Stop Wasting Money on Good Ideas

Getting enough ideas is never the problem. When you look at the ideas collected from employees, customers, suppliers, and other channels, you’ll often find that you have more than enough to work with. The hard part is deciding which ideas are worth exploration and development; and from there, which ideas deserve investment. In a perfect world, you would have unlimited resources with which to explore every idea that pops into your head, but the reality is that you have to make decisions, often on the fly, about what’s worth your attention and what’s not. The truth is most people can tell the good ideas from the bad, but real innovators can tell the great ideas from the good ones.

At first glance, you can often rely on your instincts and experience to steer you away from the ideas that are simply not worth a closer look. These may be ideas you’ve already explored in the past, or ideas that are simply not quite ripe enough for your current needs. But when it comes to identifying great ideas from a pool of promising ones, it’s important to reduce your reliance on “gut” in favor of more objective tools.

In today’s rocky economic environment, you simply cannot afford to waste time, money, or effort on projects that don’t add some type of value. The only way to ensure that you’re consistently picking winners is to develop and refine a set of tools to use in idea evaluation.

It’s not too hard to develop a useful idea-screening tool. Pick a few key criteria to use in your preliminary screener, and then rate ideas on a 1-5 scale (1 being “no/completely disagree”, 5 being “yes/completely agree”). Here are a few criteria that will help get you started:

Strategic Alignment. Is this idea aligned with your overall organizational strategy? How will it contribute to your organization’s goals over the next few years? Ideas that “fit” within the context of your organization will meet with less friction and enjoy more resources during their development. This, in and of itself, can often lead to more successful launches.

Competitive Advantage. Does this idea place you ahead of your competition? If not, that doesn’t mean it’s not worth moving forward, it just means that the idea may not qualify as a “great” one. Great ideas are ones that change your competitive landscape and leave your competitors scratching their heads and scrambling to catch up.

New Customer Opportunity. Will this idea help you engage a new group of customers? Many organizations mistakenly “innovate” around the needs and requests of their most loyal customers, and assume that the rest of the market will follow. This simply isn’t the case. While your fans will certainly offer you a great deal of insight regarding enhancements to your existing offerings, they can rarely tell you how to reach out and acquire customers you don’t already have. Ideas that help you tap into completely new customer segments have the potential to disrupt your industry and redefine the idea of your “target market.”

Financial Opportunity. Will this idea add to the bottom line? This is perhaps the most important criteria for many organizations— but don’t get tripped up on financial projections and spreadsheets. Great ideas are ones that present not only new opportunities for revenue, but also new opportunities for cost savings and efficiencies. Some of the best ideas can be internal improvements that help organizations reduce costs on a massive scale.

“Wow!” Factor. Will this idea wow our customers/competitors/the media/shareholders? Good ideas are expected; great ideas take people’s breath away. Your idea screener should include a “soft” category to account for the buzz opportunities implicit in a given idea. Will the launch of this new product spawn weeks of chatter on the blogs and publications that follow your industry? Will your share price or valuation jump when this new project is announced? Ideas that have the power to excite people are often the great ones.

Cost-Benefit. Does this idea have potential returns that far outweigh the costs and difficulty of execution? Sometimes seemingly insignificant ideas can be great ideas simply because they’re easy to execute and have huge returns. Apple, for example, has systematically cut down the size of its product packaging over the past few years. Simple idea: make the package smaller. Big returns: more units of each product can be shipped per palette, reducing shipping and inventory costs; there’s less packaging waste (increasing the company’s “green” credentials); and smaller, simpler packaging is less expensive to produce.

Once you’ve picked a few important idea-screening criteria, take your screener for a test drive. Run an idea-selection meeting and use your new tool on 5-10 actual ideas from your pipeline. Set rules at the beginning of your meeting to avoid hang-ups, and ask participants to jot their scores down privately as each idea is presented, then tally up scores once all ideas have been reviewed.