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iii

Introducing Innovation Readiness Levels – A Framework to Evaluate

Innovation Efforts

Carl-Magnus Lunner Emelie Worrmann

Master of Science Thesis TRITA-ITM-EX 2018:568

KTH Industrial Engineering and Management

Machine Design

SE-100 44 STOCKHOLM

Presentation av innovationsniva er – Ett ramverk fo r att ma ta mognadsgraden av

innovation

Carl-Magnus Lunner Emelie Worrmann

Examensarbete TRITA-ITM-EX 2018:568

KTH Industriell teknik och management

Maskinkonstruktion

SE-100 44 STOCKHOLM

i

Master of Science Thesis TRITA-ITM-EX 2018:568

Introducing a Framework for Innovation Readiness

Levels – A Framework to Evaluate Innovation Efforts

Carl-Magnus Lunner

Emelie Worrmann

Approved

2018-06-07

Examiner

Sofia Ritzén

Supervisor

Mats Magnusson

Commissioner

Husqvarna Group

Contact person

Petra Sundström

Abstract

When developing new products, it is important to be able to evaluate their readiness as

this helps organizations manage three major challenges of product development,

performance, schedule, and budget. The National Aeronautics and Space Administration

(NASA) discovered this in 1990 and developed a nine-level framework to measure the

progression of technology development, Technology Readiness Levels (TRLs). The

framework has since then been adopted by many different industries, among them

OEMs. However, there are more aspects of the innovation process than just technology.

Research topics such as user centered design and business model innovation has lately

gained much attention, indicating that user and business aspects of the innovation are

important. Therefore, the purpose of his thesis was to propose a framework to evaluate

the readiness of business, user and technology aspects.

To do so, a case study was performed at the Swedish OEM (Original Equipment

Manufacturer) Husqvarna Group, a global producer of equipment for garden and park

care, as well as for the construction industry. A literature study was performed to create

an understanding of the current knowledge on the topic. Semi structured interviews were

used to investigate how innovation is performed at the researched company. The result

from these interviews was contrasted with the results from interviews at four other

Swedish OEMs, to increase external validity. Lastly the findings were validated through

focus group interviews at Husqvarna Group.

The case study resulted in the identification of important steps when developing viable,

desirable, and feasible products. From these, the nine most important for business and

user was identified and frameworks for business and user readiness respectively were

developed, along with attainment criteria for each level. The findings showed that the

TRL framework still holds relevance, however the attainment criteria were adjusted to

better suit OEMs. Together these three frameworks create the Innovation Readiness Level

(IRL) framework.

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Keywords: Technology Readiness Level (TRL), Innovation process, Design Thinking,

Lean Start-Up, The Innovators Method, Business Model Innovation, User-Centred

Design

iii

Examensarbete TRITA-ITM-EX 2018:568

Presentation av innovationsnivåer – Ett ramverk för att

mäta mognadsgraden av innovation

Carl-Magnus Lunner

Emelie Worrmann

Godkänt

2018-06-07

Examinator

Sofia Ritzén

Handledare

Mats Magnusson

Uppdragsgivare

Husqvarna Group

Kontaktperson

Petra Sundström

Sammanfattning

Vid utveckling av nya produkter finns det tre stora utmaningar i produktutvecklingen;

prestanda, tid och budget, därför är det viktigt att ständig stötta processen genom att

utvärdera projektets mognadsgrad. År 1990 utvecklade NASA en niogradig skala som

kan tillämpas som ett ramverk för att mäta mognadsgraden av en teknikutveckling,

Technology Readiness Levels (TRL), detta har sedan dess införts av många

industriföretag. När det kommer till innovation finns det dock fler aspekter än enbart

teknik att ta hänsyn till. Forskning inom användarfokuserad design och

affärsmodellsinnovation har fått ökad uppmärksamhet den senaste tiden, vilket

indikerar att användare och affär är viktiga aspekter inom innovation. Syftet med denna

studie är att föreslå ett ramverk för att utvärdera mognadsgraden utifrån ett affärs-,

användar- och teknikperspektiv.

För att genomföra detta gjordes en fallstudie på det svenska industriföretaget Husqvarna

Group, en global tillverkare av skogs-, park- och trädgårdsprodukter samt utrustning för

konstruktionsindustrin. För att skapa en förståelse av den befintliga kunskapen inom

ämnet gjordes en bred litteraturstudie. Semi-strukturerade intervjuer genomfördes för

att undersöka hur innovation hanteras inom Husqvarna Group. Resultatet från det

undersökta företaget ställdes i kontrast med intervjuresultat från fyra andra svenska

industriföretag för att skapa ett mer generaliserbart resultat. Till sist testades resultatet

genom validering med fokusgruppsintervjuer på Husqvarna Group.

Fallstudien resulterade i identifiering av betydelsefulla steg vid utveckling av en ny

produkt som ordnades kronologiskt. Vid varje nivå i skalan föreslogs en rad kriterier från

ett affärs- respektive användarperspektiv som ett produktutvecklingsprojekt bör uppnå

för att öka chansen att bli väl mottagen när den når marknaden. Resultatet visade även

att TRL-ramverket fortfarande är aktuellt och relevant, men uppnåendekriterier

anpassades för ett industriföretag. Tillsammans skapar dessa tre faktorer det föreslagna

ramverket Innovation Readiness Levels (IRL).

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Nyckelord: Technology Readiness Level (TRL), innovationsprocesser, Design Thinking,

Lean Start-up, Innovators Method, affärsmodellsinnovation, användar-fokuserad design

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Acknowledgements

We would like to thank our co-researcher and friend, Josefin Rosén, for all your help and

contribution when writing this thesis. We would especially like to thank you for making

this project so much more enjoyable.

The reason this thesis came to be is Petra Sundström, at Husqvarna Group. Thank you

for giving us this unique opportunity of being a part of your work and the warm welcome

to the company. Thank you also for your continuous support and guidance.

Thank you, Mats Magnuson, our supervisor at KTH. Your feedback and help throughout

this process has been invaluable.

Lastly, we want to thank everyone who gave us their time and shared their knowledge

with us. You are the ones that made this possible.

Carl-Magnus Lunner & Emelie Worrmann

Stockholm, June 2018

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Abbreviations

BMC Business Model Canvas

BRL Business Readiness Level

FEI Front End Innovation

IA Innovation Accounting

IRL Innovation Readiness Level

MVP Minimum Viable Product

NASA National Aeronautics and Space Administration

NPD New Product Development

OEM Original Equipment Manufacturer

TRL Technology Readiness Level

URL User Readiness Level

US United States

VR Virtual Reality

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Table of Contents

Abstract ......................................................................................................................................... i

Sammanfattning ....................................................................................................................... iii

Acknowledgements .................................................................................................................. v

Abbreviations ........................................................................................................................... vii

1 INTRODUCTION 1

1.1 Background ................................................................................................................. 1

1.2 Purpose ........................................................................................................................ 2

1.3 Delimitations .............................................................................................................. 2

1.4 Disposition .................................................................................................................. 3

2 DESCRIPTION AND DEFINITION OF INNOVATION PROCESSES 5

2.1 Defining Innovations ................................................................................................. 5

2.2 A Holistic View of the Innovation Process ............................................................ 5

2.3 Insight .......................................................................................................................... 7

2.4 Problem ....................................................................................................................... 9

2.5 Solution ..................................................................................................................... 11

2.6 Business Model ........................................................................................................ 13

2.7 Scale it ........................................................................................................................ 14

3 TECHNOLOGY READINESS LEVELS 17

3.1 What are TRLs .......................................................................................................... 17

3.2 TRL in Practice ......................................................................................................... 18

3.3 Research Questions .................................................................................................. 19

4 METHODS USED 21

4.1 Research Setting ....................................................................................................... 21

4.2 Research Design ....................................................................................................... 22

4.3 Data Collection ......................................................................................................... 23

x

4.4 Data Analysis............................................................................................................ 25

4.5 Validity and Reliability ........................................................................................... 26

4.6 Investigation Framework........................................................................................ 27

5 RESULTS & ANALYSIS 29

5.1 Innovation at Husqvarna Group ........................................................................... 29

5.2 Business ..................................................................................................................... 31

5.3 User ............................................................................................................................ 35

5.4 Technology................................................................................................................ 37

5.5 External Verification ................................................................................................ 40

5.6 Internal Validations of Findings ............................................................................ 43

5.7 Additional Observations......................................................................................... 44

6 TOWARDS A FRAMEWORK 47

6.1 Introducing Innovation Readiness Levels ............................................................ 47

6.2 Business Readiness .................................................................................................. 47

6.3 User Readiness ......................................................................................................... 49

6.4 Technology Readiness ............................................................................................. 51

7 DISCUSSION & CONCLUSIONS 55

7.1 Main Findings .......................................................................................................... 55

7.2 Practical Implications .............................................................................................. 57

7.3 Theoretical Implications ......................................................................................... 58

7.4 Further Research ...................................................................................................... 59

8 REFERENCES 61

Appendix A – List of Interviewees .......................................................................................... I

Appendix B – Internal Interview Guide ............................................................................... III

Appendix C – External Interview Guide ............................................................................ VII

Appendix D – Tentative BRL & URL Framework ............................................................ VIII

Introduction

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1 Introduction

This chapter introduces the study, it begins with a background of the field of study which results

in a purpose. This is followed by the delimitations of this study. Lastly the disposition of this report

is presented.

1.1 Background

Traditional Original Equipment Manufacturers (OEMs), such as Husqvarna Group, have

maintained the belief that if they can develop a technology, there will also be a user

demand and thereby business potential. However, developing a new technology does

not automatically guarantee business success, today more than ever, there are more

factors at play (Brown, 2009, p. 153; Teece, 2010). Innovation through user centered

design, i.e. Design Thinking (Brown & Katz, 2011) and Business Model Innovation

(Osterwalder & Pigneur, 2010, p. 15) has gained an increased interest, further implicating

there is more to innovation than just technology (Zott, et al., 2011). Countless product

effort failures are the result of too much focus on “technology push”, rather than a

“market pull” (Cooper, 1990). This is what the “human-centered-design” in Design

Thinking counteracts through empathizing with the users and their needs (Brown, 2009,

p. 39). Within an OEM the value creation process could be described as follows; they

develop and manufacture technology, make this available to their users, through their

business. It would therefore be reasonable to believe that all parts of this trifecta, business,

user, and technology, should be attended to during the innovation process.

When investing new product efforts this trifecta needs to be considered to increase the

chance that the offering is well received in the market. Established companies evidently

provide a value to their customers and larger organizations are usually experts of

incremental innovation, small improvements to existing products, serving the existing

customers and users (Christensen, 1997, p. xix). However, focusing only on incremental

innovation to keep up with their competitors does not provide for a sustainable business

(Furr & Dyer, 2014, p. 14; Kim & Mauborgne, 1999). A business also needs disruptive

innovation to sustain their competitive advantage in an evolving environment, but this

is complex and difficult to achieve (Chesbrough, 2004). If an organization manages to

introduce an entirely novel offering there are first-mover advantages (Christensen, 1997,

p. 128). There is a constant trade-off between serving the existing users with incremental

improvements within the core business and serving the investors with steady growth,

which requires radical innovation to attain new users (Christensen, 1997, p. 103).

Managers need to be able to operate these tasks simultaneously and both radical and

incremental innovation should therefore be a part of the product portfolio.

An important aspect of innovation activities, especially from a managerial point of view,

is to be able to measure and evaluate them (Adams, et al., 2006). Traditional managerial

Introducing a Framework for Innovation Readiness Levels

2

tools are not applicable on most innovation activates as they are characterized by a high

level of uncertainty (Furr & Dyer, 2014, pp. 62-64; Ries, 2011, p. 29). When assessing the

development of new technology one method stands out; Technology Readiness Level

(TRL), a method for evaluating the maturity of a new technology that was first developed

by the National Aeronautics and Space Administration (NASA) in 1965. The usability

and usefulness of TRL has made it a popular tool at many OEMs (Mankins, 2009b). The

use of TRL has proven to be an essential tool for improving communication and has had

a positive impact on innovation activities by objectively clarifying the matureness of any

given technology (Mankins, 2009a). However, as stated above, a purely technical view of

the innovation process is not enough to create a sustainable business, and a systematic

evaluation, similar to TRL, has not yet been created for user and business aspects. These

aspects are less tangible than technology, and existing metrics can give answers that are

ambiguous and difficult to interpret (Furr & Dyer, 2014, pp. 6-7). If a standard for the

evaluation of business, user and technology where to exist it would ease the

communication, help with hand over processes, and give managers a powerful tool to

assess innovation and distribute resources more efficiently.

1.2 Purpose

The purpose is to propose a framework for the assessment of business, user, and

technology readiness, and to find typical key steps associated with them. Therefore, the

progression of user, business, and technology readiness throughout the innovation

process at an OEM is investigated.

1.3 Delimitations

This master thesis was conducted by two master students at KTH Royale Institute of

Technology. The study was conducted over a period of 20 weeks at Husqvarna Group.

The interviewees were chosen together with a supervisor from Husqvarna Group,

because of time and budget restrictions all interviews were held in Sweden. Due to

confidentiality, data that can identify the respondents, the external organizations, and

new initiatives were removed. This was done to help respondents answer freely and

allow for a more open dialogue.

Introduction

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1.4 Disposition

Chapter 2 - Innovation Processes - This chapter presents an overall view of the innovation process

from a theoretical perspective. It focuses on the current theoretical knowledge of insight, problem,

solution, business model, and scaling. These are presented respectively.

Chapter 3 - Technology Readiness Levels - This chapter is an exposition of how the TRL framework

has impacted the industries who have adapted it. This segment will include the benefits and

challenges that accompany the use of TRL. The chapter ends with the presentation this thesis’s

research questions.

Chapter 4 - Methods Used - This third chapter describes what methods were used when performing

this study. Firstly, the research setting is presented along with an introduction to Husqvarna

Group. This is followed by the research design of this case study. Thereafter follows a detailed

description of the data collection and data analysis. Last is a discussion of the validity of the chosen

methods followed by the investigation framework.

Chapter 5 - Result & Analysis - This chapter presents the results of the study and analyzes these

findings. It describes what innovation looks like at Husqvarna Group at large. Followed by a

detailed description of the steps in business, user, and technology readiness, respectively. These

results are contrasted with an external study at other similar OEMs, investigating the same topic.

The results were later tested and validated through focus groups interviews at Husqvarna Group.

Chapter 6 – Towards a Framework - In this chapter the frameworks for the assessment of business,

user, and technology readiness respectively is introduced. The concept of Innovation Readiness

Levels is also presented.

Chapter 7 – Discussion & Conclusions - The last chapter of this thesis starts by presenting and

discussing the main findings. How the framework for evaluation of business, user, and technology

can be implemented and the practical implications of innovation readiness levels is discussed.

Following this is theoretical implications and suggestions for further research.

Description and Definition of Innovation Processes

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2 Description and Definition of Innovation Processes

This chapter presents an overall view of the innovation process from a theoretical perspective. It

focuses on the current theoretical knowledge of insight, problem, solution, business model, and

scaling. These are presented respectively.

2.1 Defining Innovations

There are as many definitions for innovation types as there are authors on the subject

(Garcia & Calantone, 2002). The fundamental principle is that innovation refers to a novel

offering that creates value (Nagji & Tuff, 2012). The authors of this thesis have examined

previous research and found that the following definitions of innovation are useful in the

present context:

• Incremental innovation is a relatively small change to a current product (Schilling,

2017, p. 48).

• Sustaining innovation is an improved product performance of established

solutions. It is a relatively small upgrade that improves what the mainstream

user has valued in major markets (Christensen, 1997, p. 39).

• Radical innovation is here regarded as very new and different from the previous

existing solutions and product offerings (Schilling, 2017, p. 48).

• Disruptive innovation is often, initially, an underperforming product compared to

existing available products but with a different value proposition, thereby

creating a new market (Christensen, 1997, p. 41). It could i.e. result in a lower

price or, be smaller, simpler and more convenient to use than previous solutions,

however, there is often a tradeoff on performance (Christensen, 1997, p. xix).

2.2 A Holistic View of the Innovation Process

The first phase of the innovation process is referred to as the Front End of Innovation

(FEI), and is defined as those activities that proceed a formal development process,

including testing of a products viability, feasibility and desirability (Markham, 2013;

Brown, 2009, p. 18). This phase is often referred to as fuzzy, due to the high levels of

uncertainty (Reinertsen, 1999). To resolve this, Koen et al. (2001) introduced five key FEI

elements; opportunity identification, opportunity analysis, idea genesis, idea selection,

and concept and technology development; to make this part of the innovation process

more tangible. The importance of having a well-structured FEI process cannot be over

stated as this streamlines the fuzzy process in two ways (Koen, et al., 2001). Firstly, by

determining the viability, feasibility, and desirability early, companies can prioritize


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developments with a higher likelihood of success (Markham, 2013; Brown, 2009, p. 19).

Secondly, if a problem is detected in the early stages of development, it can be resolved

faster and with greater ease (Thomke & Fujimoto, 2000). At the end of the FEI process a

problem has been discovered and verified, ideas for how to solve the problem have been

generated, and a concept has been developed and tested (Koen, et al., 2001).

Once a concept has been developed and tested the next phase is to enter the formal

product development (Koen, et al., 2001). When entering this phase most uncertainties

have been resolved and what remains is to develop a product that can be introduced to

the market. It is therefore suitable to use a streamlined process such as stage-gate

(Cooper, 1990) or agile methods (Beck, et al., 2001).

Before a product can be launched, the growth and value hypothesis must be validated

(Ries, 2011, p. 61). The value hypothesis ensures that the product creates value that users

are willing to pay for, the growth hypothesis tests if new users discover the product,

enabling growth. A business model surrounding the product needs to be formulated with

an overall strategy of how a firm captures and delivers value to their users (Teece, 2010).

It should consist of cost structure, value proposition, and user segment and acquisition

(Osterwalder & Pigneur, 2010, pp. 21-41). Defining the business model is an iterative

process that focuses on testing and validating a products value and growth hypothesis,

the solution to the problem must provide value to the targeted segment (Furr & Dyer,

2014, p. 144).

As hypotheses have become facts and uncertainties decreased, attention is directed

towards capturing and maximizing value, this is the last part of the product development

process, what Furr and Dyer (2014, p. 187) refer to as the scaling phase. Here, the product

or service offering is prepared for commercialization, studies have shown that well

received product efforts often have devoted considerably more resources to market

orientation activities than less successful efforts (Cooper, 1990). Because uncertainties are

lower in this part of the process there is a shift from entrepreneurial management towards

more traditional management techniques (Furr & Dyer, 2014, p. 189). This is one of the

busiest phases in the innovation process with more stakeholders involved and is

therefore characterized by a greater resource requirement compared to previous stages

(Koen, et al., 2001). The purpose of this stage is to identify and adopt suitable processes

with standardized, simple patterns that are scalable to the organization (Furr & Dyer,

2014, p. 197; Ries, 2011, pp. 187-188).

Furr and Dyer (2014, p. 30) have developed a method to solve problems that are

characterized by high uncertainty and transform them into successful innovation, The

Innovators Method, see Figure 1.


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Figure 1. The Innovators Method, adapted from Furr and Dyer (2014, p. 11)

The Innovators Method is a synthesis of several other methods and their implementation

in successful organizations, creating a good overview of the innovation process. For this

reason, the following exposition of theory will use this method as a springboard for

further investigation of the innovation process.

2.3 Insight

According to Koen et al. (2001) there are two sources of innovation, the emergence of an

idea or the discovery of an opportunity. However, ideas and opportunities do not just

appear, and a company cannot expect their users to tell them what they need, in most

cases they simply do not know (Brown, 2009, p. 41; Ries, 2011, p. 49; Furr & Dyer, 2014,

p. 109). Instead a company must try to understand what their users experience and find

new development opportunities (Furr & Dyer, 2014, p. 31).

To attain insights of new opportunities one must fully understand the situation of the

user. Design Thinking is a user centered product development method where insight and

user knowledge is a key element (Brown & Katz, 2011). The fundamental principle is that

the user is the expert in their field and it is the developers’ task is to understand the lives

of others. The design thinker meets the user in their environment to understand what

needs they have and what new values they could benefit from (Brown, 2009, p. 41). This

mindset has similarities with the Japanese term Genich Genbutsu, that the lean

manufacturing principle stresses, it translates to “go and see” and implies that a problem

must be seen to be understood (Ries, 2011, p. 86). By observing the user and their behavior

Insight Problem Solution Business

Model Scale It

Creativity & Ideation

Open Innovation

Design Thinking

Agile Methods

Lean Start-Up

Business Model Canvas

The Innovators Method


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one can learn from what they do and especially, what they do not do. The challenge is to

listen to the user and get them to articulate the latent needs they did not knew they had

and through empathy translate the observations into insights (Brown, 2009, p. 49). A

user’s behavior can never be right or wrong in the eyes of a design thinker, it is always a

meaningful learning (Brown, 2009, p. 43). These insights will be the core of the following

development of new products or services that will improve the life of the user (Ries,

2011, p. 81), thereby creating new ground-breaking innovations (Brown, 2009, p. 40;

Chesbrough, 2004).

To empathize the developer is required to spend time with the user and be observant of

their needs. Therefore, the first-phase of the development process is unpredictable,

unstructured and often chaotic, it is characterized by a high level of exploration to gather

understandings and insights (Koen, et al., 2001). Working within the front end of

innovation, firms also needs to explore and scan across technologies and markets to

identify and shape ideas and opportunities (Florén & Frishammar, 2012). By reaching out

externally, away from the firm’s boundaries, open innovation activities can and be a

source for ideas and opportunities and therefore be a valuable activity for a firm. Social

networks and relationships can support the creation with unique expertise and provide

creativity, novel inputs, and outside-the-box thinking (Florén & Frishammar, 2012). Open

innovation corroborate that internal ideas can be brought to market using external

channels and thereby adding new value to the current business (Lodish, et al., 2001, p.

84; Chesbrough, 2004). It also increases the sources of ideas, and thereby increases the

complexity in evaluating early-stage projects and the commercial potential (Chesbrough,

2004).

Throughout the many times complex process of gathering insights, there are two factors

at play that make successful innovation more likely. First, the product or service must be

targeted towards an appropriate market position and segment (Lodish, et al., 2001, p. 9).

The main question the developers have to ask themselves is “What am I selling to

whom?”. The segment is the intended users of the product and the positioning is how

the segment perceive the value of the offering compared to the competition on the market

(Lodish, et al., 2001, p. 4). Secondly, when an opportunity has been reviled, the overall

strategy of the project must be aligned with the business strategy (Bacon, et al., 1995).

This strategic alignment should reach from the concept development to launch and be in

line with the competence of the firm (Ries, 2011, p. 64). If the firm does not possess the

specific capabilities needed, the project could look for competence from outside of the

firm (Bacon, et al., 1995). By utilizing the resources and capabilities effectively the

company increases its chances of being able to position themselves to reach the intended

segment with the product or service.


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2.4 Problem

When an insight has been generated the next step is to formulate and verify a problem to

be solved (Furr & Dyer, 2014, p. 30). The definition of a problem is according to

Nickerson, et al. (2012) a deviation from a desired standard. All problems could be

reduced to one, or a combination, of these four interrelated conditions (Landry, 1995):

1. An occurrence in an organizational context which is percieved as negative.

2. When an individual or a group has minimal control over a situation.

3. A sense of willingness to change and invest in form of committing resources.

4. Uncertainty of an appropriate action to a situation.

Reis (2011, p. 37) stresses the importance of knowing that a relevant problem is being

solved, if the user does not want what you are making, the fact that it is on time and

budget is of little importance. However, finding a problem worth solving is often

difficult, and differentiating between what users want and the problem they are trying to

solve may be hard; i.e. someone may say that they want a car, but the problem they are

trying to solve is transportation (Furr & Dyer, 2014, p. 87). As discussed previously,

design thinking refers to this search for a problem as Empathy, that is, putting oneself in

the shoes of the user and experience a situation from their point of view (Brown, 2009, p.

49). By getting to know the user and their needs it is possible to identify problems worth

solving (Plattner, et al., 2015, p. 10). The user is an expert in their field (Brown & Katz,

2011) and the developer needs to reach out externally from the boundaries of the firm,

hence, open innovation is a valuable activity due to the external input and increased

amount of ideation sources (Chesbrough, 2004).

As stated above, finding a relevant problem is difficult, because the solution to the

problem needs to hold a viable business potential, offering a new or superior buyers

value (Kim & Mauborgne, 1999). A product that offers a radical or disruptive innovation

enables new markets, thereby making it difficult to analyze. Christensen (1997, p. 233)

notes that, “Markets that do not exist cannot be analyzed”, this is one reason why

companies get paralyzed whenever they enter a new market. However, when

Christensen says that a new market cannot be analyzed he suggests that cannot be done

using traditional market research. To solve this issue, a more experimental approach

must be used (Furr & Dyer, 2014, pp. 62-65). One way to identify problems that, when

solved, can add value to an organization is to ask the following four questions (Ries, 2011,

p. 64):

1. Do users recognize that they have the problem you are trying to solve?

2. If there was a solution, would they buy it?

3. Would they buy it from us?

4. Can we build a solution for that problem?


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The answers to these questions will give an early indication that a real problem has been

found, users are willing to pay for this solution, and that the problem can be solved. In

other words, the first indication of fulfillment of the design thinking trifecta, viability,

desirability, and feasibility (Brown, 2009, p. 19).

Another difficulty for larger companies is understanding the problem of a mass market,

this because they tend to focus on two things, responding to what their competitors do

(Kim & Mauborgne, 1999), and sustaining innovation by improving the experience for

the existing users (Bower & Christensen, 1995). However, managing different types of

innovation and having efficient processes for them is essential to obtain a sustainable

source of growth and a competitive advantage (Cooper, 1990; Florén & Frishammar,

2012).

When a problem has been found there is a risk that it does not fit the company’s profile,

and therefore is discarded. In some cases, this is a false negative; a project that seem

unpromising and does not receive further support, however, perusing it would have

yielded a profitable outcome (Chesbrough, 2004). Judgement regarding false positives

and false negatives are most likely to be done during this early phase of a development

process. The risk of dismissing a false negative is reduced by managing the innovation

portfolio with an innovation ambition matrix, see Figure 2. In an innovation ambition

matrix, the strategy is determined, and investment is made with regards to core, adjacent

and transformational innovation activities (Nagji & Tuff, 2012). It is important to note

that processes that minimize the number of false negatives also increase false positives,

therefore, many companies have conscious processes with policies that minimize the risk

of investing in false positive ideas (Chesbrough, 2004).

Figure 2. Innovation Ambition Matrix, adapted from (Nagji & Tuff, 2012)


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2.5 Solution

It is first when a problem is defined and understood that it can be solved (Furr & Dyer,

2014, pp. 111-112; Frishammar, et al., 2016). A key factor when developing a good

solution to a problem is to not settle for the first solution that appears, but instead create

as many different ones as possible, this is what Brown (2009, p. 67) refers to as divergent

thinking. He argues that the first step of any problem solving should be to create choices,

it is only when having done so that one can make choices. This is demonstrated in the

design thinking diamond, see Figure 3.

Figure 3. The Design Thinking Diamond, adapted from Brown (2009, p. 67)

Solutions to a problem can be generated within the company using simple methods, such

as brainstorming or idea jams (Ries, 2011, p. 248). One can also study the external

environment, both the immediate competition and other industries in the search for

analogies and inspiration to diverge the thinking process (Furr & Dyer, 2014, pp. 113-114;

Ries, 2011, p. 84). Collaboration with others, or what Chesbrough (2004) refers to as open

innovation, is also an important source for creative and novel ideas to create choices

(Bergendahl, et al., 2015).

When a diverse set of solutions have been created it is time to select the ones that best

solve the problem. Because of the amount of ideas, it would be impossible to thoroughly

investigate all of them; Furr and Dyer (2014, p. 117) propose a step by step process to

solve this. First, different themes, such as ease of use and high performance should be

identified and tested with potential users, this will give an indication of what the users

believe is most important. Next, the solutions are placed on a relevant spectrum, this

could be high technical risk or high cost, solutions on either end of the spectrum is then

investigated. This will ensure that a wide range of solutions are tested, and ensure that

the developer understand what type of solution the users want. Finally, leap of faith

assumptions regarding the solutions are formulated and prioritized based on which is

perceived to be most important for product success (Ries, 2011, p. 81).

Create

Choices

Make

Choices


12

Once these assumptions have been made explicit, experiments should be designed to

validate them. One such experiment, that has proven to be successful, is to build a

Minimum Viable Product (MVP), a version of the final offering that sufficiently can

validate leap of faith assumptions (Ries, 2011, pp. 76-77). Developing a prototype that

will test all assumptions makes it difficult to identify which assumptions are true and

which are not, it is important to “go narrow to really nail the solution” (Furr & Dyer,

2014, p. 125). Early MVPs may lack many features that will be essential later, it only needs

to be good enough to answer the questions asked. I.e. if one is examining the potential of

a technologically complicated product in its early stages of development, storyboards

and sketches may be a good MVP (Helander, et al., 1997, p. 372). Later MVPs may be very

similar to the finished product, as this will give potential users a deeper understanding

of its intended use (Furr & Dyer, 2014, p. 128).

It is important to stress that the purpose of prototyping is not just to validate

assumptions, it is also to improve on the product. Reis (2011, p. 76) refers to this process

of continuous testing and improvement as a build-measure-learn loop, see Figure 4,

where an MVP is used to create validated learnings.

Figure 4. Build – Measure – Learn loop, adapted from Ries (2011, p. 75)

In this process an MVP is built, this is used to measure data that in turn will lead to

learnings upon which new ideas can be generated. The focus here should not be to

execute all steps perfectly but rather to move through the process as quickly and

efficiently as possible (Ries, 2011, p. 76). Brown (2009, p. 17) also stresses this point by

saying “fail early to succeed sooner”. The goal of this process is to validate all leap-of-

faith assumptions and arrive at a solution that addresses the problem in a way that is

viable, desirable, and feasible (Brown, 2009, p. 19; Furr & Dyer, 2014, p. 137).

Another wide spread tool to manage the solution creation and evaluation process is the

stage-gate model (Cooper, 2008). In this process development occurs in a series of stages

separated by gates in which the project is evaluated against set criteria (Cooper, 1990).

The stage-gate model is an effective tool to increase efficiency with a focus on product

Ideas

Build

Product

Measure

Data

Learn


13

quality and market orientation, it also provides project evaluation throughout the

process.

2.6 Business Model

Any product, or service, requires a successful business model before it can become a

market success. A successful business model is defined as one that, delivers value to the

user, can derive a profit while doing so, and is hard to imitate (Teece, 2010). The definition

of a business model according to Osterwalder and Pigneur (2010, p. 14) is a rational way

of how an organization creates, delivers and captures value. Their tool, the Business

Model Canvas (BMC) is a simple method that provides a quick overall view by describing

9 building blocks of the business model; user segment, value proposition, channels, user

relationships, revenue streams, key resources, key activities, key partners and cost

structure (Osterwalder & Pigneur, 2010, p. 18). Defining the blocks in a business model

is an iterative process and the hypothesizes need continuous testing and validation with

the intended users (Sosna, et al., 2010; Ries, 2011, p. 49). A BMC is a simple model to

utilize for stakeholder to understand and discuss the business. This enables iteration of

the solution to make sure it is understood, appreciated and reached by the users

(Osterwalder & Pigneur, 2010, p. 15). Iteration, learning, and understanding are key

factors in this process and it is therefore important that the organization provides a

culture where it is possible to innovate and perform experiments continuously. (Furr &

Dyer, 2014, p. 59)

The business model should be developed to answer what Ries (2011, p. 61) refers to as,

“the two most important assumptions”:

• The value hypothesis – The product provides user value.

• The growth hypothesis – The users will discover your offering.

Answering these are a crucial part of any product development process. A systematic

approach to test the value and growth hypotheses and create validated learnings is called

Innovation Accounting (IA). In this process, learnings are generated by measuring how

well a business model performs in regards to the hypotheses through the gathering of

qualitative and quantitative user data. This will provide the developers with an

understanding of what works and what does not and thereby facilitate the decision of

whether to preserve an element of the business model or to pivot towards another

solution (Ries, 2011, pp. 150-154). To increase the accuracy of the validated learnings it is

important to test with the intended user segment (Ries, 2011, p. 49).

One very important aspect to get right from the beginning is pricing (Lodish, et al., 2001,

pp. 43-44). This is because if the price of an offering were to increase during its lifetime it

is human nature to perceive it as unfair. To get the pricing right, one cannot simply ask

the user what they are willing to pay for an offering, instead different prices should be


14

suggested to different people (Lodish, et al., 2001, pp. 27-28). A price elasticity study

should also be performed to investigate the effect of different price levels (Tellis, 1988).

The methods and amount of effort that is required when developing a business model

differs between sustaining and disruptive innovation. When companies develop

sustaining innovation they rarely need to develop entirely new business models,

however when handling disruptive or radical innovation, change is more dramatic (Yu

& Hang, 2010). Disruptive innovation is a risk and managers must be prepared for failure

and a look upon business model development as an iterative process that generates

learnings in the search for a viable product. However, this is often difficult as successful

organizations cannot tolerate failure in the sustaining innovation, and therefore

automatically find it difficult to tolerate failure regarding disruptive innovation,

although it is often inevitable (Christensen, 1997, p. 98). Another factor that may decrease

that amount of disruptive innovation is that traditionally organizations are often

occupied with competitive advantages and competitive benchmarking. This competitive

thinking tends to limit the opportunity for disruptive innovation, therefore Kim and

Mauborgne (1999) argue that the path towards market success should be to create

superior user value in both existing and new markets.

2.7 Scale it

When a product is fully developed the next step is to prepare it for launch, in other words,

scale it. There are three main areas to focus on when an innovation is scaled (Furr & Dyer,

2014, p. 190):

• Market – The product needs to generate enough attention and ligitmacy to reach

a large market.

• Processes – Processes must shift from dicovery to execution, to be able to

efficiently finalize the offering.

• Teams – Create product teams with the skills needed for scaling.

The reason for this change is that once the scaling of a product begins, the front end of

innovation activities has ended, and the development has entered a New Product

Development (NPD) process where the product is finalized (Koen, et al., 2001). In this

part of the innovation process, where efforts escalate (Bacon, et al., 1995), a stage-gate

model is regularly used because of its structure and effectiveness (Cooper, 2008). A

successful project is often characterized by the support of well-defined development

stages, that become more formal as the projects proceeds and there is an inflection point

when managers must shift from entrepreneurial management towards more traditional

management (Bacon, et al., 1995). This change is possible because uncertainties and

technological risk is reduced as the research and development proceeds (Koen, et al.,

2001).


15

To address the increased complexity and larger teams, managers must establish more

formal processes and tools for communication and coordination. The aim is to find a

formal approach with processes that have simple, standardized patterns that are easy to

scale and apply by team members in the organization (Furr & Dyer, 2014, p. 197).

However, when the tasks get divided and the amount of people that work on a product

increases it is hard maintain an innovation focus. To keep development in line with the

earlier efforts a product definition, containing business model and product functionality,

should be used (Bacon, et al., 1995).

The last step of the scaling process is to prepare the product for launch, this must be

aligned with the organization’s strategy and invest enough resources to support the

marketing and launch (Bacon, et al., 1995). Many product failures depend on lack of

market assessment and inadequate launch efforts (Cooper, 1990). This is especially true

for disruptive innovations and the author of Innovator’s Dilemma describes that a

disruptive technology should be framed as a marketing challenge, because the essential

key for success is to match the market with the technology (Christensen, 1997, p. 226;

Lodish, et al., 2001, pp. 1-2).

When a product has been launched, the adoption rate can be described using the

adoption lifecycle. In this, users are categorized by how early they adopt a new

technology, each category is then given different attributes that explain their adoption

behavior (Furr & Dyer, 2014, pp. 194-195). This theory describes that the first 15% percent

who adopt a new technology are likely to tolerate a product that may not be fully

functional. However, to reach the rest of the potential users, or “crossing the chasm”, a

reliable, fully featured product is needed (Christensen, 1997, p. 233).

Technology Readiness Levels

17

3 Technology Readiness Levels

This chapter is an exposition of how the TRL framework has impacted the industries who have

adapted it. This segment will include the benefits and challenges that accompany the use of TRL.

The chapter ends with the presentation this thesis’s research questions.

3.1 What are TRLs

All new technology development face three major challenges; performance, schedule,

and budget (Mankins, 2009a). Dependent on how these challenges are managed they may

have a large impact on the technology development, both positively and negatively. A

key tool in helping managers navigate these is the ability to assess technology readiness

in an objective and structured way. In 1974, NASA discovered this and assigned Stan

Sadin to develop a technology matureness framework, what later became the TRL

framework (Mankins, 2009b). Sadin’s initial framework consisted of seven levels, in 1990

the framework was expanded to include two more levels (Mankins, 2009b), these are

illustrated in Figure 5.

Figure 5. Technology Readiness Levels adapted from Mankins (2009b)

System Test,

Deployment & Ops

System/Subsystem

Deployment

Technology

Demonstration

Technology

Development

Research to Prove

Feasibility

Basic Discipline

Research


TRL 9

TRL 8

TRL 7

TRL 6

TRL 5

TRL 4

TRL 3

TRL 2

TRL 1

Actual system proven through successful system

and/or mission operations

Actual system completed and qualified through test &

demonstration in the operational environment

System prototype demonstration in the planned

operational environment

System/sub-system model or prototype

demonstration in a relevant environment

Component and/or breadboard validation in relevant

environment

Component and/or breadboard validation in

laboratory environment

Analytical and experimental critical function and/or

Characteristic proof-of-concept

Technology concept and/or application formulated

Basic principles observed and reported


18

In 1995, John Mankins published a white paper in which he defined attainment criteria

and descriptions to all nine levels. These along with the structure of the TRL framework,

as proposed by Mankins (1995) is presented below:

1. Basic principles observed and reported – Scientific research has led to observation

and reports of basic principles which has evolved to applied research and

development.

2. Technology concept and/or application formulated – Practical applications for the

observed basic physical principals is found and reported.

3. Analytical and experimental critical functions and/or characteristic proof-of-concept –

The most critical functions of the new technology is validated by using both

analytical and experimental methods.

4. Component and/or breadboard validation in a laboratory environment – The concept is

tested to assure that the technical elements can be integrated together and

achieve the desired performance, at a component and/or breadboard level.

5. Component and/or breadboard validation in relevant environment – The components

making up the concept is tested individually in realistic environment.

6. System/sub-system model or prototype demonstration in a relevant environment – A

model or prototype of the concept, not individual components, is tested in a

relevant environment.

7. System prototype demonstration in the planned operational environment – A prototype

is tested in the environment in which the final product will operate, in the

original NASA framework this meant to test the technology in space.

8. Actual system completed and “qualified” through test and demonstration in operational

environment – The technology is built to the specifications of the final product

and is tested in the operational environment alongside all systems it will interact

with.

9. Actual system proven through successful system and/or mission operations – At this

level the all technology development has been completed and the technology is

performing as intended in the real-world environment.

3.2 TRL in Practice

Immediately after being developed several US (United States) governmental agencies,

including the U.S. Department of Energy and the Department of Defense, developed their

own TRL scales based on Mankins (1995) work (Straub, 2015). The use of TRL has since

been adopted on a global scale, both in governmental and private industries (Mankins,

2002; Tomaschek, et al., 2016). One explanation for the widespread use of TRLs is its

proficiency as a communication tool (Mankins, 2002). Another reason is its use as a


19

general guidance for technology development and technology handover agreement

between stakeholders (Tomaschek, et al., 2016).

3.3 Research Questions

The theory in this chapter suggests that TRLs are a useful framework to evaluate the

readiness of technology, and that such evaluation can prove a powerful managerial tool

in the product development process. However, the current framework was developed

for NASA in 1990, it is therefore meaningful to investigate to what extent the framework

is relevant in the OEMs of today, hence the following research question:

RQ1: Which steps does technology readiness follow through an innovation process at an OEM?

In chapter 2 the importance of business and user aspects, alongside technology, are

discussed, but no previous research into the readiness of these two aspects exists.

Therefore, research question two and three were created to increase the understanding

the progression of business and user readiness respectively:

RQ2: Which steps does business readiness follow through an innovation process at an OEM?

RQ3: Which steps does user readiness follow through an innovation process at an OEM?

Lastly, evaluating the readiness of an innovation may be difficult. A framework to

perform such evaluation in a meaningful way will therefore be proposed, based on the

insights gathered when investigating the three research questions above.

Methods Used

21

4 Methods Used

This third chapter describes what methods were used when performing this study. Firstly, the

research setting is presented along with an introduction to Husqvarna Group. This is followed by

the research design of this case study. Thereafter follows a detailed description of the data collection

and data analysis. Last is a discussion of the validity of the chosen methods followed by the

investigation framework.

4.1 Research Setting

Husqvarna Group routinely uses TRL to measure the progress of innovation initiatives,

however, measuring only technology has been observed as a concern in the product

development process. To address this issue, Husqvarna Group commissioned this thesis.

Supervision was conducted by Prof. Mats Magnusson, Professor Product Innovation

Management at KTH Royal Institute of Technology, and Dr. Petra Sundström, Director

Idea and Innovation Management at Husqvarna Group.

Another thesis Evaluating Innovation Readiness – A Case Study, with the same supervisors,

was written alongside this one by Josefin Rosén. The two theses have examined the same

subject but with two different purposes. Because of the similarities the authors of these

have collaborated closely, conducted the interviews together, and have, to some extent,

had a shared literature search process.

Husqvarna Group

Husqvarna Group was founded in 1689 in Sweden and is today a global leader in outdoor

power tools, innovative products for forest, park and garden care, as well as cutting

equipment for construction and stone industries. The Group is the European leader in

garden watering products. The different offerings are divided into four different

divisions; Husqvarna, Gardena, Consumer Brands, and Construction; all targeted

towards different user segments. Husqvarna Group has a global presence with

approximately 13 000 employees in 40 countries. Distribution is done through a dealer

network, comprised of both dealers and retailers, spanning over more than 100 countries.

External Organizations

Data was also gathered from other OEMs, the purpose was to verify the result and

thereby strengthen the external validity (Yin, 2009, p. 34). Two of the companies were

food producers within the Fast-Moving Consumer Goods (FMCG) industry the other two


22

produces electronical products and systems, targeting themselves to both consumers and

professionals. Below, see Table 1, is a list of the companies that participated.

Table 1. External companies participating in the study

Alias Company Description

Company A International producer of food

Company B International producer of consumer electronics

Company C Global multi-industrial producer of electronic products and services

for consumers and professionals

Company D International producer of food

Because Husqvarna Group and the other investigated OEM’s products are sold through

retailers or a dealer network, it is necessary to distinguish between customer and user.

Their customers are their dealer network; hence, the terms customer, dealer, and retailer

will be used interchangeably throughout this report and refer to the dealer network. The

term user, consumer, as well as end-customer, refers to whomever uses the product.

4.2 Research Design

The authors of this thesis departed from the assumption that the TRL framework gives

an accurate understanding of innovation readiness. Instead, they investigated whether

mapping the evolution of user, business, and technology readiness could reveal a more

holistic framework. To this end an exploratory research methodology was chosen, aiming

to develop a framework for the readiness progression of these aspects by examining and

analyzing the innovation process at Husqvarna Group (Kothari, 2004, p. 37; Stebbins,

2011, p. 2).

On an overall level the thesis was conducted with a system approach, investigating from

both a practical and scientific standpoint with the help of literature and case studies

(Arbnor & Bjerke, 2009, p. 179). The ambition was to understand and interpret the

interdependent and interrelated factors, which creates a system within this field. The

system view framework is an interdisciplinary way for the researchers to extract new

knowledge to create a result, in this case, practical steps and ways of working.

An introductory study was conducted using abductive research to detect patterns and

increase understanding (Alvesson & Sköldberg, 2008, p. 42). Because of the exploratory

nature of this phase this was done using unstructured interviews (Robson, 2011, p. 289).

Methods Used

23

This was followed by a broad literature study that identified the three important aspects

in product development and the scope of the thesis; business, user and technology.

The previous steps revealed three topics that were thoroughly examined to formulate the

research questions. The literature study together with the abductive research led to a

selection of the research method, a holistic single-case study, an appropriate design when

contributing to knowledge and theory building through the study of a single case (Yin,

2009, p. 40). It is a suitable method to find answers to specific how and why questions (Yin,

2009, p. 22). The contextual conditions in this research are OEMs and the case is

Husqvarna Group.

The data was collected through semi structured interviews (Robson, 2011, p. 280) with a

panel of experts (Okoli & Pawlowski, 2004). The experts were employees at the

researched OEM, working with product development at different phases of the process.

External validation of the findings in this thesis was conducted by gathering data from

four other cmpanies companies. The external companies were selected based on the

context of the study, OEMs, and the similarities in their product development and

innovation process. Selection of interviewees was done with the help of supervisor Prof.

Mats Magnusson; all interview subjects were active within innovation management in

different positions and segments. A complete list of all interviewees, internal and

external, can be found in Appendix A – List of Interviewees.

Based on learnings from the literature and the empirical data, tentative answers to the

research questions was formulated. These were presented in two focus group interviews

at the researched OEM and the attendees were asked to discuss the findings and apply

them to two projects, one in each interview, that they had recently worked on. The two

different projects had reached different levels of matureness and were therefore suitable

test objects. The purpose of this exercise was to validate the findings and strengthen the

practical implications of the research.

4.3 Data Collection

An introductory study was performed during the initiation of this thesis to increase the

authors understanding of the research area. Unstructured informal interviews were used

for this phase, that is taking the opportunity as it arises to discuss the research area with

someone who possesses relevant knowledge (Robson, 2011, p. 289). Because of the

spontaneity of this technique recording the interview is not feasible, instead detailed

notes were taken soon after the interview.

Following the introductory study, semi structured interviews were made and screening

of documentation to collect data for the case study (Robson, 2011, p. 280). The first round

of interviews was conducted with employees at Husqvarna Group, working with the


24

innovation process. The interviewees were chosen to create a panel of experts that could

give stake holder knowledge regarding innovations projects.

When selecting the panel of experts, choosing a homogenous group who are primary

stakeholders with an interest in the research target is suitable (Hsu & Sandford, 2008;

Keeney, et al., 2011, p. 48), and when the panel of experts is homogenous, ten to fifteen

subjects is sufficient (Hsu & Sandford, 2008; Skulmoski, et al., 2007). In compliance with

this, a panel of thirteen experts was selected following a five-step process suggested by

Okoli and Pawlowski (2004). Of these, twelve chose to participate and one interview was

held with each of them.

Data collection from the four external organizations was also performed using semi

structured interviews with one respondent at each company. This was done to

understand what results are specific to Husqvarna Group and which is more

generalizable. All external interviewees were innovation managers.

All interviews were structured using a funnel model, starting with broad questions,

followed by more specific ones to narrow down the scope. The final part of the interview

was spent clarifying answers and resolving any ambiguity. An interview guide was used

for the internal interviews, see Appendix B – Internal Interview Guide , this was modified

slightly for the external interviews, see Appendix C – External Interview Guide.

Before the interviews, all respondents received a one-pager, explaining the topic and the

purpose, attached to this was the was the interview guide. They were promised

anonymity and a chance to review the result and revise their answers before publishing.

The interviews were approximately 60 minutes long. All interviews were conducted in

Swedish, except for interview 4 which was held in English. To properly analyze the

results all interviews were transcribed, apart from interview 14, which instead was

summarized in detail directly following the interview.

Data were also collected through two different focus group interviews, to validate the

findings of the study. This was done together with key stakeholders from previous

innovation initiatives at Husqvarna Group. During the focus group interviews each

incentive was discussed and evaluated based on findings regarding business, user, and

technology readiness within the project. The interviews were recorded with the

permission of the participants and the written results, such as post-it’s and whiteboard

notes, were saved and documented.

The data collection process and the three phases it consists of is visualized in Figure 6

below.

Methods Used

25

Figure 6. Visualization of the data collection process

4.4 Data Analysis

The data analysis began by coding the transcripts of the interviews, this was done

according to the following structure:

1. If data is related to a step in the process

2. If data refers to when a method is preformed

3. If data refers to what methods is preformed

4. If data is surprising or interesting and may prove relevant to 1, 2, or 3

To gain objectivity to the data, the transcripts were coded by two researchers separately

and then compered, any ambiguity was discussed and resolved. The codes were then

transferred to a separate datasheet and analyzed by grouping similar statements and

categorizing them according to the three sub-categories identified earlier; business, user

and technology. The resulting steps were then summarized and sorted in chronological

order, from beginning through end of the innovation process. The analysis was made by

contrasting the results with the literature study. In the next phase, the researchers

summarized the gathered steps into nine levels, for business, user, and technology

respectively, they considered to be the most relevant in the innovation process.

The external data collection went through the same process and were later compared to

the outcome of the internal data collection. Similarities and differences are stated in

section 5.5.

Phase 1:

Internal

Interviews

Identification of which steps Business, User and

Technology Readiness follow during the innovation

process

Phase 2:

External

Interviews

External verification of

Business, User and Technology Readiness steps

Phase 3:

Internal

Workshops

Identification of the order in which the steps progress

for Business, User and Technology respectively?


26

The data from the focus group interviews were analyzed by reviewing the order of the

steps and comparing the result between workshops and previous findings. The data were

also compared with findings from the exposition of theory.

4.5 Validity and Reliability

The quality of the research design used in this thesis was tested along four different

dimensions, construct validity, internal validity, external validity, and reliability (Yin,

2009, p. 34). Construct validity was addressed by using multiple sources of evidence,

establishing a chain of evidence, and allowing key informants to review drafts. The

conclusions drawn from the research was validated through two internal workshops. By

performing pattern matching, comparing predicted outcomes with empirically based

ones, the internal validity was tested (Yin, 2009, p. 116). The External validity was tested

both by comparing the results with theory, and by performing four external interviews

and comparing the results. Finally, the reliability was tested by creating a case study

protocol and establishing a case study database. The tests and case study tactics are

summarized in Table 2.

Table 2. Case study tactics used to perform four design test, adapted from (Yin, 2009)

Test Case Study Tactic

Construct Validity

Multiple sources of evidence

Establish chain of evidence

Key informants reviewing the draft

Validation of conclusions through focus group interviews

Internal Validity Pattern matching

External Validity Exposition of theory

Replication logic through external data collection

Reliability Case study protocol

Case study database

To reduce objectivity when coding this was done by two researchers separately and later

compared, as discussed in section 4.4. The result was analyzed by both researchers

together.

All the interviews, except one, were held in Swedish. The analysis of the data was

therefore made in Swedish, to achieve as reliable results as possible. After the analysis

was made, the quotes found in chapter 5 was translated. There is always a risk when

translating quotes as the interviewee may be misinterpreted. To avoid misunderstanding

Methods Used

27

of quotes, each quote was translated by both authors together. A draft of the result was

later shared with the interviewees who got the chance to amend their translated quotes.

4.6 Investigation Framework

An investigation framework was created to achieve a greater focus on the data that is

relevant to answering the research question. In collaboration with the industrial and

academic supervisor three sub-categories were identified; business, user and technology.

These also became categories within the investigation framework and are defined below.

• Business – Business development within innovation activities refers to all those

activities that infer either a cost or an income to the organization. Included in this

are; user segment, value proposition, sales channels, user relationships, revenue

streams, key activities, key resources, key partnerships, and cost structure

(Osterwalder & Pigneur, 2010, pp. 16-17).

• User – The user is the person who uses the innovation. The user aspect of

innovation activities are those activities that investigate the need for a new

product or service and whether it is desirable.

• Technology – Technology are the parts, components and mechanics that a product

or service consists of. Within innovation activities, technology development is

the creation of a product that is feasible.

Results & Analysis

29

5 Results & Analysis

This chapter presents the results of the study and analyzes these findings. It describes what

innovation looks like at Husqvarna Group at large. Followed by a detailed description of the steps

in business, user, and technology readiness, respectively. These results are contrasted with an

external study at other similar OEMs, investigating the same topic. The results were later tested

and validated through focus groups interviews at Husqvarna Group.

5.1 Innovation at Husqvarna Group

In the beginning of all interviews the interviewees where asked to explain what the

innovation process looks like. The answers differ somewhat between the different

interviews as the respondents work with diverse areas of the innovation process and

within different parts of the company. As a whole, however, they provide a holistic view

of the innovation process at Husqvarna Group.

There is an established stage-gate model for the development of new products called the

Product Creation Process (PCP). However, this process does not focus on the front-end

of innovation and no formal process and methodology exists to fill this void. Instead

different departments and people tackle this problem differently, making the innovation

performance dependent on the culture within the development teams as well as

individual skill. There is a separate division focusing on trend scouting and outlook, who

are currently developing a FEI process. An activity that according to Koen et al. (2001)

will enhance their overall innovation performance. The later stages of the PCP, taking a

concept and transforming it into a finished product, are well defend and have proven

successful through continuous use of the process throughout the organization.

To structure when to perform what activities Husqvarna Group uses the TRL framework.

This helps them to communicate project readiness and thereby increases their control

over performance, schedule, and budget (Mankins, 2009a).

Below follows an overall description of how Husqvarna Group structure and perform

their innovation activities.

When the interviewees were asked to draw the innovation process, as they see it, most

agreed that it started with the identification of an opportunity, in line with what Koen, et

al. (2001) describes as the beginning of FEI. An opportunity can present itself in many

ways, but the most common ones are, a wish from the market, a change in laws and

regulations, or the realization of a gap in the product offering.

“There’s a wish from the market, but it could also be a regulation that requires an update of a

product or the development of a product. That could be one of the inputs, it could also be that we

find a gap in the product offering where we might not have seen an explicit input from the


30

market, because the market hasn’t realized the need, but we have identified the business

opportunity”

- Interviewee 8

One interviewee also stressed scientific discovery as an important catalyst for innovation,

especially the discovery of new materials. These kind of discoveries forces people to

consider the new possibilities it can lead to.

“Technology [breakthroughs] almost always come from a change to a material in some way”

- Interviewee 2

The next phase is the idea phase, however, some respondents argued that this was the

first step in the innovation process. Here the opportunity is translated into more tangible

ideas taking business user and technology aspects into consideration. Techniques such as

brainstorming, and customer journey workshops are frequently used. As a source of

internal open innovation there are two different innovation reports that anyone within

the organization can submit. One more formal that goes through an intellectual property

(IP) engineer and one less formal, used in one of the divisions, where ideas are collected.

It is important to note that generating too many ideas may increase complexity as the

ones with commercial potential become more difficult to identify (Chesbrough, 2004). A

common viewpoint at Husqvarna Group is that there are plenty of ideas to choose from

and producing new ones is rarely a problem.

“We have considerably more ideas than we have capacity to develop”

- Interviewee 2

The most promising idea is selected, often based on business potential and a strategic

prioritization, a product owner is tasked with developing it further. A business case

including factors such as project costs, expected outcome, and initial economic forecasts

such as price, revenue and Return on Investment (ROI) is also made. This is presented to

managers for a go/no go decision at a gate called Project Proposal.

“A business case must be developed. That’s why we have the Project Proposal. […] It could

include how fast the payback is on the project itself, that the project could continue to build the

brand, and that there is a strong user need and we have a possibility to grab market shares. If

those criteria are met the project moves forward.”

- Interviewee 11

Once a project has been approved it enters the primary development phase. This is where

different concepts are being built and tested. This could span from the development of

novel technology to restructuring existing components to create new value propositions.

The purpose of this step is to investigate and validate the feasibility, viability and

desirability of a new product. Interviewee 12 describes this process as follows; this

process begins by developing several concepts, the most promising concepts are

identified and built as simple prototypes. The prototyping process is performed

iteratively with several simple prototypes in the early stages, which through a process of

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testing and continued development becomes fewer and more complex as time passes.

This way of working is similar to the build-measure-learn principle described by Ries

(2011, p. 47) as it tests the hypothesis as quickly as possible with an MVP and thereby

minimizing waste. The process interviewee 12 describes, ends with a validation of the

products through field tests with the intended users.

Striving for a balance between feasibility, viability, and desirability with a holistic view

is both challenging and rewarding (Brown, 2009, p. 19). Balancing the user experience

and generating profit is not an easy process and different organizations may prioritize

one factor in front of another. At this stage, when feasibility, viability and desirability all

have been verified, a decision of whether this project should become a real product needs

to be made. At Husqvarna Group, this is performed through an Investment Request. This

is similar to the Product Proposal, but at this stage a much higher level of accuracy is

required.

“We present it to an investment committee, the management. Dependent on the amount of

money, higher management gets involved. Here we look at, what’s the revenue going to be,

what’s our pay-back, how good is the business case, and is it within our overall strategy plan?”

- Interviewee 3

If the investment is granted the project moves into the next phase of the PCP, a more

formal New Product Development (NPD) process, following a stage-gate model, a

process first suggested by Cooper (1990). In this process the concept is transformed into

a product that is ready to be launched on the market.

The final step in an innovation process is the launch of a new product. The interviewees

share the opinion that an innovation project is successful when it results in a profitable

product that performs its intended purpose well and provides value to the user.

“…it’s getting feedback from the market, it can’t really be anything else than when it creates a

‘buzz’ among the users in some way. That in combination with it selling…”

- Interviewee 8

This was a holistic description of how innovation activities are performed at Husqvarna

Group. The following sections will provide a detailed view of how they innovate with

regards to business, user, and technology respectively. The steps that have been

identified are bold in the text and summarized at the end of each section.

5.2 Business

Business is one of the important aspects in the previously mentioned trifecta regarding

new initiatives, see section 1.1. During the interviews, most of the respondents reported

that in the beginning of the innovation process on must first identify a business

opportunity. The project must be profitable in some way, either by itself or adding value


32

to another profitable product, hence the importance of a BMC to rationalize the efforts

(Osterwalder & Pigneur, 2010). For a project to be realized, a business opportunity must

be present.

“At the end of the day, everything is about money, we should make money from the product, or

possibly support another product that we make money on. Otherwise we shouldn’t do it”

- Interviewee 3

During the development process one needs to take the surrounding circumstances into

account. This could be changes in laws and regulations or global trends. At Husqvarna

Group there is a team assigned to scout the business environment, making sure the

company is prepared if there were to be a sudden change in the market. This is an

important way to identify possible business opportunities. A business opportunity can

also be found by identifying a gap in the product portfolio.

“So, our process is basically about always working from a technology, user, and business point of

view, keeping track of markets and trends that are currently affecting us”

- Interviewee 1

When the opportunity is understood, the idea generation begins. Interviewee 12 state

that a wide brainstorming activity within the group is a good way to start. Ideas are

selected based on input from the user and converged towards a concept. Cross-functional

workshops is another way to find ideas, staff from different divisions meet and discuss

the problem area and segment.

The company has an overall organizational strategy, where they want to be and how to

get there. An ambition matrix, consisting of core, adjacent, and transformational

innovation, shows where investment should be made. The focus is within the core

business with only some funds allocated to adjacent innovation. Transformational

innovations are less prioritized and financed through an innovation fund, as stated by

Interviewee 1. In contrast, Nagji and Tuff (2012) write that there is a golden ratio of how

to distribute funds for different types of innovation. In this theory Husqvarna Group

would be categorized as “A leading consumer goods company” and a fruitful investment

division would be the following: 80% core, 18% adjacent and 2% towards

transformational innovation. The innovation ambition matrix correlates with the

company’s strategic road map, which should be taken into consideration when planning

the product portfolio, the product development projects should be adopted and aligned

accordingly to the strategic fit.

“We have a road map from 2018 to 2030…that says, somewhere we need a new product that can

do this. And then we iterate those ideas and then start talking, what kind of new technology are

there, from R&D, what kind of ideas do we have, what do we work with etc.”

- Interviewee 5

It is important to be clear about the ambition for the company and the ambition matrix

gives the managers an opportunity to survey the initiatives and dispose investment

according to strategy (Nagji & Tuff, 2012). The new initiatives also need to be prioritized

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within a portfolio of other development efforts, taking technical risk and market success

into account. The company’s market positioning must also be taken in consideration, and

what happens with the current product offerings if a competitor would take lead within

a product segment.

“High technical risk and low market success is something we are trying to completely avoid, and

what I see now is where we have most of our projects, are at the low technical risk and estimated

high market success.”

- Interviewee 2

Mature companies often fail when attempting to enter new businesses (Nagji & Tuff,

2012). This reflects how difficult transformational innovation is and require new

organizational settings regarding people, motivational factors and support systems.

O'Reilly & Tushman (2004) suggest an ambidextrous organization structure because it

allows different processes, structures and cultures for different types of innovation, but

still maintains the competence and knowledge within the organization.

After an idea has been selected one needs to consider both the value and the supply

chain. A decision needs to be made of what the company should produce themselves and

what they should outsource. To make this decision it is important to research possible

suppliers; what are they offering, can we benefit from a relationship, who has the

capability to deliver? It is also important to know if the development is far away from the

organizational core, if this is the case a partner may be essential to delivering the value.

The supply chain should be established in the business case.

“Do we have anyone that could do this today? No? Then sourcing has to be attached pretty

early in the phase and go out to scan the suppliers to get a commodity base for this segment”

- Interviewee 3

Once the value and supply chain has been determined the last step before an investment

request can be granted, is to acquire the sales team’s commitment to the product. This is

done partly as a test of the business validity but also to get a higher accuracy when

determining pricing, volumes and margins in the business case. Later, the revenue

stream must be determined to calculate project cost, ensure stakeholder profitability and

return of investment. When the business case is established it is presented before a

committee who can grant an investment request.

“We have the prototypes and the users love them, we have carefully calculated and estimated the

market, we have gotten a sales commitment, then it is time to introduce the sales office and they

are like ‘oh sure’. Then we are in the new product development project and then we are basically

through”

- Interviewee 7

Manufacturing cost also needs to be calculated as the value chain and project cost is

determined. Another task that is of great importance to the success of the product is to

determine the method of sales. To minimize the risk the business hypothesis needs to be


34

tested and iterated upon, a waste minimizing mindset as Brown (2009, p. 17) states “Fail

early to succeed sooner”. Validated learnings should be generated and include pricing

and the users’ willingness to pay. This is what Ries (2011, p. 85) refers to as “leap of faith

assumptions” and the most important ones are the value and growth hypothesis. How

the customers will discover the product, and their willingness to pay for it. This is suitable

to test with a high-fidelity prototype, referred to as a Proof of Concept (PoC) at

Husqvarna Group. When the business case is tested, validated and finalized, it can move

towards commercialization and into the formal process of a new product development

project.

“I should have changed the location […] changed the pricing. Then it might have proven to be a

[successful] business case”

- Interviewee 1

The final proof of business validity comes from launching the product. If the product

creates revenue according to, or better than, the predictions the business development

can be considered complete.

“An innovation hasn’t [succeeded] until it starts to generate money”

- Interviewee 1

The steps involved in developing the business model surrounding a product could be

summarized as follows:

• Identify business opportunity

• Analyze surrounding circumstances

• Project portfolio planning

• Idea generation

• Idea selection

• Develop and adapt to road maps

• Strategic fit

• Decide value chain position

• Research suppliers

• Negotiate with suppliers

• Secure commitment from sales channels

• Estimate sales numbers

• Research price

• Calculate project cost

• Calculate ROI

• Investment request

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• Calculate manufacturing cost

• Determine method of sales

• Test price

• Determine price

• Prove business case through high fidelity prototype

• Finalize business case

• Launch

5.3 User

Finding and identifying an opportunity is key for user readiness too. This is a valuable

insight for an OEM, historically countless product efforts have been focusing too much

on technology push rather than market pull (Cooper, 1990). From a user point of view an

opportunity is the discovery of a new way to serve the end customer. It can present itself

as a gap on the market or by identifying a user pain, both implicit and explicit. The

opportunities are most commonly found through a continuous dialogue with the dealer

network and by questioning the users directly. Several interviewees also agree on

suppliers being a good source for opportunity identification.

“We have continuous contact with our sales companies and they work very closely with the

users. We have a lot of contact with our users, different forums and different events, and through

personal contacts. Those are the two most common routes to discover a new user need”

- Interviewee 5

Once an opportunity has been recognized it should be coupled with a user segment.

Questions such as who does this opportunity regard, and what is their investment in it,

needs answering. It is also important to estimate the size of the user segment here.

“…we found more user segments, or rather, the user segment grew”

- Interviewee 3

When a user segment is identified it is possible to get their input on the opportunity.

Before anyone begins to solve a problem or develop a new product it is important to

know what the users’ pains and gains are. Therefore, a set of user requirements need to

be established in collaboration with the intended users. But studying to the user is not

enough, to fully understand what the user requirements are, one must also investigate

the surrounding circumstances. New trends and the emergence of new technology are

both factors that may affect what a user requires from a product.

“Studying the users, that might be one way, another could be to realize that something is going

on. We know of urbanization, we know that the environment will become more important. Those


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are trends. But it could also be new technologies that have the potential to create value that the

user is not aware of.”

- Interviewee 10

Idea generation is a crucial step for all parts of the innovation process, and it could be

done using a plethora of methods. Brainstorming sessions and workshops, with or

without the user, are some of the more common ones. Regardless of the chosen method

it is important that the user is in focus.

“[We use] innovation workshops […] trying to brainstorm ideas and trying to understand the

user”

- Interviewee 4

The idea generation is the beginning of an iterative process where ideas are being

examined, discarded and improved on until only one is left, what Brown (2009, p. 66)

refers to as making choices through convergent thinking to select an idea. The first step

in this process is to identify the most promising ones through user testing with low

fidelity prototypes. Interviewee 6 stresses the importance of verifying one’s ideas with

the users early on, to reduce the risk of spending money on something that will

ultimately prove unsuccessful. Early in the process just discussing the ideas with the user

is enough but, at some point prototypes are needed to sufficiently communicate the

product offering to the user. Simple prototypes offer a cost-efficient way to achieve first

validation of the ideas, also known as validating assumptions through an MVP (Ries,

2011, pp. 76-77).

We’re building several prototypes during the spring to compare how the user wants the

functionality”

- Interviewee 1

The previous tests will have identified that there is a need for a new product and that a

suitable solution have been found. However, to truly nail the solution and optimize it for

desirability, testing needs to be performed using a high-fidelity prototype, what

Husqvarna Group refers to as a PoC. This prototype should have the look, feel and

functionality of the intended product but does not need to be built or function the same

way. What is important is that the user gets the same experience as they would with the

finished product. By building this type of prototype the assumptions regarding user

desirability can be tested in a real-world environment, which increases the reliability of

the results. It is important to note that the purpose of the high-fidelity prototype is not to

verify a proposed solution, rather, it is built to experiment with different value

propositions and to increase the understanding of what the user wants. The concept then

has to be iterated until user satisfaction is acieved.

“When you have the list defined and aligned, that’s when you develop a PoC, a Proof of Concept,

that you can go out and validate with the user, to learn more”

- Interviewee 10

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Early adopters need to be identified and tested with, because they are more susceptible

to innovation with early technology and accept possible shortcomings (Christensen, 1997,

p. 233). The final proof that user desirability has been achieved can only be found through

a launch of the product. When a product is received well on the market and is performing

according to, or better than, the expectations, and the users are expressing their

satisfaction, the user need can be considered as solved.

“[Success is] if you have created something where you have helped the user with a huge

challenge and made a difference for them in their environment”

- Interviewee 11

The following steps were identified as the most important ones to discover and verify

user desirability:

• Identify opportunity

• Identify user segment

• Identify user requirements

• Analyze surrounding circumstances (laws & regulations, global trends, etc.)

• Idea generation

• Idea selection

• Test with low fidelity prototype

• Verify user requirements

• Test with high fidelity prototype

• Iterate concept until user satisfaction is achieved

• Identify early adopters for field testing of final product

• Launch

5.4 Technology

Innovation may well start with the discovery of a new way to perform a task or the

possibility to do something that previously has been impossible. As Kim and Mauborgne

(1999) state, change is happening in an accelerating rate and keeping up with emerging

markets and technology demands a constant outlook. Suppliers are an excellence source

of opportunity identification, and so is relationships with the research community

through university collaborations and journal subscriptions. A large portion of the

primary research is analyzing the surrounding circumstances by maintaining a

technological outlook and constantly scanning the external environment, as well as

monitoring the competition and staying updated on new laws and regulations.


38

“We must have a preparedness if the technology or our competition were to have or do something

that we must respond to”

- Interviewee 6

The internal primary research should answer questions such as, what is possible to do

with the current technology, do the company have the means to develop something new?

Can we exploit this technical discovery to create something that could solve a problem

for our users? Once a technical opportunity has been identified and properly analyzed,

ideas of how it could be translated into a product offering can be generated. Ideas that

show feasibility are then identified and idea statements formulated.

“The R&D department want a clear direction from us from the beginning, a specification of

market and user requirements”

- Interviewee 3

During this idea selection phase, it is important to scan for existing patents to avoid

Intellectual Property (IP) related conflicts.

Once the technology development process has reached this stage it enters primary

development, here employees investigate and develop novel technologies that could be

used to realize the ideas. To do this a series of different concepts are developed and tested

iteratively to find the technology that best solves the problem. Interviewee 12 describes

how the primary development process follows these steps:

1. The first screening is done by constructing simple prototypes using of the shelf

products.

2. This is followed by the development of simple prototypes that are evaluated

through an internal quality assessment and if applicable, some field testing.

3. Further development and optimization of the concepts using computer

simulations follow.

4. New prototypes are built and tested extensively in the operational environment

to evaluate the performance.

When this process is completed it is followed by an evaluation phase where the results

are analyzed and documented. By the end of this process a technology that satisfies the

need in the idea statement will, if possible, have been identified. The projects that do not

proceed from this stage are documented to capitalize on the learnings that have been

generated. The key here is iteration and learning, to create a good enough prototype to

test the assumptions, as Ries (2011, p. 85) states. Thereby, finding a balance between a

feasible technology that is desirable for the user to create a viable business (Brown, 2009,

p. 19). It is important to dare to take the risk and test new technology to potentially

discover a new business.

“It’s better to be almost right than perfectly wrong”

- Interviewee 6

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At this stage when much of the new product is known an initial Bill of Materials (BoM)

along with a product specification is created. These two are vital components in the next

stage of the product development process, determining the supply chain. Before a

product can be finalized, all the restrictions and possibilities surrounding it must be

identified, investigating what suppliers can offer and what the company can produce

themselves is key. Interviewee 8 remarks that Husqvarna Group relies heavily on the

knowledge of specific suppliers, especially regarding low investment projects.

When the product has reached this stage in the development process it will attract an

increasing amount of external attention. It is therefore suitable to apply for patents, if

possible, at this stage.

When the overall design and functionality for the product, along with the supply chain,

has been established, the feasibility of the product needs to be proven. At Husqvarna

Group this is done by constructing a high-fidelity prototype in which all the different

components and technologies that make up a new product are combined and tested

together.

“When you have several technologies combined you build a physical prototype to test that it

functions together as a system.”

- Interviewee 9

This is where, according to Koen, et al. (2001), the FEI ends, and the more formal NPD

process begins, it is also the inflection point where entrepreneurial management needs to

shift towards more traditional management (Bacon, et al., 1995). Here the product is

transformed from a concept into something that will perform in the market place and

that can be manufactured at a large scale. Once finished, the product is tested in a

laboratory setting to ensure that it complies with the quality standards, including

performance and durability, as well as laws and regulations. It is also field tested with

the intended users to further verify its functionality.

Finally, the production system is set in place and the infrastructure that is needed for

full-scale production and sales is established. The final verification of the technology is

to confirm that it works as intended when it is being used by the end-customer.

In summation, these are the steps that were found in the technology development

process:

• Opportunity identification

• Analyze surrounding circumstances

• Primary research

• Idea generation

• Idea selection

• Patent search

• Primary development


40

• Concept development

• Primary project documentation

• Lesson learned

• Prototype development

• Product specification

• Supplier research

• Supply chain management

• Decide on bill of materials

• Patent application

• Development of, and test with, high fidelity prototype

• Laboratory test with final products

• Quality validation

• Field test with final product

• Prepare for production/industrialization

5.5 External Verification

To verify the result found in the internal interviews and to create more generalizable

results four external companies were contacted. These were all international OEMs with

similar complexity in their product development process when compared to Husqvarna

Group. All the external companies had an established innovation process from the

opportunity identification phase until launch, and all had multidisciplinary teams

working with innovation. In general, the result from the external companies showed that

their innovation processes were well aligned with the findings from the internal research.

The innovation process had many similarities, however there where some differences in

the findings, stated explicitly below for each external company separately.

Company A

Company A is a food producer, active within the FMCG industry. They structure their

innovation activities as a combination of a stage-gate model and an innovation funnel.

This process begins with an exploration phase where trends are analyzed, and

opportunities are thoroughly examined. When an opportunity for a new product have

been found, a project group is assigned to explore this further, this is the first gate. Further

product development includes a series of different tests used to create a strong consumer

case, this includes large scale idea generation and user testing. Before the product is

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41

finalized it is tested both internally to ensure that it performs according to quality

standards, end externally with users to confirm desirability.

When developing the business model, Company A focuses on three aspects, sales

volume, price, and cost of production. The explanation for this is that most new products

are sold through existing channels, making these factors more important than others

when exploring business viability.

Because of the fast pace within the FMCG industry it may not be possible to manufacture

all products in-house. Therefore, to ease the search of new production sites, Company A

has a global manufacturing division to whom the project manager can send a project

production brief. This separate division stays updated on the capabilities of potential

production partners, minimizing the time consumption in this part of the innovation

process.

Company B

The company is an international producer of consumer electronics. They innovate

through a classical product development process based on a stage-gate model. In the

beginning of the process they perform a wide search of opportunities, this includes

activities such as technology scouting, trend analysis, and activities to increase user

understanding. The information gathered here is used to create a technology roadmap, a

strategic plan that outlines the direction of new development efforts. Before being set in

place, the technology roadmap is reviewed by a global board consisting of people from

different segments and markets.

Based on the roadmap Company B identifies opportunity areas, these are explored and

transformed into products through a process of iterative concept development, starting

with low fidelity prototypes, including Virtual Reality VR, the prototypes become more

advanced as the project progresses. Before a concept is considered, a validation of user

acceptance of 70% is required. Once this is achieved the project moves to

industrialization, where the transformation from concept to finished product occurs.

Company B utilizes the TRL framework throughout the innovation process.

One characteristic that stands out for Company B is the multidisciplinary triangle,

consisting of a designer, an engineer and an employee from sales and market, that follows

the project throughout the process. This team utilizes their cross functional capabilities

to make useful decisions for the new initiatives and gives the project greater access to the

knowledge contained within the company (McDonough, 2000).

Company C

Company C is a global producer of electronics, creating products and services for both

consumers and professionals. They make a distinct difference between product


42

development and innovation, where product development is the continued development

of existing products, and innovation the creation of novel products. To spark new ideas

Company C uses themed workshops, where attendees are asked to focus their attention

on a specific topic or opportunity and develop ideas of how to address them.

To thoroughly address new ideas, especially ones that could lead to transformational

innovation, Company C has introduced an internal acceleration program. Once accepted

to this program the employees get to put their ordinary work assignments aside to prove

the viability of the idea, without any distractions. This is what Gibson and Birkinshaw

(2004) refer to as a temporal separation within an ambidextrous organization. It is often

a successful strategy for radical innovation because it allows different processes and

cultures but still preserves the competence and the support from senior executive level.

Company C acknowledges that innovation can impact, or even disturb, the incremental

development and should therefore be put aside and be handled separately from the daily

work assignments, as suggested by O'Reilly and Tushman (2004). It does not affect the

“business as usual” on the incremental innovations because the team is structurally

independent, an unsupported team that is still integrated in the management hierarchy

(O'Reilly & Tushman, 2004). At the end of the acceleration program at Company C there

is a competition between different ideas, top management from the global headquarters

act as judges deciding which ideas they believe holds the most potential.

“Then you get to put all the ordinary work assignments aside and you get funding for three

months to prove that this is a good idea. At the end it’s like a competition where we [get the] top

management here and they are dedicated to decide upon this.”

- Interviewee 15

The acceleration program is not the only path from idea to finished product and

Company C recognizes that each innovation is unique, the processes used to address

them must therefore differ. General for all paths is that once an idea has been created it

must quickly be coupled with a user. Early stages of innovation are often iterative, this is

because as the circumstances change, and learnings are generated, it is important to be

able to respond to them quickly, rather than following a set plan. Company C also states

that if an idea is not fully supported within the organization it is important to find a

suitable partner as quickly as possible.

“We would like that the ideas that spontaneously arise within the company to find a partner as quick as

possible because when you try to do everything yourself, the risk for the idea to wither out increases. By

quickly finding someone else who is strong within that area you will strengthen each other.”

- Interviewee 15

Company D

Company D is a producer of food, and as such active within the FMCG industry. They

have a well-defined and structured process to create new products, making a distinct

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difference between innovation and product development. Innovation is defined as the

creation of new product concepts, in the product development these are turned into

finished products. The process is a stage-gate model with different phases and

milestones. The first phase, the discovery phase, is a search for needs and opportunities,

here trends and markets are analyzed, and internal and external insights are created. If

an interesting opportunity is found it is explored further and the user understanding

within that area is increased. Once a promising opportunity is identified, ideas of how to

address it are generated. This is followed by an iterative process of concept development

and testing where different ideas are verified with the users, through both qualitative

and quantitative methods. When a concept has been fully validated a decision of whether

to start the product development is made. At the same time a strategy for launch and a

roadmap to win the users are developed. This is something that Bacon, et al., (1995)

stresses, to create a main tag line in the early-stage market assessment of the concept and

keeping it until launch, to ensure a singular focus is kept through the development

process. By making these decisions before the formal product development Company D

ensures that they have sufficient time to prepare both the market and the logistics

surrounding the product, in line with the findings of Di Benedetto (1999).

“We have several failed projects where we didn’t do our homework and didn’t align our launch

to our strategy […] we had done a lot of work within a segment without investing in and

supporting the launch”

- Interviewee 16

5.6 Internal Validations of Findings

Once the results from all interviews had been summarized, tentative frameworks for

business and user readiness was formulated, these can be found in Appendix D –

Tentative BRL & URL Framework. This was presented to employees at Husqvarna

Group, with an insight into the innovation process, at two different focus group

interviews. In these the participants were asked to decide the order in which they believe

that the steps, on both scales respectively, should occur. They were also asked to discuss

the relevance of the steps and whether they wanted to remove or add any.

Both workshops agreed that the steps represented major milestones in the development

of user and business readiness. There was also a coherence in the way that they organized

the steps. Regarding User Readiness Levels (URLs), they agreed with the researcher on

the order of the steps with only two exceptions. Firstly, the participants wanted to

emphasize the use of prototypes early in the process and therefore argued for the

development of low-fidelity prototypes immediately after idea generation. The second

altering to the process was to perform large scale testing after the development of a high-

fidelity prototype, arguing that an advanced prototype should be a part of the large-scale

testing.


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While discussing the Business Readiness Levels (BRLs), both workshops identified the

lack of a phase where they could experiment with different value models and business

cases, a phase that Furr and Dyer also advocate for (2014, pp. 143-145). Interestingly, both

workshops arranged the steps in the same way, independently of each other. The

researchers presented another order and a discussion followed and an agreement of the

order of the steps was made with the participants.

5.7 Additional Observations

During the studies other critical factors for innovation success emerged, one of these is

organizational readiness. Some of the respondents revealed that even when business,

user, and technology aspects of an innovation had all been validated the work did not

progress.

“I presented that project four times before it got accepted”

- Interviewee 3

Reasons for this can be budgeting and prioritizing, however, in this instance the

explanation given was that the product needed more organizational support before it

could be realized. Interviewee 3 explains that a key factor in acquiring organizational

acceptance for a new product is how it is presented. Interviewee 13 adds to this when

explaining that a failure to persuade top management of a new trend early may mean

missing out on that trend. This is also reflected when Christensen (1997, p. 98) discusses

how successful organizations find it difficult to act on disruptive innovation because of

the increased risk of failure, which cannot be tolerated within sustaining innovation.

Other organizational boundaries were also found. In one workshop the attendees

discussed how cultural boundaries could obstruct potentially successful products,

especially transformational ones, from being pursued. This is because successful

companies sometimes become rigid, what they have done in the past is what made them

successful, to do something else may therefore be difficult, something that Leonard-

Barton (1992) has previously discovered.

Further organizational boundaries could be found when examining the administrative

aspects of a large corporation, especially when it comes to budgeting. If an opportunity

is discovered and it is believed to be a potential success, it could be difficult to find

funding for it (Baldwin, 2016). This is especially true for opportunities that are discovered

when the budget for the period is already set.

“No one thought that we would succeed. But we got the money and when we did succeed there

was no plan to get the rest of the money that we wanted to be able to iterate the concept”

- Interviewee 1

Results & Analysis

45

Another reason why a product may fail is if it is not fully understood by the existing

dealer network who are selling it. This issue was identified both in the workshops as well

as in one of the interviews. They explained that even though you have the best product

in the world, you may not succeed if the sales team does not know how to sell it. A

possible reason for why this may be is when transformational products are being

launched, the dealers may not know how to sell it, i.e. asking people who sell hardware

to also sell software. In this instance it is likely that the sales strategy for hardware should

differ from software.

“You develop a great product, but you don’t succeed with the launch as such. You don’t succeed

in reaching all the way to sales teams, retailers, users”

- Interviewee 8

Yet another factor regarding organizational readiness is whether an organization

possesses the development capabilities needed to enter new markets, i.e. transitioning

from hardware to Internet of Things (IoT). One workshop discussed how an

organization’s preparedness towards change could have a large impact on their ability to

grasp new opportunities.

Towards a Framework

47

6 Towards a Framework

In this chapter the frameworks for the assessment of business, user, and technology readiness

respectively is introduced. The concept of Innovation Readiness Levels is also presented.

6.1 Introducing Innovation Readiness Levels

Product development is often subjected to sudden realizations and set-backs that force

the developers to go back and repeat steps. Therefore, many scholars have proposed

iterative processes, i.e. the build-measure-learn feedback loop proposed by Ries (2011, p.

75), that leverage repetition and turn it to an organizational strength. This iterative view

of innovation processes contradicts what the authors of this thesis have set out to do,

develop a linear framework for innovation readiness. However, the readiness of all

project development efforts, even iterative ones, progress.

This makes it possible to use a linear scale to measure progression, such as TRL, for both

linear and iterative product development processes. Section 3 shows that TRL is well

functioning and understood by the industry, and the research has shown that business

and user are important aspects of the innovation process. Therefore, business and user

readiness levels have been developed to mimic the TRL framework. The intention is to

make it possible to measure the progression of business, user, and technology readiness.

It is also possible to determine the readiness of the entire innovation by calculating the

mean value of the three scales. When used together in this manner they create the

Innovation Readiness Level (IRL) framework. The IRL value is an indication of how far

the innovation process has come, however, it should only be regarded as an

approximation. This is because the amount of effort to develop the three aspects differ

between different innovations. Below follow a presentation of the three scales.

6.2 Business Readiness

The creation of a business case surrounding an innovation is one of the most important

aspects of the innovation process. This is how organizations translate their offering into

an income. The research above has identified several important steps in the evolution of

business readiness, ranging from the discovery of a business opportunity through

proving the fully developed business case with a successful product launch. The nine

most important steps have been identified to create the Business Readiness Level (BRL)

framework, illustrated in Figure 7.


48

Figure 7. A visualization of the proposed Business Readiness Levels

To increase the usability of the framework, attainment criteria have been formulated for

all steps, based on the insights from the research. The attainment criteria for the BRL

framework is:

1. Business Opportunity Identified – A high-level business potential and the scope of

this opportunity has been identified. This could be a market gap, an unmet user

need, or a new technology. A decision of whether to further explore the

opportunity is made.

2. Strategic Fit Verified – The external environment, market situation as well as

competitors and suppliers have been investigated. The effect to the company’s

position, market leader or follower, has been established and the business

potential has been estimated. How the new product will affect the current

portfolio and alignment to the product roadmap has been analyzed. The

development has been aligned and prioritized with other development efforts,

taking technical risk and market success into account.

3. Ideas Generated and Selected – Ideas have been generated and selected through

user testing. A user case, how the user needs are met and how this is monetized,

has been developed and a high-level business case is established. A strategy to

reach and convince the target segment is set in place. A project application is

formulated and submitted.

Test in Business

Environment

Business Model

Development

Adaptation to

Current Business

Investigation of

New Possibilities

Business Readiness Levels

BRL 9

BRL 8

BRL 7

BRL 6

BRL 5

BRL 4

BRL 3

BRL 2

BRL 1

Business Case Proven through Successful Product

Launch

Business Case Verified

Sales Method Determined

Value Chain Established

Supply Chain Determined

Business Case Development and Testing

Ideas Generated and Selected

Strategic Fit Verified

Business Opportunity Identified

Towards a Framework

49

4. Business Case Development and Testing – A business case has been developed

through an iterative process of concept development and testing, including

verification with users until user satisfaction and market fit is achieved. Revenue

models have been explored

5. Supply Chain Established – The suppliers offerings have been examined. The

supply chain has been explored and a decision of whether the production is in-

house, outsourced or a combination thereof, have been made.

6. Value Chain Established – Sales-channels are committed and procurement from

suppliers have been determined. Costs associated with the value chain, such as

the price of raw materials, process and handling, transportation, and storage are

calculated.

7. Sales Method Determined – A suitable method of sales have been determined. A

pricing strategy has been formulated by examining the users’ willingness to pay

and by performing a price elasticity study. A marketing strategy, targeting the

user segment and making them aware of the upcoming launch, have been

determined. Education of the sales team begins, and sales channels are being

prepared.

8. Business Case Verified – The business case has been finalized through tests with a

high-fidelity prototype. All questions surrounding the business model have

been resolved; including estimating market and sales volumes, obtaining market

feedback and proving users’ willingness to pay, as well as validating the desired

market position. Project and manufacturing costs have been calculated and

margins are investigated; return on investment has been determined. A formal

investment request is submitted.

9. Business Case Proven through Successful Product Launch – The development

process is complete, and the business case is proven through a successful

launch. The product performs according to, or better than, predictions.

6.3 User Readiness

Making sure that an innovation solves a user need is critical to the success of a product.

Because of this the authors of this thesis have investigated what typical actions should be

taken to identify a user need and develop a product that addresses this. Nine such steps

have been identified and ordered chronologically to form the User Readiness Level (URL)

framework, presented in Figure 8.


50

Figure 8. A presentation of the proposed User Readiness Levels

The steps and attainment criteria for the URL framework is presented below:

1. Opportunity Identified – Makro trends have been analyzed to discover a gap in the

market and broad user studies conducted to identify new user needs. An

opportunity to create a new product or to improve on an existing one has been

identified.

2. User Segment Identified – The opportunity has been coupled with a suitable user

segment and the market size has been estimated. A strategic plan of how to

address the opportunity based on trends and user insights is developed.

3. User Needs Observed – The users input on the opportunity through further user

studies, including determination of the customer journey, have been

investigated. Other influencing factors, such as global trend and new laws and

regulations, have been observed and transformed into a list of user needs.

4. Ideas Generated – The need for a new product is confirmed from multiple users

and the knowledge of these users have increased. The opportunity has been

transformed into new product ideas through methods such as creative

workshops and co-creation with the users.

5. User Desirability Verified Using Low-Fidelity Prototypes – Simple prototypes have

been built to visualize and test the desirability of the product. These prototypes

are intended to give the user an understanding of how the product is supposed

Final Testing &

Deployment

User Desirability

Testing

Idea Exploration

and Testing

Basic User

Research

Identification of

New Possibilities

User Readiness Levels

URL 9

URL 8

URL 7

URL 6

URL 5

URL 4

URL 3

URL 2

URL 1

User Desirability Proven through Successful Product

Launch

User Desirability Verified through Large Scale Testing

User Desirability Verified Using High-Fidelity

Prototypes in Planned Environment

Promising Concepts Identified Through User Tests

User Desirability Verified Using Low-Fidelity

Prototypes

Ideas Generated

User Requirements Observed

User Segment Identified

Opportunity Identified

Towards a Framework

51

to function to provide relevant feedback. The user’s willingness to pay have been

proven. A strategy to reach the early adopters has been formulated.

6. Promising Concepts Identified Through User Tests – Potential early adopters have

been found and hypothesis are verified, and uncertainties resolved, through

testing of concept ideas with them. The concepts that best address the user needs

are identified.

7. User Desirability Verified Using High-Fidelity Prototypes in Planned Environment – A

high-fidelity prototype has been used to verify the user desirability with users

that are representable for the targeted user segment. The prototype needs

sufficient support, such as marketing and technical support, to generate a reliable

outcome. A user case, how the user will gain access to the product and how the

ownership will function, have been established through iteration and testing.

8. User Desirability Verified through Large Scale Testing – Larger scale testing is used

to verify the desirability of the intended product with the targeted user segment.

The tests have proven that the users desire the product, and that the method of

sale reaches the target segment.

9. User Desirability Proven through Successful Product Launch – The product has been

launched and users are buying it in the projected, or higher, quantities

6.4 Technology Readiness

The research conducted in this thesis has shown that the TRL framework is relevant in

the OEMs of today. Evidence also show that it is well spread throughout the industry.

These two facts suggest that changing the scale is both unnecessary and could be

confusing to the people already familiar with the existing one. Hence, the TRL scale was

kept intact, see Figure 9.


52

Figure 9. The Technology Readiness Levels as proposed by Mankins (1995)

However, the attainment criteria Mankins (1995) proposed are meant to be read and

applied by employees at NASA, these were therefore adapted to better suit OEMs. The

TRL framework is structured as follows:

1. Basic principles observed and reported – Scientific research has indicated an

opportunity to develop a new technology. This has evolved to applied research

and development.

2. Technology concept and/or application formulated – Research of the opportunity,

including trend scouting and patent search, has revealed practical applications

for the observed opportunity.

3. Analytical and experimental critical functions and/or characteristic proof-of-concept –

The most critical functions of the new technology have been validated through

simulation and concept development.

4. Component and/or breadboard validation in a laboratory environment – The concept

has been tested to assure that the technical elements can be integrated together

and achieve the desired performance, at a component and/or breadboard level. A

product specification is formulated.

5. Component and/or breadboard validation in relevant environment – The components

making up the concept have been identified and are tested individually in a

realistic environment.

System Test,

Deployment & Ops

System/Subsystem

Deployment

Technology

Demonstration

Technology

Development

Research to Prove

Feasibility

Basic Discipline

Research


TRL 9

TRL 8

TRL 7

TRL 6

TRL 5

TRL 4

TRL 3

TRL 2

TRL 1

Actual system proven through successful system

and/or mission operations

Actual system completed and qualified through test &

demonstration in the operational environment

System prototype demonstration in the planned

operational environment

System/sub-system model or prototype

demonstration in a relevant environment

Component and/or breadboard validation in relevant

environment

Component and/or breadboard validation in

laboratory environment

Analytical and experimental critical function and/or

Characteristic proof-of-concept

Technology concept and/or application formulated

Basic principles observed and reported

Towards a Framework

53

6. System/sub-system model or prototype demonstration in a relevant environment – A

complete model or prototype of the concept, is tested in a relevant environment

to validate system functionality.

7. System prototype demonstration in the planned operational environment – A prototype

is tested in the environment in which the final product will operate.

8. Actual system completed and “qualified” through test and demonstration in operational

environment – The technology is built to the specifications of the final product

and is tested in the operational environment alongside all systems it will interact

with. All questions surrounding production, logistics, and sales have been

resolved.

9. Actual system proven through successful system and/or mission operations – At this

level all technology development has been completed. The product is sold

through the intended channels and performing as intended in the real-world

environment.

Discussion & Conclusions

55

7 Discussion & Conclusions

The last chapter of this thesis starts by presenting and discussing the main findings. How the

framework for evaluation of business, user, and technology can be implemented and the practical

implications of innovation readiness levels is discussed. Following this is theoretical implications

and suggestions for further research.

7.1 Main Findings

The purpose of this study was to explore what the main steps of the innovation process

are, specifically regarding the business, user, and technology aspects, and how these

progress at an OEM. Therefore, interviews were held with stakeholders in different

positions within the innovation process at the OEM Husqvarna Group. Data was

gathered from external organizations as well, through interviews with innovation

managers at these firms. Adding to this, a literature study was conducted to explore

current theory of innovation processes. Here the TRL framework was discovered, at tool

that facilitates communication, planning, and evaluation of technology development

(Mankins, 2009b). The literature study also uncovered that innovation circles around the

three aspects, business, user, and technology (Brown, 2009, p. 19). Because TRL has proven

successful, and business, user, and technology has been found to be important aspects of

the innovation process, it appeared useful to investigate the possibility of a framework

taking all three aspects into account. The main findings of this research will be presented

below by revisiting the research questions.

Which steps does technology readiness follow through an innovation

process at an OEM?

During the development of new technology, the TRL framework is commonly used to

ease the communication of its progression. This is true also at Husqvarna Group where

the TRL scale is used both to assess the readiness of a new technology and to assign

different parts of the development process to different teams, i.e. primary development

and product development. The examination of the technology development at

Husqvarna Group, as well as other organizations, revealed several steps that most

processes follow, see section 5.4. Careful consideration of these steps found that they are

well aligned with the TRL framework. Hence, the following conclusion can be drawn; the

steps that technology readiness follow through an innovation process at an OEM are the

same steps that constitute the TRL framework.


56

Which steps does business readiness follow through an innovation

process at an OEM?

Business case development is an important aspect of all innovation efforts, it is how a

company generates revenue. Being able to properly communicate the readiness of a

business case and assign key development areas to different departments is important.

To create a business readiness framework, important steps in the business development

process at OEMs have been found. In an effort to make implementation of an additional

framework simpler, the BRL was developed to mimic the TRL framework. The nine most

important steps towards business readiness have been identified, creating the BRL

framework:

1. Business Opportunity Identified

2. Strategic Fit Verified

3. Ideas Generated and Selected

4. Business Case Development and Testing

5. Supply Chain Established

6. Value Chain Established

7. Sales Method Determined

8. Business Case Verified

9. Business Case Proven through Successful Product Launch

Which steps does user readiness follow through an innovation

process at an OEM?

An idea consists of a problem and a solution, traditionally engineers have started by

looking at the solution, taking the problem for granted. Although this approach has

generated plenty of successful innovations it is also an approach that is associated with

risks. This is because when the problem is not known there is a likelihood that the

solution will not solve any problem and therefore not be desirable. Knowing what users

want from a new product is difficult and asking them directly can often generate

ambiguous answers. To reduce the risk of creating a product that the users do not want

it is important to thoroughly empathize with them and continuously evaluate the

desirability of the product. The finding in this study has been condensed to nine different

steps through which OEMs discover and verify product desirability, the URL framework

also mimics TRL to simplify implementation. The steps were ordered chronologically to

form the URL framework:

1. Opportunity Identified

2. User Segment Identified


57

3. User Needs Observed

4. Ideas Generated

5. User Desirability Verified Using Low-Fidelity Prototypes

6. Promising Concepts Identified Through User Tests

7. User Desirability Verified Using High-Fidelity Prototypes in Planned Environment

8. User Desirability Verified through Large Scale Testing

9. User Desirability Proven through Successful Product Launch

A Method to Evaluate Innovation Processes

The TRL framework has been found to be an effective tool when evaluating the readiness

of technology development, both through the literature study and through the research

conducted here. It is concise enough to be easily understood, yet comprehensive enough

to cover the full development process. Therefore, it was concluded that a nine-level scale

was a meaningful way to evaluate readiness. However, evaluating technology alone is

not equivalent of evaluating the full innovation process. To address this the Innovation

Readiness Level framework was created. The IRL is determined by calculating the

average BRL, URL, and TRL scores. It should be noted that not all scales need to progress

simultaneously, but they should all have reached the ninth level before an innovation is

considered successful.

7.2 Practical Implications

Just as TRLs has facilitated communication and helped managers organize technology

development, the other two frameworks will do the same for Business and User. The

addition of two other aspects of innovation reduces the focus on technology, thereby

giving practitioners a more holistic view of the innovation process, helping them find

value that otherwise could be missed.

Following the BRLs in the development process will ensure continuous business case

development and validation. It will reduce time consumption by highlighting important

steps and structuring them chronologically. It will also ensure that all parts of the

business model have been validated, thus increasing the chance for success when

reaching the market.

The URLs are a continuous progression of User Case development and validation,

starting with simple interviews and observations to discover opportunities and proceeds

with testing of different prototypes. The framework will show what to focus on at which

time, facilitating the exploration of more ideas and make sure these ideas address real

user needs.


58

The usefulness of the scales become apparent when they are used simultaneously.

Though they can be used separately, it is when used together they create a holistic view

of the development process, taking the full range of business, user and technology aspects

into account. Making sure each level of each scale is achieved ensures proper exploration

of the different aspects, conversely if a level is skipped, the risk of experiencing

unforeseen obstacles increases. Another advantage of using the scales together is that

they will show where effort is needed. Even though they do not progress simultaneously,

if one aspect would fall behind substantially it is an indication that that aspect needs to

be addressed.

Because all scales are modeled after the well-functioning and already established TRL

framework, implementing BRL and URL should be intuitive. Because it is modeled after

the pre-existing scale it should have the same attributes; easy to use, standardized, and

scalable depending on the project.

7.3 Theoretical Implications

The IRL framework, presented in this thesis, is an addition to the existing TRL

framework. TRL is an established and well researched tool, but its primary focus is on

technology. As the IRL frameworks consist of the established TRL together with the BRL

and URL scales, it broadens the perspective and can be used as a model to assess and

communicate innovation progression holistically. The IRL scales increase the

understanding of the innovation process and combines technology development with

business case and user value to new product development projects. The IRL ensures the

development efforts are viable, feasible and desirable. Its theoretical implications are

therefore a link between User Experience and Design Thinking (Brown & Katz, 2011) and

classical, technology focused, product development (Cooper, 1990).

It is the concern of management to control and assess product innovation efforts. Cooper

(1990) presented a stage-gate model for managing new product development processes

to improve effectiveness and efficiency. The entrance of each stage has a set of

deliverables, exit criteria and outputs, and when fulfilled the project moves forward

towards the next gate. The model provides focus on product quality, strong market

orientation as well as project evaluation (Cooper, 1990). Because the IRL framework too

has a set of criteria that needs to be fulfilled before moving on to the next level, it is easily

combined with Coopers model. Furthermore, IRL adds to it by offering a more tangible

method to achieve viability, desirability and feasibility. The research presented in this

thesis could also be used to further investigate the applicability of stage-gate models to

OEMs.

While this thesis and its findings discuss the progression of innovation as a linear process,

the framework’s emphasis on continuous testing and exploration, allowing requirements

to change and evolve, makes it highly compatible with agile processes too (Boehm, 2002;


59

Beck, et al., 2001). By combining agile methods with the IRL framework an increased

understanding of the progression of agile development efforts can be attained.

7.4 Further Research

This research has uncovered important steps relating to the matureness of innovation,

but it has been focusing on one organization. It is possible that important steps have been

overlooked, thus there is a risk that some innovations efforts may be scored

inappropriately. The current framework should be considered a tool to aid innovation,

not a strict set of guidelines. To advance the understanding of the subject and to further

improve and verify the framework, research should be performed in additional

organizations as well.

Though the research here has focused on OEMs it is the researchers’ belief that the

framework could be used for anyone performing innovation activities. It would therefore

be valuable to empirically study the adoption of the framework across industries.

Whilst conducting this research it has become apparent that the success of innovation

activities does not only depend on whether a proposed product is viable, desirable, and

feasible, other factors are also at play. In section 5.7 aspects that affect the success of a

new product are identified:

• Organizational acceptance and top management buy in

• Budget constraints

• Cultural boundaries and rigidities

• Preparedness for launch

These aspects could be summarized as organizational readiness, how ready the current

organization is to pursue an innovation. Further research on this topic will increase the

understanding of what makes innovation successful and may provide organizations with

a new point of view by which they could improve their innovation performance.

The BRL and URL frameworks are new and have only been validated to a limited extent.

However, the tests that have been conducted suggest that the method is a useful tool to

validate the progress of innovation and facilitate communication. As such, it is suggested

that further empirical studies are performed to validate the relevance and usefulness of

the frameworks.

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61

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Appendix A – List of Interviewees

I

Appendix A – List of Interviewees

ID Company Function Date

Interviewee 1 Husqvarna Group Group Function 23/2

Interviewee 2 Husqvarna Group Primary R&D 14/3

Interviewee 3 Husqvarna Group Product Management 7/3

Interviewee 4 Husqvarna Group Marketing 1/3


Interviewee 6 Husqvarna Group Group Function 28/2

Interviewee 7 Husqvarna Group Category Management 8/3



Interviewee 10 Husqvarna Group Global Design 15/3

Interviewee 11 Husqvarna Group Global Design 1/3

Interviewee 12 Husqvarna Group Primary R&D 8/3

Interviewee 13 Company A Innovation Management 12/4

Interviewee 14 Company B Innovation Management 13/4

Interviewee 15 Company C Innovation Management 19/3

Interviewee 16 Company D Innovation Management 17/3

Appendix B – Internal Interview Guide

III


Swedish

Inledande frågor

• Vad har du för bakgrund? (Akademisk och professionell)

• Vilken är din roll i företaget?

• Vad var ditt senaste utvecklingsprojekt?

• Kan du rita upp er innovationsprocess?

o Vilka steg finns?

o Var börjar den och vart slutar den?

o Hur ser processen ut däremellan?

o Finns det några specifika milestones i innovationsprocessen?

Kund

• Hur upptäcker ni ett kundbehov?

• Hur testar ni kundbehov?

• I vilka steg utreder/verifierar ni kundbehovet?

• Vilka steg tycker du behöver finnas för att avgöra om kund är mottaglig?

• Hur skulle du vilja arbeta/ att den här processen såg ut?

Affär

• Hur utvecklas affärsmodellen?

• När i processen börjar man titta på värdekedjan?

o Partners

o Produktion

o Försäljning

• Hur bestämmer ni om en idé ska utvecklas?

o Rätt kunskap?

o Ligger det inom scopet?

o Vad händer med idén om den avfärdas? (Idé bank etc.)

• Hur beräknar/uppskattar ni kostnader för en ny produkt?

o När görs detta?

o Förändras det över tid?

o Vad baseras beräkningarna på?

• Undersöker ni om kunden är villig är att betala?

o När testar ni detta?

o Vilka typer av tester gör ni?


IV

o Tycker du att ni utvärderar detta tillräckligt?

• Hur och när bestämmer ni hur en produkt ska säljas? direktförsäljning, leasing, etc.

• Vad tycker du om den här processen?

• Hur skulle du vilja förändra den?

Teknik

• Hur jobbar ni med teknikutveckling?

o Följer ni någon process?

o Vilka steg finns?

• Testar ni tekniken?

o I vilka steg?

• Vad tycker du om den här processen?

o Hur skulle du vilja förändra den?

Avslutande frågor

• Finns det något projekt som du tycker har lagts ner på felaktiga grunder?

• Vad tycker du är definitionen av ett lyckat produktutvecklingsprojekt?

• Har du något exempel på ett lyckat/mindre lyckat projekt?

Avslut

I ett senare skede kommer vi att titta på case. Får vi återkomma med frågor?


V

English

Introductory questions

• What is your background? (Academic and Professional)

• What’s your role in the company?

• What was the last innovation project that you took part in?

• Can you draw your innovation process?

o What steps are there?

o Where does it begin and where does it end?

o What is in between?

o Are there any specific milestones in the innovation process?

User

• How do you identify a customer need?

• How do you test a customer need?

• In which steps do you verify a customer need?

• What steps do you believe the innovation process should follow to confirm a

customer need?

• What would you like this process to look like?

Business

• How is the business model developed?

• When in the process do you begin to examine the value chain?

o Partners

o Production

o Sales

• How do you decide whether you should develop an idea?

o The right knowledge?

o Within the scope?

o What happens to an idea if it’s discarded? (idea bank etc.)

• How do you calculate/estimate the cost of a new product?

o When do you do this?

o Does it change over time?

o What do you base your calculations on?

• Do you investigate where the customer is willing to pay?

o When do you test this?

o What types of tests do you perform?

o Do you think that this gets enough attention?


VI

• How and when do you decide how a product is sold? Direct sales, leasing, etc.

• What do you think of this process?

o Would you like to change it?

Technology

• How does Husqvarna work with technology development?

o Is there a process?

o What steps are there?

• Do you test the technology?

o In what steps?

• How do you like this process?

o How would you like to change it?

Concluding questions

• Is there any project that you believe have been falsely terminated? False negative

• What is your definition of a successful innovation process?

• Do you have any examples of successful/unsuccessful projects?

Ending

Later we'll be asking questions about some specific development efforts, may we return

to you with more questions then?

Appendix C – External Interview Guide

VII

Appendix C – External Interview Guide

Vi tänkte inleda med några generella frågor om innovationsprocessen på detta företag

och sedan ställa mer specifika frågor kring hur ni utvärderar nya innovationsprojekt.

Inledande frågor

● Vad har du för bakgrund? Akademisk och professionell

● Vilken är din roll i företaget?

○ Hur arbetar du med produktutveckling?

○ Vad var ditt senaste projekt?

● Kan du rita upp er innovationsprocess?

○ Vilka steg finns?

○ Var börjar den och vart slutar den?

○ Hur ser processen ut däremellan?

○ Finns det några specifika steg i innovationsprocessen?

● Hur bestämmer ni om en idé ska utvecklas?

○ Hur bedömer ni att ni har rätt kunskap?

○ Hur bedömer ni om det ligger det inom strategin?

Vi har, i vårt arbete identifierat tre viktiga faktorer som innovationsprocessen kretsar

kring: kund, affär och teknik. Här är lite frågor där vi går in på de olika områdena var

och en för sig.

Kund

● Hur upptäcker ni ett kundbehov?

○ Vilka metoder använder ni?

● Hur testar ni kundbehov?


● I vilka steg utreder/verifierar ni kundbehovet?


● Hur avgör ni om kunden är mottaglig/mogen?


● Hur skulle du vilja arbeta/att den här processen såg ut?

Affär

● Hur utvecklas affärsmodellen?

● När i processen börjar man titta på:


VIII

○ Partners

○ Produktion

○ Försäljning

● Hur beräknar/uppskattar ni kostnader för en ny produkt?

○ När görs detta?

○ Förändras det över tid?

○ Vad baseras beräkningarna på?

● Undersöker ni om kunden är villig är att betala?

○ När testar ni detta?

○ Vilka typer av tester gör ni?

○ Tycker du att ni utvärderar detta tillräckligt?

● Hur och när bestämmer ni hur en produkt ska säljas?

○ Vad tycker du om den här processen?

○ Hur skulle du vilja förändra den?

Teknik

● Hur jobbar ni med produktutveckling?

○ Följer ni någon process?

○ Vilka steg finns?

● Testar ni tekniken/produkterna?

○ Hur gör ni det?

● Vad tycker du om den här processen?

○ Hur skulle du vilja förändra den?

Avslutande frågor

● Vad tycker du är definitionen av ett lyckat produktutvecklingsprojekt?

● Har du något exempel på ett lyckat/mindre lyckat projekt?

● Finns det något projekt som du tycker har lagts ner på felaktiga grunder?

Avslut

Får vi återkomma med frågor?

Tack

Appendix D – Tentative BRL & URL Framework

IX

The BRL framework is structured as follows:

1. Business Opportunity Identified – A market gap has been identified, the user has

an unmet need, or a new technology has been discovered. A high-level business

potential and the scope of this business has been identified. A decision of

whether to further explore the opportunity is made.

2. Strategic Fit Verified – The external environment, market situation as well as

competitors and suppliers have been analyzed. The effect to the company’s

position, market leader or follower, has been established and the business

potential has been estimated. How the new product will affect the current

portfolio and alignment to the product roadmap has been investigated. The

development has been aligned and prioritized with other development efforts,

taking technical risk and market success into account.

3. Ideas Generated and Selected – Ideas have been generated and selected through an

iterative process of concept development and testing, including verification with

users. A user case, how the user needs are met and how this is monetized, has

been developed and a high-level business case is established. A strategy to reach

and convince the target segment is set in place.

4. Supply Chain Determined – The suppliers offerings have been examined. The

supply chain has been explored and a decision of whether the production is

inhouse, outsourced or a combination thereof, have been made.

5. Value Chain Established – Sales-channels are committed and procurement from

suppliers have been determined. Costs associated with the value chain, such as

Test in Business

Environment

Business Model

Development

Adaptation to

Current Business

Investigation of

New Possibilities

Business Readiness Levels

BRL 9

BRL 8

BRL 7

BRL 6

BRL 5

BRL 4

BRL 3

BRL 2

BRL 1

Business Case Proven through Successful Product

Launch

Business Case Proven through Successful Tests with

High Fidelity Prototype in Planned Environment

Business Case Established

Sales Method Determined

Value Chain Established

Supply Chain Determined

Ideas Generated and Selected

Strategic Fit Verified

Business Opportunity Identified


X

the price of raw materials, process and handling, transportation, and storage are

calculated.

6. Sales Method Determined – A suitable method of sales have been determined. A

pricing strategy has been formulated by examining the users’ willingness to pay

and by performing a price elasticity study. A marketing strategy, targeting the

user segment, have been determined. The first business model has been created.

7. Business Case Established – A business case has been established by estimating the

market and sales volumes, obtaining market feedback and proving users

willingness to pay, as well as validating the desired market position. Project and

manufacturing costs have been calculated and margins are investigated; return

on investment is determined. A formal investment request has been submitted.

8. Business Case Proven through Successful Tests with High Fidelity Prototype in

Planned Environment – The business model has been finalized through concept

iteration with High Fidelity Prototype until users’ satisfaction and market fit

was achieved. Revenue models have been explored. All questions surrounding

the Business model have been resolved.

9. Business Case Proven through Successful Product Launch – Business model is final

and proven through a successful launch. The product performs according to, or

better than, predictions.

XI

The URL framework is structured as follows:

1. Opportunity Identified – Makro trends have been analyzed to discover a gap in the

market and broad user studies conducted to identify new user needs. An

opportunity to create a new product or to improve on an existing one has been

identified.

2. User Segment Identified – The opportunity has been coupled with a suitable user

segment and the market size has been estimated. A strategic plan of how to

address the opportunity based on trends and user insights is developed.

3. User Requirements Observed – The users input on the opportunity through further

user studies, including determination of the customer journey. Other influencing

factors, such as global trend and new laws and regulations, have been observed

and transformed into a list of user requirements.

4. Ideas Generated – The need for a new product is confirmed from multiple users

and the knowledge of these user has increased. The opportunity has been

transformed into new product ideas through methods such as creative

workshops and co-creation with the users.

5. Promising Ideas Identified Through Users Tests – Potential early adopters have been

found and the ideas that best address the user requirements are identified.

Hypothesis are verified, and uncertainties resolved through testing of concept

ideas with these users.

6. User Desirability Verified with Intended Users – Larger scale testing is used to verify

the desirability of the intended product with the targeted user segment. A user

Final Testing &

Deployment

User Desirability

Testing

Idea Exploration

and Testing

Basic User

Research

Identification of

New Possibilities

User Readiness Levels

URL 9

URL 8

URL 7

URL 6

URL 5

URL 4

URL 3

URL 2

URL 1

User Desirability Proven through Successful Product

Launch

User Desirability Verified Using High Fidelity

Prototypes in Planned Environment

User Desirability Verified Using Low Fidelity

Prototypes

User Desirability Verified with Intended Users

Promising Ideas Identified Through User Tests

Ideas Generated

User Requirements Observed

User Segment Identified

Opportunity Identified


XII

case, how the user will gain access to the product and how the ownership will

function, have been established.

7. User Desirability Verified Using Low Fidelity Prototypes – Simple prototypes have

been built visualize and further verify the desirability of the product. These

prototypes are intended to give the user an understanding of how the product is

supposed work to provide relevant feedback. The user willingness to pay has

been proven. A strategy to reach the early adopters has been formulated.

8. User Desirability Verified Using High Fidelity Prototypes in Planned Environment – A

high fidelity prototype has been used to verify the user desirability with users

that are representable for the targeted user segment. This prototype has the same

look, feel, and functionality as the finished product, but does not need to be built

or function the same way. The prototype needs sufficient support, such as

marketing and technical support, to generate a reliable outcome. Iteration has

proven that the users desire the product, and that the method of sale reaches the

target segment.

9. User Desirability Proven through Successful Product Launch – The product has been

launched and users are buying it in the projected, or higher, quantities


XIV

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