From Winning to Crazy: How to Assess Your Company's Ideas

The review of Kaihan Krippendorff's strategy framework continues with a look at how to evaluate potential strategies to isolate those with the highest potential.

"What the ancients called a clever fighter is one who not only wins but excels in winning with ease."
—Sun Tzu, The Art of War

Last week I wrote about business icon Elon Musk and related his success to my IDEAS strategy development framework. By using Musk as an example, I shared the first three components of my approach to creating strategic advantages—Idealize, Diagnose, and Explore. Today I want to delve into the first step of the next piece of the process—A is for Assess.

A key difference between innovative companies and less innovative ones is defined by what they decide to do with seemingly improbable ideas. It makes sense to focus your attention only on the ideas that are feasible and, indeed, this is what most companies do. But more innovative companies keep "crazy" ideas on the table. They invest time exploring whether these ideas may become feasible.

To avoid your team's tendency to discard ideas that seem initially "crazy," it helps to break down your process of choosing from the ideas you generated during the "Exploration" phase into two steps, carefully managing each to give truly innovative solutions a chance.

Assess

Since you do not have time to test all of your ideas with rigorous analysis, you must first conduct an initial assessment to decide which are worth the effort. Many great ideas die at this early phase, because, upon initial assessment, the team rules them out.

Why did it take HP decades to adopt a version of Dell's "go direct" model? Why did it take American Airlines, Delta, and other traditional airlines 30 years to mount a meaningful counter to Southwest's budget airline model?

Great companies fail to adopt great ideas because, initially at least, they fail to recognize an innovative idea as holding strategic value. They are not even willing to invest the time to measure the idea's risks and reward potential.

To help your group avoid its natural tendency to rule out ideas that initially appear "crazy," it helps to assess your ideas across two unrelated dimensions. I call these the "path" and the "ease." The goal is to find a way to win with the least amount of effort and find the path of greatest ease.

The Path is defined by the impact the idea would have on achieving your goals. If you had a magic wand with which you could achieve every idea you conceived, which ones would prove to be the most impactful and profitable? Judge those ideas using a scale of high, medium, and low to the impact they can have on your organization's path.

Then assess the Ease with which you could realize each idea. Consider how little it will cost, how quickly it can be implemented, if your organization has the capabilities or knowledge to do so, and how complex execution will be. Again judge the achievability of each idea as high (low cost, quickly implemented, and leverages our capabilities), medium, or low.

This exercise will result in four types of ideas:

"Winning moves"—high impact (or "path") and high "ease" ideas that you should probably begin acting on immediately.

"Tactics"—ideas that are easy to execute, but that will not significantly improve your situation. You may want to execute these, but do not prioritize them as strategic.

"Time wasters"—low impact and difficult-to-achieve ideas that are probably wasting resources. We often find that through this exercise companies identify many initiatives that are time-wasters. Remove these from your agenda to focus on higher-return efforts.

"Crazy"—these are ideas that appear difficult to achieve but that could lead to significant strides to you advancing along the path. Innovative companies tend to keep these ideas alive. They continue to discuss such ideas, looking for ways to improve their achievability. Most companies, however, have no room for such ideas and risk being surprised later, but the creative competitor finds a way to make the idea work.

By jointly classifying each idea into these four quadrants, you and your team have to consider every idea. You remove completely a company's tendency to kill off ideas by refusing to consider them. To complete the process, remove "time wasters" and "tactics" from discussion, and focus your time discussing how you can turn "crazy" ideas into "winning moves." The magic is in the "crazy ideas." These are ideas with true innovative potential.

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  • Mark Bures

    "Great companies fail to adopt great ideas because, initially at least, they fail to recognize an innovative idea as holding strategic value."

    Because innovation threatens to change the basis for value creation, it threatens the careers of those execs who have struggled to the top based on the current paradigm. If you want a big company to innovate, you have recognize that lots of people have a big vested interest in the status quo, and may be willing to threaten innovation that could change that, even if it means that they simply hold on to their job as the company suffers. So you have to either protect that source of innovation or find a way for the holders of the status quo to benefit from it, too.