One of the things that really puzzles me is why so few managers know the decision rules applied by their business to filter and select business opportunities. This could be costing you millions of pounds in lost opportunities or in moving forward with the wrong ones.
Typical early-stage screening criteria include market attractiveness, strategic fit, capability fit, the size of prize, the level of investment, and risks. Of course, different rules are applied at each stage. I also include ‘gut feel’ as a criterion in the early stages of an innovation project – it’s an important barometer. I encourage managers to add one wildcard idea in their innovation portfolio. Sometimes the wildcard becomes the successful business. I have seen it happen.
In his book Innovation Prowess, George S. Day introduces a set of helpful screening questions under three areas, which he calls the Real–Win–Worth It screen: Is it real? Can we win? Is it worth it? His book is a worthwhile read.
Also, in her book ‘Simple Rules: How to thrive in a Complex World’, Stanford professor Kathleen Eisenhardt gives examples of organisations who use simple rules to help them navigate complex challenges. To be effective, Eisenhardt says that simple rules must meet four conditions: They must be limited in number, tailored to the person or organisation using them, applied to well-defined activities, and open to giving people latitude to exercise discretion.
On a final note, make sure managers have ample time (1–2 weeks before stage-gate meetings) to read and digest content before making decisions on innovation projects, especially projects that fall outside the core business. Allow for this in the project plan.
What rules does your organisation use to filter out weak opportunities and prioritise the strongest ones, at each stage of your innovation process?
If you need to grow revenue across the near, medium and long-term, and want help from an experienced and practical team, contact us!
Head of Innovation
You can also find us on Facebook www.facebook.com/3inno/