Picking Innovation Winners
We have plenty of ideas. However, pretty much every innovation manager I have ever met has one big question on his mind – which ideas to choose to develop? If only I had a pound for every time I had heard the likes of “We have plenty of ideas around here, it’s knowing which ones will be big that we need help with”.
For the most part, I think that this belief is a hallucination on the part of these managers; very few I have ever worked with truly have a stock of great ideas. Most innovation managers are also armed with an arsenal of tools for evaluating the market and commercial feasibility of ideas.
The real issue is that most companies have a stock of half-baked ideas; some of which have potential and some which don’t. And because they are half-baked, the tools for market and commercial evaluation won’t work. So there’s something that needs to happen between brainstorming and getting the winning idea to market, which is where people are really struggling.
Having run several hundred innovation projects over the last 15 years, one thing is very clear to me – picking the ideas that ‘keep coming up’ and are difficult to develop or make commercially viable is one place to look. I want to examine an example in order to illustrate this dynamic:
You may have noticed the weight of media attention recently around the concept of food miles and the sourcing of local produce. It is something that has come to the fore amidst increased interest in the environment and a general desire in the UK to find anything to bash supermarkets with – supermarkets being big and successful business which we British obviously don’t like. There are a number of underlying human needs and wants underneath all of this which ensure that there is a real opportunity to be had. Farmers markets and the emergence of regional food lines, even though they are sourced nationally, are a couple of examples of business concepts which have started to tap into these needs.
How to spot the winners #1
So here’s the rub, these ideas have been coming up in brainstorming sessions for at least 10 years (10 years ago is when I first heard them, which probably means they were around for a good few years before that). And what’s more, they have come up time and time and time again. I believe this is one of the first clues that there is some kind of opportunity to be had. For reasons which I will look at in another article, all brainstormed ideas are related to people’s needs in some way. So if they keep coming up, we have a reasonable clue that they will be more than the passing whim of a random individual.
How to spot the winners #2
So how come it took ten years to start to see some commercial exploitation of these ideas? How come they didn’t get picked out? The answer is very simple – they’re just too hard. If I were running a successful supermarket then I would probably owe a lot of my success to having very efficient supply chain and logistics. And I would have huge amounts of investment tied up in the system I had developed to deliver it. This is a big problem for me if I start to think about sourcing products locally. Which, of course, is the tip of Clayton Christensen’s Innovator’s Dilemma, which always makes it easier to do sustaining innovation – in other words make our supply chain even more efficient – rather than create a new disruptive innovation, in this case delivering locally sourced products to people.
How to spot the winners #3
So far two clues to spotting the winners: first they keep coming up, second they are difficult to do. Two clues don’t make a strategy and, in reality, the process of selection is much more involved than this. I do not want to imply that just because an idea keeps coming up, it guarantees that there is an enduring need underneath it (see ‘Predicting the Future’). Equally, just because an idea is difficult to commercialise doesn’t guarantee success. What I do believe is that these two factors are at the heart of an issue, the understanding of which is the first step on the road to success.
Imagine we had just got to the end of a brainstorming session 10 years ago and we had identified the vague concept of a local food aisle at our supermarket. Should I back the idea? Is it commercially viable? At this point, we cannot know and it is because of a phenomenon similar to the Heisenberg Uncertainty principle.
The Heisenberg Uncertainty Principle of quantum mechanics says that the act of observing changes the outcome. I think that the equivalent Innovation uncertainty principle says that the act of observing the idea changes the outcome. Like Schrödinger’s cat, the idea is both dead and alive at this point.
It is dead because we don’t know if it is commercially viable and it is alive because we don’t know if it is commercially viable. And the only way we are going to find out is by opening the box and replacing the damned cat with a fox terrier. Because unlike the cat, the fox terrier is going to keep trying to get out of the box until he falls over from exhaustion; which just happens to be the same mindset the innovation team needs at this point. Keeping trying different ways of getting the idea to work, sequentially improving it, radically changing it, experimenting with different executions of it. Put simply until you develop the idea it will always be both dead and alive. What all this means is that my original often heard quote from innovation managers “We have plenty of ideas around here it’s knowing which ones will be big that we need help with” is a trap. It presupposes that there is a definitive answer, rather than a process to transform ideas into winners. And the temptation is always to take the path of least resistance which is to conclude the idea will never be commercially viable. Or to put it another way, to be like our long-suffering cat curling up in the corner of the box and waiting for the vile of cyanide to crack.
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