Corporate Innovation Decision-Making: Disproving the Negative as a Vital (Open) Innovation Tool
Words by yet2 CEO Tim Bernstein
Introduction:
Effective decision-making in the corporate landscape often involves “disproving the negative,” a process that requires thorough exhaustive data collection to establish high confidence in the absence of alternative solutions.
This approach is particularly valuable for large companies open to external-enabled paths, where the need to explore external and internal options adds significant opportunity but also significant decision-making complexity.
The Challenge of Disproving the Negative:
Large companies frequently engage in hypothesis-driven strategies, prompting questions like “are you sure there’s no other solution?” The challenge arises when scouts, exploring innovation ecosystems, struggle to find enabling technology, leading to a crucial dilemma—did the scouts perform inadequately, or does the desired solution really not exist?
Disproving the negative goes a step beyond ‘the client didn’t like the two solutions they were presented with.’ How does yet2 go to the key stakeholder and say you can bet your job that there is no superior solution out there? This clearly, is harder than saying “we don’t think there’s a solution out there.”
Case Studies Using Disproving the Negative:
Some projects are fundamentally about disproving the negative, where a key client stakeholder expressly wants confidence there are no (or no other) viable solutions. As part of such projects, we want to make sure that the solution is not already out there. Other projects start out with high hopes for a solution, but transpose into disprove the negative when we come up light in the searching.
Case Study Examples:
- Insulation Business:
- Objective: Explore alternatives and threats which could obsolete fiberglass insulation. There are many alternatives out there but none that are completely disruptive and could revolutionize the field. The Client said they wanted something disruptive, but have not found anything. Standard large companies’ activity is to hire a scouting firm like yet2 to go find the impossible.
- Outcome: yet2 collected enough information from enough sources broadly across domains and geographies to impart confidence that disruptive innovations are likely not out there today.
- Lesson: There is an opportunity to bring promising incremental solutions to market if we can convince key Client stakeholders to narrow constraints. For example, in this case, the Client team’s diverse participants had iterated to overly specific improvement targets, like 3x improvement, aspiration for both better and lower cost, and close to commercial development stage. Such restrictive ideal (“nice to have”) requirements can easily hobble the external innovation process.
- Close to Commercial Tech Solution:
- Challenge: A company was looking for a tech solution where the key project requirement was Close to Commercial. Initially, this company didn’t believe that there weren’t solutions available meeting this criteria, so they engaged yet2’s “disproving the negative” methodology to arm them with confidence for their stakeholders.
Due to the solution chemical’s volatility, and the resulting requirement for capital investment, commercial volumes are not being produced, despite the client desiring close to commercial use as a criteria.
- Solution: yet2 employed a comprehensive global search to collect thorough data establishing high confidence in the absence of alternative solutions. yet2 also implemented a tech surveillance service to monitor the least-unpromising and other emerging opportunities.
- Insight: Sometimes, disproving the negative serves as a strategic tool to overcome internal skepticism. Broad and thorough exploration, including careful visualization of the full breadth of the search conducted, along with careful explanation of reasons why various avenues were rejected, builds confidence in search results and enhances decision-making.
Examples:
Examples of active projects seeking innovative solutions to disprove the negative:
Example of a search for 15 relevant leads presented to a confidential yet2 client, with their criteria.
Confidence Ramping:
Once the negative is disproved, confidence increases, providing a foundation for strategic decision-making. Standard scouting output does not arm with high confidence. Full Breadth of Search and Confidence Ramping methodologies by yet2 solves this.
Using a full breadth of search, this step includes all the leads that might have been relevant and explains why some were not chosen. Not having the reasons for rejection, means not having high confidence (like the LargeCo case above).
We then aim to build as creative and expansive a solution-scape as possible. We do not just stop at first 3-4 categories, and we are very transparent about why we’re rejecting some of the subcategories.
To give you insight, a couple of yet2‘s 7-step methodology include:
- Real world not-published data points
- Drawing on domain experts for confirmation
- Reasons for rejection
Examples of Reasons for Rejection presented to a confidential yet2 client.
Repercussions of Not Disproving the Negative:
Where we fail to compellingly disprove the negative, the fallout is continued wasted client investment and lost time. It leaves the client decisionmakers with a lot of unanswered questions that hinder innovation, like:
- Did the scouts miss something?
- Do we keep it on our roadmap and continue to invest against that opportunity? Or go to Plan B?
- Should we look again?
- Should we try (again) to build it ourselves?
Conclusion:
Disproving the negative is a crucial aspect of corporate innovation decision-making, offering companies the confidence and clarity needed to make better informed choices.
10-15% of projects requests yet2 receives have this nature to them. yet2 ends up accepting two-thirds of these projects because the client relaxes their constraints or the client assures the goal of the search is increasing confidence.
yet2 typically rejects a third because the Client is really hoping for the search to yield a holy grail or similar type of solution that we do not believe is out there.
Words by yet2 CEO Tim Bernstein
Image by Emily Morter on Unsplash