Generating Better Business Ideas

Some of the best business ideas originate from countercultural roots, according to the Booz & Co. article “The LifeCycle of Great Business Ideas.” But many business leaders struggle with how to weed out the non-effective ideas and find the few gems. Understanding the business idea lifecycle, learning how to identify the best ideas and understanding trends of the future can help business leaders navigate this process.

Lifecycle of Management Ideas

When evaluating the sustainability of lifecycle management ideas, it’s important to evaluate the ideas in the context of the company. Performance is more relative than absolute. For this reason, the success of business ideas can’t be replicated in every company. If ideas can be replicated, the competitive advantage is lost.

The Role of the Business Leader

Managers with revolutionary business ideas usually have a different concept about authority and have a unique management style. These managers are dedicated to making the organization much different from when they started.

For example, P.V. Kannan, CEO and Co-Founder of 24/7 Customer, a company that focuses on outsourcing, developed a company that managed email (before companies routinely used email communication). He ran into a lot of resistance when marketing the idea to business owners. However, companies use email routinely today, which makes Kannan a revolutionary leader (although the idea doesn’t provide a competitive edge any longer). Kannan also launched a call center in India and received a lot of push back. The call center currently has over 7,000 employees and is a huge success.

Some business leaders aren’t confident there are many new business ideas in the marketplace. They believe that most leaders are taking existing ideas and tweaking them to improve success. Business ideas often go through cycles. What’s successful today may be obsolete several years down the road and then make a come back in 20-years.

Recognizing Good Management Ideas

Even the brightest leaders get confused about drivers and results. Management should invest time ensuring that data is independent and reliable. When testing the success of an idea, make sure the independent variables are truly independent and aren’t influenced by outside factors. If you don’t follow this rule, companies don’t have an accurate picture of what is driving the results.

For example, Kannan was asked by a large client to develop two new customer service measures. Customer service representatives were now required to end the call by asking if there’s anything else needed and saying “have a nice day.” However, by measuring the impact of these changes, Kannan found the new changes didn’t make a positive impact. In fact, customers were annoyed by representatives prolonging the conversation and wanted to get off the phone quickly.

Generating Larger Pools of Ideas

When coming up with good ideas, it should be generated from a large pool of ideas. This way, management can throw out the bad ideas, and hone in on the most promising strategies. Employees developing the pool of ideas should come from a variety of business units. When everyone in the room comes from the same place, the organization may miss out on a truly great idea. Conformity in this process will only lead to short-term results. More diversity provides more opportunities for long-term results.

Another challenge in implementing good ideas is taking the ideas from concept to implementation. As management teams go through changes, ideas often get lost in the mix and don’t see the light of day. Streamlining the process for rolling out new ideas will ensure the strategies aren’t sabotaged by unnecessary roadblocks.

Rolling out revolutionary ideas can seem risky. However, having good research to support the new ideas allows leaders to make educated guesses when the outcome is risky. Taking calculated risks provides an opportunity to win market share and boost long-term results. When planning new ideas, management should think outside the “boom and bust” cycles and build capabilities that have the potential to provide a competitive advantage for years to come.

The Future of Management Practices and Thinking

Generating ideas to create long-term success will require a higher degree of attention paid to daily events. Managing daily activities more efficiently will continue to drive better performance and revenue. Management need to change practices to become more accountable for results. Companies also need to develop new ideas that will keep pace with the changing marketplace. Executives of the future will need to focus on ideas for generating better data and improving the accuracy of decisions.

Resource:
Bridget Finn. “The Life Cycle of Great Business Ideas” Booz & Co, September 2008.


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Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy”, “Selling Your Business the Easy Way”, “Enhancing Your Business Value…The Climb to the Top” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or click here to email Mark.