Why Good Ideas are Bad, with Michael Schrage | Big Think.

TL;DR

Good ideas are actually bad when it comes to innovation and organizations, as most ideas result in financial loss. A better approach is to reframe ideas as testable hypotheses that can be experimented with in a fast, simple, and cheap manner.

Transcript

By far the most controversial thing I wrote in the book is the notion that good ideas are bad. And being a quasi-academic and somebody who in theory loves and likes good ideas this realization, dare I say epiphany, came as a bit of a shock to me. But the reality is when you do a hard core realistic pragmatic analysis of the economic value of ideas ... Read More

Key Insights

• 🌸 Most ideas in organizations result in financial loss when implemented.
• 💪 Ideas have a strong brand and receive attention, but this does not guarantee success.
• 👻 Reframing ideas as testable hypotheses allows for a more pragmatic approach to innovation.
• 🏆 Testable hypotheses should be simple, cheap, and easy to test.
• 🏆 Many organizations cannot afford to test multibillion dollar hypotheses.
• 💡 The survivorship bias leads to the celebration of successful ideas, while failed ideas are forgotten.
• 👋 The return on investment can be maximized by reframing good ideas as testable hypotheses.

Questions & Answers

Q: Why are good ideas considered bad for organizations?

Good ideas are bad for organizations because most of them result in financial losses. When ideas are implemented, they often fail, leading to wasted resources and time.

Q: Why do ideas have a strong brand?

Ideas have a strong brand because they are associated with creativity and innovation. People pay attention to someone who claims to have a good idea, as it implies potential success.

Q: Why do organizations need to reframe ideas as testable hypotheses?

By reframing ideas as testable hypotheses, organizations can approach innovation with a more rigorous and disciplined mindset. It allows for a focus on practicality and feasibility, increasing the chances of success.

Q: Why should testable hypotheses be simple and cheap to test?

Simple and cheap tests are crucial because most organizations lack the resources to conduct expensive experiments. By keeping tests fast, simple, and cost-effective, organizations can gather valuable data without excessive investment.

Summary & Key Takeaways

• Good ideas are not necessarily beneficial for organizations, as most of them result in financial losses.

• Ideas have a strong brand and receive attention, but they often fail when implemented.

• Instead of focusing on ideas, it is more effective to frame them as testable hypotheses that are simple and cheap to test.