We have previously emphasised that it is advisable to build an innovation project portfolio and not to try to put all your eggs in one basket in the belief that you have immediately found the winning solution ("picking the winner"). Even with innovation teams consisting of proven experts who work well together, a single project is not a sure winner, because there are so many uncertainties when it comes to truly bold and innovative development. Companies typically allocate significant resources to traditional research and innovation projects, and projects worth tens or hundreds of millions are also common in the state support system. The problem with this approach is that complex projects that win the approval of company managers and scientific opponents on paper should continue in a different direction after the first test results than described, but this is often not possible because the team has to meet the milestones agreed in the submitted plan. This means that the project team cannot deviate from the original plan and does not take enough risks to create a truly world-class discovery or innovative product. Instead, it delivers the promised results, which often turn out to be mediocre or uncompetitive due to the number of similar solutions available. An even worse scenario is when the innovation team only implements developments that are considered new to the company, i.e. plays it safe, because then there is no chance of achieving results at an international level.

 

 

In recent years, while following numerous university innovation developments, I had the feeling that the most important question for the implementation team was: can we do it technically? Is the project we have undertaken feasible and will it be workable? The risk of feasibility, the risk of how a business can access and manage key resources, technology, intellectual property rights, and whether it is capable of performing key activities and involving key partners.

 

 

However, successful innovations involve much more than just implementing a brilliant idea. Design thinking, a key element of which is focusing on people and potential users of the solution, is a great help in determining what else is needed. Will customers find the developed solution interesting? In fact, the answers to this question can reduce the risk of desirability. If the market targeted by the business is too small, or too few customers demand our value proposition, or the company is unable to reach, acquire and retain customers, then the development will fail and the investment will have to be written off.

 

 

Even if we can implement our development and there is mass demand for it, we must consciously examine its business viability from the outset. The risk to business viability is simply whether the developed product or service can generate sufficient revenue. Can it be used to build an independent product line, business line or even a business? Failure can result if customers are unwilling to pay enough, or if we can only produce the developed product or service at too high a cost and with low profits.

 

 

Charles Darwin's studies show us that it is not the strongest species that survive, but the most adaptable. This is also true in the business world, as it is inevitable that, during the process of "creative destruction" associated with Schumpeter and described at the beginning of this volume, one of our competitors will take notice of our innovative product and try to internalise it in some form and exploit it for their own business interests. Many inventions, discoveries and innovative products fall victim to copying and imitation. In addition, there are other external threats to innovative products, such as how they can adapt to the competitive environment, technological, regulatory, social or market trends, or an unfavourable macro environment, which is particularly detrimental to new products and services during a recession.

 

 

In order to remain competitive in the long term, companies must not only implement developments related to their current products, services and processes to increase their efficiency, but must also strive to discover new directions and solutions that can significantly contribute to the profitable operation of the organisation over the next 1-3 years. Successful family businesses and large corporations around the world divide their development efforts between projects related to their current portfolio and larger-scale developments that will ensure their future competitiveness. According to international benchmarks, they divide their innovation resources in a ratio of 70-30 or 80-20 per cent between minor efficiency improvements and minor modifications to their products and services, and more radical innovation projects requiring significant changes.

 

 

Osterwalder (2020) cites several large corporate examples in relation to the development of an exploration portfolio. In one case, a company invested in 250 projects over years, each worth USD 100,000, of which 162 failed within six to twelve months, while the remaining 87 were successful, generating varying degrees of profit. One of the 250 exploratory innovation projects became a blockbuster success, and the company built a completely new business line and ecosystem around it. The company was called Nestlé, and the success story was the well-known Nespresso capsule coffee, which has been copied by numerous competitors. Such outstanding successes are rare, as the company's background, production, logistics and sales capacities, and successful brand-building experience all contributed to the development becoming a world-renowned success, creating a real money-making machine for the company's shareholders.