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Page 1: Design Management Systems. Guide to Managing Innovation

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BRITISH STANDARD BS 7000-1:1999

ICS 03.100.01

NO COPYING WITHOUT BSI PERMISSION EXCEPT AS PERMITTED BY COPYRIGHT LAW 

Design managementsystems Ð

Part 1: Guide to managing innovation

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This British Standard, havingbeen prepared under thedirection of the ManagementSystems Sector Committee, was

 published under the authority of the Standards Committee andcomes into effect on15 November 1999

© BSI 11-1999

First published January 1989 asBS 7000 (subsequentlyrenumbered as part 1)BS 7000-1:1989 superseded byBS 7000-2:1997, BS 7000-3:1994and BS 7000-4:1996Second edition November 1999

The following BSI referencesrelate to the work on thisstandard:Committee reference MS/4Draft for comment 99/402550 DC

ISBN 0 580 33057 5

BS 7000-1:1999

 Amendments issued since publication

 Amd. No. Date Comments

Committees responsible for thisBritish Standard

This British Standard was prepared by Technical Committee MS/4, Designmanagement systems, upon which the following bodies were represented:

 Association of Innovation Management

 Association of MBAs

 Association of Project Managers

British Standards Society

Chartered Society of Designers

Defence Manufacturers' Association

Department of Trade and Industry

Design Council

Electricity Association

Federation of Small Businesses

GAMBICA (BEAMA Ltd.)

Institute of Quality Assurance

Institution of Civil Engineers

Institution of Engineering Designers

Institution of Electrical Engineers

Institution of Mechanical Engineers

Ministry of Defence (Defence Procurement Agency)

Royal Institute of British Architects

University of Glasgow

University of Leeds

Co-opted members

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BS 7000-1:1999

© BSI 11-1999 i

Contents

Page

Committees responsible Inside front cover  

Foreword ii

0 Introduction 1

1 Scope 1

2 Normative references 2

3 Terms and definitions 2

4 Innovation, ªnewnessº and an overview of the basics of innovationmanagement 5

5 Managing innovation at the organizational level 12

6 Implementing a complete innovation management framework: system andmechanics 22

7 Tools and techniques for managing innovation 28

 Annex A (informative) Innovation self-assessment questionnaire 1 ÐThe organization 33

 Annex B (informative) Innovation self-assessment questionnaire 2 ÐProducts and services 34

Bibliography 35

Figure 1 Ð The length of the innovation highway with milestones 3

Figure 2 Ð Flow chart giving an overview of the complete innovationmanagement framework 6

Figure 3 Ð How products change over time 8

Figure 4 Ð Spectrum of ªnewnessº 10

Figure 5 Ð Where opportunities might be found to innovate at every stage of 

the value chain 11

Figure 6 Ð Iterative analysis from corporate objectives to master innovation programme 13

Figure 7 Ð Flow chart giving an overview of the innovation managementframework 20

Figure 8 Ð The length of the innovation highway 23

Figure 9 Ð Possible aspects of the width of innovation highways 24

Figure 10 Ð Risk vs. potential 27

Figure 11 Ð Some factors in assessing risks of undertaking innovative projects 31

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BS 7000-1:1999

Foreword

This part of BS 7000 has been prepared by Technical Committee MS/4. In October 1993,BS 7000:1989, Guide to managing product design was renumbered BS 7000-1:1989 to

accommodate the addition of further parts.

BS 7000-1:1989 was replaced by BS 7000-2:1997, BS 7000-3:1994 and BS 7000-4:1996, andwas withdrawn in 1997 while a new part 1 (this part) was prepared.

BS 7000, Design management systems currently comprises the following parts:

 Ð Part 1: Guide to managing innovation (this part);

 Ð Part 2: Guide to managing the design of manufactured products;

 Ð Part 3: Guide to managing service design;

 Ð Part 4: Guide to managing design in construction;

 Ð Part 10: Glossary of terms used in design management.

Other parts might be added.

Because of the novel nature of the subject matter, Technical Committee MS/4 invitesusers to submit technical comments, observations and suggestions to the CommitteeSecretary at BSI (see address on back cover). This will assist the Committee when itreviews the standard in due course and when it considers the preparation of further 

 parts of BS 7000.

 A British Standard does not purport to include all the necessary provisions of a contract. Users of British Standards are responsible for their correct application.

Compliance with a British Standard does not of itself confer immunity from legal obligations.

Summary of pages

This document comprises a front cover, an inside front cover, pages i and ii, pages 1to 36, an inside back cover and a back cover.

The BSI copyright notice displayed in this document indicates when the document waslast issued.

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BS 7000-1:1999

0 Introduction

0.1 General

This standard describes how senior executives or  principals within organizations can plan their  products and services a significant time into thefuture: the product/service generation after thegeneration after the next (3-Gen products andservices). It has been prepared in part to helpdisparate enterprises (especially those that are newor very small, with little experience of innovation) toenhance their performance and form effectiveinnovative alliances fast.

Research has revealed that organizations that evolvea framework for long-term innovation react faster to

threats or surprises, are more likely to take effectiveaction, and are better at sustaining the momentum of change. As such, they are more likely to suceed.

NOTE 1 Research undertaken as groundwork for this standardtook the form of in-depth interviews with senior executives fromselected organizations in the United Kingdom that offer a widespectrum of products and services. All were considered to beinnovative and many had won awards for design, technology or innovation during the 1990s. The largest employed 58 000 peoplearound the world; the smallest consisted of just three individuals. Annual turnovers ranged from £12 000 to £8.4 billion.

NOTE 2 The term ªproductº also encompasses services and processes (including business processes).

NOTE 3 For the sake of brevity, the term ªprincipalsº is used inmost instances to denote owner-managers, partners, boarddirectors and other top executives.

0.2 Survival of the fittest

The first priority of an organization is to ensure thatit survives and prospers.

Survival usually depends on growth from theexpansion of existing markets, withdrawal fromstagnant markets and taking advantage of newopportunities, while keeping a firm control of finances. The accumulation of market intelligenceand a researched knowledge base of customer requirements are also key to formulating realisticbusiness strategies and delivering products that

generate growth. An organization that fails todevelop its product range continuously is unlikely togrow in real terms, especially with the increase inopen competition across the globe. Eventually itmight be forced to cease trading.

0.3 Innovation goes beyond technology 

It is also important to emphasize that innovation canoccur in all parts of an organization and at all stagesof the value chain: research, design, manufacture,distribution and marketing, servicing, maintenanceand the eventual disposal of products. Worthwhilecontributions should be sought through innovation atall stages of a product's life.

NOTE Worthwhile contributions will not necessarily relate tofinancial outcomes, particularly where public and ªnot-for-profitºorganizations are concerned.

0.4 Innovation is not for all

 Although this standard is aimed at those who havedetermined that innovation is right for them andwish to innovate, it is important to underline thatinnovation might not be right for every enterprise, or for every product of innovative organizations.Typically, innovation takes longer, costs more, and isriskier than product improvement. Therefore,incremental product improvement might be a 

 preferable option.

0.5 Structure of this standard

This standard puts forward a comprehensiveframework and outlines how key issues might betackled.

Clause 4 explains the important role of innovation,describes the various kinds of innovation and givesguidance on innovation management processes.

Clause 5 outlines issues that need to be dealt withwhen managing innovation at the organizationallevel.

Clause 6 gives guidance on aspects of managementfrom idea generation through to integration withinan organization's culture.

Clause 7 describes tools and techniques for managing innovation.

1 ScopeThis part of BS 7000 gives guidance on managinginnovation: specifically the development of innovative and competitive products that will satisfycustomers' perceived and latent needs in thelong-term future (the generation after the generationbeyond those currently under development). It doesnot encompass continuous improvement in the shortterm.

This standard stretches the horizon of designmanagement and should be used by those withoverall responsibility for an organization's well-beingto plan future product strategies and so help ensure

long-term survival. It should be used in conjunctionwith the other design management guides in theBS 7000 series. The proposals in this standarddovetail into those of BS 7000-2, BS 7000-3 andBS 7000-4.

This standard is relevant to all types of products andservices, and to the business processes involved intheir creation, fabrication, delivery and sustenance inthe market, right through to final disposal, includingthe management of obsolescence.

It also applies to all levels of staff and managementin all types of organizations operating in themanufacturing, process, service and construction

industries as well as in the public and ªnot-for-profitºsectors. The principles and procedures outlinedshould be of particular interest to small andmedium-size enterprises (SMEs).

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BS 7000-1:1999

Guidance is given on the application of general principles and techniques to the management of 

innovation. Discussion of the techniques themselves,such as the management of people and time, andtheir application to areas other than innovation anddesign is excluded.

The guidance provided in this standard providesinsights into what should eventually be attained at alllevels of an enterprise.

NOTE 1 Appropriate reference is made to other documents for guidance on general management techniques. A Bibliography isgiven at the end.

NOTE 2 Guidance on procedures needed to meet statutoryrequirements (such as health and safety, or product certificationand liability) are not intended to be comprehensive. Referenceshould be made to other documents where appropriate.

NOTE 3 This standard is intended to complementBS EN ISO 9001:1994 to which reference should be made.

2 Normative references

The following normative documents contain provisions which, through reference in this text,constitute provisions of this part of this BritishStandard. For dated references, subsequentamendments to, or revisions of, any of these

 publications do not apply. For undated references,the latest edition of the publication referred toapplies.

BS 3811:1993, Glossary of terms used interotechnology.

BS 4778-3.1:1991, Quality vocabulary Ð Availability, reliability and maintainability terms Ð Guide toconcepts and related definitions.

BS 4778-3.2:1991, Quality vocabulary Ð Availability, reliability and maintainability terms Ð Glossary of international terms.

BS 7000-2, Design management systems Ð Guide to managing the design of manufactured products.

BS 7000-3, Design management systems Ð Guide to managing service design.

BS 7000-4, Design management systems. Guide to

 managing design in construction.BS 7000-10:1995, Design management systems ÐGlossary of terms used in design management.

BS 6079:1996, Guide to project management.

BS EN ISO 8402:1995, Quality management andquality assurance Ð Vocabulary.

BS ISO 10007:1996, Quality management ÐGuidelines for configuration management.

3 Terms and definitions

For the purposes of this standard, the terms anddefinitions given in BS 7000-10:1995, BS 3811:1993,

BS 4778-3:1991, BS 6079:1996, BS EN ISO 8402:1995and BS ISO 10007:1996 and the following apply.

NOTE The terms in this clause will help to clarify the differenttypes of innovation as well as differentiate long-term product andservice creation from short-term product and service development.

3.1

innovation

⟨ product⟩ transformation of an idea into a novel product, operational process or new service inindustry or commerce

[BS 7000-10:1995, definition 23011a)]

NOTE 1 It consists of all scientific, technological, commercialand financial steps necessary for the successful development andmarketing of novel manufactured products, the commercial use of new or improved processes and equipment, or the introduction of a new service.

NOTE 2 This definition also applies to public sector andnot-for-profit organizations where the products might not besaleable as such but are created for the good of society.

3.2

innovation⟨techniques, materials⟩ employment of design or construction techniques, or materials, that do nothave a proven history of performance or are notcovered by the organization's current practice

[BS 7000-10:1995, definition 23011b)]

NOTE This applies mainly to the construction industry.

3.3

innovation

⟨ideas⟩ successful exploitation of new ideas

NOTE This definition is widely promoted by the Department of Trade and Industry.

3.4

3-Gen product

long-term product or service that will becomeavailable, typically in the generation after thegeneration beyond those currently under development

3.5

innovative alliance

formal collaboration between two or moreindividuals and/or enterprises in order to developinnovative ideas

3.6innovation brief 

statement that describes the purpose and required performance of a product, service or process

3.7

innovation champion

 person dedicated to the promotion of, and strategicthinking behind, 3-Gen products

NOTE Such individuals will be involved in, or have influence in,the formative stage of the process as well as the finaldecision-making, however, they might not be responsible for anyaspect of work.

3.8

innovation highway 

 permissible route over which long-term future products and services will be planned

NOTE See also 3.26, 3.45 and Figure 1.

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BS 7000-1:1999

NOTE Although the highway appears to be direct, in practice it is likely to meander, change in width and perhaps even change direction. Furthermore, progress will be iterative.

Figure 1 Ð The length of the innovation highway with milestones

3.9

innovation leader

⟨activities⟩ person who takes the lead in innovative

activities3.10

innovation leader

⟨authority⟩ person accepted as being the keyauthority where matters relating to innovation areconcerned

3.11

innovation leader

⟨initiation⟩ person who is first to introduce a  particular innovation

NOTE This definition could also refer to enterprises.

3.12

innovation leader

⟨driving⟩ person who consistently drives innovationand has an acknowledged record of achievementthrough innovation

3.13

innovation leader

⟨trend-setting⟩ person who sets trends in marketsand industries and is acknowledged to be at theforefront of innovation practice

NOTE This definition could also refer to enterprises.

3.14

innovation plansubsection of the overall business or corporate planthat brings together all elements relating toinnovation whether dealing with output, processes or 

 parts of an organization

3.15

innovation review

formal, documented, comprehensive and systematic

examination of an innovation to evaluate its capacityto fulfil stated requirements, identify problems, if any, and propose the development of solutions

NOTE 1 Examinations can take the form of meetings constitutedof those most closely concerned with innovation, or affected bythe innovations that arise, and ideally chaired by an individual notdirectly connected with the project.

NOTE 2 Innovation reviews might take place several timesduring the progress of an innovative project. The aims are to:

a) ensure the innovation continues to conform with set briefs;

b) modify (through the originator) the innovation brief to meetreasonable economic or practical difficulties wherever theymight be perceived.

NOTE 3 Innovation reviews can be conducted at any stage of theinnovation process, and should definitely be conducted at thecompletion of this process.

3.16

innovation spiral

 process of building innovations effectively on their  predecessors

NOTE This process should ensure that:

a) the innovations are exploited fully;

b) subsequent innovations develop from a more advancedfoundation;

c) resources are not wasted retracing ground covered before.

3.17

innovation strategy chosen path formulated to achieve business andinnovation objectives supported by an indication of how resources will be committed

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BS 7000-1:1999

3.18

backcasting

 process by which attainment of a desired vision inthe long-term future is plotted progressively back tothe present through a series of milestoneachievements which effectively map out the wayforward

NOTE This process could apply to markets, products, services, processes and organizations.

3.19

blue-sky thinking

unbounded thinking, and research, during whichideas are explored without concern as to their 

 practicality, applicability or marketability

3.20

innovation management system

formal infrastructure encompassing objectives,strategies and processes, organizational structuresand values by which an organization administersinnovation

3.21

innovation philosophy 

general stance of an organization towards innovationand the value attached to the contribution it makesto business performance

NOTE This is the ªinnovationº equivalent of a business missionwhich articulates the basic reason for innovating within theorganization and formalizes its role.

3.22

master innovation programme

 programme that integrates all activities andinvestments to be undertaken by an enterprise over a specified period, broken down into stages, withresources to be committed and associated timescales

3.23

corporate software

knowledge, skills, experience, intellectual property

and other intangible attributes within an organization

3.24

envisioning

capacity to conceive of a future state

3.25

ªif onlyº analysis

 prescription of what could or would be done if certain materials, processes or technologies wereavailable, or specified events were to take place

NOTE 1 These differ from ªwhat ifº analyses in that the starting point is a specified desired future state, not the present. See 3.44.

NOTE 2 ªIf onlysº are critical enablers of, or pathways to, theachievement of a new vision.

3.26

length of the innovation highway 

 period of time over which new long-term productsand services will be planned

NOTE 1 This will be from the time when the existing productsand services go into decline forward to three product generationsahead.

NOTE 2 See also 3.7, 3.45 and Figure 1.

3.27 product generation

⟨enterprise⟩ step advance for an organization or industry

3.28

product generation

⟨standard⟩ advance that establishes a new standard

that others adopt3.29

product generation

⟨advantage⟩ advance that results in a significantcompetitive advantage

3.30

product generation

⟨ platform⟩ advance that establishes a new ªplatformºfrom which to build future output

3.31

product generation

⟨obsolescence⟩ advance that makes old productsobsolete

3.32

product generation

⟨attitude⟩ advance that forces a significant change in perception and the way things are done

3.33

product generation

⟨transformation⟩ change that transforms a market(changes rules, direction, opens up newavenues, etc.).

3.34

product generation

⟨ progressive change⟩ integration of several changesintroduced separately over time to offer a new,upgraded product that is perceived to be of higher 

 value

3.35

product generation

⟨simultaneous change⟩ change or cluster of changesincorporated into a product at the same time

3.36

parametric product brief 

limitations as specified in the length and width of theinnovation highwayNOTE This will include products that will be allowed to bedeveloped by the organization over a specified time period. It willalso provide the primary determinants against which long-termnew product and service ideas are eliminated.

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BS 7000-1:1999

3.37

sensitivity analysis

⟨degrees of change⟩ estimation of impact of differentdegrees of change in a particular factor on theoverall situation (performance, outcomes, etc.) under consideration

3.38

sensitivity analysis

⟨constituent factors⟩ determination of the relativeimpacts of equal variations in different constituentfactors on the situation under examinationNOTE Factors and constraints can be added or removed to produce ªbestº, ªworstº and ªmost probableº cases.

3.39

serial innovation

group of interrelated innovations that need to beeffected together in order to achieve desiredinnovative outcomeNOTE These often arise as a result of groundwork or follow-through necessary in the value chain to enable the targetinnovation.

3.40

technological route map

description of an anticipated series of developmentsand milestones in identified technologies that

 provides guidance on the way forward in theforeseeable futureNOTE With judicious planning, new products could be conceived

to use anticipated technological developments as they come onstream.

3.41

 value chain

all the activities undertaken by an organization thatcontribute to the value of its products as perceivedby customers and users, from first conceptionthrough to final disposal

3.42

 visual imagery 

 visual rendition of ideas and concepts

3.43

 visualization process by which ideas and concepts are expressedor represented more vividly, and with greater tangibility, using visual imagery

3.44

ªwhat if?º analysis

exploration of a problem or opportunity todetermine how performance and outcomes mightalter should circumstances change, particularly if constraints and barriers could be removedNOTE Such analyses differ from ªif onlyº analyses in that thestarting point is the known present rather than a desired futurestate. See 3.24.

3.45 width of the innovation hig hwa y 

 parameters (including financial) that must be met bylong-term products and servicesNOTE See also 3.7, 3.26 and Figure 1.

4 Innovation, ªnewnessº and an

overview of the basics of innovation

management

4.1 Flow chart of the complete innovationmanagement framework

The framework for innovation management isoutlined in its entirety in Figure 2 and indicates thegeneral direction to be followed. In practice, theremight be iteration back to earlier stages for clarification or as new and better informationbecomes available. Opportunities for concurrent

 processing should be considered by all technical andnon-technical personnel. This will help to reduce thetime-to-market for new products.

It is possible to implement all the stages of thisframework immediately and this can then be used todirect innovation management. The stages applyequally well to small enterprises and largeorganizations. The procedures adopted are similar;the differences should be principally in the degreeand scale involved.

Explanations of the terms used in this frameworkare given in clause 4. Relevant portions of thisfigure will be highlighted near the start of clauses 5and 6.

4.2 Planning beyond current horizons

The research undertaken revealed that there is verylittle that cannot be planned up to three productgenerations into the future. This span will varydepending on the type of products with which theorganization is involved, but might be ten or so yearsahead. Many organizations in the United Kingdomand abroad already have processes in place for themanagement of their new products over that horizon.

This time span is not especially long. Most peoplewould like to ensure the survival of their organization and security of their employment for atleast ten years into the future. This can only beachieved with a constant supply of well-designed

 products and services. Their introduction needs tobe planned, as does the withdrawal of products andservices in decline. Furthermore, new products andservices need to be developed along an identifiedªhighwayº into the future: this sets the direction anorganization will follow over a specified planning

 period and the milestones to be achieved in order todevelop the requisite products and services atspecified times.

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BS 7000-1:1999

Numbers in bold face refer to the relevant clauses in this standard

NOTE In small firms, the owners will probably be involved in the specific search for innovative products. In thesecases, the following activities might occur during top management brainstorming sessions (6.5): analyses of customer±product experience cycles (7.4), visualization (7.5), scenario planning (7.2), backcasting (7.3), evaluation of 

intellectual property (7.6), and the establishment of strategic alliances (5.9).

Figure 2 Ð Flow chart giving an overview of the complete innovation managementframework

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BS 7000-1:1999

Figure 2 Ð Flow chart giving an overview of the complete innovation managementframework (continued)

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BS 7000-1:1999

4.3 Assignment of tasks and responsibilities

In large organizations, tasks and responsibilities

relating to innovation will probably be discharged bydifferent individuals. In small organizations, theymight be undertaken by a single person. All thoseinvolved should be aware of what is required of them: therefore, it is recommended that they achievean understanding of the full content of this standardwhile paying special attention to the section that ismost directly relevant to them.

4.4 How products change over time

Normally, products are upgraded over time. Withinan existing product concept, there are periods of incremental improvement (such as improvements in

the ergonomics of a product or its aesthetics).Occasionally, radical improvements in performancemight be achieved through advances in existingtechnologies, ergonomics and business practices, or the introduction of new technologies and

 procedures. Innovative phases tend to be followedby ªstableº phases where incremental enhancementsare introduced until a further radical change occurs(see Figure 3).

Radical phases might herald new generations of  products, however most innovations are in realityªsub-innovationsº that do not transform the overall

 product even if one or more components might havebeen substantially altered.

Figure 3 Ð How products change over time

4.5 Nature of innovation

Innovation is the creation of change which

introduces a significant element of ªnewnessº inthought (for example, through blue-sky thinking) andaction. Typically, the change itself is radical, thoughit might be smaller in scale, perhaps the last piece of a jigsaw that leads directly to a more radical advanceor transformation.

The changes brought about by innovation mightrelate to a wide spectrum of factors such asknowledge, perceptions, values, understandingneeds, technology, design and business processes.They tend to be unusual and unexpected advances.Consequently they might not be obvious when firstencountered, though those affected, the

stakeholders, might quickly accept them. A close link between idea and action is essential:ideas need to be followed by action and the outcomeshould be seen to be beneficial to stakeholders,though the benefits need not be evaluated infinancial terms.

 An innovation might be a ªsingle stepº change or comprise an imaginative combination of changes,some of which might involve making better use of existing knowledge and practices as well asintroducing smaller evolutionary advances.

Innovations might provide new insights which mightlead to new perspectives and a crucial restructuringof problems and recommended solutions.

Innovation might be the achievement of a criticalcost, hence price, reduction which opens up themarket. It might lead to technical advances beingbrought to market much faster than anticipated, thus

 providing substantial competitive advantage.

Innovation might lead to the transformation of  products and the redefinition of customer expectations. An organization might change the wayit operates which, in turn, might lead to a restructuring of a market; new standards andlegislation might also be brought in to elevate

 performance and safeguard users' and the general public's interests.

The radical ªstepº nature of change brought on byinnovations might result in uncomfortablediscontinuities. However, even dramatic change canbe brought about in a seamless manner if planned

 properly. More often than not, success is determinedby factors other than the technical content of aninnovation, not least the manner in which it islaunched and sustained once implemented. In someinstances, serial innovation might occur withcomplementary changes through the value chain: for example, in relationships with customers andsuppliers. The ªspiralsº of innovation that might

result should help reinforce technical and marketleadership.

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BS 7000-1:1999

4.6 Reasons to innovate

Many reasons make innovation an imperative for a 

substantial proportion of business enterprises, particularly those of small and medium sizes.

The following list summarizes the principal reasonswhy innovation should be among an organization'score competencies:

a) to survive adverse changes in operatingcircumstances;

b) to make life easier for their customers and helpthem improve their businesses;

c) to raise margins and profitability;

d) to gain competitive advantage;

e) to protect market share;

f) to comply with legislation (actual or anticipated);

g) to reposition an enterprise and raise its market profile;

h) to lead the market and reinforce a reputation asmarket leader;

i) to open new horizons so as to get out of a rut or avenues with limited potential;

 j) to stimulate staff with interesting andchallenging work;

k) to attract and retain higher calibre staff;

l) to provide stability for the workforce;m) to attract extra funding;

n) to attract alliance partners;

o) to encourage those with good ideas to approachthe company;

 p) to reduce competition and/or the influence of competitors.

4.7 ªHigh productivityº innovation

To gain competitive advantage in circumstanceswhere resources are necessarily constrained, it iscrucial for enterprises to focus efforts onopportunities that yield greatest operational,

 psychological and financial benefits.

The curiosity of staff members, the challenge to dobetter within a company, customer requests or dissatisfaction, and competitive pressures all act asspurs to innovation. However, particular specialefforts should be made to generate, ªhigh

 productivityº innovations that:

a) spawn further innovations;

b) solve more problems than originally envisaged;

c) interest and inspire more people;

d) are easy to ªsellº, internally and externally;

e) are easy for colleagues to comprehend, adoptand make their own;

f) arise out of trouble-free development;

g) are easy to implement and fit more readily intohost organizations;

h) have shortcomings that are easy to rectify;

i) have a high ªfun contentº in addition to

 presenting real challenges to those who developthem;

 j) are difficult for others to copy or surpass;

k) set new ªstandardsº in markets whichcompetitors struggle to reach.

4.8 Degrees of ªnewnessº

The spectrum of change that might be introducedthrough innovation extends from ªnew to the worldºat one extreme through to ªnew to an individualº atthe other.

The former encompasses changes that have never been seen or done before as far can be ascertained.The latter might encompass existing technologiesand practices that are familiar to others or commonin different situations.

The former also holds the potential to generate thegreatest impact and returns; while the potentialimpact and returns of the latter are strictly limited.

 As change in the former is relatively greater and lessfamiliar, the risks in seeking and implementing suchªnewnessº are considerably greater; those associatedwith the latter are commensurately lower. These arecrucial factors when determining the kinds of innovations to be developed. The spectrum of newness' is shown in Figure 4.

4.9 Sources of ªnewnessº

The sources of ªnewnessº might be personal toindividuals or relate collectively to groups within anenterprise or whole enterprises. They should besought in the following:

a) aspirations and ambitions;

b) attitude towards the future;

c) attitude towards problems, constraints, threats;

d) vision and perceptions of the future;

e) where boundaries are placed;

f) the distance ahead it is sought to work and

influence;g) how things are put together;

h) how the future is linked to the present;

i) what is done;

 j) how these things are done.

ªNewnessº might be at the core of a product or  process and suffuse it; or it might be superficial andconfined to a minor part. For example, the adoptionof a new manufacturing process might requireradical changes to the design and assembly of a 

 product's components. However, these significantchanges might be invisible as the external

appearance of the product and the way it is operatedmight remain unaltered. By contrast, simply changingthe colour of a product to one that is unique in themarket might transform it in the eyes of customers.

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Figure 4 Ð Spectrum of ªnewnessº

4.10 The value chain

Research reveals consistently that success withinnovation requires attention to far more than thetechnical content of products: this might not beunderstood by customers, or they might take it for granted (see note to Figure 2).

Potential innovations should be sought throughoutthe value chain not just in the technical aspects of 

 product development, for example, by examininghow an organization operates, the way it creates new

 products, its fabrication processes and marketingthrough to final disposal of products.

The full span of the value chain is set out inFigure 5.

4.11 Basis of effective innovation management

The following list summarizes the key actions ineffective innovation management, the prerequisites inthe context of this standard.

a) Establish a culture in which there is a fundamental belief that the future can be plannedover the long term and that the future can becreated.

b) Formulate a clear long-term vision with clear objectives and tangible goals, then ensure thatshort-term work is a seamless part of the

long-term continuum.c) Adopt a holistic approach to products.

d) Rehearse and plan customer experiences over complete product life cycles as the basis for design work.

e) Use and make widely accessible the skills,knowledge and experience within the enterprise(the ªcorporate softwareº).

f) Motivate all staff involved whilst understandingorganizational capabilities and limitations.

g) Use advances in information technology tospeed and expand the potential for more effectivecommunication throughout the enterprise.

h) Ensure that there is a system by whichinnovative work is undertaken and that this iscommunicated to and accessible to all employees.

i) Place staff on the front line of innovation and promote their ability to contribute to the corporateinnovation programme.

 j) Promote innovation through teamwork toexpand opportunities tackled and increase overallbenefits. Encourage internal and externalnetworking.

k) Build an image, in the market, of achievementthrough innovation to encourage outsiders to bringtheir ideas and predispose them favourably tocollaborating when approached.

l) Encourage the generation of ideas or approaches where there is little or no competition.

m) Ensure innovations are properly supported, andthat there is provision of adequate resources(personnel, funding and facilities) throughout the

 value chain.

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    F    i   g   u   r   e    5  Ð

    W    h   e   r   e   o   p   p   o   r    t   u   n    i    t    i   e   s   m    i   g    h    t    b   e    f   o   u   n    d    t

   o    i   n   n   o   v   a    t   e   a    t   e   v   e   r   y   s    t   a   g   e   o    f    t

    h   e   v   a    l   u   e   c    h   a    i   n

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BS 7000-1:1999

n) Form innovative alliances to reinforce market positioning and reduce the impact of competition.

o) Encourage innovation in the way problems aredefined, especially in the way needs arearticulated: creative briefing goes a long waytowards the formulation of creative solutions.

 p) Encourage an imaginative configuration of  projects, especially in the expertise and resourcesbrought to bear on a problem.

q) Encourage innovative solutions, especially interms of providing comprehensive solutions toconsumer and business needs: copying becomesconsiderably more difficult when creativesolutions cover greater ground and incorporateªsoft intangiblesº.

r) Establish a ªgatewayº review system to monitor  progress at opportune intervals, allow opt-outs,revisit previous ªfailedº initiatives, and tailor workto changing circumstances.

s) Maintain a genuine and visible commitment toeffective innovation and design, and ensure thatinnovations are exploited to their full potential.

t) Be aware of customers interests and needs inorder to be able to offer a complete solution tocustomer requirements.

u) Maintain a commitment to quality andreliability.

 v) Be aware of competitors and their innovativeactivities as well as other relevant activity in other fields relating to innovation.

w) Evolve a blame-free culture that also underlinesthe value of learning the lessons from failures.

x) Encourage innovative thinking by providing a stimulating work environment that might requiresome individualization of workspaces.

5 Managing innovation at the

organizational level

5.1 GeneralThis clause addresses matters that relate to themanagement of innovation from the perspective of an enterprise as a whole. It focuses on the directionand guidance that should be expected fromowner-managers and partners in small firms, or board directors and senior executives in larger enterprises.

Organizations develop their competencies inmanaging innovation in stages. The way principals

 progress through these stages is strongly influencedby their personal interests, the specificcircumstances of their organizations and the markets

served.NOTE The term ªcorporateº in this standard is used in relationto the top-level perspective in large, medium and smallenterprises, as well as issues that span the entire organization.

5.2 Responsibility for innovation

 An organization's capacity to innovate is affected far 

more by those who set the environment in whichinnovation is to occur and manage innovativeactivities than those who undertake the creativework, including specialists brought together intoinnovative teams. Therefore, it is essential thatcompetent and experienced executives are assignedresponsibility for innovative activities.

Ultimate responsibility for promoting and sustaininginnovative activity in an organization rests withowner-managers, partners, or the chairmen of company boards of directors. These individuals havea collective responsibility to ensure that their organizations have a clear stance and direction withrespect to innovation so that full benefits might bereaped through such activity. Owner-managers,

 partners and chief executives in larger enterprisesare responsible for ensuring that this direction isfollowed effectively and that innovation does,indeed, make a full contribution to an organization's

 performance.NOTE For the sake of brevity, the term ªprincipalsº is used inmost instances in this standard to denote owner-managers, partners, board directors and other top executives.

It is critical that the principals of an enterprise drivecorporate innovation to ensure their organizationssurvive profitably well into the future. Colleagues atlower levels in the organization should inevitably bemore focused on the present and short-to-medium

term futures, therefore they are less likely to havetime or resources to explore the long-term future.

Principals might assign day-to-day executiveresponsibility for innovation to colleagues whoreport directly to them. All these individuals shoulddemonstrate a clear understanding of their responsibilities and commitment to innovationthrough their statements and actions. It is importantthat their job descriptions clearly state their rolesand responsibilities in promoting innovation. Theseshould be reviewed and updated periodically.

 Aspects of responsibility for innovation should beclearly communicated to junior colleagues so thatthey know who to turn to for guidance, who tosubmit ideas to for assessment, who to gainauthorization from in order to proceed with

 particular ideas or projects, or who to turn to for other decisions relating to innovation.

Broadly, those who have responsibility for, lead or champion innovation should:

a) promote the view, and convince colleagues, thatthe organization can influence and even create thefuture;

b) establish that planning products and activitiesfor the long-term future is worthwhile and isundertaken seriously;

c) have a tangible record of achievement through

innovation;d) develop a corporate environment that nurturesinnovation and ensures that, where appropriate,time, resources and support are committed tolong-term products and services;

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BS 7000-1:1999

Figure 6 Ð Iterative analysis from corporateobjectives to master innovation programme

e) provide a future vision that drives the corporateinnovation effort;

f) provide a role model that inspires colleagues;g) instil values and understanding of theorganization's mission and objectives, and providea framework by which colleagues can operate,then leave them to get on with innovating togenerate success;

h) tolerate a greater freedom of action to allowinnovation to flourish;

i) make innovation an explicit and ªvisibleº aspectof an organization's culture;

 j) communicate the organization's innovation philosophy in a way that can be ªpassed onºwithout difficulty throughout the organization and

 personalized by each employee;k) promote the best use of the organization'sintellectual property and endeavour to make better use of what competitors and others have;

l) have the facility to ªnavigateº through the fullrange of disciplines, processes and projects withinan enterprise as well as through major corporatechange programmes;

m) act as ªexpert impresariosº who can bringtogether the right skills, teams and resources, andcreate alliances to address appropriate issues;

n) promote an organization's reputation for successful innovation.

5.3 Formulation of innovation objectives,strategies and programmes

5.3.1 Context for longer-term product creation

Research has revealed consistently that innovationsthat address market needs have the highest record of success. Therefore, all innovative activity shouldseek to deliver clear customer benefits while beinganchored to the achievement of corporate objectivesand to facilitate corporate strategies (see note toFigure 2).

When dealing with the longer term, care should betaken not to base plans substantially on current

customer needs and market trends. Extrapolation of such factors is equivalent to a ªtechnology pushºapproach which has a significantly inferior record of success.

Clearer guidance on market relevance and customer  value will derive rather more from a vision of thefuture based on a deep understanding of the

 principal drivers of change in markets and the coretechnologies used. Therefore, the context for creating long-term products should be a clear future

 vision. A carefully crafted statement of anorganization's business mission might provide a 

 powerful motivation and sense of direction in this

respect.Figure 6 outlines the iterative analysis that principalsshould undertake to formulate an innovation

 programme built on the solid foundation of corporate objectives.

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BS 7000-1:1999

5.3.2 Corporate objectives, strategies and mission

Corporate objectives should provide the foundationfor innovative activities. Principals should formulatesuch objectives in a precise and, whenever possible,quantifiable manner. Corporate strategies should bedrawn up as prescriptions of approaches to be takenand of how resources will be harnessed to achievethe corporate objectives set.

These objectives, strategies and, where appropriate,a vision and a mission statement should bedocumented in a business (or corporate) plan, andcited in operating and departmental plans.

Principals might also wish to publicize and explainobjectives and strategies in their organization's other 

communications such as annual reports, briefings tofinancial institutions and staff training programmes.

5.3.3 Innovation culture

Those who lead innovation should take account of the corporate identity and culture of theorganization: the physical, operational and humanfeatures and values that give the organization itsunique personality.

It is essential to evolve a culture that nurturesinnovation. Such cultures are chracterized by thefollowing:

Ð a core belief that the future can be influenced,and planning the long-term is worthwhile;

Ð a restlessness with the current situation: thenecessity to change being at the core of allactivities;

Ð a clear vision of the future and the role of theorganization and its products in that future;

Ð all changes are geared to the attainment of clear stakeholder benefits;

Ð an openness to ideas coming from anywherethat will help enhance products;

Ð an openness to ideas that point to differentinterpretations of requirements and approaches totackling problems as well as unusual solutions;

Ð all staff feel they can contribute to changewithin their organization;

Ð the stamina to achieve visionary objectives;

Ð a greater tolerance of uncertainty;

Ð a higher level of experimentation and anacceptance that not all attempts succeed;

Ð staff devote a fair time working on ideas toenhance products and the customer experience;

Ð a holistic perspective of products;

Ð a willingness to take bigger risks, though on a much better informed basis;

Ð an enlightened yet rigorous system for vettinginnovative ideas with fast decision-making;

Ð direct staff access to ªcorporate softwareº tomake best use of skills, knowledge andexperience;

Ð an emphasis on appropriate teamwork andnetworking;

Ð meticulous planning for the introduction andefficient implementation of innovations;

Ð training to upgrade innovative performance;Ð acknowledgement and celebration of innovativeachievements and success;

Ð a passion to learn from all experiences,especially failures, as well as from others.

Care should be taken to ensure that the productsand associated outputs reflect and enhance theorganization's identity, and that innovation andinnovation management procedures are coordinatedand in harmony with the prevailing corporateculture.

5.3.4 Future vision

The context for long-term planning is a vision of thefuture that sets out the key characteristics of targetmarkets, what the principal drivers will be in termsof customer needs and activities, perceptions andexpectations, and hence the bases of purchasedecisions and determinants of satisfaction andloyalty.

The vision will also set out how the organizationintends to position itself in that future and contributeto making that future become reality.

These scenarios will include descriptions of how people live and go about their business. Therefore,they will be informed by changes in the natural and

built environment, core technologies as well as lifestyles, developments in business practice and societygenerally.

5.3.5 Innovation philosophy

Innovation philosophy, objectives and strategies areamong the prime determinants of what is acceptableto the organization in terms of innovative activitiesand investments. Consideration should be given toformulating a statement of an organization'sinnovation philosophy to complement its businessmission. This should explain an organization'sgeneral stance towards innovation, the prime reasonsfor promoting innovation and its contribution to

corporate performance.5.3.6 Innovation objectives and strategies

Principals should ascertain, document andcommunicate the implications in relation toinnovation of their organization's overall businessobjectives, culture, future vision and strategies.Innovation objectives and strategies should then beformulated and, wherever possible, quantified.

Principals should also nurture a proactive attitudeamong colleagues: for example, staff should have anopen invitation to put forward innovative suggestionsto facilitate the implementation of corporatestrategies, hence the achievement of corporate

objectives. Where appropriate, support should be provided to develop these suggestions into formal proposals for longer-term investments that arereviewed before being sanctioned for implementation(see also 6.10).

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BS 7000-1:1999

5.3.7 Business, innovation, design and product plans

Innovation should be considered in all major plansdrawn up within organizations. Principals shouldensure that all relevant innovation and innovationmanagement issues are addressed during the

 planning cycle, and that the results of deliberationsare documented in the business (or corporate) plan.If a separate section on innovation cannot becreated, these issues should be clearly identified inother sections.

Such plans should address the manner in whichmarket demand, specific customer needs andtechnological advances will be brought together inthe range of products offered by the organization.

Industries, markets and specific niches whereattention and resources will be concentrated shouldbe highlighted.

The emergence of new markets and forecasts of  potential demand should be complemented byassessments of the positions of current products intheir life cycle, and hence of future turnover and

 profits. This analysis will reveal potential gaps incorporate performance. Strengths and weaknesses,as well as opportunities and threats in relation toinnovation, should then be explored.

This information could be expanded into a separatedocument focusing specifically on the organization's

current and planned range of products.

5.3.8 Innovation highway

The creation of a future vision should be followed bya wide-ranging review of an organization's currentcapabilities, and current and emerging technologiesand practices, in order to draw up a clear,challenging ªinnovation briefº. This should guide andinspire colleagues throughout the organization tocome forward with appropriate propositions to bedeveloped into long-term products.

Such a review should encompass: analyses of customer experience with the organization and its

 products; scenario setting, envisioning futuremarkets, events and activities; anticipated changes inlegislation; trends in leading edge practices;competitor analyses.

The results of these analyses might then feed intothe innovation team brainstorming sessions in which

 principals might participate to generate further ideason opportunities to be targeted in markets,technologies, practices or products.

The outcome of these sessions will be thedetermination of the innovation highway that willtake the organization to its desired future. This ismade up of two key components:

a) the time into the future which will be planned(or the length of the highway);

b) business and operating constraints within whichinnovative opportunities will be sought anddeveloped (or the width of the highway).

5.3.9 Master innovation programme

 All approved proposals for investments in innovation

should be coordinated within a master innovation programme that sets out specific innovative activitiesto be undertaken, the outcomes sought and thecontributions to the attainment of corporateobjectives.

The programme should encompass all innovativeactivities, both long- and short-term, broken downinto stages. Skills and other resources to becommitted, outcomes and deliverables at each stageshould be specified together with associatedtime-scales.

It is important that this programme can be referredto by all those involved and interested in innovation

in a formal, easily accessible working document.

5.4 Communication of innovation objectives,strategies, philosophy and programme

Managing innovation has been likened to managingchaos. Innovation certainly thrives on a degree of freedom, therefore an ability to control innovationwith a light and enlightened touch is a distinctadvantage.

The value of plans will be enhanced if they aredocumented and communicated effectively.Principals, executives and staff need to be fullyaware of the direction and objectives set, as well asthe parameters that define the innovation highway,so that they know the rules, are familiar with the

 pitch and understand the ªgame planº. Thisknowledge will help them to focus their efforts andwork in unison. Yet most organizations restrict thecirculation of plans to key executives. Considerablebenefits might be derived from informing virtually allstaff of the essential features of plans through teambriefings, staff conferences and companynewsletters.

It is also important that stakeholders outside anorganization are kept appropriately informed of itsoverall intentions and strategies. This will givereassurance that proper preparations have been

made to ensure future prosperity, and that there isthe clear sense of direction and leadership to turnthose intentions into reality.

Staff often get the impression that ideas for changeand the implementation of change are the

 prerogative of senior colleagues and they have littlechance of influencing outcomes. This misconceptionis dangerous. All staff should be made aware of their individual responsibility for the successfulimplementation of plans and efforts should be madeto issue a summary reference and other workingdocuments that inspire and motivate staff, and helpto build team spirit.

 Visualization and the use of design might do much tobring to life textual and quantitative information, by

 providing fresh perspectives and vivid presentationusing stimulating and easily comprehensible visualimagery.

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5.5 Infrastructure for managing innovation

Enlightened innovation management requires an

infrastructure of values, policies and procedures thatgoes beyond the personal interests and approachesof the individuals in charge. A system of management should be adopted formally and linkedto the equivalent systems of other businessdisciplines.

It is a key responsibility of principals to create sucha ªlivingº system and promote it to the point where itis fully implemented, operates smoothly, is openlyappreciated and is firmly embedded within anenterprise.

 An organization's innovation management systemshould encompass the following key issues:

a) innovation responsibility and leadership;

b) development and sustenance of a culture withinenterprises that nurtures innovation;

c) innovation philosophy and strategy formulation;

d) auditing innovation and innovation management practices;

e) creation of a future vision for the enterprise;

f) determination of the innovation highway;

g) new idea generation and processing;

h) monitoring market and technologicaldevelopment and trends;

i) capturing and making best use of corporateknowledge, skills and experience;

 j) development and/or harnessing appropriatetechnologies;

k) assessment of opportunities and risks, particularly in relation to timing and degree of innovation;

l) planning the introduction and sustenance of innovations;

m) development of the impresario skills needed to put together innovative projects;

n) establishment of protocols for sharing

information and the formation of innovativealliances;

o) establishment and support of corporateinnovation teams;

 p) training programmes to upgrade innovation andinnovation management skills and performance;

q) funding/resourcing of innovation activities;

r) assessment, protection and exploitation of intellectual property;

s) evaluation of the contribution of innovation toan organization's performance;

t) projection of a reputation for achievement

through innovation;

u) security arrangements for keeping innovation plans and programmes confidential within theorganization.

5.6 Environmental dimension of innovationmanagement

The environmental dimension of productdevelopment and business processes should be givengreater attention. There is increasing legislation to

 protect the environment and to curb waste and pollution. Consumers often appreciate buying fromorganizations known to be responsible members of the community.

Organizations should address environmental issuescontinuously to:

a) reduce consumption of energy in their  processes;

b) reduce their products' consumption of energyduring use;

c) reduce material waste (for example, duringmanufacture and in packaging);

d) reduce or eliminate adverse impact on theenvironment through emissions and discharge of waste;

e) eliminate complication in fabrication andassembly (for example, by reducing unnecessary

 variety in materials and components used);

f) introduce recycling of materials and spentcomponents;

g) ensure continuity of their product range,allowing compatibility when upgrading without theneed for replacement;

h) extend the durability and the useful life of  products by designing out unnecessaryobsolescence;

i) increase efficiency of distribution by reducingsize, and improving stackability and storage;

 j) contain or reduce costs (including those for disposal of used or obsolete products).NOTE Refer to the ISO 14000 series for more detailedguidance on environmental issues.

5.7 Legal dimension of innovation management

The legal aspects of managing innovation are of critical importance because of increasingly stringent

statutory regulations, and a greater frequency of litigation by those affected adversely by productsand the manufacturing process.

With the higher rate of development andconvergence of technologies used, copyinginnovations is much easier and faster. There is alsomore widespread counterfeiting and more frequentinfringement of intellectual rights. Therefore, there isa need for considerable care and vigilance to ensurethat an organization remains within the law wherever it operates, protects its intellectual assets and profitsfrom them for as long as possible.

There should also be formal procedures in place to:

a) register designs, patents, and trade and servicemarks;

b) detect counterfeiting and other infringementsquickly, and take strong action to stop them;

c) deal with product defects and complaints;

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d) pick out fundamental flaws in design that mighttrigger an early recall from the market;

e) keep track of new legislation in all countrieswhere the organization has interests;

f) make appropriate representations to influencethe debate about proposed new regulations or laws;

g) ensure the organization is ready to comply withnew legislation whenever necessary;

h) check compliance with all existing andanticipated standards, testing procedures,regulations relating to health and safety at work,and disposal of packaging and products after use.

5.8 Designing the total product experience

Customers' satisfaction arises out of their overallexperience with products and associated services,including the way in which an organization respondswhen contacted. Therefore, careful attention shouldbe paid to those components of the total productthat contribute to this experience. Sensitivityanalyses will help determine the priorities set bycustomers and users, and the effects of eachcomponent on the attractiveness of the total product.Principals should ensure that all these elements areidentified and defined, understood by and familiar tostaff.

5.9 Innovative alliances

With the increased complexity of technology andscarcity of resources, organizations should consider harnessing the skills and experience of external

 parties around the world. Customers, suppliers,distributors and even competitors might becomemembers of an organization's innovation teamwhether or not collaborative initiatives andlonger-term alliances are formed.

Innovative alliances might be formed at any stagewithin product development or the rest of the valuechain. They might involve expert consultants,universities or research institutions in advancing thetechnologies needed for future products. They mightinvolve organizations with reputations as innovators

or leaders in particular business procedures or  practices such as marketing or customer care.

The list below summarizes the reasons mentionedmost frequently for establishing innovative alliances.

a) Lighten the burden of financial investment.

b) Spread workload.

c) Gain access to knowledge, skills, andexperience, and extend geographic reach.

d) Gain access to other resources.

e) Put together more comprehensive, better integrated offers to customers.

f) Gain competitive advantage through critical

mass (size, resources, market share, etc.).g) Generate new initiatives that would not be possible otherwise.

h) Reposition and raise profile of enterprise.

i) Attract funding.

 j) Speed processing of innovations.

k) Build better understanding of customers,

suppliers, technologies and practices.

l) Restructure products or market.

m) Transform enterprise by adopting practices andstandards of partners.

n) Promote early buy-in thus achieving smoother implementation and longer-term survival of innovations.

o) Surmount barriers and speed entry to markets.

 Apart from setting objectives, there should beagreement on the scope, timing and duration of alliances. Smaller enterprises should also weighcarefully the benefits of entering into very close

working relationships with substantially larger organizations, not least to ensure an ªequivalenceº of contributions and a sensible separation of assetsshould the alliance be terminated for whatever reason.

5.10 Investment programmes

5.10.1 Resourcing the long term

Products and associated services are the lifeblood of organizations. Skimping on investment in new

 product and service creation is very likely to jeopardize future competitiveness and profitability.

Public sector organizations should ensure they gain

approval from appropriate government departments,while voluntary agencies will need to satisfy their governing bodies.

Principals should ensure that appropriate resourcesare available to undertake the research, design anddevelopment work as well as the training indicatedin the master innovation programme. This goesbeyond releasing existing funds or generatingadditional funding for specific projects: continuity of resources at sensible levels is essential to raisestandards, and then sustain excellence.

Resourcing long-term research costs relatively little:typically an additional 5 % on existing product

development budgets made up virtually exclusivelyof people's time. In many organizations, thisrepresents roughly 0.25 % of annual turnover. Such a small investment should not affect share value,therefore the short-termism of financial analysts andinstitutions should not be used as an excuse for desisting from such important commitments.Organizations that seek to maximize short-term

 profitability from current products and services(ªcash cowsº) are likely to have insufficient investedin long-term product planning.

The payback period on this investment might belong-term, perhaps twenty or so years, so the

investment might be written off as an expense.It will be necessary to create a ªtreasure chestº tofund innovative ideas and ventures. This will alsohelp to control the costs associated with suchinitiatives.

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BS 7000-1:1999

In several instances, work on longer-term productdevelopment might generate shorter-term benefits.

Care should be taken to act appropriately on ideasthat are likely to generate revenues in theshort-to-medium term, to ensure that they do not

 jeopardize long-term work.

5.10.2 Financial plans

Principals should ensure that funds allocated tolong-term product conceptualization anddevelopment are spent as intended and not withheldor diverted unless there are overriding reasons.These should be clearly stated and carefullychecked. If funds have to be reallocated, the impacton individual initiatives and the overall innovation

 programme should be taken into consideration andthe plans revised.

It is vital that the financing of innovative activities, particularly the conceptualization of new products, iswritten into corporate, business and operating plans.

 Administering imaginative projects from stage tostage in an undisciplined manner rarely leads tosuccessful outcomes. Therefore, the resourcerequirements and cash-flow implications of conceiving and developing long-term productdesigns, as well as the business systems and

 procedures that will enable these to be undertakeneffectively, should be forecast and set out in thefinancial plans as well as in the master innovation

 programme. This should ensure that funds areavailable when required.

 A proper balance should be established betweenfunding activities from, say, departmental revenuesand making new corporate funds available from thecentre. Principals have to make clear which activitieswill be sustained entirely from central (corporate)funds, which will be financed entirely fromdepartmental budgets, and which parts of anenterprise will be expected to contribute a 

 proportion of the budget. These should be agreedbeforehand.

Moreover, the required funding should be split

between capital and revenue accounts. Capitalallocations should be made for anticipated changesin facilities and equipment to take advantage of enhancements in technology and systems. All thesefactors should feature in the master innovation

 programme that sets out clearly when funds will berequired. Where appropriate, figures should bediscounted to make allowance for the passage of time and so reveal net present values.

Capital assets earmarked for innovation should notbe utilized for operational purposes if such use

 jeopardizes the innovation programme. However,offsetting the capital cost by sharing facilities and

expenses should, if feasible, help to optimize thecosts of, and returns from, innovation activities.

Financial planning for longer-term products, and thecosting of long-term market and product

conceptualizations should be facilitated by an easilycomprehensible system of budgeting. Guidelines onappropriate expenditure on different elements andthe fair allocation of overheads will also be helpful.

 Among the details that should be specified infinancial plans are the following:

a) levels, timing and nature of cash calls;

b) anticipated market and share;

c) revenues to be generated over a specified time;

d) anticipated margins to be achieved;

e) profits or surpluses to be generated;

f) payback periods;

g) rating of risks involved;

h) other budgetary constraints;

i) cost-benefit analyses;

 j) returns on investment and/or capital employed;

k) maximum project budgets;

l) monitoring of expenditure;

m) revision of allocated budgets where necessary.

5.10.3 Resource plans

Resource plans should specify the resources to becommitted to addressing innovation and innovation

management issues. Particular attention should begiven to the following questions.

a) Does the proposed activity make appropriateuse of in-house knowledge, skills and experience?

b) Will new technologies be developed, bought inor contracted out to specialists and suppliers?

c) Will new equipment or design aids be developedspecifically for the enterprise or could standard

 versions be used, perhaps with minor customization?

d) Is adequate accommodation available (for example, space, location and controlled workenvironments) to allow team members to operate

effectively?

e) Are administrative systems in place to enablethe activity to progress smoothly from initiationthrough to completion? Are these systemsadequately coordinated across the differentfunctions and disciplines within the enterprise?

f) Are the necessary ancillary resources andactivities planned so that innovative activity

 progresses smoothly without cross-functionaldifficulties, especially at the transitions betweenstages where responsibilities might transfer fromone function to another?

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BS 7000-1:1999

Two further key components of any innovationinvestment programme relate to training which:

a) raises awareness of innovation and raisestolerance to uncertainty and risk, as well asenhancing the capacity of all staff to be innovative;

b) enhances innovation management skills.

Where an enterprise seeks to sustain a close workingrelationship with customers and suppliers,consideration should be given to offering them theopportunity to join in such training: those who traintogether often relate better and work better together.

Substantial benefits could derive from a better understanding between the parties, a common meansof expression, and a convergence of attitudes and

approaches.5.11 Review and control of innovativeactivities and procedures

Principals are responsible for monitoring the leveland nature of innovative work undertaken by, or onbehalf of, their organizations. This requires regular reviews of outcomes from different departments,facilities, subsidiaries and agents. Reviews shouldalso enable the creativity of ideas and quality of their execution to be checked, as well as the ªfitº with thefuture vision and parameters set in the innovationhighway.

Reviews should be extended periodically to examine

innovation management procedures. The sameapplies to practices and facilities that might helpnurture innovation (location and quality of workenvironment, amenities, equipment and so on).

 Annual reviews of innovation management procedures will normally be adequate to provideinsights and allow corrective action to be taken.

There should be a formal procedure for monitoringthe progress of the master innovation programme inwhich the staff involved should participate. Thesereviews should be scheduled into the programmeitself.

Outcomes should be circulated widely within theorganization for information and debate, especiallyto those who can act on the information to improve

 performance. Principals should be informed of anyslippage or deviations in parameters and goals, andthe remedial action taken.

Reviews can be assisted through the use of checklists such as the self-assessment questionnairesset out in annexes A and B.

5.12 Evaluation

In evaluation, the three most significant assessments

that need to be undertaken are the following:

a) the contribution of innovation to the performance of an enterprise, especially theoutcomes of innovative activities, the extent towhich innovation goals and the organization'soverall objectives are met, and the financialresults;

b) the overall cost of an innovation programmeassessed against the whole-life returns frominnovations as well as capital and opportunitycosts;

c) the master innovation programme (including

control of progress, addressing an organization'sinnovation requirements, proper resourcing of activities, effective integration of all disciplines ininnovative activities, sanctioning of innovative

 projects and reinforcement of the position of innovation within the organization).

There should be a formal procedure by whichinvestments in innovation are reviewed, evaluatedand sanctioned. That procedure should be formallydocumented, transparent and familiar to a widerange of personnel within the organization. Thecriteria for approving proposals should be clearlystated with guidance to assist employees in puttingforward proposals that have a good chance of beingapproved. Similar principles should apply to thereview of projects in progress.

Innovation objectives, strategies and programmesshould be reviewed periodically to check their continuing relevance and effectiveness, not least insustaining the challenge they present in taking theorganization forward. Annual reviews are normallyadequate, though six-monthly reviews might beconsidered in organizations operating in fastdeveloping technological areas.

It is important to stress that evaluation should notbecome an end in itself, but should always be

 viewed as a means to more effective performance. Itshould never become a burden on those whoinnovate, or disrupt the momentum of innovativeactivity. Responsibility for carrying out appropriateassessments lies squarely with innovation leaders.

Principals should ensure that the lessons learnt fromevaluations are properly documented anddisseminated. Sharing experiences should help avoidthe repetition of mistakes and the unnecessaryduplication of work. Another likely benefit is that

 problems should be anticipated or diagnosed earlier,leading to prompter, more effective action.

Finally, the performance of those withresponsibilities for innovation should be evaluated atappropriate intervals. This might lead to revisions of 

 job descriptions, adjustments in responsibilities,seniority, reporting lines and the upgrading of skills.

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BS 7000-1:1999

Numbers in bold face refer to the relevant clauses in this standard

NOTE In small firms, the owners will probably be involved in the specific search for innovative products. In these cases, the following activitiesmight occur during top management brainstorming sessions (6.5): analyses of customer±product experience cycles (7.4), visualization (7.5),scenario planning (7.2), backcasting (7.3), evaluation of intellectual property (7.6), and the establishment of strategic alliances (5.9).

Figure 7 Ð Flow chart giving an overview of the innovation management framework

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BS 7000-1:1999

Figure 7 Ð Flow chart giving an overview of the innovationmanagement framework (continued)

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BS 7000-1:1999

6 Implementing a complete innovation

management framework: system and

mechanics

6.1 General

This clause gives guidance on aspects of innovationmanagement from the generation of an idea throughto bedding it into an organization's culture. Thestages are set out in the order in which they need tobe undertaken; principals should endeavour tocomplete each stage before moving on to the rest.However, the stages are iterative and checks shouldbe made back, perhaps making changes to earlier stages as more information becomes known or circumstances change.

The stages apply equally well to small enterprisesand large organizations. The procedures adopted willbe similar, the differences should be in the degree of scale involved.

The key documents that set out the long-termdevelopment of business and innovation strategy aretied in closely with the corporate mission. Theyshould include consideration of how to translatecore objectives into products over the planning

 period and factors that cannot be planned ten years(or three generations) ahead.

They will indicate what it means to adopt a holistic,complete life cycle perspective to productconception and development, from first customer awareness to final disposal.

6.2 Informal communication

Though a framework (see Figure 7) should be prescribed, this need not replace the informalcommunication that exists within an organization.Informal organization tends to reduce the burden of bureaucratic paperwork and should be encouraged.It should also be remembered that people andinternal politics are nearly always more than 50 % of the process.

6.3 Fast-tracking

It is not advocated that organizations introduce a fast-track for the development of long-term or short-term products or services. The process heredescribes a route that should be followed with alllong-term developments. Any fast-track procedurethat involves omitting stages or tackling them lessrigorously should be avoided as these are very likelyto increase the risks of failure.

Considerable increases in pace might be achievedwith the introduction of parallel working wherever 

 possible and adding resources when necessary. Theincrease in revenues which are likely to arise fromgetting innovations implemented quicker might

 justify the extra resources involved.

6.4 Top management review

Before planning the future, the current situationshould be identified and quantified in a broad-ranging review covering the activitiesdescribed in clause 5 of this standard. This shouldinclude an analysis of strengths, weaknesses,opportunities and threats as well as a skills audit toidentify the existing skills resource.

6.5 Top management brainstorming: scope andactivities

Groups of principals will meet over a series of brainstorming sessions to identify the basic

 parameters within which new products must fit.Their aim will be to plan the direction of theorganization which spans three or more productgenerations. They will determine the length andwidth of the innovation highway. It is not the

 purpose of these sessions to distil specific productideas or project initiatives; however, if any emerge,they should be recorded for consideration andappraisal at a later stage (see 6.9).

One of the keys is to identify what an organizationdoes well and then plan to develop those strengths.It might be that the organization aims to spread theinfluence of the brand. For example, if theorganization has a reputation as a leader in specificareas, it might be possible to enhance the associatedgoodwill or extend its influence into additional areas.

To create the stability necessary for the later stagesof long-term product development, the outcome fromthese brainstorming sessions should not be alteredmore than once a year.

6.5.1 Determining the length of the innovation highway

The aim is to plan three product generations ahead.This time will vary depending on the type of 

 products the organization offers. This is shown inFigure 8. By carefully planning the length of theinnovation highway, it should be possible to generateseamless change even with radical innovation.

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BS 7000-1:1999

Figure 8 Ð The length of the innovation highway 

6.5.2 Determining the width of the innovation highway

Having determined the period over which new products will be planned, the next stage is todetermine the parameters that circumscribe thatwork. This is the width of the innovation highway.

These parameters might include:

a) financial factors such as the maximum that canbe invested in any project, the minimum return oninvestment or maximum payback period;

b) maximum development time to bring a productto market;

c) performance and risk measures against whichideas and project proposals will be judged(see 4.9);

d) specific benefits sought perhaps to enhancecustomers' experience of the organization and its

 products;

e) emerging technologies and practices that hold particular interest and promise;

f) strengths to build on: core technologies and practices that need to be boosted and protected;

g) new technologies and practices that ought to be

introduced to reinforce core technologies;h) weaknesses that need to be eliminated;

i) sources of likely threats and counter strategies;

 j) organizations that might be approached with a  view to collaboration.

Some parameters are shown in Figure 9.

The width of the innovation highway identifies thekinds of products and market sectors that might betargeted for development over the planning horizon.It might even provide parametric product briefs.

Care should be taken when specifying parameters: if too restrictive, they might stifle the potential of theorganization; if too vague, those involved indevelopment work will have insufficient direction.The width of the innovation highway will be the firstªtest gateº for checking the ªfitº of new product and

service ideas with corporate innovation objectivesand strategies. Those that do not pass the test andcannot be amended appropriately should beeliminated, or archived for future reference.

6.6 Choose innovation leaders

 At this point, it will be necessary to nominate one or more individuals to take charge of the efforts to planthe longer-term future. People who thinkstrategically are needed to champion long-term

 products. It is advisable that team leaders are senior  people and, to ensure continuity, those likely toremain with the organization for a significant time

into the future, at least long enough to complete thedevelopment to market.

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BS 7000-1:1999

Figure 9 Ð Possible aspects of the width of innovation highways

6.7 Select the innovation team

Potential team members will be identified with thehelp of skills audits (see 4.2 and 6.4). In smaller companies, the same people are likely to be involvedin both short- and long-term product development. Inlarger organizations, there might be different (thoughequally important) groups of people. Where separate

groups are established, care should be taken tofoster harmony and common ownership of projects.Those involved in longer-term activities should notdivest themselves of responsibility for the projectsonce they have played their part as this attitudemight lead to antagonism between long-terminnovators and short-term developers. Opencommunication between these groups, and somecommon members, are often instrumental inenhancing working relationships.

6.7.1 Job security

It is not possible to innovate over the long-term if  people do not feel secure in their jobs or foresee a threat to their security of employment as a result of innovations they might generate. Enlightenedorganizations do all they can to guarantee long-term

 job security for certain members of the organization.

The fact that an organization is planning some periodinto the future should indicate to employees greater 

 job security. Further into the framework it should be possible to identify specific skills needed to developlong-term products. This should underline toemployees with those skills their place in thecompany's future product plans.

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BS 7000-1:1999

6.8 Develop a system for recording andarchiving ideas

One aspect of long-term product development is theneed to retrieve ideas that have been consideredbefore, perhaps several years previously. Before

 proceeding further, it is necessary to develop aneffective method for recording, organizing andretrieving ideas that emerge during the subsequentstages of development.

Ideas might hover around an organization for many years; during that time, people might retire, find jobselsewhere, or simply forget. If ideas, discussions and

 processes are not documented, they are likely to belost. Furthermore, there needs to be an effectivearchive of future ideas, probably stored by electronic

means and designed to provide easy accesswhenever required. An effective index will be neededso that these ideas can be retrieved. For example, itmight not be possible to develop these ideasimmediately if current technologies cannot deliver the desired changes. However, once technologiesadvance to the required point, action should betaken promptly in a manner that avoids theunnecessary repetition of work.

This archive should also be in a form that remainseffective when computer systems have becomeobsolete.

6.9 Innovation team brainstorming: scope andactivities

6.9.1 General

 A second series of brainstorming sessions shouldnow take place with the aim of creating the productsand services that will fulfil top management's future

 vision for the organization: to create the futurerather than simply respond to it.

The purpose is to develop methods to envisiondesired futures and new ideas, and then to identifythe products that will be developed along theinnovation highway.

These sessions will involve individuals identified as

being able to contribute, who might be drawn fromany department within the organization or fromoutside. It can be helpful to establish internal andexternal networks of experts who have a particular facility or knowledge to think about critical aspectsof the future. Staff might be supplemented byoutsiders with specified skills, for example,academics, futurists, specialists, consultants,customers, suppliers and other alliances.

Employees are often too busy coping with thedemands of the present to think properly about thefuture. Time allowances should be specified within

 job specifications for employees to work on

long-term future activities. Research for this standardhas shown that these might range from 5 % to 15 % of employees' time. The use of outsiders should helpemployees to think beyond their day-to-day jobs or the short-term projects they might be involved in.

These brainstorming sessions need to occur regularly, say, every four months or so depending on

the type of products being developed. As theoutcomes of these sessions might be referred to over many years, it is necessary to archive the futureideas generated during these sessions (see 6.8). Thetools and techniques that are used in thedevelopment of ideas at this stage are described inclause 7.

Individuals within an organization will only discover the future if they look for it. Long-term products arelikely to be fundamentally different from those theorganization produces now. Therefore, thoseinvolved should try to think in a less constrainedmanner, challenging conventional boundaries. Ideas

that emerge from this process are opportunities thatneed to be submitted to qualitative and quantitativeexamination.

One aim of this programme is to exploit innovationsto the full. This might require further brainstormingsessions to identify a wider use of the innovationsbeing identified and subsequently developed.

In large organizations with branches or facilities thatwork on particular products, it might be possible todesignate these as ªcentres of excellenceº whichfocus on particular areas, with their own authorityand autonomy.

6.9.2 Mapping important milestones

Initially, a ªbroad brushº approach should beadopted to plan when products will need to beenhanced (through short-term product repositioningand upgrades) or replaced (longer-term productre-creation) as the current range declines incompetitive appeal, and hence in profitability.

Several activities related to markets and emergingtechnology might need to be executed concurrentlyand associated milestones plotted over the length of the highway; perhaps these could be displayed on a wall of a secure office.

Brainstorming sessions and detailed analyses of 

customer±product experience cycles should help toidentify potential product enhancements as well asnew products. Once identified, significant researchmight be necessary to determine the viability and

 potential of the ideas.

Further brainstorming sessions are likely to alternatewith complementary work, around identified

 problems and outcomes, which is assigned toindividuals. Work should focus progressively onmore specific problems until it is possible for a 

 product to be designed according to guidance provided in BS 7000-2, BS 7000-3 and BS 7000-4.

 After running the activities described above for some

time, several embryonic ideas should have beengenerated, some having reached a more advancedstage. These need to be developed in theshorter-term future.

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BS 7000-1:1999

6.9.3 Mapping out future technology

Certain products might only become possible when

new technology becomes available; others might becreated through advances in current technologies, byintroducing unfamiliar technologies from other industries never considered before, or by usingfamiliar technologies in unfamiliar ways.

The methodology at this stage might take twodirections.

a) Identify, over the length of the innovationhighway, products that could be developed andthen wait until the technology appears that makesthese possible. It is necessary, therefore, to seekrelevant emerging technologies and this taskshould be written into the job specification of relevant employees of the organization. It might be

 possible to ªpromptº other companies to developthe technology, perhaps by creating appropriatealliances.

b) Identify technologies used or in developmentelsewhere, then check how an organization mightapply them. Again procedures should be in placeto seek out useful technologies. Wherever possible,organizations should endeavour to incorporate theªclever bitsº of products found elsewhere intotheir own.

The map of future technology might indicate gaps intechniques, materials, processes, procedures or 

 practice which can be filled in when the relevantinformation becomes available. A technology routemap can be developed from this to span the lengthof the innovation highway, showing the milestones atwhich identified new technologies are likely toemerge and what targeted markets might make of likely applications. These technologies are morelikely to gain approval within the organization if theyhave been identified as ªfavoured areas of technologyº (see 5.3.7).

6.9.4 Mapping out future markets

 Another way to proceed is to identify potential

future markets on the innovation highway and then plan the products and services to exploit thosemarkets.

It might be possible to identify the technologynecessary to develop particular markets, then toestablish an alliance with organizations that coulddevelop that technology. Such an alliance couldassist in developing the technology. Alternatively, thealliance could become a customer, raising potentialsales to a level that would make its developmentworthwhile.

 Another way of investigating future markets is toanalyse the customer±product experience cycle and

then determine aspects that might be improved withnew products (see 7.4).

These ideas should be combined with thosegenerated as described in 6.9.2 and 6.9.3. The better 

ideas will be those that combine effectively.This process should also indicate where newalliances might be forged for mutual benefit, perhapsto deal with research or marketing processes, or toattract funding. Internal alliances might be forged aswell as those with external parties. Differentdepartments or other subsidiaries within a groupmight be invited to participate if they have therelevant skills and resources.

It is at this point that a range of options for future products is fully revealed and evaluation of the bestalternatives can proceed.

6.10 Assess and filter new ideas As new ideas are generated, they will need to beassessed quickly to select those with the best

 potential.

The first method of filtering ideas is to eliminatethose that do not fit the length or width of theinnovation highway as specified by top management.It is not possible to draw up a full specificationbefore this stage, therefore the normal method of appraising ideas against specifications is not

 possible. Furthermore, details cannot be planned atthis stage and it is unlikely that many of the ideasthat emerge from these brainstorming sessions can

be developed immediately. If they can, the procedures described in BS 7000-2, BS 7000-3 andBS 7000-4 should be used.

It might be that some particular product or servicehas been identified through these brainstormingsessions as being significantly different and inadvance of products currently on the market and, atthe same time, can be developed now. These

 products are of the type that will ªleap-frogº theorganization significantly ahead of the competition.

The best measures of likely 3-Gen products willalmost certainly relate to the whole life of the

 product.

It is wise to achieve a balanced-risk portfolio. The portfolio of likely 3-Gen products will include somethat are high risk with high returns, and some thatare low risk with higher returns. Those with lowrisks and high returns will be favoured over thosewith high risks and low returns; wherever possible,the latter will not be taken up. This is shown inFigure 10. Methods of identifying risk are outlinedin Figure 11.

There are likely to be some threats associated withany proposal, often from existing competition. Theseneed to be identified and appraised. Ideas that willnot overcome those threats should be eliminated.

But even these ideas should be appraised to judgewhether aspects can be included to provideincremental improvements or serial innovations.

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BS 7000-1:1999

Figure 10 Ð Risk vs. potential

If the organization is exploring innovations that noone else is believed to be tackling, then there is nocompetition. If these are successful then the benefitswill be considerable so long as competitors cannotcopy them quickly. If an innovation is not successfulwhen first attempted, efforts should be made to gainas much feedback as possible, if viable, improve the

 product, according to the lessons learnt, andrelaunch it as soon as possible to maintain itsmarket position and goodwill.

6.11 Develop staged project work programmes

The planning should now have reached a pointwhere only a staged, and more detailed, work

 programme can be drawn up for each potential product. This should include milestones anddeadlines. Product specifications will graduallyemerge as the programme develops. Innovation

 programmes tend to be highly iterative at this stage.

It should also be possible to identify work areas thatcan be executed in-house and areas where help willbe required. This might be bought in, out-sourced or 

lead to the formation of alliances.In many cases, it might still be several years before itis possible, or advisable, to develop a model or 

 prototype. Even so, development work should startas soon as possible.

6.12 Plan product withdrawals andreplacements

Most organizations do not plan the withdrawal of their products. Having identified products that willemerge along the innovation highway, organizationsshould also be able to determine when productsshould be withdrawn, even those that have yet to be

developed. The continued supply of spare parts andsupport services are likely to be importantconsiderations in withdrawal plans.

If there are gaps on the highway, the life of productsmight be extended with incremental changes to fillthe intervals before an innovative product is readyfor launch. Typically, the life of products might bedoubled by judicious improvements. Research hasshown a strong trend of organizations increasing

 product life cycles through incremental changeswhile reducing the ªtime to marketº and the intervalsbetween new model introductions. Decisions toextend product cycles should follow careful analyses

of costs and returns on resources employed.

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BS 7000-1:1999

From the customer's point of view, it is increasinglyimportant that there is a seamless transition between

existing products and their replacements so thatupgrading leads to minimal inconvenience. Wherecustomers seek to create some disruption in order tocreate a new order, careful planning should helpachieve successful implementation and the desiredoutcomes.

6.13 Evaluate the framework

Evaluations should be undertaken periodically toreveal whether the management of innovation hasbeen effective. Such evaluations should also help todetermine and analyse the costs of operating thisframework as well as the opportunity cost of notundertaking other activities. Although the largenumber of variables to be considered over a ten-year rolling horizon make it very difficult, wherever 

 possible, these costs should be compared with theactual and potential whole-life financial returns fromthe ideas generated through the framework.

Evaluations should also highlight where risks of failure might be minimized in future, and revealwhere financial potential has been over- or under-estimated. Steps could then be taken toimprove forecasts and performance.

Over a longer period, it will also be necessary toevaluate the contribution and impact of innovationon overall corporate performance. Agreed measuresmight be used but most are likely to be financial,

 particularly those based on the cost of theinnovation programme, including the opportunitycost and a factor covering the cost of capital.

 All such evaluations will be assisted by the use of checklists and innovation audit questionnaires, suchas the examples in annexes A and B.

It is also worthwhile compiling case studies of good practice to enhance the ªcorporate memoryº andhelp improve the development of subsequent

 products.

6.14 Maintain flexibility to change course

If it is found that an organization has been moving inthe wrong direction, or discovers a better opportunity, then the direction needs to be changed,and quickly. There might also be instances whennew opportunities arise which offer more attractive

 prospects than those projects sanctioned in thecurrent programme. These new opportunities shouldbe given serious consideration.

The framework proposed is flexible and adaptable;new circumstances should be assessed and remedialaction taken quickly and easily implemented. Theorganization should record and archive the mistakesto prevent them recurring.

7 Tools and techniques for managing

innovation

7.1 Brainstorming

Brainstorming is a pivotal activity in theidentification of future innovations (see 6.5 and 6.9).Many have heard of brainstorming but relatively fewundertake such sessions effectively.

Teams generate more effective ideas than individualsand brainstorming sessions are effective ways of drawing out new ideas from teams. The sessionsshould be held in comfortable surroundings awayfrom distractions such as telephones. Those involved

 per session should not exceed nine people, and a leader should be nominated to facilitate sessions.

Initially the team should be put into the right frameof mind by undertaking some trivial task thatencourages them to think in a less constrainedmanner, challenging conventional boundaries. For example, they might be asked to spend a fewminutes thinking of possible uses of a safety pin.

The guidelines should then be introduced (for example those relating to the width of the highway).Ideas should be encouraged and early in the processit is important to obtain a large number of ideaswithout any form of appraisal. It is normal at thestart to have ªold and obviousº ideas which can later be discarded.

When ideas appear to dry up, the session should beended and those involved allowed to move on toother activities. This period of ªgestationº is a necessary part of brainstorming and, when thebrainstorming session is reconvened, the team islikely to have new and more useful ideas.

The leader of these sessions should ensure thatcriticism of ideas and people are forbidden.Contributions from reticent members should bedrawn out, and no individual should be allowed todominate proceedings, especially more senior members, as the quality of ideas is not necessarilyrelated to seniority. Furthermore, when an idea is

 put forward, it should be treated as a ªgroup ideaº;this prevents members comparing their ideas withideas proposed subsequently.

 As the period under consideration spans many years,it is important to have an effective method for archiving and retrieving ideas. The system of retrieval should be configured and used so as to

 prevent the brainstorming sessions inadvertentlygoing over ground covered in earlier sessions.

These brainstorming sessions should be purposefulwith clear written objectives communicated to all

 participants. However, care should be taken to avoidrushing them as the products that result will usually

be required when the products after those currentlyoffered go into decline. Therefore, there will besufficient time to consider and appraise fully allideas generated, even to revisit them over a periodof months or years.

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7.2 Scenario planning

One of the tools in the second stage of brainstorming

is the envisioning of the future. Often peoplespeculate that more frequent and increasingly radicalchanges will occur in the future than actuallytranspires. Apart from certain areas of rapiddevelopment, change tends to be slow and thereforerelatively easy to predict.

Whilst envisioning the future, the focus can beimprovements to lifestyles, the effects on theenvironment, forthcoming legislation, or radicaltransformations in work methods.

The future presents multiple possibilities, somebeneficial, some threatening. In order to cope withthese eventualities, we need to ªmapº them out andformulate strategies to avoid or deal with them. That

 planning process and much of the subsequentactions are fundamentally design processes: wedesign desired futures then design the means tobring them about.

 Visualization is a key tool for ªpreviewingº thesefutures, typically through scenarios and concepts for specific products, services and environments. Theseenable people to gain a more tangible hold on ªwhatmight beº and this facilitates implementation. Thefacility to ªcreate the future todayº is a characteristicof innovation leaders.

Care should be taken not to limit perceptions of satisfaction of needs to current use in definedcircumstances.

7.3 Backcasting

Several ideas will be at the very earliest stage of consideration, perhaps in the form of scenarios.Having determined a future vision for theorganization as a desirable long-term destination, itis important to speculate on the journey from theideal future back to the present. This can be done bymapping out key events back to the present (a blueprint) indicating the stages or milestones over time.

7.4 Customer±product experience cycles

Customer satisfaction derives from the range of experiences from first awareness through to finaldisposal. Commercial success, for industrial andconsumer products, is achieved by managing thoseexperiences: each phase has considerable potentialto delight or antagonize customers and actual users.Understanding those experiences forms the soundestfoundation to designing satisfying products so that

 valued ªhighsº can be planned in and debilitatingªlowsº eliminated as far as possible.

 All such ªcustomer±product experience cyclesº havecommon phases such as awareness, interest and

information gathering, purchase, first use, on-goinguse and disposal. Each phase can be analysed indetail to map out the likely sequences of key events.Rehearsing the acquisition, ownership and use

experiences, ideally through role-playing featuring allrelevant parties, should help distil how and at what

 points innovation and design can facilitate andenhance those experiences. The way targetaudiences (particularly key customers) react to

 proposed new product concepts, features andimprovements will provide insights into how they

 value those propositions as well as their perceived priorities.

 Analyses of ªexperience cyclesº provide powerfultriggers for developing technologies that contributeto successful product design, manufacture anddelivery. The dialogue that is established andnurtured between the innovation team, users,suppliers, distributors and other specialists gets to

the root of current perceptions, thinking and practices. It also encourages exploration of the idealfuture: the ªif onlyº world. Future products thatmatch needs and aspirations closely, and deliver favourable customer use and ownership experiences,are more likely to come from such analyses thanfrom mere ªtechnology pushº strategies. Moreover,the creation process should be more involving andinspiring because it is more human, fun andrewarding. Experiences represented through

 visualization provide the most vivid ªlivingº briefs towork to. The design and innovation processes areeffectively ªdialogues with the futureº.

7.5 VisualizationThough ideas are communicated predominantly withwords and numbers, there is increasing evidence thatmany people ªthink in picturesº. Moreover,observation is a major factor in learning andunderstanding.

Images in the mind change as ideas take shape,develop and become embedded. They ªplayº in themind almost always accompanied by a ªsoundtrackºas individuals ªconverseº with themselves and other 

 parties connected with the ideas in hand. Ideas cometo life, are tested and personalized through a 

 progression of animated images. As such, there are

considerable benefits to be gained fromunderpinning communication with imagery, not leastwhen it is critical to ªget on the same wavelengthºquickly and build a binding spirit between diverse

 people who need to work together effectively.

 Visualization and envisioning are about ªseeing in themind's eyeº, externalizing and sharing those images.The design activity provides to these endeavourswith ªtangibilityº and ªfinishing powerº.

This added dimension is generally taken to benon-threatening, largely because most peopleconsider themselves to be ªvisually literateº throughwidespread familiarity with cinema, television,

computer games and so on. This view holds eventhough relatively few have developed skills indrawing or other techniques of visual representation.

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When speed and radical change are sought,harnessing the ªvisual dimensionº is critical to

success, not least because its ªinclusivenessºencourages collaboration and facilitates rapidacquisition and application of new knowledge andskills.

Special care should be taken to ensure that contentand presentation are mutually reinforcing: thecredibility of communication should not becompromised by poor visual aids that negate itscontent and impact. The effective use of design canhelp present innovative messages in fresh ways that

 provide immediate demonstrations of how thingsmight be done differently, to higher standards.

The benefits to be gained from using visualization

are that it:a) facilitates rapid comprehension and faster adoption of new knowledge and skills;

b) opens eyes to fresh perspectives andencourages multiple viewpoints;

c) illustrates and helps devise enlightened ways toapply new ideas and technical advances;

d) helps in the evaluation of user appeal through value analyses and preferences ranking;

e) enables user comprehension to be tested aswell as users' sophistication in the use of productsand services;

f) provides checks on technical feasibility andisolates potential conflicts between marketing and

 performance specifications;

g) provides guidance and exemplars for sales andother service/support personnel;

h) establishes common experiences andunderstanding among development team members,either created together or subsequently shared;

i) isolates inconsistencies of approach andgaps/disjoints in experiences during projected lifecycles;

 j) provides messages that are more vivid and real

to target audiences, yet allow flexibility and personalization, hence greater potential for further development.

7.6 Risk assessment

Ideas should be judged initially against the parameters specified in the innovation highway;those that do not fit should be eliminated.

Ideas might be judged for potential returns againstthe probabilities and risks of conceiving successful

 products. Risk analysis goes beyond potential profitability and should include consideration of whole-life costs, time-scales, safety and the likelyeffect on the environment (see Figure 11).

7.7 Evaluating and protecting intellectualproperty 

Innovation over the long term is likely to generatemany ideas that should be protected. Team membersneed to safeguard the confidentiality of discussionsthat could prove problematic when outsiders areinvolved. Sometimes secrecy can be maintainedthrough confidentiality agreements with staff andthird parties.

Often, ideas might not be developed sufficiently for a  patent application, otherwise the product could bedeveloped immediately. New aspects of technologyalready developed could be patented for use infuture products. However, the cost of maintaining a 

 patent and the loss in life of the patent whilst

waiting for the rest of the product to be developedmight make it advisable to delay a patent applicationwhilst keeping the idea secure within theorganization.

Conversely, if it were suspected that a competitor were undertaking similar development work, itwould be worth patenting aspects of a likely future

 product. This might help dissuade competitors fromstopping a company from benefiting from work inthat area. Monitoring R&D among competitorsshould provide valuable insights into how they mightupgrade products and avenues they consider to beimportant in the forward development of their 

 products.Intellectual property can also be exploited throughsale or licensing to other organizations.

7.8 World Wide Web

The World Wide Web (Internet) is a rich source of information. All organizations interested inintroducing ªnewnessº into their products shouldsearch through it for relevant ideas. However, staff might require guidance on ªsurfing the Netºeffectively, otherwise considerable time might bewasted.

Search routines might be set up and ªfavourite sitesº

specified to be visited regularly or whenever updated. A procedure should be instituted wherebyrelevant information is disseminated to all who mightmake use of it.

7.9 Intranets and websites

 Another important step for organizations is toestablish intranets and websites to encourage staff (and certain outsiders) to share information andexchange ideas, particularly with colleagues whomthey would not normally meet or consult.

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NOTE Check boxes with an3 at the appropriate point on the scale.

Figure 11 Ð Some factors in assessing risks of undertaking innovative projects

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The principal reasons for setting up intranets andwebsites are to:

a) establish a focal contact point for staff andthird parties, especially when there is an openinvitation to make inputs (such as ideas for improvement, lessons learnt, interestinginformation gleaned from elsewhere, issues thatought to be investigated and opportunities for collaboration);

b) help communicate the innovation missionstatement, the future vision of the organizationand the parameters of the innovation highway;

c) set out the protocol for sharing, divulging andusing information (extent, safeguards, guidelines);

d) provide direct access to useful information, andspeed applications by presenting it in a ªready touseº format;

e) list current and emerging core technologies andbusiness areas of particular interest;

f) list ªleading edge players/best practicesº in alltechnologies/business processes of interest;

g) list on-going projects and those involved;

h) list skills and experience within theorganization (including those individuals to beconsulted on groundwork and on gaining supportfor potential proposals);

i) provide guidance on refining ideas, formulationand submission of project proposals;

 j) publicize innovation success stories from acrossthe organization and acknowledge individuals

involved;k) document case studies of ªgood practiceº andachievements;

l) provide a forum for a competitive ªinternalmarketº such as a ªBest five long-term ideas of themonthº competition;

m) advise on best procedures for use of Internet(guidance on key sources of information and howto carry out searches).

Once they are set up, it is important to updatewebsites and intranets regularly to feature newinformation that will attract staff and encourage

constant use. ªHot linksº to other appropriate sitesof further interest will facilitate more fruitfulsearches and networking. The aim should be tomake these the first ªport of callº for staff seekinginformation or help. Moreover, procedures should beintroduced to ensure prompt responses to queriesand suggestions ªpostedº on sites. It is essential for intranets to be secure against access by those whoare not authorized, while encouraging andmaintaining ease of access of those who do havethat authority.

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© BSI 11-1999 33

 Annex A (informative)

Innovation self-assessmentquestionnaire 1 Ð The organization

 A.1 What types of innovation do you have inyour organization?

Innovative changes can be introduced throughout the value chain. For example, within the product, duringmanufacture, in distribution, in marketing or bysupporting the product in the market. The fastest areasfor innovation (and, in many ways, the easiest andmost profitable) relate to the services that complement

 products.

 A.2 Does your organization have a procedure

for developing 3-Gen products and services?

 A.3 Is this procedure documented?

It has been shown that the organizations most effectiveat long-term innovation follow a documented

 procedure. Most enterprises have introduced aspects of such a procedure but have still to write them down.Mapping out procedures in this way will reveal gaps in

 practice and methodology; these can then be addressedusing tools, techniques and methods outlined in thisstandard. Clause 6 describes such a procedure.

 A.4 If the process is documented, how widely isit distributed?

So that all team members are made aware of theapproved process for introducing innovations, andwork to the same procedures, full copies should beissued to all relevant members. For specificinnovations, it is advisable to show which specific partrelates to the individuals involved.

 A.5 How does your enterprise use its long-term vision of the future to influence and informpresent activities?

New products should form a seamless continuum intothe future. It is possible to identify the products andservices at specific milestones along the length of the

innovation highway. Generally, life cycles of existing products can be increased through incrementalchanges while the time-to-market is being reduced.This should make it possible to achieve this seamlesscontinuum.

 A.6 What is your organization's budget for newproduct development?

This depends on the type of market you are in and willtypically be between 3 % and 20 % of annual turnover.

 A.7 How much of this budget is set aside forinnovating 3-Gen products?

This also depends on the product and the type of 

market you are in but, typically, this will be 5 % of thebudget set aside for new product development. As thisrepresents between 0.15 % and 1 % of annual turnover,it is a small investment especially as it is almost

entirely made up of people's time. Such a modestfigure is unlikely to affect share value and, as a result,the organization should not use a short-termist attitudeamong financial analysts as a reason for holding backfrom investing in planning for the long term.

 Allowing 5 % to 10 % of specified employees' time for this activity is a useful guideline to work to.

 A.8 Is planning 3-Gen products a specifically defined activity within your organization?

Planning for the long term is different from short-termnew product development. Time should be allocatedfor this activity and should also be written into the jobspecifications of particular employees.

 A.9 Does an innovative attitude permeate yourorganization?

 A culture that nurtures innovation should permeate anorganization and not just be confined to the new

 product development department. Ideas for future products and services could be generated in all partsof the organization. These should be encouraged, justas failure should be tolerated. See clause 5.

 A.10 How is this innovation attitudecommunicated internally and externally?

Having developed an attitude that encouragesinnovation throughout the organization, this shouldalso be communicated outside the organization, as part

of its corporate identity.

 A.11 Does your organization have a skills audit?

 An analysis of the skills, techniques and practiceswithin your organization can help to identify the typesof products and services that should be focused on inthe future. These will help to determine the width of the innovation highway. When considering specific

 products, it will also indicate areas where skillsshortages exist, which might be filled through alliances.See clauses 4.3, 6.4 and 6.7.

 A.12 Is your organization involved in any alliances?

It is unlikely that your organization will have all theskills or experience necessary to complete itslong-term development programme. Mutually beneficialalliances might be formed to supplement skillshortages. These alliances could be made with other enterprises within your own group or outsideorganizations and could provide benefits throughoutthe value chain; from research, through productdevelopment and marketing, to servicing and evendisposal. See 5.9.

 A.13 What are your organization's weaknessesin long-term product conceptualization anddevelopment?

Weaknesses can be addressed only if they have firstbeen identified. With each weakness consider howthese shortcomings can be remedied. See 5.11, 5.12and 6.13.

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 A.14 What mechanism does your organizationhave to react fast to threats or surprises from

the competition?Even though plans might be in place for developing 3-Gen products, competitors, often thosenot currently within your market, can occasionallyappear with a product or service that threatens your share of the market. As part of your organizational

 procedures there should be a mechanism for dealingwith such emergencies. If the process for developing 3-Gen products is effective, such threats areless likely to come as surprises.

 A.15 How does your organization protect itsintellectual property?

This is not as easy as it would first appear. Patents areimportant to the development of 3-Gen products, butthere is a downside to this: applications might notsucceed, or competitors might copy them in countrieswhere protection is not secured, once the substance of innovations is revealed. Care should also be taken to

 protect intellectual property when staff leave. See 5.7and 7.7.

 A.16 How does your organization learn fromfailures?

There needs to be a system of evaluation both for  products and the processes used in their development.If measures are put on these it will be possible to

identify failures and it should then be possible to avoidsuch pitfalls in future. See 5.11, 5.12 and 6.13.

 Annex B (informative)

Innovation self-assessment

questionnaire 2 Ð Products and servicesNOTE This questionnaire is to be used for the development of specific 3-Gen products or services.

B.1 What is the length of the innovationhighway for this particular product?

This should represent three generations of the product

(see 6.5.1).B.2 What is the width of the innovationhighway?

This determines what the organization will allowincluding aspects of finance, time and market(s)(see 6.5.2).

B.3 What kinds of ªnewnessº are incorporatedin this product?

Figure 2 shows the type of newness that might exist in your organization relating to this type of product.Normally, the further down the spectrum the proposed

 product can be related, the lower is the likely riskassociated with this product.

B.4 Who is the long-term product champion forthis new product?

Ensure someone is assigned formally to drive thedevelopment so as to ensure it is given the greatestchance of success. People who think strategically tendto make the most appropriate champions of 3-Gen

 products. See 6.6.

B.5 Apart from the product champion, who else will be involved in this 3-Gen productconceptualization and development?

It is necessary to identify the majority of the teamearly in the process. They will be selected using a skills audit. Any shortages in available skills might bemade up through alliances, once the deficiencies havebeen identified. See 6.7 and 6.7.1.

B.6 What aspects of this 3-Gen product do youbelieve cannot be planned ahead?

Perhaps, surprisingly, almost all aspects of 3-Gen products can be planned a long way into the future. In

 practice, it tends to be detailed specifications and theaesthetics which cannot. Most other aspects can.

B.7 In planning this particular product, whichof the following will you use?

a) Brainstorming (6.5, 6.5.1 and 6.5.2).

b) Backcasting (clause 7).

c) Scenario planning (7.2).

d) Mapping out future technology (6.9.1).

e) Mapping out future markets (6.9.3).

f) Assessing and filtering new ideas (6.10).

g) Analyses of customer±product experience

cycle (7.4); rehearsals of experience management.h) Visualization.

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1) This standard will be revised and renumbered BS 6079-2.2) In course of preparation.

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