Facilitating The Internal Adoption Of Radical Innovation Concepts

Abstract

Radical innovation is a critical source for creating competitive advantage and value for potential customers. However, radical innovation has inherent characteristics that make a radical innovation project difficult to manage, such as: increased generativity – the aspect that describes how radical innovation outcomes are creative and novel, different than other radical innovation outcomes, and fundamental non-probabilistic uncertainty – uncertainty inherent to radical innovation cannot be mitigated using data-driven forecasting techniques. The increased generativity and fundamental non-probabilistic uncertainty characteristics of radical innovation presents challenges especially when a decision regarding the internal adoption for further development of a radical innovation concept needs to be made, as financial tools, such as Return On Investment (ROI) and Net Present Value (NPV) are widely used to evaluate and make a decision regarding the internal adoption of radical innovation concepts. The aim of this master thesis is taking a strategic design approach to design a tool, that facilitates the decision-making process behind the internal adoption of radical innovation concepts, while addressing the knowledge gap between the challenges of radical innovation, and the decision-making tools and evaluation criteria currently used. Literature review and field research, consisting of qualitative interviews with experts from academia and experts working in industry, was conducted to understand the context of the decision-making process behind the internal adoption of radical innovation concepts. The research phase revealed the knowledge gap mentioned above and insights that were used towards devising design criteria for developing a tool. Insights gathered from the literature review and field research led to the development of the Viability Decision Canvas, a tool that facilitates the decision-making process behind the internal adoption of radical innovation concepts. The Viability Decision Canvas is based on the Viability Model which describes viability as the main decision criteria when a radical innovation concept is evaluated by a company, where viability is modeled by desirability, feasibility and suitability. Viability Decision Canvas facilitates the evaluation and the decision-making process behind the internal adoption of radical innovation concepts by employing abductive reasoning in a Fast-and-Frugal decision tree format, that addresses the non-probabilistic uncertainty inherent to radical innovation. The Viability Decision Canvas, besides the decision-maker, involves other relevant people (e.g. designer, engineer, marketer, senior manager, etc.) in the decision-making process to ensure organizational alignment. Being simple and structured, the Viability Decision Canvas allows and encourages rapid adjustment to suit the specific context of the company and the context created by the radical innovation concept generativity aspect. Critical assumptions identified during the design of the Viability Decision Canvas were validated through a test in a company context, while the usability of the Viability Decision Canvas was tested in the same company context and in a role-playing test with peers. The feedback gathered was incorporated through iterations towards the final version of the procedure. The positive results of the Viability Decision Canvas evaluation, regarding the facilitation of the decision-making process behind the internal adoption of radical innovation concepts, show the potential value of the use of the Viability Decision Canvas to be implemented as a company routine.