This is a question that I have thought about before, partly because I touched on it in my recent book, Future Minds, and partly because the issue of why people make mistakes is something I read about in a great book called Why We make Mistakes: How We Look Without Seeing, Forget Things in Seconds, and Are All Pretty Sure We Are Way Above Average by Joseph Hallinan. So here's a little something on why good ideas can go bad and why intelligent people sometimes get things catastrophically wrong.
Looking back over a few decades of dealing with innovators, large and small, there appear to be five reasons why some ideas make it and others don't. This is not an exhaustive list. Neither does it take into account factors such as finding a customer need state (or inventing one), financial issues or a host of other things budding innovators need to worry about. This is merely a summary of why some people seem to succeed and others don't, especially when it comes to making critical decisions about new ideas.
For example, the first reason that many individuals fail to get their ideas off the ground is that they sink too much of themselves into projects. They continue to back fixed strategies well past the point of no return in a futile quest to get their sunken time, and especially their sunken money, back.
In contrast, smart innovators practice fast failure. When projects reach a point off diminishing returns they get out fast to avoid losing even more time and money - and then they start again in a different way. This trait of not letting go or adapting is especially prevalent with sole inventors. These individuals will not adapt their idea, or change their vision, even when doing so might attract investors or make the final route to market much easier.
Sometimes dogged determination and persistence can pay off. Indeed, history is littered with examples of might be called 'endurance invention', where individuals struggle for years (often decades) before an idea finally becomes a reality. James Dyson, the inventor of the bag-less vacuum cleaner, Trevor Baylis, the inventor of the windup radio, and Colonel Sanders (KFC) are well-known examples. But such stories are misleading. Most of the time the desire for absolute control over flexibility, kills good ideas stone dead.
At the extreme, sole inventors will not share their ideas with anyone because they fear that their idea will be stolen or misused. This does happen. But no non-disclosure agreement will prevent this from happening unless you are prepared to spend enormous sums of money on lawyers (i.e. much more than the other guy). This is also a very negative mindset. Yes, there are people out there that will rob you blind, but most people will not. Moreover, you cannot do everything yourself. At some point you will have to let go and let others craft and polish your idea, especially if your aim is scale.
What else goes wrong? In my experience, the second reason that good ideas go bad is too much time and money. With small firms austerity and necessity can be the father and mother of invention. But with large organizations (e.g. multi-nationals) too much time and money can be fatal.
Large companies are generally risk-averse perfectionists. They are inherently conservative (often rightly so), but the downside is they often focus too much on the legacy (existing) business and move at a snail's pace when it comes to anything new. They move so slowly, in fact, that any market opportunity has often expired by the time a 'perfect' idea has been developed and launched. I won't name any names, but most large FMCG firms inhabit this terrain, which is why they are regularly out manoeuvred by smaller, less cash-constrained start-ups.
Linked to this thought is the idea that people behave very differently with things they own compared to things they don't. If overcommitted individual inventors not letting go is one problem, people in large companies not having any skin whatsoever in the game is another. After all, why fight to the death for an idea if there is no personal financial benefit, or if there is a chance that the support or investment for an idea will be withdrawn once a senior decision maker moves upwards or outwards.
The third reason that good ideas can go nowhere is that our brains are designed to deceive. Essentially, all information and experience gets a 'tag' and gets stored away deep inside our heads. However, such information and experience do not sit quietly on the sidelines, waiting patiently to be called up to play when they will be most useful. No. Ideas are connected to other stored ideas deep inside our heads. Normally this isn't a problem, because we use these stored ideas to make decisions and judgements.
But occasionally these connections let us down. Sometimes memories attach themselves to information that results in false pattern recognition or understanding. We think that we understand a problem based on previous experience when in fact we do not. An example might be Segway. This was a technically brilliant idea, but I suspect that Dean Kamen failed to see what was hidden in plain sight, namely, that the Segway was kinda problematic on the freeway and also the sidewalk.
The fourth reason for failure or mistakes is what's called egocentric bias. The idea here is that we usually think that we are right. This isn't generally a problem with sole traders (companies with just one employee) but with corporate teams you can imagine the consequences. Everyone in a team (or corporation) has an opinion about what should be done and spends most of their time ensuring that the opinions of other team members (or departments) don't prevail. Throw in some alpha-male (or female) behaviour and it's a wonder that anything ever gets done in some corporations. I suspect that political parties, falling behind in opinion polls, and brands lagging in second, third and fourth places in a category, fit with this too.
Confirmation bias is the fifth reason that things can go from good to bad very quickly. In short, our brains subconsciously seek out facts and opinions that strengthen our existing opinions. For example, if we believe that Microsoft is a bad company then any mistake they make will be used as evidence to support this opinion. Equally, if we think that Apple is a good company then any mistake will go unnoticed or will be quickly forgotten.
Linking this back to innovation, if someone has an idea that they believe in, then any fact that supports the idea will be quickly seized upon, whereas any fact that questions it will be instantly dismissed. Many CEOs suffer from confirmation bias. They seek out people that agree with their opinions and dismiss (literally) those that do not.
Why else do good ideas go bad? The list is almost endless, but it would probably include overconfidence, expediency, conformity, distraction, not listening to customers, listening too closely to customers, distribution issues, pricing, quality, marketing and so on.
5 ways to stop good ideas going bad
1. Be pragmatic. 90% right and in market is better than 100% and not.
2. Think like an upstart start-up. Apply half the time and half the money rule.
3. Walk in the shoes of the final customer. Do the shoes hurt?
4. Say to yourself, maybe the other person is right.
5. Seek out the opinions of disinterested outsiders. Is it still a good idea?
Richard Watson is a writer, speaker, and thinker who helps organizations to think ahead, with a particular focus on strategic foresight and scenario planning. Richard is the publisher of What's Next, a website that documents global trends, and is co-founder of Strategy Insight, a specialist scenario planning consultancy. His books include Future Files (2007), which has been published in twelve editions worldwide, and Future Minds (2010), which investigates the impact of digital technology on thinking.