No organization is short of new ideas.
When we engage clients in an innovation strategy session, no one ever says “we don’t have any new ideas.”
Usually, what we hear is “how do we figure out which ideas to invest in – and which ones to kill?”
Everybody’s got their own pet idea, nobody wants to let their project fail, it is not clear who has the decision-making authority, or even the criteria, to kill anything, and there are not enough resources to push everything forward. Sounds familiar? These are the common things we hear when we talk to teams managing innovation. It is often at this point too when an outside advisor is hired to engage with the team, to help be an external arbiter of what’s good and should be advanced, and what should be parked or even killed.
The process of identifying which opportunities are mostly likely to work
Innovation teams often mistake a large number of opportunities as an indication of their success.
Managing a large portfolio of opportunities without some sort of appropriate criteria and process that allows the team to appropriately prioritize leads to a lack of alignment and inefficiency.
A key to success in prioritizing and choosing to invest in the few ideas that could actually work is having a process and a framework, and most importantly a set of criteria to assess them. We have found the best set of criteria are built around how attractive are these opportunities, and how good a fit are they to the organization? A significant challenge to this approach is that the attractiveness criteria are an “outside-in” assessment, “how attractive is this opportunity to anyone, based on market size, growth, ease or difficulty of entry, necessary partnerships, etc.?”. The fit criteria, on the other hand are usually easier for a team to assess because the question is “how good a fit is this opportunity with us, with our company and our capabilities and access to markets?” A robust assessment process looks at both, independently.
With attractiveness and fit criteria defined, and a process to prioritize in place, the next step of ranking growth ideas is typically very efficient, often taking hundreds of ideas down to the top 5 or 10 that are really both attractive and a good fit based on your business goals.
Success depends on the objectivity of the team in assigning the criteria to the different opportunities, and a mindset of collaboration. Groups that own this process and work together to drive it are the ones who are successful at finding that one, innovative idea that could potentially catapult your business.
How attractive is the opportunity?
Like I mentioned earlier, most organizations can’t figure this out on their own.
They need outside perspectives and insights to help them assess their market, understand customer needs and buying behaviors, and the ecosystem of suppliers and customers, influencers and decision makers that drive the dynamics of the market.
These are the key elements of a market assessment for attractiveness; where you engage with industry experts to gain essential insights into a particular segment and geography, to assess the market and understand what it would take to make it an attractive opportunity, or not.
How good a fit is the opportunity?
Market attractiveness doesn’t have anything to do with a company’s capabilities, either. The exercise of market attractiveness is more about determining if customers would buy your solution, what are the incentives required, are there other competitive options, and what is the size of the market. You also need to understand if the solution is a good fit for your organization, or not.
Here’s a good example. Let’s say you’re a manufacturer of batteries. You have identified solar cells as an attractive market opportunity, but you need to understand if it is a good fit for you, or not. Some criteria for fit could be whether or not some of the manufacturing processes or materials technologies are similar to that of batteries, or maybe whether or not some of your customers that buy batteries are also buying solar cells, or maybe your company has cash on your balance sheet and you want to pursue an acquisition in this space and need to know whether or not the size of potential targets fits your investment appetite. All of these could be criteria for why an opportunity is a good fit or not. And many still require some outside insights into potential M&A targets or buying behavior of your existing customers.
This part of the process literally assesses the fit of an opportunity with the existing organization and its specific ambitions for growth.
Bringing it all together
Using this approach, we can help you understand the opportunities that are best to invest in by prioritize those opportunities that are both most attractive and have the best fit to your organization and ambitions. We do so quickly and efficiently by using real expert insights and analysis.
Through our proven process of market assessments, M&A scans, benchmarking and customer segmentation, we can help guide you to identifying the right criteria and assess each opportunity against those criteria.
To learn how we can help guide you and your organization to growth opportunities that actually work, click here to schedule time with our team.