The Five Questions
Score your answers to each of the first three questions from 0 to 5. A 0 means that the idea being considered doesn’t move the needle on this question (or, in other words, is a no-go for the time being), while a 5 is a resounding yes. You should ask these five questions for each of the ideas being considered. You’re looking for both an initial yes/no response, and an eventual score for the ideas that get the initial yes.
- Does this idea improve the customer’s experience and/or expectation?
Does this idea solve a problem? Will it give your customer something they need and want? Will it solve their problems in a unique and different way?
- Does this idea fundamentally change how you’re positioned competitively in the market?
Will this idea put you ahead of your competition? Will it disrupt the market’s idea about your organization?
- Does this idea radically change the economic structure of the industry?
Will this idea disrupt the way value is created and monetized so that your organization benefits?
If you can’t answer yes to one or more of these first three questions, then you’re doing the same thing as everyone else, so why bother.
The last two questions are about whether the idea is a strategic fit for your organization. To have a killer idea, you must be able to answer yes to both of them. Score them the same way you did for the first three.
- Do you have a contribution to make?
Do you have the experience and/or expertise to bring to the problem?
- Will this idea generate sufficient margin?
Are the potential returns enough to justify the cost of pursuing the idea?
Just because you can do something, it doesn’t mean you should. When I ask you if you can make a contribution, I’m asking if your organization brings some capability to the idea. HP has the R&D budget to explore just about any avenue of innovation, but we’re not going to work on an idea that is too far outside of our industry or our core strengths. There needs to be some foundation to leverage from.
Finally, you want to figure out if this idea is lucrative enough to be worth pursuing. This is often a matter of gut instinct, since for a truly great idea, you won’t have a precedent to determine its value. Think about it. If an idea is solid enough to get a yes on the first three questions, it should make money. In most organizations, return on investment (ROI) is the first filter that an idea has to pass through if it’s ever going to get funded. Setting ROI as your primary filter means that you will discard a ton of potentially great ideas, because there is no way to prove (to the satisfaction of the CFO and CEO) in advance exactly what the return will be. The determination of how much it will return will be the output of the stage-gate funding process. Don’t get too hung up on how much but more on its potential.
Keep the top ideas to use now, but don’t discard the rest. Instead, hold on to the master list of all ideas, and revisit in a year or so, when the timing might be better for them. I don’t specify how many ideas we should end with because it varies depending on what the objective is for any given group. And always remember, just because an idea comes out with a top score, it doesn’t mean it’s the best idea to pitch. Once everyone is finished totaling their scores for each idea you can gather the totals for all the scores and determine which ones are the best to explore further.