Before the advent of the web, and more specifically, Web 2.0 technologies, effective innovation was a slow process and was usually limited to large organizations which had the resources to genuinely filter through thousands of ideas.

According to the American Management Association’s (AMA) data, most companies lack a formal process for selecting ideas. They surveyed 1356 global managers and found that:
  • - 48% “don’t have a standard policy for evaluating ideas.”
  • - 17% use an “independent review and evaluation process.”
  • - 15% said “ideas were evaluated by the unit manager where the idea was proposed.”
As Robert Tucker states, “An effective selection process connects your “idea funnel” to your “idea pipeline.” Without it, this winnowing is haphazard, hierarchical, and discouraging to would-be innovators.”

One of the best examples of idea management connecting the idea funnel to the idea pipeline is that of Disney. According to Peter Schneider, who was president of Disney features, many of Disney’s best ideas came from their home-grown “Gong Show”. Several times a year employees had an opportunity to pitch their ideas to Eisner (Disney’s CEO) and several other top managers. Up to 40 of them would perform or present their ideas until a ‘gong’ would sound. Eisner and his team would then discuss each one and decide which ones would fit strategically with their vision. Disney Stores, as well as many of their animated features were born through this process.

Eisner and the Disney team clearly understood the value of listening to their employees and applying strategic criteria to each idea, however, in the face of this process, and the fact that top management had to sit, sift and decide based on input from 40 employees, this process was highly inefficient and ineffective. For one, most employees would faint at the thought of standing directly in front of Eisner to pitch their idea, so only the bravest would stand a chance at presenting their idea. Second, of these 40 probably came through some resource intensive pre-vetting otherwise Eisner et al (and their expensive salaries) probably would have had to listen to some pretty bad ideas. Finally, this process took place several times a year, thus it was not a continuous day-to-day process.

In a company with tens of thousands of employees ideas lie everywhere, but finding the best ones has always been a problem only because vetting them has traditionally been a resource intensive task, and thus the numbers reported by AMA are a reflection of management teams not wanting to dedicate the time, effort, and resources to such a task.

Idea Management Software is changing the game. Most players in the market, including ourselves (INCENT), have developed effective algorithms and ‘game-like’ situations to help ideas flow at an unprecedented rate into the funnel, reduce the pre-vetting strain on management resources, and ultimately yield a higher number of high quality ideas for management to review.

So how do these systems work? In a nutshell (and I won’t go into the pros and cons of the different algorithms), ideas are posted via the web to a common platform accessible globally by all users. The users can review, add feedback, and vote on the ideas they feel passionate about. The ideas which are ranked highest are then reviewed by an expert committee and rigorously analyzed against a predetermined criteria scorecard (the better Idea Management systems include this feature, but with the most basic ones this process goes into ‘manual’ mode.)

Criteria are usually defined around the company culture and values. For example, Bank of America’s scorecard reflects the following: ease of implementation, associate impact, customer delight, and revenue potential. Once the criteria are applied to the ideas, those with the highest ‘expert’ scoring will likely be introduced to the idea pipeline.

However, the greatest value in these systems is not their ability to filter the ideas and to help organizations identify the best ones more efficiently, but rather it’s the transparency of the process, which keeps users engaged, and the centralization of all the ideas, which makes them searchable by the entire organization. The ‘lessons learned’ database that is built through the use of the system is what systematically helps improve the quality of the ideas and the rate at which problems are solved throughout the organization. Especially with intra-innovation, or continuous improvement, individuals looking for ways to solve problems may find that similar or identical problems have already been addressed in other parts of the organization. In lean parlance, these systems enable “Yokoten”, which in Japanese means “across everywhere”