The relative ease of i) generating good ideas and ii) lack of resources means that there are usually more good ideas available than can be successfully innovated. As a result, it is often the case that ideas must be evaluated for risk and reward in order to select those that are most likely to succeed.
Part 2 of Good Ideas – Creativity and Innovation Management - will briefly discuss the concept of fit. An idea may be a good one, but does the person or firm that generated it have the ability to successfully bring it to market?
To provide a simple measurement and relative value of ideas, the following three criteria can be rated (or further analysed and rated):
a) Strategic fit. Katz et al (2003) argue that an idea must fall in line with the organization’s strategy. If Hewlett Packard (for example) were to suddenly attempt to develop soundless Velcro, non-fossil fuel cars or a sonic screwdriver, the chances increase that innovation of those products would conflict with their existing strategy and divert resources, thus increasing the risk for all product lines. Stick to the knitting is a common expression, though diversification can bring benefits.
b) Does the firm have the technical expertise to make it work? If HP were to take up non-fossil fuel cars, then that would involve significantly different technical competencies than they already have in-house. Whole teams with different skill sets and experiences would have to be brought in.
c) Do the business competencies exist? These include competencies in marketing, new product development, the ability to manage widely scattered employees and facilities etc. Does the big idea justify the expense?
In conclusion, a multitude of criteria must be considered and evaluated for risk and reward before big budgets are spent bringing the product to market.
This topic is covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com. You can also receive a regular, free newsletter by entering your email address at this site.
Kal Bishop, MBA
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