So let’s do a quick review of the Decision Quality (DQ) framework and show how it can apply to innovation. There are six dimensions: Information, Integration, Commitment, Value, Frame, and Alternatives.
Agile movements point out that the frame for Innovation decisions is one of exploration and discovery. The right frame isn’t to make a decision, but rather to open the decision space: this gives Innovators a broad perspective on what major uncertainties they are likely to encounter and how to anticipate them. Then they can design their experiments better and execute more decisively and impactfully.
- In the business case. Business cases are littered with assumptions about things like market size, market share, cost structures, etc. By considering ranges of uncertainty and modeling multiple business cases, Innovators can learn which uncertainties matter the most and gain insight into how to drive the upside. They’re often surprised to find they weren’t working on the biggest uncertainties that drive the business case.
- In development. An innovation must get many things right to be successful at all. Of these, only a few are actual proof points (sometimes called kill shots or critical hypotheses). DA defines and assesses these binary success/fail steps productively. DA helps Innovators put the proof points in the right order to uncover failure early and cheaply. That saves Innovators from unintentionally pursuing plans that are likely to fail late and expensively.