Signal-to-noise ratio is the electrical engineering concept that describes the strength and clarity of a signal as a function of the signal’s power level divided by the strength of the noise. Noise, or static, can be so great as to mask or corrupt the signal. Measuring the signal-to-noise ratio requires the selection of a representative or reference signal. With these reference signals, average signal-to-noise ratios are measured and normalized with the goal typically being to achieve a cleaner signal by filtering out the noise and thus allowing the signal to stand out better (Wikipedia).
Signal-to-noise ratio is an apt metaphor for what we are trying to do in an innovation project, both early and late in the process. When an innovator is in the early exploratory challenge, the goal is to detect the presence or potential of a new signal where before most found only noise. In the invention challenge, the goal is to clarify just what the reference “signal” (the new value proposition) is, and get it to stand out. In the reduce-to-practice challenge the goal is to consistently produce signal-to-noise ratio profitably enough to attract investors to take the next steps. And in the introduction and integration challenges the innovator must find the right channels to attract customers to the signal without frightening them.
Each innovation likely has its own native and optimal reference signal. Like a sculptor chisels out the shape he/she envisions in a hunk of marble, so the innovator carves out from the noise of surrounding context a signal that, if successful, resonates greater value and meaning with the end-user than what the user had before.
This is true for all innovators, whether entrepreneur or intrapreneur, although intraprenuers arguably have another layer of noise to deal with—the prevailing business models and organizational culture of the host organization.
An innovation can establish a whole new set of signals in forging new connections and communications between the innovating company and end-user. Innovations not only create new value. They become new signals themselves. In fact, one of the more gratifying experiences of an inventor and/or innovator is to have their innovation accepted and “at home.” When it happens it means that the innovator heard, felt or saw something (directly from the user, indirectly from the context or a combination of both) that others may have missed. Understood this way, the process of innovation—at least in the early stages—is all about increasing the signal-to-noise ratio.
Finding the right new signals often starts out awkwardly. How often we use the phrase “working title” or make up elaborate project names, partly because we don’t quite know what to call the invention at first—a symptom that the innovation is anything but at home yet.
We see examples of this all the time in invention workshops. When inventors get very intrigued with a line of thinking and/or a particular embodiment, a struggle can instantly arise. Part of the struggle is a search for the right words to describe what inventors can see in their mind’s eye but lack words to describe.
This is why diagramming what is in the mind is so important and useful; particularly at times when collaborators become, as our associate John Philipp calls it, “inventors-in-heat,” and even whole new words get invented. This is one of the characteristics of novelty that makes the process of innovation so challenging. We not only have to invent the thing itself, but often the new words or phrases to describe it.
When popular culture puts an “ing” on the end of brand name we know the innovation has found a permanent home in society. “Podcasting” is a recent example (it’s startling how this one happened so quickly). “Horseless carriage” was the phrase we first used in reference to what we now call the automobile.
When viewed in hindsight, the words all seem to make sense and fall into place. When we are in the midst of the process of innovation, however, it is a little different. In fact, the process of innovation can be viewed as a sense-making process, requiring innovators to discover and isolate a new signal from what others may have considered merely background noise. Metaphorically speaking, innovation is about creating new signals in the process of creating new value.
As innovators, our never-ending task is to increase the strength of the new signal and decrease the noise and interference around it.
This article was originally published in Innovating Perspectives in July 2007. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.