Do you know the importance of understanding Return on Invested Capital as an innovation manager?
Honestly, when I just started out, I didn't.
When I started, I focused too late on the financials of the projects I had worked on.
Like good Customer Development and Lean Startup taught us, focus on discovering problems and innovation accounting. Financials will come later.
But with rising interest rates, it makes sense to at least use a few financial principles in your innovation processes.
The problem is that money isn't free anymore. If you want to lend money, you typically pay between 4 to 7% interest rate.
This forces your board members to make more challenging decisions. It is up to you to help them out and show them the potential of your innovation.
I've written an article about it on Substack.
Don't create unicorns, Let's breed blue whales.
Innovation and Return on Invested Capital a love and hate relationship. (substack.com)
