When calculations about each product are made based on the Innovation Accounting method outlined under Measuring Product, the most likely outcome of a portfolio can also be expressed as a range, based on the Monte Carlo Simulations.
Financial success can not be expected for each startup, so a few have to make up for the many that don’t return. The goal therefore, is to test as many ideas as possible to find the winners. The innovation game Plinkromatic from our partner Kromatic demonstrates why many bets and the ability to kill early are key ingredients for success. This can only be achieved effectively by utilising Innovation Accounting.
A portfolio is what tests the Innovation Strategy. Each portfolio needs to aggregate tailored information to inform the underlying assumptions of the Strategy.