Are you ready to go in front of the Sharks? You think helping your organization continuously innovate is a great idea. You and the right team have surveyed the market, have a fair understanding of the investment you would need to make and narrowed your choices to the top solutions you believe are best suited to support your innovation program. However, securing a budget and resources for new enterprise initiatives is never guaranteed. Strategic systems such as Innovation Management solutions that change the business will require discussions, presentations and business case development. A good way to prepare your case is to think about how a contestant would pitch innovation management to the panel at Shark Tank.
Unlike most other enterprise systems that focus strictly on the top line or bottom-line measures, innovation management systems will identify a full range of revenue increase, cost reduction and risk avoidance opportunities.
EY’s report on “Delivering agile innovation”* in June 2014 states that “we will be transitioning from the Age of the Experience (2010-2015) where companies competed on the quality of experience and an ability to engage consumers to beyond the Age of Innovation where companies that place innovation at the heart of their purpose, transforming experiences, processes and business models win”. The time has come for organizations to put their innovation plans into action.
A single meaningful idea can result in an exponentially meaningful return on your investment but making the case still requires a strong argument grounded on facts and robust quantitative data to back up your position.
Shark Tank investors want to see numbers. Your pitch has to be based on defensible metrics and projections or you will quickly get the boot from the Sharks.
Shark Tank investors want to see numbers. Your pitch has to be based on defensible metrics and projections or you will quickly get the boot from the Sharks. The big question then for a lot of organizations is how can I illustrate the value of a well-designed innovation management program and create the urgency for immediate action?
A Financial Impact Analysis (FIA) is a great exercise that would certainly help. An extremely valuable step to achieve this is to go through an objective value estimation exercise by developing a standardized needs analysis questionnaire which details the status quo based on the challenges being experienced that would be addressed by such a solution.
A proper FIA will help you establish a baseline and determine a impact on revenues, risks and costs based on a three to five year operating window. It will clearly quantify your Total Cost of Ownership, which will be minimal compared to the tremendous rewards of a well-executed program, and help you make the business case in a summarized executive dashboard to the Sharks.
The key here is to review the following metrics:
– Funnel of ideas broken down in the following stages:
– Implementation ratio
- Incremental – Small meaningful change on how you do business
- Exponential – Significant improvement over how work got done
- Breakthrough – Disruptor or Game changer that turns a market upside down
- Revenue generating – impacting your top line
- Cost reduction – impacting your bottom-line
- Risk avoidance – impacting your top- and bottom- line
– Complete inventory of your costs:
- FTE (full time equivalent) including management, support, review and experimentation
- Innovation management system costs: subscription, deployment and training
- Other costs including rewards and communications
An experienced innovation management partner can help you develop the right approach to properly estimating your results. This is a key step often times overlooked in many initiatives. The FIA exercise will also help you set expectations internally and communicate your goals with your innovation management partner.
* Source: EY Survey on delivering agile innovation 2014