As a corporate innovator, at every stage of the proposition development process, from problem-solution fit to solution-product fit to product-market fit, you need to ask for money from your sponsors to keep your projects moving forward.
This usually requires you to present a business case, most of which are terrible. Lots of indecipherable raw data? Absolutely. Fantastical graphs showing exponential growth curves? Always. A prototype that you've mocked up in PowerPoint to get everyone excited? For sure.
The problem with business cases as they're presented today is that they maximise your risk of failure. If you’re selling a business case to your sponsor or senior leadership, and they say, “Yes, I want that”, then you’re condemned to execute the business case you sold them. And the challenge is that most ideas, forecasts and projections, as they make their way through your experimentation process, don’t look anything like they did in the business case.
At Future Foundry, we like to use 'The Five Whys' to help clients structure their presentations and articulate the essence of why their project deserves to be pursued, even if it's too early to give an evidence-based ROI calculation.
Here's how we structure them:
First, start with the idea itself. Amidst a mountain of potential projects your sponsor could invest in, why pursue this one? The answer should tell the story of the evidence you've collected so far and demonstrate that you've already managed to remove a substantial amount of risk through experimentation:
- Customer desirability - what evidence have you gathered that demonstrates that customers are interested, that the market is large enough and that you can reach, acquire and retain customers?
- Commercial viability - what evidence have you gathered to suggest that customers are willing to pay for it, that it can generate enough revenue and that the cost base ensures you can make a sustainable profit?
- Technical feasibility - what evidence have you gathered that you can build and deliver the idea, access critical resources, or leverage internal capabilities?
If there are outstanding risks, make them explicit along with the corresponding test plan.
'Why this?' isn't enough, and even the most sophisticated teams we work with tend to stop here. But to make a case, you also need to speak to your firm's unique knowledge, positioning or other competitive advantages that mean you're best placed to develop the solution. It's not enough to embark on a project because it seems exciting or is the current trend (hello Metaverse, NFT and AR); you also have to state your case as to why, with its specific blend of capabilities, assets and experience, your company is best positioned to succeed where others may not have.
Timing can be everything; in fact, 65% of unicorn founders attribute the success of their venture to timing. Here, you need to create urgency around the ask by telling the story of the market conditions that make the present the optimal time to develop your idea. You have to understand and convey the trends, market forces, industry forces and macroeconomic forces that are creating a window of opportunity. You could also reflect on the internal conditions of your organisation and its readiness to adopt and support the venture.
The organisational context in which the idea is going to be incubated and scaled plays a big part in whether it’s likely to succeed or not, so this isn't about the physical location but about the structural units within the organisation that will either enable or hinder the idea's growth. Articulating why your corporate structure, with its specific resources, networks, and knowledge base, is the ideal incubator for this idea strengthens the business case by highlighting the support systems that will hopefully fuel its development.
Why Do This at All?
This is perhaps the most profound and introspective question to answer, and it requires you to justify the endeavour beyond the allure of novelty or the pursuit of growth for growth's sake. It demands you reflect on the idea's deeper purpose and potential impact, not just for the organisation but for your customers and the broader industry or community. You must tell a story of the emotional and philosophical commitment to the idea and offer a compelling narrative that can inspire support and dedication from all levels of the organisation.
Let's imagine a corporate innovation project where a company, we'll call them Utilities Inc., develops a "Smart Water-Saving Irrigation System" for agriculture. This system uses AI to analyse weather data, soil moisture, and plant needs to optimise water usage, significantly reducing water waste and improving crop yields.
Problem: Agriculture accounts for approximately 70% of global freshwater use, with significant inefficiencies leading to water waste and unsustainable farming practices.
Evidence: Research and pilot tests have shown that smart irrigation can reduce water usage by up to 30% while increasing crop yields by 20%. Feedback from initial trials with farmers highlighted strong interest in cost-effective solutions to reduce water consumption and enhance crop productivity.
Competitive Advantage: Utilities Inc. has a strong background in developing eco-friendly technologies, with a dedicated R&D team skilled in AI and environmental science. Our company has established partnerships with agricultural research institutes and access to cutting-edge technology, positioning us uniquely to tackle this challenge.
Capabilities: We've successfully developed and commercialised similar technologies, such as energy-efficient greenhouse systems, demonstrating our capacity to innovate and execute complex projects.
Market Timing: With increasing global attention on water scarcity and sustainable farming practices, there is a growing demand for technologies that can make agriculture more efficient and environmentally friendly.
Regulatory Environment: Governments worldwide are introducing stricter regulations on water usage in agriculture, creating a pressing need for solutions that help farmers comply with these new standards.
Technological Maturity: Advances in AI, sensors, and IoT devices have reached a point where cost-effective, scalable solutions for smart irrigation are now feasible.
Organisational Context: Utilities Inc. operates in regions facing acute water scarcity issues, making our market both strategically important and highly receptive to water-saving innovations.
Cultural Fit: Our company culture emphasises sustainability and technological solutions to environmental challenges. This project aligns with our core values and leverages our organisational strengths, such as agility in product development and a collaborative ethos.
Why Do This at All?
Impact: Beyond the immediate commercial viability, this project has the potential to significantly contribute to global water conservation efforts, support sustainable agriculture, and help ensure food security in water-scarce regions. It embodies our mission to use technology for societal benefit, providing a powerful narrative for why this innovation is not just a business opportunity but a moral imperative.
Legacy: Implementing this system can position Utilities Inc. Innovations as a leader in sustainable agricultural technology, paving the way for further innovations in this space and reinforcing our brand as one that delivers impactful environmental solutions.
If you can't answer these questions, or there are gaps and weaknesses in the rationale, it's probably a sign that you need to find ideas with better strategic alignment and justification. But hopefully, this flow gives you a way to not only test your idea's foundational premises but also a persuasive, structured and profound way to articulate the strategic fit and potential impact of the ventures, products and services you're working on in a way that balances data with storytelling.
More importantly, I hope it helps you to unlock the cash you need to move them forward.
Need a hand with finding these answers? Grab a call with the team.