ValizeImpactGuides
Welcome to our comprehensive online learning guide series!
Whether you're a curious learner eager to expand your knowledge, someone seeking to acquire new skills, or are part of a team seeking to collectively upskill, our series is designed to provide you with a flexible and engaging learning experience.
In this digital realm, you'll find a treasure trove of videos, explainers, and assessments that you can navigate at your own pace, tailoring your educational journey to fit your unique schedule and learning preferences.
The guides were developed to address a fundamental issue for organizations today Although we know that competitive advantages follow a life cycle – from innovation, through launch, into repeatable operations and then into transformation when an existing advantage is exhausted – we neglect to train people in the skills that are critical to both innovation and transformation.
By using our guides, you and your teams can learn to use and apply these skills, as close to putting them to work as you can. Indeed, we envision that people will iterate back and forth between learning and application, retaining the learning and building capability as they go.
Whether you're a student, a professional, or simply a curious mind, our online learning guide series is your passport to limitless learning
Join us on this transformative journey and unlock the doors to a world of knowledge, all at your own pace. Your adventure begins here!
Join us on this transformative journey and unlock the doors to a world of knowledge, all at your own pace
Your adventure begins here!
What are the Guides?
Each of our guides covers six lessons on related topics
You can think of them as travel guides for a journey through essential innovation knowledge. Each guide contains six lessons, an explanatory video, a suggested application exercise and an assessment
If you prefer to do your reading on paper rather than on a screen, the text portion of the guides can be downloaded for your convenience
You will access the guides through your individual library in our learning area, which will be available to you after registration There, you’ll be able to access the landing pages for each guide
The platform also supports a community area, in which you can exchange ideas, ask questions and otherwise connect with your fellow learners.
You can also join in regular live office hours with Rita McGrath and her colleagues.
We also package the guides in our collections, which consist of six guides on related themes
Buying a collection is a great way to establish a longer-term learning journey for increased impact.
Different models for learning
You can, of course, purchase and absorb each guide on an individual basis
You can also purchase guides and collections as a team.
We also plan to create learning cohorts who will go through each guide on a timed basis, to increase motivation and keep up the pace
For Enterprise users, please contact us for library-wide subscriptions or incompany cohorts.
How to use our Guides
As you’ll learn from the video, there are several things you can do to improve the effectiveness of your learning journey.
First, pick your topic(s)
We have loosely structured the guides around themes that are relevant to innovation and to doing new things. We suggest you start off with a few topics that you believe will have the biggest impact on you and your organization
Secondly, put your time for learning in your calendar!
If you are working with a team, have them do the same, and try to set milestones for when you want to complete each guide If possible, consider doing the application work with your colleagues – you’ll have more ideas and embed the capabilities more deeply if you work together
As you go through each guide, another good practice is to capture ideas, insights and reflections in a journal. Research has shown that leaders who practice regularly making commitments to journalling tend to retain information more readily, are able to explain the concepts to others and have more and better ideas
MeetYourGuide,RitaMcGrath
Rita McGrath is a best-selling author, a sought-after advisor and speaker, and a longtime faculty member at Columbia Business School.
Rita is considered one of the world’s top experts on strategy and innovation.
She is the winner of the 2022 CK Prahalad award for scholarly impact on practice from the Strategic Management Society, and in the same year was inducted into the Business Excellence Hall of Fame She ranks among the top 10 management thinkers globally, including the #1 award for strategy by Thinkers50.
Rita’s most recent book is Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen (Houghton Mifflin Harcourt, 2019).
Rita is the author of four other books, including the best-selling The End of Competitive Advantage (Harvard Business Review Press, 2013).
Rita is one of the most widely published authors in the Harvard Business Review, including the bestselling article “Discovery Driven Planning” (1995), which was recognized as an early articulation of today’s “lean” startup philosophy and was praised by Clayton Christensen as one of the most important ideas in management - ever.
She is also a highly-respected academic researcher whose work has won awards from the most prestigious management journals
On the lighter side, she was named by Fast Company Magazine as one of the 25 smartest women to follow on Twitter
Rita is recognized as one of a small group of experts who have built today’s best-in-class innovation practices She has won many awards for her work and impact, including the “Theory to Practice” award from the Vienna Strategy Forum and multiple “best book” awards for her work
Rita joined the faculty of Columbia Business School in 1993. Prior to life in academia, she was an IT director, worked in the political arena, and founded two startups. She received her Ph D from the Wharton School, University of Pennsylvania and has degrees with honors from Barnard College and the Columbia School of International and Public Affairs.
She is active on all the main social media platforms, such as Twitter @rgmcgrath.
She is married and is proud to be the mother of two delightful grownups.
For more information, visit RitaMcGrath com
SampleLesson:BareBonesnetpresentvalue calculator
The conventional approach to planning for new growth businesses borrows heavily from the same toolbox as other kinds of planning for corporate investment. An individual or team would come up with an idea Research then often followed, attempting to quantify such elements as total addressable market, customer segments to be served, problem to be addressed and so on All of this would be put into a conventional business plan format, with estimates up front and confident projections with respect to timing, rollout, sales and the like
The plan would then be presented to a corporate decision-making body and approved, or not. Approval very often implied authorization of a large budget, a complete team, and a rollout roadmap stretching over the planning and launch phase, which would be 18 months to two years or longer
In the plan, metrics such as customer adoption rates, volumes to be sold and other variables, would be painstakingly described. Goals for the new business plan were often expressed in terms of desirable corporate metrics – return on net assets (RONA), return on investment (ROI), economic value added (EVA), net present value (NPV) and so on
To get a plan approved, a team would have to argue that their project would surpass corporate benefit requirements, often a hurdle rate for a positive net present value or other future-looking metric
The first dilemma this creates is that to get their projects approved, project teams were likely to paint a rosy picture of how great this new venture would be, whether or not they believed they could accomplish the outcomes with the investment, for the benefits, in the timeframe promised in their plan.
An unfortunate consequence of this is that many projects were doomed to fail on the projections made for their future. This is not necessarily because the project wasn’t a good one, but because those pitching it had sold an unrealistic set of expectations to their corporate counterparts.
In short, new businesses were being planned with the same methodologies suitable for planning a product line extension or entry into a familiar category In those cases, planners have a robust foundation of experience to work from, and a great deal of knowledge about how things are likely to go. With a new business in a new market or utilizing a new technology, there is no factual basis for making projections
Much is unknown
That in turn implies that embedded in these conventional plans were an enormous number of assumptions, which might be proved correct, but which also might not
This way of planning is often subject to a tremendous amount of gaming, as the people proposing the plan and the people who have to approve it both know that making estimates about an uncertain future is unlikely to be accurate.
So, what is the proposed NPV? Whatever it needs to be to get the project approved!
As an example of how pervasive gaming was, we were doing some work with a large chemical company and had the chance to look at several of their new product launch plans. All were dutifully packaged with an NPV analysis Just for fun, we suggested that they eliminate terminal value considerations from the plans What happened? 8 of the 10 plans we examined went NPV negative and the remaining 2 barely scraped by
The whole plan approval process was being driven by a number that had nothing to do with the operation of the proposed business!
But although we recognize that this isn’t a smart way to plan for new businesses, there is still a tremendous hunger to quantify what the outcome of an investment in something new might be We therefore developed a simple software tool called the “BareBones” net present value calculator
This is an Excel spreadsheet that allows a user to put in their estimates for the time and cost of several phases of a project: the launch phase, the ramp up phase, the steady-state phase and the erosion phase, plus costs that apply no matter what phase the project is in
While it certainly is no more scientific than traditional NPV calculations, it is a lot easier to use and lends itself well to “what if” guessing. We use it practically during checkpoint review meetings or to update other groups on the project goals
Useinstructions-BareBones
Calculating an NPV can be a timeconsuming and fiddly exercise
The good news is that if you are hoping to think through an investment in a new venture, you can achieve roughly-right results with a pared down version of NPV
Instead of laboriously calculating yearby-year spreadsheets over the entire life of a proposed project, you need to estimate only nine project values.
1.Launch Time. How long will it be before the project begins to generate its first revenues?
2. Ramp–Up Time How long will it take the project to move from its first revenues to a steady state? The BareBones NPV estimator will assume that this is a linear ramp-up period
3. Competitive Response Time. How long after launch will it take for competitors to respond?
4. Competitive Erosion Time. How long will it take for the competitors to erode your profits to the point that you are only just recovering your fixed costs? The BareBones NPV estimator will assume that profits drop off linearly from the state of the competitive response time to the end of the erosion time
5. Total investment. What is the expected total investment? The BareBones NPV estimator will assume that this is a one-time investment incurred at the end of the launch time.
6. Discount Rate. This number is used to “discount” future cash flows to account for the fact that if you weren’t doing this project, you could just as easily leave your money in a bank account and earn interest. The idea is that a sum of money in your pocket today is worth more than the same amount five years from now.
7. Expected annual fixed costs
8. Expected annual variable costs per unit at steady state
9. Expected annual revenues in units at steady state
For the purposes of this calculator, we assume that the terminal value or salvage value is zero If it turns out that there is some value there that is awesome, but shouldn’t drive your initial investment decision Indeed, in a world oftransient advantage, you’re a lot better off assuming that competitive advantage will erode rather than making investments today assuming there will be value left over
Download the spreadsheet and it should be fairly self-explanatory to complete it
