Innovation Project Appraisal
How do you decide which innovation to back in a world where biggest may not necessarily be the best, and returns may be some way off in the future?
Brainstorming ideas for innovation is just the start and instinct can only take you so far. Managing multiple opportunities in a dynamic environment requires an organised approach, and structured project appraisals and ranking can help sort the ‘wheat from the chaff’.
- A packaging company needed to innovate; to bring new ideas to the market, to secure growth and expansion ahead of competitors.
- Moot developed an assessment matrix for the evaluation of the commercial potential of all innovation opportunities.
- The result was a clear ranking of innovation opportunities weighting income, risk, constraints and returns. Informed decisions, about which would work best for the business, could now be made.
What was the problem?
In response to an intensifying competitive environment, a rapidly growing transit packaging company had initiated a programme of innovation. Workshops had created a long-list of potential ground-breaking opportunities but there was no way, beyond gut judgement, to determine the best means of prioritising resources. A more structured approach was required, with the proviso that any methodology developed should be transparent, straightforward and, above all, capable of being accessible to all staff.
What did Moot do?
Moot developed a twofold approach. Initially all opportunities were recorded in a structured format, containing broad details of opportunities and preliminary estimates of investment, volume growth, selling price and probability of success. All opportunities were then assigned a development status.
With potential opportunities running in the hundreds, they were recorded in a database and modelling algorithms were developed to allow users to manipulate levels of income, risk, investment constraint and payback periods as greater clarity emerged. By defining company hurdle rates for risk and return, the model could be used to prioritise development efforts. Equally, preparatory work on projects that were not taken forward were not discarded, rather archived should they need to be revisited.
What were the results?
The approach yielded immediate insights, quickly identifying developments to be prioritised and introducing an easy way to phase activities to manage both investment and returns over time. The output from the database and model now underpins a quarterly assessment of market opportunities by the management team enabling informed decisions on where best to invest.
Instinct can take you so far. Managing multiple opportunities in a dynamic environment requires a structured approach!
Moot will kick-start innovation in your organisation, creating the structures that will allow the benefits to be felt long afterwards.