Optimizing Innovation – Dr. David Matheson of SmartOrg

by Braden Kelley

Dr. David Matheson of SmartOrgWe are happy to bring you some of the key points and insights from Dr. David Matheson’s talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Dr. David Matheson of SmartOrg conducted a workshop on optimizing profitable growth in uncertain times. He started by talking about how when it comes to innovation, you should always start with the following three questions:

  1. Does anybody care?
  2. Can we do it?
  3. Should we do it?

And then explore some of the things that make innovation difficult to pursue:

  • Time horizon
  • Payback
  • Uncertainty
  • Risk
  • Competitive Landscape
  • Scale & Reach
  • Mission Fit
  • Incentive Structure
  • Market Adoption Rate
  • Regulation
  • Past Experience
  • Unknown Unknowns

You have to keep in mind that the mental models that people use for project evaluation, don’t work for innovation (assumption, hockey sticks, etc.).

“How good are you at articulating your ignorance?”

When it comes to evaluating innovation projects and building an innovation portfolio, you have to make people state percentage ranges (one person’s definition of likely is different than another’s). But keep in mind that these may change with new information. Focus on the range not the assumptions.

“Nobody knows the future.”

As much as you might try and look for it, data does not exist on the future. Gartner reports are often extrapolations made by recent MBA graduates – they are not data.

“If I walked in and asked for $500,000 and said I could make $2,000,000, the COO would laugh at me and I wouldn’t get the money. But if I asked for $500,000 and promised $750,000 then I would get it. Why is that?”

A company’s culture and our own credibility pose challenges for people pitching innovation ideas using the expected costs and expected returns.

“In the room here you just validated that most of you spend money on validating what you think you already know rather than testing what you are most afraid of.”

“In would argue that to follow the fail fast principle and maximize learning, that you should invest in testing proof points, not in validaton.”

If it is a good calculate risk made on the best information you are going to get, with appropriate offset for risk, then it is a good investment.

“If you want more certainty, you’ll get more mediocrity.”

“Project Risk is not equal to Portfolio Risk”

It is EXTREMELY important that you do not transfer corporate risk to individuals if you want to succeed in innovation:

  • Measure Value
  • Embrace Uncertainty
  • Maximize Learning

Optimizing Innovation Conference


Braden KelleyBraden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

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