Scouting options involve the major uncertainty of taking something you think you know how to do into a new market. A lot of AI applications are in this space right now— we’ ve invented some whiz bang app or solution and now we have to find out if anyone wants it. Key to success in scouting options is to have an experimental mindset, bearing in mind that an experiment that doesn’ t go the way we hoped is not a failure— just an unsupported hypothesis.
Stepping stone options are the most uncertain of all. The idea is to find a real group of customers that has a problem that can’ t be solved without AI. The introduction of autonomous driving technology in the military is an example. By replacing human drivers in trucks that can play followthe-leader, the AI technology reduces risk for the humans, saves time and allows for more precise management of transport fleets than is possible in an analog way.
The general rule of prudent investing is that 70 % of the available resources( people and money) go into the core, 20 % into platforms and no more than about 10 % into options. Ironically, research shows that ROI goes the other way— a dollar invested in the core returns about 10 %, in platforms around 20 % and in options, if they are properly managed, 70 %.
We ' ve invented some whiz bang app or solution and now we have to find out if anyone wants it.
What a map like this allows you to do quickly is figure out what your organization is actually working on. In far too many cases, the portfolio is a ragtag assortment of people’ s passions, the pet bunny from two CEOs ago and stuff that just isn’ t
Technological and capability uncertainty
Positioning
Platforms
Core making progress. If your portfolio analysis ends up looking something like the one in Figure 2, you really can’ t claim to be investing the capital in AI strategically.
How to score the levels of uncertainty? Here are some ideas.
How confident are you about the following? Rate each item( right):
Stepping Stones
Scouting
Internal and external market uncertainty
Figure2: A portfolio symptomatic of poor governance
68 Bold ideas to power progress