Detail from Royal Navy recruiting poster 'The Navy Wants Men', 1915 (Source: Wikimedia Commons)
Ideas for Leaders #597

Hunt for Innovative Ideas Externally or Internally – Just Not Both

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Key Concept

Time is limited. New research shows that the most innovative people choose to focus either on outside sources of innovation ideas or within the organization. Those who try to do both only build thin relationships that don’t yield the same results.

Idea Summary

The hunt for innovative ideas is best achieved, according to the ‘variance hypothesis’ by leaving your office and meeting a broad range of new people in new domains. The greater variety in your network of external contacts — what is known as ‘external breadth’ — the more successful the search for ideas. Variety refers to different types of contacts: business partners, competitors, customers, consultants or contacts from trade associations, suppliers, and universities are a few examples.

One international research team believes the variance hypothesis has its limits. At the firm level, the enthusiastic pursuit of externally generated ideas can lead to gathering more information than existing resources can integrate.

Scaling up is even more of an issue at the individual level. Time, after all, is finite: any time spent on one activity carries an opportunity cost, since that time cannot be spent on another activity.

Thus, spending time on external searches comes at the expense of internal innovation activities —activities, from understanding the innovation needs of the company to implementing or integrating new ideas, that are equally valuable to successful innovation.

To better understand how individual search behaviour might impact innovation success, the team developed a research study based on 615 leading innovators in IBM. The innovators were surveyed to explore in-depth how they allocated their time in the search for ideas. Using a point allocation system, they were how much time, on a given day, they spent interacting with internal and external contacts in different category types (customers, suppliers, university contacts etc.) and how much time they spent searching through internal and external written sources.

The survey results were then compared to the number, novelty and quality of the patents the survey respondents filed. (The 615 selected individuals filed an astounding 10,000 patents during the study period.)

In general, the research showed that innovators who were focused more on external searches were less innovative (less likely to produce patents) than those focused on internal sources of ideas. A more granular analysis, however, revealed a more subtle and somewhat surprising picture of the paths to innovation.

The researchers identified different types of innovators based on external vs. internal search for ideas and the management of their networks.

  • Social butterflies had a wide variety of contacts in their external networks (external breadth), but did not take the time to maintain strong relationships with them.
  • Monogamous innovators focused on external contacts, but had no breadth in their networks. For example, one innovator told the researchers that he talked exclusively to people in universities.
  • Cosmopolitans (a term borrowed from the groundbreaking 1950s research of Alvin Gouldner) developed a variety of external contacts, but also took the time to maintain a close relationship with as many contacts as possible.
  • Locals (another term borrowed from Gouldner) allocated most of their time on their internal networks.

In terms of number, novelty and quality of patents, the most successful searchers for ideas were the cosmopolitans and the locals. While the success of the cosmopolitans reinforces the common wisdom on the power of diversity and variety when looking for new ideas, the success of the locals (which matched that of the cosmopolitans) demonstrates that there is an alternative path to innovation sources. In sum, external breadth does not necessarily lead to great new ideas — just ask the lagging social butterflies. 

Business Application

While a variety of external contacts can generate new ideas and innovations, companies should not believe that there is a one-size-fits-all recipe for innovation search. Some people will be more comfortable searching inside the company, others searching externally.

Companies should encourage both types of innovators as they bring different but equally valuable skills and contributions to the process. While cosmopolitans effectively mine their external networks, locals will uncover the innovative ideas buried within the organization. In addition, a new idea or innovation is only valuable if it can be implemented or integrated in the organization. Locals have the internal contacts and relationships that ensure successful implementation and integration.

The core lesson of this research is that companies will find that the best innovators are at opposite ends of the spectrum: those who focus their search time almost exclusively on outside contacts, and those who focus their time almost exclusively on internal contacts. Individuals who try to balance external and internal searches for ideas will do neither well — and, thus, will underperform.

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Authors

Institutions

Source

Idea conceived

  • February 2016

Idea posted

  • April 2016

DOI number

10.13007/597

Subject

Real Time Analytics