Many scholars have tried to identify phases or stages of innovation processes, resulting in the following stages of innovation: market research, idea generation, conceptual and technological development and commercialization (Gopalakrishnan & Damanpour, 1997; Ortigueira, 2008; Verhaeghe & Kfir, 2002). At Innovative Dutch we use the process developed by Avans University (Spruijt, Demouge & Koert, 2012):

  • Problem finding
  • Ideation
  • Concepting
  • Implementation

Spruijt, Demouge & Koert (2013)

The fact this the different stages are drawn like diamonds has a reason: every stage contains a diverging, often vague, phase in which creative and diverging processes are or seem to be generally chaotic and where next to the generation of ideas innovation seems to be rather arbitrary and a converging, disciplined, phase in which creative ideas are critically addressed, edited and selected and further developed into commercial business cases and successful innovations.

The Innovation Funnel:

The following text is an abstract from an article published by Gerry Katz in Applied Marketing Science, 2011. The article however, is not publicly available anymore.

As originally envisioned, the product development funnel implied that a well-defined product development process exists. However, the original funnel, and others that have followed, are increasingly seen as lacking. This article proposes a new funnel that addresses these missing elements.

The icon of a funnel has been in use for several decades now as a visual depiction of the new product development (NPD) process. It works well because it implies that product development is, in fact, a refinement process that takes us from the earliest stages of a project – with a lot of fuzzy ideas and fuzzy thinking – to the final stage of new product launch. However, in reviewing the many funnels that have been proposed and used over the years, there is a growing realization that most are lacking in a few important ways. In this article, we will review some of these funnels, discuss their strengths and weaknesses, and ultimately propose a new one that addresses these weaknesses.

Evolution of the Product Development Process:

 One of the earliest attempts to create a “flowchart” diagram of the product development process appeared in Urban and Hauser’s 1980 textbook, Design and Marketing of New Products.

Having been close to these authors at the time of their writing, it is evident that most of the real-world examples that led to this flowchart came from the world of consumer packaged goods (CPG), a realm in which ideas were plentiful and most did not require any particular technical expertise to imagine – e.g. a new flavour of soup, a new brand of toothpaste, or a new dishwashing liquid. In this world, most of the action deals with marketing issues such as the screening of ideas, product positioning, advertising and messaging, and sales forecasting. The creation of prototypes to test was usually neither prohibitively expensive nor technically daunting, and so the process almost always included real world “test marketing”, i.e. launching the product in a small geographic area in order to test its viability before the major investment of a national or international launch. In this world, little attention was paid to the idea generation process.

Next, in 1986, Robert Cooper published the first edition of his popular book, Winning at New Products. In it, he presents a diagram of the product development process that breaks it into five stages preceded by a process he calls “discovery,” a process that includes idea screening. Only two years later did he give this process a name: Stage Gates®, a name that he actually trademarked and is now in use at companies worldwide.

Cooper’s “client” for this process diagram was usually either the research and development (R&D) director or a high-level NPD manager who needed to deal with a portfolio of products, all at different stages of development. What he advocated was a formal management review process in which product development teams were required to come before this high-level management committee to present their project so that management could make an informed decision, using consistent criteria, as to whether to promote a project onto the next stage of development or to kill it.

Notice, however, that Cooper’s discovery process – which includes idea generation and screening – precedes the main Stage Gate process. At this earliest stage of new product development, little budget is required, and in many cases, no team has even been assigned to work on the project.

The earliest use of a literal “funnel” that I was able to find appeared in Wheelwright and Clark’s 1992 textbook, Revolutionizing Product Development.

Their diagram consists of three major stages, which they label Investigations, Development, and Shipping of Products. As with the previous two, the emphasis at the start is on screening of ideas. Little is said as to where the ideas come from or how they are generated.

At approximately the same time, Michael McGrath, one of the founders of the consulting firm PRTM, published his book, Setting the PACE in Product Development6. McGrath’s first stage deals with Concept Development, usually a piecing together of ideas into a full product description. Similar to Cooper, McGrath advocates a periodic management review process that he calls Phase Reviews. But in almost every other way, they are the equivalent of Stage Gates.

One other noteworthy thing about McGrath’s process is that he includes the development of a formal “business case” as a major phase before the project moves onto formal development. As with Cooper, his focus is with a portfolio of projects which need to be weeded through periodically. And again, little is said about where the ideas come from. They clearly precede the entrance to his funnel.

A similar diagram was put forth in 2005 by MIT’s Center for Innovation in Product Development (CIPD). It has some of the characteristics of all of the preceding diagrams – a literal funnel, with multiple projects proceeding in parallel. But once again, the “discovery” process falls outside the funnel in a stage called “Opportunity Identification and Idea Generation” with little advice about how to go about it.

In 2006 Chesbrough published his famous book on Open Innovation, with an ‘open funnel’ included: