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2017-10-10 05:58:31
Dylan MinorPaul BrookJosh Bernoff
October 09, 2017
Juan D az-Faes for HBR
Sales and marketing were once disciplines ruled by emotions. But somewhere
along the way, we recognized that they were based on definable pipelines and
applied technology to manage those pipelines. Today you can put a corporate
dashboard in place to manage them and tweak the settings to try to boost your
results.
What if we applied the same thinking to innovation? After all, innovation, like
marketing and sales, is a pipeline. In one end go raw concepts and notions. Out
the other end come actionable ideas that can move the business forward. With
the right technology, could you manage this pipeline the way you manage a sales
pipeline?
Our research shows that you can.
One of us, Dylan, has analyzed five years of data from 154 public companies
covering over 3.5 million employees that have used an idea management system
called Spigit. For the millions of employees of these companies, the idea
management system functions a little like Facebook people can post ideas, get
votes, deliver or respond to feedback, and develop the ideas into innovations
that make a difference to the company. The innovation teams at these companies
use them to track and process all the ideas and whether the company committed
to putting them into practice. Some companies use this software for process
innovation; others develop new products; others seek efficiencies and cost
savings.
Once you put innovation into a system like this, you can track everything. We
know how many innovation challenges the companies are running, how many people
are suggesting ideas, and how many ideas they suggest. We know how many people
are participating in other ways by voting or making comments, for example.
And we also know how many of those ideas get through the endpoint of the
challenge, which is where the company s management determines which ideas to
pursue further. We used linear regression to analyze every potential measure
the system includes over every 3-month time period when the system was active
within the company.
But what we learned from our analysis of all this data is that innovation is,
indeed, a science. And surprisingly, the variables that make for a successful
innovation program are independent of whether the company is seeking disruptive
or incremental innovations. It doesn t matter whether they re asking for
process or product innovation, what industry the company is in, or even, for
the most part, whether the company is large or small.
The key variable that we identified across all the companies in our analysis is
the ideation rate, which we define as the number of ideas approved by
management divided by the total number of active users in the system. Higher
ideation rates are correlated with growth and net income, most likely because
companies with an innovation culture not only generate better ideas, but are
organized and managed to act on them.
After reviewing dozens of variables that could potentially affect ideation, we
identified four that drove the ideation rate. They weren t what we expected.
Scale more participants. To succeed, an innovation program needs lots of
participants. It s the wisdom of the crowd: a large mass of participants will
always out-ideate a small group of smart people. On average, companies generate
one idea for every four participants in the system.
Frequency more ideas. To get to a set of promising ideas whose implementation
would make sense, you need to sift through a lot of candidates. To succeed, a
company needs to create frequent idea challenges for its employees. These
challenges reinforce a culture of innovation and generate more ideas going into
the pipeline. While there is a great deal of variation based on the types of
ideas and the companies reviewing them, on average, it takes five idea
candidates to generate one idea that the company judges to be worth
implementing.
Engagement more people evaluating ideas. It s not enough to get some people
suggesting ideas. You need lots of other people figuring out whether those
ideas are worth working on, or what it will take for them to become better. A
successful idea management system is a ferment of commentary, with lots of
feedback.
Diversity more kinds of people contributing. You might think the most
productive innovation system would be full of engineers or other
problem-solvers. You d be wrong. A successful system needs contributions from
all over the organization, especially staff who are close to the front lines:
sales staff, support workers, or people in close touch with the company s
manufacturing processes, for example.
When a program like this is working, it churns out actionable innovations at a
steady and predictable pace. What s that like?
One large industrial manufacturer has put an innovation management system to
good use. The company has mastered frequency and scale: it has run 15
challenges in the last year with over 2,000 active participants. Hundreds of
ideas have poured in, generating thousands of comments. In 12 months, the
company selected over 50 ideas to implement.
For example, the company challenged its employees to find ways to serve
customers better. Among the problems that surfaced was the difficulty of
inspecting a particular aircraft part overnight. The inspection process
typically took eight hours. The company s customers airlines found this
frustrating because sometimes planes land late and need to take off early.
As the service techs understood, the problem wasn t actually the inspection. It
was the process of threading the camera inside the aircraft part to inspect it.
That took seven hours. The subsequent inspection took one.
An administrative assistant at the company who was familiar with the airlines
complaints responded to the challenge. She had recently seen the Tom Cruise
movie Minority Report. She posted an idea, wondering, Why can t we send a
robotic spider into the part, like the ones in the movie?
While a lot of people reviewing her suggestion found it silly, the company s
Chief Technology Officer was intrigued. He tried putting a miniature camera on
a remote control set of robotic legs and walking it into the part. It worked.
He then turned the secretary s idea into a standard practice. Now the
inspections takes 15% as much time as they used to, and the airlines are a lot
happier.
A single idea like this is impossible to predict or optimize for just like a
single sale is impossible to predict. But when you treat ideas systematically
with an appropriately designed system, you can manage the pipeline of those
ideas. That pipeline engages the employees who best know how to solve the
problems of the business, and generates a predictable stream of innovations.
Those innovations drive the business forward. Our research shows how to
generate that steady stream of ideas.
Once everyone is thinking about ideas and imagining that their cool concept
might actually move the company you get the while company effectively engaged
in innovation. And in the Internet era, with the pace of innovation always
accelerating, understanding the science of innovation could make all the
difference in your ability to compete.
Dylan Minor holds an assistant professorship at the Kellogg School of
Management. Professor Minor received his PhD in business administration from UC
Berkeley. His research explores the nexus between organizations and social and
ethical issues.
Paul Brook is the Chief Customer Officer at Spigit, the largest provider of
ideation management software. Paul leads Spigit s customer success, support,
and operations teams, driving innovation at the world s largest companies in
financial services, manufacturing, healthcare, and energy.
Josh Bernoff is the author of the new book Writing Without Bullshit: Boost Your
Career by Saying What You Mean and the coauthor of three business strategy
books, including the bestseller Groundswell.