The New York Times blog has posted an interesting interview with A. G. Lafley on innovation at Procter & Gamble (registration free but required). The interview is well-worth a read.
I particularly like his answer on the question “…and yet only half of your product innovations succeed. Why isn’t the rate higher?” Lafley states “I don’t really want it to be. Human nature is such that, if we push our people to drive the batting average up, they’ll try to hit more safely, take a shorter swing, go for the singles instead of home runs. But we try to set milestones that innovations must meet at every step along the development process. As soon as they miss one, we allocate the resources to another product moving through the funnel. That’s another difference from the old days, when P. & G. let bad ideas go too far.”
I absolutely agree with not pushing the success rate too much, as it would come at the cost of getting less innovative ideas. These ’safe bet ideas’ could quite possibly result in a lower profit than a few truly innovative ideas with a few failure ideas.
However, instead of letting slip the strictness of criteria to get more ideas out, organisations could also focus at the front end. One way for organisations to get more output is to get more ideas into the Innovation Funnel. For example: an organisation has 100 ideas moving into the innovation funnel and at the end that results in 1 new product introduction. Now, if that organisation wants to have 2 product introductions, it could loosen it’s criteria so 2 out of the 100 original ideas end up as a product introduction. The organisation could also try to get more ideas into the funnel. If they get 200 ideas in, with the same criteria, the result will also be 2 new product introductions. To get more ideas in, organisations could start idea challenges and open innovation initiatives.
