Ideation and the 90:10 Rule
Most surveys today indicate that Research and Development executives are frequently disappointed in their ideation exercises and that they commonly complain that ideas aren’t actionable, aren’t relevant or simply aren’t economical. They also complain that ideas are insular, vague and can’t be scaled for the real world but ultimately it would appear that good ideas are hard to find and some recent research studies have indicated that it can take thousands of ideas to generate one commercial success. That’s a lot of time, money, and energy to invest only to meet frustration.
Most companies respond to this dissatisfaction by increasing the number of participants in the ideation process, or by increasing the number of ideation sessions but in the worst cases by simply stopping the programs all together and this can lead to the company’s slow death. If not managed properly company’s can find that their returns on ideation erode further and the hole they are in only gets deeper.
What could Albert Einstein, a man born in the 19th century tell us about working in the 21st century? After all he couldn’t matriculate to a prestigious university, couldn’t pass the entrance exam to the university he did eventually attend and got an ‘F’ in his Beginning Physics course. In fact he was considered such a poor student by the time he did graduate that no university in the whole of Europe would hire him.
It turns out he can tell us quite a bit: “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” Companies that excel at ideation do so by investing significantly more energy understanding the problem rather than creating the solution and while this contradicts conventional wisdom, companies that spend time developing a deep understanding the customer’s challenges achieve superior returns.
In order to thoroughly understand the problem companies invest significant effort structuring the front end of the ideation process. The best companies use a variety of quantitative and ethnographic research techniques to research the marketplace and map the competitive landscape. This allows companies to deeply understand the needs, problems and aspirations of their customers before ever beginning to brainstorm possible solutions.
Cargill fields a customer facing team who gather large amounts of consumer data and then educate the extended team. This leads a deep discovery process which typically generates 500 key findings about the marketplace. The team then works to find patterns in the data and then distill the 500 findings down to 50 key themes. It then distills those 50 key themes down to just 20 opportunity areas. Only then is an ideation exercise conducted.
By tightly winnowing the ideation space, and by providing detailed information about customer needs, frustrations, and aspirations, the returns increase. Where a company might see a yield of 1 project per 1000 ideas, companies adopting this approach have seen yields as high as 14 projects emerging for every 100 ideas. Moreover, recent surveys have shown that these companies reduce also manage to reduce their concept to market time by a quarter while achieving superior sales growth and reduced cannibalisation rates.
The deep discovery process leaves no stone unturned and continuously challenges existing assumptions and conventional assumption with real world data. Rather than an idea competing on the basis of whether or not it’s someone’s pet project, the deep discovery results in survival of only the fittest ideas.
Over 100 years later it seems Einstein still has something to teach us.
image credit: successfulworkplace.com
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Matthew Griffin specialises in creating new medium and long term revenue streams for both private and public sector enterprises. Recently, he has helped McLaren Formula 1 and the FIA, Toyota, Barclays, Lloyds, GE, DHL and ADP create new differentiated revenue streams.
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