Too often, teams and firms like the "boundless" approach to innovation - that is, we need some NEW IDEAS about something that will help us DO SOMETHING VALUABLE. Often, this is the direction that innovative teams and people receive. Now, there's a benefit to keeping innovation very open - it allows a significant degree of freedom when generating ideas. However, too much freedom means that the ideas can represent virtually anything the participants think is valuable and may not align to the needs or direction of the business.
What we like to see is the definition of a boundary or a given, and the ability to "pivot" from that position while retaining some consistent boundaries or constraints. For example, your team could say that you have the best cheese making capabilities known to man, and want to generate ideas about how you can use your cheese making capabilities to increase production, create new products, offer new services to existing or new clients and potentially disrupt an existing market or create an entirely new market. But all of that is bounded or constrained by the cheese making process and the amount of risk or newness that you plan to inject.
When establishing boundaries or approaches, there are several paths you can follow. The first, and probably most overused, is the inside out technology approach. You may be familiar with this one - it's also referred to as the "hammer looking for a nail" approach. In this approach, you ideate and innovate based on your interesting technology - who needs it and how can it best be delivered?
As we identified above, you can also do this based on a capability, a service or a business model, although the preponderance of the effort is unfortunately placed on technology (read product) innovation. Too little emphasis is placed on understanding how a strong knowledge base or capability can be leveraged to create new products or services or disrupt existing tangential markets.
Another path to follow is to identify unmet or undermet customer needs. If your team can identify markets, industries, verticals or customer segments that have unmet or undermet needs, then you can innovate based on those needs. The question then becomes - how can our firm, with our capabilities, technologies and processes - address those unmet or undermet needs in an innovative way? Don't forget that you can meet those needs with a partner as well.
Another path to take is to project the future and anticipate trends and future markets and future needs. This is probably the least utilized approach since it requires the most research and risk, yet provides probably the best chance for high rewards. If your firm can accurately project the future and begin developing innovative products and services people will want, then you can get quite a leap on the market. In this regard, your bounds are the future wants and needs of a target group of individuals. Then, your task is to determine how, or if, your firm can meet those future wants and needs.
A final path is the disruption of an existing market based on a better mousetrap. Based on the capabilities, technologies, methods and processes, you may discover that your firm has the ability to disrupt a market that it has never competed in before - not just enter the market but radically change how it works. For example, could Apple change how music is distributed? Could Salesforce change how software is purchased and licensed? Too often many firms fail to examine their core strengths and consider how those strengths could be consolidated and provided to a new market.
These paths or approaches I've suggested are just a few ways to "bound" the innovation and ideation and make it more productive. Many firms aren't willing to "bound" or constrain ideation because they are afraid the results will be too timid. However, without a set of bounds that tie closely to strategic direction and intent, most ideation and innovation will be incremental at best, and unfocused and unproductive at worst.