What makes an idea a good investment?
There are many ways to craft a good idea. It can solve a problem, lower costs, enhance prestige, or add value in a myriad of different ways. We can easily sit in a room designing “good ideas” all day … but there is no guarantee these “good ideas” will also be “good investments” for the organization.
One of the four requirements of innovation is that it “pays its way.” Ideas that are good investments contribute to the organization’s success. Ideas become a good investment when they find an energized market and excel there, embraced by customers and beating out the sharp elbowed competitors.
Customer and competitors decide whether an idea is a good investment. This means there are lots of “good ideas” that are bad investments. Success is entirely contextual.
Current thinking divides the market place based on the kinds of customer needs that are being served. It highlights a winning market based on prestige and product quality, and an equally viable (but very different) market based on convenience and cost. There are also danger areas, the Mush Middle of stagnation and of below the bar mire of Obsolescence which are surprisingly easy to slip into.
Understanding these markets, their rules and their opportunities, can help a Business Innovation Architect take the step from “Good Idea” to “Good Investment”.
Select a market type and understand its rules. Then build your innovation to reach that destination.
- Fidelity – Convenience Tradeoff: Strategy highlighting winning and losing market destinations
- High Fidelity Market: One of the two “winning” market destinations. High quality premium value.
- High Convenience Market: The other “winning” markets. Low cost/simple/high availability.
- Mushy Middle Market: So-so quality and average cost. A no man’s land of product stagnation.
- Below The Bar Market: Not good enough to play at any price. Obsolescence and substandard quality.
- Continually Rising Bar: The ongoing force that redefines market positions. Staying still is deadly.
A Good Read
Multiple authors make this point. My favorite is “Trade Off – Why some things catch on, and other don’t” by Kevin Maney. Xxxx in “Treasure Hunt” demands respect for the convenience access with many examples from the retail space. Advocating for the premium retail experience is xxxx in xxxx.
- Do I know what market I’m in?
- Do I know what market I should be in?
- Does my innovation drive toward an excellent position in a winning market?
- Which markets can I realistically reach?
- How would my innovation change if I changed my Market Destination?