Internal Innovation - HOW TO DO IT WELL

This is an early excerpt from a book I am working on that I plan to call "Product Snacks". It will be a concise collection of chapters, each offering practical and accessible advice for product managers and designed to be a desk-side companion, providing quick, digestible tips to guide and inspire when you're seeking clarity or a fresh perspective. I’d love ANY and ALL feedback and if you’d like to collab, let’s chat!

When it comes to fostering innovation in a growing organization—especially one that’s still finding its footing—you need a structured yet flexible approach. Scaling up without a deliberate process to manage and nurture new ideas? That’s a fast track to chaos.

Cross-functional representation at the table from day one supercharges the ideation process. The right mix of perspectives means better ideas, faster validation, and fewer blind spots. In this snack, we’ll dig into the practicalities of setting up a stage-gate process, led by a cross-functional leadership team, to ensure innovation isn’t just a buzzword but something that actually delivers results.

The Engine of Innovation – A Cross-Functional Team

Innovation isn’t some lone genius’s job. Sure, there might be a visionary who can grok strategy, business cases, product taste, engineering quirks, and design principles—someone who can get people to yearn for the open ocean (props to Shackleton for that one). But at the heart of any real innovation pipeline is a dedicated cross-functional team.

This team acts as the advisory board for new ideas, making sure innovation isn’t just left to chance but is managed with the same rigor as any other business process. And the cross-functional mix? Absolutely critical. You need a blend of strategy, product, engineering, marketing, finance, and operations. Each member brings expertise, perspective, and—most importantly—a different set of biases to challenge assumptions. The goal is well-rounded, reality-checked decisions, ensuring alignment with broader business objectives at every step.

The Innovation Pipeline: A Stage-Gate Process

If you want to turn ideas into actual business impact (instead of an endless backlog of “good ideas” that never see daylight), you should leverage a stage-gate process. This framework breaks the journey into clear stages, with hard checkpoints before moving forward. Here’s how it might look in practice:

1. Ideation – Cast a Wide Net

Ideas can come from anywhere—customer feedback, internal brainstorming, market trends, late-night shower thoughts. The key at this stage is Volume. Don’t filter too aggressively. Sometimes the dumbest-sounding ideas spark the best ones. Encourage a culture where people feel safe throwing wild concepts into the mix.

2. Business Case & Core Assumptions – Gut Check

Once an idea is in the mix, it’s time for brutal honesty and you need to have a set of standard questions - something along the lines of:

• What problem does this actually solve?

• Who’s the target market?

• What’s the revenue potential?

• Do we have a moat here, or will competitors copy it in five minutes?

• Is now the right time?

If you can’t make a clear business case, kill it now. Set up criteria to measure against—is this a big enough bet? Does it meaningfully extend our competitive advantage? If not, move on.

3. Market Validation – Stop Drinking Your Own Kool-Aid

Before pouring real money into an idea, test it in the wild. Surveys, interviews, small-scale pilots—whatever gets you real-world signal fast. If customers don’t care, listen to that. Don’t fall in love with an idea that isn’t landing. Iterate based on feedback and if the feedback doesn’t help you find the answer, kill it.

4. Scope & Cost Analysis – The Reality Check

If market validation looks good, it’s time to answer the next set of hard questions:

• How much will this actually cost?

• What resources do we need?

• What are the risks?

• If we do this, what else are we choosing not to do?

The cross-functional team plays gatekeeper here, balancing technical feasibility, market opportunity, and financial viability. If the cost outweighs the upside, pull the plug now—before you get too deep and can’t let go.

5. Proof of Concept (PoC) / Minimum Viable Product (MVP) – Fast, Cheap, and Dirty

Now we build just enough to test the key assumptions. This is not about making something perfect—it’s about getting a usable prototype in front of real people FAST and keep iterating based on feedback. You may end up iterating here for some time too - which is why the constraints for this exercise as defined in the stage before this are so critical.

And here’s where teams screw up: they get attached. If early tests show weak signals, kill it and move on. Don’t let sunk cost bias keep you throwing good money after bad.

6. Pilot + Reference Customers – Can We ACTUALLY Sell This?

If the MVP shows promise, put it in real customers’ hands. This is where you get the most valuable feedback yet—does it actually deliver value? If so, start building a base of reference customers who can vouch for it. Their testimonials are pure gold when it’s time to scale.

7. Integration into the Business - Make or Break

If the pilot succeeds, it’s time to go all in. That could mean scaling production, launching a full marketing push, or rolling out across multiple regions. The cross-functional team plays a huge role here, ensuring a smooth transition from pilot to full-scale execution. 

The incredibly hard thing to do here is to INTEGRATE this into the core business. You have to treat this like integrating an acquisition of a separate business and team and be very intentional about the process. 

Innovation Can’t Be Stuck in the Core Business’s Grind

Your business already has a well-oiled machine—a set of core competencies that drive growth, keep the lights on, and ensure everything runs smoothly. That machine requires rigor, discipline, and predictability. And that’s great—until you try to squeeze innovation into the same system.

However, innovation doesn’t thrive in the core business’s day-to-day operations. It needs its own breathing room.

You can’t expect new ideas to flourish if they’re constantly up against the same prioritization process as your existing revenue-generating initiatives. Innovation demands a different operating rhythm—one that allows for speed, flexibility, and fast pivots without getting tangled in red tape.

This means you need to resource innovation bets properly. That could mean:

• A dedicated team (even if small) that isn’t fully committed to day-to-day execution work.

• A decision-making process that allows fast kills and fast scaling—no endless loops of committee reviews.

• Leadership buy-in to protect innovation from being deprioritized when things get tough - again, why defined constraints matter early on in the process.

A lot of companies make the mistake of expecting groundbreaking new ideas to emerge inside the core business structure—without adjusting how they allocate time, people, or money. That’s like expecting a startup to thrive while forcing it to act like a Fortune 500 company on day one. Doesn’t work.

If you’re serious about driving innovation, carve out space for it—or accept that it’s just not going to happen.

Governance and Resource Allocation

If leadership isn’t willing to back up their innovation ambitions with real authority, decision-making power, and dedicated resources, then don’t bother. You’ll just frustrate people, waste time, and end up with a bunch of half-baked ideas that never go anywhere, and you’ll likely lose a lot of really good talent in the process. 

A cross-functional innovation team needs to be empowered—not just “advisory.” They should have the ability to:

• Greenlight or kill ideas at each stage, without waiting for approvals from a boardroom full of execs who meet once a quarter (again, why having a defined process matters).

• Allocate resources—budget, people, time—without fighting for scraps.

• Set clear criteria for moving forward, so teams aren’t second-guessing whether an idea has legs.

And let’s talk about money. Innovation budgets can’t be an afterthought. You don’t need to spin up a massive R&D department, but you do need to create pockets of dedicated investment for new bets. One approach? Treat it like a mini venture fund inside the company—small but strategic allocations to explore high-potential ideas, with clear stage gates to double down or walk away.

If your innovation efforts are always competing for resources with your core business priorities, guess what? The core business will win every time. Make the investment, or don’t pretend you’re serious about it.

Making Innovation a Sustainable Process – The Long Game

Most companies have flashes of innovation—a big idea here, a bold experiment there. But sustaining it? That’s where most fail.

Why? Because they treat innovation like a one-off project instead of a core competency.

To make innovation stick, you need:

1. A clear, repeatable process – No more “we’ll figure it out as we go.” Build a framework that guides ideas from concept to execution, so innovation isn’t dependent on random strokes of genius.

2. A culture that values experimentation – If failure is punished, people will stop taking risks. If success isn’t celebrated, people won’t be motivated to innovate. You need both.

3. Ongoing investment – Innovation isn’t a “this year’s initiative” thing. It’s a perpetual commitment. The companies that stay ahead are the ones that bake this into their DNA.

We’ve all heard the phrase what got us here won’t get us there. It’s a cliché for a reason—because it’s true.

If you’re not building a sustainable way to discover, test, and scale new ideas, you’re just waiting to be outpaced by someone who is. The best companies understand that innovation isn’t an occasional event—it’s a machine. One that needs to be built, maintained, and optimized over time.

At the end of the day, ideas are easy. Execution is everything. Build the system, commit to it, and watch the magic happen.

Innovation Needs Speed—Not Bureaucracy

“This feels like an oppressive process—won’t this structure stifle innovation by making it SLOW?”

The short answer? Hell no.

The whole point of this process is VELOCITY—making high-quality decisions fast at each stage gate. These gates aren’t meant to be bloated, committee-driven bottlenecks where ideas go to die in endless PowerPoint presentations. They’re quick gut checks—structured moments to confirm we’re still on track and not blindly charging off a cliff.

If the guardrails and constraints are set upfront, these checkpoints should be frictionless. It’s not about endless debate—it’s about meeting the bar or moving on. You either pass the gate, pivot, or kill the idea. No drama, no delay.

Now, sure, sometimes you’ll need to tweak the criteria as you learn and refine your process. But that’s part of iteration, not bureaucracy. The key is going slow upfront to go fast later—designing stage gates intentionally so you can move through them at full speed without second-guessing or unnecessary roadblocks.

Done right, this process should eliminate bureaucracy, not create it. If your stage gates are dragging things down instead of propelling them forward, you’re doing it wrong. Fix that.

Final Thought: Do It Right, or Don’t Bother

Here’s how I see it, if you half-ass innovation, you might as well not do it at all.

There’s nothing more frustrating than a company that claims to value innovation but doesn’t actually support it. No budget, no decision-making power, no strategy—just a lot of wishful thinking and corporate theater. Don’t be that company.

If you’re going to do this, do it right. Give your innovation pipeline:

• A real process that people can trust and follow.

• Clear decision-making authority so things don’t get stuck in endless loops.

• The right resources—time, money, and autonomy—to make things happen.

Because when you commit, you create something powerful: a repeatable system that keeps your company ahead. A competitive edge that compounds over time. A culture that attracts top talent, where people actually believe they can turn bold ideas into reality.

That’s the difference between companies that lead and those that fade into irrelevance.

So ask yourself—are you actually serious about innovation? Or just playing pretend? Then get to work - either back to work - or to build your innovation machine.