Thursday, 12 November 2015

Deferring judgement vs the innovation funnel

One of the most important elements in innovation is the deferral of judgement.  That's why innovation funnels are such a poor innovation tools

In the video below, the creativity guru Min Basadur talks about how deferral of judgement (your own judgement, and that of others) is a key principle behind the innovative/creative process. 

New ideas are both fragile and incomplete. They can be easily killed prematurely by judgement.  Deferral of judgement allows them to be explored, combined and modified, so that ideas converge into robust innovations.

The problem with innovation funnels is that they are predicated on judgment.

An idea enters the funnel, and is immediately judged.

The purpose of the funnel is to weed out the ideas that don't work, rather than to explore and modify them until they do. As this article points out:

The entire focus of the funnel and stage-gate process is to ‘whittle down’ a large number of ideas to a smaller number by ‘killing off’ weaker ones and ‘picking’ the winners, rather than being constructive and finding solutions to the problems each idea poses.
The funnel focuses on judgement, administration and evaluation, assuming that ideas are easy to come by, that the majority are bad, and that the good ideas emerge fully formed.

Here is another article with some scary figures:

In their 1997 article “3,000 raw ideas = 1 commercial success!”, published in the Research Technology Magazine, Stevens and Burley summarized a study based on project literature, patent literature, and venture capitalist experience, and concluded that “across most industries, it appears to require 3,000 raw ideas to produce one substantially new, commercially successful industrial product”. The funnel they described acts as follows: 
  • 3,000 raw ideas turn into 300 ideas for which minimal action is taken (such as simple experiments, patent filing, or management discussion); 
  • 125 of the 300 ideas become small projects; 
  • 9 out of the 125 become significant projects with a significant development effort; 
  • 4 out of the 9 become major development efforts; 
  • 1.7 out of the 4 is commercially launched; and 
  • 1 out of the 1.7 launched (59%) becomes commercially successful (this last success rate varied from 40% to 67%, depending on the source of information, industry, and geography).

This is a mechanical approach to innovation - a ruthless culling of ideas before they have had any gestation time, and a relatively low level of attention paid to any individual idea (you can't spend long on each idea of there are 3000 of them).  It counter-incentivises the contribution of ideas. Why bother to contribute an idea, if there is only a one in 3000 chance of it being taken through to commercial success?

In Knoco we recommend a different approach.

  • The funnel approach should be applied not to ideas, but to problems, to allow you to  find the problems most in need of an innovative solution.
  • Each problem then becomes the subject of an innovation Deep Dive process, involving a cycle of fact finding, problem definition, idea generation, idea combination, solution finding, solution testing and acceptance winning. 
  • The success rate for each problem should be 100%, not one in 300

Don't ask your staff to contribute ideas, just so you can kill them. Do away with the judgement-based innovation funnel, and be creative instead.


Arshad Ahmed said...

Hi Nick, a very interesting post. I guess I never saw it like that, but it makes sense.
Are you aware of idea management/ideation tools? If so, apart from the tool being a tool until the other things are taken care off, would you say these would also suffer from the same flaws when it comes to selecting the "best" ideas?

Nick Milton said...

I would suggest "selecting the best ideas" is probably the wrong model. Think more in terms of co-creation than selection.

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