Innovation and Decision Making Is How Teams Test New Ideas

Kodak made billions licensing digital-imaging patents, then sold about 1,100 of them for roughly $525 million in 2012 after filing for Chapter 11. The company had already helped invent the category. That is the real test: who was willing to make a real commercial commitment before the old business stripped the future for parts. The Wharton account of Kodak's slide and Wired's report on the patent sale tell it plainly.

I get impatient with the way this subject gets discussed, as if a new idea turns up at the committee door asking for a fair hearing. That story suits the people already paid by the old model. It lets them treat a threat to current revenue as an optional experiment, then call the delay prudence.

Innovation and decision making is the discipline of judging whether a new idea deserves commitment, based on the evidence and assumptions that would have to hold.

Innovation and decision making split when the old business feels safer

Xerox PARC is the crueller case. Xerox built the Alto and much of the graphical future of office computing. The Computer History Museum records that thousands of Altos were built and none were sold. When Apple saw the Alto in December 1979, it decided the interface was worth backing. Xerox had the invention and still refused the commercial commitment. If you want to understand why that keeps happening, start with the unspoken assumptions in decision making that make the current business feel like fact.

I have seen the same move in executive teams. The old business walks in with unit heads and bonus plans attached to it. The new evidence walks in alone. Then the people living off yesterday explain that nothing can happen yet, which is a lovely arrangement if yesterday is what pays them. I have heard people ask for "more evidence" when what they really wanted was more time for the old numbers to keep paying them. Then comes the quarterly review, where the same people report that the core business needs protecting for one more cycle and nobody asks why the opportunity is now absent from the paper. A reorganisation follows, the project gets moved under a safer pair of hands, and the burial is complete without anyone having to say they killed it.

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Innovation and decision making improve when the test is cheap

3M handled Post-it Notes better. Spence Silver produced a weak adhesive in 1968. Art Fry found a use for it as a bookmark that stayed put and lifted cleanly. Early market tests were weak enough that a nervous manager could have buried the idea there. Joe Ramey chose a better test instead. According to 3M's own history, more than 90% of people who tried the notes in Boise said they would buy them, and the national launch followed in 1980.

Roger Estall and I set this logic out in Deciding, and we later built it into the Universal Decision-Making Method. When the signal is messy, ask what would have to be true for the idea to matter, then run the cheapest honest test of that claim. That is where innovation and decision making either becomes a discipline or gets handed to the loudest person in the room. The resistance usually comes from a sponsor who wants a coronation or a nervous manager who wants the file buried before one clean test embarrasses an old assumption.

Innovation and decision making depend on who may chase an anomaly

Paul Nurse made an institutional decision at the Francis Crick Institute that more firms should study. He argued for "a place without departments or restricting hierarchies", and the Crick now puts more than 1,500 people under one roof. That was a practical decision about how far an odd result should be allowed to travel before a silo kills it. I wrote recently about serendipity in decision making; serendipity only matters if somebody with authority lets the surprise survive first contact with the org chart.

Alexander Krauss mapped more than 750 major discoveries to the tools that enabled them and found that, since 1975, most arrived within four years of the needed tool appearing. His 2026 study shows that the sparks are common enough; the real shortage is adults with authority willing to let an odd result threaten an existing budget. If the only people allowed to legitimise a strange result are the ones whose budget it threatens, the decision has already been made. Plenty of firms still stage creativity theatre while keeping that veto intact. They hang posters about curiosity, then make sure curiosity still reports to the budget owner it might embarrass.

Decision quality is the missing innovation capability

The real question is whether the assumptions protecting the current model still deserve the deference they are getting, because excitement about the new idea is the easy part. In practice I start with two questions. What would have to be true for this opportunity to matter? What signal earns the next commitment? That discipline stops novelty from hijacking the room, and it blocks the hindsight laziness behind good decisions, bad outcomes, where people flatter or condemn the bet after the fact.

A serious innovation decision also needs a stop signal. If nobody records what would make the team pause or reverse, persistence becomes a subsidy for somebody's ego, usually the sponsor's. I have watched sponsors avoid writing one down because a written stop signal can be read back to them later. So the team keeps funding the thing on mood and status until the only honest decision left is to admit the earlier decision was never disciplined at all. Managers call that resilience right up to the quarter when finance has to explain why the money kept going out.

The wider standard sits inside the broader case for decision quality. If the room cannot say what the opportunity rests on, or what evidence would make it stop, the organisation is protecting the incumbents who live off the old model and marketing that protection as boldness.

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Grant Purdy is the co-author, with Roger Estall, of Deciding (2020), and the architect of the Universal Decision-Making Method.