Decisions concerning innovations in the early stages of product development arise mostly from intuition. Olli Hyppänen has studied development work in strongly innovative ICT companies in his doctoral dissertation for the Department of Industrial Engineering and Management in Aalto University. He shows that innovative decision making is often remarkably intuitive.
Both in the practice of innovation management and in managerial decision making research there is a knowledge gap the size of intuition, Hyppänen has discovered.
"In innovative product development the success rate of launches is, and has been for 50 years, 60 per cent, which could indicate that innovation management is in need of new thoughts and processes," remarks Hyppänen.
Numerous rational and analytical process models have been developed to guide decision making in product development. The challenge of innovation management is to pick the most prime and prospective ideas for further development. Hyppänen noticed in his research that in uncertain circumstances, refined and rational process models are rarely of help.
"The biggest mistakes are made and the biggest success stories initiated precisely in the uncertain front end of innovative product development. Decisive action on forwarding innovative ideas into the development pipeline is often taken intuitively."
Hyppänen asserts that organisations can advocate the use of intuition with clearly structured ways of working.
"A strong process culture safeguards intuitive action, because employers trust that the processes of the organisation will actually refine and concretise ideas. Also, for instance, possibilities for quick prototyping of product ideas enable intuition to be fostered and tested."
Hyppänen encourages seeking ways to manage intuitive decision making and including practices to sustain it in product development. Hyppänen has identified several roles, which decision makers take in organisations and as team members.
"We need to understand the origins and reasons for the different ways people use their intuition. For example technical-minded engineers think and act differently than people of a managerial background."
Hyppänen sees great potential for further research in intuition management.
"How to, for instance, build ideal team dynamics between people who vary in their intuitive ways – and elaborate traditional team-building models?"
Explore further: Why companies don't learn from their mistakes
More information: M.Sc. (Tech.) Olli Hyppänen will defend the dissertation Decision Makers' Use of Intuition at the Front End of Innovation on 22 March 2013 in lecture hall AS1, Otaniementie 17, Espoo.