An innovation funnel is used to describe the steps that take place in developing a process or product. The purpose of all innovation is to create processes or products that meet market needs in manufacturable or economic forms. In the initial stages of development, some ideas are collected which go through a refinery system.
After refining, a few ideas are left which the company implements. The ideas that remain after refining are combined to come up with a new concept.
Developing an innovation funnel involves three major steps
The first step focuses on the wide mouth of the funnel
At this stage, the organization increases it knowledge and information base. The aim of this stage is to collect as many ideas as possible. The more ideas the company has, the greater the number of products that the company can develop. A prior strategy on where to gather the information from is very important. You can gather information from competitors, research, university connections, existing partners, or institutes. Information can also come by evaluating the market and traveling to the areas where your customers come from to absorb different experiences and insights.
For this stage to move fast, you need to have a clear perspective of your objectives. You need to have a reasonable understanding of capabilities and intent to be able to actualize the ideas. Relying on ideas received to come up with an objective will force you to take a longer time before implementing the ideas. As you receive the ideas, explore them and relate them with your objective to get different points of alignment. Having a deep insight about your customers, markets, the customer’s unmet needs and your ability to implement the ideas will help you in connecting and exploring the points.
The narrowing segment of the funnel represents the second step
The ideas that a company generates from the first step go through screening. The process of screening involves matching the ideas with the goals to see whether they are related. After this, you should carry out an assessment of returns and risks to decide on which ideas to select. It is also at this stage that you need to test the product or service with actual customers.
Resources are then allocated to the most promising and attractive opportunities. Resources are scarce, so it is good to use them where there will be greater return. However, ideas selected must be in line with your company’s objective; they must be relevant and connect to the company’s objectives. Besides, they must also position the company to strategically carry out future projects.
The third stage is the narrow segment of a funnel
Here, the company ensures that the ideas selected deliver on the company’s objectives that were anticipated when the company was begun. The new product or service is then released or the market at this stage.
The funnel concept is simple to adopt, and that is why many organizations specializing in different industries use it. However, it does not explain what it takes to develop a new product in the market. It also discourages creativity as new ideas are pruned so early before they are tested. The model favors safe ideas and not creative ideas.