Is Your Company Choosing the Best Innovation Ideas?

There is an interesting article in the MIT Sloan Management Review about innovation pipelines and how to manage them (Is Your Company Choosing the Best Innovation Ideas?)

As we have discussed in the past, even though every manger wants to have their organization become more innovative, getting those ideas is tough. From innovation bazaars to the quirky way, a lot of different ways exist to access innovation. However, once we get those ideas, what should we do with them? The article has an example of a large multinational company that solicited ideas from their employees and got 25,000!

I analyzed proposals for innovative ideas solicited from more than 50,000 employees at a large multinational corporation operating several hundred sites in more than 60 countries (see “About the Research”). It is difficult to know how many employees eventually submitted ideas, how many proposals they sent in and how many different managers were involved in evaluating all of the submissions, in part because of the large number of operating locations and also the number of different IT platforms in use. I began with 25,000 idea proposals, which could be traced to approximately 6,000 different employees worldwide.

Here is the trouble - how to sort through these ideas?

Sifting through ideas to find the best one may seem like it would be a mundane task compared with the creative side of the process; perhaps that is why there is little or no data on what organizations spend on the idea selection part of large innovation campaigns.

More importantly, it is expensive to do these evaluations! The company in question invested almost six many years into evaluating innovative ideas over just two years. That is equivalent to having three employees dedicated full-time just to evaluate innovative ideas:

More than 200 lower-level managers and about 80 midlevel managers were involved in evaluating roughly 20,000 of these ideas over the course of about two years before the selection process was terminated. Since each idea required anywhere between 10 and 20 minutes of total evaluation time (including reading and reporting on the proposal, conferring with colleagues and so on), and since some ideas had to be evaluated repeatedly, this group of ideas required total manager assessment time of between 5,500 and 11,000 hours (or 715 to 1,430 workdays); that does not include any time needed for implementation.

Clearly, these evaluations have to be distributed and manged carefully. The article goes into suggest six biases that need to be taken into account to ensure the process bubbles up the truly innovative ideas.

1. Geographical and organizational bias: Ideas suggested in the country, division and site are preferred by respective managers. If an idea comes from a particular site, the evaluators from that site are 10-50% more likely to give it a positive grade. Some countries and cultures tend to be more innovation friendly than others.
2. Length of the proposal: In this particular company, 250 words was the sweet spot for the proposal. Both shorter and longer proposals had a lower likelihood of being selected.
3. Tone of the proposal: A proposal that talks positively about the impact on the company business is more likely to be selected (regardless of the actual benefits)
4. Size of the organization: Larger organizations are more likely to select innovation ideas (there is other research that supports this)
5. Hierarchy: Less hierarchical organizations are more likely to select ideas for innovation. We have seen related evidence from other angles as well.

The table below lays out some of the authors recommendations. Here are mine:

1. Develop a standard form for all innovative idea submission across the entire company. This form can be structured to remove some of the biases pointed out above.
2. Ensure the form is short enough (250 words or less) so each form gets equal attention.
3. Ensure the form asks specific questions about business benefits. Not only will this remove biases related to the tone of the proposal, but it will also force the innovator to think about the practical aspects of its innovation.
4. Set up a standard set of evaluation questions (checklists) for all evaluators. This should eliminate geographical and cultural biases.
5. Ensure evaluation checklists is short so that many different perspectives can be obtained.
6. Distribute evaluation beyond managers to technology experts. In addition to getting more valuable evaluations and reducing management work load, this will help build employee networks and foster collaboration.