The Greatest Business Ideas Ever

Learning from great innovators

What are the greatest business ideas ever? People have their own favourites, for example: Henry Ford deciding consumers, and his motor company, would benefit from standardised, mass-produced vehicles, or Bill Gates deciding software, not hardware, was where the fortune lay in computing. Ideas are great not simply because of immediate benefits; they are great because they provide inspiration and a way of working that others can follow. This article highlights some of the best business ideas – the ones with the greatest impact, ability to inspire and potential significance.

One of the greatest ideas is scenario planning pioneered by Shell. In the 1960s Pierre Wack, Shell’s Head of Group Planning, wanted to discover which factors other than technical availability might affect the future supply of oil. By exploring possible changes to governmental policy it became apparent that oil-rich governments were unlikely to remain amenable to Shell’s activities. Fortunately for Shell when the 1973 Arab-Israeli war limited the supply of oil, raising prices five-fold, their scenario work meant they were better prepared than competitors to adapt. Shell knew which governments to lobby, how to approach them, where to diversify and what action to take. Their ability to take the right action quickly saved Shell billions of dollars and catapulted them from seventh to second in their industry league table.

Scenario planning enables leaders to manage uncertainty and risk and to understand the dynamics of the business environment – the forces at work shaping the future. It helps recognize new opportunities, assess strategic options and take long-term decisions.

The challenge of building customer loyalty has spawned some of the best – and worst – business ideas. Harley-Davidson uses their knowledge of customers’ needs and an appeal to emotions to build trust and bond with customers. Their managers meet customers regularly at rallies where new models are demonstrated. Advertising reinforces the brand image, promoting customer loyalty, while the Harley Owners’ Group (HOG) membership club entrenches this loyalty, ensuring customers receive benefits they value. The result: customers trust Harley-Davidson and this trust is used to develop stronger bonds and greater profits. Consider this: what other firm do you know where thousands of customers tattoo themselves with the company’s name and logo?

Another genius idea is microfinance – lending small sums of money to entrepreneurs in the developing world. Microfinance targets the bottom of the wealth pyramid, and its pioneers, Muhammad Yunus and the Grameen Bank that he founded, were jointly awarded the Nobel Peace Prize in 2006. It works by loaning customers relatively small amounts of capital (e.g. $50) at a commercial rate of interest. This leads to the development of a product or the realisation of an idea. This lending process then stimulates a self-sustaining cycle of wealth creation. By addressing humanitarian concerns, microfinance provides hope and promotes prosperity. It encourages responsibility and generates greater participation in society, which can lead to improved political, social and economic stability.

Demonstrating the simplicity of great business ideas is the Service-Profit Chain and employee engagement. It may seem obvious but engaged, committed employees do a better job for customers and this translates directly into greater profits. Sirota Consulting surveyed over 2 million managers in 237 organizations worldwide from the 1970s to the 1990s. They identified three factors affecting employees’ commitment: equity – being treated justly in relation to the basic conditions of employment; achievement – taking pride in one’s accomplishments by doing things that matter and doing them well, and camaraderie – having warm, interesting and cooperative relations with colleagues.

Licensing is another simple but effective idea. It may seem ordinary but when it works well – as with Microsoft licensing IBM to use its operating system and, in the process, creating a standard for the computer industry – the results are impressive, benefiting businesses and customers. The Balanced Scorecard is another great idea because it highlights the importance of measurement for improving business performance.

The balanced scorecard enables managers to generate objectives in four areas (innovation and learning, finance, customers and internal processes) providing a framework for action, with progress being regularly assessed. Its success lies in its ability to integrate indicators that measure key activities and processes. This presents a balanced picture and highlights specific activities that need to be completed. Two of the highest profile and most successful examples of the balanced scorecard at work are provided by Exxon Mobil and Cigna Insurance. Exxon moved from last to first in profitability within its industry from 1993 to 1995. Cigna Insurance was losing $1 million a day in 1993, but within two years it was in the top quartile of profitability in its industry. Both organisations attribute part of their success to the balanced scorecard.

In the 1920s, US President Calvin Coolidge famously commented that “The business of America is business”. Arguably, the 1803 Louisiana Purchase qualifies as a great business idea. It highlights the need for boldness, flexibility, opportunity-spotting and a readiness to splash the cash. US President Thomas Jefferson believed in reducing America’s national debt, but when cash-strapped Napoleon offered a massive slice of continental America Jefferson couldn’t miss the opportunity. Although the problems of integration (and America’s westward expansion) were significant, it laid the foundation for a bold, modern and secure future.

Identifying great business ideas is subjective, but it highlights some of the key ingredients. As these examples show, circumstances matter, the situation needs to be favourable for ideas to thrive. Yet there are ways to improve the quality of innovation. These include simplicity, a relentless energy and enthusiasm and the ability to build on ideas and recognise that they can come from anywhere. Also significant is the ability: to handle paradox and ambiguity, for example, balancing rationality with intuition; to implement ideas by sweating the details, taking personal responsibility and providing leadership; to let imagination roam free by adopting a constructive, challenging and questioning approach. Great ideas have empathy: an appreciation of the current situation that provides a starting point. This prompts the question: What do you want to achieve that is not currently available? Finally, self-awareness and an emphasis on learning and development play an important part. People play to their strengths and than expand these strengths. Achieve that and you are well on the way to a great idea.