One of the surest ways to kick start sluggish corporate growth is to invest in big ideas that will underpin a new product line or entire business, but it’s hard to do and can lead to some incredibly expensive mistakes if companies get it wrong.
But it doesn’t have to be this way. Collecting and scanning a wide range of ideas, pulling out the best, and then removing the “growth anchors” that exist throughout a large firm will all help companies find and fund the big ideas with the biggest chance of success.
For the first step in that sequence, R&D teams should build a formal management process for collecting and selecting ideas to fill their innovation pipeline with high-quality, commercially viable concepts. The best “ideation models,” as they’re called, focus on accepting fewer, higher quality ideas into the formal new product development (NPD) process. The models then use clear idea evaluation criteria and speedy feedback that result in close to three out of four ideas being funded and advanced to concept or development stages (see charts 1 and 2).
Chart 1: Number of ideas entering the innovation process Medians, by innovation performance Source: CEB analysis
Note: Sustained innovators are those companies whose new product revenue streams have high longevity and low cannibalization effects.
Chart 2: Percentage of ideas funded Medians, by innovation performance Source: CEB analysis
Note: Sustained innovators are those companies whose new product revenue streams have high longevity and low cannibalization effects.
Three Steps to Follow
Successful idea management processes begin with three planning steps, which lay a foundation for objectively selecting winning ideas and quickly preparing them for the company’s innovation pipeline.
1. Determine how to manage submitted ideas: What’s needed is essentially a knowledge management tool to capture submitted ideas, save data and content related to each idea, and that allows multiple people to view the materials.
Some companies invest in third-party software systems that manage the ideation process end-to-end or that add idea management to the front-end of existing product lifecycle management tools. Other organizations’ internal IT groups build custom ideation tools that syncs with their intranet or SharePoint. For smaller organizations just starting an ideation process, data collection may happen manually via email and spreadsheets.
2. Build an initial submission screen: Every ideation process needs a submission form where employees can upload descriptions and data about their ideas. Progressive companies think of this step not just as a means of data collection, but also as a screen to make sure ideas entering the system are of high-quality and commercially promising.
These screens typically require those submitting the ideas to self-assess the idea’s potential using a standard questionnaire; low scoring ideas do not make it further in the review process. Six tips will help companies build an effective idea screen.
- Make it short and sweet: The longer the submission form is, the less likely people will take the time to submit ideas. One company in CEB’s networks ensured its idea submission questionnaire took 15 minutes to complete to encourage broader participation.
- Avoid overly quantitative or financial criteria: At this stage you’re trying to understand the characteristics of the idea rather than building a proper business case. Qualitative questions like – “Does this fit with our business strategy?” or “Would this deliver technical / product differentiation?” – are better than NPV or market sizing estimates, which are often inaccurate at this early stage. Remember, ideas are still evolving and granular technical or market details will be fleshed out later in the process as the idea is improved via peer feedback, customer insight, technical pressure testing, and so on.
- Evaluate strategic fit: Strategic fit criteria make it less likely that only incremental product improvement ideas will pass the initial screen. Requiring that ideas are well-aligned with an articulated corporate, business, or technology strategy will also increase the quality of the ideas and train employees to think more strategically about what constitutes a “good” idea.
- Create a scoring rubric: Provide definitions for each criteria in your scorecard to ensure consistency of the self assessment. The scoring rubric should be objective and measurable whenever possible so there’s little room for interpretation when people are filling it out. For example, employees can evaluate the competitive differentiation of an idea by considering its patentability using this scale, with a “4” being the most attractive:
- 1 = technology is already patented by a third party
- 2 = technology will not require a patent
- 3 = technology can be patented by our organization
- 4 = technology is already patented by our organization
- Low scoring ideas should be automatically routed back to the person that submitted it: If an idea doesn’t meet minimum criteria thresholds, then the system should inform the submitter why it wasn’t accepted. This will screen out low-value ideas, saving executives time since they’ll only focus their review on high-quality ideas. It also gives ideators an opportunity to iteratively improve their idea (i.e. narrow the scope to make it better aligned to a strategic opportunity) and resubmit it into the system in the future.
- Consider using quality control: Some teams ask a technical expert or business analyst to quickly scan ideas that pass the basic threshold to ensure the questionnaire was filled out realistically. For any ideas where the evaluation seems too optimistic or incomplete, the expert can reach out to the submitter to help revise the submission.
3. Gather ideas: There are several ways ideas tend to flow into a company’s ideation process, including:
- Outputs of focused ideation sessions.
- Opportunities / improvements identified by project teams.
- Ad hoc idea submissions.
- Hackathon/idea challenge outputs.
- Customer feedback-based improvements.
The goal is to build a sustainable process that continues to source ideas beyond the initial rush of submissions at launch.
Most companies will use multiple channels to encourage idea submissions and strategic thinking from their teams. For example, when first launching an ideation process, a company might hold high-profile “innovation challenges” related to specific business needs to encourage a broad set of employees to use the system.
They might also ask project managers submit improvement ideas from lessons learned or retrospective analysis during the closing down of a project. Finally, R&D executives could require managers to check-in with their direct reports quarterly to solicit any ideas they have and to encourage participation.
Blog courtesy of CEB, now Gartner. Read more blogs from the firm here.
