To stay profitable in a small business, you need to be market-driven. To do this successfully you must, in the words of management guru Peter Drucker, "Take the lead in making obsolete your own products and services rather than waiting for a competitor to do so". And to do this effectively you need a flow of good ideas.

Unfortunately, for most small businesses, the time this takes is sometimes difficult to find. New opportunities for tomorrow are drowned by the crises of today.

This guide reviews how you can build idea generation into your management style, and thus create a steady flow of exciting new opportunities.

Recognising the possibilities

Here are some techniques that successful entrepreneurs use.

Many ideas arise spontaneously but like so much else, idea generation works best when handled systematically. This does not rule out inspiration, but instead channels creative thought to make it constructive.

So it is important to regard the process as:

• Necessary – It must be done or you will end up with a stagnating and uncompetitive business. It is as important as managing cash flow, so make time into your diary for it. This takes determination and discipline.
• Possible – You can develop a regular flow of good ideas. The process just needs organising.
• Attractive – It is potentially one of the most satisfying aspects of being in business, and can directly affect profitability.

Basic idea generation techniques

SWOT

One of the simplest ways to start is to analyse where your business is now.

There are many ways of viewing your business that help focus your thoughts, planning and implementation for the future. One of these is a SWOT analysis.

This looks at your Strengths, Weaknesses, Opportunities and Threats. The first two strands are essentially internal factors, the others external. Simply asking yourself searching questions under any of these four headings can provide a useful list of factors to explore further.

Such structured analysis can do two things:

• Identify areas where ideas are necessary (for example, activity by your competitors indicates your product range needs updating) so that you can begin to say, “I need a way to...”
• Begin the creative process. An idea might start with a focus on the way a competitor does something, leading to an adaptation of it that gives you an edge.

Take a broader view

Sometimes opportunities arise from how you look at the broader picture. For example, one company looked specifically at market opportunities. They asked the simple, yet fundamental, question: “What business are we in?”

At the start the answer seemed clear enough. They “supplied scaffolding to the building trade”. However, they realised this was too restrictive. Their thinking then developed through three further stages:

• They redefined their market extending the definition of their target industry to construction, rather than just building, which highlighted prospects in whole areas of civil engineering projects from motorway bridge construction to oil rigs.
• They redefined their expertise reassessing this as ‘providing temporary access and support’. As a result they saw openings in aspects of the leisure market – spectators watch parades and sporting events seated on a web of scaffolding.
• They combined markets and expertise. Their ‘special skills in safe scaffolding erection’ led to additional business in the Middle East – not through exporting steel poles but by running local training programmes in modern scaffolding techniques necessary for the increasingly complex building projects being undertaken there.

All this came from:

• asking questions at a fundamental but broad level,
• simple analysis of their business.

It produced new customers, new products, new ways of doing things and far wider, and more profitable, markets. It may seem obvious with hindsight, but the creative thinking had to happen first.

Reassure people

You don't necessarily have to come up with all the ideas yourself. In fact, the best ones often come from your staff. So do all you can to encourage fresh, creative thinking. However, there may be reluctance to put ideas forward.

• Ideas are risky. Imagine, for example, an office junior has an idea. However, they don't volunteer it because they think they or the idea will automatically be shot down: ‘It's so obvious everyone has already thought of this and rejected it,’ ‘People will think it's silly or “not my place,”’ ‘It can't be right, I don't know the full picture.’ So it is imperative to establish that you want ideas, that you will consider all ideas and that everyone is involved.
• Ideas are dangerous. People will think twice about volunteering ideas if they foresee it might make them or other people redundant. So allay fears where possible; for example, by reassuring people that you will retrain them where necessary, or pointing out that new ideas might create more jobs in the long run.

Idea stimulation

Even if you know where you want ideas – “I need a way to automate blueberry picking...” – you may benefit from a mechanism to stimulate ideas.

Some of the following techniques may help.

Two heads are better than one. So involve everyone in your team. This also helps you gain acceptance of the ideas later on because people will share ‘ownership’ of them, and so will be less likely to obstruct or sabotage them.

Brainstorm

Brainstorming is where a group assembles specifically to see what ideas they can come up with. It needs a prescribed approach to work effectively:

• Gather people together and explain your objectives – for example, write up the problem you are trying to crack, clearly expressed.
• It can also be worth inviting along consultants or people from other departments to bring new perspectives and fresh ideas.
• Allow time for thought individually (or in pairs).
• Start taking contributions and note them publicly (say, on a flipchart). Initially go in strict rotation so everyone gets a chance and nobody dominates the process. Only when people start drying up should you open it out.
• Explain that there are to be no comments on ideas to begin with, however wacky they may appear.
• When you have a decent list, begin some analysis.
• Make sure everyone understands each idea and get the ‘owner’ to clarify it if necessary.
• Group similar ideas together to make the list more manageable.
• Review the list through open-minded discussion. Ask only for improvements to ideas already mentioned.
• Identify and prioritise those ideas that should be explored further.

Such a session must exclude the word impossible, especially when linked to prejudice – “But we don't do things that way!” By discouraging any negative responses, and allowing ideas – however wild – to spark or refine others, you can often evolve new approaches that are practical and innovative.

As Einstein once said, “If an idea is not at first absurd there is no hope for it.”

An absurd solution to flying is to “Flap your arms like a bird.” However, analysing the difference between arms and wings results in a refinement of the idea: “Tie banana leaves on your arms to make your arms more wing-like.” But you still cannot fly because your arms are not strong enough to hold you in the air. So you develop the theme further: “Support the wings on a structure”... and you get a hang-glider.

Mind mapping

Mind mapping is “organised doodling”. Oversimplifying it perhaps, you start by drawing a circle in the middle of a large sheet of paper and write your problem inside it.

Then draw similar circles around it noting any factor that might have a bearing on the issue. Create sub-circles around these and continue the process until you see where it leads. In itself it helps to visualise the issues and stimulate thinking.

The real benefit comes, however, when you start drawing connecting lines between various circles. This can highlight inter-relationships and dependencies that would not be apparent from a linear list.

For example, you might identify the following factors when mind-mapping your supply and manufacturing processes:

• train people in negotiation,
• renegotiate with suppliers,
• cost reduction,
• review manufacturing process,
• improve project management,
• train people in project management,
• waiting time,
• manage wastage,
• poor quality,
• find alternative suppliers,
• time taken on admin,
• train people in time management,
• training.

In this instance, training emerges as an issue that combines several different factors. It is an example of a previously unsuspected key point that jumps out as a result of mind mapping.

Lateral thinking

Creative thinking is not random but has its own logic – one that allows you to reach a solution not in a straight line, but by zigzagging or jumping all over a problem.

One aspect involves using a form of “provocation”.

Provocation might take any form – thinking of song titles, a cartoon character, what your grandmother said, subconscious thoughts – noting them down and using them to stimulate further, more practical, thoughts. For example, a business consultant listed all the song titles he could think of, one of which was “tea for two”.

When he went back over his list, this song prompted the thought of teatime, which in turn got him thinking about time... and then deadlines. From this he developed the idea for a new consultancy product, one that was highly attractive to clients because it specified a limit – the eight hour audit.

There is clearly a link here with mind mapping. Indeed, most kinds of thinking models overlap and various permutations are possible.

Other techniques

• Assume it is possible. Sometimes it helps to give yourself a “magic wand”.
• Develop headlines. Use phrases such as “I wish...” or “How to...” when thinking of ideas. And when developing solutions use the same positive language: “What you do is...”
• Use another character to change your perspective. For example, how might Marilyn Monroe tackle a problem with customer complaints? She would use charm to recover disgruntled customers whereas Henry VIII might threaten to chop off the heads of people who got it wrong in the first place. Both characters have a valid point of view: Monroe's solution might be to train people in customer relations; Henry VIII's to resolve the underlying problem so it does not arise again.
• Never discount apparently absurd or impossible ideas – there is possibly gold in them. When panning for gold there is always a danger of washing away a nugget because you don't recognise it, either because it's too small, hidden in mud, or it's a weird new shape. Somehow, too, it is easier to be negative than positive about ideas. Try to maintain an open mind to avoid thinking along the lines, “That's impossible”. Search only for solutions.

Evaluating ideas

Evaluation becomes easier, especially if there are a number of ideas to consider, if you:

• Sort the list – Refine others and group them into any obvious categories.
• Rank them – Are some immediately more appealing than others? Do some need more information or research to make proper evaluation possible? Even going as far as listing every one in rank order may be helpful.
• Shortlist – Maybe there are two or three worth special attention or immediate investigation.
• Keep all absurd ideas – For centuries mankind wanted to fly. The fact that we can now fly to the moon is because people found solutions for “ideas that will never work”. Keep such ideas in mind, mull them over and look for new perspectives on them with the view that nothing is impossible. Use positive language: “What you do is...”

Create acceptance

For a new idea to be accepted in business you often have to overcome a range of barriers including prejudice and bad past experiences. So you need a process to evaluate ideas objectively. It must be:

• Practical – It must actually work.
• Straightforward – Sometimes opportunities are inherently complex but in general the simple ones are often the most successful.
• Cost-effective – In resources and time.
• Compatible – It must fit with other matters and not detract from them.
• Acceptable – It must be something that can win the approval of people in the business. So, for example, handle with care ideas that could be seen as a threat to individual people.
• Appropriate – For example, when developing an idea to cut costs, say, you must be careful not to make your business appear inappropriately penny-pinching.

Indeed, it means analysing every aspect of an idea, so avoid focusing solely on the immediate gains – either in time or organisational terms – when the long-term implications could have wider repercussions.

For example:

• How will production (or whatever) be affected?
• What will customers think?

Often, compromise is involved, primarily between factors such as cost, quality and time. So the “best” solution may cost too much or involve too long in staff training to implement. On the other hand, quality may be everything and the cost worthwhile.

Your original objectives should help you decide what level of compromise is best.

Once you have evaluated, approved, perhaps tested an idea, you have to plan how to implement it.

Barriers to implementation

Many ideas are stillborn, not because they are bad ideas, but because implementing them threatens to create insurmountable problems. What is worse, however, is that sometimes very simple problems result in ideas being put “on hold” and never pursued. There are a host of excuses for not implementing ideas or putting them off.

You need to be honest and self-aware to stop such things leading to self-fulfilling prophesies.

Barriers during implementation

The main barrier to implementation comes down to communication – or the lack of it. One hears of huge projects collapsing because “no-one thought to ask the drivers”, say, who could have pointed out obvious flaws or who refused to co-operate because they saw it as a threat.

Many people will attempt to sabotage your best ideas if they take a dislike to them for whatever reason.

These are the keys to success:

• Involve people in idea generation and consultation to give them a sense of ‘ownership’ of the ideas.
• Build commitment through ownership. Get everyone affected to participate in the main discussions at least so they can feel they made a contribution and that they are an important part of the process.
• Communicate clearly and thoroughly throughout the process. Tell people what will happen, why, when and – above all – how it will affect them.

Effective implementation

It is often said: “proceed with haste, repent at leisure” and this is especially true of implementing new ideas. Time taken at the concept stage is always well spent. Test carefully, analyse your findings and plan in depth.

This written plan should include your objectives, budgets, resources required, timescales and milestones, project review, success criteria, testing and parallel running, communication, security, patenting and so on.

To improve your ability to see and take opportunities:

• Always have clear, specific objectives for idea generation.
• Do not snap up the first half-decent idea – investigate several avenues.
• Assess all ideas thoroughly and objectively.
• After selecting some initial ideas to develop, test them on a limited basis.
• Adapt ideas in terms of any initial feedback.
• Involve people from beginning to end.
• Communicate what is going to happen.
• Judge success against the original objectives.
• Never rest on your laurels. If something works, fine – but keep asking, “Is this still the best?”, “Can we do better?”, “Do conditions make another change necessary?”

It is said that the trouble with opportunities is that they so often come disguised as hard work. If it were easy, everyone would do it and gaining any sort of competitive advantage would be impossible.

A continuous review of the possibilities, and a systematic way of prompting, selecting and implementing ideas make the process easier and more certain.
Taking advantage of a new opportunity and profiting from it is always satisfying. This is all the more so if you look back and remember that you made it all happen.