There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.
What happened to the iterative process?
What happened to going out and talking to your customers or potential market to figure out what they wanted?
What happened to doing the work to test whether an idea had merit or could be adapted to succeed?
In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.
The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!
I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.
Even if you have no idea what I’m talking about I promise it will make sense in a second.
The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.
No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.
You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.
How might your customers respond to you offering a discounted version of your service?
Would they still perceive it as valuable?
What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?
Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.
It came from iterating and evaluating not just rushing some new idea to market.