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The Use of Discovery Driven Planning to Manage High Uncertainty Projects

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Discovery Driven Planning is a process for the management of innovation and development with high levels of uncertainty, new product projects and game changers.

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The Use of Discovery Driven Planning to Manage High Uncertainty Projects

  1. 1. DISCOVERY DRIVEN PLANNING AND HIGH UNCERTAINTY PROJECTS #INNOCHAT MAY 27, 2010 Jose A. Briones, Ph.D. Twitter: @Brioneja
  2. 2. DISCOVERY DRIVEN PLANNING BACKGROUND <ul><li>Process for management of innovation and development projects with high levels of uncertainty such as disruptive innovations, new product/new market projects or game changers </li></ul><ul><ul><li>1995: First Publication by  Rita Gunther McGrath and Ian C. MacMillan (1) </li></ul></ul><ul><ul><li>2000: Popularity increases with publication of book “The Entrepreneurial Mindset” (2) </li></ul></ul><ul><ul><li>2008: Endorsed by Clayton M. Christensen as an alternative to Stage Gate for high uncertainty projects (3) </li></ul></ul><ul><ul><li>2009: Publication of book Discovery Driven Growth (4) </li></ul></ul>
  3. 3. DESCRIPTION <ul><li>Discovery Driven Planning turns the basic project map on its head </li></ul><ul><ul><li>Discovery Driven Planning is a plan to learn, not to show that you had all the answers when you wrote the plan </li></ul></ul><ul><ul><ul><li>“ Learn as you go” </li></ul></ul></ul><ul><ul><li>Instead of estimating the market demand and calculating the potential revenue/profit, DDP starts by defining the desired financial target that will meet the company’s targets and strategy </li></ul></ul><ul><ul><li>The method then defines the set of assumptions, technical and commercial that MUST be proven true in order for the project to succeed </li></ul></ul><ul><ul><li>A plan is put in place with specific milestones to test and verify the assumptions. </li></ul></ul>
  4. 4. <ul><li>Method provides discipline and framework to the discovery process but at the same time provides the flexibility necessary for the project to change direction or iterate as needed </li></ul><ul><li>DDP uses four basic documents (5) </li></ul><ul><ul><li>‘ Reverse Income Statement’ models the business economics. </li></ul></ul><ul><ul><li>‘ Pro-Forma Operations Specs’ defines operations needed to run the business. </li></ul></ul><ul><ul><li>‘ Key Assumptions Checklist’ identifies the business hurdles and assumptions for the initiative. </li></ul></ul><ul><ul><li>‘ Milestone Planning Chart’ specifies when the assumption needs to be tested. </li></ul></ul>
  5. 5. <ul><li>DDP has been successfully used by oil and pharmaceutical companies to tackle high uncertainty projects </li></ul><ul><li>More companies are adapting the method, but there is still strong resistance to leave Stage Gate behind. </li></ul><ul><ul><li>Stage Gate can be used after the results of DDP have defined the project and reduced the level of uncertainty </li></ul></ul>
  6. 6. INNOCHAT QUESTIONS <ul><li>How does your company manage innovation projects with high levels of uncertainty? </li></ul><ul><li>Do you believe that there is a need for a different process for incremental vs. disruptive innovations? </li></ul><ul><li>Have you or do you know someone who has had success implementing Discovery Driven Planning? </li></ul><ul><li>Do you know of alternative innovation management processes for high uncertainty projects? </li></ul>
  7. 7. REFERENCES <ul><li>Discovery Driven Planning, 1995, http://hbr.org/1995/07/discovery-driven-planning/ar/1 </li></ul><ul><li>The Entrepreneurial Mindset, 2000, http://www.amazon.com/Entrepreneurial-Mindset-Continuously-Opportunity-Uncertainty/dp/0875848346/ref=sr_1_1?ie=UTF8&s=books&qid=1274888243&sr=1-1 </li></ul><ul><li>Innovation Killers, 2008, http://hbr.org/product/innovation-killers-how-financial-tools-destroy-you/an/R0801F-PDF-ENG?Ntt=innoation%2520killers </li></ul><ul><li>Discovery-Driven Growth, 2009, http://www.amazon.com/Discovery-Driven-Growth-Breakthrough-Process-Opportunity/dp/1591396859/ref=sr_1_3?ie=UTF8&s=books&qid=1274887263&sr=8-3 </li></ul><ul><li>Discovery Driven Planning http://faculty.msb.edu/homak/homahelpsite/webhelp/Discovery_Driven_Planning.htm </li></ul>

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