Leaders of large companies are coming under more intense scrutiny and pressure to drive innovation within their organizations, in order to avoid being disrupted by smaller, more nimble competitors. Many are responding to this threat by flagging innovation as a corporate value and running idea submission contests, designed to promote thinking outside the square and maintain competitiveness.
While it’s encouraging that the innovation agenda is at least being given some mandate at most large companies, often the idea submission contests amount to little more than a case of innovation theatre. That is, leaders often need to be seen to be doing something in response to innovation so what better way than a very visible idea contest that garners hundreds of submissions. Unfortunately, movement is not akin to productivity, and these contests usually deliver little, if any value at all.
The Typical Idea Generation Contest
If you work or have worked for a large company, you may be very familiar with idea generation contests, also known as innovation jams, bright idea contests and so on…
Usually, an online platform is set up on the corporate intranet designed to do little more than collect ideas and facilitate the voting and commenting on ideas.
An email is promptly sent to all staff promoting the initiative and those companies with a few spare dollars to burn might even go as far as hosting a catered event promoting the launch of the initiative!
Posters, complete with flashy images of light-bulbs and innovation buzzwords, are strategically positioned in common areas such as kitchens, meeting rooms and doorways across the office, complete with flashy images of light-bulbs and buzzwords like Apple’s “think different”. Unfortunately, most companies lack the DNA of an Apple and neglect to implement the processes required to be anywhere near as a innovative as the darling of Silicon Valley.
Ideas submitted are finally ranked in order of votes collected. Top ideas are sent to senior management to review and select some winners from, despite the fact that these same senior managers have never innovated themselves.
That’s usually the end of the show. The cast takes a bow, the curtain promptly drops on ideas and the innovation theatre comes to a close. The whole process ultimately amounts to little more than innovation theatre and is broken for a number of different reasons.
Eight Reasons Why Idea Generation Contests Are Broken – And How To Fix Them
1 – Idea Submission Portals Don’t Facilitate The Shaping Of Ideas
Platforms used by large companies tend to be very simple and lack the ability to build on top of or add to ideas submitted, essentially the essence of creativity and an inherent advantages that a company with thousands of employees has over startups with less than 20. Comment boxes, while helpful, do not support building on top of ideas in any seamless, effective manner.
The odds that one person will come up with a commercially viable idea at the outset is incredibly remote. The products we know and love are the result of emergent strategy and evolution over time, based on validated customer learnings.
The best ideas are those that bring together the perspectives of different people with different experiences from across cross-functional roles.
Steve Jobs was a classic example of a broad thinker who was able to draw from his diverse experiences.
“Creativity is just connecting things. That’s because they (innovators) were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.”
In the absence of one having the broad experiences of Steve Jobs, we can leverage off the broad experiences and perspectives from across an organisation to connect dots and come up with better products.
How To Fix It
2 – Employees Who Vote On Ideas Aren’t Trained In Innovation Theory
If you’ve not got a fundamental understanding of the dynamics of sustaining and disruptive innovation then the quality of your votes can be thrown into question. Given the alarming rate at which companies are being disrupted by smaller competitors and startups, it simply doesn’t make sense that whatever little innovation budget is being made available is being spent on ideas selected by employees who don’t have the foundation skills to tell good idea from bad. Would you let somebody without any knowledge of property, stocks or alternative asset classes make investment decisions on your behalf?
How To Fix It
Employees that vote on ideas should have a fundamental understanding of disruptive and sustaining innovation theory, as popularized by corporate innovation thought leader and author of The Innovator’s Dilemma, Clayton Christensen.
Consider setting up a cross-functional innovation committee, made up of people that possess the requisite innovation skills, thus limiting the amount of training that must be delivered to a small cohort of people within the organization.
Be careful that innovation committee members are not ‘tainted’ or ‘institutionalized’ insofar as their way of thinking is concerned. They must also have some level of authority over the selection process and not be subject to being overruled by short-term incentivized driven senior managers.
Ideally though, a company should strive to have everybody in the organization trained, perhaps as part of an on-boarding process, in the dynamics of innovation theory as this will not only improve the quality of ideas submitted during a contest, but keep people’s eyes and ears open to new opportunities throughout their time with the company.
3 – Idea Contest v Popularity and Marketing Contest?
It’s not a stretch to imagine that people from within the organization who command greater authority or popularity receiving more votes than their lesser-known colleagues. Likewise, people within the organization who do a better job at marketing their idea through various channels are also likely to collect more votes – not unlike successful Kickstarter campaigns. Unfortunately, in both cases the number of votes secured has little to do with the underlying revenue generating and disruptive potential of ideas.
How To Fix It
Make submitters names anonymous and consider doing away with voting altogether and delegate the selection process to an appropriately trained and empowered, cross-functional committee (for more on that, see 2).
4 – The Purpose Of Idea Generation Contests Is Not Effectively Communicated
No distinction is often made between whether the contest is after sustaining or incremental innovations as opposed to more big bang, disruptive ones.
Naturally, these warrant not only different ideas but a totally different assessment criterion. It’s important not to confuse or prioritize one type of innovation over the other as they serve two distinct purposes, one to sustain the operations of the core business, the other to find new, high growth markets.
How To Fix It
Be clear from the outset as to what kind of ideas the company is after.
Consider providing a simple criteria of what these ideas look like. For example, if the company is after disruptive ideas then providing an overview of the disruptive innovation litmus tests to assess whether ideas meet this criteria before submission will not only ensure that only potentially disruptive ideas are submitted, but will also limit the number of ideas submitted so that resources allocated to review and select ideas are not stretched by receiving hundreds of bad ideas.
5 – Winning Ideas Are Selected Based On The Wrong Criteria
Senior managers, particularly those at listed companies, are incentivized by short-term bonuses and are often not thinking about the company’s health five or ten years from now. What this lends itself to is the selection of ideas based purely on core business and existing customer needs. While this will lend itself to sustaining innovations and incremental improvements, such ideas only ever amount to small, replicable innovations.
As captured best in Geoffrey Moore’s Crossing The Chasm, the market for disruptive innovations is initially way too small for large companies to be interested in and therefore, senior managers will not select such ideas, forfeiting significant growth markets in several years time.
How To Fix It
Incentivizing senior managers based on an innovation ROI and training them in disruptive innovation theory can both go a long way to improving the selection of ideas.
Consider proving staff with small amounts of cash and frameworks to smoke test their ideas before submitting results for review. This will restrict ideas submitted to those from intrapreneurs who have actually committed some time to build prototypes and test appetite for an idea, not only providing a form of early validated learning, but also demonstrating entrepreneurial qualities in the submitter, who may later be rewarded with responsibility for driving an initiative should their idea be selected for further development. Adobe’s recently announced Kickbox is a fantastic example of this approach.
6 – Selected Ideas Don’t Get Developed
Funding or resources are not made available to explore the winning ideas or funds are pulled early because a lack of instant results. Again, this is symptomatic of short-term mindsets plague most large companies.
How To Fix It
Ensure that at least 10% of the R&D budget (which itself should be between 5% and 20% of a company’s expenses, depending on industry and company maturity) is put aside for exploring big bang disruption. A further 20% of R&D should be reserved for adjacent innovation while 70% should be invested in safer, sustaining core innovations.
Ensure that winning ideas, or at the very least, minimum viable products, are developed, to validate and invalidate assumptions underlying their business models. Attempt to find product market fit, which is an exercise in marketing, not product development. This is where methods outlined in The Lean Startup are incredibly useful.
As outlined in The Innovator’s Method by Nathan Furr and Jeff Dyer, be patient for growth but impatient for profit. The quicker a new initiative can pay its own way, the greater its chance for survival when the axe starts falling.
7 – Submitters Don’t Receive Feedback
When first launched, idea generation contests can result in quite a bit of positive energy, movement and activity across the company, engaging a lot of employees who previously felt flat. The problem is that apart from a few ideas that are ultimately selected, the remainder don’t receive any form of acknowledgment, let alone tailored feedback. It’s important that all submissions receive some form of feedback to encourage repeat submission and not disenchantment with the program for oftentimes it can be a person’s second, third or forth idea that may have some legs.
How To Fix It
Ensure that all submitters receive at least some form of feedback. While there is a cost involved in doing this, particularly when hundreds of ideas are submitted, the value in an engaged workforce and successful idea submission contests cannot be discounted.
8 – Execution > Ideas
As all good entrepreneurs know, it’s not the idea but the execution that matters most. You can gift a large organization 100 good ideas but unless the organization has tuned its culture, processes and resources to successfully innovate, new ideas will ultimately fall victim to the realities of a large company that is built to execute on a repeatable, scalable business model, rather than search for one.
How To Fix It
Ensure that the company culture, processes and resources align with what’s required to successfully innovate. This may be done internally but more often than not it will require that independent companies are set up, that aren’t the policies and procedures of the mothership, or that new companies are acquired with the capability to innovate.
image credit: Adriano Agulló
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Steve Glaveski is the co-founder of Collective Campus, a corporate innovation school based in Melbourne, Australia, where he delivers classes in innovation theory, the lean startup and agile software development. Steve previously founded office sharing platform Hotdesk.net and has worked for both Ernst & Young and Macquarie Bank. Follow Steve and Collective Campus on Twitter at @steveglaveski @collcampus