Innovation: Size Matters
Instead of trying to inflate a small idea, take a big one and tell consumers how it can change their lives
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 humour, 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 we 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.
We’ll explain.
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 likePriceline.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.
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