (Figure 9.9) is
critical for replacing a process and ensuring success. Leaders provide a vital role
and channel that includes open, two-way communications, required for suc-
cess. Leaders are charged with providing the organization’s roadmap for success.
Employees will follow leadership when the benefit is clear (positive) and objec-
tive achievable. Even when circumstances require a negative outcome, if commu-
nicated and executed well, employees will adjust and acquiesce over time.
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Fully
support
the
decision
Communicate
support
Describe the
reasons
Highlight
the
effect
Request
employee
input
Allow
time for
acceptance
Leading an effort inspires those that support the effort. Leadership provides
stability, vision, and purpose. Employees that see (and experience) strong
support will trust the leader’s decision. Leaders that explain the reasons for
change, detail the process, and describe the expected outcomes will be able
to successfully initiate change within the organization. Those that assume that
change is not the concern of stakeholders will find less acceptance and more
resistance. Change, although shunned by some, is a natural process that pro-
vides new avenues of business and commerce. Figure 9.9 details the process of
leading the change.
Step 7: Implement
Finally, embrace the change and the change will become permanent
(Figure 9.10). This is the rollout phase. Accept feedback from those whom the
process “touches” as they have a unique insight. Ask experienced people to
validate the decision—let them provide the “best” reasons for the replacement. In
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Implement
Accept
feedback
Employees
adapt
Change
process
complete
addition, let employees adapt to the replacement, accept the decision, and share
in the benefit (McLaughlin and Kennedy, 2015, p. 222–223).
EXERCISE 9.6: ROADMAP

Develop a leadership roadmap for change. Include items such as communica-
tion effectiveness, employee input, sufficient reasons for the change, and an
expected outcome (what can stakeholders expect).
Summary
This chapter has developed a process for implementing an innovation project
when management decided to replace the existing system with a suitable alterna-
tive. The process focuses on selecting the best alternative that addresses a desired
outcome. To be innovative, the alternative must provide a level of performance
that exceeds expectations as well as meet a unique need. This innovative posture
presents the company or organization with a distinct competitive advantage.
Alternatives bring both benefits and repercussions. Alternatives permit the
opportunity to explore options, new methods, and refine objectives. After
finalizing the decision, management must lead the effort, define the benefits,
and consider the fate of employees impacted by the decision. These actions
will influence the organization well into the future. Work to align stakeholders
(both external and internal), provide open communications and feedback. Give
employees time to adjust and accept the decision; recognize and highlight the
benefits.
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1. Describe the circumstances that would lead an organization to require a pro-
cess or product replacement.
2. Why is replacement a more common practice for a service business?
3. How would you align group of employees, who work for you, to accept and
support an upcoming replacement?
ASSIGNMENTS
1. Create five to seven elements of a communication plan to announce change
to employees.
2. Consider something you would like to change in your organization. Develop
a plan to choose alternatives. What criteria would you use to assess the
alternative?
3. Complete an AREA chart (template) by considering a possible change that
will directly impact you or your department.
Reference
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Business & Management
Innovation Project Management Handbook provides

organizational leaders and decision-makers with a
cadre of agile, disciplined, and transformational tools
and processes for improving innovation opportunity
outcomes and achieving sustained innovation project
success. The authors introduce new tools and
processes developed over their decades of work
in the field of innovation that assist organizations in
aligning innovation opportunity decisions with their
core competencies, business objectives, and strategic
vision. In concert with accepted tools already in use
today, you are provided a detailed description of each
tool and process in an “easy to follow” format with
actual application scenarios and exercises.
The handbook begins with an innovation primer and

introductory discussion on how the authors evolved
the original ENOVALE™ model into the N2OVATE™
methodology. An overview of how to select a project
for each type of innovation opportunity is provided,
followed by an in-depth, step-by-step discussion on
how to implement each innovation process type.
Based on innovative outcomes, the authors identify

seven unique processes, each having its own
unique circumstances. This allows you to tailor the
processes and associated tool-sets to the needs of
your organization and situation. After selecting one of
the seven processes that fits your desired innovation
outcome, you simply follow the detailed process maps
provided in the applicable chapter to achieve a desired
outcome. In doing so, you will learn how to use, adapt,
and improve the tools and techniques offered in the
handbook to achieve a positive innovation outcome
and add value to your organization, customers,
stakeholders, and shareholders.
an informa business K25790

www.crcpress.com
ISBN: 978-1-4987-2571-2
6000 Broken Sound Parkway, NW

90000
Suite 300, Boca Raton, FL 33487
711 Third Avenue
New York, NY 10017
2 Park Square, Milton Park
9 781498 725712
Abingdon, Oxon OX14 4RN, UK
w w w. p r o d u c t i v i t y p r e s s . c o m
https://t.me/PrMaB
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What is the purpose of the handbook?

What is the purpose of the handbook?

What methodology is introduced in the handbook?

What methodology is introduced in the handbook?

Innovation

Dr. Gregory C. McLaughlin

Dr. Gregory C. McLaughlin

No claim to original U.S. Government works

International Standard Book Number-13: 978-1-4987-2572-9 (eBook - PDF)

Step 6: Tabulate and Track Performance......................................................... 35

Rationalize the Concept................................................................................ 66

7 Incremental Innovation: Performance below Expectations.............153

Figure 1.1 ENOVALE process.............................................................................. 9

Figure 4.3 New and unique—step 1................................................................. 64

Figure 7.16 Storyboard—example (basic)......................................................... 186

Table 1.1 Innovation comprehension survey....................................................... 6

Table 5.6 Project expectations survey..............................................................105

This book represents a maturing of our knowledge, experience, and practice in

success. Subsequently, we suggest the reader to first examine A Guide to

to your organization, customers, stakeholders, and shareholders. As we continu-

Greg McLaughlin is a managing partner at

William R. “Buzz” Kennedy is currently an inde-

Using the Handbook

1. What do the differences say about and to the group?

Our experience tells us that it will be difficult to agree on a single definition

Baregheh, Rowley, and Sambrook, (2009) reported 60 individual defi-

Therefore, the essence of the term “innovation” requires a broader definition;

technology that exceeds their expectations, it is innovative (McLaughlin

Defining the “Means” of Innovation

(replaced). Think of these as three distinctive transformations of accomplishing

Theme 1: New (something new, novel, or unique)—normally we think of an

An innovation opportunity reveals itself in the performance delivered. “New”

Innovation Comprehension Survey

7 Changing what does not work 1 2 3 4 5

The three dimensions (concepts) are:

◾◾ New types of innovation: Statements 1, 2, 8

New average: (statements 1 + 2 + 8)/3; range = Max–Min

EXERCISE 1.2: INNOVATION COMPREHENSION SURVEY

The Evolution of ENOVALE

1. E— Envision the need

These seven steps (Figure 1.1) help identify if an innovation opportunity

1. Products, services, or technology that are unique (truly a new item)

Nominate and Adapt and

Verify and Evaluate and

Figure 1.1 ENOVALE process.

performance standards to meet expectations) or bringing performance back in-line

Selecting an Innovation Project

Step 1. N: Needs and new ideas

In order to help the reader to better understand this methodology, we offer a

Step 1: Needs and New Ideas

Figure 2.1 Needs assessment (Part 1)—step 1.

◾◾ Viability: Changes would improve performance and reliability

Identify innovation type

New Improve Change

Sustainability: Sustainability: Sustainability:

Refine the yes

Figure 2.2 ​Needs assessment (Part 2)—step 1.

The process begins by identifying those characteristics that define viability,

Table 2.1 Needs Analysis and Rating Tool

EXERCISE 2.1: NEEDS ASSESSMENT RATING TOOL

Figure 2.2 Needs assessment (Part 2)—step 1.

Figure 2.6 Validate—step 4.

Figure 2.12 Tabulate and track performance—step 6.