• by Emily Morris , March 17, 2009

The innovation marketplace has never been more crowded. A Google search for "innovation management" turns up more than 23 million results. Research shows that for every "big" idea, there are often 50 mediocre ones, and companies can spend millions turning an idea into an actual product. Further, a look at consumer packaged goods companies shows that while the total number of ideas is growing, there has been a decline in truly innovative ideas relative to modest or incremental product improvements. Yes the need to innovate has never been more pressing.

To generate new ideas, many companies are going beyond traditional R&D groups and in-person focus groups to tap into a new generation of connected consumers through online communities that help generate massive quantities of new ideas. But simply increasing the number of ideas in the pipeline is not enough. Too often, so-called idea management technologies and online suggestion sites have turned out to be little more than vast graveyards for ideas, leaving companies awash in a sea of ideas with no way to separate the good from the bad or transform raw ideas into real products.

So what's the solution?

Turning Ideas into Action
What's needed is a more disciplined and innovative approach to prioritizing, refining and recognizing true breakthroughs and innovations--in short, to the process of "ideation." Reinventing ideation through the use of online communities has been an area of intense focus and innovation for MarketTools over the past several years, and our experience has uncovered several steps that are key to the process:

Collecting Ideas: The best approach is to combine open ideation with directed ideation where members of the community can either submit a fresh idea or respond to a specific problem or challenge put forth to them.

Handling Duplicate Ideas: Instead of trying to prevent duplicate ideas or relying on a moderator to manually merge similar ideas, try merging duplicates through a combination of user-flagging and moderation.

Prioritizing Ideas: Combine the advantages of an easy-o-use rating system with the granularity of a prediction market by using multiple variables to determine the "score" for an idea--this helps provide more predictability around an idea's potential for success.

Responding to Ideas: First, communicate the goals and process for ideation up front. Second, use ratings and community support as the primary drivers of an idea's success. Third, close the loop on ideas by leveraging experts to explain why some ideas move forward and others do not.

Turning Ideas into Solutions: Use a threaded discussion guided by a moderator who helps solicit feedback and refine ideas.

Keeping the Community Engaged: Keep contributors connected. Nurture authentic interaction and keep it dynamic and interesting enough that members are motivated to participate on an ongoing basis.

Putting the Pieces Together to Unleash Innovation
The net of these best practices is an approach called guided idea development in which a moderator helps identify the best ideas based on community comments and ratings and then guides members' to consider specific, critically important aspects of a solution in order to tweak it and make it better. This means that all members of the community -- from external customers and consumers to internal R&D to sales and marketing -- have a chance to weigh in, provide feedback, share potential concerns and help move the best ideas to the next phase.

Here is a great example of how a major pet food company put all the pieces together. Instead of relying solely on consultants and small internal teams to come up with new ideas, the company invited 650 cat owners to join an online community to collectively participate in the ideation process. The process is simple: consumers contribute ideas, respond to themes presented by the moderator and together evaluate, rate and refine ideas. The hottest ideas bubble to the top, are turned into concepts and then tested with quantitative survey research.

In just eight weeks, the community had generated more than 300 ideas, 15 of which were turned into "champion" concepts for testing. Eleven ideas passed standard screening criteria for purchase intent. Results so far indicate that ideas from the community are passing concept screens at a highly successful rate and are surpassing ideas from other sources in terms of uniqueness.

Conclusion
Any company looking for true breakthrough innovation should consider online communities as a powerful and valuable tool. With engaged and directed members, online communities have the potential to become engines of innovation, continuously identifying and evolving ideas into winning solutions. As the pet food company's community clearly demonstrates, harnessing the creative energy of diverse groups of people can quickly result in more innovative, unique and well-formed concepts than typical offline ideation processes.

But if managed incorrectly, online communities can also perpetuate the problem of idea overload. So be thorough as you investigate the best approaches for your company. Keep in mind that what distinguishes an online suggestion box from a true innovation community is how you observe and understand your members to keep them engaged and focused on the problems you want them to solve. With an army of committed, engaged community members behind you, you'll be smarter, faster and more innovative than ever before.