How Not to Kill Innovative Ideas

Getting creators of ideas and people from outside an organization more involved in the evaluation process of new projects is a good way to promote innovation. Thorsten Grohsjean of the Bocconi Department of Management and Technology has studied this aspect in a new paper written with Athanasia Lampraki of Aarhus University in Denmark, Christos Kolympiris of Warwick University in the UK and Linus Dahlander of ESMT Berlin.

Innovation is by definition the result of a good idea which improves on the previous state of things. But in order for a good idea to be put in practice, it has to be assessed and judged as having some merit. This is the crucial passage that Thorsten Grohsjean and his colleagues focused on. A well-known paradox is that many new ideas are in fact rejected exactly because they are too novel.

There are basically two roles involved in the innovation process. One is played by those who generate new ideas, and the other by those who vet them and select the ones which may be developed further. Typically, younger researchers begin their professional careers in the first role and move into the second role as they become managers. The crucial node is therefore the passage between those who generate an idea and those who evaluate it. How is it possible to reduce the possibility that good (that is, more novel) ideas might be rejected?

The authors argued that researchers called from the outside of an organization are better at judging new ideas than insiders, because they are likely to have a wider contact network and up-to-date knowledge. Moreover, and maybe most importantly, they are creators of new ideas themselves. In other words, the authors posited that by blurring the distinction between the two roles the selection process would improve.

To prove their point, they studied a real-life case of this nature. The US National Science Foundation (NSF) is a federal research agency that supports fundamental research across all non-medical fields of science. In some cases, the NSF makes use of academics on loan from their home institutions (seconded employees) to select research projects exactly because "they have different talents", in the words of the NSF chief.

After studying the NSF files from 2000 to 2012 and conducting 37 in-depth interviews, Grohsjean and his colleagues found that seconded employees select proposals that are, on average, 10% more novel compared to proposals selected by permanent employees who do not interact with a seconded employee. Moreover, permanent employees who interact with a seconded employee select grants that are 6.4% more novel. Although this indirect effect is smaller than the direct effect, it is still meaningful as it affects more people - the NSF has more permanent than seconded employees.

"Seconded employees-the focus of our paper-come from the outside to join the group today and stay tomorrow," says Thorsten Grohsjean. "As strangers that were not always part of the group, they can bring qualities into it that do not and cannot stem from the group itself. They have devoted most of their career to generating rather than selecting ideas. Generating novel ideas helps seconded employees develop a better understanding of the knowledge frontier and an extensive academic network."

Athanasia Lampraki, Christos Kolympiris, Thorsten Grohsjean, Linus Dahlander, "The new needs friends: Simmelian strangers and the selection of novelty", Strategic Management Journal, first published 5 November 2023, DOI https://doi.org/10.1002/smj.3564