E32: Asking for Ideas is a Bad Idea

What if asking for Ideas is a Bad idea? Welcome to Invisible Solutions. I'm your host, Steven Shapiro. Each week we tackle your most complex problems using the lenses from my book, Invisible Solutions. If you need the lenses, go to get the lenses.com with that. Let's get started with today's episode. This week I bring you chapter three from my book, Best Practices are Stupid. And every other week I'll be releasing a new chapter from the book here on my Invisible Solutions podcast. Just so you know, there are 40 chapters in total. In chapter one, I discussed the three levels of innovation. Innovation as an event, Innovation as a capability, and innovation as a system. In chapter two, we explored how to create an innovation capability and what that means. That's level two. And today in chapter three, we're going to get to the cornerstone of my innovation work, which is all around why asking for ideas is a bad idea. So let's get started with chapter three. Chapter three Asking for Ideas is a Bad Idea A large European bank that was suffering from eroding market share thought that they had a great idea to solve this emerging problem. They decided to get input from all of their employees with ways to improve and grow their business. In order to do this, they collected employee ideas and they implemented an enterprise wide electronic suggestion box. They believed this would help them tap into previously undiscovered innovation. Hey, this sounds like a great idea, right? Wrong. They received thousands of ideas. Evaluators looked at every one and in the end, none were implemented. The company's entire innovation program lasted a total of 18 months, at which point it was shut down and deemed a huge failure. In an attempt to be more innovative, many companies start by asking their employees for their ideas. But this is a bad idea. The ideas that are submitted tend to be impractical and of low value and end up only creating an overwhelming amount of unproductive clutter in the system. This points to one of the most important yet under considered measures in the innovation process, the signal to noise ratio. The signal to noise ratio is an engineering term that is used to quantify how much signal is corrupted by noise. For example, in an audio recording, the signal is the music and the noise is the background hiss. A higher ratio indicates more signal than noise, which is the ultimate goal. Many online discussion forums use the term to describe the ratio between useful information and spam or false or irrelevant information. That latter use of the term is the one that best applies to innovation. In innovation, the signal is comprised of solutions that are implemented and create value. The noise is made up of all the ideas that never come to fruition and the useless suggestions for problems that don't matter and don't create value. To increase your innovation's signal to noise ratio, the first thing you want to do is stop asking for ideas. Suggestion boxes are cluttered with noise and the amount of time required to sift through the bad ideas to get to the gold is huge. Even when you do find a good suggestion, the amount of effort required to rally the troops to implement the idea can be significant. In the aftermath of the bank's innovation efforts, I was asked to do a post mortem assessment of what went wrong. In going through the submissions, I found that the ideas could be categorized into three broad groups. The first group were the duds. A large percentage of the ideas were clearly not worth pursuing. They were not new. They were unlikely to show a positive roi. There might have been a nugget of usefulness among these suggestions that was missed. However, the energy to nurture these nuggets was probably not worth the effort. The second category were the false negatives. These were the good ideas, but for whatever reason, the evaluators dismissed them. Part of it had to do with the biases of the evaluators and sometimes it was due to a lack of knowledge on their part. Oftentimes it was because the ideas were not fully developed, making it difficult for them to be properly judged. And the last category? I call it the good idea no home and this was the most disconcerting category. These were the good ideas that evaluators liked, but sadly they had no organizational home or strategy for implementing them. As a result, the ideas withered on the vine and were never used again. They never got the resources or funding necessary to move them to the next level. The bank's experience is not unique among organizations. A well known software company had an idea program that generated tens of thousands of suggestions. Less than a dozen proved to have any value and the program was completely scrapped. One large retailer is known for holding a well publicized competition each year where employees and in some cases customers could submit new product ideas. The winner gets a large check and the company implements the best idea. I asked the person responsible for this program if it was a success. He thought for a moment and responded. It was a PR success but a commercial failure. End quote. The competition generated buzz in the media, but none of the products ever generated a positive return on investment. Although the company's idea based competitions did not generate good bottom line results, their programs that focused on solving specific product improvement opportunities were a huge commercial success. The fact that this company recently stopped running. Their annual idea competition gives you an idea of how how much value those innovative ideas brought to the company. The other problem with asking for ideas is that there is no level of accountability because people tend to develop ideas on their own time. There are no tracking methods that can keep tabs on how much energy is invested in idea generation. If you encourage ideas, you are probably spending more money on those initiatives than you could ever imagine. You might be able to measure the ROI of a specific winning idea, but it's difficult to determine the ROI of your overall idea based program. There's no way to know how much time was spent on those thousands of duds that never saw the light of day. My suggestion Throw out your suggestion box. Organizations are often enamored with collecting a large number of ideas from employees and customers, and although these can be useful for employee morale, if you go down this path, your organization needs to make sure to implement enough of the ideas to keep enthusiasm high. Unfortunately, the lack of traction gained by most idea platforms hurts morale and leaves the organization with a lot of extra work. If you have an infinite amount of time, money or resources, then the idea driven approach might actually be useful for finding hidden gems. But sometimes the best idea is to stop asking for ideas. Although that is the formal end of chapter three. I want to actually go back a little bit to the introduction for Best Practices Are Stupid, which I provide in any of these episodes. And I think this will provide a little more perspective on why asking for ideas is a bad idea. And the introduction starts off with a story I love to tell during my speeches because it really does illustrate why asking for ideas is a bad idea. And we go back to April 20, 2010. That's the day when the Deepwater Horizon oil rig exploded, spewing as much as 180 million gallons of crude oil into the Gulf coast of the United states. It took 87 days to cap the gushing wellhead. After the initial explosion, they tried a number of different innovations. There were, I believe, seven different innovations that they tried to solve the problem, some of them provided by movie stars. And as it turns out, none of them worked. So what they decided to do was to turn to something called crowdsourcing. And by the way, I'm a big fan of crowdsourcing when it's done right. But in this case, I believe it was really more of a PR stunt than a concerted effort to find a solution. The issue was that the solutions were hard to find because the well was nearly a mile below the surface, so there was A group called the Deepwater Horizon Unified Command. This was spearheaded by bp and they launched a website where anyone could submit their ideas to to an online suggestion box. According to an article in the USA Today, the website received 125,000 ideas. 80,000 of them had to do with plugging the leak and 43,000 had to do with cleaning up the oil. Now, of these ideas, about 100 were deemed as having some possible merit. A couple dozen were tested. None had anything to do with the final solution. So on the surface, this might appear to have been a successful endeavor. BP was able to gather a lot of possible ideas to help end the disaster. And yes, for a company that stood to lose billions of dollars in cleanup costs, relief payouts and lost sales due to bad publicity, this approach might have actually been a great strategy. But the resources, the resources necessary to respond to this type of disaster typically don't exist within most organizations. Now, in this case, a workable solution was not found through this strategy. But regardless. Regardless, even if it had been found, consider how many people it would take to evaluate 123,000 ideas. It would be an overwhelming task for any organization. So with an innovation strategy like this, finding a useful idea is like finding a needle in a haystack. Or maybe more accurately, it's like finding a needle and a stack of other needles. Unfortunately, this innovation strategy is what many well intentioned companies use in their quest to be more innovative. They operate under the misguided belief that getting more ideas leads to better innovation. Organizations that use this approach spend a lot of their time sorting the wheat from the chaff. And sadly, most of the ideas are chaff. So with that, we are at the end of chapter three where we explored why asking for ideas is a bad idea. We talked about the signal to noise ratio and why that's an important measure for innovation. Next week we're gonna get to chapter four. And in chapter four, we're really going to explore the power of asking better questions. We often hear the expression think outside the box. But actually what you're going to discover is you don't want to think outside the box. You want to find a better box. And with that, we are at the end of this week's episode to submit problems you want solved on this podcast. When we aren't doing the best practices or stupid episodes, go to invisiblesolutionspodcast.com and remember to download the lenses. Go to getthelenses.com I look forward to being with you next week. And until then, happy problem solving.