Ideas Are More Valuable Than Their Execution, Part II

In a previous post I discussed that ideas, always and everywhere, are far more valuable than their mere execution.

You may want to re-read that post as this one builds upon its foundation, especially the comments from Thomas Sowell and Paul Romer.

Before you proceed, please take a look at this short Super Bowl ad for Bud Light.

The distinction between ideas and knowledge may be subtle, but perhaps management consultant Sid Caesar clarified it best when he quipped:

The guy who invented the first wheel was an idiot. The guy who invented the other three, he was a genius.

Charles Murray, in Human Accomplishment, explores fourteen of the world’s most important meta-inventions that occurred after 800 B.C. until 1950, essentially cognitive (not physical) tools for improving the world around us:

  1. Artistic realism

  2. Linear perspective
  3. Artistic abstraction
  4. Polyphony
  5. Drama
  6. The novel
  7. Meditation
  8. Logic
  9. Ethics
  10. Arabic numerals
  11. The mathematical proof
  12. The calibration of uncertainty
  13. The secular observation of nature
  14. The scientific method

All of the above are nonrival goods, meaning we can all utilize them at the same time without their being diminished—your use of the alphabet does not inhibit mine. These ideas changed the world, creating untold wealth. They were also the contributions of an incredibly small number of individuals—4,002 to be precise, according to Murray.

In the arena of business management, ideas have an enormous capacity to apply knowledge to knowledge, thereby increasing innovation and wealth.

Management consultant and author Gary Hamel has identified 175 significant management ideas between 1900 and 2000. He applied three questions to each idea to create the most important advances:

  1. Was it a marked departure from previous management practices?

  2. Did it confer a competitive advantage on the pioneering company or companies?
  3. And could it be found in some form in organizations today?

Think of the global impact the following dozen management innovations have had, which all met Hamel’s criteria:

  1. Scientific management (time and motion studies)

  2. Cost accounting and variance analysis
  3. The commercial research laboratory (the industrialization of science)
  4. ROI analysis and capital budgeting
  5. Brand management
  6. Large-scale project management
  7. Divisionalization
  8. Leadership development
  9. Industry consortia (multicompany collaborative structures)
  10. Radical decentralization (self-organization)
  11. Formalized strategic analysis
  12. Employee-driven problem solving

Economist Paul Romer is right, innovation rests on individuals’ ability to create and test ideas, thereby creating new knowledge and wealth. Even something as prosaic as a pill bottle can become the genesis of a new idea that creates value, and even saves lives.

Deborah Adler’s grandmother mistakenly took her grandfather’s prescription medication Amoxicillin by accident. While Adler was working on her MFA thesis, she came up with an idea for an easier-to-read, user-friendly pill bottle with color-coded rings and other safety features. Target was so impressed with her redesigned bottle it bought the design from her. In the autumn of 2005, the bottle was displayed in the New York Museum of Modern Art.

Business is about people, ideas, and things, not land, labor, and capital. Yet ideas are not easily measured or quantifiable, so they are not given the resources they deserve by many organizations. Creativity and dreaming take time, which does not enhance conventional productivity statistics.

But in an intellectual economy, creativity is what propels economic growth. Tim Delaney, Vice President, Executive Designer, Creative Development with Disney says:

The success of the Walt Disney Company has centered on two basic fundamental concepts: our ability to be great storytellers, and the constant and the vigilant search for exciting new ideas.

This is how you can say with complete confidence that ideas are always and everywhere more valuable than their mere execution.

It’s worth asking again. What percentage of your firm’s human capital is devoted to creating and testing new ideas versus merely executing old ones?


  1. Ed Kless says:

    Not to be contrarian, but while I think Ron is right that ideas are more valuable than their execution, I would like to assert that “metaphors and stories are far more potent (alas) than ideas; they are also easier to remember and more fun to read.”

    The quote is from the Black Swan by Taleb.

  2. It is amazing to me how hard people fight to devote most, or even all a firm’s resources to executing existing ideas.

    I found a related post interesting: You Get What you Track: What Crap (

    I agree that you don’t necessarily get what you track – but I do believe you get what you reward. Our firm is working towards creating a ROWE, the primary challenge of which (I think) is defining the required results for each individual. How do we equitably and reasonably establish what those results should be? How do we reward, and therefore get people to train and mentor others, contribute to the team with their innovation and creativity, and of course get the client work done?

    We’re still working on that. Hopefully we’ll get it figured out before too long.

  3. Ron Baker says:

    Hi Monica,

    I agree, existing ideas are already dying. Firms need to allocate a good share of their resources to tomorrow, not yesterday.

    I, too, agree that you get what you reward. Incentives matter, as all economists know, which is why I think Key Predictive Indicators should guide a firm’s compensation structure.

    Congratulations on moving to ROWE. All of the challenges you point out, let me just say:

    You have all those challenges under any model you use!

    A ROWE, I believe, makes them easier to overcome because people will sort it out. Turn them lose. If they have autonomy (Greek for “self-governance”) you’ll be amazed at what they can do. These are intelligent knowledge workers who cannot be micromanaged anyway. What firms have now is the illusion of control.

    Good luck, and keep us posted. We have a few other firms who are doing ROWE–it’s a critical part of the firm of the future.

  4. You are absolutely correct that we find those challenges in any model.

    Our firm is just over one year old, and we do not use timesheets. Are other accounting firms willing to share the details of how they are successfully implementing the concepts of Action Reviews and KPIs? We are committed to the Value Pricing and ROWE model, and could really benefit from others’ experience.

  5. HI Monica,

    Congratulations on no timesheets and implementation of a ROWE!

    Any Trailblazer firm on our site, or any VeraSage fellow who runs a firm, I’m sure, would be more than willing to share their experiences with you–the Trailblazer case studies on the site that do just that.

    Keep us posted on your progress.


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