Idea Generation

1. The Search for New Ideas

reflect

Have you ever had a "great idea" for a new product, like Gordon's idea for a smart bike? It might have been a practical tool, like a kitchen device, or a more creative inspiration, like an idea for a tabletop game. Either way, it takes a lot of resources, connections, and perseverance to turn an idea into reality.

After setting a well-defined strategy (NPS) for new products (NPD), the idea generation stage begins, where the search for product ideas is made to meet company goals. The idea generation concerns the birth, development, and maturation of a concrete idea from a concept. After defining the markets and segments based on the NPS it wishes to target, the firm must advance and nurture ideas wherever they occur to take advantage of the identified opportunities.

The main purpose of this stage is to generate several different ideas from which the firm can select the most feasible and promising one(s). A greater likelihood of achieving success depends in part on the number of ideas generated. A classic study states that a company needs seven ideas for every good one, which is still often touted in business, but in fact it may be much, much higher, and depends on the industry. Toy companies might generate thousands of ideas to end up with only a dozen products, and only one success story—the hot toy that makes up for all the failures (Dubois, et al., 2019).

EXAMPLE

Moose Toys is considered an innovative leader in their industry. Their toy line, Beast Lab, is an experiment-based, interactive set that allows children to “create their own beast,” which captured the #1 action figure playsets & accessories spot during the holiday season of 2023. The company considered thousands of ideas and prototyped dozens to find the one that caught the public’s attention (Moose Toys, 2023).

Firms that are effective at idea generation are those that do not focus solely on the first source to generate ideas (i.e., ideas that originate from inside the firm) but that concentrate on all potential idea sources. There are many sources and many different methods to generate ideas. The firm can derive new ideas from internal sources (i.e., employees, managers), external sources (i.e., customers, competitors, distributors, and suppliers), and from implementing formal research and development. Brainstorming, morphological analysis, and gap analysis are the most commonly employed methods for generating ideas. Customers can be an especially good place to start searching for new product ideas, and ideas generated by customers have a relatively high success rate.

Remember, effective new product strategy hinges on a robust system for idea generation. This process should consider both market needs and operational feasibility. One approach involves soliciting customer feedback to identify unmet needs. Operations can then assess these ideas in terms of manufacturability, resource allocation, and cost. For example, customer feedback might reveal a desire for a portable coffee maker. The operations team would assess production feasibility, considering factors like size, material availability, and integration with existing processes. This collaborative approach fosters innovation while ensuring new products are successfully brought to market.

2. Critical Success Factors for Idea Generation

Brainstorming sessions, user research, and competitor analysis can all spark creative idea generation. However, translating these ideas into successful products requires identifying critical success factors (CSFs). CSFs are the essential elements for a product to achieve its goals—those things that can make or break a product for customers.

Successful businesses and teams that drive winning new products have a dedication towards the voice of the customer. A strong customer involvement is necessary right from the idea generation stage. Ideas generated by customers have a demonstrably higher success rate than ideas developed internally.

IN CONTEXT: VOICE-ACTIVATED APPLIANCES

Imagine a company develops household products and is introducing a line of devices that are voice activated. A critical success factor (CSF) would be reliable voice recognition that responds to commands but does not errantly respond to household conversations. Determining exactly how to activate and operate the device would take extensive research with the devices inside people’s homes; the critical success factor is the machine not being more work to operate than conventional appliances. This would lead to the specifications the company could use in product development and further learnings regarding if the product is feasible with current technology.

One such device was the Amazon Echo, which sold well but failed to make a profit and was discontinued after losing billions for the company. Amazon sold the devices at a loss in the expectation that customers would interact with it to buy products from Amazon; in fact, customers didn’t want to entrust all their shopping to Alexa (the virtual personality that Echo used). Having people use the machine this way was another critical success factor for the product but wasn’t what aligned with what customers actually wanted (Amadeo, 2022).

By identifying the CSFs through research and testing, companies can align idea generation with customer wants, and businesses can bridge the gap between innovative concepts and successful product launches.

3. Metrics for Idea Generation

Metrics to track idea generation and enrichment include: number of ideas generated from the customer, number of ideas retrieved and enhanced from an idea portfolio, number of ideas generated over a period of time, and the value of ideas in idea bank. Of these metrics, the number of ideas generated from the customer is the one most associated with the critical success factors of the idea generation stage. Firms must devote more resources to customer-based idea generation activities, such as focus groups with customers; detailed, one-on-one interviews with customers; customer site visits, especially by technical people; the active solicitation of ideas from customers by the sales force; and the development of a relationship with lead users.

Operations management plays a vital role by evaluating these ideas using metrics like cost-benefit analysis and production feasibility. For instance, a fitness tracker company might explore voice-activated coaching (idea) but prioritize its development only if production costs and market demand (metrics) justify it.

4. Tools and Techniques for Idea Generation

Understanding customer and market needs is a consistent theme for successful product development. There are many creativity and brainstorming techniques for enriching the idea stream. Effective methods for enriching the customer-based idea stream utilize lead user methodology and ethnographic approaches.

EXAMPLE

Some successful companies, such as LEGO, encourage customers to send their ideas. For LEGO, these make up the successful “Ideas” line of kits that were submitted by enthusiasts. Lego has a community of more than 2.8 million people and have shared more than 135,000 ideas with Lego. The best part for customers that share ideas is the fact Lego does revenue sharing with them. If a customer’s idea is accepted, such as the top-selling medieval blacksmith set, they earn 1% of top line revenue (Lego, 2024).

EXAMPLE

Toyota is another company that encouraged customers to send their ideas—in this case, for ways to repurpose Toyota technologies. They received thousands of ideas within a few hours of opening the submission portal (Toyota, 2011).

think about it

Can companies listen too much to customers? This is a common topic of conversation in the gaming industry and other entertainment industries. Most fans love companies that are responsive to their requests, such as creating new content for existing games, or including numerous inside jokes from a movie director referring to earlier films. Others complain about “fan service,” feeling it stifles or waters down creative intent. What do you think?

The lead user methodology takes a different approach compared to traditional approaches in which ideas are generated based on random customer input which may not be collected in a methodical way. The lead user methodology collects information about both needs and solutions from the leading edges of the target market and from markets facing similar problems in a more extreme form. For example, in technology development, the lead user methodology focuses on high-end users in the expectation that their needs and expectations will soon be the general needs and expectations of users.

The rich body of knowledge collected during this process continues to be useful during the remaining steps of product development and marketing.

EXAMPLE

An art museum that suffers a decline in visitors and donations would want to go beyond reading the comments sent through their website or suggestion box. They might have focus groups of both enthusiasts who still come to the museum and people who have dropped their memberships. They may also talk to other arts organizations within (or even outside) the community to find out if the drop-off is part of a trend or specific to their organization.

An ethnographic approach to idea generation is a descriptive, qualitative market research methodology for studying the customer in relation to their environment. Researchers spend time in the field observing customers and their environment to acquire a deep understanding of customer’s lifestyles or cultures as a basis for better understanding their needs and problems. In this approach, observation, interviews, and other methods of documentation are used to capture how people go about their everyday lives. Since this method allows for multiple converging perspectives—what people say, do, and use—it reveals more and provides greater insight than more passive methods of data collection like user surveys. This deeper level of understanding is used to generate customer-based ideas.

EXAMPLE

Panasonic did onsite research in spas as they developed their line of electric grooming products for both men and women. They also considered the cultural differences in grooming around the world and so conducted research in international markets. Among the ideas generated from this process was the Multishape, an all-purpose men’s grooming tool. The tool is meant for travel and has several attachments to be used for a variety of grooming needs (Panasonic, 2022).

terms to know

Lead User Methodology

The product design strategy of collecting information from the leading edge of the target market or from other, more extreme, markets.

Ethnography

In product design, the use of descriptive, qualitative market research methodology for studying the customer in relation to their environment.

REFERENCES

Amadeo, R. (2022, November 11). Amazon Alexa is a “colossal failure,” on pace to lose $10 billion this year. Ars Technica. arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-colossal-failure-on-pace-to-lose-10-billion-this-year/

Dubois, L., Gauntlett, D., & Escandon, L. (2019, December 11). Not child’s play: The serious innovation behind toy making. The Conversation. theconversation.com/not-childs-play-the-serious-innovation-behind-toy-making-128211

Lego (2024, March 18). Lego Ideas: Product Idea Guidelines. Lego.com. ideas.lego.com/guidelines

Panasonic (2022, June 27). Panasonic Launches the MultiShape, the First-Ever Integrated Grooming System. Panasonic.com. na.panasonic.com/us/news/panasonic-launches-multishape-first-ever-integrated-grooming-system

Moose Toys (2023, November 20). Moose Toys’ Newest Innovations Hit #1. PR Newswire. www.prnewswire.com/news-releases/moose-toys-newest-innovations-hit-1-301992754.html

Toyota (2011, May 11). Five Winners Selected in Toyota ‘Ideas for Good’ Challenge. Toyota.com. pressroom.toyota.com/winners-ideas-for-good-may-2011/