How to prioritize business ideas

It is critical for firms to rank their ideas to effectively allocate resources and focus on the most promising projects or ideas. Effective prioritization leads to an increased rate of innovation, improved decision-making, and a greater return on investment. Prioritizing ideas also helps with alignment with the company’s overall strategy and goals. Without a structured approach to prioritizing ideas, companies end up spreading their resources too thin, working on multiple projects at once without a clear focus, which leads to wasted resources and ultimately, a lack of progress in achieving goals.

An innovation prioritization matrix is a tool used to evaluate and prioritize potential innovation projects or ideas based on their potential impact and feasibility. The matrix typically includes two axes, with one axis representing the potential impact of the project and the other axis representing the feasibility of the project. Projects are plotted on the matrix based on their perceived impact and feasibility and are then prioritized based on their position within the matrix. This can help organizations to focus their resources on the most promising projects and ideas (and those most aligned with the business strategy and priorities).

There are several steps involved in creating an innovation prioritization matrix:

• Identify potential innovation projects or ideas. We can do this through brainstorming sessions, customer feedback, or other methods of gathering input from stakeholders.

• Evaluate each project or idea based on its potential impact and feasibility. We can measure impact in terms of things like revenue potential, cost savings, strategic alignment or customer satisfaction. Feasibility can be measured in terms of things like technical feasibility, resources required, or time to market.

• Plot each project or idea on the matrix based on its impact and feasibility. Typically, high-impact and high-feasibility projects will be placed in the upper right quadrant of the matrix, showing that they are the most promising.

• Prioritize the projects or ideas based on their position within the matrix. This can be done by assigning a numerical value to each quadrant, or by using other methods of prioritization.

• Review the matrix periodically, re-evaluating the projects or ideas and adjusting the prioritization as needed.

• Implement the prioritized projects or ideas by allocating resources and developing a plan for execution.

It’s important to note that this is just one way to create a prioritization matrix: different organizations can have different variations of it. The steps and details may vary according to the organization’s goals, processes, and resources.

The development of an innovation prioritization matrix typically involves a cross-functional team of individuals from various departments within an organization. This team may include representatives from:

• Research and Development: These individuals will have knowledge of the technical feasibility of potential projects or ideas.

• Marketing and Sales: These individuals will have knowledge of customer needs and market trends, and will evaluate the potential impact of potential projects or ideas.

• Finance and Accounting: These individuals will have knowledge of the financial feasibility and impact of potential projects or ideas.

• Executive Management: This group will have the overall strategic perspective and will provide oversight and guidance for the development of the matrix.

• Innovation or strategy team: This team can act as a facilitator to gather all the inputs, develop and prioritize the matrix, and align it with the organization’s overall strategy.

It’s important to note that the composition of the team will vary depending on the organization and the specific projects or ideas being evaluated. It’s important to ensure that they represent all relevant perspectives and expertise.

There are several key skills that are needed when developing an innovation prioritization matrix:

• Analytical skills: The ability to evaluate the potential impact and feasibility of potential projects or ideas, and to plot them on the matrix.

• Strategic thinking: The ability to understand the organization’s overall strategy and goals, and to align potential projects or ideas with those goals.

• Communication skills: The ability to effectively communicate the matrix and the prioritization of projects or ideas to stakeholders within the organization.

• Project management skills: The ability to manage the development of the matrix, including gathering inputs, prioritizing projects or ideas, and allocating resources.

• Facilitation skills: The ability to lead a cross-functional team through developing the matrix, and to ensure that all relevant perspectives and expertise are represented.

• Technical skills: Depending on the projects or ideas being evaluated, it may be important to have individuals on the team with specific technical expertise.

• Problem-solving skills: The ability to identify and evaluate potential solutions to problems and to prioritize the best solutions based on their potential impact and feasibility.

• Creativity: The ability to generate new ideas and to be creative when evaluating potential projects or ideas.

An innovation prioritization matrix is a valuable tool for organizations to evaluate and prioritize projects or ideas based on potential impact and feasibility. This structured approach helps organizations focus resources on the most promising projects, increasing the rate of innovation and return on investment. The approach also aligns potential projects or ideas with the organization’s overall strategy and goals, ensures that all relevant perspectives and expertise are represented and we can use it as a communication tool with stakeholders. It also helps to manage risks by identifying and prioritizing the most workable and impactful projects. It is a powerful tool for resource allocation and project management, which ultimately leads to a greater return on investment.