First of all, innovations and cocktails – what’s that all about? Well, at the risk of being accused of stretching a metaphor too far: cocktails come in different shapes and sizes, are drunk at home, in small specialist bars and in big establishments, have broad appeal (think Manhattan) and niche offering (a ‘fuzzy monk’ at a local Pittsburgh eatery springs to mind), they come in small glasses and pitchers, cost not very much through to an ‘arm and a leg’…I’ll let you make the connection(s) to innovations – they’re there, trust me.
Picking the winners
Now, many businesses are working very hard to build an innovation pipeline, develop new business models and incubate start ups as a means to build sustainable growth. ‘Picking winners’ is the name of the game – and in order to do that, you need a good decision-making approach. Not only that, within corporate environments (as separate from stand-alone ventures), you need to assess how an innovation might fare within the broader context of the larger business.
OK, there’s loads of stuff written about selection criteria for ideas, and stuff you should consider for ‘shark tank’ reviews of potential businesses to incubate.
Well, this article doesn’t give you yet another a list of criteria, what it does do is set out eight factors that are important to consider when building your decision-making process. This will enable you to organize your criteria in a better way, make them more independent of each other and also enable you to ask the necessary ‘hard’ questions that often get missed.
Eight factors to consider
To start with, these eight factors are divided into two groups – external basis and internal basis. For each of these factors, you may have one, several or no criteria, and that may be OK, but I would suggest that you consciously decide, and what follows is designed to help you make that decision.
‘External basis’ factors relate to how the innovation might stack up in the outside world:
- Compelling – for example, strong value proposition, preferably validated in some way
- Winnable – for example, good model for value capture
- Meaningful – for example, is it worth doing (and remember, that’s all relative)
- Differentiated – for example, is IP creation possible
Internal factors have a different emphasis. They speak to how organizations tend to think when undertaking new programs.
- Exciting – for example, will we be able to get a team motivated around this, and will senior executives continue to back it?
- Actionable – for example, do we understand what it is and how we can (at least) begin to build it
- Sustainable – for example, is it a ‘one-trick pony’, or is there potential to grow beyond the MVP?
- Insightful – for example, does it make us go ‘of course, now why didn’t we think of that sooner’
You’ll notice that the external and internal factor examples are phrased differently. I’ve written them that way to highlight the differences between criteria as ‘things’ – good model for value capture’ – and criteria as tough questions we need to answer – does it make us go ‘of course…’
This is important as the mantra of “what you can measure, you can manage” is great, but in terms of selection criteria, it tends to drive thinking inside what is already known, rather than challenging the current status quo, in order to stretch outside. I’m sure that there are those that would take issue with that perspective – and that’s OK – and I would really encourage you to create criteria that stretch how people think about new opportunities, rather than use the measurement tools that you use for your current business. You decide.
Looking forward to comments and suggestions. Also happy to talk further about this.