Steve Shapiro on Idea Management Systems

Steve Shapiro, a prominent innovation author and consultant, wrote recently on his blog that

A large bank in England asked their employees for new ideas using an idea management system (a tool). Unfortunately the executives never implemented any of the ideas causing a massive rebellion by employees and the eventual dismantling of their innovation efforts. Leadership must show a commitment to innovation. It must not be viewed as another project. It must be treated as a way of life; a never ending mindset.

Shapiro's core point about the necessity for organisations to develop and maintain an innovation culture, with sustained leadership executive commitment to funding and managing the innovation initiative effectively, is a key point and is well taken.

However, it is important to note that the phrases "executives never implemented any of the ideas" - and Shapiro's related suggestion on his blog post that innovation initiatives are often not sufficiently well funded to invest to a significant enough extent in the most promising innovation ideas - is not in any way in conflict with the usefulness of Idea Management Systems as a tool for managing innovation outcomes.

This is because the whole point of an Idea Management System is to maintain a pipeline where ideas are assessed and a portfolio of the most promising ideas are invested in. Providing the necessary funding for the Idea Management System to work is as axiomatic as providing the budget the marketing people need in order to implement, for example, a lead generation strategy, or the budget for a project to succeed. A well conceived and implemented Idea Management System will allow appropriately qualified and informed individuals to systematically test ideas against established commercial and technical criteria, and provide sufficient funding to invest in a portfolio of suitably promising ideas.

While there is a wide range of manners in which an Idea Management System can be set up, and a variety of appropriate funding schemas could be considered, there still remains the necessity to apply best practices in Idea Management when implementing the Idea Management solution.

Like any significant organisational process, an Idea Management System needs to be properly designed and implemented to achieve the desired outcomes.

KickStart your Idea Management System Selection Process With an IMS Analyst Report

IdeaManagementSystems blog sponsor Cognitive Transitions is releasing today an Idea Management Systems research report.

The Report is designed to help you in your Idea Management System evaluation and selection process and in maintaining best practices in Idea Management as technologies and practices evolve. The Report contains:

• An overview Idea Management Systems report outlining current trends and issues in Idea Management and discussing a range of considerations that will impact on rapidly determining your optimal Idea Management choices
• 'Snaphot' highlight reports for 4 major Idea Management software products: Imaginatik Idea Central, BrightIdea.com, JPB Jenni, and Idea Champions IngenuityBank
• 2 hours of included Idea Management consultancy to assist you with your Idea Management evaluation and selection process

The report is sold as a subscription, giving you access to all additional subscription reports, updates and research outcomes released with the subscription during the 12 month subscription period.

To celebrate the launch, Cognitive Transitions is making the Report subscription available at a 20% discount until Friday November 23rd 2007.

Looking For Participants for Idea Management System Experiences Survey

Has your organisation implemented an Idea Management System, or do you have an innovation initiative?

Idea Management Systems weblog sponsor Cognitive Transitions is conducting research into experiences with Idea Management Systems. Take the Cognitive Transitions Idea Management Survey to share your experiences and learnings.

The survey will be open until December 31st 2007.

UK Based Scott Bader Selects Sopheon Accolade for New Product Development and Idea Management

Sopheon's Accolade product has been selected by Scott Bader, a U.K.-based producer of composite and specialty polymer resins, to implement their PLM system and New Product Development processes - including an Idea Management component. According to a Dutch report,

Sopheons Accolade system will play a central part in the initiative by enabling Scott Bader to automate its product development process and make more informed decisions about which product ideas to develop . . . The idea management module will facilitate the submission and capture of product ideas and supply scorecards that will help users systematically and objectively evaluate them.

One of the attractions of the Accolade system was its focus around process management. A spokesman for Scott Bader commented:

One area where we want to grow in sophistication is process measurement. Accolade will help us capture the metrics needed to track and evaluate the efficiency and predictability of our process and the business value of the projects that pass through it.

Embracing Idea Management

Paul Williams argues on the Think For a Change innovation blog that many managers are resistant to innovation initiatives in general - and Idea Management Systems in particular - because successful new ideas will generate new projects, and are therefore perceived to create a drain on the limited pool of project resources. Williams writes:

Executives fear successful innovation programs because they look at their already overworked resource pool and wonder how in the world they are going to add more projects to the mix, even if they look extremely promising. This fear leads to risk avoidance which then leads to either complete inaction or very slow action.

A similar point has been argued by the Monitor group in a short paper that argues that as executive leaders pursue growth through innovation they venture into uncharted, risky waters - and potentially become paralysed by, or deny options for, change. Monitor proposes scenario planning as a useful tool to resolve the impasse, through exploring opportunities and consequences of a range of future scenarios and thereby informing the planning process for growth initiatives.

Williams argues that in poorly performing innovation programs the response to this fear of the consequences of change is to attempt to reduce the risk by pursuing a safe, incremental option:

One of the most common things I see when consulting on poorly performing innovation programs or in simply trying to embed a new idea management program, is the inevitable drift to slow decision making down, tweak the idea just a bit to reduce the risk, move forward with ideas that are "guaranteed" or "safe," or splitting resource time between innovation and lean programs . . . But to really leverage a successul innovation or idea management program, you need to occasionally roll the dice.

I don't believe an effective implementation of an Idea Management System will be particularly susceptible to the issues Williams suggests, as an effective Idea Management initiative will be properly funded with a budget for resourcing innovation initiatives above and beyond existing projects, and the Idea Pipeline itself would have checks and filters in place to ensure that the highest value ideas and innovations move to the front of the line for priority in relation to the limited allocation of idea implementation funding available. In addition, the idea of how an Idea Management system works and the benefits it offers is not difficult to communicate. Typically, both managers and employees back an Idea Management System initiative provided that executive management shows sufficient commitment to assessing and acting on ideas submitted.

But Williams' comments do raise a serious issue for consideration in relation to organizational innovation programs in general - and perhaps offer some additional warning signs for when a more systematic and rigorous approach to innovation such as through an Idea Management System is required.

More on Top Swedish Innovators

Idea Management Systems recently posted on Top Swedish Innovators.

It turns out that the study was originally undertaken by two Swedish Masters students, Claudia Suraga and Ulrika Schleimann-Jensen, and the results were subsequently further publicised by some of the companies involved in the study such as CapGemini.

For those interested, the original thesis may be obtained on request from the Masters students' academic supervisor, Alf Rehn, reachable at http://www.alfrehn.com/

Idea Management and New Product Development

The Wikipedia article on New Product Development suggests 7 stages of development of a new product (or service):

1. Idea Generation
2. Idea Screening
3. Concept Development and Testing
4. Business Analysis
5. Beta Testing and Market Testing
6. Technical Implementation
7. Commercialization (often considered post-NPD)]

Idea Management software products typically focus on at least the first of these two stages, with some products extending into the third and fourth stages. Typically the fourth through seventh stages are handled by other organisational systems outside the Idea Management System.

The first stages (overlapping into the second through fourth stages) constitute what Wikipedia calls the 'Fuzzy Front End' of the New Product Development process.

According to Wikipedia, the Fuzzy Front End consists of:

1. Opportunity Identification
2. Opportunity Analysis
3. Idea Genesis
4. Idea Selection
5. Concept and Technology Development

What is the Difference Between a Suggestion Box and an Idea Management System?

The difference is a matter of historical evolution.

The traditional Suggestions Box was originally a physical box, with a slot in the top, that sat in a suitable location in a building and people physically dropped their written idea suggestions into it. The ideas submitted to the suggestions box were then periodically reviewed by a designated person, typically a member of the administrative staff or the owner of the business or manager of a business unit.

In the 1990s, developments around innovation practices such as the notion of a stage-gate process lent more discipline and rigour to the process of innovation, and companies became more sophisticated about the kinds of organisational structures used to assess idea suggestions. A number of approaches developed, including "innovation councils" and innovation "cross-functional teams". With these developments, the modern Idea Management System was born.

In parallel with the development of the Suggestions Box into the Idea Management System companies such as Imaginatik (1994) and General Ideas Software (now BrightIdea) (1999) entered the market, allowing companies to capture and process ideas through dedicated software packages. Such tools allowed managers to configure and run 'idea campaigns.' In addition to these industry pioneers, a number of further vendors have entered the market, such as JPB (makers of Jenni), Idea Champions (makers of IngenuityBank), and OVO (makers of their Spark and Incubator products).

At What Stage of Growth Would My Organization need an Idea Management System?

I recently gave a series of talks on Idea Management Systems for the Australian Computer Society, and one question that was asked regularly is "at what size or stage of organisational growth would my organization need an Idea Management System"?

While the best answer would obviously depend on the particulars of your organization, I think that one good answer is that your organization would benefit from putting an Idea Management System in place at pretty much the same point of growth at which your organization would benefit from putting an intranet portal in place.

If you only have 5 or 10 people in your organisation in the same building and you can all talk to each other regularly in the lunch room, maybe a formal Idea Management System is of less value. But by the time you get to 30 or more people - and particularly if they are spread out across client sites or branch offices - perhaps it is time to start thinking about an intranet portal solution - and if you are committed to innovation, it is also time to start thinking seriously about putting an Idea Management System in place. If you have 300 or more people in your organisation, then perhaps managing innovation systematically through an Idea Management System becomes imperative.

Innovation Killers

Joyce Wycoff of the Innovation Network has listed the top 10 "innovation killers":

1. Not removing fear of doing something new or of failing.
2. Not making innovation performance part of everyone's review performance review process, with innovation targets and KPIs
3. Not documenting, communicating and getting buy-in to the innovation process
4. Not allowing flexibility to explore new possibilities and collaborate with others inside and outside the organization.
5. Failing to ensure that everyone understands the corporate strategy, and that all innovation efforts are aligned with it - while still catching ideas from the left field
6. Not scanning the environment for new ideas and stimulation
7. Not honouring a diversity of thinking styles, experience, perspectives and expertise.
8. Not finding a balance between good focal criteria that can focus ideation and restrictive criteria can stifle ideation and perpetuate assumptions and mindsets from the past.
9. Not treating innovation teams differently to “regular” project teams: Innovation needs different tools and different mindsets, different training and a different mix of skills and personalities.
10. Not buying or developing an idea management system that captures ideas in a way that encourages people to build on and evaluate new possibilities.

Coming in at number 10 is not managing Innovation systematically through an Idea Management System

Idea Management Software Reduces The Complexity Of Innovation

Jeffrey Baumgartner is Managing Director of Bwiti, one of the makers of the Jenni Idea Management Software. Baumgartner posted an article recently arguing that a key benefit of Idea Management Systems (and Idea Management software in particular) is that this approach reduces the complexity of innovation, making it more manageable.

Baumgartner argues that:

I have noticed over recent months . . . a tendency to turn corporate innovation into a highly complex system involving numerous processes, approaches and models. Such systems are being promoted by consultants who, not surprisingly, charge by the hour for implementing and teaching their systems . . . corporate innovation need not be horrendously complex.

The article suggests 7 key factors for making innovation work:

• Trust
• Executive sponsorship ("management buy-in")
• Appropriate resourcing ("budget")
• Tools (idea management software and creativity tools such as brainstorming and mind mapping)
• Methods for evaluation of ideas
• Incentives/Rewards
• Time and Environment in which employees can be creative

Idea Management Systems and The Development of an Innovation Culture

A recent article in BRW explored Idea Management Systems and the relationship between the systems and processes of Idea Management Systems and the development of an innovation culture.

John Louth of the Hargraves Institute comments that:

. . . an abundant source of innovative ideas resides in the intellect of all employees and stakeholders, not just those specifically employed to be creative . . . to tap into this vast resource, an organisation needs to build both the culture to engage people and the processes to manage the flow and implementation of ideas.

Louth argues that companies need to concentrate on "the capacity to capture and implement ideas." Like most change initiatives, this process needs buy-in from the top and the changes must be communicated effectively. Louth believes that:

Culture alone without process to deal with the ideas that are generated is not only ineffective but dangerous. Unless ideas are evaluated effectively and implemented . . . there is no value.

Louth discusses a spectrum of approaches, from stage-gate methodologies to less formal approaches; from a high level of maturity and sophistication around idea management metrics to a focus and emphasis on building a creative culture.

The Year of The Idea

The Australian Institute for Commercialisation (AIC) has nominated 2007 as the Year of The Idea.

In introducing the Year of The Idea, CEO Rowan Gilmore highlights the importance of an Idea Management System to successful innovation, and commercialisation of ideas:

"We're encouraging people to talk about ideas at their workplace, to try to convince their managers to implement formal idea capture schemes.
Then the next process is to sort through and prioritise them, and consider how those ideas might develop into products and process improvements and so on."

Göran Roos on Idea Management Systems

Göran Roos is a researcher, academic and business advisor on the management of Intellectual Capital, with co-authorship of works such as Intellectual Capital and Managing Intellectual Capital in Practice to his credit.

Roos was interviewed on innovation recently in the July 19-25 issue of Business Review Weekly, and outlined the need for an Idea Management System to provide a disciplined approach to innovation:

Most people think the generation of ideas is the ability to put a suggestion box on the wall. You'll get a huge amount of ideas. But if you don't give direction, you may get ideas that are completely irrelevant.

Consequently,

What you want is a strategic document that clearly articulates what you are looking for, ensuring people put forward ideas that are relevant to the organisation and linked to its overall strategy. Then you need a management system that can evaluate and commission innovation projects. You will always get more projects than you have funding for, so you need to prioritise them, and get sign-off between the people who are going to develop it and and the people who are going to use it.

In addition, this disciplined approach leads to the ability to systematically measure innovation progress.

Idea Management using a Stock Market Metaphor

An article from the New York Times reported that Rite-Solutions, a software company that builds advanced command-and-control systems for the US Navy, developed an interesting approach to Idea Management Systems by creating:

. . . an internal market where any employee can propose that the company acquire a new technology, enter a new business or make an efficiency improvement. These proposals become stocks, complete with ticker symbols, discussion lists and e-mail alerts. Employees buy or sell the stocks, and prices change to reflect the sentiments of the company's engineers, computer scientists and project managers — as well as its marketers, accountants and even the receptionist.

In this approach,

Fifty-five stocks are listed on the company's internal market, which is called Mutual Fun. Each stock comes with a detailed description — called an expect-us, as opposed to a prospectus — and begins trading at a price of $10. Every employee gets $10,000 in "opinion money" to allocate among the offerings, and employees signal their enthusiasm by investing in a stock and, better yet, volunteering to work on the project. Volunteers share in the proceeds, in the form of real money, if the stock becomes a product or delivers savings.

This approach has already been highly successful, for example one of the earliest stocks - with a ticker symbol: VIEW - was a proposal to apply military three-dimensional visualization technology to help sailors and domestic security personnel practice making decisions in emergency situations. While the initial proponent of the ideas was unenthusiastic about promoting it, it received extensive support in the internal marketplace - and the resulting product line, "Rite-View," now accounts for 30% of total sales.

This approach is interesting because it draws on the principles of Idea Management Systems (tap into the contextual experience and situation of employees to generate relevant and interesting ideas) but also provides an effective rating system - and a well-known metaphor (the market) - to guide and inform that activity. It is also similar in principle to the approach to giving employees a stake in the company taken in the book The Great Game of Business.

This system also forges connections across disciplinary boundaries - for example, pattern-recognition algorithms used in military applications and for electronic gambling systems at casinos were applied in educational settings by a non-technical member of the administrative staff. Engineers were keen to support it, and this resulted in a contract with Hasbro to build its "VuGo Multimedia System."

The key principles applied in the Rite-Solutions approach are to solicit employee ideas, and to provide a mechanism so employees will invest in voting for what they consider to be the best ones. Since the 'opinion' money can be converted into real money for successful ideas, employees have a real stake, and the principles of 'the wisdom of markets' apply.

However, it must be noted that an idea funnel is still required: a stage-gate process must be in place for the organisation to assess the contributed ideas against the resources required and the market demand to confirm the business case for proceeding, and to ensure the ROI on the investment in the new product or service proposition.
The NYT article concludes by discussing open innovation through the application of similar principles to external marketplaces of ideas, for example at InnoCentive. Similar networks exist elsewhere - for example the Innovation Xchange Network in Australia.

The full text of the article can be accessed at the New York Times website. The article was written by William C. Taylor, a co-founder and founding editor of Fast Company magazine

The Harvard Business Review on the 6 Stages of Idea Management

The June Issue of The Harvard Business Review had a nice article on Idea Management Systems, which the authors, Morten Hansen and Julian Birkinshaw, called "innovation value chains."

In Hansen and Birkinshaw's model, the innovation value chain consists of stages of

1. Idea Generation
2. Conversion
3. Diffusion

or more explicitly, stages of

1. In-house idea creation
2. Cross-pollination of ideas across units
3. External collaboration on ideas with parties outside the firm
4. Selection of ideas through screening and provision of initial funding
5. Development of ideas - moving from idea to result
6. Spread or dissemination of the developed innovation across the organization (by which the authors mean developing appropriate metrics to measure the success of the innovation)
   

Coincidentally, each of these 6 stages corresponded to work published predominantly from the Harvard Business School stable of authors, specifically:

1. Teresa Amabile et al "How to kill creativity (HBR Sept-Oct 1998); Jamming (John Kao, 1996)
2. Evans and Wolf's "Collaboration rules" (HBR, July-Aug 2006); "Co-evolving at last," Eisenhart and Galunic (HBR Jan-Feb 2000)
3. Democratizing Innovation (von Hippel, 2005); Blue Ocean Strategy (Kim and Mauborgne, 2004); Open Innovation (Chesbrough, 2003)
4. Hamel's "Bringing Silicon Valley inside" (HBR Sept-Oct 1999); Corporate Venturing )Block and MacMillan, 1993)
5. 10 Rules for Strategic Innovators (Govindarajan and Trimble, 2005); The Innovators Solution (Christensen and Raynor, 2003)
6. Payback (Sirkin and Andrew 2007); Kim and Mauborgne's "Tipping point leadership" (HBR April 2003)

Hansen and Birkinshaw's framework is high level and discusses principles rather than processes, but provides an interesting perspective on Idea Management Systems.

What is an Idea Management System?

An Idea Management System is a structured and disciplined approach to managing innovation by putting in place systems and metrics to manage

• Idea Generation
• Idea Capture
• Idea Collaboration
• Idea Assessment
• Idea Implementation
• Idea Outcomes Monitoring

An Idea Management System involves 5 components:

• A Front-End system to capture and develop ideas
• A Back-End system to define and implement processes for filtering and assessing ideas and deciding which ones to invest in
• An organisational architecture to define the roles and organisational structures facilitating this activity
• IT systems to support and enable this workflow
• Metrics and measures to monitor the flow of ideas through the 'idea pipeline' and to determine the business value of the idea generation and implementation process
  

That is, an Idea Management System puts in place systems and processes to implement a 'stage-gate' or idea funnel process where ideas are systematically filtered and assessed against criteria and only the most valuable ones are implemented and put into practice.

An Idea Management System manages, monitors and implements innovation in a structured way. Although it is not the only way to approach innovation, it is very appealing to management as it provides structure, discipline, clear milestones and metrics to what may otherwise be a very qualitative and unstructured process.