In a survey of 118 companies, 75% called incubation important to their growth, yet only 6% called themselves efficient at it.

The core issue is that the stage-gate process running that review was built for the core business, where risks are known and well understood. Incubation, on the other hand, runs on soft numbers, such as a market estimate or a customer conversation.

David Matheson and Doug Williams from SmartOrg created a new process; one which centers on learning instead of planning. In the 6Vs framework, the team tests the assumption most likely to change a project's direction first, while the test is still cheap, and lets the results decide where the next dollar goes.

The companies running incubation this way are seeing solid outcomes already: a defense contractor's antenna project — which originally looked like a small bet — found a real opportunity after reframing its scope, an agricultural-chemical company kept updating its business case and watched a project grow value 5X, and Eli Lilly, a pharmaceutical giant, is training its drug-discovery scientists to use the same framework before making bets that can cost them millions.

Find out how these companies unmessed their middle

When the projects an innovation team is running haven't generated revenue yet, the team can only report what it did: workshops run, pilots launched, a project or two killed.

That kind of update doesn't tell leadership whether uncertainty is actually going down, or whether the team is investing small amounts to learn, before committing bigger amounts to scale.

Hismael Doval, Innovation Program Lead at Deloitte Spain, replaced that update with a decision loop and five desirability checks tied to a strict rule: every pass mark gets set before anyone sees a result.

After nine full years of hitting revenue targets and posting a 3.6x return, the board trusted the program enough to let it stop reporting revenue altogether - all inside a company that still reviews its financial results every two weeks. Today, a test that kills a weak assumption is treated as one of the most important updates the board gets.

Here’s they made the switch, and what it took to get finance to believe in it.

Nancy Yaklich, who ran new product concepts there, wanted to know if the wider market — not just the handful of large accounts who already buy Caterpillar equipment — would pay for a product that didn't exist yet.

So she built a second company. New name, new website, nothing connecting it back. Contractors who filled out forms and asked for pricing had no idea they were talking to Caterpillar.

By the end, more than 250 contractors had signed up to buy a trailer that was still just an idea, including one company asking for over 100 units. At that point, Caterpillar’s spend on production was zero. 

See how Nancy ran the test, what she measured before spending a dollar on tooling, and what she learned about asking the market instead of asking her customers.

Pick one project in your portfolio — the one you'd defend confidently in a meeting, but haven't actually tested.

Find the assumption underneath it that would change everything if it turned out wrong, and figure out the cheapest way to check it this week.

That's the whole move behind all three stories above. Try it and thank me later ;)

Next week? How owning a P&L (and speaking the language of the business) is the best recipe for your innovation team to survive even the toughest crisis.

Hans Balmaekers
Founder, the Compass and Novum

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