Growth and Fitness
through Innovation
How to
augment the returns
from your stake
© Klaus G. Saul
4. Create full insight
This chapter is just to demonstrate how decision tree methods can identify the optimum control parameter to ensure maximum stakeholder return with respect to the competitive situation.
4-1
The Cooper
reference system and his stage-gate procedures have remarkably advanced the power of
modern innovation management. But the content of truth in the outcome is limited by the
uncertainties which entered into the hypothetical assumptions of the initial business
cases. It looks as if the empirically observed uncertainties in the forecasts of about 20%
cannot be further reduced due to the missing knowledge when assuming the hypotheses.
4-2
A traditional
way to fill up missing knowledge is to ask advice from competent peers. But the knowledge
of peers does rarely penetrate beyond the limits of the consensus assured knowledge base
[EXHIBIT 12]. We can e.g. not learn from traditional peer review what the optimum path of
a specific business deployment [EXHIBIT 3] looks like. This, however, often is the crucial
question for any stakeholder safeguarding his competitive advantages. Therefore we are
strongly advised to go beyond classical peer review techniques. Consequently and by
following the ideas of Joseph Alois Schumpeter (1883-1950) [EXHIBIT 2] we constructively
pose “learning questions” to the most competent experts and peers.
4-3
Learning
questions begin with “What if ?”. They produce new bifurcation, new paths and
new options. The options can be evaluated and ordered along generalised decision trees in
accordance with {Magee, J. (1964)}. Later Werner Popp {Popp, W. (1988)} succeeded in making those
decision trees operational by comparison of the net present values (NPV) and thus to
develop a powerful new management tool.
4-4
The tool
provides a good analysis of both the paths of the projected business cases and of their
environments. The insight gained allows to reduce the risks of failure and to re-enforce
the potential of new emerging opportunities. They therefore increase the reliability of
management decisions far beyond the limits that are accessible by the Cooper procedures so
far.
4-5
Instead of
operating on individual paths the procedure of Popp investigates whole flocks [Exhibit 21]
of possible paths. The flocks are assessed and compared for their likelihood to yield
maximum return {Popp, W. (1999)}.
4-6
The new
knowledge [Exhibit 12] is generated within a constructively guided dialogue among experts.
The dialogue is restricted to the exchange of factual information. The experts are lead to
jointly perceive and rationally verify as much as possible of the factual knowledge about
the flocks and about the optimum path of each flock, in particular.
LITERATURE
Dr. Klaus G. SAUL; Leiter Fachausschuss S1.3
INNOVATIONSMANAGEMENT
DEUTSCHE GESELLSCHAFT FÜR LUFT- UND RAUMFAHRT - LILIENTHAL- OBERT e.V. (DGLR) 53175 Bonn