Suffering From The ‘Shark Tank’ Effect? Here Are 3 Ways Out
As seen on LifeHealthPro
Reality shows know how to grip their viewers by bringing them through a gamut of emotions. Power, achievement, success, failure, embarrassment, loss, sadness, anger, euphoria, fear…you name it.
As innovation becomes a buzzword in many industries, it makes for a dreamy story to think about a rags-to-riches outcome from an idea that an ordinary person has, that someone powerful likes, and then money is put behind it. These are the same dynamics that create superstars in music, sports and film.
However, this dynamic requires a great deal of luck, in addition to skill. Luck has never made for a good strategy in large corporations, but I still see well-known companies relying on it to seed their idea pipelines.
I call this the “Shark Tank” effect. That means the company does not have a framework for making these decisions. Instead, they rely on the judgment of a panel of powerful people who hold purse strings and command over resources.
While this may (sometimes) work on “The Voice,” “America’s Top Model,” and even on “Shark Tank,” it doesn’t work very well in a large corporate environment where innovation is not a developed skill. While reality TV shows are not really reality, they use experts who have a knack for spotting new talent, which increases their odds of success.
Large corporations, such as insurance companies, don’t yet have that track record. So putting powerful executives in the hot seat of judging new ideas based on their personal opinions is not only dangerous, it is unfair to them and a recipe for a “no answer” answer. This leads to the unfortunate and frustrating belief that the organization cannot innovate.
If one or more of the below is true for your company, it could be suffering from the Shark Tank effect.
Six indicators of the Shark Tank effect
- Someone who has a new idea is instructed to pitch it to a committee to make a decision.
- Even a “new-to-the-world” idea is expected to come with a full revenue projection, cost estimate and time needed to launch.
- People who have ideas spend more time selling them than proving them.
- People don’t agree on which market and/or needs their ideas should target.
- Rejection of ideas can be attributed to someone important having a bad day.
- Ideas are evaluated by what has worked in the past versus what new consumers will want in the future.
If you answered yes to any of the above, here are three ways out of the shark tank.
Three principles to guide decisions
- Have an inspiration target. This is a quantified group of consumers that you design for. It may not be the same as your target market. An inspiration target should have new, emerging needs.
- Use an innovation process. Despite the uncertainty of new ideas, a process that is driven by consumer insight will help de-risk ideas and stack the odds in your favor.
- Manage ideas in a portfolio versus individually. Not all ideas will be fruitful, so you must allocate your innovation resources across a group of ideas. You also must manage the risks of each in accordance with what is known and unknown. This changes the dynamics of business cases, funding decisions, and even how the right leaders are chosen.
By applying these three principles, an innovation team has a framework of “rules” (yes, rules!) to guide decisions. And, more important, no one person is responsible for success or failure. This doesn’t mean that innovation loses the gamut of emotions; however, it makes the outcomes more predictable.
It is not nearly as sexy as reality TV, but the results are much better!