It is a bold, but from me not uncommon statement. Ideas are worthless! I would even argue that ideas have a negative value, maybe as much as €50,000 each, or if you are a larger firm even 10 times that amount.
So, the more ideas you have, the worse your situation is? Not really, if you have no ideas, you are in a different position. Even worse. You are doomed.
It is how you select and drive ideas in your ideation process that will determine if you can turn the “idea liability” into value. Skunkwork is a phenomenon that I find relevant in bridging the black abyss of non-project oriented innovation.
The co-workers dilemma
There you are with a big bunch of co-workers that all see opportunities and growth potential in different solutions. They have been to the seminars, they have registered in the state-of-the-art cloud based ideation system on your intranet. They have tried all the colored hats, the Lego building, the business model development courses. They are networking and working in diverse teams. They are doing it. But are you?
They might even, worst case, receive a €200 reward for generating ideas that have great value. Is that the response they want? No! We know it. You know it. Dan Pink shows it in his research. They feel it.
We want to be recognized and we want to participate in the process of realization. If not, we loose interest, drive, lust and passion. Our organizations end up loosing value, value that has financial impact.
An organization, which lacks the ability to foster ideas that are generated, end up loosing more than money and time on the wrong ideas; they end up creating a dysfunctional culture for Innovation. It just ain’t no fun no more. If we at least receive feedback and understand the rational behind what we invest in and not, we can continue to search for the recognition and fulfillment we are after.
Apart from the resources needed to explore an idea, there is another side to it. If unexplored and reasons are not clear, eventually the organization loose interest in the development of new ways to form its future. And worse is, cases will linger around and steal bandwidth from those that might be better suited.
The death by drain dilemma
OK, so do we stop the idea generating process in the organization in order not to build this liability of ideas? Well, do we want to stop amazing our customers and clients? Do we want competitors to out-beat us? Will we destroy value for our owners? Do we want to be part of destruction? No. Simply, No!
An organization that lack the ability to continuously develop, re-model, disrupt, amaze and launch new solutions will also loose its fans and lovers; the customers. Drain an organization of ideas, and you have drained the future of value creation.
So which are the reasons for draining the ideation process of ideas? Are you not seeing good enough ideas? Is cost and time to market to high? Do you lack resources?
My experience is that organizations benefit from sticking their head in new boxes, rather than thinking outside the box. We need to look at what has worked for whom and why, in other areas of business than our own that is. I have no intention to promote path followers or benchmarking. We need to meet people from other industries and with other experience. Through this diversity of influenes, we become creative.
When it comes to open innovation as a means to achieve different, better and faster- that is all good. But open innovation also means you actively have to search for ways to transfer your ideas to others, given you have no intentions to commercialize them in-house.
The portfolio dilemma
So here we are, the organization is ready and willing. The needs are there. We might have enjoyed double-digit growth with high margins, but what does the future look like? Even the best artists can fall in their rankings. Their clients just might not want more shipments from them. The ‘mojo’ is lost. The product has gone over the top due to product development galoring the product into what we would compare to a Hollywood spouse; Yes, it has been vibrant and beautiful, but all the technology put into it, all the upgrades all the touch-ups have just killed the ‘mojo’. Customers will look for something that has disrupted or even represents a radical change.
In their recent blog, Swedish super design firm PeoplePeople, approach this from a slightly different but just as important angle; They say “Our recommendation is a process that acknowledges creative tools for generating ideas and tools for rationality for deciding on ideas.” I have participated in finding one very simple solution to this. The solution is simple, but the value is a bit more complex to explain. Googols Decision Tool, not only assist organizations to find that rational reasoning, it also helps form a culture that leans towards the direction of business objectives, and it helps us bridge cultural hurdles in teams that inhibit everything from ‘management by decision’ to ‘not invented here’.
Guru Clayton Christensen, professor at Harvard Business School, touches at this in an article published in Business Journals. He claims even our most loved and promising brands are heading the wrong way. In my opinion he states the similar finding I make, they are at risk of loosing it due to partial inability to focus and understand what is important, things have or will change and we need to DO things. We need to build and manage the portfolio of Innovations and through this make our whole organization understand why we decide to focus on certain projects and not on others.
Thinking different is not enough. You have to DO different to make a difference.
The Non-Projecting dilemma
A common situation is that organizations have a funnel which they treat as a tunnel.. or rather a bucket. They throw everything in there and resist decisions on what to focus on and not. Here is a thought on this;
Random innovation is even more dangerous than indecisive processes. Have ideas that get no feedback and you end up with a discouraged organization. So, let your organization know what you are after.
- Form a vision to lead your Innovation Strategy.
- Ensure that the Innovation Strategy includes your business goals. Nota bene; Includes, not limits to.
- Communicate the strategy and let people know what you need help to fix and what you can’t focus on.
- Then, set a portfolio strategy so you balance short-, medium- and long term with continuous improvements and disruptive Innovation. Better yet, open up for the Radical also. Whether this involves a 70/20/10 strategy or a more bold 40/20/40 one; it’s a whole lot better than the commonly seen 95/5/0.
- Allocate recourses. The best resources.
Organizations cost of failure tend to be higher when they fail to Innovate, as compared to when projects fail to deliver. So dare to start the projects, pilot, test, iterate and if necessary; Kill’em. And actually here we have a major dilemma; The inability to go into project mode, and the inability to sacrifice other cases and invest resources into the unknown. We call this the Black Abyss. After all the inspiring and welcoming idea generation, there is just an abyss were everything tends to fall into a bucket of waiting.
We have to understand how we go from ideas, into projects. Find what is relevant and get started.
As Googolians ask; Are you Innovating or are you innowaiting?
Funny enough, when dealing with corporate ventures, I have found that the stories of Skunkwork inspire and amuse us all. But let us stop for a second and reflect about this. What is it that make Skunk work?
We could say that it is a self-fulfilling prophesy; if it works it will be called a Skunkwork. If it doesn’t it will be called a failed project.
Skunkworks are projects that work under the radar. They are not burdened with the administrative, managerial and rule bound ways of a large corporation. It is important to understand that Skunkworks may be sanctioned by management, or even should be. Let us say ought to be. It is not by definition that they have to be secret, illegitimate or refused.
To skunk a work, is to form an autonomous unit, with small resources, a dedicated team and letting them work entrepreneurially. They will (have to) seek new and different ways to accomplish results, with very limited resources, and be incentivized to do so. You will have to put best of breed in terms of staffing into this.
Skunkworking is actually a way for an organization to structure their ambidextrousness. I could very well say that Mr. Richard Bransons continious breaking large growing businesses into smaller ones, is a way of using the method to retain drive, innovativeness, entrepreneurship and business focus.
So we know that Skunk works. But not everywhere; recently I sat with people from a leading Swedish firm. They had skunked a new business and at start done everything right. They recruited one of their top dogs to run it, they moved them to a different environment, even geographically, so they would be nearer the industrial center of this new technology. Not long after business started to build, managers of “Mothercorp” demanded reports and budgets and the rest is history. -You better move back to our premises so we can support (read: control) you. -The CEO is so good, can she also do this and that for Mothercorp? -Your business isn’t large enough so we need to… and today a beautiful opportunity is dormant, in yet another big corporation.
If you have your portfolio strategy set. If you have the ideas, based on problems and needs. If the ideas can be selected based on rational as well as gut feeling (i.e. passion), if you have limited resources; well, the skunk working is not a bad way to work.
My personal experience is that failure is less common and less costly inthese cases. Skunkworks need long term view. Skunkworks enthusiasm the staff. Skunkworks build value.