How do you present a new idea, an innovative product or a disrupting new service to your decision makers? In a new business case it is your challenge to be convincing. The more radical your innovation is, the bigger the challenge as there will be more uncertainties.
According to my experience as innovation facilitator, your idea will be evaluated in the boardroom from at least five perspectives:
1. The Customer: will they buy it?
2. The Technology: can we deliver it?
3. The Business model: will it pay off?
4. The Risk: what do we risk? What if it’s a failure? What if it’s a huge success?
5. The Fit: Why should we do it? What’s the strategic perspective?
When the front end of innovation is finished, a lot is still unknown. The figures in your business case will be estimations, extrapolations, best guesses and hard results from small-scale experiments.
It is the potential risk of failure that makes managers and investors so prudent. Gilbert and Eyring found it useful to think in three broad, sometimes overlapping categories of risks starting up a new venture: deal-killer risks, path-dependent risks, and easy-win, high-ROI risks.
Deal-killer risks are uncertainties that, if left unresolved, could undermine the entire venture. Path-dependent risks arise when pursuing the wrong path would involve wasting large sums of money or time or both.
The remaining risks are risks that can be resolved without spending a lot of time and money. When you fail to spot a deal-killer risk, your innovation is doomed, so it’s of extreme importance to identify and address the most important uncertainties in your new business case.
A practical framework for your new business case covers 7 subjects
For more than 10 years, I have been using and giving instructions on a handy, practical framework for a new business case. My advice was to just use PowerPoint (or keynote) instead of writing a full written report, as nobody will read it anyway. Here’s the framework of a 7-paged new business case, which you can present in 20 minutes at the most.
Slide 1. The Customer Friction.
• The customer situation.
• The customer need.
• The customer friction (problem/challenge).
Slide 2. Our New Concept.
• The customer target group (qualitative and quantitative).
• The marketing mix of the new product, service or business model.
• New for…. (the world, the market, our company).
Slide 3. This Makes our Concept Unique.
• Buying arguments for the customer.
• Current solutions and competitors.
• Our positioning.
Slide 4. It will be Feasible.
• We are able to develop it.
• We are able to produce it.
• The development process.
Slide 5. What’s in it for us.
• The number of customers (in year three).
• The projected revenues (in year three).
• The projected profits (in year three).
Slide 6. Why now?
• Why to develop it now.
• What if we say no.
Slide 7. The Decision to Proceed.
• The major uncertainties.
• The development team,
• The process, costs and planning.
“Nobody buys innovation from a clown.”
An original way of presenting your idea gets you attention. By making a new business case according to this format, you strengthen the persuasiveness of your proposal.
It increases the chance you will get a ‘Yes’, especially if you also have a prototype which makes your new concept tangible and easy to understand. Be serious. Remember: “Nobody buys innovation from a clown.”
Presenting a new business case is a different kind of sales pitch. Of course you need to convince your board or investors. Beware though of being too ‘salesy’ though.
In this phase of the innovation process there are still so many uncertainties. It will increase your trustworthiness when you will make the uncertainties very explicit. In the innovation delivery process, there are plenty possibilities to be eliminated.
Note : This article was originally posted on LinkedIn
Gijs van Wulfen
Gijs van Wulfen is a recognised authority and keynote speaker on innovation and Design Thinking. He was chosen as one of the first LinkedIn Influencers and as of 2017, 300.000 people across the globe are following his notably engaging, prolific and insightful posts. In 2016 Gijs came number 2 in the international Top 40 Innovation Bloggers. In 2017 his book ‘The Innovation Maze’ was elected ‘Management Book of the Year’.