I was thinking about the ways companies try to get ideas into the marketplace and I noticed there are three general categories of getting ideas into the marketplace that are all considered innovative by the general business community. However, the interesting thing is that in practice we see that each of these three categories often indicate different states of innovativeness. I would like to share these thoughts with you.
The first category are often called incubators. Incubators are often a sign that a company is not innovative at all. The second category is idea management. Companies that implement idea management can be quite innovative, however management does not trust its employees to have the right judgement to pick the right ideas and develop them. The third category is the most innovative and is a form where employees themselves are expected to bring further their ideas.
Incubators
Often we see companies attempting to drive innovation by setting up separate departments with smart people that think up new ideas and try to launch them. When these guys are mostly technical they are often called R&D and when the people are more business oriented they get fashionable names such as incubators. These separate departments can be useful and certainly have delivered. However, they are usually a sign that the company wants to be innovative but in its core isn’t innovative. Examples of reasons for not being innovative can be a strong focus on operational excellence or short term commercial targets. Whatever reason there is, there usually is a group of people in the company, often middle management, that suck the life out of all innovative initiatives; we call these people innovation vampires.
Senior management may feel they don’t have the power to change this situation and decide to set-up an incubator to make sure the projects can be developed outside the reach of these innovation vampires. If incubators are set-up for this reason, chances are small they will deliver. First of all you need a lot of ideas to find a profitable one and incubators are better suited to execute ideas than to think of many. So the odds are against them. Secondly, if the projects are a success they (mostly) are to be integrated into the standing organisation again. There will be a lot of hungry innovation vampires waiting.
Am I saying these incubator environments don’t work? Not at all. If they are used as a true pressure cooker and are supported by the standing organisation, they can be great ways to speed things along. Furthermore, incubators can be valuable to show an organisation that has trouble to execute projects that it is possible to get things to market quickly.
However, if your company is not yet an innovative company, we believe you should consider other methods of increasing your innovativeness; incubators are not likely to make you more innovative nor will they deliver you a constant stream of innovations.
Idea management
In general, implementing idea management scores between 4 and 8 (on a scale of 10) of innovativeness. Often those companies that implemented idea management did so after realising that management, marketing, and product management just do not generate enough ideas and they need to tap their employee base for more ideas. From our experience we can say that just that realisation is a great leap forward for many organisations.
If implemented and executed correctly, idea management can be of great value to companies. It has proven to generate winning ideas, it can be very valuable as a tool to coach employees into more entrepreneurial thinking, and (if supported by a database) is a great way to store ideas as a means of knowledge sharing and organisational memory.
However, what makes idea management not truly innovative is the second word; management. There is an implicit assumption that there is a select group of people that is better able to evaluate and develop ideas.
I’m not arguing that idea management will not help to deliver new innovative propositions, as said before, there are many examples of successful idea management. The argument is that by having a small group managing and executing innovation the company itself will not be innovative.
Innovation by all
Practice is showing that those companies that are excelling in today’s marketplace involve their employees in the full innovation cycle. There are different approaches to this and there isn’t a clear recipe for success but the common denominator is full employee involvement.
The principle is that the company urges and expects employees to come up with innovative ideas. Instead of passing the ideas on they are encouraged to further develop these ideas. When we talk to clients about this type of innovation the first response often is that they want their employees to do what they’re hired for and not goof off to all sorts of wild ideas. And of course they are right in saying that. The companies that successfully manage this balance are those that excel.
The greatest reward of this way of working is that it cannot be copied and can give the company a true competitive advantage.
