Technique 2.100 Risk and Uncertainty In Innovation

Introduction

Focus on the things you have to get right for the innovation to succeed, like aspects of the customers' behaviour, viability of the business model, etc.

Questions

Ask the following questions

1. Configuration

Which part of the business model will have the greatest impact on profitability?

What are the exchanges of value (money, information, expertise, etc) between you, your partners, vendors and customers?

What additional capabilities and assets will you need, and will you buy, build or partner to obtain them?

2. Offerings

What does it look and feel like?

How does it compare with and connect to other products and services that are currently in the market?

Which features or services must you absolutely include? Which one should you leave out?

3. Experience

Which is the best way to engage your target customers?

Which channels and touch points will provide your users with a singular experience?

What is the core promise of your innovation idea, and how you communicate it?

Some examples of ineffective innovation:

- RJR Nabisco (an initiative to develop a smokeless cigarette. They spent around $ 350 m and came up with a dud.)

- Motorola (in 1987 it predicted 42 m satellite phone users by 2002; launched in 1998, it only attracted 20,000 and went bankrupt 9 months later. There was one critical detail: satellite phones need a line of sight to their satellites; they consequently do not work well indoors or on cloudy days, etc)