You can only present an idea for the first time, once! So when you have the chance to present it to your board, be aware of the fact that a new product idea is not only ‘a creative product’ but also must comply to all the regular business criteria of your organisation too. Does it have (extra) turnover potential? Does it have profit potential? Does it fit into the company’s strategy? And of course, the ‘Bob the builder’ question: Can we make it? These questions must all be answered, as far as possible, during the ideation phase of the innovation process. A common way, in management practice is the business case, where I then choose a mini variant, which complies with all uncertainties in the earliest phase of the innovation pipeline: the mini new business case.
The innovative product or service concept plays the leading role in the mini new business case, of course. The purpose of this case is to substantiate, in a businesslike and convincing manner, to what degree and for what reason the product concept can meet the set criteria.
A good mini new business case consists of six elements:
1. The customer friction (1 slide).
- The customer situation
- The customer need
- The customer friction
2. Our new product concept (1 slide).
- The customer target group (qualitative and quantitative)
- The marketing mix of the new product, service or business model
- New for…. (the world, the market, our company)
3. This makes the concept unique (1 slide).
- Buying arguments for the customer
- Current solutions and competitors.
- Our positioning.
4. It will be feasible (1 slide).
- We are able to develop it.
- We are able to produce it.
- The development process.
5. What’s in it for us (1 slide).
- The number of customers (in year three).
- The estimated turnover (in year three).
- The estimated profits (in year three).
6. Why now? (1 slide).
- Why develop it now.
- If we don’t do it, then….
7. Decision (1 slide).
- Why further.
- The follow-up team and process.
Two Practical tips
Tip 1. Don’t count every penny in calculating the turnover, cost price and profit margin. Because you can count on only one thing at this early stage: your calculation will be wrong. You just need to control the expectations from line management. In the first few years following the launch, will this product generate an annual turnover of € 100,000, € 5 million, € 25 million or € 100 million? Make a clear choice. And try to substantiate as to why one of the above options will be the likely outcome.
Tip 2. Make use of the specific expertise of all the participants in your innovation team and others from within the organisation as much as you can.
I wish you lot’s of success drafting mini new business cases in practice. The fuzzy front end of innovation confronts you with a lot of questions. In my new book ‘Creating innovative Products and Services’ I try to solve them with the FORTH innovation method. If you’d like more tips, formats and checklists you can download thirteen free checklists of the FORTH innovation method here. Do you have other personal tips for drafting mini new business cases? Please add them!
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Gijs van Wulfen leads ideation processes and is the founder of the FORTH innovation method. He is the author of Creating Innovative Products & Services, published by Gower.