Four Types of Ideas, Their Values and the IIPI
By Jeffrey Baumgartner
Within an innovation initiative, there are four types of ideas.
- Innovation vision pushers
- Innovation vision supporters
- Useful, non-vision ideas
- Useless ideas
Understanding these idea types is critical to the success of any innovation initiative. But first, let me explain "innovation vision".
Innovation Vision Statement
In most cases, your innovation vision is your strategic vision. However, as some organisations have either not defined a vision or have a vision statement that is overly vague, it may be necessary to create an innovation vision statement that reflects your understanding of the organisation's strategic direction and aims.
The Idea Types
Innovation vision pushers
The most valuable type of idea is one that pushes your company's innovation vision forward in one big leap. Think Apple and the iPhone. Think Toyota and just in time (JIT) inventory management. Think Facebook's 'like' button. All of these ideas propelled their companies forward and gave them a big leap over the competition. Apple's iPhone made every other kind of phone seem old-fashioned. Toyota's just in time inventory management allowed the company to reduce drastically inventory costs and enforced discipline on supply-chain management, forcing discovery and elimination in unnecessary complications in the chain as well as influencing product design to enable more efficient assembly. The like button radically increased Facebook user engagement and interaction.
Innovation vision pushers are usually very risky. They involve investment in an unproven idea. If the idea fails, it can be costly and even humiliating. Apple's first attempt at making a tablet computer was the Newton, which it brought to market in 1992. It was a flop. The Newton, and especially its flawed handwriting recognition system, was roundly made fun of by comedians and pundits.
However, if strategic vision pushers succeed, they can be very valuable indeed. The iPhone is worth billions of dollars. Toyota's just in time inventory management has saved the company billions by reducing the need to stock excesses of costly inventory.
Founding Ideas
A subcategory of strategic vision pushers is the founding idea, which is an idea that forms the basis of a new company. Think Uber's mobile phone app, Amazon's first on-line bookshop or Dyson's first vacuum cleaner. Because such ideas form the basis of all new companies, they are rarely a part of innovation initiatives. The exception is when a company uses an idea to launch an all new business. Examples of this include Google's self driving car (now a new business unit called Waymo) or Flikr, which was originally a photo sharing tool in Neverending, a multiplayer on-line game. The tool proved more popular than the game and was spun off as a separate and very profitable business.
Founding ideas within organisations often come when people realise that tools built for the organisation are commercially exploitable. For example, Amazon had built up expertise in building web servers to support its on-line shop. Someone high up, probably CEO Jeff Bezos, realised that the company could make their servers available to other organisations that needed secure, well managed server space on a flexible basis. As a result, Amazon web servers was launched and has proven remarkably successful.
Because these ideas drive companies in new directions, the ideas behind them generally come from the very top.
Innovation vision supporters
Innovation vision supporters are ideas that are in line with your innovation vision and help strengthen it. Such ideas include the ideas that go into iPhone upgrades, technologies that can improve just in time inventory management, and the variety of emotional response alternative to liking a Facebook post.
Strategic vision supporters are the life blood of innovation. They enhance your innovation vision, ensure your company is up to date and keep you ahead of the competition. They should be the focus of your innovation initiative.
Useful, non-vision ideas
Useful, non-vision ideas are ideas that are not related to the corporate vision, but which are nevertheless useful. Designing a software tool that makes processing invoices more efficient is an example. It reduces operational costs, improves efficiency and leads to fewer mistakes in invoicing. But, unless your company makes and sells software, it is not strategic.
As a result, you have to be careful with non-vision ideas. In our example, you might also simply buy an off-the-shelf invoice management software rather than invent your own. Off-the-shelf software may not be as ideal as your own design, but it is good enough. Moreover, because invoice management is not part of your innovation vision, you do not need to be the leader in this area.
Many innovation initiatives tend to capture mostly useful, non-vision ideas, rather than focusing on the innovation vision supporters. While this can be a good thing, it can also lead the innovation team feeling frustrated that they are not building big, exciting innovations.
Useless ideas
The last category of ideas is useless ideas. These are ideas that have nothing to do with the innovation vision and are irrelevant to business needs. If you work at Facebook and propose a Facebook branded vacuum cleaner, that would be an example of a useless idea. Facebook is not about vacuum cleaners. And while vacuum cleaners are useful for cleaning the company's office, there is no rational reason for the company to design its own. There are already many companies that produce really great vacuum cleaners.
Sadly, many innovation initiatives capture too many useless ideas, particularly initiatives in massive companies (which are often involved in numerous activities) and poorly designed crowd-sourcing initiatives that collect ideas from the public.
Having lots of useless ideas may seem proof that your innovation initiative is successful because it has collected loads of idesas, but because they are useless and because you need to invest time in administering ideas collected, useless ideas actually incur a cost without providing any real benefit.
If you are an innovation manager, you want to minimise useless ideas.
Why you should classify ideas this way
In the past, ideas tended to be classified at a universal level, for instance, there are product ideas, process ideas and so on. The thing is, this old classification method is not relevant to the organisations whose innovation should be focused on their strategic vision and needs. By classifying ideas according to each company's needs, you can do some cool things. Perhaps, most importantly, you can attribute a value to each idea. A strategy pusher is the most valuable idea, followed by a strategy enhancer and then by useful ideas. Useless ideas actually have negative value as they incur administrative costs, but do not bring value. Values can also change depending on whether an idea is only an idea, it is a project in development or it has been implemented.
Innovation Initiative Performance Indicator
And, indeed, this forms the basis of the Innovation Initiative Performance Indicator (IIPI − which could conveniently be pronounced "yippee" for fun). The IIPI allows innovation managers to measure their performance and the performance of their initiatives in a way that is both meaningful and realistic.
The combination of idea categorisation and the IIPI allows managers to focus their initiatives on developing high value ideas and then put resources into those ideas. Why spend €100,000 on developing a useful idea when it could be invested in an idea that supports your innovation vision or possibly pushes it forward?
And this means, of course, that managers can run innovation initiatives more effectively and, as a result, create more value for their organisations.
Free on-line Innovation Manager Training Course to introduce IIPI and more
I have made a short, on-line training course on How to run an effective innovation initiative. In it, you will learn how to get more relevant ideas, how to ensure a larger number of high value ideas are implemented and how to measure performance. The training will go into more detail about IIPI, the four idea types and innovation vision statements.
Best of all, the training is absolutely free. Learn more and get started here...
Innovation Management Improvement Workshop In Your Company
If you want a comprehensive, one or two day innovation initiative training workshop for your innovation team, get in touch. In that short period of time, you and your colleagues will learn how to focus creativity on developing relevant ideas, how to ensure more of those ideas are implemented and how to measure results using the IIPI. The workshop can be followed up by remote coaching. Best of all, you can measure the results of the workshop using IIPI!
Out-innovate the competition! Contact me and let's talk about how the Innovation Management Improvement Workshop will benefit you, your team and your entire organisation.
R103/20170329
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