Disruptive ideas usually don’t see light of day at large companies. And when they do, it’s not for long.
This is because traditional financial metrics such as NPV, IRR and RoNA are used as measures of success. In addition, the allocation of capital for new ideas hinges on business cases that ask us to forecast indicators such as the target market, the market size, the payback period and aforementioned financial metrics - all factors that can’t be reliably predicted when it comes to disruptive innovation which is inherently uncertain and chaotic.
In the odd case that capital is allocated to a potentially disruptive idea, it’s usually pulled prematurely because the financial metrics or assumptions that made up the crux of our business case were faulty - which is to be expected for almost any truly disruptive idea because if you’re reliably estimating what every variable looks like from day one, you’re either a prophet, have a crystal ball or are just pursuing incremental innovation, the opportunities for which are much more visible and obvious, so too the underlying assumptions.
So what’s the alternative?
If you've got any thoughts on this model then I'd love to hear from you at:
@steveglaveski on Twitter or email me on email@example.com
Follow me on Instagram: @thesteveglaveski
Listen on iTunes @ goo.gl/sMnEa0
Listen on Stitcher @ www.stitcher.com/podcast/future
Listen on Google Play @ bit.ly/FSGoog
Like us? It'd make our day if you took 1 minute to show some love on iTunes, Stitcher or Soundcloud by subscribing, sharing and giving us a 5 star rating.
To sign up to our mailing list head to www.futuresquared.xyz
For more information on Collective Campus, our innovation hub, school and consultancy based in Australia and Singapore check out www.collectivecamp.us
Your host and occasional cybernetic organism, Steve Glaveski, is committed to helping people better navigate the growing uncertainty that technology change brings, in order to survive, thrive, create more value for the world and lead more fulfilling lives.
Steve is the CEO and co-founder of innovation accelerator Collective Campus, founder of children's entrepreneurship program Lemonade Stand, author of Amazon best-seller The Innovation Manager's Handbook and the Wiley book, Employee to Entrepreneur, investor in blockchain based fractional property investment platform Konkrete and is a keynote speaker and startup advisor.
When not fighting T-1000s Steve can be found in the gym, hiking, skating at the beach, attempting standup comedy, at a heavy metal show or socially lubricating at a whisky bar.