Great Idea or Dud? How to Tell the Difference

Dear B.B.: It’s not a dumb question at all. Overestimating the potential market for a new product or service, or underestimating how quickly competitors will make it irrelevant, is so common that even a master innovator like Steve Jobs bet on a dud now and then.

“When I talk with organizations, I ask them to define what important innovation looks like to them, meaning what they want it to achieve,” says Patrick Stroh, CEO of consulting firm Mercury Business Advisors. “That sounds like a pretty simple question, but you’d be amazed at how few people can answer it.”

Part of what makes successful innovation so elusive is that people tend to confuse it with creativity. Stroh notes that, as you’ve noticed, “thinking up exciting new ideas is usually the easy part. Taking a step back and deciding what result you really want, and which ideas will get you there, is harder. It takes discipline.” He devised a system for evaluating innovation, and describes it in a new book you may want to check out, Advancing Innovation: Galvanizing, Enabling, and Measuring for Innovation Value.

Stroh says that companies are often led astray by thinking too big, explaining that “tech giants like Apple and Google, who are always looking for the next big breakthrough” have had an outsize influence on the zeitgeist. By contrast, Stroh’s research shows that, for most successful innovators, a series of incremental improvements to the products or services they already offer prove just as profitable as inventing a whole new line of business, and it’s a lot less risky.

So, one way to start narrowing your long list of ideas down to a workable few, he says, is to “focus first on what you can do around your existing business. What’s already in your wheelhouse?” Don’t overlook small, practical tweaks. “You can’t swing for the fences every time,” says Stroh. “You need a portfolio of ideas that includes some singles and doubles, too.”

Then, analyze each idea on your list by asking, first, are customers likely to care? Something that seems exciting to you may not matter to the people you’re hoping will buy it, Stroh notes—“and if it won’t, why would you be willing to spend company resources on it?”

Much of what customers actually want can seem surprisingly basic, as a Fortune poll discovered at the annual Consumer Electronics Show last month. Even with all the futuristic gadgetry on display, attendees at the event said they were most impressed with better smartphone batteries.

Of course, if you believe an idea could appeal to a whole new customer base, then fine, “but define the market,” says Stroh. Then be ready to spell out to higher-ups in your company how you would launch your new product, and to whom—and why its potential makes it worth diverting sales and marketing dollars from your existing business.

Next, think about whether an idea can get enough support in the organization to make it fly. Is it strong enough to withstand internal skepticism? How much of your own time and attention are you willing to devote to making it work? “Would you be willing to set aside other priorities that you’re currently working on, in order to see this through?” Stroh asks. Lots of promising new ideas fall by the wayside simply because no one sticks by them.

Approach each idea on your list with an open mind. “None of these essential questions is meant to disqualify any suggestion before you’ve really considered it,” Stroh says. “The point is to dig until you find the ‘sweet spot,’ where you arrive at innovations that can really add value.”

Talkback: Have you ever tried to decide whether an innovative idea was worth pursuing? How did you do it? Leave a comment below.