Three Rules for Selection in the Innovation Process

Do you know what happens when you ask too many friends what to get for your girlfriend's birthday, where to go for holiday, how to get a stain out of the sofa cushion, or how to open a can without a can opener? You will get myriads of ideas, and chances are you will be not a jot wiser.

Then you actually know already what I am going to talk about. Generating ideas is one part of the job. Selecting the best one is another and not necessarily the easier one.

How often even the biggest companies fail in it can be witnessed daily by walking down the road. Surely you know your "favorite" car models that make you wonder each time you see them, "Heavens! How could this design go all the way through the company, get all the Go's it needed and actually be built? It looks like a chimera on wheels!"

To understand which ideas are pursued and developed into innovation projects, I studied the selection of ideas in a large multinational company with my colleagues Paola Criscuolo, Linus Dahlander and Ammon Salter. In this company, every employee is allowed to submit new R&D ideas. When an idea gets selected the employee is allowed the required budget and time to fully work on the project. Once they finish their work, the result is rolled out into the whole company.

We found three interesting factors that influence funding decisions in this organization.
First of course the novelty value of an idea. However, the most innovative ideas are not given most preference. Rather those ideas of medium novelty hit the target. If a project strays too far from the company's main activities, or if it seems too difficult to commercialize, it does not get funded. If the idea is considered to be too progressive, such as one that aims to improve existing processes, it meets the same fate. Whereas projects which, say, find a new way to serve increasing client demand by stretching existing capabilities, fall into the sweet spot of novelty and receive funding.

Secondly, we observed the more diverse the decision panel is, the more innovative are the ideas they choose. Decision boards that consist of members from different departments with diverse professional knowledge welcome more novel ideas than a comparatively specialized decision panel.

Thirdly, the workload of the decision makers has a negative effect on the innovation value of the selected ideas. The more ideas they have to evaluate, the less innovative are the ideas they prefer. For big innovations to get a chance, the company must strictly limit the workload on the decision makers.

So next time you need a birthday present and ask people for advice, bear in mind that the most innovative idea might not be a safe present, it's no use in asking only like-minded people and don't overload them by also asking about holiday trips, couch cushions and tin cans.

However, the chimeras on wheels, I am afraid, will go on rolling down the streets in spite of all the research in the world.