IMAGINE THIS SCENE: A team is pitching an innovation project to leaders of your company using a slide deck with five-year revenue projections, an execution road map and assumptions that are being presented as facts. After the presentation, the leaders take things from bad to worse. The finance director states that she cannot approve any investment in this new idea because it does not meet the company’s financial ‘hurdle rate.’ The rest of the leaders agree and tell the team to go back and work on their spreadsheets — and only come back when their numbers meet the required hurdle rate.
At first glance, this seems like a logical conversation, but it is in fact absurd. The team was presenting a spreadsheet describing the five-year performance of a product that does not yet exist. In response, the leaders were implicitly asking the team to go and finesse these numbers so they can feel comfortable giving them money.
This scene is a classic example of innovation teams doing the wrong set of questions.
