3 Reasons Why Idea-Driven Innovation Fails

Despite its popularity, academic support, and widespread use, the ideas-first approach to innovation cannot be counted on for predictable growth and is inherently doomed to failure.

There are three reasons for this:

First, generating more ideas does not meaningfully improve the probability that someone will come up with the optimal idea to satisfy unmet customer needs. People are in effect brainstorming ideas without ever knowing what all the customer’s needs are or which of those needs are unmet. We know that in any given market a customer has 50 to 150 needs (how we know this will be discussed later) and that anywhere from 5 to 80 percent of those needs may be unmet.

The mathematical probability of someone coming up with an idea that satisfactorily addresses all the customer’s unmet needs without knowing what they are or whether or not they are satisfied is close to zero. [Given the number of possible ways that just 15 unmet needs could be satisfied by products and services in any given market, millions of ideas would have to be generated before an exhaustive set of ideas could be created. If you assume three competing ideas for each of 15 unmet needs in various combinations, then you are generating ideas on the order of three to the power of 15, which is 14 million ideas. The chances of any one idea effectively addressing 15 unmet needs are one in 14 million. Furthermore, in most markets, we find there are more than 15 unmet needs.]

Generating more ideas that fail to address unmet customer needs is misguided, and doing something bad faster does not lead to better results.

This approach to innovation is analogous to expecting a sharpshooter to hit a target without knowing what the target is. It is like expecting a doctor to recommend the right treatment without knowing what is wrong or what the symptoms are.

This brings us to a second reason why the ideas-first approach is doomed to failure: the evaluation and filtering processes are flawed. Because the customer’s unmet needs are unknown, the evaluation and filtering processes used today can easily miss great ideas and fail to filter out bad ideas. Let’s remember what the evaluation and filtering process is supposed to do: separate the useful ideas from the useless ones. Or, in other words, choose the ideas that best address the customer’s unmet needs. And yet, this evaluation and filtering process is typically executed without knowing what the customer’s needs are.

Lacking explicit knowledge of customers’ unmet needs, managers rely on intuition or evaluate proposed concepts using methods such as conjoint analysis, paired comparisons, and forced-choice scaling techniques, along with surveys and qualitative methods such as focus groups. These methods and others like them rely on customers to evaluate how well a proposed idea will address their unmet needs without truly understanding the product or technology and how it explicitly relates to those needs. Such an evaluation and filtering process is faulty in several respects. The first and most obvious one, mentioned earlier, is that chances are great that the best solution is not even in the consideration set. But there is also the fact that customers may not be able to make the connection between the technology and their needs. It is not surprising, then, that companies using the ideas-first approach to innovation struggle to achieve success rates greater than 10 to 20 percent.

The third reason why the ideas-first approach is doomed is that customers cannot articulate the solutions they want. In most cases, the customer is not a scientist, engineer, researcher or materials expert. They don’t know what solutions are possible, but why should they?

The question I like to ask is, “Why are we even asking customers what solutions they want?”

Why should a company depend on the customer to know the best solution?

Why hire the customer to do the job of the marketing, development, and product planning team?

Coming up with the winning solution is not the customer’s responsibility. It is the responsibility of the company.

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JOBS TO BE DONE: Theory to Practice
by Anthony Ulwick
IDEA BITE PRESS October 25, 2016