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EVALUATING IDEAS

Organisational innovation is not just about generating creative business ideas. It is also about reviewing ideas in order to identify those which are most likely to become successful innovations. Unfortunately, many organisations make mistakes in their idea review processes that result in rejecting the most potentially innovative ideas in favour of less innovative ones.

In some instances, the idea review process is a simple matter of a manager reading through a batch of ideas and selecting those she believes will work best for her firm. This is most often the case in smaller firms run by a single owner and manager. In most medium to large businesses, however, a structured evaluation process is necessary in order to:

identify the ideas that are most likely to succeed as innovations for the company.
ensure that complex ideas are reviewed by people with the appropriate expertise necessary to understand what would be necessary to implement the idea – and what might go wrong.
enable a middle manager to defend the idea to senior management, stakeholders, and financial officers who may need to grant budgetary approval of the idea.
make it possible to review a large number of ideas in a resource efficient manner.
improve the idea by identifying potential implementation problems and preparing suitable actions to overcome those problems. Sadly, this last aspect is often lost in formal idea review procedures.

Methods

There are all kinds of idea review methods. We will look at three methods that we use, pass-fail evaluation, evaluation matrices and SWOT analysis.

Pass-Fail Evaluation

If there are a large number of ideas that need to be reviewed –- for instance, you have run a company-wide ideas campaign on a popular issue and have generated hundreds of ideas – a simple pass-fail evaluation is often essential to bring the idea pool down to manageable levels.

It is best to start with a simple criterion for determining whether an idea will go on to a more in-depth evaluation. This criterion might be related to budget, time-frames, fit with company culture or just practical viability. Whatever the criterion, it should be made clear. If a colleague later asks what happened to her idea, you can explain why it did not pass this initial stage. Knowing that her idea did not get implemented for a pragmatic reason – such as being too expensive to implement – is more reassuring than having the idea rejected for no apparent reason.

It is also important to be careful that you are not too quick to reject ideas which, with modification, might meet the pass-fail criterion. For example: a very creative idea that does not meet your budget criterion ought nevertheless to pass. You may be able to determine a means of implementing the idea at lower cost.

If there are few ideas, the pass-fail evaluation is often not necessary. It is easier to move on to the more sophisticated evaluation matrix.

Evaluation Matrix

The evaluation matrix is a simple array in which experts compare an idea with a set of criteria. In our experience, five criteria is best as it allows for a rounded review without bogging the evaluators down in unnecessary detail. The evaluator ranks how well the idea meets each criterion (we use a scale of 0-5 points for each criterion). Evaluators are also encouraged to provide comments elaborating on their ratings and, in particular, suggesting how the idea might be improved to overcome weaknesses.

The evaluation matrix provides a criterion by criterion score as well as an overall score for each idea. Assuming several ideas, focusing on a particular problem or business issue, are being evaluated at the same time, these scores can be compared and the highest scoring ideas can be selected for further review. However, it is important to look at the evaluators' comments. An idea with a low score might be vastly improved following minor changes.

We favour the evaluation matrix as the primary idea review approach because it is simple to set up, requires a minimum amount of time for review, enables comparative idea review and makes it easy to identify the most promising ideas in a large collection of ideas. That said, the evaluation matrix in itself is not usually sufficient for making a final decision on an idea that may cost millions of Euro to implement. But it helps you select ideas for more detailed review, thus making the review process more efficient.

SWOT Analysis

An analysis of Strengths, Weaknesses, Opportunities and Threats (SWOT) is an old marketing stand-by and as such is a useful follow up to an evaluation matrix. In the unlikely event you are unfamiliar with SWOT analysis, it is a simple form in which reviewers indicate the potential strengths, weaknesses, opportunities and threats of an idea. Because the SWOT analysis looks at an idea from different perspectives, it provides a more rounded review of an idea than some methods.

Our SWOT analysis approach includes a scoring system in which reviewers give 0 to 5 points each for strengths and opportunities and takes away 0 to 5 points each for weaknesses and threats. This provides a SWOT metric which can be handy for comparing large numbers of ideas.

We also ask evaluators to suggest methods to overcome weaknesses and threats.

Idea Development

Once an idea passes these initial hurdles, it may be ready for implementation or it may require more detailed testing. We call this phase of idea review: “idea development” as it is no longer a process of evaluating an idea so much as a method to develop it for implementation.

Idea development may include business case preparation, prototype development, project management initiation or test marketing. There is not room enough in this issue of Report 103 to go into idea development in detail – so we'll save it for another issue. Moreover, how a firm develops an idea depends on the nature of the idea, the nature of the firm and existing processes for implementing ideas.

Criticism Versus Improvement

Over the years, I have noticed that business analysts tend to be overly critical of new ideas. This is understandable, they are tasked with managing and minimising risk. And creative ideas tend to be the riskiest. As a result, many evaluators stress weaknesses and threats. On one hand, this is understandable. Your company should not be implementing ideas that will prove to be costly failures. But, many weaknesses can readily be improved. An idea that would be very expensive to implement may, with minor changes, be implemented at far lower cost. And by improving a creative idea's weaknesses, you may be turning a costly failure into a profitable success!

Evaluation Teams

Evaluations should be performed by a team of people with relevant expertise. Ideally, that expertise should be varied. For instance, if you are evaluating new product ideas for an electronic gadget, your experts might include engineers, marketing people, retailers (who would sell the product) and one or more people representative of the consumers expected to buy the new products.

Evaluator Agendas and Prejudices

A particular benefit to having teams review ideas is that while individual evaluators are prejudiced, a varied team is likely to cancel such prejudices out.

For example: an engineer trained in an older technology may well be reluctant to give a high evaluation score to an idea that uses a new technology with which she is not familiar. The success of such an idea might well threaten her job! A jealous manager might not like the fact that her subordinates are more creative than her and so might give poor evaluation scores to creative ideas. At the other end of the spectrum, creativity and innovation people like you and I are often too enthusiastic about the most creative ideas and so give overly high scores for creativity. Sometimes, a less creative idea might prove to be the more innovative (in terms of being profitable).

Evaluation Tools on Jenni Idea Management

Our idea management service, Jenni, includes the evaluation tools described in this article: pass-fail evaluation, evaluation matrix, SWOT analysis and an open idea development module that allows you to upload templates to Jenni and apply them to the review of ideas. For more information about Jenni, please visit http://www.jpb.com/jenni/ or contact your local sales and service partner (http://www.jpb.com/jenni/contact.php)

USING IDEA MANAGEMENT FOR PRODUCT DEVELOPMENT

Most of our clients use Jenni idea management -- at least in part -- for developing innovative new products as well as making innovative improvements to existing products. Indeed, Jenni has been used to devise various new food products, chemicals, advertising solutions and banking products that have contributed to our clients' bottom lines.

There are numerous approaches to innovative product development, from the development of all new products and services to the modification of existing products.

Innovative New Products

Typically, when using idea management to develop new product ideas, you will have a specific frame in mind, for instance you may want to make new products in response to new trends in the marketplace or to appeal to a different consumer profile. In order to solicit and develop such ideas, you can run ideas campaigns (an ideas campaign is a focused idea management event in which you solicit ideas in response to a specific innovation challenge – see www.jpb.com/jenni/ for more information) with innovation challenges like these:

"What kinds of healthier desert products might we offer our customers?"
"What kinds of products might we make that would appeal to young women?"
"What kinds of financial products might appeal to students?"

In addition, from time to time, it is both fun and profitable to try more speculative innovation challenges, such as these two challenges that would provide the basis for two consecutive ideas campaigns:

First ideas campaign: "What new technologies might render our products obsolete overnight?"
Second ideas campaign: "If technology X rendered our products obsolete, what new products might we develop?" or "What products might we make using technology X?" -- where technology X represents an threat identified in the first ideas campaign.

Product Improvements

In order to remain competitive, you need to improve your products all of the time. Enterprise idea management is an excellent way to facilitate this. Your employees are dealing with your products on a daily basis. Your sales people are selling them and your call centre staff are handling customer complaints and questions. So, they all have ideas. Moreover, if you market consumer products, you have the added advantage that your employees are also your customers.

Nevertheless, there is no law stating that only employees may participate in ideas campaigns. Indeed, Jenni makes it easy to invite customers, business partners and even the general public to participate in your idea management process and help you innovate.

Product improvement ideas campaigns might be based on challenges as simple as

"In what ways might we improve product X?"

But it is often better to focus challenges on specific needs, such as

"In what ways might we make our DVD players easier to use?"
"In what ways might we improve the usability of our web application?"

Packaging

A key component of many products - especially consumer products - is the packaging. An appealing box makes it more likely a consumer will select your product, rather than your competitor's, from the shop shelf.

And of course, there are other issues at stake. If your products are fragile, your packaging must prevent them from being damaged in transit. If you are selling food products, you want to ensure your products remain fresh and edible as long as possible. If your packaging costs are too high, you can only benefit from lower cost alternatives that provide the benefits of your existing packaging.

In addition, food, medicine and other products are normally subject to packaging laws which differ from country to country.

Thus, depending on your products, markets and packaging, you might run ideas campaigns such as:

"How might we make the packaging of product X more attractive?"
"In what ways might we reduce the cost of packaging for product X?"
"How might we make our snack foods easier to eat while on the run?"

In other instances, packaging may take on a more abstract meaning. For instance:

"In what ways might we re-package our consulting services to make them more appealing to SMBs [small and medium sized businesses]?"

If you are selling your products in more than one country, or if you have purchased a company in an overseas market, packaging products from one country to appeal to consumers (or corporate buyers) in another country often requires innovation. Ideas campaigns are a great method for initiating that innovation.

"How might we package our drinks to make them more appealing in China" (we assume you would be including Chinese people in such a campaign!)
"In what ways might we repackage our life insurance products for the Russian market?"

New Uses for Existing Products

This is partly a packaging and marketing issue - but it is one that offers substantial opportunities for low cost, easy to implement innovation. Very often, your existing products are being used by consumers in ways that you might not expect. Moreover, slight modifications to one of your products might give it new applications. For instance, a company that produces a spray for polishing wooden furniture learns that many of their customers are using the product to polish other surfaces such as plastic and metal. They run some ideas campaigns, first on how to modify the product's formula to make it suitable for multiple surfaces, followed by additional campaigns on marketing and packaging. The result is an all-purpose cleaning product developed at little expense, but increasing their potential market substantially.

Thus it is worth running periodic ideas campaigns with challenges such as:

"What wild and crazy things might customers do with product X?"

Or you might ask your customers directly. Jenni allows you to do this easily. Indeed, you can even run public ideas campaigns on Facebook.

"What uses do you put product X to?"

If your company is a service company, there are still opportunities to repackage your services in order to expand your market.

"Given our expertise, what other services might we offer our clients?"
"What related services might benefit our clients?"

Continuous Innovation

By using Jenni to run regular ideas campaigns for product, improvement, packaging and adaptation ideas and by involving people across the enterprise (rather than just the research and development people as is often the case), you can ensure your company keeps well ahead of the competition with new products, improved products and more appealing products.

This is particularly critical in times of economic slow-down. If your customers are spending less, you want to ensure that their spending is concentrated on your products and not your competitors'. Continuous product innovation is one effective way to accomplish that.

If your firm is not continually developing your products and packaging through idea management, you are in danger of being left behind by your more innovative competitors (who might already be using Jenni!). So act now! You can find more information on Jenni at http://www.jpb.com/jenni/ - or contact you nearest representative.

ELECTRIC CARS AND PARADIGMS

In view of the increasing cost of petrol and diesel fuel, concerns about the environment and the success of electric-fuel powered cars such as the Toyota Prius, car companies are once again looking at battery powered cars. Most of the focus is on hybrid vehicles like the Prius that combine a battery with a petrol engine that can recharge the battery. Nevertheless, there is an interest in pure battery powered cars. That in itself is not particularly innovative. At the turn of the 20th century, battery powered cars were commonplace and had history been a bit different we might all be driving battery powered cars today.

The problems with battery powered cars are well known, batteries have relatively short ranges and take time to recharge. Unlike a petrol (or diesel) engined car which you can pull into a petrol station and fill up the fuel tank in minutes, a battery takes some time to recharge. And even then, it has less than half the range of an equivalent fuel engined car.

Moreover, replacing petrol stations with battery recharge stations would be a major infrastructure project. But until such stations exist, few people are likely to be comfortable buying an electric car for anything but local errands. They are afraid of running out of electricity in the middle of the road. Or so the logic goes.

In fact a major problem with electric cars may be that we are looking at the wrong paradigm: petrol engined cars. Thus we think of petrol stations, refills and battery range limits. Perhaps a better paradigm would be highly successful long range electric powered vehicles which exist today: trains and trams. TGV trains, in particular, can and do cover hundreds of kilometres per trip at speeds of up to 300 kmh (186 mph) and they are electric powered.

But, of course, they do not use batteries that need to be recharged. Rather they use wires suspended above the track that provide electricity to the train. And if you feel that such a model is not viable for the road, consider the tram. These run in city streets and are also powered from overhead cables.

Such a model could almost certainly be applied to cars, thus not only solving the problem of limited battery life, but also providing additional benefits.

In the Baumgartner Electric Car Vision, major roads are strung with overhead electrical cables for powering cars. Cars have electric engines and relatively small batteries designed to power them on small back roads and driveways where it would not be economically viable to have power cables.

On entering a main road, the car's electrical connection bar rises from the roof to connect to the overhead power cable and brings electricity to the car. On leaving the road, the connection bar retracts and the car uses its battery for the last leg of the journey – which might simply be pulling into the drive. Thus, recharging the batter during journeys is no longer necessary. Indeed, battery powered cars would have longer ranges then fuel driven ones.

In addition to providing power, overhead electrical cables also facilitate the sharing of information. For instance, drivers might be able to choose from various electricity providers while driving. They might opt for a more environmentally friendly provider or they might choose a package that combines car and home electricity at a special price.

In addition, data about traffic can be collected by the grid of power cables, compiled by a central computer and provided to drivers as traffic information. Drivers can immediately identify traffic jams and use their navigation systems to seek alternative routes. The navigation systems, of course, would also take into account current traffic conditions compiled by the grid.

If the grid identifies an accident or a dangerous spot on a road, it can power down the surrounding area to prevent further accidents. Indeed, the grid might even be able to control cars, allowing drivers to nap or read while on long tedious journeys.

Finally, the Baumgartner Electric Car Vision allows substantial improvements in efficiency. Cars driving down steep hills can send power back to the grid. Open stretches of road can include wind turbines and solar panels to generate renewable energy. Vehicles need only take the electricity necessary to maintain speed.

All in all, a little change in paradigm provides a much more viable solution to a major problem. And if you toy with the Baumgartner Electric Car Vision yourself, you will doubtless see other possibilities.

It is worth trying this exercise when problem solving: change your paradigm and see what solutions suggest themselves. I assure you, you will be amazed by the results!

LATEST IN BUSINESS INNOVATION

If you want to keep up with the latest news in business innovation, I recommend Chuck Frey's INNOVATIONweek (http://www.innovationtools.com/News/subscribe.asp). It's the only e-newsletter that keeps you up-to-date on all of the latest innovation news, research, trends, case histories of leading companies and more. And it's the perfect complement to Report 103!

Happy thinking!

Jeffrey Baumgartner

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Report 103 is a complimentary weekly electronic newsletter from Bwiti bvba of Belgium (a jpb.com company: http://www.jpb.com). Archives and subscription information can be found at http://www.jpb.com/report103/

Report 103 is edited by Jeffrey Baumgartner and is published on the first and third Tuesday of every month.

You may forward this copy of Report 103 to anyone, provided you forward it in its entirety and do not edit it in any way. If you wish to reprint only a part of Report 103, please contact Jeffrey Baumgartner.

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