The desire to structure innovation processes is driven by the attrition of NPD projects as they proceed toward commercialization, see the “Attrition of New Business Development Project” figure. On average it takes between 1-3000 ideas to create one commercially successful product. This low success rate has prompted much research on methods to improve NPD processes.
Because the success rate is so low there is considerable pressure to improve its efficiency by using structured best-practices. This of course is a worthwhile objective but unfortunately the tendency in R&D organizations is to structure all processes to the same degree. This is faulty logic as in the innovation process contains several steps that are processes in of themselves. Some process steps are straightforward and others have many feedback loops. The process rarely resembles a funnel diagram that is often used illustrate R&D processes, especially with respect stage and gate methodologies. An example of the complexity is shown in the “Complexity of the Innovation Process” figure.
Current consensus among best practice R&D leaders is that early stages of the R&D and ideation process be guided by high-level objectives and the work itself left unstructured. In contrast later steps in the commercialization process that consist of planning, manufacturing scale up, and consumer issues benefit from structured organized work processes that guide actions of individuals and functional groups. This is been reported by Perry Norling of DuPont in ChemTech, October 1997. Similar work done by a A.L. Page, done by surveying hundreds of organizations and reported in a paper presented at the PDMA conference in Chicago of 1991, shows the historic attrition curve was similar (see the “Historic Attrition Curve of NPD Projects” figure). The business need for improvement and appropriate structuring of R&D and NBD processes is overwhelming.