Gartner research has found that 80% of executives say they have a gap in alignment between strategy and product development activity. Similarly, 79% of top managers say their company does not have enough high-value projects in their portfolio, according to research by the Product Development Institute. What are some ways to address these gaps?
At Sopheon, we have identified five best-practice principles of effective idea development. Companies that follow these principles get targeted, relevant ideas into their new product pipeline.
Top 5 Best Practices for Effective Idea Development
First, ideation must be driven by strategy. Specifically, a company should use its strategic plan to identify areas of interest for future products. These areas of interest can be identified by “voice of the customer” research, such as ethnographic research that uncovers customers’ unmet needs.
The company then uses this information to establish clear objectives. Objectives should have boundaries and be specific. Boundaries help focus the ideation process so that it leads to ideas that are more executable. Objectives take into account both an internal perspective (the company’s core competencies, for example) and external factors (the market, the competition, etc.).
Once a company has an objective, it can create an idea campaign, challenge or event around that objective. An idea campaign is a specialized, short-duration business process in which a company seeks to generate ideas focused on a specific market area, problem, product line, technology, or business strategy. By following this structure, each idea campaign is linked to the company’s strategic plan through the objective.
Second, companies connect idea submitters to other knowledge sources to facilitate discovery. That is, potential submitters (who may number in the thousands) connect to a community of knowledgeable people who nurture the idea into something that can be reviewed effectively.
Third, companies must have a culture that encourages ideation. Cultures that encourage ideation have three pillars: collaboration, contribution and public recognition. Public recognition can be monetary (such as winning an iPad or accumulating points to use at the company store), or public praise at a company event. Monetary prizes do not have to be extravagant, but they should be significant enough to be noticeable. Thus, recognition at a company’s quarterly meeting as being one of the Top 5 idea contributors would confer noticeable status for the employee among his or her peers and managers.
Fourth, companies need a process by which to flow ideas consistently and efficiently through the work process. The process begins with a relevant, large set of related ideas that are developed and combined to increase their attractiveness. For example, ideas that are innovative in six ways are more attractive than ideas that are only innovative in one way. Ideas that are innovative on multiple dimensions are more robust and likely to succeed.
Finally, the company must ensure seamless transition from ideation to execution.
By following these five principles, the result is a focused set of high-value ideas aligned to their strategy. Executives can then prioritize the ideas to fit into the company’s R&D portfolio and gain sustainable, profitable revenue growth from new products.
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