Ideas are valueless

Neil Robinson of Lanzen Strategy Blog was horrified a few days ago when I said that ideas by themselves are valueless. He then went on to write an interesting post:

“Many companies now have blue sky departments tasked with creating the Next Big Thing. But can we factory farm a golden goose?”

I suppose he was referring, really, to my point that we spend most of our time moving (figurative) check boxes around on forms. It is this kind of thing that pays the bills. Neil goes on to suggest that teams doing this aren’t really innovating:

“The team’s intimate knowledge of the company’s processes and a close-coupling to the internal touch-points ensures a return. But isn’t that simply process re-engineering rather than innovation?”

And that’s a valid point of view, and one that we regularly address both inside and outside the bank. From our point of view, innovation is any situation where you create new levers or change the possible range of old ones. Re-engineering (we call it optimisation at the bank) is where you move the levers.

Changing Interest rates or terms and conditions is optimisation.

Changing a business process or modifying the usage of a channel is innovative if it means that the interest rate you can offer customers might be way outside the norm. ING Direct proved that.

But back to my assertion about the value of ideas.

Ideas are valueless by themselves, because without execution, they don’t make returns. I’ve never worked anywhere that lacked ideas, and everyone has great ones. We have mature capturing and scoring systems for ideas here at the bank, so I know this as a statistical fact.

The problem is that people with day jobs don’t often have the time to turn their ideas into reality. It is the chief problem innovators face: with so many things one can do, how do you prioritise scarce resources to make things happen?

One of the biggest myths about innovation is that to get more innovative, what you need is more (and better) ideas. Actually what you need is more capability to execute.

Having fallen into the Schumpeterian trap of confusing invention with innovation, Neil goes on to conclude the real role of innovation teams is as a great big ideas switchboard:

“Internal innovation teams focused on process re-engineering, managing ideas flowing inwards from commercial-social frameworks that provide a voice for customers, suppliers and everybody else concerned with the business to be heard.”

Of course, the problem is being able to do something with all those new ideas coming in. Some, certainly, will be unbelievably good. But what message do you send when you ask people for their time and effort and then don’t do anything at all?

The real answer is co-creation. People who have enough invested emotionally to actually dream up the idea in the first place are probably likely to take it a little further if you make it possible. The innovation team enables the idea originator to make things happen.

We’re about to do something very special in this regard for our internal ideas factory, and we hope it will link the idea to execution in a way that’s never been done before. I’ll be posting on that in the next few weeks when we see how it all works out.

Update: My mispelling of Neil’s name has been corrected. Sorry Neil!

7 Responses to“Ideas are valueless”

  1. July 23, 2008 at 10:53 am #

    My concern is that this creates a sense of innovation elitism rather than fostering a culture of invention within the business. Your idea has no value unless you are able to give me a high level understanding of how it could be implemented and how this helps us make money. Such an attitude can stop great ideas in their tracks and mean missing out some great thoughts from the wider community.
    Innovation doesn’t start and end within an innovation team, they’re merely the conduit through which great ideas can often be taken to the next stage. A catalyst to transform an invention through to a practical innovation. Of course many people don’t have the time to invest in an idea through to the extent whereby it could be considered ready to turn into an implementation, that’s our job.
    You need to wear many different hats in innovation; technical, commercial, marketing and management (of ideas rather than people necessarily). Being able to play the role as well as having the contacts required to get an idea somewhere is vital and the process is not something that everyone is going to be able to go through.
    Even given a promising idea there are many ways it can fail and for many different reasons. As an example the big three causes of failure for us here are probably:
    No stakeholder benefit:
    A common example of this might be from the recent announcement of technology and a suggestion comes in along the lines of ‘”Let’s use technology ‘x’ on the website”. That’s great but usually there is no clear benefit in doing so.
    Doesn’t play into a sponsor’s goals:
    Someone has to pay for the innovation and the purse-holders have their own agendas and goals. if it doesn’t fit in with those then an idea is going to really struggle for realisation. It’s always easy to say ‘no’ to something that doesn’t tie in with where you need to get to.
    Not the right time for the organisation:
    It could be a great idea, the sponsor could love it but because of other constraints (resourcing, other projects etc) it just isn’t possible.
    The point being that an idea that’s wrong now, could well be of great value later and is not something to be dismissed. Not only that but in a global organisation what isn’t right for one region may play straight into the goals of another.
    I would rather see an innovation team triage and realise the value in an idea than simply score an innovation. If that becomes a bottleneck then that’s a great problem to solve.

  2. July 24, 2008 at 9:23 am #

    Thanks for the name check, James albeit an inaccurate one!
    Let’s put things back into context here.
    My post set out my thoughts about the innovation culture in the wider sense. It was not about any specific company and would be presumptuous in the extreme to try to judge one who’s processes and philosophy I have little knowledge of.
    My “golden goose” post referred to the efficacy of internally driven innovation teams versus social network driven teams.
    It tried to get across to readers the vast wealth of external information that flows external to an organisation and how it might be harnessed to make product offerings more efficient.
    It compared CRM (backward looking) and social networks (back, present and forward looking) which I clearly didn’t emphasise enough because you made no comment on it.
    The truth is, I believe innovation is about trying to grab handfuls of sand from that great global beach that is the Internet and build with that.
    If others want to pluck sand from the firebucket in the corporate corridor, well that’s their call.
    I prefer the sun on my neck to a flourescent tube…

  3. July 24, 2008 at 7:40 pm #

    Could we have 1 concrete worked example of a “social network driven team” ?

  4. July 24, 2008 at 9:34 pm #

    An example of a social network driving an internal team?
    Gosh, where shall I start?
    Try Yahoo, who opened up to a worldwide audience their new work on search technologies.
    Yahoo again with their academic science project, see the link below:
    Google’s work with its Open Source mobile platform
    The Open Source Community
    The Mozilla Foundation
    The Zimbra Open Community
    The Open Software Foundation (OSF) was the original one, back in the eighties.
    Every university in the World
    Xerox Parc Labs before that.
    Unix before that.
    ARPANet before that.
    Shall I go on?

  5. July 26, 2008 at 9:18 pm #

    To be honest, by “social network driven team” I was thinking that you meant teams driven by a websites like myspace/facebook.
    So basically every co-operative team R&D effort in the world that isn’t within a closed institutional hierarchy could go on the list above?

  6. July 28, 2008 at 6:20 pm #

    Yes, Thomas, that’s my point exactly.
    I feel we need to look at social networking as a service, not just at a couple of sites in isolation and rule them out simply because they don’t happen to fit the plan.
    Look how almost universally external collaboration has driven down costs and yet made quantum leaps in capabilities. Take Open Source, for example, its all free.
    As an aside rather than the “Play” sites, look at Second Life for a use of a pure virtual community in commerce…

  7. July 30, 2008 at 11:13 pm #

    And it’s a good point, and I agree with it.
    What would your definition of “social networking as a service” be?
    There are sites like Facebook that expose APIs to themselves, schemes like FOAF (and my never-implemented 3rd yr project) that define protocols between independently controlled SNS, and various bits of free software for building standalone SNS. What model(s) would you see as being a “service”?
    I suppose the extent to which you can expect to benefit from external collaboration depends on how generally applicable the subject is. OpenCoin is a small project that could potential solve a lot of people’s problems, it’s easy for them to attract help. Redesigning Lloyd’s banking website is a solution to one firm’s problem, that will never directly benefit anyone else. (If Lloyd’s wanted to improve the OFX standard, that might be different…)
    To want extend do you think that the scope of “stuff people want do for free” is increasing, or that “stuff people want do for free” is now easier to contribute to?
    Second Life is an interesting one, some people are (ab)using the Linden bucks system for casinos and p0rn. But there are a few clean for-profit content businesses (+ various in-game finance houses). Not sure you would want to base a RL business out of there though, Too many furries!

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