6 Top Innovation Methodologies You Should Know

Published on Jun. 29, 2024

Attempting innovation without relying on the right innovation methodologies is akin to constructing a house without a blueprint. While you might have the right materials and a suitable workforce, all efforts will likely result in chaos and inefficiency without a plan.

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The stakes are high: choosing an adequate methodology can significantly influence the success of a project.

This is why we provide a guide for the six top-performing innovation methodologies, including their definition, how they work, and potential limitations.

More specifically, our focus is on methodologies incorporating an innovation-driven, disruptive outlook that has been successfully applied to large corporations.

But that’s not all: scroll to the end of the article for some practical tips on how to choose the right one!

The top-performing innovation methodologies

1. Design thinking for innovation

This human-centered approach to innovation puts customers’ needs at the center of decisions.

Based on iteration for creative problem-solving, it prioritizes a deep understanding of user needs while promoting collaborative ideation processes and experimentation. The approach has many key proponents and influencers, including Herbert A. Simon (who first introduced the idea of design as a way of thinking) and the American consultancy and innovation firm IDEO.

How does design thinking for innovation work?

innovation methodologies_1_design thinking

  • It starts with empathy; companies must understand users’ needs, experiences, emotions, and challenges.
  • Next, define; articulate the problem based on the data collected in the first stage, forming a clear problem statement or design challenge.
  • It’s then time to ideate; generate a wide range of ideas that can bring potential solutions to the issue.
  • The prototype phase involves creating tangible representations of these ideas (sketches, models, digital prototypes, etc.).
  • Finally, test and iterate: evaluate prototypes to identify their pros and cons and refine the solution.

When put into practice, design thinking for innovation typically involves a less linear process so that different stages can coexist or certain steps can be paired up on an ‘on-the-go’ process.

Limitations

  • It can be intensive in terms of time and resource investment, particularly in the iterative phase.
  • The fact that it typically involves small, cross-functional, and highly collaborative teams means it can be challenging to scale for large organizations
  • Prioritizing the needs of end-users may mean results are misaligned with business goals and other stakeholders.

2. Agile innovation

An iterative, flexible philosophy to innovation that emphasizes collaboration, customer feedback, and rapid prototyping. At its core, it focuses on adaptability and feedback-driven progress as a recipe for success.

How agile innovation works

Agile innovation is based on the Manifesto for Agile Software Development, a document created by a group of developers in 2001 which cites the following four pillars to any successful innovation project:

  1. ‘Individuals and interactions over processes and tools’
  2. ‘Working software over comprehensive documentation’
  3. ‘Customer collaboration over contract negotiation’
  4. ‘Responding to change, over following a plan’

Described briefly, this approach typically involves creating cross-functional teams in charge of creating iterations (small, incremental steps that build on each other by incorporating feedback). As such, it prioritizes speed in course correction, prototyping, and decision-making.

Limitations

  • Its advocacy for minimal planning can make it difficult to predict project timelines or resource planning.
  • Promotes a ‘do-as-you-go’ philosophy that can limit documentation and measurements, preventing companies from accessing the benefits of measuring innovation.
  • While it works well for small teams and projects, scaling these practices can be challenging for large and complex organizations.

3. Open innovation methodology

This paradigm for innovation promotes exchanging technology, expertise, and resources both within and outside the organization.

Within the open innovation methodology, external and internal ideas and paths to market are all incorporated in order to advance technology and develop new products and services.

RELATED: Upgrade your Innovation Funnel: Introducing Open Innovation

The concept was popularized in the 2003 book Open Innovation: The New Imperative for Creating and Profiting from Technology by Henry Chesbrough, a professor at Harvard University at the time.

Developed to counteract traditional closed innovation models (where research and development are conducted internally), it was pioneered by initiatives such as the collaboration between Xerox’s Palo Alto Research Center (PARC) and Apple’s co-founder Steve Jobs in the 1970s. More recently, it’s possible to cite the Visa — Plug and Play synergies as a success story.

How it works

There are diverse pathways for implementing the open innovation methodology, but all involve actively seeking and integrating ideas, technologies, and knowledge from outside the organization. To do so, companies engage in partnerships, alliances, and networks with other organizations, all with the aim of bringing innovations to market.

Limitations

innovation methodologies_the art of choosing strategy

  • Companies might encounter internal operational and structural obstacles when integrating innovations.
  • Cultural resistance can occur within organizations due to a preference for traditional closed R&D processes.
  • A lack of well-defined strategic goals within the company can prevent organizations from aligning the external ideas and technologies they have access to with internal priorities.
  • Management of external partnerships can be complex without proper supervision, as they require significant efforts for coordination and communication.

4. Lean startup innovation

This innovation methodology focuses on shortening product development cycles and rapidly discovering whether a proposed business model is viable.

While the origin of this methodology can be traced back to Taiichi Ohno, an engineering executive at Toyota in the mid-20th century, entrepreneur Eric Reis later popularized it in the book The Lean Startup.

How it works

The core of the lean startup innovation is the Build-Measure-Learn Cycle. This involves building a minimal viable product (MVP), measuring its performance with real customers, and learning from the feedback, allowing companies to iterate and improve the product.

Based on direct feedback learning, companies then decide whether to pivot (make a fundamental change to the product or strategy) or persevere (continue on the current path).

Limitations

  • The lean startup methodology may not be suitable for certain industries, particularly those with longer development cycles or higher regulatory requirements.
  • The heavy reliance on customer feedback can be problematic if gathering processes are not correct (for instance, if the input ends up not being representative of the broader market)
  • A lack of clarity around MVPs might mean they’re not always easily scalable to fully developed products or services

5. Six Sigma

Six Sigma is a set of techniques and tools for process improvement and quality control. Initially developed by Motorola in the 1980s, it aims at improving the quality of output by removing the causes of defects and minimizing variability in manufacturing and business processes.

When applied to innovation processes, it can be employed to source innovation that generates measurable impacts.

How it works

Six Sigma offers a framework called DMAIC for optimizing business processes. However, when it comes to innovation, the DMADV Framework (Define, Measure, Analyze, Design, Verify) is applied. An approach designed for developing new methods or products, it includes the following concepts:

  • Define project goals and customer deliverables.
  • Measure by identifying attributes and risks that are critical to quality (CTQ).
  • Analyze design alternatives.
  • Design detailed and optimized methods or products.
  • Verify through testing and pilot runs.

innovation methodologies_method brainstorming

Limitations

  • Six Sigma offers a rigorous approach focused on efficiency, quality improvement, and avoiding deviations in processes. However, companies looking for dynamic and ground-breaking developments may find Six Sigma doesn’t provide what they are looking for.
  • The changes needed for applying Six Sigma might be met with resistance and an organizational culture that isn’t willing to adjust.

6. Stage gate methodology

Stage gate offers a structured approach to innovation by breaking the process into distinct phases separated by gates.

The framework relies on this structure to evaluate project progress and make decisions on whether to proceed to the next stage, modify the project, or terminate it. As such, it ensures products and services will pass through multiple approval processes before being launched.

How it works

This innovation methodology is divided into sequential stages and decision points called gates:

  • Stage 0 — Discovery: preliminary research and analysis are conducted to identify viable opportunities.
  • Stage 1 — Scoping: Initial ideas are refined to determine their feasibility and alignment with the company’s strategic goals.
    • Gate 1: The decision to proceed to the next stage is based on a solid business case (market potential, technical feasibility, resource availability, etc.) and a feasibility review. This decision often involves approval by executives and finance.
  • Stage 2—Development: Detailed road maps are developed to bring the selected concepts to life and create prototypes. When the prototype is finished, the project can move to the next stage.
  • Stage 3 — Testing and validation: Prototypes and concepts are tested and validated via internal and external validation (e.g., real user validation).
    • Gate 2: based on the results of testing and feedback, companies decide whether to continue to the final stage or make modifications.
  • Stage 4 — Launch and commercialization: the phase for scaling up production and preparing the market launch.
    • Gate 3 — Go/no-go decision: at this point, the focus is on evaluating the readiness for commercialization. It can be launched, postponed, or terminated.

Limitations

  • This procedure is more rigid than some of the innovation technologies we’ve mentioned in this article because it provides a highly structured approach. Companies looking to maximize speed, dynamism, or adaptability might prefer other, more exploratory approaches.
  • Resource allocation is performed after the project passes each gate so that delays can be caused if potential resource constraints are not managed correctly.
  • Placing feedback gathering in the late stages means companies may lose early opportunities to gather information about how products will perform and respond quickly to market changes.

Make the decision: The art of choosing among innovation methodologies

Maybe this sounds too obvious, but here’s a fundamental truth about how to choose the right innovation methodology: look beyond trends and buzzwords and focus on what your company truly needs.

The path toward innovation success can take many forms. Still, all fruitful initiatives have one thing in common: the companies and their strategic allies are truly aligned with the innovation efforts.

As such, it’s important to note that the limitations mentioned in this article are not necessarily inherent to the methodologies: what might suit one company may not be recommended for others at all.

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This is where the role of innovation experts truly stands out. These professionals are qualified to help companies navigate innovation’s complexities, including the choice of methodology and its later implementation. With their specialized knowledge, they are responsible for assessing the organization’s innovation maturity and recommending tailored strategies.

The result is companies can innovate with confidence and maximize their chances of success.

At Plug and Play, we work with corporations to boost their innovation projects. With more than 100 innovation programs around the world and more than 15 years of guiding our clients to success, we are known for adapting our services to our clients’ needs through custom programs, consultancy workshops, and other initiatives.

As specialists in open innovation, we can help you assess this framework’s potential for your company and guide your innovation journey to maximize your organization’s capabilities.


Looking for the right innovation methodologies for your company?Reach out to our innovation experts and find out more about our tailor-made services and programs.