Betting on ideas
Many of the drivers of today’s society are the result of good and bad ideas. Good ideas bring us forward, failed ideas pull us back, right? Well, not quite.
In the last 10 years, we’ve seen the rate of innovation dramatically rise at a pace that is increasingly difficult for individuals to keep up with. Today’s marketers are tasked with having to rapidly adapt to a changing society, adopt alternative mediums, master new tools, and forced to learn new frameworks at a rate that often feels overwhelming. However, despite all these new solutions, one thing has consistently remained a key driver of business growth (for most industries) - betting on ideas.
No matter how great a company is at execution, the shortage of ideas will sooner or later become a critical impediment for continuous growth. Simply put, if your idea supply chain is broken, soon you will be out of business. Today’s business value is highly dependent on the successful marriage between great idea generation and execution models. This is what high-growth startups bet on, a great idea and great execution. In fact, many of the drivers of today’s society are the result of good and bad ideas. Good ideas bring us forward, failed ideas pull us back, right? Well, not quite.
Every company dreams of driving high-growth innovation within its category, this is a proven way to have scaled advantage in a crowded marketplace and one that, when well-leveraged, can sustain the test of time. But with it comes an opportunity cost, the simple exercise of innovation and idea generation is a choice that distracts teams from the routine of the present, in order to allow them to rethink their role in the future. For most companies this is a big no, there’s too much at stake and the fear of failed ideas leads them to retract into a conservative approach. Few companies and employees can afford failed ideas. But, if we look closer, is it accurate to consider all failed ideas to be growth detractors?
In 1968, Spencer Silver was a Senior Scientist at 3M tasked with developing a super-strong adhesive to be used by the aerospace industry in building airplanes. The output of his work couldn’t have been further from its intended plan, as he accidentally ended up developing a low-tack adhesive that surely wouldn’t hold any airplane piece together. At the time, it turned out to be a failed idea with no foreseen possible use case and distracted 3M from their original goal. However, after many years and through leadership changes, Spencer’s idea ended up seeing the light at the end of the tunnel and became available on shelves. It rapidly turned out to be an astounding success. Today, this low-tack adhesive generates $1B+ in sales/year for 3M and, funny enough, for many years it’s considered to be the go-to office supply for teams looking to generate new ideas. You may have guessed it, this is the brief story of Post-It Notes aka ”the invention that no one wanted”. In reality, Spencer did not complete the intended task, but what 3M understood was that ideas should never be wasted no matter how far from their intended goal.
What’s stopping us then? Unlike Post-It Notes, most failed ideas don't end up becoming multi-billion-dollar businesses. Most of them end up costing the company money and consume valuable resources for too long. No company is planning to develop failed ideas and neither did 3M, but the luxury of a failed idea enabled experimentation that paid off handsomely and gave birth to a whole new category. The question here is not how to identify successful failed ideas, but how to build an idea generation engine within an organisation, that will help produce a stream of potentially successful ideas? We start by changing how we think.
With the daily pressure to succeed at our jobs and in the projects we touch, we are rarely given much room for failure and as a consequence, we tend to fall into the trap of resulting - we interpret the success of our decisions simply based on the outcome that is produced. If the project was a success it’s because we did everything well (100% success!), but if it failed then we must have done a bad job and our decision was the wrong one. This way of thinking makes a complex process seem too simplistic and we miss out on the opportunity to interpret the specific drivers of success and failure. As a result, we risk learning nothing.
The quality of our decisions is always impacted by two variables - knowledge and luck. Knowledge is simply our ability to assess the information available at the time combined with our own experience - this variable is within our control and can be trained. With luck, we are playing with an abstract variable that can either benefit or negatively impact the outcomes of our decision - the impact is out of our control but can be estimated. When we fall into the trap of resulting, we ignore the impact of these variables and risk repeating a fundamentally wrong decision. For example, you may have made a decision based on an incorrect assessment of the information available at the time (knowledge) but because luck played in your favour and the outcome of your decision turned out to be positive, you deem it a good decision and will repeat it next time. By not interpreting these variables, we delay our own experience and our own progression curve. It’s important to keep clear that the goal is not to avoid making bad decisions but to become a more experienced decision-maker. To do so, we must make more decisions.
How do I know what ideas to pursue? One way to overcome this is to reframe our expectations and to think of ideas as a set of multiple bets that may or may not pay off further down the line. You will lose a few, but the likelihood of getting something right increases as you diversify your idea portfolio. Ask any successful Poker player about their track record and they will tell you they often lose bets (and large sums of money), but that doesn’t mean they’ve failed. Betting is a game of odds, you are expected to lose many times. The goal, however, is to try to win more times than the ones you lose. Not every idea will succeed, but every idea should be treated as if it will.
When we think of high-growth companies like Netflix or Pixar, much of their success doesn't come from nailing every single idea they come up with, but rather having a culture system in place that revolves around the freedom and trust to explore multiple bets. By creating a culture and a mindset that puts ideas at the core, these companies are becoming better than their peers at judging which ideas could succeed and which could most likely flop. No matter how many great innovators you have within your team, if betting on ideas is reserved to only a few then you will be left with only a few ideas.
What if we schedule 1h every week for creative thinking? If you ask any professional in the arts and creative industry, they’ll agree that a creative process is far from being rational, exact, or even certain. There’s plenty of uncertainty with the likelihood of success of any idea, no matter how brilliant. Some ideas sound brilliant at the conception stage and later end up becoming a gigantic flop, whereas average ideas sometimes unexpectedly become strokes of genius. The reality is that innovation takes more than time and commitment. It requires a group mindset that must be present from the top to the bottom of the organisation.
In his book “No Rules Rules”, Reid Hastings (Co-Founder and CEO of Netflix) describes the Netflix mindset of expecting every employee to think of the projects they work on as a series of bets. Not just safe bets, but long-shot ones too. The risk with this approach is clear, but the objective gain can be endless. What Reid and Netflix understand is that when you’re playing it safe every time you’ll eventually get stuck and, most importantly, you will stop acquiring new knowledge. Learning from failed bets is an underappreciated growth engine that has the power to steer ideas in the right direction.
How can companies empower their people to become better at generating ideas and better manage their bets to drive business growth? Creative Thinking and Innovation are team sports. You need people in order to bring ideas to life and make them commercially viable. It starts at the top with the thinkers and flows downwards to the doers. Although these two play very different roles, they must share the same growth mindset and belief that ideas can sparkle amazing prospects.
Apply it this week:
During this week, ask yourself these 3 questions:
What was your biggest success and failure (personally or professionally) of the last 12 months? Are you able to detach your choice selection from its outcome/results?
Do you keep a list of ideas with you or are you playing it safe? What ideas are you “betting” on right now (small or big)?
Think of when you last organised/attended a post-mortem for one of your projects. What influenced the outcome the most: was it your assessment of the information at the time or was it good/bad luck? What can you do better next time?