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As experts in our business, most of us think we will know a good idea or opportunity when we see it. That might be true, but it leaves the business entirely in the trust of that gut reaction, which—as has been proven historically across industries—can lead to poor decisions and the loss of a high-potential idea to another company. Intuition is valuable; rely on it, but not exclusively. Develop criteria for idea or opportunity assessment that can guide you in making more effective decisions. Here are four areas you may find helpful:
1. The people behind the idea. Consider the background, experiences, and competencies of the management team, employees, or advisors who propose the idea. A great idea with high market potential may fail if the people behind it are not fully and passionately committed to it. An idea champion, with the skills to integrate the idea into the business, is a prerequisite for success.
2. The resources available to the business. Evaluate the financial resources and human capital, including assistance by people with expertise in the field. What relationships can be leveraged to support the idea with resources needed to carry it out. In today’s business climate, how likely is it that you can actually acquire additional resources? Can you reallocate what you have to pursue new business opportunities to ensure you will survive?
3. Knowledge and information. Dig beyond what you already know about the business, the product or service, and your current clients. What industry and market research can inform you about the new idea? What don’t you know, and how can you obtain this information? Avoid idea infatuation. Assess the idea objectively, especially regarding its flaws.
4. Revenue generation. Determine how much revenue the idea will bring in. When? From whom? How tight are your predictions, and what are the contingencies you can prepare for if your projections are incorrect?
These questions form the basis of idea/opportunity evaluation. Your answers help you to move forward and create strategies that will support the viable business model.
Lisa Gundry, PhD
Professor of Management
Director, Center for Creativity and Innovation
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