The 9 Signs of a Losing Organisation

Indonesia's Professionals and Entrepreneur's Club has recently posted an article on "the 9 signs of a losing organisiation."

Coming in at number 9 is poor "Idea and Knowledge Management":

Poor Idea and Knowledge Management: cross-pollination of ideas is not facilitated; no idea management and knowledge management strategies and systems; "know-it-all" attitude; "not invented here" syndrome.

The other 8 signs proposed are:

1. Fuzzy Vision
2. Lack of Leadership Skills
3. Discouraging Culture:
4. High Bureaucracy
5. Lack of Initiative
6. Poor Vertical Communication
7. Poor Cross-functional Collaboration
8. Poor Teamwork

Idea Management in the UAE

It is interesting to look at the implementation of Idea Management Systems across different cultures and languages.

A recent article in Arabian-speaking countries' news portal Al Bawaba discussed Idea Management in the UAE by focusing on Dubai World’s "Suggestion and Reward Scheme" (SRS), supervised and run by Dubai World's Business Excellence Centre.

According to the article:

SRS received 755 suggestions in the first six months of 2008, of which 131 were implemented. These helped saving Dhs16 million for Dubai World, while the rewards given away totaled Dhs.570,000. The number of suggestions submitted, approved and implemented since 2001 to the first half of 2008 totaled 1442, and the total amount rewarded touched Dhs4.3 million.

Ms. Awatif Mohammed, Head of the SRS programme, reported that during this period:

. . . the SRS has received several prominent international awards, such as the 2007 Idea of the Year Award - Productivity Category from ideasUK, the 2007 First Prize in International Poster Competition from ideasUK and the 2008 Idea of the Year Award - Finance Category and runners up in Productivity Category.

There are approximately 9 Dhs to the US dollar.

The Three Primary Value Positionings For Idea Management Software Tools

Jeffrey Phillips has added more to his recent critique on idea gathering tools such as Dell's IdeaStorm and SalesForce.com's SalesForce Ideas. In a recent article posted to the Innovation Tools website, Phillips argues that

• the ideas generated need processing, and for Dell's IdeaStorm with over 9000 ideas submitted a brief cursory evaluation of 5 minutes per idea would take 450,000 minutes or 750 man-hours - a third of a year FTE. In addition, ideas from customers or partners may need legal review for IP ownership, adding to the time involved.
• Social Networking or Crowdsourcing sites do not provide workflow processes for idea evaluation and selection beyond "a simple voting or rating process."
• Social Networking and Crowdourcing approaches are claimed to generate less relevant ideas as:
  

. . . these programs primarily generate very incremental ideas, and since these approaches are very open, collaborative and web-based, they expose ideas to a large number of people. The larger the group, the more the thinking and ideas will revert to the mean. So you can't expect really insightful or disruptive ideas from this approach

I think that Phillip's key message is that an Idea Management system is more than a front end for capturing ideas, it is also a back end for efficiently and effectively processing and filtering those ideas and commercialising or investing in the best ones - for a significant commercial return on innovation investment.

I think that anyone involved with Idea Management Systems and indeed innovation generally will easily find consensus on this key message.

But I don't think that that one point alone is a damning critique of Dell's approach. Let's grant that assessing Dell's existing ideas costs 1/3 of a FTE resource? I suspect Dell could afford it. Indeed they could also afford additional extra resources to develop the criteria against which to assess ideas and to give relevant training to their staff involved in assessing the 9000 ideas and afford a team of reviewers and evaluators. The key issue here should not be the cost of evaluating ideas, but the net return on innovation investment after the most promising ideas have been selected and developed and commercialised.

More to the point from my point of view is that Dell, like many organisations, will already have systems in place for New Product Development. Large organisations will typically already have significant investment in software, systems and processes for New Product Development, process improvement, and input into strategic direction and performance improvement - systems which may have already been trialled 'proven' and committed to to a greater or lesser extent. In addition, organisations may have commitments to existing IT infrastructure such as portals and other communications technologies. The question arises therefore of where Idea Management Solutions 'sit' in relation to these existing systems and processes.

There seem to me to be 3 clear positionings for Idea Management Software solutions:

1. An Idea Management System is expected to generate and capture ideas and feed them into existing systems and processes which will then filter and assess them.
   In this case the Idea Management tool itself is not expected to provide significant initial business evaluation and filtering of the ideas beyond peer review or a very rapid initial assessment (e.g. a go/no-go decision for promotion to the next stage or a selection from a list of defined options) by an assigned business representative
   
2. An Idea Management System is expected to integrate with existing systems or processes by providing suitably qualified ideas to the appropriate entry point.
   In this case the Idea Management tool is expected to provide significant initial business evaluation and filtering of the ideas, but more extensive evaluation and development of opportunities is to be fulfilled by other organisational systems and processes.
   
3. An Idea Management System is expected to support and facilitate a complete end-to-end stage-gate process from idea generation to idea commercialisation and value realisation

Depending on what the organisation wants, there are distinct value criteria to assess an Idea Management System against.

• In case 1 above, the system must generate an appropriate volume of reasonable quality ideas.
• In case 2 the system must not only generate ideas, it must put them through an appropriate process of qualification and evaluation to filter the best ideas to forward to the next stage in the system.
• In case 3 the system must be capable of stewarding ideas through a complete stage-gate process from idea generation to commercial realisation.

The question of whether and how an Idea Management System integrates with existing processes for market testing, developing a business case, prototyping, project and portfolio management and other activities is an interesting one, and different vendors have positioned their software in different ways to address this question.

It seems to me that most Idea Management software tools are focused around cases 1 or 2, for the primary reason that organisations do typically already have significant investments in existing systems and processes for activities such as NPD, process improvement, strategy and performance management.

In the case of Dell, they appear to have clearly positioned their Idea Management tool in the first category. My reading of Dell's Idea Management process is that what Dell primarily wanted was a front end for generating ideas to feed a stream of ideas into their existing relevant organisational processes such as NPD.

While I agree with Phillips that an Idea Management tool can provide additional value by providing focus to generate more better quality and more relevant ideas and can further develop that value through efficient initial back-end processes for evaluating and filtering ideas, I don't think that focusing the tool on the front-end of idea capture is inherently a fault. The question is whether the back-end processes at Dell efficiently pick up the slack and process the ideas efficiently, whether enough appropriate evaluation and selection is incorporated into the front-end tool, and most importantly whether the system generates enough commercial value and return on innovation investment. These are, I expect, questions that Dell will eventually answer for themselves from their own experience.

An additional point to raise in relation to Phillips' critique is that we need to think carefully about what value an organisation is seeking when it engages employees, customers or partners for ideas. In addition to the commercial value of evaluated, selected and implemented ideas, there is value in engaging customers and employees with the company, in capturing market intelligence and trends, and in general developing a closer relationship with customers, employees and stakeholder groups. For example, the value of social networking tools for enhancing the relationship with customers is described in a recent MIT Sloane Management Review article through the concept of Virtual Customer Environments, summarised here and here. So the possibility exists that regardless of the success of social networking or crowdsourcing tools for generating commercial value as a front end for innovation, such tools may generate commercial value in themselves through enhancing the relationship with key stakeholder groups such as employees or customers.

OVO Innovation CEO Discusses Idea Management at Dell and SalesForce.com

OVO Innovation VP Sales and Marketing Jeffrey Phillips recently posted on Dell's and SalesForce.com's initiatives in relation to Idea Management (Idea Storm and SalesForce Ideas respectively). Phillips argues that capturing ideas in a corporate "social networking" space is the easy part - back end management processes to evaluate test, develop and commercialise the best ideas is the hard part. Phillips writes:

". . . anyone who works in innovation will tell you that idea generation is easy - managing, evaluating and maturing ideas is the hard part. We think this is where the actual value in innovation resides - having a process and team that can consistently manage ideas and convert them into new products and services."

Phillips argues that open suggestion models such as enterprise social networking or crowdsourcing approaches:

". . . are interesting but will ultimately run into many of the same problems that doomed the physical suggestion box:

1. Too many ideas are submitted for the teams to manage
2. There is no downstream process for managing ideas successfully
3. The ideas address too many different challenges and issues to manage effectively
4. The ideas usually don't address issues the management team considers strategic
5. There are concerns about the ownership and legality of the ideas"

Phillips, of course, makes a very solid point - effective back end processes to evaluate and filter ideas and invest in the best ones is fundamental to any effective Idea Management System. However, it is not so clear at this stage that the criticism applies forcefully to Dell. Dell seem to argue that they already have effective back-end management processes for assessing ideas, and IdeaStorm is simply a front end for feeding ideas into that system. Dawn Laccalade from Dell talks about Dell's backend management processes for Idea Management in IdeaStorm in a recent podcast (start about 1:50 in to the talk). Whether Dell's backend management processes can scale effectively to deal with the more than 9000 ideas generated is the key question for Dell's implementation.

One of the most high profile implementations of SalesForce Ideas for Idea Management is through Starbucks' my starbucks idea portal (see here and here for some brief information on Starbucks's solution). Dawn Laccalade (above) notes that when Starbucks implemented their system, they were quite surprised by the number of people they needed evaluating ideas (around 30 people FTE).

Imaginatik CEO Speaks on Innovation and Idea Management on YouTube

Imaginatik have been putting quite a bit of good content on Innovation and Idea Management up on YouTube.

This video was posted recently. In this video, Imaginatik CEO Mark Turrell talks about how he captures ideas personally from his daily life and argues that Idea Management Systems used by Dell and Starbucks are not as effective as they could be because they focus on the 'front end' of Idea Capture and do not develop the back end processes of assessing and filtering the ideas as strongly as other products in the Idea Management space.

Part II of the discussion can be found here. In Part II, some of the interesting points include the centrality of effective processes to effective organisation and emphasises the importance of software support for people implementing idea assessment and selection processes to realise a high return on investment

K-Community hosts a focus group on Idea Management

K-Community, a Knowledge Management professional group based in Bangalore, India recently hosted a focus group on Idea Management systems attended by representatives from organizations including Capgemini, TCS, Wipro, Honeywell, Robert Bosch, and Accenture.

The discussion was reported by Vinay Dabholkar, and some of the key points raised in the discussion were:

• "All organizations use some tool or the other for idea management." Some of the organisations present used Idea Management tools from a vendor, others used Idea Management tools developed in-house. None of the participants expressed a sentiment that their tool was a limiting factor
• Most organisations were putting an effective in putting appropriate supporting organisational structure around the Idea Management initiative
• One of the challenges was identifying criteria for ideas that were strong enough to guide development of useful ideas but not so strong as to be limiting
• A second challenge was that may ideas are by their nature cross functional, and the challenge is when to involve a cross functional group in the discussion in the ideation phase
• A third challenge was obtaining the right mix of radical and incremental (or at least less radical) innovations in the portfolio mix
• A fourth challenge was "sustaining the innovation engine" over time. If sustainability is perceived as an extra task then motivation for innovation by participants may vary over time.
• The final challenges were integrating Knowledge Management with Idea Management and maintaining the "soul" of the innovation process while developing processes and structure around it.

McKinsey on Online Collaborative Technologies for New Product Development

Global Management Consultancy McKinsey recently published an article the next step in open innovation arguing that the next step in innovation is the use of online technologies to allow companies and outside groups such as customers or suppliers to come together and "co-create" new products and services.

McKinsey write:

If a company could use technology to link these outsiders into its development projects, could it come up with better ideas for new products and develop those ideas more quickly and cheaply than today?

McKinsey discuss a number of case examples, such as

LEGO, for instance, famously invited customers to suggest new models interactively and then financially rewarded the people whose ideas proved marketable . . . shirt retailer Threadless sells merchandise online - and now in a physical store . . . that is designed interactively with the company's customer base.

A number of challenges exist for successful co-creation:

• Building communities and attracting participants
• Breaking down complex problems into an appropriate form where members of the community can work on different parts and put them back together
• Governance mechanisms
• Maintaining or identifying quality

McKinsey conclude that "companies should experiment with this new approach to learn both how to use it successfully and more about its long term significance."

The Australian Government Kicks Off an Idea Campaign

Australia recently voted in a new Government late last year, and one of the first acts of incoming Prime Minister Kevin Rudd was to open up an Idea Campaign, called Australia 2020, to solicit the best ideas for Australia as a country in the period going forward to 2020.

Ideas have been sought in the following categories:

• Productivity Agenda - education, skills, training, science and innovation
• Australian Economy - the future of the Australian economy
• Sustainability and Climate Change - population, sustainability, climate change and water
• Rural Australia - future directions for rural industries and rural communities
• Health - a long-term national health strategy – including the challenges of preventative health, workforce planning and the ageing population
• Communities and Families - strengthening communities, supporting families and social inclusion
• Indigenous Australia - options for the future of Indigenous Australia
• Creative Australia - towards a creative Australia: the future of the arts, film and design
• Australian Governance - the future of Australian governance: renewed democracy, a more open government (including the role of the media), the structure of the Federation and the rights and responsibilities of citizens
• Australia's Future in the World - Australia’s future security and prosperity in a rapidly changing region and world

A political activist group, GetUp!, has also set up a forum for members to contribute and discuss ideas for submission to the forum - and GetUp members who are delegates to the summit will take members' ideas forward to the government.

The period for submissions has recently closed, and submissions are now being considered.

The Australian Government initiating an Idea Campaign is a terrific step forward. It would be nice to see this kind of Idea Management activity integrated into democratic government on an ongoing basis, not only in Australia but around the world.

2008: The Year Of Idea Management?

Over at Business Week, Bruce Nausbaum is making his predictions for innovation in 2008. Bruce writes:

The demand for innovation is soaring in the business community . . . nearly all CEOs and top managers who have learned the language of innovation are now seeking the means to make it happen. It took the Quality Movement a generation to change business culture. The Innovation Movement is still in its infancy, but it's growing fast. You can see that in the vast changes taking place within the field. Companies are demanding new tools and methods to execute that change within their existing organizations

Idea Management Systems are one of the central new tools and methods for consistently achieving significant innovation outcomes, and for managing innovation with the same degree of rigour and discipline as other core business functions. Idea Management is a mature and evolving toolset that's ready for more consistent and widespread adoption, and companies are likely to increasingly focus on Idea Management as a key point of differentiation and competitive advantage through consistent and repeatable innovation across products, services, processes and business models.

It will be interesting to see what 2008 brings for Idea Management.