It’s reported that nine out of 10 startups fail. The main reason why? Companies focused on solving the wrong problem.
Forty-two percent of founders surveyed by research firm CB Insights blamed a lack of market need for their startup’s demise. The issue isn’t limited to new companies, however. Thomas Wedell-Wedellsborg, a co-author of “Innovation as Usual,” interviewed more than 100 C-suite executives. Of those, 85 percent said their organizations were bad at problem diagnosis, while 87 percent agreed that that weakness came with significant costs to their company.
“Finding the right opportunity can be the hard part,” says Tucker Marion, an associate professor in Northeastern University’s D’Amore-McKim School of Business and director of the Master of Science in Innovation program. “Trying to find the right problem to solve requires ideation techniques.”
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What Is Ideation and Why Is It Important?
Ideation is the creative process of generating new ideas, which can be accomplished through a variety of ideation techniques, such as brainstorming and prototyping. If done right, ideation is what helps founders and executives determine the right problem to solve and how to solve it.
Ideation plays a critical role in the design thinking process—a concept popularized by global design firm IDEO. The goal of design thinking is to empathize with customers, uncover the non-obvious pain points they’re experiencing, and learn more about how the current solutions in the marketplace aren’t meeting users’ needs. It’s often in those gaps where companies can spot the best business opportunities.
“Ideate” is the third phase of the design thinking process. It follows “Empathize,” in which companies observe and engage with users to discover their frustrations and needs, and then “Define,” where organizations begin to solidify the problem—not as they see it, but as customers experienced it. From there, ideation can begin, and is when companies start to leverage different techniques to come up with solutions to the problem.
“Where you have a gap right now is to do the upfront better,” Marion says, emphasizing the importance of ideation. “That entails giving employees the skills to better understand opportunities, to apply different methods of getting information from potential customers, and to achieve better brainstorming.”
An example of this is IDEO’s approach to reimagining the shopping cart. The firm sent out two groups to learn firsthand what the people who use, make, and repair shopping carts think about them. The groups interviewed experts and walked through stores, taking photos and jotting down notes of how people were actually interacting with the carts. Were customers maneuvering them down every aisle, or could they benefit from a removable basket? What child safety features needed to be implemented?
After gaining customer insights, the two teams were able to better brainstorm, because they had personally experienced the customers’ pain points and knew which areas to focus on, such as maneuverability, child safety, shopping behavior, and maintenance cost. When IDEO landed on a final design, they knew they were closer to solving the right problems, because they had put the customer first.
How to Successfully Implement Ideation Techniques
Before employing a particular ideation technique, companies need to consider overall best practices. For example, is there a diverse group of employees in the room?
Tom Kelley, a partner at IDEO, established “The Ten Faces of Innovation,” highlighting the roles people can play in an organization to foster innovation and boost creativity. Personas include “The Hurdler,” who tackles problem-solving head-on, and “The Caregiver,” who works to understand and form relationships with each individual customer.
“Generally, if you’re looking for better ways to ideate, you need to have a variety of people involved,” Marion says. “It helps to look at things from a different vantage point.”
Another best practice is to establish constraints. What are the client’s objectives? Are you working within a particular budget? How much time should you dedicate to brainstorming? While you don’t want to stifle employees’ creativity, you also want to stay focused.
“Often, brainstorming is done by too many people over too long a period of time,” Marion says. “You can’t go into a room with no framework for what you’re working on. You need some type of challenge question to frame the discussion.”
With constraints established, wild ideas can still flow—and should be encouraged. During the ideation phase, there are no “bad” ideas. The most outlandish concept could be the right solution, or at least inspire and influence other team members. The goal, according to Marion, is “to have the biggest pool of ideas and opportunities that you can.”
That need to cast a wide net has inspired some organizations to pursue open innovation efforts, in which companies, universities, individuals, or agencies collaborate to create a product or service. Each partner shares the risks and rewards that come from that partnership and gains access to internal and external ideas.
Legacy brands like General Electric (GE) have launched Open Innovation Challenges to source new ideas to pressing problems, such as water scarcity. The company will often offer cash prizes, development grants, or even the chance to become a GE supplier to the individuals or organizations with the best solutions to the challenge.
Another example of open innovation is internal venturing, in which organizations invest time, money, and resources to establish a new business within the company, or acquire external startups that can benefit the company.
Liberty Mutual’s Solaria Labs is exploring both opportunities. The insurance brand rented out co-working space in Boston’s WeWork buildings where employees can focus on developing “disruptive ideas” and turning those ideas into products. Liberty Mutual has also started investing in early-stage companies with hardware, software, or business models that are reshaping the insurance industry.
“You need perspective from the outside,” Marion says, explaining the value of open innovation. “Having a strong innovation network and ecosystem is vital. You want to expose your employees to different ways of innovating and sourcing new ideas.”
Popular Ideation Techniques to Try
There are several other ways you can source new ideas that take less time and investment, but are still effective. Here’s a look at five ideation techniques you can test in your organization:
In a brainstorm, the goal is to leverage the power of the group to build on each other’s ideas. It’s one of the most recognizable ideation techniques, and an activity you might already perform at your organization. There are ways to make brainstorming more effective, however.
You want to make sure the team involved is diverse, but you also want to limit the brainstorm to five or seven people. Amazon CEO Jeff Bezos calls this the “Two Pizza Rule”: Invite only as many people as you could feed with two pizzas. The smaller the team, the more focused and effective the conversation. Only the people you need will be in the room, and those employees will feel more responsible for generating ideas; their voices won’t be lost in a large crowd.
Marion also suggests limiting the brainstorm to 20 minutes and having employees stand around a whiteboard, where they can each write down an idea, state it to the team, and then build from it. Again, you want to get as many ideas as possible, Marion says.
Method 6-3-5 is a form of brainstorming in which six people write down three ideas in five minutes. When the five minutes is up, team members pass their sheet onto the next person, so that their peer can build off their ideas. This activity is completed in silence to avoid any one employee from dominating the discussion or idea generation—democratizing the process and placing each employee on a level playing field.
Creating a physical representation of your idea—prototyping—can help during ideation. Prototyping can help employees visualize how their product will work, as well as enable the team to gather feedback from internal and external stakeholders sooner in the development process.
“It can’t hurt to have access to a workshop where you can rapidly prototype,” Marion says. “Today, in the virtual world, we also have great wireframing software to mock up mobile applications.”
Similar to brainstorming, though, prototyping needs parameters, as there can be consequences with digital design, according to research co-authored by Marion. Companies don’t want to be lulled into a false sense of security by creating a prototype that looks more like a final product and start moving so fast they stop seeking input from customers. They also don’t want to over-prototype, or rather, keep iterating until engineers feel like they’ve developed the “perfect” product. One too many virtual design rounds can come with high project development costs.
Five Whys Analysis
Toyota popularized the idea behind the “Five Whys” technique, in which employees are forced to ask “why” five times. The goal of the exercise is to get to the root cause of the problem—and that might take asking one “why” or 10.
Simply start with a problem statement, such as, “Our website didn’t launch on time.” From there, ask “why” that problem happened and, if the response doesn’t identify what you addressed in your problem statement, ask “why” again. Repeat that step until you stop garnering useful insights. An example of this could be:
Problem Statement: Our website didn’t launch on time.
Why? Stakeholder feedback took longer than expected.
Why? We didn’t provide context earlier in the project, and we sought buy-in too late.
Again, you may only need a couple of “whys” to reach the root cause of the issue.
Through storyboarding, companies can develop a visual story related to their problem or solution. The activity allows teams to illustrate their prospective customer and scenarios in which he or she might interact with the organization and how. Storyboarding enables teams to bring situations to life and outline the future impact of their solution.
Solving Your Most Challenging Business Problem
By testing and implementing ideation techniques in your organization, you can more effectively tackle the biggest business challenge: Solving the right problem. If you can accomplish that, your company could be the one out of the 10 that sees success.