Traditionally the Innovation funnel is a stage-gate process that organizations use to define their approach to ideation. Businesses that adopt this usually start off by narrowing down their challenges, gathering ideas around them, reviewing said ideas, and then implementing them. However, here at Qmarkets we believe that this is only one part of a greater innovation funnel.
We have created a unique vision of the innovation funnel which incorporates the full spectrum of innovation activity. In this blog, we’ll give you a step-by-step guide to our ‘Innovation Ecosystem’, providing you with multiple ways to discover and manage innovations at your enterprise.
A Unique Innovation Funnel
The Qmarkets Innovation Ecosystem is made up of three main phases:
- Front End Discovery. Identify trends, insights, opportunities, and other sources of inspiration that can inform innovation activity.
- Innovate & Craft. Use varied systems and processes to develop, evaluate, and refine ideas around strategic challenges.
- Commercialize. Manage the delivery of promising ideas to generate measurable outcomes and bottom-line results.
Each phase of the innovation funnel is designed to help you tap into multiple sources of inspiration and insight, develop ideas through structured processes, and ultimately manage their delivery.
Now, let’s explore each phase of the innovation funnel and how it can help your organization maximize innovation ROI.
Front End Discovery
The standard innovation funnel is kicked off with an idea generation phase, yet this does not focus on the strategic inspiration for idea challenges – these being a specific topic or issue that you wish to ideate around. In our experience, your innovation funnel needs to include ways to constantly supply ideation by generating a steady flow of inspiration to do so.
Trends & External Data Providers
Your company’s innovation infrastructure is not just made up of employees, but external stakeholders too. Monitoring and partnering with external data providers, such as customers, business partners, startups, academia, and expert communities, provides your organization with a steady flow of insights from sources that influence your business.
These external insights can strengthen the front end of your innovation funnel. Using them to understand developments and trends within your industry can help your organization identify emerging opportunities and determine which areas deserve further exploration.
Analyzing trend data with a trend analysis tool can help you assess its relevance to your business and explore potential scenarios in which those trends could have an impact. Your experts, partners, and employees can then build on this information, share their perspectives, and determine which opportunities are viable and potentially rewarding to pursue.
Every relevant insight gives your organization an opportunity to assess its potential business impact and generate ideas for solutions, improvements, and new opportunities. This creates a more informed innovation funnel, where ideation is guided by evidence and insights from both inside and outside the organization.
Innovate & Craft
Once you have gathered relevant insights and trends, the next question is: who should be involved in solving these challenges? It is important to identify your key audiences and have a clear understanding of how they will contribute to your innovation funnel. These audiences may overlap with the customers and external data providers involved in the discovery phase.
So far, the innovation funnel has focused primarily on external sources of insight. At this stage, you should also incorporate internal resources, bringing together employees, experts, and other stakeholders who can apply their knowledge and experience to your strategic challenges.
Strategic & Company Goals
This is usually where the standard innovation funnel begins, using your organization’s goals and strategy to define what to ideate around. While we see this as only one part of the wider innovation funnel, it is no less important. Strategic goals may be influenced by insights gathered during front-end discovery, as well as internal business priorities.
Leadership and employees can bring different perspectives to these priorities, including:
- Revenue and growth opportunities.
- Organizational culture.
- Operational costs and efficiency.
- Process improvements.
- New products and customer feedback.
Combining these priorities with insights from external experts gives you a broader view of your organization and industry. From here, you can pinpoint where to focus your ideation efforts and establish idea challenges that align with your strategic goals.
Ideating Around Your Strategic Challenges
This is perhaps the most important stage of the innovation ecosystem. Here, your internal and external audiences share ideas around your organization’s chosen topics and strategic challenges, informed by insights gathered during the previous stages of the innovation funnel.
Successful ideation means generating a diverse range of relevant ideas that can help solve organizational challenges. These ideas can uncover new opportunities, strengthen competitive advantage, and improve outcomes for both employees and customers.
Once ideas have been collected, your audiences can review and evaluate them against defined criteria. This helps identify the most viable and valuable ideas, ensuring that only the most promising progress further through the innovation funnel.
“Innovation is successful when you have gathered as many ideas as possible to source solutions to your organization's challenges”
Scouting
Ideation will most likely generate new opportunities and identify gaps in your existing offerings. These ideas must then be evaluated to determine whether they can be implemented internally. However, this is not feasible for every organization due to budget constraints, limited resources, or a lack of specific capabilities.
Within our innovation funnel, scouting helps address these challenges by enabling organizations to explore external opportunities. Instead of developing every idea internally, scouting can help you identify and manage opportunities such as:
- Joint ventures and strategic partnerships.
- Mergers and acquisitions.
- External technologies and solutions.
Qmarkets’ scouting software helps organizations manage these opportunities as part of a broader innovation funnel. By looking beyond internal development, you can access external capabilities, accelerate time to market, strengthen your competitive position, and deliver more comprehensive products and solutions to your customers.
Commercialize
After thoroughly evaluating your organization’s ideas and determining whether scouting is a suitable option, the next stage of the innovation funnel is to develop the idea internally and assess its market viability. If an idea proves viable, it can progress toward implementation and an official launch, after which its ROI can be measured.
Post-launch, your organization will likely gather further insights, expert feedback, and new ideas based on real-world results. These insights can help you adjust and refine the product or solution, while also informing future opportunities and restarting the innovation funnel as a continuous cycle.
Incubate Concept, Prototype & Experiment.
Now your organization must deliver the idea. This could involve a small process improvement or the development of an entirely new product. For larger ideas moving through the innovation funnel, R&D teams may need to develop prototypes, run experiments, and gather feedback to determine whether the concept is viable.
These activities can generate further ideas and improvements before implementation. Each idea should therefore be managed appropriately throughout the development process, helping teams use resources effectively, address potential issues, and support efficient and successful delivery.
ROI
Perhaps the most essential step is measuring the ROI of an idea. Implementing new ideas requires budget, time, and resources, so it is important to understand whether the investment has delivered the expected results. Measuring ROI also helps determine which ideas have created value and which may require further improvement.
These learnings can feed directly back into your innovation funnel. If a launched idea does not achieve its intended impact, further ideation may be needed to improve and optimize it. The results can also inform new idea challenges, scouting opportunities, and open innovation initiatives, helping to continue the innovation ecosystem cycle.
Implementing Your Innovation Ecosystem
The innovation ecosystem funnel provides a workflow covering the full range of innovation activity, while allowing your organization to adopt only the steps it needs. For example, you may implement an employee innovation program to tackle strategic challenges or establish a scouting program to identify emerging technologies and potential partners.
“The beauty of the Innovation Ecosystem funnel is that whilst providing a workflow of the full strategic range of innovation activity, it is also possible to only adopt as many steps as your organization deems necessary”
Qmarkets has developed tools for every step of the innovation funnel, enabling organizations to implement, manage, scale, and measure their innovation activities. Each module can be configured around your existing processes, making it easier to start with one practice and expand your program as your needs evolve.
Adopting the full suite of innovation activities will establish a strategic innovation funnel that will provide a constant and varied influx of innovative inspiration and insight for your organization to utilize. Fundamentally delivering opportunities that will stimulate bottom line revenue, enhance your competitive edge, and improve your employee and customer experience.
Curious to find out how others have implemented Qmarkets’ innovation funnel? Then read our case study with Swiss Post which explores the bottom line results they achieved via their innovation management program.'
Innovation Funnel: Common Questions Answered
A strong innovation funnel consistently produces strategically relevant opportunities, maintains appropriate conversion rates between stages, avoids unnecessary delays, and gives leadership clear evidence of innovation performance and business value.
Innovation leaders should track participation, idea quality, evaluation time, stage conversion rates, implementation speed, investment, realized value, and portfolio balance to understand both innovation efficiency and overall effectiveness.
Organizations can prevent bottlenecks by establishing clear decision criteria, assigning accountable owners, setting evaluation deadlines, monitoring stage duration, and ensuring promising opportunities receive the resources required to progress efficiently.
Responsibility typically sits with innovation leaders or dedicated innovation teams, supported by executives, subject-matter experts, business units, and project owners who provide governance, evaluation expertise, resources, and accountability.
Organizations should monitor innovation funnel performance continuously and conduct structured reviews at regular intervals. Reviews should examine bottlenecks, resource allocation, strategic alignment, portfolio performance, and opportunities to improve decision-making.
