Idea evaluation

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When evaluating an idea, an idea is supplemented with assessments, which together form a decision-making template . This is used to enable a decision on what should then happen to the idea. For smaller tasks, the decision simply consists of looking at the alternatives more closely and discarding them , and the decision is called an idea selection . If the ideas are in an innovation process, other alternatives are saved until a later point in time or forwarded to another department .

Both general criteria that apply to most tasks and task-specific criteria are used to evaluate ideas. Depending on the type of decision-making process used, quantitative or qualitative criteria (or both) are used.

Evaluation criteria for ideas

Framework conditions and success criteria

Boundary conditions are the criteria that an idea must meet. That is why they are often called mandatory criteria . For example, an idea could be required to be implemented within a certain period of time or with a certain budget. Ideas that do not meet the boundary conditions are ruled out.

Success criteria or should criteria are the characteristics of an idea that make it valuable. In the case of ideas for a public event, this could be, for example, the number of expected visitors or the attractiveness for the local press. Success criteria can be described in the form The more ... the better . At the end of the evaluation process, the ideas that score best on the Success Criteria have the highest chance of realization.

General and task-specific criteria

There are three categories of general criteria:

  • Attractiveness : What are the arguments in favor of the idea and how strong are they?
  • Feasibility : What is necessary for the realization and can or do we want to make this effort?
  • Disruption potential : Which organizational changes does the idea require and are we ready or able to do so?

For example, questions such as how many visitors can we attract? or how big is the market for it? The feasibility includes questions like how much will it cost? or do we have the necessary resources for this? The area of ​​disruption includes questions such as How do we have to redistribute responsibility in order to realize this idea? or Are we ready to make an exception (to a specific house rule) for this idea?

The task-specific criteria often require in-depth knowledge of the task at hand. For example, evaluating inventive ideas for patent applications includes assessments of the inventive level and degree of novelty. For the evaluation of product ideas , customer benefits of the product and the customer needs that are to be satisfied by it must be known. Such evaluations often require extensive research - they can then no longer be carried out as part of an innovation workshop.

The task-specific criteria also include information that forms the context for the idea. In the case of product ideas, for example, these can be market trends; in the case of ideas for new business areas, the corporate strategy will be an important factor in the evaluation.

Application in the company

Idea evaluation is always necessary when companies are planning innovations . It is therefore a tool for innovation management and is used, for example, in

Involved

Ideally, all areas of the company that are affected by an idea are involved in its evaluation. This means that the assessment is almost always carried out by groups of experts representing different areas.

  • The sales department knows the current situation of customers and their needs.
  • The marketing department knows the trends in the market and the activities of the competition.
  • The development department can make statements about the technical feasibility of a new product.
  • The production can estimate the effort and the costs associated with the manufacture of a new product.
  • The business unit or company management can assess the suitability of ideas for the corporate strategy.

Larger companies often have their own managers for the various types of innovation. In addition to the specialist departments, the responsible innovation, product, idea or new business manager is also involved in the idea evaluation.

The evaluation process

In order to keep the effort for the evaluation as low as possible, it is usually divided into several phases according to the type of stage gate process . At the beginning, boundary conditions are applied in order to quickly remove all ideas that are out of the question from the pool. For the remaining ideas, successively more demanding success criteria are applied in order to gradually identify the most promising ideas.

This principle often means that the early evaluation criteria tend to be qualitative, while the later require quantitative information. For example, one of the first questions to be asked of a product idea is whether there is a customer benefit and whether a target group is known. For a final assessment of the idea, however, estimates for the achievable price and the market size are required. Another consequence of this approach is that idea evaluations in the early phase consist of only a few details that can be queried in an innovation workshop, while at the end they come close to a full-fledged business case , which can take a few weeks to prepare.

Evaluation criteria for product ideas

There are a number of criteria for evaluating ideas for new products or services. Particularly in the final phases of the assessment, very demanding or specific questions can come into play, which can be very time-consuming to answer.

The so-called 7K checklist is suitable for a rough orientation . This contains important evaluation criteria that are relevant in most cases:

  • Customer benefit : Does the product have a benefit for the customer that he will be willing to pay for?
  • Customer potential : How big is the market for the product?
  • Competitive advantages: What advantages does the product have over the competition and are these sufficient for the customer to justify a change, if necessary?
  • Skills : Do we have the necessary skills to deliver the product?
  • Communication : Can we convincingly communicate the advantages of the new offer?
  • Cost : How much will the development, production and marketing of the product cost?
  • Capital : What is the financing requirement for the product?

Idea evaluation problems

The idea evaluation has four difficulties that come into play in many use cases.

Scope for interpretation

Evaluation criteria almost always have room for interpretation. Qualitative criteria are often not measurable ( the market must be sufficiently attractive ) or are very subjective ( the idea must match the company's image. )

Assumptions and estimates

Often, idea evaluations are inevitably based on assumptions or estimates. Examples are the market size for a new service or the continued availability of a certain resource.

Different opinions

Due to the scope for interpretation of the evaluation criteria and deviations in the assumptions and estimates, there may be differences in the results of the individual evaluators. In order to arrive at an overall result, however, these differences must be overcome.

This can be done through a discussion aimed at reaching an agreement. However, this can be very time consuming with no guarantee of success.

In the case of a quantitative assessment, the mean value of the individual judgments can be formed. However, this can cause important information about an idea to be lost.

In moderated workshops, a simple voting process is often preferred, with each participant receiving votes in the form of adhesive dots, which they then distribute to the ideas they prefer. The ideas with the most votes are the winners. This method has the disadvantage that it cannot map different criteria individually.

Aggregation

In order to obtain an overall evaluation, the evaluation results must be aggregated with regard to the individual criteria. Since this is easiest to do with quantitative evaluations, mathematical methods are often preferred.

In the simplest case, the mean value is formed over all criteria. This corresponds to the procedure with school grades, where the grade 1.0 in one subject and the grade 3.0 in another subject together result in the grade 2.0. A prerequisite here is commensurability, namely that evaluations based on different criteria can mutually compensate for one another.

The utility value analysis , which also requires commensurability, is popular with companies, but very complex to carry out . This requirement is often criticized because it is not appropriate for an idea evaluation. This criticism can be formulated as follows: A car with an excellent transmission and a bad engine is not considered mediocre.

Another complex mathematical method is the AHP method , which calculates an eigenvector of a stochastic matrix to determine the evaluation result. Serious concerns have also been raised against this procedure, for example that the subsequent addition of another alternative to the assessment task changes the existing ranking.

literature

Individual evidence

  1. ↑ Innovation laboratory of the University of Magdeburg: The 7K checklist: Checking the chances of success of business ideas , 2014.