What is the greatest business idea ever? Everybody has their favourite. For some it might be Henry Ford’s decision that consumers ­ and his motor company ­ would benefit from standardised, mass-produced vehicles, or perhaps Bill Gates deciding software, not hardware, was where the fortune lay in computing.

Ideas are great not simply because of immediate benefits, but because they provide inspiration and a way of working that others can follow. One of the greatest ideas was ‘scenario planning’ pioneered by Shell.

In the 1960s Pierre Wack, Shell’s head of group planning, wanted to discover factors, other than technical availability, that 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.

But for Shell, the 1973 Arab-Israeli war limited the supply of oil, raising prices five-fold, so their scenario work meant they were better prepared than their competitors to adapt. Shell knew which governments to lobby, how to approach them, where to diversify and what action to take.

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 recognise new opportunities, assess strategic options and take long-term decisions.

Hogging the limelight

The challenge of building customer loyalty has spawned some of the best ­ and worst ­ business ideas. Harley-Davidson uses its 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 membership club entrenches this loyalty, ensuring customers receive benefits they value. The result is that customers trust Harley-Davidson and this trust is used to develop stronger bonds and greater profits.

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 (for example £50) at a commercial rate of interest. This leads to the development of a product or the realisation of an idea.

The micro-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 and committed employees do a better job for customers and this translates directly into greater profits.

Sirota Consulting surveyed more than two million managers in 237 organisations worldwide from the 1970s to the 1990s. It 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.

We mean business

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; and 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 on the way to a great idea.

balanced performance

Of particular interest to finance directors is the balanced scorecard, which is a great business 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 $1m (£500k) 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.

Jeremy Kourdi’s 100 Great Business Ideas is published by Marshall Cavendish and Cyan Books priced £8.99