You have often heard that there are no bad ideas. In general, I agree with this from a philosophical, utopian ideal but in the reality of the business world, you can find organizations riddled with bad ideas.
When I first started consulting, I told a client, "There are no bad ideas. Just ideas that distract you from more profitable choices." I have since used that phrase with countless clients and direct reports to illustrate a simple point - just because you have an idea, it doesn't mean it will meaningfully contribute to your top line or bottom line growth objectives. For an innovative idea to have merit, you need to "stress test" it through the lens of business case analysis to start to understand what it will ultimately do for your business.
Certain things in business are finite. Time is one. Try as we all may, no one has been able to find more hours in a day. Or more days in the week. Our maximum capacity per FTE (Full Time Equivalent) is 168 hours per week. And I highly recommend not maxing out your workforce on this number as it does not count for time taken for sleep, eating and having a life outside of work.
So if you can't change time, you can certainly add people but that has a point of diminishing returns to your bottom line. For every new person you add, you add more than just salary and benefits but additional fixed costs and variable costs. A manager with more direct reports is not going to have more time to coach for performance or help with culture. There are costs associated with on-boarding and retention. There are costs with employees not knowing where their focus should be.
It is for all these reasons, that I advocate for understanding how an idea will impact your total business. So many companies (and I assure you the big companies are the ones that do this the most) start chasing down whatever idea seems fruitful at the time. Like my Labradoodle, they are easily distracted by every flash outside the window or knock on the door.
So what separates a good idea from one that distracts from more profitable choices?
One of my most favorite professors at University of Chicago Booth School of Business (and Distinguished Service Professor of Creative Managment), Harry L. Davis, summed it up best when he articulated the three key areas for business success:
Let's start with number 3 - LUCK. As anyone in Las Vegas will tell you, you can't control Lady Luck but I'd like to think you can get out ahead of her. Luck in business comes down to "right place, right time, right product/service". By having a methodology to exploring innovation and new ideas, you can increase your luck but you can't guarantee it.
Kodak Film Company invented the digital camera decades before it was mandatory on all mobile devises yet they didn't want this new technology eroding their profitable film business. Some may point out that this is a good example of not letting an idea distract you from more profitable (insert "core") choices, but there is a balance between killing ideas forever and shelving them for a time that is important to embrace in any business. Maybe that idea doesn't make sense now, but it could when situations change.
This is where "Fast Failure" innovation is important in a business culture. How can you make room for continuous innovation that doesn't distract or tie up your employees as they chase every idea? How can you find room for exploration? And PLEASE keep in mind, some employees are just not the right fit for innovation work and that leads me to Professor Harris' second point - MANAGEMENT.
As way of personal background, I was a rower at the University of Wisconsin - Madison. Before joining the women's crew, I had been part of other team sports but it was this sport, more than all the others, that instilled in me the vital importance of having the right people in the right spots to win the race.
In my opinion, the art and science of successful performance in rowing is 85% physics and 15% strength. You can have the strongest athletes, with the best cardiovascular stamina, and a boat will struggle down the race course. To allow the boat to travel at its optimum speed, you need every rower working both together but also doing their "job".
The rowers in the bow have different responsibility (helping keep a boat set even on the keel) versus the rowers in the stern (who are charged with keeping stroke rate and cadence). A great coach knows how to move rowers around to play to these natural strengths. They also know that if there is one rower not moving as one with the rest, the boat will stall and sink which ultimately slows it down (as the goal is to hydroplane over the surface of the water). So all that said, do you have the right people, in the right spots all rowing together? Do they have someone to coach them along and point them in the right direction? Do they have a solid race plan that focuses them against the objectives in meaningful and purposeful ways? And that leads me to point number 1 - STRATEGY.
An idea is NOT A STRATEGY. Let me type that again in case you skimmed over it - An idea is NOT A STRATEGY. Just because you have an idea (like putting your shirt on backwards - see photo), doesn't mean you should. I don't know how many clients, executives, board of directors and direct reports I have frustrated when I respond with a simple, "Well, that is an idea.." when they share their latest "brain child".
Don't get me wrong, I love ideas but what I really love is a good strategy. And what is STRATEGY? I am not going to cover all the points as that is a full load of coursework and exploration but I will say this - it has objectives and tactics that are rooted in facts not opinions. I often challenge my teams with "Is that a fact or an opinion?" and "How do you know that?". And again, I will caveat that ideas can be substantiated with opinion - many of the great innovators start with a hunch or feeling - but that is an art perfected over time and an exception to general rules.
So how, as a business leader or owner, do you help bring profitable ideas to market? Well, the simplest way is to give Flashpoint Strategy a call (I know, it is a shameless sales plug). But if you want to embrace innovation internally, here is my quick formula:
Create a culture and process for "fast failure" that includes continuous ideation and strategy development
Hire employees that embrace and push on new ideas and are balanced by other employees that will apply sound business acumen to those ideas.
Keep on Exploring,
Chief Innovation Officer - Flashpoint Strategy