Innovation now is more important than ever.

Researchers at Harvard conducted a yearlong study to compare the outcomes of strategies employed by organizations in response to the financial crisis of 2008. They concluded that companies that balanced higher operational efficiency with investments in new market and asset development recorded the best results after the crisis.

Both activities – achieving operational efficiency and developing new opportunities – demand innovation.

We define innovation as a deliberate step-change improvement in business performance. The activity is fraught with peril. Only a fraction of innovation projects achieve their goals.

Consider the case of Google Stadia, a console-free cloud-based gaming platform. It was launched to great fanfare by Sundar Pichai in November of 2019. Google hired 150 developers and invested tens of millions of dollars to create an innovative platform that was going to disrupt the gaming industry. In February of 2021, slightly over a year after its launch, the project was shut down. It was discontinued before the team had a chance to ship their first product.

The story fits a pattern that is very common in our industry: run fast, break things, and, when failing, fail fast. Still, it does raise a few questions. Was it truly necessary to invest this much money and hire that many people before abandoning the idea?

Google is a very sophisticated innovator. The company is famously data-driven and boasts the industry’s best innovation management, product management, and engineering talent. What could go wrong?

Only the folks at Google know the true answer, but having lived through similar endeavors more times than I am willing to admit, allow me to speculate.

Here is a high-level depiction of the innovation process.

Innovation delivers step-change improvements in business performance by converting raw ideas into new or better products, services, markets, business processes, and business models. Inside the innovation box, one can employ any number of the available frameworks and strategies: design thinking, lean startup, agile, the three horizons, performance zones, and many others. There is no shortage of books on the subject.

Imagine for a moment a team with the perfect mastery of the most effective innovation frameworks. They can do agile and design thinking in their sleep.

Is there anything that can still go wrong in this picture?

By the method of exclusion, it must be the ideas: garbage in, garbage out. If the initial idea is bad, there is no amount of money or willpower that can turn it into a successful product, process, or business model.

How can one tell a good idea from a bad one?

The answer is simple: one needs an idea discovery process. In fact, such a process already exists.

I was fortunate enough to go through idea discovery at MIT during IDEA Week, one of the many innovation events organized by the institute.

The process is immensely effective and surprisingly low-tech.

It begins with 100 or so people pitching their ideas. There are no PowerPoints or product demos. Every person is given exactly 60 seconds to describe their idea to the audience. Pitches flow quickly one after another in one uninterrupted sequence.

There is no clapping or signs of approval. If someone likes an idea, they express their support by standing next to the person who pitched it. Highly diverse teams form spontaneously around ideas. A team that reaches a critical mass, six or so members, is fully formed and can leave the auditorium.

What follows next is an intense one-week product and customer discovery session. The teams must interview as many stakeholders as possible: subject matter experts, customers, end users, partners, investors, competitors, and colleagues. Social networking, telephone, pen, and paper are the only tools required.

Paradoxically, the purpose of the exercise is not to seek social proof but to prove the idea wrong by questioning its every assumption. In the process, ideas morph and transform beyond recognition.

Finally, the teams apply their diverse cross-functional skills to put together high-level business plans that are pitched to the whole group and a panel of experts.

Quite a few MIT startups were launched in this manner. Alumni-founded companies created 4.6 million jobs, generating nearly $2 trillion in annual revenues.

IDEA Week at MIT is an instance of a systematic idea discovery process that consists of three distinct phases: idea generation, idea development, and idea evaluation. See this paper for details.

Many project and startup failures can be traced back to skipping the idea discovery process entirely or bypassing some of its stages.

Where do ideas come from in your organization? How are these ideas generated, developed, and evaluated? What is their economic and social impact? How is it measured?

According to LinkedIn, over 6,000,000 people on this planet have the word “innovation” in their job titles. Just imagine how many billions (trillions?) of dollars and years of unnecessary pivots could be saved if they all thought through these questions before stepping “inside the tornado”.