Is Your Company Choosing the Best Innovation Ideas?

This is an MIT Sloan Management Review article. There is no dearth of advice or resources on how to turn corporations into fountains of creative ideas. However, as veteran leaders of innovation campaigns know, the problem for most large organizations usually isn't a shortage of ideas -it's figuring out how to ferret out the good ones. As experienced executives know, delegating critical decisions comes with risks. The corporation may end up promoting ideas senior management does not deem worthy; alternatively, it may not pursue projects top management would have promoted had they known about them. Therefore, it's essential for senior managers to understand the mechanisms at work when their staff evaluates one another's ideas, so that executives can design an efficient idea selection process to hone in on the ideas that will make a real difference to the organization as they move through the innovation funnel. This article, based on research on more than 10,000 innovation proposals from within a large multinational corporation, examines what happens when ideas are screened through a large organization. Senior managers need to design systems, or funnels, where the ideas they are likely to favor are either (a) selected by subordinate managers for further evaluation at their level or (b) if the ideas are of sufficient importance or promise, flagged to the attention of top management for further evaluation. In a sense, the real challenge in selecting good ideas is optimizing the trade-off between the direct selection costs on the one hand and the costs of both missing out on good ideas and implementing the wrong ideas on the other. The author describes seven "setscrews"that senior managers can adjust to their particular context to ensure that the most promising innovation proposals -and only those -stand a good chance of being implemented.

• Innovation
• Corporate strategy
• IT management