Tuesday, August 31, 2010

Innovation does not start with idea generation

I've just finished reading a book called Intangible Capital (more on that in another post) by Mary Adams.  The book does a good job describing the value and importance of knowledge, intellectual property and other intangible assets, and why innovation is key to the creation of those assets.

But that's not the subject of today's post.  Today's post deals with the fallacy that innovation "starts" with idea generation.  I'm picking on Mary's book because it was at hand and the latest to suggest that innovation starts with idea generation.  I know this because it says so on page. 85, but Mary's writing does not stand alone.  Far too often I hear people suggest or read that innovation starts with idea generation.  Sorry, no - and my apologies in advance to Mary for calling out this small problem in what was otherwise a very good book. 

Idea generation is at best the "mid point" of an innovation process, because by the time you start generating ideas you need to have:
  1. A good sense of the strategic goals and direction of the organization
  2. A good sense of trends and the unfolding future
  3. An understanding of unmet or unarticulated needs
Only when you are armed with this knowledge can you generate ideas that are worth anything.  We at OVO call this "ideating in context".  The obvious alternative to "ideating with no context" which is what many teams do, and why idea generation and brainstorming have such poor reputations.  Let's examine why all three factors need to be complete before you can brainstorm effectively.

First, you need to understand the strategic goals, direction and strategic intent of the business, and how it will remain constant or change.  This aspect forms the "framework" for your idea generation.  If your firm has the goal to be the best at customer intimacy or experience, then that should inform your idea generation - you'll want to spend far more time focused in those areas than in operational excellence.  Too often there are no clear guidepost or guardrails to shape your thinking and in those cases all ideas and all strategies seem equal.  They aren't, and if you present ideas out of sequence or out of context with strategy then you'll find that out.

Second, you need to understand something about the future.  After all, the average time to market for an idea in most large firms is between 24 and 36 months, idea generation to commercialization.  That means an idea you generate today will be birthed into a world two to three years from the one we are in today.  How much change will occur in that space?  If you create an idea today that assumes the world will be the same as it was when the idea was created, you've shot behind the curve and the idea will seem dated from the start.  Not to mention the fact that observing trends and understanding where the future may evolve is important. You may spot entirely new opportunities by spending time understanding the future, and your products or services may arrive at exactly the right time.

With those two factors safely covered, you can also understand what customers want and need.  You do this through many different qualitative exercises - voice of the customer, observation, lead users, ethnography, etc.  What you are seeking are the unrecognized, unmet or unarticulated needs that align to your strategic goals and to the unfolding future.  At the intersection of those three converging factors are ideas that will be relevant, valuable and in line with your capabilities. 

These factors create the "context" that identifies customer needs in line with future trends and aligned to strategic goals.  Within that context or framework, generating ideas becomes far more easy and far more robust - actually becomes safer, since you are generating ideas you know link to strategic goals and to customer needs.  It's less arbitrary since you know the goals, potential futures and customer needs.

Innovation doesn't start with, and doesn't end with, idea generation.  In fact we should place far less emphasis on the idea generation phase than we do, but it seems to get the most focus, probably because it is the easiest to organize and any one can participate, while the other tasks require real thinking, real planning and real work.  Generating ideas should be the outcome of good strategic thinking and careful assessment of customer behaviors and needs.  If that work is done well, idea generation is almost an afterthought, but it certainly isn't the first step in the process.
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posted by Jeffrey Phillips at 11:53 AM

13 Comments:

Anonymous Mary Adams said...

Jeff-

I will gladly accept your critique on the admittedly simple description we use of an innovation process. You are one of my favorite innovation bloggers and am thrilled to have your feedback.

But I would ask you to take another look and let me know what you think about our higher level point.

Because the discussion of innovation process is inside a section called "the dual challenges of innovation management" which says that innovation is both a process and an ecosystem.

We have seen in our research and our consulting work that it is not enough to have a process (even your expanded process) if the company does not have the right people, the right knowledge and the right relationships. These are the essence of intangible capital. And our thesis is that intangible capital is the ecosystem for innovation.

Would love to hear what you have to say--do you see the ecosystem in the same way?

12:27 PM  
Anonymous Anonymous said...

Observation.

Most Ideas generated in any system have those attributes. The challenge in any large organization is capturing, identifying and capitalizing on said innovation opportunity.

With that said, a focus on the prior three with 100K people really isn't feasible. Those with out those prerequisites will not be implemented or deemed valuable.

3:15 PM  
Anonymous tomislav said...

I agree with your post, if this 3 prerequisites are not fulfilled there is a big change to fire above target.
Before Idea Generation, Trends&Strategy must be known and well stated in front of brainstorming participants.

1:39 AM  
OpenID James Todhunter said...

Great post, Jeffery!

4:50 AM  
Blogger Mark Andrews said...

I think most idea generation is automatically bounded by the confines of the strategic direction of the company and its culture. I doubt in any brainstorming session at 3M would generate ideas on the next greatest ice cream product--that's just plain silly. So in summation, your three tenets are somewhat correct. I see innovation as the distillation of generated ideas into ground-breaking marketable products and services--you need the ideas and creativity before the innovation can happen.

7:40 AM  
Anonymous Chip Garner said...

This is a interesting and nicely written post - thank you for sharing it. I do, however, have to agree with Mark. For while your argument is sound, I believe for most corporate entities, it is a given.

Idea generation for the purpose of innovation is by definition bound by the rules of need, value and applicability. It is also, in a corporate culture, competitively driven - ideas are finely tuned in hopes of being that one of many to which valuable resources will be applied, and will therefore be highly targeted to the present and future needs of the company.

Creative thinking for the purpose of innovation is never a jumbled stream of disparate ideas - it is always disciplined with focus and purpose to be effective.

9:05 AM  
Blogger Jeffrey Phillips said...

To Mark and Chip:

You are both correct in asserting that the "context" should be in place for idea generation in most firms, but in our experience it almost never is in place.

First, strategies must be clarified. It's as important to say what we "won't" do as it is to say what we will do. Strategies often take things, like sacred cows, for granted. We can't do that in innovation.

Second, it's rare to find an organization that has any forecasts or scenarios more than 18 months to 2 years into the future. There is so much focus on the day to day and quarter to quarter drumbeat that very few people are looking "that far" down the road. Yet the ideas we generate today won't be commercialized in this reality, but in the reality of the market 2 to 3 years, at a minimum, down the road.

Third, most organizations innovate from the "inside out". That is, they extend existing products and services rather than understand new customer needs. That's why my Microsoft Word application has 5 times as many features as I can possibly use. In most large organizations, no one ever actually meets the consumer and understands their needs. At best we outsource that to market research firms.

So, while in concept all of the work I stipulate as context for brainstorming SHOULD be a given, it rarely is.

10:31 AM  
Blogger Jeffrey Phillips said...

This comment has been removed by the author.

10:31 AM  
OpenID bcockrum said...

IMO, putting any constraints on "brainstorming" will limit the ideas that are suggested (even though it may be frustrating). When you are diverging don't be afraid to truly diverge. Use your judgement and evaluation skills later when you are converging on the best (however defined) ideas suggested. It's hard for the mind to be in divergence/convergence mode at the same time, trying to generate ideas while also censoring within to not break the rules.
Maybe the suggestion of ice cream could inspire an idea within a colleague that leads to a new product for 3M; or maybe it simply gets eliminated during convergence because it doesn't meet established criteria.

12:42 PM  
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