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Idea Evaluation Process & Criteria to Select the Right Business Ideas

Idea Evaluation Process & Criteria to Select the Right Business Ideas

Idea evaluation is crucial for selecting the right business ideas. Standard metrics like ROI and market size work for improving existing products, but innovative ideas require a different approach. The evaluation process should be transparent, helping refine ideas and align them with company objectives. Different types of ideas require different evaluation approaches, and scoring and rating methods should be used. Shortlisting the top 10 ideas makes decision-making easier, and ideas should be validated before implementation through methods like experimentation and focus groups.

Idea Evaluation Process & Criteria to Select the Right Business Ideas

Collecting ideas from your employees can have numerous benefits for your company. The more ideas you collect, the higher your chances of finding the ones that can drive innovation and lead to the development of game-changing products. 

But how do you know which ideas should be implemented, which ones should be tested, and which ones should be discarded right away? How do you evaluate ideas? 

Idea evaluation is a crucial part of idea management process. If done well, it can help you pinpoint the ideas that can ultimately contribute to your company’s success. If done wrong, you risk missing out on growth opportunities and losing resources on implementing ideas destined for failure from the start. 

So, in this article, we’ll shed some light on idea evaluation processes and criteria to help you select the right business ideas. 

What Is Idea Evaluation? 

Idea evaluation is as simple as assessing and analyzing different ideas or initiatives to determine which ones are worth pursuing. It’s simple, but it doesn't mean it's easy.

Several factors need to be considered during the evaluation process, such as how a specific idea should be evaluated (because not all of them can be evaluated using the same approach) or which stage of evaluation it’s at. 

Ideas that aim to improve upon existing products are usually assessed based on standard metrics, like return on investment (ROI) and market size. These metrics provide a solid foundation for understanding the potential impact of an idea within the business’s current operations.

But when it comes to truly innovative ideas - the ones that bring about significant changes instead of minor improvements - it can be challenging to evaluate them with the same metrics.

That’s because these metrics cannot always capture the true potential of groundbreaking ideas. 

flowchart of the innovation process with idea evaluation in focus

Another critical aspect to consider when evaluating ideas is the stage at which the ideas are in the evaluation process. There are two stages of idea evaluation. 

The first stage is when the team comes up with a critical volume of ideas. At this point, we need to evaluate, compare, and rank these ideas to see which ones hold the most potential. 

📌 To ensure ideas at this stage are evaluated as best as possible, we need to have clear processes in place. This is important because it helps us make the decision-making process easier when we present the ideas to the person in charge.

The second stage is when the ideas are presented to the decision-maker. We won’t talk about this, as we’ll focus on the first scenario throughout this article. 

Also read: Goodbye Suggestion Boxes, Hello Digitalization & AI

The Importance of an Idea Evaluation Process

From promoting transparency and fairness to motivating everyone at the company to contribute more ideas, having a solid idea evaluation process has multiple benefits for organizations.

Here are a few.  

It helps you improve ideas and prepare them for implementation

Idea evaluation plays a crucial role in the innovation process by helping to improve and refine ideas and making them ready for implementation. 

It’s rare for ideas to be fully formed at the initial generation stage, particularly when they arise from collaborative efforts such as crowdsourcing, brainstorming, blue-sky thinking, or ideation sessions

So, the evaluation process becomes the critical opportunity to enhance and perfect these ideas.

By taking into consideration company objectives, values, and the realities of the business environment, ideas can be refined to align better with the organization's goals and maximize their potential for success. 

It helps you stay on brand and meet company objectives

Idea evaluation is vital for keeping your brand consistent and meeting company goals. When evaluating ideas, it’s crucial to use metrics that align with what your company is trying to achieve. 

Having these metrics in place helps to keep everyone on board and accountable for achieving the objectives that matter for the company at the given moment. 

Nothing will shut an idea down faster than it not meeting the vision and mission of the organization.

📝 Sometimes an idea might seem good, but it’s not in line with your brand or goes against your core values. In that case, it's best to set it aside and revisit it later.

Then, instead of forgetting about those initially dismissed ideas altogether, keep revisiting and refining them until they reach a stage where they can be implemented.

You never know when the initial idea could turn into a groundbreaking one that can accelerate growth for your company.

Also read: The 10 Best Crowdsourcing Tools on The Market

It helps you keep a transparent ideation process

The idea evaluation process should be as transparent as possible for everyone involved in idea generation

Such transparency creates a friendly atmosphere where people feel encouraged and motivated to share their ideas. They know their ideas will be properly evaluated rather than dismissed without a second thought. 

When your team members and employees are more motivated to contribute their ideas, you’ll naturally end up with more ideas to choose from, which increases the chances of stumbling upon the groundbreaking idea you’ve been searching for. 

How to Evaluate Innovation Ideas 

Not all ideas can be evaluated the same way, using the same process and criteria.

That’s because there are different kinds of ideas. For example, evaluating innovative ideas requires an entirely different process and criteria than evaluating incremental improvement ideas. 

So, evaluating all ideas using the same approach doesn’t do some of these ideas justice. It carries the risk of selecting bad ideas or ones that will present too many challenges when implemented. 

When it comes to evaluating innovative ideas, the evaluation process needs to be approached as a progression. 

You start by shortlisting the ideas that show the biggest potential and then selecting the best ones out of that. Here are the steps you need to go through to select the top 10. 

infographic with an innovation funnel on how to evaluate ideas

Give feedback on ideas you receive

When collecting ideas, be open to providing feedback to the idea generators. This allows people to receive feedback before their ideas are judged. 

This way, you’re also creating an environment that fosters collaboration and transparency. 

When people receive feedback on their ideas, they can act upon those insights and improve their ideas in the future, or even generate more ideas based on received comments.

💡 Plus, leaving feedback on people’s ideas is the first step toward evaluation, although it may not carry the weight of an official assessment.

Pay attention to engagement stats on ideas to select the promising ones 

One effective way to select the ideas that hold the most potential is to pass them through the collective evaluation filter. 

The first step towards evaluating the ideas you receive during the collection stage can be allowing your idea generators to react to the submitted ideas by liking, commenting, or voting.

This way, you can obtain valuable engagement statistics and identify the ideas that generated the highest level of interest and enthusiasm. 

To facilitate this process of collective evaluation and gather relevant engagement stats, you’ll need to use an idea management software, such as Ideanote, to collect your ideas.  

Cluster different types of ideas for evaluation 

As we mentioned before, different types of ideas require different evaluation approaches. 

For instance, ideas aimed at improving existing products or services cannot be evaluated using the same approach as ideas aiming to introduce something completely new or ideas aimed at disruptive innovation. 

This means that companies need to have more than one idea evaluation process. In fact, companies need to have multiple idea evaluation processes adapted to different types of ideas - with varying criteria of evaluation. 

🍀 Luckily, platforms like Ideanote make it easy to set up different evaluation criteria and cluster different types of ideas with the help of automation and AI.

Also read: Idea Meritocracy: The Way to Collective Decision-Making

Score and rate ideas based on idea evaluation criteria

When evaluating ideas, you need both scoring and rating methods. Scoring means assigning a numerical value - a score -  to an idea based on predetermined criteria, while rating means assigning a subjective quality to an idea, such as “practical” or “cost-effective.” 

By incorporating both scoring and rating, you can strike a balance between the objective mathematical aspect and the subjective human aspect of idea evaluation. This is important because truly innovative ideas often challenge conventional logic, requiring human judgment to recognize their brilliance.

This is why evaluation ratings aren’t always based on hard facts and are often based on intuitive guesses. In this case, the metrics you have chosen for the evaluation process may not even be relevant.

💡 To evaluate ideas properly, you must remain open to relying more on intuitive human judgment rather than hard numbers.

Shortlist 10 ideas for review

Start by shortlisting the best ideas your idea generators and yourself have carefully evaluated. Once you’ve prepared a list of the top 10 ideas, present them to your business leaders. 

Ultimately, the decision rests with them, but having a set of 10 best ideas makes it much easier for them to make a choice compared to sifting through an unfiltered list of thousands of raw ideas. 

📌 By narrowing the selection down, you're making the decision-making process more manageable.

Validate your ideas before implementing them

The more complex your ideas, the more they need to be validated before being implemented. These ideas need to be tested with customers, so you can gather data and make informed decisions about whether or not to implement them. 

​​When it comes to testing your assumptions, there are plenty of effective methods, such as experimentation and ethnographic studies. You can also consider organizing focus groups and conducting A/B testing. 

This validation phase may lead to multiple iterations of your idea, but through continuous testing, you’ll gain insights into which features are essential and which are not.

Only once an idea has been validated, it can be confidently implemented.

Ready to manage ideas like a pro?

Do you think your company could be managing employees' ideas better?

If you're looking for an all-in-one solution for your innovation, look no further than Ideanote! With our flexible platform you can do everything from collecting ideas, engaging your crowd and analyzing your innovation performance.

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