Phil McKinney is the author of the new book, “Beyond The Obvious: Killer Questions That Spark Game-Changing Innovation.” McKinney is an innovation expert who has served as Chief Technology Officer (CTO) for major companies and also leads innovation boot camps.
McKinney admits that true innovation is hard, but with a disciplined, strategic approach, any size company can become more innovative. He’s devised a set of Killer Questions to guide your innovation efforts.
But, he says, before you can become more innovative, you must first address your industry and company assumptions, manage the inevitable jolts and neutralize your corporate antibodies (naysayers). Then, incorporate his FIRE method (Focus, Ideation, Ranking, Execution) for developing ideas, while using his gated funding model for best results. Here, the focus is McKinney’s gated funding model:
Phil McKinney is the author of the new book, Beyond The Obvious: Killer Questions That Spark Game-Changing Innovation. He’s an innovation expert who has served as Chief Technology Officer (CTO) for major technology companies and also leads innovation boot camps.
McKinney devised the gated funding model to help assess the viability of ideas. Each idea passes through a set of predetermined goals or “gates” to progress towards becoming an actual product. The gated funding model:
- Limits the risk by forcing ideas to meet predetermined standards.
- Gives each gate-passing idea additional resources (people, budget, etc.) and a new set of goals the team needs to achieve to advance to the next level.
The four gates are:
Market Validation. This gate requires your team to prove that there is a customer base willing to pay for your proposed product. Your team needs to hit the streets to verify firsthand that a viable market exists. Don’t rely on available research or accept third party statements as reliable evidence.
Customer Validation. This gate helps evaluate whether you can create a solution to the problem. Give the customer a prototype, video or sample, etc., that allows them to see, feel and experience your idea. Are your customers willing to pay for your idea? Does the revenue and margin match up to your overall business model?
Limited Launch. Build and sell the product to real customers in a limited market or trial. Note customer reaction now that they’re actually paying for your product or service. Determine if you can get your team excited about your product and gauge their confidence to make sales. Do the revenue and margin potential align with your business model? Lastly, can your organization elevate the product to a global launch?
Global Launch. The factories are operating and there’s no going back. Integrate the idea into your overall business. Encourage the eventual owners of the product to start taking emotional accountability of the idea and its execution.
The breakdown of gated funding is:
- Market Validation: All Ideas Ranked.
- Customer Validation: 50 % of Ideas from Gate 1.
- Limited Launch: 50% of Ideas from Gate 2.
- Global Launch: 50% of Ideas from Gate 3.
McKinney advocates constraint-based innovation. If you give your team full time, budget or number of people they request, they’ll never execute anything significant. Give them less and make things a little more challenging. They’ll push themselves. It also forces them to think in unique ways.
Remember too, ideation and ranking won’t necessarily produce one surefire great idea or product. They do however, give the best possible selection of ideas to pursue and arrange in order of quality and applicability. Ideas that typically get implemented aren’t identical to ideas generated in the innovation workshop.
McKinney explains the importance of having an ideation system. Without one, weak ideas get selected, producing disappointing results. Management loses confidence that the organization is able to generate killer ideas; and turns to outsiders or acquisitions to fill the gap. Also, management will pursue an idea long after it should have been nixed. For best results, continually ask, “Why are we doing this project?” and “Is this the best idea?”
If your company is committed to becoming more innovative, Beyond The Obvious offers a blueprint for success. Incorporating McKinney’s gated funding model is integral to achieving your innovation competitive advantage.
For current dialogue on innovation, follow Phil McKinney on Twitter, at: https://twitter.com/#!/philmckinney