The “Innovation Ambition Matrix” is a strategic tool that categorizes Innovation projects into quadrants based on their feasibility and impact, aiding efficient Resource allocation and risk mitigation for optimal innovation outcomes.
Quadrants:
- Easy Wins: Low effort, high impact projects.
- Big Bets: High impact, resource-intensive projects.
- Quick Wins: Low impact, easy-to-execute projects.
- Moonshots: High effort, transformative impact projects.
Characteristics:
- Scalability Assessment: Evaluates project scalability potential.
- Resource Allocation: Guides efficient resource allocation.
- Risk Management: Identifies and mitigates project risks.
Examples:
- Easy Wins: New feature launch in existing product.
- Big Bets: Revolutionary product requiring R&D.
- Quick Wins: Internal process optimization.
- Moonshots: Exploring cutting-edge technology.
Benefits:
- Strategic Alignment: Aligns innovation with organizational goals.
- Resource Optimization: Maximizes resource allocation.
- Risk Mitigation: Prioritizes feasible projects to reduce risks.
Challenges:
- Biased Prioritization: Biases can lead to suboptimal decisions.
- Uncertainty: Uncertain project outcomes and market dynamics.
- Resource Constraints: Limited resources hinder high-impact projects.
Key Highlights
- Quadrants:
- Easy Wins: Low-effort, high-impact projects that yield quick results.
- Big Bets: Resource-intensive projects with the potential for significant impact.
- Quick Wins: Low-impact projects that are easy to execute.
- Moonshots: High-effort projects with the potential to bring transformative impact.
- Characteristics:
- Scalability Assessment: Evaluates the potential scalability of innovation projects.
- Resource Allocation: Guides efficient allocation of resources based on project categorization.
- Risk Management: Identifies and manages risks associated with different types of projects.
- Examples:
- Easy Wins: Launching a new feature within an existing product line.
- Big Bets: Developing a revolutionary product that requires significant R&D investment.
- Quick Wins: Optimizing internal processes to improve efficiency.
- Moonshots: Exploring and investing in cutting-edge technologies for groundbreaking innovation.
- Benefits:
- Strategic Alignment: Aligns innovation efforts with overarching organizational goals and priorities.
- Resource Optimization: Maximizes the effective allocation of available resources to the right projects.
- Risk Mitigation: Prioritizes projects that are feasible and have a higher chance of success, reducing overall risk.
- Challenges:
- Biased Prioritization: Biases can lead to suboptimal project prioritization and decision-making.
- Uncertainty: The inherent uncertainty of project outcomes and market dynamics can impact the accuracy of categorization.
- Resource Constraints: Limited resources might hinder the pursuit of high-impact projects with transformative potential.
Case Study
| Steps | Description | Examples |
|---|
| 1. Define Ambitions | Start by defining your innovation ambitions or goals. These are the strategic objectives you want to achieve through innovation. | – Ambition 1: Develop breakthrough technology for the healthcare sector. – Ambition 2: Enhance customer experience through digital innovation. |
| 2. Identify Initiatives | Identify specific innovation initiatives or projects that align with each defined ambition. These initiatives are the means to achieve your innovation goals. | – Initiative 1: Research and develop a novel medical device for early disease detection. – Initiative 2: Implement a mobile app for personalized customer engagement. |
| 3. Evaluate Impact | Assess the potential impact of each innovation initiative on the achievement of the corresponding ambition. Consider factors such as market impact, revenue generation, and strategic alignment. | – Initiative 1: High potential impact by addressing a critical healthcare need. – Initiative 2: Moderate impact by enhancing customer engagement and loyalty. |
| 4. Allocate Resources | Allocate resources, including budget, personnel, and technology, to support the selected innovation initiatives. Ensure that resources align with the potential impact and strategic importance. | – Initiative 1: Allocate a significant R&D budget and skilled researchers. – Initiative 2: Allocate resources for app development and customer support. |
| 5. Monitor Progress | Continuously monitor the progress of each innovation initiative. Track key performance indicators (KPIs) and adjust resource allocation and strategies as needed to ensure success. | – Initiative 1: Monitor R&D milestones and clinical trials. Adjust funding based on results. – Initiative 2: Track app adoption rates and customer feedback. Refine the app based on user insights. |
Connected Thinking Frameworks
Convergent vs. Divergent Thinking
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.
Critical Thinking
Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.
Biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.
Second-Order Thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
Lateral Thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.
Bounded Rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.
Dunning-Kruger Effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.
Occam’s Razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.
Lindy Effect
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.
Antifragility
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).
Systems Thinking
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.
Vertical Thinking
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.
Maslow’s Hammer
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).
Peter Principle
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.
Straw Man Fallacy
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.
Streisand Effect
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.
Heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.
Recognition Heuristic
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.
Representativeness Heuristic
