Evaluating great (or not) ideas


One of the aspects of the innovation process on which I have been focusing a lot of thought lately is the evaluation of ideas. Assuming you have a process for generating and collecting ideas, how do you decide which ones are worth exploring further? And, once you have dug a little deeper, how do you decide whether to keep going, or when to stop? I was just reading a post on Escape from Cubicle Nation: Is your business idea the next YouTube or a Jump to Conclusions Mat where Pamela lists some good guidelines for assessing your business idea’s potential. I guess the only real concern I have is that the guidelines mix the evaluation of the idea with the self-evaluation of the individual with the idea – this is not necessarily wrong, I am just looking at the more isolated problem of evaluating ideas on their own.

I have also been reading the book Innovation: The Five Disciplines for Creating What Customers Want by Curtis R. Carlson and William W. Wilmot, which I highly recommend. It describes an innovation management approach from SRI International. There are a few ideas I like in this book. A fundamental point that I like is their definition of innovation – essentially that it is not innovation until it creates value for a customer. This feeds into the meat of the approach, which focuses on the analyses of Need, Approach, Benefits, and Competition (NABC). I will not try to explain their approach – the authors do a much, much better job of it than I ever could. A key characteristic of the analysis, to me, is that it is not 100-page document. It is a succinct, few-page description of the overall value proposition.

Coming from the technical side of things as I do, it is my natural tendency start with an Approach – with a really cool piece of technology, some really cool solution – and then to try to prove that it fulfills some need. Unfortunately this often leads to really cool solutions which nobody wants.

This is, of course, the wrong way to do things from a business perspective. From the business side, you always want to start with a compelling customer need. You can then look at how the competition fills that need, and assess whether there is room for a new solution. Only after that do you start looking at your solution approach, and its benefits. Using this approach probably has a higher success rate in terms of making sellable solutions. However, using it exclusively leaves many opportunities for ground-breaking, technology-driven advancements.

In the real world, you need both approaches. What appeals to me in the NABC approach is the emphasis on the fact that, no matter where your idea comes from, or what your focus is, you need to be able to address all 4 of these areas. If your idea comes from the techie side, and is focused on Approach, then this framework forces you to come up with the Need and Competition answers. If your idea comes out of marketing or elsewhere on the business side, then it forces you to at least look at the approach early on. The best thing (in my opinion) is that, in order to address all 4 of these areas, you must draw on expertise from multiple functional groups, thus creating the collaboration which is needed no matter what approach you take. It also encourages us to put ideas in front of customers/prospects early in the process.

Another thing I like about this approach is that the NABC analysis evolves with time. This gives us a tool for continuously evaluating the value proposition as we move through the innovation process with a given idea, giving us a decision tool to help us decide when we have invested enough in an idea.

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