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How to generate new ideas and innovate

Follow these five steps to generate ideas that lead to innovation

2-minute read

Generating ideas is vital for businesses to survive and thrive. As change accelerates in markets and technology, entrepreneurs need to continually innovate to compete, grow and remain relevant for their customers.

But many companies need help with innovation. Idea generation requires a business culture open to employee participation and learning, listening to customers and a willingness to adapt.

Ideas are a powerhouse for your business. Winning business owners have figured out how to generate ideas and integrate adaptability throughout their organization. Creativity is a game-changer for them.

5 steps to improve how you generate new ideas

1. Foster a culture of innovation

This means a culture promoting employee participation and trust, as well as trying new things, adapting and learning. If you have a closed-door organization, it’s hard to make idea flow happen.

Your team needs to see that your leadership values, encourages and rewards ideas. It can’t just be lip service. Employees can easily see if their input is really wanted—or if all the talk about innovation is just talk.

Employees have to feel their ideas are welcome and needed for the organization to thrive. This is the responsibility of leadership. They have to provide tangible and visible support for new ideas and demonstrate their openness with their leadership style.

It’s vital to appoint somebody responsible for idea generation and create processes for collecting, tracking and prioritizing ideas.

2. Identify challenges and collect ideas

Now you’re ready to start gathering ideas. It’s common to begin with a challenge—for example, a new technology, unanswered customer need, production bottleneck, product issue or pricing—then find ideas to solve it.

Developing various ways of generating ideas inside and outside your organization is essential. For example, to get input from your team, you can:

  • Put up a whiteboard in the cafeteria or by the coffee machine on which a weekly challenge could be posted for employees to propose ideas.
  • Set up an idea box where employees can drop off thoughts.
  • Hold regular employee town halls or “ideation sessions” (meetings devoted to discussing specific challenges and collecting ideas).

Your team often sees the blind spots of the owner and leadership. They see what’s around the corner and what’s shaping the marketplace. The trick is to tap into this organizational knowledge.

External sources of ideas may include:

  • customer feedback on social media
  • learning activities and industry conferences
  • an advisory board and mentors
  • an innovation coach or consultant

Once you’ve collected ideas, the next step is to choose a few of the most compelling or high-potential ones for more in-depth exploration. For this critical step of prioritization, it’s helpful to use simple frameworks (for example, a business model canvas, a visual chart often used to develop or document a business model) and selection criteria (e.g. feasibility, competencies, profitability). Then, teams can vote for the most promising ideas during a town hall or ideation session.

3. Validate

Now it’s time to explore your best ideas further to research if they’re worth pursuing and even implementing. For example, suppose the idea is a new digital service. In that case, you can discover who the target customers are, validate the value proposition with them on social media or directly, examine the market potential, and talk to your team about design and production possibilities.

Have a mechanism to validate very early in the game if your target customers desire the product or service and if they are willing to pay for it.

Innovation must be based on evidence, not wishful thinking. You don’t want to spend too much time on it if it doesn’t have the potential to solve customers’ problems or answer an unsatisfied need. You need to be creative in how you test the idea without actually building it. The challenge is the difference between what customers say and what they will do.

4. Implement and scale

Once you’re comfortable that an idea has potential, it’s time to proceed to implementation. You can start small—for example, with a pilot or prototype—, seek feedback as you work out any kinks and scale.

Constantly review the implementation to make sure it remains aligned with customer needs, pivot when necessary, and listen to employees and stakeholders to obtain feedback and adapt as needed. Implementation has to be agile and iterative.

It’s also important to recognize that many ideas won’t achieve the expected results. Be sure to have a process for deciding when to abandon the idea. You should also be ready to learn from experiments to improve your chances next time. Employees shouldn’t be rewarded only when an idea has a successful result. Also reward creativity and learning.

5. Measure your efforts

Think of a few key performance indicators you can track, such as:

  • number of ideas that come from employees, customers and others
  • portion of employees who propose ideas
  • portion of ideas that proceed to validation and implementation
  • revenue generated or costs saved from new ideas
  • learning and training accumulated along the way

At the same time, don’t fall into the common mistake of overanalyzing ideas and not implementing any of them.

It’s very common to see analysis paralysis. Many companies overanalyze and do endless searches for the perfect product or solution idea without implementing any of them. You have to get out of the boardroom and look to your customers for answers.

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