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.
ii
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).
iv
Nyckelord: Technology Readiness Level (TRL), innovationsprocesser, Design Thinking,
Lean Start-up, Innovators Method, affärsmodellsinnovation, användar-fokuserad design
v
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
vii
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
ix
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
1
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
3
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
5
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
Introducing a Framework for Innovation Readiness Levels
6
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.
Description and Definition of Innovation Processes
7
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
Introducing a Framework for Innovation Readiness Levels
8
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.
Description and Definition of Innovation Processes
9
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?
Introducing a Framework for Innovation Readiness Levels
10
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)
Description and Definition of Innovation Processes
11
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
Introducing a Framework for Innovation Readiness Levels
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
Description and Definition of Innovation Processes
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
Introducing a Framework for Innovation Readiness Levels
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).
Description and Definition of Innovation Processes
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
Technology Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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
Technology Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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?
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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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31
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
Introducing a Framework for Innovation Readiness Levels
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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33
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
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
36
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.
Introducing a Framework for Innovation Readiness Levels
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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39
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
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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
Introducing a Framework for Innovation Readiness Levels
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.
Introducing a Framework for Innovation Readiness Levels
44
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.
Introducing a Framework for Innovation Readiness Levels
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.
Introducing a Framework for Innovation Readiness Levels
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.
Introducing a Framework for Innovation Readiness Levels
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
Technology Readiness Levels
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.
Introducing a Framework for Innovation Readiness Levels
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
Discussion & Conclusions
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.
Introducing a Framework for Innovation Readiness Levels
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;
Discussion & Conclusions
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.
References
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 5 Husqvarna Group Product Management 8/3
Interviewee 6 Husqvarna Group Group Function 28/2
Interviewee 7 Husqvarna Group Category Management 8/3
Interviewee 8 Husqvarna Group Product Management 7/3
Interviewee 9 Husqvarna Group Product Management 5/3
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
Appendix B – Internal Interview Guide
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?
Introducing a Framework for Innovation Readiness Levels
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?
Appendix B – Internal Interview Guide
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?
Introducing a Framework for Innovation Readiness Levels
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?
○ Vilka metoder använder ni?
● I vilka steg utreder/verifierar ni kundbehovet?
○ Vilka metoder använder ni?
● Hur avgör ni om kunden är mottaglig/mogen?
○ Vilka metoder använder ni?
● Hur skulle du vilja arbeta/att den här processen såg ut?
Affär
● Hur utvecklas affärsmodellen?
● När i processen börjar man titta på:
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
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
Introducing a Framework for Innovation Readiness Levels
XIV
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