March 22 nd 2012 How to Evaluate Your New Ideas
The assessment process Developing a framework to assess identified opportunities Andrew Maxwell
Seven step assessment process 1. Identify innovation objectives 2. Establish what innovation success looks like 3. Develop assessment using cross-function team 4. Use tool to assess ideas 5. Pick initial pilot projects and implement 6. Evaluate success of pilots 7. Re-evaluate and improve process
Need to develop an innovation roadmap so you know where you are and where you are going Line extension Enhancement Marketing Experiential innovation innovation innovation innovation Platform innovation Organic Renewal Product innovation Acquisition Renewal Innovation Renewal Harvest & exit Disruptive Application Value engineering Integration Process Value migration innovation innovation innovation innovation innovation innovation Dealing with Darwin, Geoffrey Moore 9. Innovation strategies include: , , and
How do you measure innovation success 1. Improve quality 2. Create new markets 3. Extend the product range 4. Reduce labor costs 5. Improve production processes 6. Reduce materials usage 7. Reduce environmental damage 8. Replace products/services 9. Reduce energy consumption 10. Conform to regulations
Establish innovation framework Factor Possible Criteria Factor Possible Criteria Factor Possible Criteria Business Strategy Details Details Culture Details Performance Customer Embed solution in customer Bottom line Increased revenues People Attract talent intimacy product Create new markets together Increased margin Grow potential Enhance workplace Build joint brand Lower operating costs satisfaction Product Faster, better Market Enhanced market share Processes Speed up decision processes leadership Enhance opportunity New features Increase market growth identification Enable new market Enhanced functionality Create new solutions opportunities Market Shareholder New business model Increase share price Risk Align incentives disruption value New way to sell Enable acquisitions Freedom to operate New market opportunity Increase acquirer interest Attitude to failure Productivity Lower supplier costs Resources Enhanced resurce utilization Management Build leadership Speedier response Partnership supply chain Foster open communication Enhanced supply chain Found opportunities Empower teams
Develop specific measurement criteria Assessment against innovation objectives Innovation Success measure ABC Rating details objective Create new markets Offers significant improvement to partner offering - can not be replicated by Embed new technology in A with partner OEM or distributor offering that . competitor Enhances provides enhanced customer B customer offering, possible partner can find alternate supplier Limited additional value to customer, can be replaced easily value C Improve product Provides significant new level A Creates significant perfromance advanatge over existing offering and over performance of perfromance or functionality . competition Enhances B current product perfromance to create competitive advantage C Provides marginal improvement perfromance that competitors may be able to replicate Reduce product Reduces product costs or other A Signifcant cost reduction - creates compelling value proposition for new customers costs cost associated with product . Create savings to current customers that enhances competitive position adoption or use B Provides marginal improvement in costs that may be replicated by competitors C Enhance brand Provides enhanced reputation A Builds on and enhances existing brand reputation, such that new customers and brand . interested Reinforces B decision of existing customers to work with you C Provides small level of positive impact in the marketplace or with other stakeholders Improve supply chain Improves desirability of working A Creates a compelling reason for potential customers to switch to your product with your company be reducing . offering Provides improved costs, improving speed or B overall performance that encourages existing customers to collabortate enhancing options . Builds small improvement in supply chain perfromance that has marginal effect C Increase acquisition Make your business more A Develop business partnerships that multiply performance potential and enhance value attractive to a potential . reputation Attract key acquirer (or partner) B . customers that make your business more valuable for its marketshare C Create new revenue sources that marginally enhance bottom line profitability
Evaluate innovative ideas Idea Evaluation Benefit Timescale Resources Measurable Strategic Financial Other Ref Source Idea Details Ranking required Outcome outcome outcome outcome
Choice considerations Impact Resources Timescale Messaging and culture Processes and decision making Risk
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