Monday, December 3, 2012

4 ways to improve the performance of innovation tournaments



Organizing contests to generate a blockbuster idea or a few best ideas is not a novel concept. You may be familiar with campaigns such as GE’s ecomagination challenge or Economic Times’ “Power of Ideas”. Similarly idea campaigns have been an integral part of innovation programs of various organizations including Cognizant, Intuit, Titan etc. Question is: How do you ensure or at least increase the chance of getting a blockbuster idea through such a campaign? What are the levers that improve the performance of idea campaigns? Prof. Karl Ulrich of Wharton School calls such campaigns innovation tournaments. He along with Prof. Christian Terwiesch (also of Wharton) has written a book titled “Innovation tournament: Creating and selecting exceptional opportunities” that addresses these questions. In this article, let’s look at the 4 levers from the book that Ulrich presents in the Wharton lecture shown above. First let’s start with a definition of innovation tournament.


What is an innovation tournament? Innovation tournament is a process which starts by identifying a number of opportunities and through one or more filters selects the best one(s) that are most likely to result in substantial value. It looks like this picture.

Here are the 4 levers Ulrich advocates to improve the performance of innovation tournaments:
  1. Challenge not too broad, not too narrow: Suppose your start with the question: “In what way might we reduce the waiting time in a queue by 20%?” Now, you may ask, “Why do we want to do that?” and the answer could be “Well, less time means overall better in-queue experience”. Ask a few more “Whys” and it may lead to “In what way might we improve the experience of being served?” Note that the former statement assumes (a) waiting in the queue as inevitable and (b) waiting time as the primary factor that affects the experience of the customer waiting in the queue. The latter doesn’t make these assumptions. As a result the solution space for the latter includes ideas that can eliminate the queue altogether or ideas that don’t change the waiting time but still make the waiting time more enjoyable. Ulrich suggests using “5 whys” to identify the right level of abstraction to state the challenge – not too broad, not too narrow.
  2. Get many and diverse ideas: Quantity matters! When Merck got its blockbuster drug Zocor, they had started out with 10,000 compounds. When Pixar releases a movie like Cars, they would have started with 500 one sentence descriptions of movie scripts.  Ulrich points out that the base rates for how many ideas you need at the initial stage to get a blockbuster may vary depending upon whether you are making a molecule or a movie. However, a couple of hundred is almost always better than a dozen.
  3. Stack the deck with proven high performers: Research shows that idea generation is a skill just like playing basketball or chess is. Some people can consistently generate higher quality ideas. It helps to have those people participate in the tournament. Who are those? Well, there is no simple formula as yet. You will have to figure that out for yourself. It cuts across ranks, functions, roles etc.
  4. Filters – generous early and ruthless later: Let’s say you got 100 ideas as a response to the challenge. Now, how many do you select to go to the next round? One option is to be generous – say about 30 to 50 move to the next round.  The other option is to narrow down to 5 to move to the next round. Which option is better – being generous early or aggressive early? Ulrich suggests that being generous early is better. Reason? Well, it is very difficult to predict a sixer at an early stage.There is too much of uncertainty associated with the ideas. So a little bit of prototyping and a little bit of user feedback goes a long way. Most of the time this activity doesn’t need much investment. I like the way Ulrich puts it: As a manager, be humble in the first round.

3 comments:

  1. Interesting blog post--good ideas.

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  2. Interesting read...I always wonder about the effectiveness of idea generation campaigns and their ability to appreciate the potential of various ideas. Opportunity to present a prototype and scope to receive user feedback in early stage can bring better ideas forward. Thanks for sharing such a good piece of information.

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