Business case for innovation

Within larger organizations, innovation projects stall more often than you’d think. They start with a great idea and plenty of energy, but as soon as the risks take center stage, the project loses momentum. As a result, the team loses direction and motivation. Because the outcome of innovation is never guaranteed, it feels abstract to many people, and the uncertainty around that outcome quickly gets associated with risk rather than with the growth opportunities it could bring.

A strong business case for innovation prevents this. It answers the question of whether the investment outweighs the returns, and it gives stakeholders the context they need to make that call. In this blog, we’ll tell you more about it and give you 3 tips for building a strong business case that will win stakeholders over.

In this blog:

• A business case for innovation works differently
• The key components of a strong business case
• The value a business case brings to your organization
• 3 tips for building a strong business case for innovation

A business case for innovation works differently

While a traditional business case is built on predictable outcomes, like fixed costs, guaranteed returns, and a tight timeline, innovation works differently. With a regular business case, elements like costs and returns are largely known in advance. With innovation, you have to uncover and prove those numbers as you go. You’re exploring something new, testing assumptions, and adjusting your plans based on what you learn along the way. That’s why a business case for innovation needs to stay flexible. It starts with what you currently know, and the details get filled in as research and experimentation bring more clarity.

The key differences

• Hard ROI vs. validation: A regular business case is driven by financial KPIs like ROI and payback period, figures that are often already fixed. A business case for innovation, on the other hand, is driven by learning speed and interim milestones. The investment goes into testing assumptions, such as “Are customers actually interested in this innovation?”
• How data is used: A regular business case relies on historical data and benchmarks to predict the future. With an innovation case, there’s no historical data available, you have to gather it yourself through experiments, prototypes, and pilots.
• Funding happens in stages: A regular business case asks for the full budget for building and rolling out in one go. With innovation, the budget is requested in small steps, and funding for the next step only becomes available once the current step has proven successful.

The key components of a strong business case

In a business case for innovation, various components can be adjusted as the project progresses, based on what you learn along the way. Five elements come up every time:

1. Reason and problem: What’s driving your innovation, and what problem does it solve?
2. Objectives: What do you want the innovation to achieve? What growth should it deliver? Make these objectives concrete and measurable.
3. Costs and investment: What time, people, and resources do you expect to need to bring the innovation to life?
4. Benefits and returns: What financial and strategic returns does this deliver in exchange?
5. Risks: What risks do you anticipate? Also describe how you plan to manage them.

The business case answers the question of whether the investment and growth potential outweigh the risk. That insight helps convince stakeholders of the innovation’s value and secure funding for it.

Also interesting: Making an innovation plan: This is how you make it concrete and tangible

The value a business case brings to your organization

A business case supports decision making around an innovation project. It provides direction throughout the process and answers the financial questions that would otherwise go unaddressed. The research and experiments you carry out for the business case also raise the knowledge level of everyone involved, which brings clarity to both the direction and the expectations.

3 tips for building a strong business case for innovation

1. Start small and stick to the essentials at first: pin down the problem, the goal, and the expected returns before diving into further detail.
2. Work iteratively: refine the business case as research and experiments give you more insight.
3. Involve stakeholders early: make sure decision makers are involved in both the business case and the innovation process from the start, so assumptions and expectations stay aligned.

How we look at the business case for innovation

You don’t put together a strong business case for your innovation on your own. It’s something you build together with the people who need to carry out and approve the project. At Beeliners, we’re happy to think this through with you, and you don’t need a fully worked out business case yet when you get in touch with us.

Curious what we can do for your innovation? Get in touch with us, no strings attached.