strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: August 27, 2009

 
 

Are You Killing Enough Ideas?

To avoid these patterns, look at your organization as a whole, particularly in relation to R&D. Figure out ways to shape the formal and informal structures together, integrating them from the beginning. One useful approach is to map informal networks, a technique developed in academic circles in which communications among people are diagrammed to reveal the patterns of information flow and identify the “hub-like” people who contribute to it. (See, for example, “The Community Network Solution,” by Karen Stephenson, s+b, Winter 2007.) Network mapping is still a relatively novel practice in the commercial world, even though senior teams and breakthrough innovators rely heavily on their informal networks for both gaining insights and building support. There is great power in identifying critical nodes for information flow in the organization and planting creative and socially sensitive people in those positions, to make the best use of their natural networking talents to sharpen creative ideas and obtain advance support for the best ideas. (See “Finding and Grooming Breakthrough Innovators,” by Jeffrey Cohn, Jon Katzenbach, and Gus Vlak, Havard Business Review, December 2008).

2. Capture budding ideas from the widest possible net and collect them centrally. In most organizations, a subset of people in marketing or product development are formally tasked with developing and testing new ideas. They are typically chosen not because they are the most creative and insightful individuals, but because they know how to navigate the development process once an idea has been formed: They know how to get it approved or funded. Truly innovative companies like Apple or Google, by contrast, make generating ideas an informal part of everyone’s job and motivate employees largely with nonmonetary recognition. A call center representative who notices a pattern among customers’ complaints is just as likely to think of an inspired way to fix it as the marketer applying analytical techniques with focus groups. And external innovators are sometimes the best source of ideas. (See “The Promise [and Perils] of Open Collaboration,” by Andrea Gabor, s+b, Autumn 2009.)

Unfortunately, many of the best ideas never get past the rounds of informal watercooler conversations. Although the informal organization is good at surfacing new ideas outside standard operations, these ideas can fade away without help from the formal organization to codify them. Thus the challenge is to capture informal ideas without constraining them, and to bring them into formal consideration. New communication and electronic interaction mechanisms can help. For example, Web-based systems such as Starbucks’s www.mystarbucksidea.com gather and codify ideas and even use decision-market approaches to evaluate them. Companies must develop ways to motivate employees and customers to contribute their thoughts, and set up an efficient formal mechanism that makes it easy for these ideas to enter the development system. The more ideas you capture, the more likely you are to hit some winners.

3.    Involve multiple perspectives in “go/no-go” choices from the outset, and thus make them stick. Most organizations have discrete formal groups and processes that use different lenses for evaluating ideas: Marketing represents the customers, finance evaluates the economics, and engineering determines feasibility for launch. They answer the questions in series, and then “throw the problem over the wall” to the next team. They may not even be aware of one another’s findings.

The principles of focused accountability or clear decision rights provide a purported rationale for this fragmented approach. Breaking up the innovation process often seems like the easiest way to make progress. However, it ignores the fact that truly effective innovation needs to integrate choices about customers, finance, and technology; without buy-in at the outset from all these groups, choices made upstream may be undone downstream. When the final decisions about launching the product must be made, the groups often find themselves at cross-purposes; either one group wins and the others lose, or they reach a rapid but weak compromise for the sake of consensus that satisfies nobody, including the customers.

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store