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L10. Is It Real Can We Win Is It Worth Doing - Coggle Diagram
L10. Is It Real Can We Win Is It Worth Doing
The Risk Matrix
To balance its innovation portfolio, a company needs a clear picture of how its projects fall on the spectrum of risk.
The risk matrix employs a unique scoring system and calibration of risk to help estimate the probability of success or failure for each project based on how big a stretch it is for the firm
A project’s position on the matrix is determined by its score on a range of factors, such as how closely the behavior of targeted customers will match that of the company’s current customers, how relevant the company’s brand is to the intended market, and how applicable its technology capabilities are to the new product.
A portfolio review team – typically consisting of senior managers with strategic oversight and authority over development budgets and allocations – con ducts the evaluation, with the support of each project’s development team.
Team members rate each project independently and then explain their rationale. They discuss reasons for any differences of opinion and seek consensus.
The resulting scores serve as a project’s coordinates on the risk matrix.
Screening with R-W-W
The R-W-W screen is a simple but pow- erful tool built on a series of questions about the innovation concept or product, its potential market, and the company’s capabilities and competition
It is not an algorithm for making go/no-go decisions but, rather, a disciplined process that can be employed at multiple stages of product development to expose faulty assumptions, gaps in knowledge, and potential sources of risk, and to ensure that every avenue for improvement has been explored.
The R-W-W screen can be used to identify and help fi x problems that are miring a project, to contain risk, and to expose problems that can’t be fi xed and therefore should lead to termination.
Innovation is inherently messy, nonlinear, and iterative.
R-W-W guides a development team to dig deeply for the answers to six fundamental questions:
Is the market real?
Is it
real?
3 more items...
Is the product real?
Is there a clear concept?
1 more item...
Will the final product satisfy the market?
1 more item...
Can the product be made?
1 more item...
Can the product be competitive?
Can we win?
3 more items...
Can our company be competitive?
Do we have superior resources?
1 more item...
Do we have appropriate management?
1 more item...
Can we understand and respond to the market?
1 more item...
Will the product be profi table at an acceptable risk?
Is it worth doing?
2 more items...
Does launching the product make strategic sense?
Does the product fit our overall growth strategy?
1 more item...
Will top management support it?
1 more item...