Agile Economics: A New Approach to Commercial Strategy
Say goodbye to category analysis and fake-o-nomics, and hello to human-centric, real world analysis.
It’s critical to bring commercial rigor to innovation — to focus investment, bulletproof solutions through development and be practical about what it will take to scale. But dropping traditional approaches to commercial strategy into innovation projects — like assessing category market share, profit pools and developing in-depth P&Ls — can limit the vision of teams and make it hard to set the right expectations among stakeholders.
We see four pitfalls with inserting traditional commercial strategy approaches into innovation projects:
- Category blinders
Traditional approaches to analysis are driven by existing category boundaries — which narrow thinking and are inherently backward-looking.
Teams are pushed to develop accurate multi-year forecasts when uncertainty is high — leading to false precision and poor expectation setting.
- Lack of human focus
Approaches to opportunity selection are driven by existing solutions and business models, not untapped human problems — leading people to follow “today’s money” rather than “tomorrow’s money”.
- Assets as destiny
Existing assets are seen as filters, rather than as springboards to solutions, or routes to new thinking.
So what to do? We’ve developed a set of new tools and approaches that we call Agile Economics. It’s a cutting edge approach to commercial strategy that’s built for the uncertainty of innovation. They include:
A tool to help map and assess the relevance of your company’s existing assets for the project you’re working on, and use them to spark new solutions and expand possibilities.
A method to help you focus your innovation efforts by strategically assessing which problems to solve— not existing profit pools to pursue, that are based on yesterday’s money— based on a problem’s incidence, intensity, the potential for value creation and your own company’s right to win in solving it.
Get a human-centric view of your ‘true’ competition by looking at who and what else solve the problem you’re focusing on — giving you a broader and deeper view that’s unhampered by existing category boundaries.
A staged, agile alternative to a traditional P&L — enabling you to make a realistic investment ask for an uncertain venture based on real options theory, defined pivot points and ‘just rigorous enough’ economics.
You can learn about Agile Economics and more tools and approaches to experimental innovation by subscribing to The ?What If! Toolkit — the on-demand service that keeps corporate innovators at the cutting edge.
The ?What If! Toolkit offers access to practical learning, tools and template to support everyday innovation projects, updates on new tools as soon as we roll them out to our own inventors, and on-demand support through emails, virtual office hours and webinars.
To schedule a demo of The ?What If! Toolkit, get in touch!