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Give innovation investment, or give it death!

How to redesign innovation project management for better short-term efficiency and long-term resilience. Dr. Nick Milanovich, Director of ISG, has a tip: Milestones.

by Nick Milanovich, PhD

Milestones can be a transformative project management tool for developing innovation.

When used right, project milestones are like approaching new foods that look and smell unfamiliar when you’re hungry –try a sample before piling it on your plate in place of something you know you will eat and enjoy.  Basically, it’s a way for R&D professionals to slice big, risky innovation projects down into more bite-sized, executable micro-projects.
 

Taking an idea and developing it can be pricey and risky. There are just so many unknowns that can stall a project—from technical feasibility to commercial viability, to R&D capabilities. But those risks are less daunting when, rather than committing $100,000 to the successful development of an embryonic idea, there are built-in pivot points should the idea reveal itself to be unfeasible, or the project undoable. Again, it’s like taking a bite of a new food and saying “no thanks,” instead of loading it onto your plate, taking one bite, and then throwing it in the garbage.

Milestones in practice

Give innovation investment, or give it death!

The biggest stumbling block to investing in a new idea is its risk…

The biggest stumbling block to investing in a new idea is its risk… “It’s just an idea on paper!” you say. We at Xinova totally understand and we fully agree. This is why we break up projects into milestones, each with go/no-go decisions, and structure proposals as pay-per-milestone. Each milestone is the point at which we review data and decide whether to continue investing in an idea or whether our money is better spent elsewhere.

Our starting point is almost invariably an idea on paper. Is it a good idea? Who knows… Asking the innovator who cooked it up is like asking a mother if her child is beautiful. But if our customer sees promise in the idea, and IF it works, AND it’s worth the risk of exploring, then we create a development plan to test it out. Here’s an example of how one milestone will trigger the next.

Milestone 1: Can we make this stuff?

We designed a plan for a project where the goal was to create a chemical barrier that our customer can apply to their products. This barrier material doesn’t exist commercially, so we will need to synthesize it for the first time. Therefore, the logical first question is, “Can we make this stuff?” In addition, the data will hint at answers to future questions such as, “Would it be practical to do so at commercial scale?”

Milestone 2: What are the key characteristics of this stuff?

There are certain physical and chemical characteristics the material we’re trying to create needs to have for it to be practical. An example of this would be: at what temperature does this material melt at and at what temperature will it be destroyed? This will indicate whether or not the material will withstand our customer’s manufacturing conditions.

Give innovation investment, or give it death! Project milestones.

Milestones unblock innovation and clear the road for bold projects managed by an efficient process.

Milestone 3: Does it work as intended?

If the project makes it to this milestone, then everyone involved will be nervous with anticipation of the results –it’s the actual proof-of-concept! The outcome here is usually one of the following:

-The technology doesn’t work, so the project is shut down.

-The technology works, but is impractical or too expensive, so we shut it down.

-The technology works, and the customer wants us to do additional development, or is ready to bring it in-house.

Milestones are a great way to get approval for a bold project. Recently, a new customer who came to us was interested in one of our technologies, which was just an idea on paper, because it would give them a new manufacturing capability that would enable new products. We prepared a full development proposal complete with timing and milestones. It wasn’t GDP-of-a-small-country expensive, but it would require our contact to get a bunch of approvals draw scrutiny due to sticker price.

To enhance the proposal’s appeal and to reduce sticker shock, we broke up the work into milestones. The project contained clear go/no-go decisions at the end of each milestone, beginning with:  does this technology exist, and will it actually do the job that needs to be done? Costs of each milestone went along with the provision that the customer only has to pay through the current milestone. If it’s no-go, then we’re done; the customer isn’t on the hook for the rest of the project cost. If it’s a go, then we’re ready to move right into the next milestone.

Efficient via failure

“When I came to run my new food company one of my first priorities was to contact Xinova. Their work for me at my previous food MNC made them my first choice to work on some of our most challenging problems in changing the world of food. Their quick delivery of novel and creative technical solutions is unique, allowing me to manage costs and risk in a smarter and more strategic way. I believe Xinova’s partnership approach is the future of efficient innovation.” — CEO of leading food tech company

The fact is ideas are a dime-a-dozen. While many look like gold when they are shiny and new and untested, few will actually pan out as hoped. This is a fact of innovation, not an indictment of any R&D team’s ability. To distinguish the good from the bad—and then develop the good into commercially viable products– milestones should be installed to help you fail fast to a successful outcome.

“Wait… fail?” you may ask. Yes, fail, the other f-word. Finnish gaming company, Supercell has encoded failure into their corporate DNA to the point where they celebrate success with beer and failure with champagne:

“We’ve killed countless games at various stages of development. Usually they get killed after a milestone… We’d like to think that every failure is a unique opportunity to learn, and every lesson will ultimately make us better at what we do. That’s why we have a tradition of celebrating these lessons by drinking champagne every time we screw up. For us, it’s clear that releasing hit games means having to take big risks. And by definition, taking those risks means that you’ll fail more often than you’ll succeed. So whenever we realize that we haven’t failed in a while, it’s a sign that we haven’t taken enough risks. And that is truly the biggest possible risk for a creative company like ours.”

Resilient

The partnership we have with Xinova has focused on timeless key problems to deliver on-trend solutions. We are focused on delivering technical unlocks to sharply prioritized and clearly defined R&D problems that have eluded solutions via usual ecosystems. The partnership has enabled us to tap into thinking from very different industries, to find novel approaches to these evergreen opportunities and then adapt them for our applications.” – VR Basker, Nutrition Category VP, PepsiCo

With our long-term clients like PepsiCo, project milestones allow us to tap our idea bank should an early-stage project prove unfeasible, or a late-stage project hit a snag. We recently had one project that hinged on the implementation of nanofibers, which sound sexy, but having worked with them I knew that finding something economical enough and commercially available in the quantities necessary at scale would be a tall order. Companies who went into nanofibers are no longer pushing them; they aren’t seen as the magic pixie dust solution they’d once hoped.

At the first milestone, we tapped the global network and discovered after two weeks that no commercially produced nanofibers existed that would meet our technical specifications. Inventing a whole new technology was prohibitively expensive and well beyond the scope of the project. So we stopped—and pivoted to exploring other solutions waiting to be tested.

Proceeding along milestones builds resiliency into the process. Projects can advance past unforeseen setbacks later in the journey when all the stakeholders are satisfied with its progress and metrics up to that point. We had one project with Pepsi, for instance, that resulted in a pair of licensing deals after almost dying on the operating table at the last mile. After meeting every project milestone, we opened up a box of product samples at their headquarters that came out moldy. Disaster! But because of our process, we had the flexibility to go back and identify the problem, and convince our partners to give it another go. It turned out that changing the packaging we were using solved the problem immediately —the innovation actually worked and tasted great. Success! 

Milestones in practice

“We don’t guarantee that the idea will work, but we do promise to quickly find out whether or not it does so our customers can continue investing in development or kill it and move on. And I also promise the data will be good so you can make an intelligent business decision.” – Nick Milanovich

Customers are always interested in our concept development service. The statement above never fails to strike a nerve with them because they are used to internal projects taking forever or, sometimes, being forced to go through the motions of innovation with yet another cursed zombie project.

“Sometimes failure is a great inspiration. So, learning why we fail and getting to know fast whether something is viable or not is important. I think some of the more creative people won’t belabor an idea that’s not working. Alternatively, large companies tend to have a lot of projects which just drag on because their owners won’t give up.” – Austin Kozman, PhD, R&D Sr. Director-External Innovation at PepsiCo

R&D departments are full of smart people. They know that ideas are actually a dime-a-dozen and only by rapidly exploring a lot of them will you be able to occasionally find one worth real investment. To quote Thomas Edison, “To have a great idea, have a lot of them.” This is as true today as when Edison was stealing Tesla’s ideas.

We at Xinova specialize in wild ideas, and our global network generates many for our customers. For just one customer, over two years we received almost 800 solutions to challenges and have done concept development on ~10% of them. This meant evaluating ideas quickly and deciding whether to move forward or kill the dang things. For example, we killed that afore-mentioned materials project using nanofibers in under 2 weeks. At the other extreme, we successfully developed a new method for non-thermal pasteurization that took nearly 2 years, which is now ready for licensing.

 

Give innovation investment, or give it death! What does success cost?So, factoring in failure– what does success cost?

After they say, “Looks great!” the obvious next question from the customer is “How much does this service cost?”

Our response of, “That depends on the project,” might seem equally obvious, but it is the truth. Our projects have ranged from a few thousand bucks for a first prototype for a new puffed rice snack for Asian markets, to 6-figure projects that address non-thermal pasteurization, or inline sensing of particle sizes for manufacturing. Innovation comes in all shapes and sizes. If anyone promises a one-size-fits-all approach, they are scamming you.

Concept development might seem expensive, but consider: What would development cost a customer lacking internal expertise and the time, equipment, and knowledge to do the work? Is building that innovation infrastructure worth the investment in time and money to validate and develop just one or two ideas that could very likely not work?

The distributed innovation model is well positioned to get around this issue. One needn’t worry about filling your department with all sorts of equipment and expertise. Just knock down the walls and find what you need! Our network has members with all sorts of technical backgrounds who can do all sorts of things. Need someone with manufacturing experience in multiple industries to do a project in food and beverage, or micromachining expertise, or pulp and paper? We got you covered.

From here, the project is ready to launch. I have a whole other set of recommendations for how to pitch an innovation project like an entrepreneur. But if you have pushed a project through milestones, you’ll likely have already gotten adjacent business units’ buy-in.

*****

Give innovation investment, or give it death! | Nick Milanovich

The Speaking Scientist, Nick Milanovich, PhD is a rare combination of scientist, speaker, and presentations coach, with a head for marketing and sales. In addition to being Director, Innovation Services Group at Xinova, he helps other scientists and engineers communicate in a way that is meaningful to their sponsors, investors, and customers. Nick holds a PhD in biophysical chemistry and has published and presented on diverse topics such as clinical dentistry, cancer diagnostics, and quantum mechanical modeling of aerospace materials. Nick has guided countless scientists, engineers, entrepreneurs, and organizations with developing impactful presentations, investor pitches, and marketing materials in ways that resonate with their audiences. Nick has developed a reputation for exceptional results with start-ups, national and internationally recognized companies, and universities.

 

 

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