Horizon Three in McKinsey’s Three Horizons of Business Growth focuses on Creating Viable Options for Growth. This is the idea generation phase of the Growth Conundrum, which simply stated is the challenge with determining how to create longterm sustainable business growth for any company. Ideas generated in Horizon Three that become proven and begin to gain steam ultimately move to Horizon Two to be further developed as Emerging Opportunities and then ultimately to Horizon One, the core business if they are successful.
The biggest challenge most companies have with in Horizon Three is in generating a large number of good ideas to drive the innovation process. What techniques work and can you use today to Prime the Idea Engine in your company or with your clients? Following are a few thoughts on what works now.
Develop a Process
Dr. W. Edwards Deming taught us that “it’s not the people, it’s the process” when it comes to continuous improvement in any business or organization. The same is true for innovation. Innovative new ideas rarely just pop out of no where, they are much more likely to be developed out of a process that has resources and is managed end to end. It’s a myth that processes dampen creativity, in my experience it’s the opposite, the right Innovation Process drives creativity and generates a large number of good ideas.
Components of an Innovation Process
The following components are the foundation for any sustainable Innovation Process:
- Commit to an overall goal of Profitable Business Growth. The Three Horizons of Business Growth is an excellent model to start with, follow this link to learn more: http://www.mckinseyquarterly.com/Enduring_Ideas_The_three_horizons_of_growth_2485
- Form an Innovation Team that is cross-functional, led by a senior executive who champions innovation and growth, and that includes at least one outsider to your company, this outsider could be a trusted consultant, customer or a supplier. The key is to have diversity of thought to stimulate creativity and the generation of new ideas.
- Launch an Innovation Event, typically a 1-2 day offsite event dedicated to learning about innovation and developing a large number of ideas in a short period of time. One of the best models for this event that I have experienced is Eureka Winning Ways, follow this link to learn a bit more from Eureka Ranch: http://www.eurekaranch.com/Eureka-Winning-Ways-Choices-for-Growth
- Commit to continuously generate new ideas, evaluate them quickly and pick the ones to explore further. Don’t try to find the best idea, let customers and the market tell you which ones work and are in demand. Prepare for a 10% or less success rate on turning new ideas into profitable emerging business opportunities. Check out this recent Seth Godin blog profiling artist Tim Burton: http://sethgodin.typepad.com/seths_blog/2010/01/unrealized-projects.html
- Fertilize the Emerging Business Opportunity. When you select an idea as a winner and move it to Horizon Two, be prepared to form a new team to support and manage the opportunity as professionally as possible. Practice the Forget, Borrow, Learn approach described by Vijay Govinarajan in the Ten Rules of Strategic Innovators, follow this link to a good BusinessWeek story on this approach: http://www.businessweek.com/careers/content/mar2007/ca20070328_966917.htm
- Continuously improve your Innovation Process using Process Mapping and other Lean Tools. Follow this link for more information on Process Mapping: http://www.fpm.iastate.edu/worldclass/process_mapping.asp