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Invent Like Thomas Edison: A Structured Argument For Managing The Idea Process
Invent Like Thomas Edison: A Structured Argument For Managing The Idea Process
This white paper sets point by exploring three major trends which underscore reasons why
improved ideation is a requirement for future competitiveness. Further, this paper shows
how ideation fits into the product pipeline and that it is not just limited to ideas for new
products and services. Finally, this paper highlights research showing the common problems
with idea management, so that organizations can avoid them. This discussion is intended to
motivate smart managers and employees to improve their company’s ideation processes.
Introduction
As a full-time researcher and Ph.D. in Innovation, I have uncovered some horribly
mismanaged parts of the product development process. Unfortunately, major activities like
idea generation and idea management are systemically mishandled across a majority of
industries. This may be due to the complicated nature of today’s development process,
making us lose sight of these vital activities. Or perhaps it is due to the 20th century’s
predominate financial paradigm, pushing our focus toward the expensive back end of the
development process, while ignoring the low cost front-end processes. Nonetheless, I will
show in this white paper that these activities need to be brought back into the limelight. As
well, I will show that a well-run ideation process will be required for competitiveness today.
A SHORT STORY
Thomas Edison, founder of General Electric, was the first true inventor of the R&D lab.
So, I figured he was a worthy place to start my research on ideation. I dove into
references about his company and saw how he invented and marketed his products
(Stross, 2007; Hardagon, 2000). In order to produce a steady stream of inventions he
systematically managed ideation. To do this, he hired a diverse set of people (from
engineers, to watchmakers, to repairmen), conducted idea campaigns, and zealously
managed idea generation activities where tasks like detailed competitor reviews,
tinkering, prototyping, and rapid experimentation were required. To ensure ideas were
managed properly he kept tidy records of new ideas and had individuals assigned to
reviewing, screening, and categorizing ideas. Finally, he promoted rigorous discussion
of ideas and to help this he placed his engineers in several small and cramped rooms
to assure their quick propagation.
After this review of Edison’s methods, I marched forwards in time toward the current
days’ practices in ideation. One would imagine that we have evolved much since
Edison’s humble beginnings, but the statistics tell a different tale. My survey sample of
mid- to large-cap companies showed that the majority placed very little management
attention on their ideation process, resulting in the haphazard generation of ideas,
poor ideas, and a poor ability to utilize ideas. Somewhere in the mix, Thomas Edison’s
lessons were lost, and if alive today he would have laughed at the poor state of these
processes. I could imagine him zestfully saying, “If something is important to you,
manage it!” So, are you managing your ideation process?
INVENT LIKE THOMAS EDISON: A STRUCTURED ARGUMENT FOR MANAGING THE IDEA PROCESS
CONTENTS
B. The Need to Convert Ideas at Higher Rates and More Efficiently ........................ 5
Type I Errors: False Positives ......................................................................... 5
Type II Errors: False Negatives ...................................................................... 5
References ........................................................................................................... 13
Most of Don’t Know
To what degree does your company: Never Rarely Sometimes Always
the time or NA
Hold events to generate ideas? 18% 28% 33% 10% 10% 3%
Actively manage these events? 15% 28% 18% 15% 20% 5%
Actively manage idea generation activities? 10% 30% 30% 15% 13% 3%
Actively manage the capturing of ideas from 8% 23% 31% 13% 18% 8%
outside sources?
Actively manage the capturing of ideas from 10% 13% 23% 26% 23% 6%
employees?
Table 1: Sample of statistics from Improving Idea Generation and Idea Management
in Order to Better Manage the Fuzzy Front End of Innovation
This appalling lack of management for these ideation activities may be due to: 1) the limited
but growing literature on conducting and managing these activities, 2) the formerly poor
quality of tools and software to manage these activities, or, what I think is most likely, 3)
the lack of understanding about how essential ideation will be in the near future for the
competitiveness of the company. The arguments presented herein will concentrate on the
third point by showing how important it is to improve and manage the ideation process. This
should motivate smart managers and employees alike to pursue improvements in these
often underappreciated processes.
to motivate upper management into action; hence a more grounded argument is needed.
The case for more and better ideas revolves around four major points: 1) the increased
pace of competition in many industries, 2) the need to meet or exceed growth targets, 3)
the need to fight against commoditization, and 4) the need to develop more disruptive
products and services.
2. Growth Targets
Further, as a company grows, so does the size of its growth targets. Clayton Christenson
discusses how a company with US$10 million in revenue may need to put on US$1-3 million
to meet growth needs; whereas, a company with US$5 billion may need an astounding
US$250 - $400 million in new revenue (Christensen, 1997; Huston, Sakkab, 2006). It
is fairly straight-forward – as a company grows so must its development capacity – but
something interesting happens to ideas. New product ideas and opportunities which were
once very attractive no longer are, because the possible revenues they would create would
not help in meeting growth needs. Consequently, as a company grows, its previous stock of
ideas becomes inadequate. Unfortunately, these large revenue ideas are much harder to
find or create.
customer quality groups, customer research teams, and root-cause squads. In addition,
they now will work much more closely with the service and design departments to prevent
problems before they occur. The improved manufacturing department is now much more
sensitive to the customer’s assessment of quality, more responsive to changes, and
becomes forward-thinking anticipating future quality needs.
New tools and methods are required to deal with this massive amount of customer
information (Karkkainen et. all; 2001). As well, the customer-facing employees are now
being turned into idea factories, and must have an easy method of submitting ideas. In
combination, this creates a great number of new and valuable ideas, and to successfully
make use of them, the idea management process must greatly increase its capacity and
efficiency.
The need to convert ideas at higher rates and more efficiently will be aided by new
and proven methods of managing the development process, including agile development,
portfolio management, project management, product lifecycle management, rapid product
development, and knowledge management systems. Additionally, more effective
development processes will be created by tying together, and strongly linking, previously
separated parts of the development process. Interestingly, new development software has
made great strides in these areas.
Intriguingly, the costly Type I error, or failed project, which is often blamed on middle and
upper management, can be reduced by gathering more ideas. Consider that for every batch
of ideas gathered, there is some distribution
of idea quality as shown above. When
dealing with a batch of, say 50 ideas, one
would pick the top 30 ideas to evaluate, and
out of this try to select the top 10 ideas for
preliminary development. Selection is not
an exact science, because there is a natural
error in estimating an idea’s quality and its
probability of future success. Now, if the
batch grows to 100 ideas, one would
probably still pick the top 30 ideas to
evaluate because of time constraints.
Hence, the chance of getting higher quality
ideas increases and the risk of a Type I
error decreases. This would be especially
important to managers whose careers are
based on on-going success in picking good
projects to develop. Further, by increasing
the quality of ideas going into the
development pipeline, you have a higher
chance of converting the products into
market successes. The old adage, “garbage
in equals garbage out” truly applies to the
development process and starts with
ideation.
Lastly, the need to be customer driven Figure 1: How idea quality is affected by the number
will require executive management of ideas gathered
committed to making core processes
sensitive to customer needs. This starts with making the incentive and performance review
processes from the leaders on down sensitive to customer metrics. Choosing the right
metrics for each department or process is vital. Once that is completed, the departments
will feel the pressure of customer demands, and should implement mechanisms to better
understand and deal with customer needs. In conjunction with this, a stream of information
and ideas will trickle, then pour in from the different parts of the business: Sales, Customer
Service, Repair, Delivery, and so on. To deal with this great influx, and capture its value,
knowledge management tools and idea management systems will need to be put in place.
The typical view of ideation is that of a front-end activity, where ideas for new products and
services are created or captured and then enter into the pipeline. This is correct, but what
most people do not consider is that ideation is actually needed throughout the whole
pipeline (Hardagon, & Sutton; 2000). For example, development teams often explore
multiple design aspects of a product, and most often run into technical problems. To deal
with this, team leaders often run problem-solving sessions which often involve
brainstorming and problem-solving activities. From this, the team leader gathers a small
batch of solutions (ideas), and often settles on a less than optimal design because of the
limited number of solutions. However, if he quickly ran an idea campaign tapping the larger
brain of the company, he would have a much better chance of getting an optimal solution.
This type of situation exists not only in development, but also in the commercialization, and
market launch processes.
Nevertheless, ideation’s heart is in the front end of innovation, and must be elaborated on.
Figure 3 represents a simplistic yet accurate view of this process, based on my research on
the front end of innovation (Glassman, 2009). From this figure, one should note that the
idea management process deals with ideas from the idea generation process, but also
captures ideas floating around the company or ideas submitted by outside sources like
customers or suppliers. The ideas then move through the idea management process.
Promising ideas are put into preliminary development, where they are further developed,
researched, and have business cases wrapped around them. Finally, the best ideas, being
preliminary product concepts, are presented to the gatekeepers of the development
process for acceptance.
This simplistic view of this process is illuminating, yet it does not highlight where things can
go wrong. The following section will look at the common problems with the idea
management process.
The idea management process is broken up into six major activities: 1) capturing, 2)
screening, 3) storing, 4) categorizing, 5) diffusing, and 6) routing ideas, and there are
common problems which each.
1. Capturing Ideas
For capturing ideas, companies often erroneously limit themselves to employees and current
customers, when they should actually be tapping many sources like prospective customers,
lead customers, suppliers, hobbyist groups, universities, national labs, inventor groups,
research firms, friendly competitors, and so on... This error is usually due to inexperience in
capturing ideas from outside sources, legal concerns, or due to an inadequate system for
capturing ideas.
Another major problem is the lack of active management over the capturing of ideas, as
shown in Table 1. My research has shown that active management greatly increases a
company’s satisfaction and effectiveness in capturing ideas from employees and outside
sources (Glassman, 2009, pg. 265). Passive methods like suggestion boxes or email
requests for ideas are often the most ineffective means of gathering ideas. In order to
capture ideas as they occur, flexible and engaging methods like idea management software,
open door policies, idea fairs, idea contests, and designated idea coordinators are needed.
2. Screening Ideas
My research also observed idea screening being applied haphazardly or randomly by
managers, even inside the same company. This is a constant source of frustration for
employees hoping to submit helpful ideas, and can even dissuade them from future
submissions. For screening to be effective, uniform criteria must be applied to all ideas, and
be applied fairly. This minimizes personal bias or obsolete criteria from influencing what
ideas are kept and which are discarded. This can be avoided by training, audits, or through
structured screening processes like those present in idea management software.
3. Storing Ideas
As for storage, I have seen small number of ideas effectively kept in spreadsheets or in
Microsoft Word documents. However, with more ideas, emailing an idea document around
or updating it manually quickly becomes tedious and eventually fails to be practical.
Consequently, a considerable amount of ideas requires robust storage systems like those
present in top-grade idea management software; antiquated or repurposed databases often
do not work.
4. Categorizing Ideas
The ability to categorize and sort ideas is vital for managers seeking a specific type of idea,
like a disruptive product idea, amongst many hundreds in the idea bank. Further, spotting
and filling gaps in the idea bank can only be done with formal categorization and sorting
methods. Here, filing cabinets of ideas are often ineffective, and relegated to collecting dust.
Spreadsheets and documents packed with ideas are often just as frustrating; here again the
viable solution for a large numbers of ideas is idea management software or purpose-built
databases.
For companies with existing idea management systems, a qualified assessment should
quickly show if the current system can be made adequate, or if it needs to be replaced. This
can be done internally by an innovation expert, or, if one is not available, an expert can be
hired or often provided for free by an idea management software vendor.
Next, the implementation of the idea management system will cost the company time and
money. The time requirements will consist of training employees to use the new system,
and formatting the system to meet the company’s specific needs. Often, user-friendly idea
management software can be quickly learned by employees and requires minimal training.
In some case, behaviors of employees will need to be changed (like making employees want
to talk about new ideas) and this behavior adoption will also take time. Now, as can be
expected, the price of a premium idea management system can be quite a bit higher than
that of lower-end ones, but often this is justified through their robustness, user-friendly
design, and dedicated support.
Finally, there is an ongoing diversion of management’s time toward supervising the idea
management system. But as management becomes more knowledgeable and proficient in
controlling this process, the time required to do so becomes minimal. Interestingly, the
structure of the idea management system also determines how much time is required to
manage it, with hand-run systems often requiring a lot more time than software-based
systems.
VII. Conclusions
Thankfully, after so many years, some of the sources of Thomas Edison’s inventive genius
are being remembered and put back into practice. However, we still have a long way to go
before companies are proficient at ideation. So one must remember that the ideation
process is important and must be actively managed in order to create high quality results.
Also, there are three major trends pushing companies to improve their ideation processes,
these being: the need for more and better ideas, the need to convert ideas at higher rates
and more efficiently, and the need to be customer driven. Next, ideation is broken up into
idea generation and idea management, and there are common problems with idea
management that can be avoided with smart management of this process. Finally, using
idea management software for large numbers of ideas will greatly help in the logistics and
execution of this process. Hopefully, this white paper was illuminating and moreover
motivates you to improve your company’s ideation process; in this way we can all “invent
like Thomas Edison.”
References
Glassman, Brian. (2009) Improving Idea Generation and Idea Management In Order to
Better Manage the Fuzzy Front End of Innovation, Ph.D. Dissertation, Purdue
University, West Lafayette Indiana http://techrd.com/blog/diss
Christensen, Clayton. (1997) The Innovator’s Dilemma, New York, New York, Collins
Business Essentials
Clark, K., & Wheelwright, S. (1995) The Product Development Challenge: Competing
Through Speed, Quality, and Creativity, Harvard Business School Press, Cambridge
Massachusetts
Hardagon, A. and Sutton, R.I. (2000) Building and innovation factory. Harvard Business
Review, 78 May-June 157-166
Huston, L. & Sakkab, N. (2006) Connect and Develop: Inside Procter & Gamble's New
Model for Innovation, Harvard Business Review, March
Karkkainen H., Piippo P., Tuominen M. (2001) Ten tools for customer-driven product
development in industrial companies International Journal of Production Economics,
69 (2), pp. 161-176
Porter, Michael. (1985) Competitive Advantage: Creating and Sustaining Superior
Performance. New York: Free Press
Randall E. Stross. (2007) The Wizard of Menlo Park: Thomas Alva Edison invented the
modern world, Crown Publishing Group, New York City, New York
Ref 1 Anonymous. (2009) Type 1 and type 2 errors,
http://en.wikipedia.org/wiki/False_positive#Type_I_error
Selden, L., & MacMillian, I. (2005) Manage Customer-Centric Innovation Systematically,
Harvard Business Review, April 2006 pg 108-116
Souder, Wm., Buisson, D., Garrett, T. (1997) Success Through Customer Driven New
Product Development, Journal of Product Innovation Management, 14:459-471
Stevens, G. A., & Burley, J. (1997). 3,000 raw ideas = 1 commercial success! Research
Technology Management, 40(3), 16-27.
Thomke, S., & Von Hippel, E. (2002) Customer as Innovators A new way to Create
Value, Harvard Business Review, April 2002 pg 74-81