Ooh, that is a big idea, a really, really big idea. The other guys have ideas, but theirs are so small. You’d better watch out or you may hurt someone with that big thing. And I can see you’re very excited about it, too!
We know what you’re thinking. We’re just a couple of guys overly amused by sophomoric humor, making a lame attempt to get your attention and some cheap laughs, right? Well, kinda.
We admit to not taking ourselves too seriously, but before you rush to judgment, let us make a simple point that leaders too often miss when it comes to innovation: It is easy to make a big idea small and nearly impossible to make a small idea big.
By making a big idea small we mean coming up with a complicated game-changing concept and explaining it in a way that people get instantly. For example, in 2009, Hyundai introduced an “Assurance” program that allowed you to return your new car if you got laid off. As a result, while most of its competitors posted losses, Hyundai’s 2009 February sales increased.
What made this a big idea was the marriage of a powerful insight—a creative insurance mechanism that would have been almost impossible to explain on its own—and spot-on marketing that talked directly to the consumer’s worry about being laid off. It was a big idea that garnered immediate attention from potential customers and the media and produced impressive results.
Don’t Hype a Small Idea
Staying with the automotive theme, we see many insurers spending millions on advertising programs that give you discounts when you choose their company for multiple policies. In other words, if you bring them more business, they will charge you less. In our opinion, with the advent of companies like Priceline.com (PCLN), consumers now expect a discount when things are bundled, and pointing out that you can give such a discount makes a recipe for cannibalization, not sales growth. Giving a discount for buying multiple products and then hyping the idea is an attempt to make a small idea big. It rarely resonates.
So when it comes to industry-changing ideas, the size of the ideas and the resolve behind them really do matter.
We believe leaders should talk about big ideas. Big ideas get your company attention. They demand a higher price. They increase loyalty. They demonstrate that you know how to listen, invent, and take risks. Great leaders know how to recognize, promote, and successfully launch big ideas.
Small ideas do just the opposite. With all your big talk, you may get someone to look at them, but in the end they will cost you your reputation, your team’s loyalty, and your customer. Far too often, leaders make the mistake of talking about big ideas that are really embarrassingly small.
As we have said in the past, we believe that companies should manage their innovation portfolios just like they manage their financial portfolios.
Low Risk, Low ROI
By definition, this means innovation leaders are intentionally taking some small risks with small ideas. We call these ideas evolutionary innovation. Good leaders do not brag about these ideas, because in addition to being lower risk, these ideas provide a lower return on investment and your competitors are already trying them. If these are the only ideas you’re working on and your head of innovation is bragging about how they are going to change the world, then yes, we suspect you have some overcompensating going on.
Because of the hype, your customers will be interested at first but will quickly turn their heads toward the big, sexy ideas of your competition. You can’t tell them you have big things in store and then not deliver.
Perhaps it is the size of the leader’s resolve and courage that matters most. Leaders with too much courage will quickly move beyond talk and, like wide-eyed sailors, jump right into action. They have big ideas all right, and everyone in the world is going to know it tonight! Ready, fire, aim. They exhaust their bullets on extremely high-risk ideas. More accurately, they blast through your budgets since they’re playing with team time and company resources. But it is O.K., says your leader, because these are revolutionary ideas! We define revolutionary ideas as ones that your company doesn’t know how to put in action while also targeting a yet-to-be quantified market need.
Question: If you don’t know the market needs it and you don’t know how to do it, why are you so focused on this idea? The dot-com crash of the late 1990s was fueled by twentysomethings with something to prove. The defense rests.
We all make mistakes. Failing forward is part of growing up. In many ways, the best innovation leaders have sown their oats in their youth with semi-calculated, low-risk attempts at innovation. Perhaps they even bragged about these adventures. But as they grew older, they realized that actions speak louder than words. That if they were going to tell the world that big things were about to happen, they needed to make sure they were able to back up their promises with creativity and performance.
When it comes to creating new products and services, courage isn’t bad; it is necessary. In fact, without courage, a leader will allow his team to fall into the trap of only launching safe, undifferentiated ideas or, worse, launching no ideas at all. Remember, if nothing gets launched, nothing gets measured. (So you can go on just talking a big game.)