Idea management could make the difference between surviving the recession or not
Recessions are a key part of the business cycle as they can eliminate the waste in an industry by forcing less efficient companies out of business, or by trimming a company’s waste to focus on core competencies. How a company reacts during a recession can impact if they will be around for the next one. Survival is one thing, but the best companies in the world win in these economic turns by being more innovative than their competitors. The less optimal method to innovate is to to increase R&D spend and place more bets, however the more effective method is to make a company’s R&D machine more efficient. The largest opportunity to do this is in idea management.
Many companies say they are committed to innovation but when studied, find that their frequency and speed of new ideas falls short of the company expectations.
So how does idea management help a company effectively innovate?
Companies today recognize that the key to having a successful product or even a “blockbuster” is having more ideas as well as a better process to evaluate these ideas. If we dig deeper into the first area, the old model of hire the brightest minds and placing them into a think tank is dead. The new model recognizes that ideas can come from anywhere. They can come from anyone in the value chain from the tier three supplier to the end consumer, or even someone who historically has no connection to the company. The biggest challenge is how to gather and normalize the ideas so that they can be evaluated and prioritized objectively. Focusing on fixing this problem and setting up vehicles to gather a larger number of ideas will help yield the best results.
There is a lot more to idea management, such as the question of how to incentivize the broad set of idea contributors to increase submissions. Based on the fact that over 80% of the fortune 500 companies in the 1960’s went out of business because they couldn’t adapt, one of the worst things a company could do during a recession is to ignore R&D.
How many of today’s fortune 500 will survive and who will replace them on the list?
