Monday Mornings with Madison

Slugs vs. Caterpillars: How to Spot Good Ideas that can Turn into Great Ideas

Word Count: 1,936
Estimated Read Time: 8 min.

John Steinbeck once said, “Ideas are like rabbits.  You find two and learn how to handle them and soon you have a dozen.”  He meant that ideas have a tendency to reproduce.  That may be so.  And, certainly, these days there is no shortage of ideas.  The Internet and social media have made information sharing and collaboration much easier, which provides the fertile ground for new ideas to sprout.  So perhaps in 2020, the challenge isn’t in producing more ideas but rather in finding a way to spot which good ideas have the potential to become great ideas.

In that way, then, ideas are less like rabbits and more like slugs and caterpillars.  At first glance, slugs, and caterpillars might behave similarly… inching along slowly and struggling to survive in today’s predatory and fast-paced world.  However, we know that caterpillars aren’t like slugs.  Caterpillars may start out crawling along but, given the right environment and care, are able to transform into spectacular butterflies that soar.   Slugs, however, will never take off.  If ideas are like slugs and caterpillars, the challenge for businesses then is to spot the ones that have the potential to go from crawling to soaring.   However, that is easier said than done.

When it comes to spotting ideas with the potential to go from good to great, business leaders often fail.  According to Jeffrey Baumgartner, author of The Way of the Innovation Master and publisher of Report 103 — a popular newsletter on creativity and innovation in business, “Organizations often make mistakes in their idea review processes that result in rejecting the most potentially innovative ideas in favor of less innovative ones.”  At many companies, the idea review process boils down to a manager or two listening to an idea and then deciding if the idea will work for the company, or reviewing a basket of ideas and picking which appears on the surface to be best suited for the company.  This is especially true in small organizations run by one or two owners, or a couple of top-level managers.  But that “shoot-from-the-hip” approach to idea assessment is ineffective.  That is why businesses have often been created by the former employees of companies where the leadership refused to consider their proposed ideas.  After being ignored, those employees went on to start competing businesses.  Therefore, a failure to vet ideas carefully not only increases turnover, but leaves good ideas on the table (which is worse even than leaving money on the table) and establishes fertile space for competitors to incubate and take off.  For those reasons, it behooves business leaders to focus on developing an assessment process effective at spotting ideas most likely to become successful and achieve organizational innovation.

Assessing if an Idea Can Go from Good to Great

It helps for a company to have a well thought out method for assessing ideas.  A structured evaluation process helps the company to:

  • Identify the ideas that are most likely to succeed as innovations for the business;
  • Make it possible to review a large number of ideas in an efficient manner;
  • Ensure that complex ideas are reviewed by people who have the appropriate expertise to understand what is needed to implement the idea;
  • Identify what could go wrong with the idea;
  • Enable a mid-level manager to champion the idea to senior management, stakeholders, and financial officers who may need to grant budgetary approval of the idea; and
  • Improve the idea by identifying potential implementation problems and then finding suitable actions to overcome those problems.

It is the last step in the process, however, that is often lost in formal idea review procedures.

Idea Evaluation Phase

Step 1: Pass-Fail Evaluation

When there are a large number of ideas to review, a simple pass-fail evaluation helps cull the idea pool to a manageable number.  Start by establishing simple criteria for determining whether an idea will go on to a more in-depth evaluation. The criteria might be related to budget, time-frames, fit with company culture, practical viability or audience connection. Whatever the criteria, these  benchmarks should be shared with everyone involved.  This way, if someone asks later what happened with a proposed idea, there are specific reasons to explain why it might not have passed the initial vetting process. Knowing an idea wasn’t implemented for legitimate reasons is important for morale.  However, it is equally important to be careful not to be too quick to reject ideas which, with modification, might meet the pass-fail criteria.  For example, a creative idea that does not meet the budget or timeframe criteria might still pass the initial pass-fail test if it may be possible to identify a means of implementing the idea at lower cost or in a faster timeframe.

If there are few ideas, the pass-fail evaluation is often not necessary. It is easier to move on to the more sophisticated evaluation matrix.

Step 2:  Evaluation Matrix

The evaluation matrix is a simple chart in which experts compare an idea against a more robust set of criteria.  Five to ten criteria is usually adequate without being too cumbersome.  The evaluator ranks how well the idea meets each variable using a points system, such as 1-10.  Evaluators can also provide comments elaborating on ratings and suggest how the idea can be improved to fix weaknesses.  The scores can then be added to determine an overall score.

Assuming several ideas, focusing on a particular problem or business issue, are being evaluated at the same time, these scores can be compared and the highest scoring ideas can be selected for further review. However, it is important to look at the evaluators’ comments. An idea with a low score might be vastly improved following minor changes.

The evaluation matrix is seen as an excellent approach for idea review because it is simple to set up, requires a minimum amount of time for review, enables comparative idea review and makes it easy to identify the most promising ideas in a large collection of ideas. That said, the evaluation matrix in itself is not usually sufficient for making a final decision on a costly idea. However, it can help in the selection of ideas for more detailed review.  This makes the review process more efficient.


Alternate Step 2:  SWOT Analysis

An analysis of Strengths, Weaknesses, Opportunities and Threats (SWOT) is a business process that can also be used as an evaluation matrix.  A company’s leadership indicates potential strengths, weaknesses, opportunities and threats of an idea.  By looking at an idea from different perspectives, there is a more well-rounded assessment of an idea.  If each element added to the chart is scored with points, then it becomes easier to see how the benefits vs. flaws measure up.  This SWOT metric can be handy for comparing a complex idea.  What is particular useful is for members of the team of evaluators to suggest methods to overcome weaknesses and threats, thereby beginning the process of determining which idea can go from good to great.

Idea Development Phase

Once an idea passes initial screening, it is ready to move to either implementation or more detailed testing, depending on the complexity of the idea, the size of the organization and how easily it can be implemented.  Once ideas are vetted and several good ideas are identified, the next stage should be idea development.  This could include business case preparation, prototype development or proof of concept, project management initiation or test marketing.

Squashing the Caterpillars

Of course, how a company develops an idea depends on the nature of the idea, the nature of the firm and existing process for implementing an idea.  But, regardless of the type of company, there are some common pitfalls that companies should avoid when trying to spot the good ideas that can transform into great ones.

a. Criticism versus Improvement

Business analysts and accountants tend to be overly critical of new ideas probably because they are tasked with managing expenditures and minimizing risk.  Generally, creative ideas tend to be risky and usually involve cost.  As a result, these types of evaluators tend to stress weaknesses and threats. While a company should not implement ideas that will likely prove to be costly failures, many weaknesses can be improved or even eliminated with the right tools.  An idea that would be very expensive to implement could succeed at far lower cost with minor changes.  Or it can be tried on a smaller scale, perhaps at a single location or with a single region or office, and as a proof of concept.  And by improving an idea’s weaknesses, that costly failure could be converted into a profitable success.

Case in point.  The idea for Federal Express was floated as a concept for a business course.  In 1965, writing a paper for an economics course at Yale University, Fred Smith proposed a new kind of freight service. He suggested that piggy-backing air freight onto passenger service created an opportunity for a company that would be totally dedicated to small, time-sensitive air freight.  That kind of company would be free from the shifting schedules of different airplanes that troubled the existing freight forwarders.  Smith’s professor pointed out the futility of the idea, given the regulatory climate and the lack of cooperation by huge airlines.  Smith got a “C” for his efforts.  In 2018, Federal Express – the brainchild of Fred Smith – generated $65 Billion in revenue and net over $4 Billion.  That was an idea that, on paper, had a great many weaknesses and threats.  However, a proof of concept was created and the fledgling startup went on to create a logistics industry where none had existed before.  The lesson is that it is fine to find the weaknesses in order to improve upon them, but criticism of new ideas must be balanced against the potential and brilliance it brings.  The key then is to look for how a good idea can be turned into a great one.

b.  Evaluation Teams

That brings us to the second pitfall and how to avoid it.  Evaluations should be performed by a team of people with relevant expertise. Ideally, that expertise should be diverse. For instance, if a company is evaluating new online customer support ideas, experts might include sales staff, marketing people, IT staff, and one or more people representatives from the customer service department that will be dealing with the customers affected by any ideas implemented.  That ensures a variety of perspectives are considered, and that ideas for overcoming problems can be tapped.

c.  Evaluator Agendas and Prejudices

A particular benefit to having teams review ideas is that while individual evaluators are prejudiced, a varied team is likely to reduce or eliminate such prejudices.  Ie A programmer trained in an older technology might not give a high evaluation score to an idea that uses a new programming language with which he is unfamiliar or seems trendy. The success of that idea might also make him look obsolete.  Or jealousy might cause a person to resist a creative idea that would elevate a coworker.  By the same token, creative types might be too eager to embrace every creative idea and score new ones too high and a less creative idea might be scored lower, even if the less creative option is more feasible and cost effective.  Thus, it is important to have a team that can balance those tendencies.

By vetting all new ideas in a way that looks to spot which good ones can be transformed into great ones, a company can sort out the slugs and nurture only the caterpillars so that they can become butterflies that soar and succeed.

Quote of the Week

“It takes a lot of hard work to make something simple, to truly understand the underlying challenges and come up with elegant solutions.” Steve Jobs


© 2019, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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