Use the RWW model to prioritize innovation ideas and improve your probability of success
Organizations face a constant barrage of decisions that can significantly impact their success. From choosing between investment opportunities to making strategic partnerships or even deciding on product development, the ability to make informed decisions is paramount. The Real-Win-Worth (RWW) model is an HBS-derived methodology first developed by Michael Porter to help organizations make decisions about when and how to invest in innovation.
Here is a practical guide for using the RWW model to enhance decision-making processes.
What is the Real-Win-Worth Model?
The Real-Win-Worth Model is a decision-making framework that guides organizations through strategic choices that are not only viable but also aligned with their long-term objectives. Let's break down each of these components:
Real: Real refers to the feasibility and practicality of a decision. It involves assessing whether an organization has the resources, expertise, and capabilities to execute a specific strategy or project successfully. It's about understanding the "can we do it" aspect.
Win: Win focuses on the potential for success and the competitive advantage that can be gained from a decision. It asks the question, "if we do it, can we succeed?" This aspect emphasizes the strategic importance of the decision and its alignment with the organization's goals.
Worth: Worth addresses the return on investment and the overall value of the decision. It involves evaluating whether the potential rewards are worth the effort and resources required. Worth helps answer the question, "should we do it?"
Using the RWW Model in Decision-Making
Intake and Screening:
1. Identify Strategic Choices: This could include options such as expanding into a new market, launching a new product, or forming a strategic partnership. Make sure you understand your organizational goals and strategy before diving in the RWW model.
2. Capture and Screen Innovation Ideas: Ideas can come from anywhere. If you've done a good job of encouraging ideation, you should have a lot of ideas; too many ideas. Use the mini-RWW model to sort them out. Ideas with low scores on any one of the mini-RWW model can be immediately screened out. These are showstoppers.
3. Categorize Innovation Types: For ideas you're considering after the preliminary RWW, determine whether you have little innovation (little i) ideas of BIG Innovation (BIG I) ideas:
Little i ideas can be dispositioned based solely on the Mini R-W-W -- You can get going on these right away
BIG I ideas that pass the mini should go into a full R-W-W Assessment
R-W-W Full Assessment for BIG I Innovation
1. Is it REAL? Is there a real and viable market and product concept?
A market exists for the product if:
There’s a need or desire for the product
The product is better than alternatives
Customers can and will buy it (affordability) (willingness to shift)
Target market size is adequate
The product is real if:
There is a clear concept with precisely described characteristics
The product can be produced with available technology and materials
The product will satisfy the market in its final form
Assess the market before assessing the product. When market is unfamiliar, the probability of failure increases. The market will not adjust to match the product, but the product can be adjusted or replaced to better fit the market.
Learn how to conduct an RWW assessment here: <link>
Contact me for an Excel Template that automates much of the RWW process: <link>
2. Can you WIN? Finding a real opportunity does not guarantee success. Can the product win? Can the company win? Can you gain and hold adequate market share?
The product will be competitive if:
It offers clear tangible and intangible advantages over alternatives
Those advantages can be sustained (first line of defense is patents)
It can survive competitor’s responses
The company will be competitive if:
We have superior resources for execution
Team has the experience and skills appropriate for project’s scale and complexity
Team has a mastery of market research tools and customer insight
Consider the competitive landscape, market conditions, and the strategic importance of the decision. If probability of success is low, it might not be the right choice.
Learn how to conduct an RWW assessment here: <link>
Contact me for an Excel Template that automates much of the RWW process: <link>
3. Is it WORTH doing? Estimate the return on investment (ROI), considering both the short-term and long-term benefits. What is the revenue and cost impact? How fast can your turn a profit? What are the impacts of changes in pricing, market share shifts, etc?
The product will be profitable at an acceptable risk if:
Its forecasted returns are greater than costs
It fits with the company’s growth strategy (For example, by enhancing customer relationships or creating opportunities for follow on business)
Does launching the product make strategic sense?
Does the product fit your overall growth strategy?
Will top management support it?
If the ROI is insufficient or doesn't align with your goals, you might want to explore other options.
Learn how to conduct an RWW assessment here: <link>
Contact me for an Excel Template that automates much of the RWW process: <link>
Model Outputs: Prioritize Projects By Quantifying the Value and Risk
The Real-Win-Worth Model is a powerful tool to quantify the value of strategic decisions to your particular space. Once you've completed the Real-Win-Worth worksheets, the RWW Model will output quantified RWW score and probability of success dashboards.
You can use these the scoring and risk values to compare projects and make go / no-go decisions.
Learn how to conduct an RWW assessment here: <link>
Contact me for an Excel Template that automates much of the RWW process: <link>
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