The controlled chaos of Red Thread Thinking may be the best way for companies to innovate effectively – and efficiently.

IBM talked to more than 1500 CEOs from 60 countries and 33 industries worldwide, and learned that by an overwhelming margin they believed that innovative thinking more than anything else was the key to successfully navigating an increasingly complex world — and keeping their businesses ahead of the curve.

It didn’t surprise me since I hear it all the time — entrepreneurs and brand managers tell me the same thing. “We need to innovate better.” Time and again, I see companies trying to institutionalize the innovative process, depending on the same old methods of generating ideas and solutions that result in banal groupthink that can damn many projects from the get-go.

For instance, traditional brainstorming is largely ineffective. Conventional focus groups, if not organized and led properly, can result in faulty intelligence. Leaving innovation to only certain people or departments means you’re missing out on the talent of a lot of smart people in your organization.

These missteps are often part of a company’s attempt to rigidly hold to corporate protocol, management hierarchies and strict rules. Trouble is the “that’s the way we do it here” attitude can end up costing big money in mistakes or missed opportunities.

Stop Brainstorming

Brainstorming doesn’t unlock creativity; instead, it stifles it. Numerous studies reveal that brainstorming groups think of fewer ideas than people working alone, and group performance gets worse as size increases. Moreover, the ideas brainstorming groups do come up with are often predictable and unoriginal — humdrum word association writ large.

Part of what we know about neuroscience explains why formal brainstorming fails. The brain can’t make the necessary connections needed for brilliant insight in a rigid environment. There’s too much pressure and too much influence. People instinctively mimic others’ innovation opinions, leading to suggestions and thoughts that are “safe”… and stale.

The moratorium on any criticism (“There’s no such thing as a dumb question!” “No answer is wrong!”) may be the model’s biggest flaw. Like giving every kid in the third grade a trophy whether or not he or she deserves one, accepting everyone’s ideas and contributions as completely equal, doesn’t challenge people to work harder, think bigger and look more deeply at the problem at hand.

Debate and criticism help generate the flow of ideas — not hinder it — because they force us to consider other perspectives and question our own assumptions. If you’re not creating an atmosphere where differing perspectives clash in unpredictable ways and draw from (seemingly) unrelated connections you simply can’t get out of that box you desperately want to escape. Example: Apple structures its departments to work together as a unit so that all the groups — from design to manufacturing to sales — interact continuously, sharing and generating ideas in what’s called concurrent or parallel production.

Focus Group Fuzz

Do consumers really know what they’re talking about when you get them in a room with a two-way mirror? Are they really going to voice their opinions when they feel as if they are back in a classroom and eager to impress or please the “teacher.” It depends. A focus group done right, with the correct demographic pertinent to your inquiry, and the right leader, who knows how to lead a group in a way that gets to root issues and answers and who asks the right questions, is crucial. And this is an art as much as it is a science. In the right situation a focus group is very effective in parsing out deeply held consumer beliefs and feelings.

That’s why it’s not enough to fill a room with people and start asking them questions or giving them false choices. Be sure you’ve got the right people putting your focus group together.

A large toy manufacturer held such a focus group with children in an effort to come up with a hit toy for the next holiday buying season. They showed prototypes of two toys in the running, and the kids definitively preferred one to another. The company developed the preferred toy, and it was an abject failure once it hit store shelves. Why? Because the kids were comparing the toy to the one other toy in the room, not to the many toys kids get to choose from in a toy department. Sure, between the two of them, one was a clear winner but why would anyone think that would translate to the preferences people show in a real-life buying situation where myriad toys compete for a buyer’s attention?

A focus group needs to stimulate feelings about real-life scenarios and actual consumer behaviors and this one didn’t.

Getting Caught in the Trend Trap

Those who look to trends to inform their future plans fail — although it’s easy to understand why trends are so seductive to innovation-starved companies. They look like no-fail winners, with an already proven success story in the marketplace.

The trouble is by the time a company creates something based on a trend, many others may have already jumped on the bandwagon. You end up being last in, and as a result, forgettable or indistinguishable from what’s gone before. Or worse, people have moved on to some other trend and you’re stuck with a lot of stuff representing the old trend. That’s what happened to Kraft when it introduced its Carb Wells line of low-carb foods in 2004, when the low-carb fad was beginning to wane. Too much, too late: most of the products were off the shelf very quickly.

Red Thread Thinking

Organizations need to consider allowing what I call anarcho-innovation to take hold in their innovation efforts. In politics, anarchy is considered the ideal, or the absence of government and absolute freedom of the individual, free of fear or reprisal. In innovation, it’s allowing team members to use their strengths to challenge assumptions and unearth information in a variety of ways, and then form connections between data — again without fear.

I call it Red Thread Thinking. It means having a certain amount of confidence in your team – and the ability to let go of your notions of hierarchy and who’s an expert and who isn’t. In fact, your entire staff should be thinking this way “on the job” — and all the time. It’s the best way to have insights and make connections between seemingly disparate events or information, which lead to brilliant innovation.

First, the innovation team should be made up of your best thinkers from a variety of departments with complimentary and even competing skills and interests. Don’t create a team of the “usual suspects” — give people chances who don’t usually participate in innovation or development projects.

Make sure there is a good mix of age and background, because a team of 35-year olds with the same educational background and cultural frame of reference will come up with predictable and similar ideas and insights. Next, give one or two members of the team one of five “threads” to pull on their own before they come back to the team to weave them together.

One or two people should spend some time alone “playing”, indulging their curiosities and visualizing futures. Another member or two on the team should do what I call a “deep dive” — and go back into the history of the organization to find out what was done, discarded, or developed but not to the point of implementation. Often times, the past is a lush feeding ground for fresh ideas.

You can see how the anarcho-innovative process of Red Thread Thinking assumes a certain amount of chaos — and that precisely suits the spontaneous, unpredictable nature of innovation. Obviously, I’ve t scratched the surface of how it’s done. It takes practice to develop the ability to look at data and make the right connections. However, when team members become good at seeing shared information as filaments to be connected in certain revealing ways, brilliant insights and innovation happen. Sparks fly and arguments ensue in an environment where everyone has the right to disagree, challenge, correct, and advocate for his or her point of view with respect – but without fear.

And everyone might even get and deserve a trophy…

This article appears in the May/June issue of The Executive Magazine of California Society of Association Executives.