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Financial Value of Innovations



Harness the Power of Financial Decision-Making in Innovation with Real Options. By integrating Lean-Startup principles, this approach efficiently minimizes risks and accelerates innovation processes, while also providing the crucial financial rationale needed by decision-makers. The key is in employing Real Options—a strategy that perfectly aligns with today’s fast-paced, risk-aware business environments.

 

Why use Real Options?

  • Risk Management and Reduction: By applying financial principles through Real Options, decision-makers can quantify risks and make more informed choices, leading to a reduction in the likelihood of pursuing non-viable projects.

  • Accelerated Decision-Making: By providing a clear financial rationale and valuation for innovative projects, it enables organizations to rapidly assess the potential and feasibility of different initiatives, thus speeding up the innovation cycle.

  • Enhanced Project Evaluation: It goes beyond traditional Net Present Value (NPV) methods by considering the flexibility and future possibilities that an innovation project might offer, thus capturing the true value of these initiatives more accurately.

  • Enhanced Project Evaluation: It goes beyond traditional Net Present Value (NPV) methods by considering the flexibility and future possibilities that an innovation project might offer, thus capturing the true value of these initiatives more accurately.

 

When to use Real Options

Innovation Business Cases

Financial Portfolio Prioritization

​Make informed decisions on innovation initiatives swiftly. Accept promising projects with confidence and reject non-viable ones without regret, embodying Steve Jobs' philosophy of focused innovation.

​Real Options aids in prioritizing initiatives to maximize financial value creation, enabling judicious resource allocation to the most promising projects.

 

The Real Options Calculator™

This state-of-the-art software places comprehensive and understandable Real Options valuation at your fingertips. It simplifies complex financial assessments, aiding decision-makers in evaluating and prioritizing innovative projects effectively.

  • Intuitive Business Assumptions: Allows for a natural and clear expression of business assumptions.

  • Financially Sound Evaluations: Uses Real Options for solid financial evaluation of Agile Business Cases.

  • Informed Decision-Making: Strengthens the grounds for accepting or rejecting agile innovation initiatives.

  • Lean Portfolio Management: Incorporates a financially grounded prioritization metric, enhancing portfolio management effectiveness.

This approach is powered by our leading-edge software that encapsulates decades of Real Options expertise and the latest research advancements. It's fully compatible with Lean-Startup methodologies and offers 100% backward compatibility with the Cox-Ross-Rubinstein model.

 

Learn More


Collaboration with Rita McGrath, a best-selling author: "NPV doesn’t work for risky, high-potential projects. Here’s a better approach."



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