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TOPIC 5 : DECISION MAKING UNDER UNCERTAINTY - Coggle Diagram
TOPIC 5 : DECISION MAKING UNDER UNCERTAINTY
Innovation is about knowledge – creating new possibilities through combining different knowledge sets. Such knowledge may already exist in our experience, based on something we
have seen or done before. The process of weaving these different knowledge sets together into a successful innovation is one which takes place under highly uncertain conditions. We don't know about what the final innovation configuration will look like (and we don't know how we will get there). Managing innovation is about turning these uncertainties into knowledge, but we can do so only by committing resources to reduce the uncertainty.
Process of Increasing Resource Commitment Whilst Reducing Uncertainty
Risk Averse mentality diffuses innovativeness, it's a great idea but a risk averse person prefers lower returns with known risks rather than higher returns with unknown risks.
We're doing okay
It's not broken
Nice idea but doesn't fit
Not invented here
Great minds think alike
It's not big enough
Existing customer don't want it
It's not a business
We've never done it before
It's not our business
Assessing Innovation Projects
Complex Financial Measures
Net Present Value (NPV)
Decision Matrix
Multi Criteria
Simple Financial Measures
Return on Investment
Gut feel
The problem of multiple projects
Portfolio management