What is idea management and why is it important for any business

Visualize this:

  • You continuously get incredibly innovative ideas from your own workforce
  • Ideas that, if materialized into innovative products or services, align with your organization’s goals, increasing revenues and keeping competition at bay
  • Your employees recognize everyday challenges and address them, feeling engaged and appreciated

It does sound too good to be true, doesn’t it? You couldn’t be more wrong. This is entirely possible and easily done.

What is idea management?

Top management world over is now running helter-skelter demanding innovation. And somehow, it would seem tremendously wrong if the C-Suite don’t turn to their employees, who are in the thick of things, for ideas that improve efficiency and cut costs. That’s the crux of idea management, thereby potential innovation.

“Idea Management is a structured process of generating, capturing, discussing and improving, organizing, evaluating, and prioritizing of valuable insight or alternative thinking that would otherwise not have emerged through normal processes” (Karlsson, 2010). Another definition hinting at its pivotal role in innovation is this: “Idea management is facilitating the flow from idea generation to idea conversion in the innovation value chain” (Hansen & Birkinshaw, 2007).

Ideas can come from customers, employees, vendors, investors, that is, just about anyone. Whether it is limited by time or continuous process, idea management can include internal initiatives and external stakeholders.

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What are the phases of idea management?

According to Malik (2014), the idea management process has the following steps:

Idea genesis and gatheringGenerate ideas by encouraging all employees to collaborate to address a particular challenge statement; support voting and rating
Idea evaluation and selectionOpenly share ideas and experiences; discuss further implementation
Idea feedback and recognitionGet feedback from other workers and management; recognize/reward efforts
Idea implementationAllocate resources for the winning idea to be executed as part of current innovation strategy, or later
Idea bankKeep good ideas for future use; implementation for learning

What are the different idea management approaches?

In idea management, you “capture” an idea to make it real via an organized system. This is different from creative problem solving where you have to just come up with an idea. And, this is also different from innovation management where you work on the idea with the most potential to create value.

A little history first!

The first-ever employee suggestion program was supposedly used by the British Navy in 1770. The next suggestion system, albeit a passive one, was believed to have been used by William Denny and Brothers, a shipbuilder in Scotland, in 1880, and by Krupp in Germany in 1872. Denny rewarded ideas for improvements and innovations and got 600 submissions, and within seven years nearly one-third were implemented!

In the mid-1940s, the Japanese added a more creative dimension—the Kaizen Teian system—where employee involvement was more important than increasing revenue. The concept went from employees inside to customers outside. From wooden suggestion boxes, companies went to emails and surveys in the 1990s.

There are two models of idea management: open suggestion schemes and targeted campaigns.

Generalized themes—quality, safety, improvement ideas—can work well with the open suggestion approach. Unfortunately, about 80% of these schemes are ineffective due to irrelevant ideas, duplicate suggestions, a deluge of submissions making evaluation difficult, and no means to track the status of a submitted idea.

Companies use targeted idea campaigns (similar to creative problem solving) to get relevant solutions to pressing business issues. Idea campaigns are focused events that need to be well promoted for maximum gain. The innovation challenge could be a cost-benefit analysis, SWOT, or a well-defined problem statement.

Why is idea management important?

It is important because as a vital component of the innovation process, idea management helps harnesses creativity and implements it to better business outcomes. The innovation process can be broadly classified into discovery, idea management, and execution.

  • An organization first discovers business challenges, untapped approaches, or potential areas of improvement and decides the criteria for picking the ideas or solutions.
  • Idea management, or ideation, involves capturing ideas, evaluating ideas, and shortlisting the most promising ideas.Employees are motivated to find solutions for a specific business need. Over a set period of time, the participants are expected to work collaboratively. Experts evaluate the solicited ideas and forward the winning ones for execution.
  • In the final phase, the innovator executes a proof of concept and gathers feedback; the outcome of the previous task decides the implementation strategy of the “winners.”

Idea management. Phases of idea management Innovation is about change. Change can either produce “technology push” (for example, Samsung Galaxy with touchscreen technology in 2012) that generates new solutions or lead to “market pull” (for example, photo-editing software) which defines new problems. And, organizations connect new problems to new solutions, effectively closing a loop. (Watch this lecture if you want to know more about the two types of innovation strategies.)

Idea management typically helps develop new solutions for new or old problems—through redirection or reinitiation and incrementation, and not replication or stagnation.1

And why is innovation important?

  • Economic development (job creation, growth)
  • Social and environmental change
  • Sustainable business (competition, better stock value, reduce cycle time, better quality, lesser costs)

“Idea management is supporting the diverging ideation phase of the “fuzzy middle” – after insighting and before implementation – of the innovation reactor.” (Järrehult, 2009)

How can you manage ideas?

Employers continue to “listen” to their employees. It is just that now companies use idea submission software, and not boxes, that get all the ideas into a central repository. The ideas are assessed by innovation teams or managers to decide which ones make the cut. You can submit, share, align, and archive ideas via an idea management system. It can also2

  • Manage “idea pipeline” as a commercial asset
  • Provide a framework to identify, invest, and measure the return on the most valuable ideas
  • Provide a means to manage innovation systematically

Idea management programs can “capture proactive creativity.” Web-based applications are easy to use, accessible to a larger audience, and cost effective; these self-sustaining systems support different phases of the innovation process.

What are some best practices for idea management?

To justify the time, money, and effort a company spends on its idea and innovation management programs, it needs to ensure the following are in place:

  • A clearly-defined idea management system/program for employees to easily submit and track their ideas
  • An idea champion or an idea manager to oversee the entire program, to organize workshops or campaigns, and to motivate the employees and encourage collaboration
  • A system that is open to employees at all levels to create a vast pool of ideas from a diverse workforce
  • A process that ensures an idea is acknowledged and not dismissed without satisfactory reasons
  • An innovative culture fostered by the management


Capturing diverse ideas from employees at different levels of an organization and places, creating an active and collaborative workforce, identifying customer needs, and communicating effectively with all stakeholders are key reasons that warrant idea management.

Business is no longer about managing money and people; it is also about managing ideas to walk confidently into the future. Gartner says idea management is already close to the maturity phase. It is being redefined by a dynamic environment of racing technologies, fast-disappearing geographic boundaries, mercurial consumer behavior, and evolving markets.

About the Author

Dhanya Menon
Dhanya Menon is an editor and academic writer. This is her first stint in content marketing, having spent over 5 years in e-learning. Her interests are varied. She likes to lose track of time reading anything from chemistry to Allende, from statistics to Thurber cartoons, from Ruth Rendell to listening to her son's unique take on life.