Rules of thumb often have unintended consequences.
Several large organizations I’ve worked for instituted a $20 million in revenue hurdle. (The $ figure was sometimes higher, sometimes lower — but always a significant percentage of existing revenue.)
The thought process is pretty straight forward: Why bother with an idea if it can’t make a meaningful contribution to overall revenue. In one fell swoop upper management gets to weed out ‘insignificant’ ideas and focus their attention on ‘ideas that matter’ and their golf game.
Problem is – It is very difficult to get a consensus on the revenue potential of a game changer.
Net Result? – The revenue hurdle takes on a life of its own. It becomes shorthand at every level of the organization. Ideas that masquerade as innovation (but are actually just obvious, competitively predictable business moves) float to the top. Game changers and radical innovation get pushed aside by all but a few. A wall is built, doorways bricked over and windows blackened. Great ideas stop flowing because , “Everyone knows the boss won’t like that, it’s only a million dollar idea.”
So what? The big ideas have been funded, that’s the idea right? Even if the ‘big’ ideas in this situation deserve funding, you have cut off discussion of innovations that might be more deserving strategically and even financially. You are also probably spending all your resources based on the the same predictable ideas that your competitors have also identified.
Some ideas to break through bricked up doorways -
- Any idea with a believer is worth a listen.
- Create a ‘cool’ strategic category. Who cares about revenue – it is cool!
- Most disruptive nightmare. Ideas that would destroy a current business. Bring them on.
What can you use for a wrecking ball?
Your suggestions make lots of sense. Brilliant ideas never get a chance because they don’t forecast neatly. Once in Las Vegas I tried to play it safe at the blackjack table. Never took even the slightest chance. Lost my entire stake in no time!
Hi Brad. Sounds like your Vegas luck unfortunately mirrors my own. It can be unnerving to think how much luck has to do with great ideas making it into the marketplace. Thanks for the comment!