HC7-Dealing with uncertainty

Question 1

the innovation funnel

Answer 1

outline concept-> detailed design-> testing -> launch

to ensure that a structure is in place that reviews information about both technical and market aspects of the innovation as it moves from high uncertainty to high resource commitment but a clearer picture of progress.

Question 2

Overdependence on a small number of customers has three major drawbacks:

Answer 2

• Vulnerability to changes in the strategy and health of the dominant customer
• A loss of negotiating power, which may reduce profit margins
• Little incentive to develop marketing and sales functions, which may limit future growth

Question 3

barriers adaptation of innovations

Answer 3

1. economic
2. behavioural
3. organizational
4. structural barriers

Question 4

5 problems arising from poor portfolio management

Answer 4

1. no limit to projects taken on
2. unwillingness to kill-off or de-select projects
3. Lack of strategic focus in project mix
4. Weak ambiguous selection criteria
5. weak decision criteria

Question 5

Successful managers allocate resources to technological activities by 6 criteria:

Answer 5

1. Encouraging incrementalism – step by step modification of objectives and resources
2. Using simple rules models for allocating resources, so that the implications of changes can be
   easily understood
3. Making explicit from the outset criteria for stopping the project
4. Using sensitivity analysis to explore if the outcome of the project is robust to a range of different assumptions
5. Seeking the reduction of key uncertainties before any irreversible commitments
6. Recognizing that different types of innovation should be evaluated by different criteria

Question 6

funding by

Answer 6

• Friends, families and fools (3Fs)
• Grants and banks
• Crowdfunding
• Corporate venture funding
• Venture capita