Prioritizing new business model ideas is critical yet challenging. Companies risk spreading resources too thin without a structured approach. Implementing evaluation frameworks, scenario planning, and involving diverse stakeholders ensures focus on ideas with the highest potential for long-term success.
Once a company has identified potential value pools and generated a variety of ideas for new business models, the next critical challenge is prioritizing these ideas. Prioritization is essential to ensure that resources are allocated effectively, but it can be particularly difficult when multiple promising ideas compete for attention and investment. Without a clear and structured approach to prioritization, companies risk spreading themselves too thin, pursuing too many initiatives at once, or focusing on ideas that do not align well with their strategic goals.
For instance, a global consumer goods company might identify several new product ideas based on emerging consumer trends, such as sustainability, convenience, and health. Each of these ideas could have significant potential, but the company has limited resources and needs to decide which idea(s) to develop first. If the prioritization process is not systematic, the company might end up investing in projects that are less aligned with its core competencies or market strengths, ultimately leading to suboptimal outcomes.
Recommended Approach: To tackle the challenge of prioritizing ideas, companies should implement a robust evaluation framework that allows them to assess each idea against a set of predefined criteria. McKinsey suggests using a scoring system that evaluates ideas based on factors such as strategic alignment, potential return on investment (ROI), feasibility, and risk​(TSI). This approach enables companies to compare different ideas on a like-for-like basis and make informed decisions about where to focus their efforts.
Another key recommendation from Boston Consulting Group (BCG) is to engage in scenario planning. This involves exploring different future scenarios and assessing how each idea might perform under various conditions. By considering factors such as market shifts, regulatory changes, and technological advancements, companies can better understand which ideas are most likely to succeed in different future contexts. For example, a technology company might prioritize an idea that is highly adaptable to different regulatory environments, especially if there is uncertainty about future regulations in its industry​(Deloitte United States).
Deloitte also highlights the importance of involving diverse stakeholders in the prioritization process. By bringing together cross-functional teams—including representatives from finance, marketing, operations, and R&D—companies can ensure that all relevant perspectives are considered. This collaborative approach helps to identify potential synergies between ideas and ensures that the prioritization process is aligned with the company’s overall strategic objectives​(Deloitte United States).
Moreover, The Strategy Institute advises adopting an iterative approach to prioritization. Rather than making a one-time decision, companies should regularly revisit their prioritization decisions as new information becomes available or as conditions change. This allows for greater flexibility and responsiveness, ensuring that the company can pivot quickly if an idea that was initially deprioritized becomes more attractive later on​(TSI).
An example of successful prioritization can be seen in the automotive industry, where companies like Toyota have implemented rigorous prioritization processes to decide which innovations to pursue. By focusing on ideas that align with their strategic goals of sustainability and technological leadership, Toyota has been able to develop successful initiatives like hybrid and hydrogen-powered vehicles, which have reinforced its position as an industry leader.
In conclusion, prioritizing ideas is a critical but challenging step in developing new business models. By implementing a structured evaluation framework, engaging in scenario planning, involving diverse stakeholders, and adopting an iterative approach, companies can ensure that they are focusing their resources on the ideas with the greatest potential to drive long-term success.
Wraping up
Developing new business models is a complex process that requires strategic thinking, clear governance, and the ability to adapt to market changes. By proactively addressing each challenge and exploring the recommended avenues, companies can increase their chances of success. Don’t hesitate to reach out to our team to discuss how we can help you in your journey
