A strategy design model for innovation management named the Seven Circles of Innovation. This model highlights the fact that achieving innovation excellence involves a series of interrelated innovation process steps, based on sound innovation fundamentals at the corporate level and closely linked to the customer and market – all stressing the fact that achieving innovation excellence is not a question of focusing on innovation as a product, but as a process requiring an optimized corporate structure
Phase 1 – Idea generation
External surroundings are systematically scanned for ideas (e.g. via the internet, networks, competitors, other trades, etc.). There are clear objectives and criteria for idea generation, as well as formal procedures and systems for filtering ideas
Phase 2 – Evaluation and planning
A preliminary business case is formulated (strategy, market, technology and competencies), as well as early planning for the entire innovation project (including formulating milestones, risk assessment, formulated measures for the innovation project, resource allocation).
Phase 3 – Testing/prototyping
Innovations are always tested by means of prototypes, test runs, scenarios, etc., and simulation can result in rejection of an innovation or its iteration in the IMM process
Phase 4 – Business planning
An innovation project’s alignment with the company strategy is checked, and all functional areas (production, HR, sales/marketing, etc.) are included in the business planning. Objective criteria are combined with strategic consideration for funding innovation projects internally, co-funding them with external partners or funding them completely externally. Also, objective criteria are combined with the strategic considerations relating to the implementation model, such as external or internal venturing or the establishment of an internal project team.
The Five Circle of Innovation
Phase 5 – Implementation
Clear and structured procedures exist for the transition from the innovation phase to daily operation. There also exists a formal procedure with objective criteria for the final decision to invest, which considers factors such as finance, market, technology or a combination thereof. The final responsibility for the approval of the business plan/implementation plan is clearly fixed.