There is very little at risk with a strategy innovation initiative, other than the time and money invested by the team. The internal team sets the overall budget so that costs (primarily in the Exploring Phase) can be controlled to whatever level represents a reasonable investment in the company’s future.

We have never encountered an initiative where discussions with customers and industry experts did not lead to valuable insights for the company. The only question is whether the impact of those insights represents a significant business opportunity for the company (or only a minor business opportunity) and whether the company will choose to follow up with them.

Other things to watch for as critical success factors that can affect overall results include:

1. The selection of the Discovery team, where lack of diversity in functions and skills can limit the quality of the output.
2. The breadth and commitment of the management mandate to the team, as small mandates tend to produce small results.
3. Alignment with senior management perspectives on the business, which greatly enhances the usefulness of the resulting portfolio of new business opportunities.
4. The pursuit of new insights on customers and the marketplace, using techniques that are new to the company.
5. The creativity of the team’s working environment, where the identification of new business opportunities is not constrained by the company’s current business model.
6. The collaborative nature of the team’s working environment, so that opportunities have cross-functional internal support.