Innovation is central to the continued success of an organization, especially in a competitive environment, where it has to have an advantage over similar firms. However, it is challenging to innovate reliably because the process is reliant on creativity and the ability of the management to recognize a promising concept and implement it. Furthermore, other organizations will copy the new approach if it is successful while introducing their unique innovations. As such, a company has to continue adding new excellent ideas and methods to remain sustainable and achieve economic success. The concept of idea management was introduced to address this need and ensure that innovation becomes reliable. This paper will discuss the different methods employed for the process, both internally and externally.
The Concept of Idea Management
Idea management is responsible for the introduction of innovation into an organization’s processes. New suggestions are generally not viable, with Gallmeister and Lutz (2016) noting that only ten in every 2,000 proposals ultimately become successful products after several stages of discarding. With the acceleration of progress that has characterized humanity’s advancement in recent decades, companies can no longer wait for the winning idea to arrive naturally. As such, Hamel (2006) notes that companies had to innovate in their management practices and create robust mechanisms for idea development. They had to generate enough ideas that some would pass the selection process and support their approval and implementation throughout the various stages. As such, the concept of idea management was created and refined.
Idea management encompasses all stages of the innovation process, beginning before idea generation and ending when the product or improvement is introduced. However, according to Mikelsone and Liela (2015), research on the topic is generally divergent, and most companies use paradigms that have been developed internally. Naggar (2015) offers a model that links communities, science, organization strategy, and knowledge sharing to ultimately formulate projects, assign teams to them, and use the results to promote further generations. The approach is cyclical, which means that the process has to be continuous, and the company has to participate in the broader idea narrative to succeed in its efforts. However, once it begins actively engaging, it will receive benefits that can potentially offer considerably higher returns than the resource investment necessary.
The creation of ideas is an essential part of the process, as innovation cannot succeed without a radical approach with high potential. The notion that change is crucial to continued success may be considered general knowledge, and an organization’s stakeholders such as employees and customers have an interest in generating ideas. As such, ideas for innovation will frequently arise in a well-managed enterprise, though not many will ultimately be viable, and the company will not have the resources to implement them all. This part of the process is known as idea generation, though Dorow et al. (2015) argue that a similar concept of ideation is also applicable. Generally, the concepts formulated at this stage are theoretical, as their creators do not take the time to evaluate them in detail. As such, the idea manager has to assess the potential of the idea based on existing similar projects and his or her understanding of the process.
Furthermore, many companies work to enhance the number of ideas that arrive in their idea management frameworks through a variety of methods. Flynn et al. (2003) offer a complex structure that consists of passive incentives such as tolerance of nonconformity and failures and active ones such as suggestion and patent programs and encouragement of risk-taking. However, the internal employee resources of a company are limited, and their idea generation capacity may be insufficient for the needs of the enterprise. As such, many modern organizations take advantage of the significant increase in connectivity associated with the rise of social networks and participate in external ideation programs. A company’s customers offer a massive pool of potential products that can be evaluated by the market before the company ever creates them.
The elimination of ideas that would have failed in the market is another significant part of the management process. In doing so, the manager reduces the burden on the company and allows it to allocate higher amounts of resources to smaller numbers of projects. Nevertheless, most companies will find it challenging to work on several large-scale projects at the same time. As such, most of the approved innovations should be small improvements that would accumulate to provide the organization and its product with a competitive advantage. Stevanovic, Marjanovic, and Storga (2015) propose two methods that can be used to estimate the potential benefits of the proposed improvements and determine whether they justify the costs of implementation. The approach is mostly risk-free and does not require a significant change in the company’s processes.
While small, gradual improvements may be sufficient to maintain a company’s position in the market, innovation can create more significant successes. Unique new products, such as smartphones, can lead to complete upheavals of industries and the elimination of former leaders from the industry. According to Nicholas et al. (2015), the search should focus on radical and discontinuous ideas alongside safer, smaller ones to achieve massive success. The market stories of companies that started based on an idea rejected by other members of the field and grew to large sizes support this hypothesis. However, the adoption of radical ideas is a risky decision with the potential for failure and the pressure to take advantage of the organization’s position as a first mover.
Internal Idea Management
Internal generation of ideas is a traditional approach to innovation that is responsible for most improvements that are put into practice. Malhotra et al. (2017) note that the employees of a company are intimately acquainted with its operating practices, and therefore, they can offer many viable improvements. Furthermore, their suggestions will likely receive more attention and be evaluated in a more positive light by the management than other proposals. As such, companies are becoming interested in fostering the generation of ideas among their workers through a variety of methods. El Haiba, Elbassiti, and Ahjoun (2017) identify creativity, knowledge, collaboration, and learning as the primary factors that contribute to innovation, and organizations try to help their employees develop these attributes. They do so through a variety of methods that combine traditional management practices such as organizational culture creation and innovative techniques such as knowledge repositories.
An understanding of knowledge is essential for an ideal manager that wants to introduce a framework for its effective utilization. Lee (2016) notes that information generally comes in two varieties, explicit and tacit. The former can be expressed in words as a clearly defined idea, enabling quick and simple transfers. By contrast, the latter encompasses passive skills and experience that a person accumulates as he or she studies and works, which may be more challenging to share. As such, the competencies of the person who provided a piece of knowledge should be taken into consideration. Some of the ideas may be used for general practice, while others may require adjustments from someone who is experienced in their use for success.
As was mentioned above, various companies employ radically different approaches to multiple aspects of idea management due to their independent evolution. Hansen, Nohria, and Tierney (1999) describe two different approaches to knowledge management that are employed by consulting companies, codification, and personalization. The former involves storing knowledge in a shared database after extracting it from the person that has it, allowing anyone to access the information at any time. The latter focuses on individuals and conversations, taking advantage of the improved ability to adapt the ideas and discuss details that are offered by an interaction between two people. Codification is an excellent tool to transmit explicit knowledge, and personalization is useful for the sharing of tacit information. A refined version of the strategy would likely combine the two approaches, as they are not mutually exclusive, but a manager would have to be skilled at using both methods to succeed.
The organizational culture can also contribute to idea generation and promotion significantly. Employees can become creative only if the company permits and encourages these changes. Stacho et al. (2016) describe the contents and performance of the organizational climate as the critical factors in the promotion or suppression of innovation. It should be supportive but not too strong because the feelings of safety and satisfaction lead people to want to maintain the status quo instead of introducing changes. As such, the overall culture should be focused on improvement and growth, encouraging cooperation, brainstorming, and the creation of ideas despite rejections and failures. If this objective is achieved, the employees can then use the various resources provided to them by the organization to improve the efficiency of their creative process.
Regardless, the expectation that employees will be able to create new and unprecedented ideas continuously is unrealistic. Most of their proposals will be derived from other examples that they know, offering a partial guarantee of success provided the analogy is sound. Kim and Horii (2016) suggest that extended deliberation periods and high amounts of trial and error testing lead to the generation of a higher proportion of appropriate ideas. As such, the manager’s task is to balance the environment so that employees are encouraged to try their designs even if they are not sure that they will succeed but also to consider each proposal carefully. These concepts are opposite to each other, and excessive engagement either can harm the company through a lack of initiative or continuous damage from failed projects.
All of these concepts may be unified in a single framework that will encourage idea generation and offer employees resources and support for their initiatives. Benbya and Leidner (2018) describe the example of Allianz UK, which successfully implemented a comprehensive innovation initiative over six years despite initial failures and challenges. In the process, the company embraced paradigms such as continuous improvement more thoroughly and changed the employees’ conception that ideation is extra work. It encouraged workers to solve small, day-to-day issues in their work, then investigate the underlying causes, identify problems, and offer improvements. As a result, it saw a massive increase in the overall numbers of ideas generated once the platform’s issues were resolved, many of which were accepted and implemented.
External Idea Sourcing
Many successful products are introduced to meet market demand, and therefore, awareness of the trends and interests of consumers is essential to innovation. However, ideas that come from outside the company may be unrealistic or challenging to implement, and therefore, the manager has to separate the components that have value from those that do not. As such, Gama, Frishammar, and Parida (2018) note that open innovation in small and medium enterprises is most effective when they have a robust idea management framework. The same is likely true for large companies, but they are likely to have such a system as a prerequisite for success. Overall, consumers, suppliers, and other partners offer a valuable source of information as long as the submissions are structured and systematic.
Ideas in the Market
Many of the customers of a company are interested in obtaining the best possible product from a particular manufacturer. The IT industry can serve as an example, as the migration from one software package to another can be a costly and time-consuming process. Schweisfurth and Dharmawan (2019) note that lead users, meaning those that benefit strongly from the satisfaction of needs that will become relevant in the broader market later, are likely to have their ideas implemented. Such customers are usually crucial to a company, and therefore, it should consult them and ask for suggestions and potential improvements. The mutual interest and the addition of the experience of the extended use of the product to the overall knowledge base can lead to the creation of many improvements.
However, while the company should collect ideas from the market for its improvement, it cannot neglect the aspect where it gives knowledge back. Torres, Ibarras, and Arenas (2015) note that the monopolization of knowledge and distrust towards others’ ideas are issued for many companies. In doing so, they lose the goodwill of many potential partners and reduce their innovation opportunities. This tendency is particularly harmful because many of the innovations employed in the market guarantee success, and the other organizations will want to implement them. As was mentioned above, the model should be cyclical, and every participant in the industry should contribute to its overall improvement. Otherwise, they will become isolated from the knowledge-sharing network, which will usually have a higher capacity than the organization.
The engagement of educational and research institutions can significantly benefit a company for two reasons. It can find potential new employees who will come to work for it alongside the idea it promotes. Students and researchers can also introduce proposals that are based on the latest trends and knowledge. Kawai (2017) describes a Japanese system where teams of students create and commercialize products using patents from large firms and the help of smaller enterprises. The process is mutually beneficial, as the innovators receive the support they need to implement their ideas while the firms can then use the relationships they establish with the creators for various purposes. Many countries employ similar programs, providing companies access to technological innovation and fresh talent.
Idea management can also be applied to cooperation with an organization’s industrial partners and the technology transfers that are sometimes involved. Jiménez-Narvaez and Gardoni (2015) note that the use of crowdsourcing and collaboration could boost the activity of the Canadian Space Agency’s technology transfer office, increasing profits and promoting growth. In less competitive industries such as space flight, cooperation is essential to the advancement of each participant’s capabilities to the point where they can meet the potential demand and begin competing. As such, a collaboration between different companies and organizations can be highly beneficial to everyone without damaging any participants’ or the consumers’ interests. Innovations used somewhere can be adopted and refined by others, then passed on to the rest of the network to create cumulative growth.
Crowdsourcing is another useful source of innovation, as many independent experts can offer ideas about the solution of an issue. Jovanović et al. (2017) describe BMW’s practice of announcing Internet-based contests for the resolution of particular concerns with awards being offered to the winner. The approach requires significant marketing efforts to attract the attention of experts who may be able to provide a solution. At the same time, it capitalizes on the vast capabilities of the Internet and the overall intellectual wealth available in the world. While the answer is one-time, and the company may not necessarily be able to establish a lasting partnership with the innovator, it is still a useful source of ideas.
Social Network Usage
The advancements in communication technology that occurred with the introduction and development of the Internet have provided companies with unprecedented opportunities for direct customer communication. According to Saldivar et al. (2016), companies with robust Facebook followings can gather many useful ideas from crowdsourcing initiatives, though the platform’s features are sometimes lacking. As social media engagement is becoming a significant part of marketing, many companies will have established presences on the major platforms. As such, they would have the essential resources necessary to start a data-gathering campaign and observe the results. The approach can then be altered if necessary, with the changes serving the purpose of establishing a more open and mutually beneficial relationship with customers.
Motivation is a significant challenge with the introduction of open social network initiative gathering initiatives. Consumers will generally not want to put in the effort of thinking of a realistic product or improvement that they would like to see. The relationships between many companies and their customers are not strong enough, with low brand loyalty failing to provide a reason to attempt. However, Bretschneider, Leimeister, and Mathiassen (2015) note that people may participate in ideation communities for purposes of self-marketing, recognition, and peer contact. As such, appeals to hobbyists and independent experts on social networks may produce significant results. Some people may even offer ideas to secure a job with the company and introduce new talent to the organization in addition to fresh ideas.
However, some companies will have to contend with the opposite issue, where there will be too many suggestions. Most of them will be similar, but with small differences that improve or reduce their viability. According to Koning (2016), exposure to high-quality ideas is more beneficial than that to a wide variety of suggestions, which may even hurt a firm’s performance. However, there are methods of speeding up the filtering of such ideas and determining the best ones without becoming losing much performance capacity. Klein and Garcia (2015) offer an approach based on user engagement in rating ideas in addition to proposing them. The method can help the company discard the least viable ideas and make it easier for the management to investigate the range of proposals to determine whether any warrant further discussion.
Idea management is essential for most organizations, especially companies that operate in competitive environments. It encompasses the creation and implementation of ideas, including the encouragement of creativity and the support using the organizational climate and knowledge management. There are two primary approaches to the latter that should be used together, though the task may be challenging due to the expertise necessary. The organization’s employees can offer realistic ideas, but the process has to be supported by a comprehensive framework. The company can also look beyond itself for innovation ideas, collaborating with customers and suppliers as well as other industry members and educational as well as scientific facilities. Distrust towards others and monopolization of innovations are not sustainable strategies, as most companies will gain massively by receiving information on successful changes. Social network initiatives are also excellent information sources, but they should be approached with caution.
Benbya, H & Leidner, D. 2018. ‘How Allianz UK used an idea management platform to harness employee innovation’. MIS Quarterly Executive, vol. 17, no. 2, pp. 139-155.
Bretschneider, U, Leimeister, JM & Mathiassen, L. 2015, ‘IT-enabled product innovation: customer motivation for participating in virtual idea communities’. International Journal of Product Development, vol. 20, no. 2, pp.126-141.
Dorow, P, Dávila, G, Varvakis, G & Vallejos, R. 2015. ‘Generation of ideas, ideation and idea management’. Navus-Revista de Gestão e Tecnologia, vol. 5, no. 2, pp. 51-59.
El Haiba, M, Elbassiti, L & Ajhoun, R. 2017, ‘Idea management: idea generation stage with a qualitative focus’, Journal of Advanced Management Science, vol. 5, no. 4, pp. 271-278.
Flynn, M, Dooley, L, O’sullivan, D & Cormican, K. 2003, ‘Idea management for organisational innovation’, International Journal of Innovation Management, vol. 7, no. 4, pp. 417-442.
Gallmeister, U & Lutz, B. 2016. ‘Engagement and retention: essentials of idea management’, in M Zeuch (ed), Handbook of Human Resources Management, Springer-Verlag, Berlin, Germany, pp. 727-745.
Gama, F, Frishammar, J & Parida, V. 2019. ‘Idea generation and open innovation in SMEs: when does market‐based collaboration pay off most?’, Creativity and Innovation Management, vol. 28, no. 1, pp. 113-123.
Hamel, G. 2006. ‘The why, what, and how of management innovation’, Harvard Business Review, vol. 84, no. 2, p. 72.
Hansen, MT, Nohria, N & Tierney, T. 1999. ‘What’s your strategy for managing knowledge’, Harvard Business Review, vol. 77, no. 2, pp. 106-116.
Jiménez-Narvaez, LM & Gardoni, M. 2015, ‘Harnessing idea management in the process of technology transfer at Canadian Space Agency’, International Journal on Interactive Design and Manufacturing, vol. 9, no. 3, pp. 247-252.
Jovanović, T, Bansemir, B, Kirchner, M & Voigt, K. 2017. ‘The crowdfunding idea contest of BMW’, in Proceedings of the 26th International Association for Management of Technology Conference, Vienna.
Kawai, H. 2017. ‘Open innovation university-industry collaboration: student idea contests and exit strategy in Japan’, Journal of Japanese Management, vol. 1, no. 2, pp. 31-48.
Kim, E & Horii, H 2016, ‘Analogical thinking for generation of innovative ideas: an exploratory study of influential factors’, Interdisciplinary Journal of Information, Knowledge, and Management, vol. 11, pp. 201-214.
Klein, M & Garcia, ACB 2015, ‘High-speed idea filtering with the bag of lemons’, Decision Support Systems, vol. 78, pp. 39-50.
Lee, MC. 2016, ‘Knowledge management and innovation management: best practices in knowledge sharing and knowledge value chain’, International Journal of Innovation and Learning, vol. 19, no. 2, pp. 206-226.
Malhotra, A, Majchrzak, A, Kesebi, L, & Looram, S. 2017, ‘Developing innovative solutions through internal crowdsourcing’, MIT Sloan Management Review, vol. 58, no. 4, pp. 73-79.
Mikelsone, E & Liela, E. 2015. ’Literature review of idea management: focuses and gaps’, Journal of Business Management, vol. 2015, no. 9, pp. 107-121.
Naggar, R. 2015. ‘The creativity canvas: a business model for knowledge and idea management’, Technology Innovation Management Review, vol. 5, no. 7, pp. 50-58.
Nicholas, J, Ledwith, A, Aloini, D, Martini, A & Nosella, A. 2015. ‘Searching for radical new product ideas: exploratory and confirmatory factor analysis for construct validation’, International Journal of Technology Management, vol. 68, nos. 1-2, pp. 70-98.
Saldivar, J, Daniel, F, Casati, F & Cernuzzi, L. 2016. ‘Idea management in social networks: a study of how to tap into the ideas of Facebook communities’, in 2016 International Conference on Collaboration Technologies and Systems, IEEE, Orlando, pp. 3-10.
Schweisfurth, TG & Dharmawan, MP. 2019. ‘Does lead userness foster idea implementation and diffusion? A study of internal shopfloor users’, Research Policy, vol. 48, no. 1, 289-297.
Stacho, Z, Potkány, M, Stachová, K & Marcineková, K 2016, ‘The organizational culture as a support of innovation processes’ management: a case study’, International Journal for Quality Research, vol. 10, no. 4, pp. 769-784.
Stevanovic, M, Marjanovic, D & Storga, M. 2015. ‘A model of idea evaluation and selection for product innovation’, in International Conference on Engineering Design, POLITECNICO DI MILANO, Milan, pp. 2-10.
Torres, LTR, Ibarra, ERB & Arenas, APL. 2015. ‘Open innovation practices: a literature review of case studies’, Journal of Advanced Management Science, vol. 3, no. 4., pp. 362-367.