Strategic innovation and the fuzzy front end

Innovation is a process, and while the introduction of a genuinely innovative product or service may be highly publicized or even glamorous, the process itself is driven much less by creative brainstorming or strategic planning than by carefully managed and highly-sophisticated cross-disciplinary thinking and research. Readers will learn how to manage the critically important first steps from this thinker, author and CEO.

The need for 21st-century mindsets and protocols has heightened interest in innovation. The manifestation of that need is a process we call the fuzzy front end, an insight-driven, prototype-powered and foresight-inspired search for new ideas that can be applied to products, services, experiences, business strategies and business models. It is both a creative and an analytical process to better identify customer needs, collect insights, explore white space and create possibilities.

It is often an ongoing challenge for companies to synthesize a sea of insights and identify breakthrough innovations for which demand has yet to surface fully AND prevent being blindsided by aggressive competitors. The challenge lies on several fronts: the gathering and filtering of ideas, the creative manifestation and experimentation of ideas, the internal selling of ideas, and capturing economic value from them. To meet this challenge, managers normally resort to hosting an offsite brainstorming session. However, this exercise usually lacks rigor and creates a large pool of diverse ideas with little relevancy to the business strategy. The drive for off shoring and optimization has further discouraged companies from experimenting with new ideas. Industry leaders particularly are at risk of failure, due mainly to their inability to see the next big thing and their false sense of relative competitive advantage. This is why the fuzzy front end is so critical and needs to be engineered into a company’s strategic planning process. In this article, I describe a systematic approach for managing that fuzzy front end, one that has the right tools and frameworks, and that is a very effective mechanism for getting a sharper picture of the future and identifying opportunities outside the current roadmap.

Managing the strategic fuzzy front end

Innovation is only strategic when all activities related to it are aligned with reenergizing the core or connecting adjacent or future business opportunities with the core. Otherwise, pursuing un-informed innovation paths is likely to lead to failure.  Successfully managing the fuzzy front end requires the following:

  • Combining specific skill sets, tools and methodologies from different disciplines in order to uncover the most salient bits of information and insights that will ultimately inspire and help shape the development of value-creating innovations.
  • Balancing divergent exploration and investigation with convergent analysis.
  • Developing and articulating a more holistic awareness of current and emerging consumer needs, mind-sets, values, and expectations.
  • Collecting, organizing, and making sense of the forces that will help shape the acceptance and practicality of new products, services, and business models etc.
  • Synthesizing and clarifying competitive opportunities in order to help establish the most effective starting points for innovation.
  • Helping organizations better understand choices and explore opportunities early on, prior to investing a great deal of time and resources.
  • Clearly articulating potential solutions for customer-centered feedback and learning.

The methodology used to drive these activities – that once consisted of random insight collection and creative brainstorming – has become more sophisticated. For example, numerous disciplines now collaborate to leverage the potential of their unique skills and tool sets. By establishing more formal and structured front-end processes, organizations have been able to increase the value, speed and quantity of high-potential concepts as well as the probability of their success.

More sophisticated methodology, however, has not completely eliminated the most common symptoms of front-end failure. These include:

  • Not asking the right questions that help frame/guide the design and scope of initial research and investigations.
  • An inability to organize and make sense of massive qualitative and quantitative insights, and apply them to opportunities mapping.
  • Creating bridges between innovative ideas and current business models, leading to the abrupt cancellation of projects in midstream because they don’t “match the company’s business strategy.”
  • Not giving “top-priority” innovation projects the required attention because there is no senior executive sponsor or because key people are “too busy” to spend the necessary time working on them.
  • Failing to articulate how innovative ideas can create economic value and how this value can be captured, as well as failing to determine the opportunity cost of these innovations.

Complicating and magnifying the difficulty of managing these challenges is the fact that this first stage of the strategic innovation process is commonly referred to as the “fuzzy” front end. The adjective “fuzzy” is appropriate because at no other stage is the future context of an innovation as uncertain, ambiguous and complex. As well, this is the stage where organizations typically suffer from a deficit of actionable, “future-oriented” information, and lack the meaningful customer insights required to help them set/re-calibrate goals, make design decisions, and pursue innovations with confidence. “Fuzzy” also points to the scale and variety of unpredictable, non-linear drivers and inputs (behavioral, socio-cultural, political, environmental, economic, technological etc.) that may or may not combine to shape the future desirability, acceptability and feasibility of a given innovation.

Against a backdrop of such uncertainty and ambiguity, it is easy to understand why the front end’s role in innovation is first and foremost about learning in order to clarify and recognize an opportunity. This is because the focus in this first stage is on the methodical acquisition, synthesis, sharing, creation and expression of contextual relevant knowledge and insights that will ultimately help feed downstream foresight, opportunity mapping, ideation, prototyping and validation exercises.

The seven, clarifying phases of the fuzzy front end

The fuzzy front end of our strategic innovation process consists of seven phases:

  • Collecting customer insights (UCI)
  • Developing strategic foresights (DSF)
  • Sense making and opportunity mapping (SOM)
  • Ideation and concept development (ICD)
  • Rapid concept prototyping (RCP)
  • Customer co-creation (CCC)
  • Brand / market assessment (BMA)

Our extensive experience in studying and applying the principles of front-end innovation activities in over 100 companies has enabled us to identify and create certain best and next practices in each of these phases. From our descriptions below, the reader will take away a good understanding of the most effective frameworks, tools, and techniques for managing the critically important strategic fuzzy front end.

Phase 1: Uncover Customer Insights (UCI)

Managing the fuzzy front end begins with ethnographic research into unknown and unmet human needs. We do this for one reason: Innovative ideas transform behaviors, cultures and consumers. To truly understand these things – to know and feel them so they inspire organizations to move forward – the tool we employ to identify and communicate true insights is anthropology.

The study of human culture and society, anthropology’s territories of inquiry and expertise, are vast: myths, symbols, signs, tools, technologies, performances, rituals, communities, communications, languages and the multitude of ways we manipulate, create and innovate our selves and our identification with them.

To cover that territory and bring back a true understanding of, and appreciation for, customer needs, our anthropologists draw on ethnographic research. Ethnography is the art and science of telling stories about people’s stories. It’s how anthropologists study and tell stories about people in the spaces and places where they live, work, play, shop, eat and imagine the world around them.

Drawing on the inter-disciplinary research methods and social theories that frame every project, our teams seek to identify micro (tactical) and macro (thematic, cultural) insights that provide a critical lens and insider perspective on the beliefs, behaviors and attitudes that drive consumers and shape their cultures and communities.

For many, the anthropological approach to ethnography is a radical shift away from traditional market research. Ethnography reveals customer narratives whereas surveys produce only data. Ethnography relates dreams, hopes, histories, memories, fantasies, experiences and performances in everyday life. Focus groups, on the other hand, only offer opinions. Ethnography depicts real people in real situations, not in personas. And where market research creates speculation, ethnography informs and drives innovation.

The UCI phase typically includes four core activities:

  1. Design field research: With our clients and through stakeholder interviews and/or observations, we begin by identifying the critical questions, challenges and areas of inquiry that will frame our study. Here, we decide on methodology, timing, recruiting, location, market segment and other tactics to be used in our research.
  2. Conduct ethnographic research: Watching, participating, asking and being in the same psychic and physical spaces and places as consumers enables us to understand and articulate their stories. Those stories can be pursued in tandem with other research methods, at any stage in a project lifecycle and, depending on the scope of inquiry, quickly as required or over an extended period of time. The earlier that we are involved in that lifecycle, the better the outcome.
  3. Frame the insights. Working with strategists, designers, experience architects and other specialists, our formally trained, PhD-level anthropologists draw on social theories and field data to map patterns and identify strategic opportunities by suggesting new metaphors, contexts and behaviors.
  4. Organize the data and present the deliverables and/or workshops that will best socialize our findings and recommendations in our client’s organization. We pride ourselves on creating clear, concise and critical reports, documentary video, photographs and consumer profiles that will tell a deep story in an accessible way and that will begin to yield value immediately.

Phase 2: Develop Strategic Foresights (SF)

The primary goal of Strategic Foresight is to help individuals and organizations identify, understand, envision, and gain access to future “What if” contexts. This is done to avoid surprises, better understand their choices, and the potential long-term impacts of actions/inactions. At the front-end, strategic foresight is about “future proofing.”

Strategic Foresight generally seeks to define futures that incorporate changes in consumer behavior, motivations, values, and expectations. It also questions and explores the disruptive potential of technology and its impact on the design of new products, services, experiences, and business models.

Activities in this phase also aim to improve “situational awareness” and generate constructive inputs that enhance downstream sense making and opportunity-mapping exercises. This is achieved by developing a variety of future-oriented scenarios that help team members and organizations situate themselves “in the future,” set and define new goals and/or strategic objectives, and discuss their potential outcomes.

The primary tools and activities used in this phase typically include:

  • Environmental Scanning
  • Context Mapping
  • Scenarios Development
  • Scenarios Workshop

Phase 3: Strategic Sense-making and Opportunity Mapping (SOM)

Strategic sense-making and opportunity mapping is a convergent exercise that focuses on distilling and synthesizing all previously gathered knowledge, insights, and foresight so that key patterns, themes, and opportunity spaces can be defined, discussed, expanded upon and explored.

At this stage, the opportunities are described only in broad terms. Sheer idea productivity is more important than the articulation of low-level details given to ideas that have the potential to capitalize on “white space.”  Identifying “white space” opportunities necessitates exploration into areas adjacent to, but outside, your traditional business boundaries These white spaces are considered against the team’s understanding of organizational strategic intent.

An opportunity map is a tool that allows us to look at the competitive landscape through new lenses. Maps typically contain unique sets of attributes (i.e. customer insights, key signals and themes, drivers, etc) that help describe gaps and openings, spaces that have yet to gain the attention of competitors. Additionally, opportunity maps help innovation teams explore ideas within specific frameworks or guidelines that have been defined and validated by research.

In this phase, multi-disciplinary teams collaborate to organize and classify the information into opportunity spaces, which may include or be shaped by:

  • Unmet consumer needs
  • Newly-discovered consumer needs
  • Unarticulated customer needs
  • Broad customer aspirations
  • Key gaps
  • Value drivers
  • Distinctive intersections
  • Macro product & service-design trends
  • Key enabling technologies

Creating and refining opportunity maps include the five following activities:

  • Validating themes. A team discusses, debates, contrasts, and compares opportunity-space attributes against research findings and organizational/brand understandings.
  • Forming combinations. Roughing out and loosely articulating opportunities by combining insights, themes, and signals from research in ways that leverage and make sense of their attributes and potential.
  • Crafting thick descriptions. The opportunity space is clearly defined and articulated.
  • Testing. Opportunity spaces are tested against a point scale that is designed to maintain consistencies with the overall project and business objectives. Each map is also put through a “spark test,” that must inspire a minimum number of initial product ideas within a condensed time frame in order to be included.
  • Meta mapping and design. Once the initial/individual maps have been validated, described, and tested, the team steps back to place them in the right proximity to one another. This is done within a larger meta view, or perspective, that explicitly suggests a coupling of one or more opportunity spaces whose attributes may align, compliment and enhance one another.

Phase 4: Ideation and Concept Development (ICD)

The Ideation and Concept Development phase draws on all learning, discussions and feedback that took place in the previous 3 phases to elicit ideas that sit within, between, and adjacent to the previously defined opportunity spaces.

At the front-end, ideation and concept development is intended to be intuitive, open-minded and rough around the edges. Emphasis is placed on generating a large volume of high-potential ideas, defining real contexts of use and user experiences, articulating benefits, and describing how an idea/concept may align customer needs, organizational competencies, and business goals.  Early on, rational criticism is generally set aside as a follow-up or secondary activity specifically employed to “rein-in” emotionally charged ideation-and-concept development sessions.

Core activities in this phase typically include:

  • Group Sharing of initial ideas, which provides an informal time and space that help team members dump, vent, and share any ideas, abstract thoughts, and intuitions they developed during the previous phases.  All content is captured and circulated for review.
  • Ideation & Concept Re-Articulation, a follow up to the more informal venting of ideas. It methodically moves through opportunity spaces one-by-one and in combination, describing and re-articulating ideas and concepts. Here, more critical and rational lenses are applied. This process is usually complimented by collaborative “white-board” sketching, which helps improve communication and inspire the further building upon/=evolution of ideas.
  • Written Descriptions, which capture and describe the ideas from all previous ideation sessions in greater detail, for review and selection.
  • Idea/Concept Review & Selection: Prior to undergoing more intensive concept sketching, ideas and concepts are reviewed by a core team with a deep understanding of the research, business, and organizational goals, in order to determine the most desirable/feasible and compelling ideas. In some cases, a variety of metrics and filters are employed to further analyze the potential of an idea before moving forward.
  • Initial 2D Concept Sketching brings ideas to life through a variety of expressive techniques including: simple product sketches that communicate intended function and form, basic platform wireframes and information architectures, device and or interface mock-ups, maps, system and experience cycle diagrams. Initial, concept sketches may explore a variety of formal and functional approaches to one idea so that diverse qualities and characteristics can be expressed and discussed.

Phase 5: Rapid Concept Prototyping (RCP)

Prototyping is an iterative process that focuses on expressing and collecting information on requirements, and on the adequacy and functionality of innovative product ideas. Rapid prototyping and prototypes – as a process and as a tangible output/artifact- are an important data resource used during the stages of product development.

The goal of RCP is to leverage various, rapid-prototyping techniques to provide the right model / artifact types, which can be used for different testing procedures, e.g., internal design evaluations, and consumer co-creation and context labs. At the front-end, these techniques help reduce costs.

Idea Couture’s front-end prototyping typically manifests itself at three levels of output and fidelity, depending on the product / idea type and its associated testing requirements. These three levels are:

  1. Low-Fidelity Rapid Prototype, or a representation of an idea that goes beyond a sketch, yet is clearly unfinished and rough. A low-fidelity prototype helps bring people onto the same “conceptual page” by communicating the essence of an idea quickly and efficiently. The prototype is used to inspire questions, further discussion, and ideation, providing just enough information to obtain initial feedback for learning and decision-making.Low fidelity “paper prototypes” can be made quickly, at a low cost and with little effort. They usually explore and expand on ideas rather than reduce and evaluate them. They also demonstrate the bits and pieces of what could be, rather than what is or will be. Because of their low cost, paper prototypes can also be used to explore one idea from a variety of perspectives, playing with, suggesting and testing a multiplicity of potential directions.
  2. Mid-Fidelity Rapid Prototypes represent the gradual refinement of an idea. A medium-fidelity prototype incorporates feedback and knowledge gained from previous prototyping phases and focuses on increasing the execution of an idea by communicating its critical elements (forms, functions, and flows) in more detail.  A medium-fidelity prototype, while obviously incomplete, demonstrates more clearly the intended scale, style, proportion, functionality, and user experience of an idea.  While a low-fidelity prototype might seek to explore and even exaggerate these elements, a mid-fidelity prototype appears to be a more rational, focused, tangible, usable execution of the idea. It is also interactive enough to elicit more detailed and measurable feedback. Finally, a medium-fidelity prototype should help to expose/reveal mistakes early and cheaply enough so as to reduce risks and avoid increased development costs further down the road.
  3. 3D CAD Based Renderings & Modeling: Mid- to high-fidelity 3D renderings establish a very clear picture of an idea and can be almost infinitely manipulated/adjusted to communicate that idea within a variety of chosen contexts. Once created, a 3D rendering enables designers to quickly and efficiently visualize formal alternatives i.e. proportions, colors, textures, material finishes, branding variations etc. While not a physical representation, high-fidelity renderings offer scalable and compelling concept-visualization alternatives that help close the imagination gap among stakeholders. For additional hands on testing and evaluation, computer renderings can be outputted as more concrete 3D and costly rapid-prototyping processes like stereo lithography (SLA) or fuse deposition modeling (FDM).

Phase 6: Customer Co-Creation (CCC)

Customer Co-Creation Labs are exploratory sessions designed to identify and examine consumers’ behaviors, motivations, needs, opinions, attitudes and ideas. Conducted as informal peer-group conversations, and through a series of semi-structured individual exercises, they give participants an active voice in designing the brands, experiences and engagements that will best fit into and fulfill the context of their lives.

At the front-end, Customer Co-Creation Labs help bring customers deeper into the early stages of the innovation process, empowering them to help shape the final outcomes. These collaborative “hands-on” sessions enable critical learning to emerge from such direct input and interaction. The knowledge and insights captured from labs is fed directly back into the early stages of concept design and development, helping teams further clarify directions and make critical improvements. Additionally, Co-Creation Labs help mitigate downstream risks by placing ideas in front of customers early, in order to capture critical feedback.

Labs are usually planned, designed, and run by a multi-disciplinary team that includes anthropologists, designers, human factor specialists, and usability strategists. This inter-disciplinary approach guarantees that many unique perspectives, lenses, and personalities will help to connect with, observe, and extract a diversity of salient information and feedback from customers during and after creative sessions.

Core activities in this phase typically include:

  • Goal setting
  • Lab design
  • Co-creative facilitation
  • Post-lab reviews
  • Key insights & recommendations
  • Knowledge transfer

Customer Co-Creation Labs help to:

  • Uncover additional customer needs and motivations.
  • Re-evaluate assumptions and insights from previous research phases.
  • Obtain meaningful feedback about potential idea and design directions by placing early stage rapid prototypes in front of end-users.
  • Elicit highly personal customer-centric ideas through active hands-on co-creation.

Phase 7:  Brand And Marketing Assessment (BMA)

Idea Couture blends qualitative and quantitative tools, methods, and analysis in order to understand how new ideas/concepts may fit into existing brand narratives and market segments, as well as to develop insights about how innovations may help create, extend, or evolve a brand toward new markets. We do this by conducting Brand and Market Assessments.

It is important to take brand and market assessments into consideration early on, at the front-end, because they are integral to the successful introduction and adoption of an innovation. Such assessments identify and develop an understanding of how key or target customer segments are likely to perceive forthcoming innovations. They also determine if new products and services are aligned with existing brand positions, value propositions and customer expectations.

Idea Couture blends qualitative and quantitative tools, methods, and analysis in order to understand how new ideas/concepts may fit into existing brand narratives and market segments, as well as to develop insights about how innovations may help create, extend, or evolve a brand toward new markets.

Generally speaking, most innovations fall into one of two categories, disruptive or incremental. Disruptive Innovations are those that have the power to re-define and/or establish new markets, and introduce and shape entirely new brand personalities and narratives. If an organization is pursuing an innovation with disruptive potential, it will be important to identify and gain an understanding of how the potential attributes and value propositions will be perceived by customers, and how levels of acceptability/desirability etc. may in turn influence design and development considerations.

Incremental Innovations typically have to play within or slightly adjacent to existing market segments and integrate /align their attributes with ongoing brand narratives. At the front-end, it is still important to make sure that the introduction of a new product, service or experience does not deliver promises and expectations that have been met already.

Companies that don’t fully understand the complexity or try to ignore or otherwise underestimate the efforts and know-how required to navigate the fuzzy front end will pay a high price. In many cases, the new product will offer what the customer values or create value for the organization. Or, the resulting product may be perfectly viable in the marketplace, but will be missing the right positioning and strategy to promote adoption. Perhaps the greatest price paid will be a loss of the organization’s confidence in innovation and the opportunity cost associated with that loss.  Our strategic fuzzy front-end integrated innovation process with inputs and outputs that fit together within one holistic system can improve innovation success rate by four fold.

Innovation is a process, and while the introduction of a genuinely innovative product or service may be highly publicized or even glamorous, the process itself is driven much less by creative brainstorming or strategic planning, than by carefully managed and highly-sophisticated cross-disciplinary thinking and research.  In the end, getting innovation right has more to do understanding how to apply the opportunity algorithm to create growth in mature industries or create new ones.