A reality check for best practices

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Best Practices Are Stupid

By Stephen M. Shapiro

(Portfolio, 205 pages, $26.50)

For all the concern these days about innovation and the many wondrous systems developed to help new products succeed, a stark fact is that most innovations fail. Perhaps that is inevitable, part of the numbers game for success.

But long-time innovation consultant Stephen Shapiro, who once led Accenture's practice in that area, argues it's a sign that the best practices being followed aren't working.

He asks us to rethink one of the most famed pieces of advice on innovation, from the legendary Thomas Edison, who declared of his many failed attempts to produce an incandescent electric light: "I have not failed 700 times ... I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work."

But each of those 700 attempts cost time and money. And they were successive, one leading to the other, as the inventor experimented serially. Instead, Mr. Shapiro says, you must try to make your investigative forays happen in parallel rather than in sequence. That's what happens with the open innovation process in which you post a challenge that might lead to hundreds of people trying to solve your problem, with only the successful innovator rewarded.

"Failures cost you nothing," he notes in Best Practices Are Stupid. "The cost of failure is pushed into the market and you pay only for value received, instead of paying for the time invested."

But be careful how you go about it. In the wake of the Deepwater Horizon oil rig explosion, BP launched a website where anyone could submit their ideas about how to handle the situation. Reportedly 125,000 ideas flowed in – 80,000 concerned with plugging the leak and 43,000 with ways to clean up the oil. Mr. Shapiro notes that it would take a huge team and a huge amount of time to evaluate them all.

"With an innovation strategy like this, finding a useful idea is like finding a needle in a haystack. Or more accurately, it is like finding a needle in a stack of other needles," he writes.

He likens the approach many companies are taking to the popular TV show, American Idol: They arrange an innovation tournament, in which contestants compete to win a prize. For example, LG Electronics held a tournament asking people to design the company's next mobile phone. It received 835 submissions from 324 individuals, with about 25 per cent of the ideas involving innovative elements the company had not thought about. Judges reviewed all the concepts, narrowing them down to the top 100 for the next set of judges, who further winnowed it to 42 for the final judges. In tournaments, there is always a winner, no matter how useful the end result.

By contrast, some companies follow a bounty-hunting model, setting out a reward it will pay but only to someone who solves a problem it faces. The Netflix Prize, for example, paid for an innovation that improved the company's recommendation engine by 10 per cent.

So in the tournament, the success criteria are often not well-defined, while in a bounty-hunting approach the criteria are clear. Mr. Shapiro says tournaments are great for getting a broad set of ideas in an undefined space while bounties help you find the best solution.

Some organizations are turning to crowd sourcing. That's what Arnold Schwarzenegger did when, as governor of California, he invited suggestions on dealing with the state's deficit and infrastructure problem. The winning entry, as voted on by interested participants, was to legalize and tax marijuana – not exactly striking at the heart of the problem as the governor saw it.

Mr. Shapiro says that asking people for their opinions and asking them to vote is not the best way to run your innovation efforts. Crowd sourcing should not be used as a democratic tool to gather the whims and wishes of individuals, but instead should be used to source solutions rather than opinions.

"In general, what we find is that crowds are better at eliminating the duds than they are at picking the winners. Therefore, a potentially effective method is to use crowds to kill the really bad ideas so that experts can then review the few remaining plausible solutions. If you can eliminate 90 per cent of the chaff using this method, you can radically speed up your review times," he says.

The book revolves around 40 tips for improving your innovation practices, often springing from his debunking – in colourful and often amusing commentary – a prevailing best practice. The book is broken into short chunks of a few pages, although sometimes those are linked, and will probably offer a few useful ideas to your innovation methods and eliminate some shaky ones.

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POSTSCRIPT

Is it possible to make the impossible possible? Stephen Shapiro argues it is, and in Best Practices Are Stupid he offers these steps:

Make sure you clearly define the opportunity or challenge you are issuing, such as how to promote a company's new Internet-based business.

Have one person give an outrageous solution. He typically suggests if it is not "illegal, immoral, or impossible" it probably isn't wild enough.

Have the other person or people list three attributes they like about the solution.

Have them next list three things that would make the solution better.

Finally, use the attributes identified in steps three and four to either refine the existing solution or develop different ones.

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager for The Globe and Mail's T.G.I.M. page, management book reviews on Wednesdays and an online work-life balance column on Fridays.