The Innovation Funnel

3M is one of the most innovative companies in the world, with an offer of over 60,000 innovative products, in 19 business sectors (see www.3m.com). Every year, the company launches more than 1,000 new product initiatives. How do large companies like 3M prioritize their innovation pipeline, to make sure that company resources are spent in the projects with the highest ROI? Meet the Innovation Funnel …

As discussed in my previous post "Stage Gate", most multinationals follow a step-wise process during New Product Development to maximize the chances of success of every individual project. Every new initiative advances by developing work packages (stages) that have to be approved by a leadership team (Gate Keepers) before more resources of the company are used in development.

As every innovation team is accountable for a limited number of initiatives, only Top Management will have a global view of the Innovation Pipeline of the different Business Units, and of the Company as a whole. The responsibility of Top Management is to guarantee that resources are used to accelerate the projects with highest Return on Investment, while projects with low potential are left aside or cancelled. In an analogy with a highway, we want to move from Image 1, where projects of different sizes compete for all the resources of the company, to Image 2, where only the projects with the highest potential move fast to market by streamlining the resources of the company.

Image 1. Source: Wikimedia Commons

Image 2. Source: Pixabay

The company innovation funnel is then a living organism, continuously fed by costumer-relevant ideas. Each one of them turns into a project embrio entering a Stage-Gate filter that will remove the projects with low potential, and will accelerate those with highest ROI.