Innovation is big business and many companies invest heavily in trying to generate new ideas. But is it worthwhile? According to some experts, most business already have enough ideas - they just need to get better at putting them into practice.
In a conference room at a smart city hotel, a group of executives are taking time out of the office to take part in a brainstorming session. Equipped with flip charts and coloured pens to aid the creative process, they are encouraged to ‘think outside the box’ and come up with ideas for new products and services.
Companies spend hundreds of thousands each year on sessions like these to generate new ideas. From brainstorming to gamestorming and design thinking, there is whole repertoire of techniques and an army of consultants and trainers who can implement them.
However, according to Dr Tim Kastelle, an innovation expert with UQ Business School, in many cases their efforts are misguided. “Generating ideas is the easiest part,” says Dr Kastelle. “Most organisations already have enough ideas. The challenge for them is not generating more but implementing their existing ideas more effectively.”
The mousetrap phenomenon illustrates the myth that good ideas guarantee success. ‘Build a better mousetrap, and the world will beat a path to your door’ – a quote adapted from the words of the 19th century American essayist Ralph Emerson – is often used to promote the benefits of creating a new and improved product. Inventors have certainly taken it to heart.
Over 4,400 patents have been filed in the US for mousetraps, with hundreds more applications received each year. Despite this, very few have made money and the original 1898 design is still in production. It would seem that the mousetrap problem has already been solved and consumers have little appetite for yet another product.
Professor Michael West of Lancaster University, who has studied innovation in teams, says: “New and improved ways of doing things are ten a penny. Implementing them is what counts and that is most difficult.”
Dr Kastelle agrees that generating ideas is just the start of the process and it is the subsequent stages that pose a problem for most companies – assessing the ideas and selecting the best ones, funding their development and rolling them out to the marketplace.
He and his colleague Associate Professor John Steen have collected information from over 300 people in 65 organisations which supports this viewpoint. The respondents were all MBA students at UQ Business School, or their colleagues in the workplace.
Only three organisations out of 65 – equivalent to 4.5 per cent – identified themselves as being ideas poor. The remainder were equally divided between those who had problems in selecting ideas and in rolling them out.
“Thinking of innovation as consisting only of generating ideas means that more than 95 per cent of organisations will not even think about the parts of innovation in which they are weakest,” says Dr Kastelle. “Organisations which view innovation as simply coming up with ideas will invest in the wrong part of the process. They will sink time and resources into idea generation when this may actually be their strongest area.”
He cites the case of a manufacturing business which employed around 10,000 people and which approached the university seeking help to embed an innovation culture. The company had bought software designed to improve innovation by capturing ideas and within a short space of time had collected 800 new ideas. However there was no system in place to select and prioritise those ideas and no budget to develop them.
Professors Morten Hansen of INSEAD and Julian Birkinshaw of London Business School, who developed the Innovation Value Chain, a tool to help companies measure their ability to manage innovation, agree that too much emphasis is placed on idea generation. They see innovation as a chain that requires strength at every link to succeed and say the focus on new ideas can be damaging.
They cite the case of a computer hardware company: “Buying into the latest advice about innovation — companies should focus on generating more ideas — managers set up a series of formal brainstorming sessions. Idea generation wasn’t the problem, however.
“The company had inadequate screening and funding processes: Concepts never flourished, nor did they die. The brainstorming sessions actually aggravated the innovation process — employees were pumping more and more ideas into an already badly broken system.”
Another problem is that employees can become disillusioned because they are encouraged to generate new ideas which then fail to get off the ground.
Dr Kastelle says companies need to recognise that innovation is not a single event and that different skills may be required at different steps in the process. While creativity might be useful for idea generation, it is likely to be less significant for specifying the technical details of how the solution will work.
“Companies need to recognise that innovation requires multiple steps and if they are bad at any one of these steps, then the process can fail. They have to be able to do them all and be committed to all of those steps.
“They may also have to be willing to adapt. It’s no good saying ‘we need more innovation’ if you’re not willing to change. Innovation doesn’t work that way.”