How Innovative Enterprises Manage New Ideas

While ideas may be plentiful, we explore how businesses can structure and manage new idea induction and evaluation.

Innovation in an Ever-Changing World

In today’s ever-changing business environment, companies need a solid innovation strategy. An innovation strategy is a central integrated, external oriented game-play that dictates how to generate, capture, and deliver value. The innovation strategy answers questions such as where to invest and how to protect your innovation and which organizational structures and processes are to be set up. It is important to have an innovation strategy because no organization has an infinite budget and resources to deal with an ever-changing world. Organizations need clear strategic direction to make smart resource investments so that they can stay competitive in the future.

An innovation strategy is different from a firm’s overall strategy. The firm’s overall strategy is what and how they want to achieve the goal. Nevertheless, an orgnasation’s innovation strategy should support the overall business strategy. For example, a company has a business strategy to produce low cost, best quality tire then the innovation strategy should be primarily how to make the manufacturing process more cost-effective and best in terms of price and quality.

Idea Management

Idea Management is described as a systematic process that helps companies to manage new ideas from the employee, customers, or suppliers. A typical Idea Management Program has three goals:

1. To recognize the need for an idea
2. Support the generation and further development of ideas
3. Evaluate Ideas generated by people

These programs are publicized to-go-to place for those who voluntarily tackle a problem for the perceived good of the company. These can then be channelized into innovation funnels. Hence, Idea Management Programs are a great way to capture and make use of creativity as it offers a perfect outlet for creativity and also provides a large number of ideas for management to choose from.

Program Management in Large Organisations

Ideas come from different types of people like employees, buyers, suppliers so the systems we use to collect, develop, evaluate these ideas should also be different. For a startup, this would be a simple categorisation of ideas that are revisited regularly and prioritised according to customer feedback, and environments scanning and startup strategy.
However, for larger organisations, there needs an underlying structure to hold all ideas. Typically, there are 3 main departments that can take responsibility for this function. these are:

R&D Idea Management Program
An R&D department within a larger organization is a natural place to house safekeeping of ideas. These programs are concerned with the ideas people submit. Typically, the R&D department looks for radical breakthrough ideas and not small improvements. It majorly focuses on the collection, evaluation, and development of a few radical ideas which are expected to be turned into great new products, processes, or business models. It receives the least number of ideas but offers the highest incentives. For example, An employee of an oil drilling firm proposing a new process to separate water from oil would be more likely to be added to critical ideas to explore than incremental ideas.

HR Idea Management Programs
Businesses create an official channel where people can put forth their ideas, so they do not have to go to their bosses, and ideas are regularly evaluated by a team of professionals. This approach is also pretty independent as your boss’s views about the idea are not relevant. This creates a better work environment and results in higher satisfaction levels among employees. This program also expects the employee to give reasons for why this idea should be implemented and this makes them think in a more entrepreneurial way. Since nominal Ideas received; an average incentive may also be granted.
The advantages of this kind of program usually results in satisfaction among employees, promotes entrepreneurial thinking especially in larger organisations where ideas also have a lateral entryway to introducing innovation and finally this also contributes changes in attitude.

Marketing Idea Management Program
Fickle customers are a reality for any business. To keep an eye to the changes, companies accept critique, new ideas, and improvement suggestions from customers. Social media and online forums are a good channel for marketing idea management programs. A lot of ideas are received but no incentive provided since people tend to do this voluntarily.

Challenges of Managing Ideas

The first challenge companies face is to motivate employees, suppliers, buyers to come up with new ideas. It is often seen that once idea management program starts, It receives a lot of ideas but with time the rate declines
Secondly, the quality of ideas may not be satisfactory. Even if a company receives many ideas, the majority of them would be mediocre and It can be expensive and frustrating to administer and evaluate such a huge amount of low-quality ideas.
A study showed that rejecting such low-quality ideas can result in employees generating better and profitable ideas at higher frequencies. But there should be a limit to such rejections as it may undermine employee’s confidence.

Improving Idea Quality

Companies can deal with this by starting a mentorship program. So whenever someone submits an idea, They should be assigned to a mentor who could help them improve their ideas. Moreover, sharing ideas and working as a team, without disturbing other members thought process can result in better and profit yielding ideas. Furthermore, providing feedback to the employee for why their idea was rejected would help in refining ideas.