TheThreePercent

Speed.  Speed in execution is the key to extracting value from innovation.  And nothing kills speed more than founders dancing around trying to maximize the returns they get from having the idea behind a new business opportunity.

Here’s my view.  There is no question that execution is where most of the value is in business.  An idea is typically worth little without execution.  And consequently the person with an idea that does not execute on that idea more effectively than others should not get significant returns, even if it truly was his or her idea first.

But there is also no question that many people who are brilliant at creating new business opportunities are terrible at executing on them.  (Some of us try hard to be good executors, but it is not in the skill set of many founders.) 

It seems to me that the non-executing innovator types in my experience have the potential to create several new business opportunities.  So perhaps for them the right strategy is to be a founder of a portfolio of business opportunities, leaving execution (and most of the ownership and returns from each business in the portfolio) to the executing teams.

For this to work well, and to keep up speed in the process, what we really need is a commonly accepted standard for the value of articulating and developing the concept behind a new business model or patented technology.  If the innovator has the necessary skills and disposition to be part of the execution team, then of course the returns and percentages to him or her should rise accordingly.  But if the only thing the innovator does is provide the model and structure, then perhaps the right number for us to agree upon in general is….yep, three percent.  A pure innovator’s share – three percent.

What do you think?