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Professor Clay Christensen endorses DDP in January 2008 HBR, “Innovation Killers”

Discovery-driven planning. Happily, though, there are alternative systems specifically designed to support intelligent investments in future growth. One such process, which Rita Gunther McGrath and Ian MacMillan call “discovery driven planning,” has the potential to greatly improve the success rate. Discovery-driven planning essentially reverses the sequence of some of the steps in the stage-gate process. Its logic is elegantly simple. If the project teams all know how good the numbers need to look in order to win funding, why go through the charade of making and revising assumptions in order to fabricate an acceptable set of numbers? Why not just put the minimally acceptable revenue, income, and cash flow statement as the standard first page of the gate documents? The second page can then raise the critical issues: “Okay. So we all know this is how good the numbers need to look. What set of assumptions must prove true in order for these numbers to materialize?” The project team creates from that analysis an assumptions checklist – a list of things that need to prove true for the project to succeed. The items on the checklist are rank ordered, with the deal killers and the assumptions that can be tested with little expense toward the top. McGrath and MacMillan call this a “reverse income statement.” The entire article can be purchased at www.hbsp.harvard.edu

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