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Managing risk and reward in an innovation portfolio - Coggle Diagram
Managing risk and reward in an innovation portfolio
From 1990 to 2004 the percentage of major innovations in development portfolios dropped from 20.4 to 11.5
Little I
Are necessary for continuous improvement
Big I
New to the company or new to the world
They are too risky
Risk Matrix
Graphically reveal risk exposure across an entire innovation portfolio
Can be positioned on the matrix by determining its score on 2 dimensions
How familiar to the company the intented market is
How familiar the products or technology is
Employs a unique scoring and calibration of risk to help estimate the probability of success
Reveal the distribution of risk across a company innovation portfolio
RWW
Can be used to evaluate individual projects
Series of questions about the innovation concept or product
Allows to incorporate increasing detailed,product,market and financial analyses
Can be used to identify and help fix problems
Is it real? Can we win?Is it worth doing?
Is the market real?
A market opportunity is real only when four conditions are satisfied
Customers are able to buy it
The potential market is big enough to be worth pursuing
The proposed product will clearly meet a need or solve a problem better than available alternative
Customers are willing to buy the product
Is the product real?
Is the time to expose ideas and identify what is to be developed
If the concept is solid the team must explore whether a viable product is feasible
A product designed to meet customer expectations may lose some of its potential appeal
Can the product be competitive?
Customers will choose one product over altenatives
Competitive advantage is only a good as the company`s ability to keep imitators at bay