Worksheet: Innovation Opportunity Cost
You may be underestimating your innovation value by a factor of 8X.
Wounded Projects, Lost Opportunities
When we choose to pursue and fund an innovation project, its uncertainty often frightens us off from pursuing it fully. We may use a conservative financial analysis to cut the project to a “safe” size, or we may “hedge our bets” by shifting some of the project’s funding and attention to projects we think are less risky. In this way, we degrade the actual project pursued. These unintended consequences can be massive.
Executives unintentionally degrade and wound innovation projects because they rarely appreciate the full potential of innovation. The Innovation Opportunity Cost worksheet helps you identify the hidden value in your portfolio from wounded and degraded projects so you can make better investment choices. (This resource explains the principles behind the worksheet.)
“Most executives fund innovation because they think they have to or because they think it’s exciting. If they knew how to evaluate innovation opportunities properly, they’d fund innovation because it’s immensely profitable.”—David Matheson, SmartOrg
Real World Evidence
65% of respondents see improvement opportunity of more than 6x.
A benchmark based on 35 R&D and innovation executives in diverse industries found the average improvement opportunity was 8.1 times the current return on innovation, and 18% found improvements greater than 12 times!
Use the Innovation Opportunity Worksheet to evaluate some of your projects and see how much value you can capture from overlooked opportunities.
David Matheson, President and CEO
Ralph Morales III, Head of Innovation Practice