The most dangerous kind of waste is the waste we do not recognize. —Shigeo Shingo

If you need a new process and don't install it, you pay for it without getting it. —Ken Stork

I was struck by these comments in a recent set of workshops, where organisations were looking to go beyond lean in process development and align that with disruptive innovation thinking.

The simple purpose of innovation is, let’s say, to create business value. That value can come in many different forms, such as incremental improvements to existing products, the creation of entirely new products and services, or reducing costs, etc.. The reason we need to innovate is that we want our organisation to survive, and thrive. Recent turmoil in global financial markets and its spill over into the real economy have generated considerable interest in innovation. Many business leaders now state that the only way to respond to this turmoil is to innovate or die! It’s clear and proven that the effective innovators have a better chance of surviving, and non-innovators tend not to survive at all.

The method of innovation is ideation: build a suite of ideas, develop the ideas, refine them into a useful form, market sense them and then bring them to commercialism. Hopefully they will achieve profitable sales, or in the operation of the business where they will achieve increased efficiencies, which may manifest itself in cost savings.

Many people describe the innovation process as a funnel: lots of ideas come in the big end and a few finished ideas come out the narrow end that are ready to go to market, return great value, and profits. It’s a concept that certainly works in principle, but it does require considerable attention to what happens inside the funnel. Somewhere between invention and commercialisation, there's a desolate place where new innovations go to die alone. The road between a discovery generated from basic research to a commercial product or process is long and, according to some, rife with significant roadblocks. Innovators and investors alike, routinely claim that a “funding gap “or “Valley of Death” exists at an intermediate stage of this process, between basic research and commercialization of a new product.

“The Valley of Death” is littered with the decaying corpses of innovative products / services that never get to realise their potential. Aside from the lack of long-term policy support, “The Valley of Death” is the single biggest threat to the progress of real and tangible innovation. Until we close this gap, we won't be able to identify the innovation that will allow disruptive innovation to take the  quantum leap.

At blackswan, we have found that it matters a great deal how you define and manage what happens inside the innovation funnel and that it is vital that this is executed effectively within the “Valley of Death”. In order to build a sturdy bridge across the “Valley of Death”, we need to implement a variety of bold, creative ideas. This is not a challenge that is addressed with a single effort. You have to be able to tackle it in an institutional way. Ideation sometimes is not the challenge. We often take bold steps to incubate early stage innovation, but we still haven't, in many businesses, created a framework that will help us realize the benefits of risk-taking.

Without addressing the problem head on, too many great ideas will be left to rot on the lonely, dusty road through “The Valley of Death” ...