Elijah Eilert is talking to Peter LePiane about innovation within large organizations. Part 2 of the podcast explores various aspects of innovation related decision-making. Peter opens up about his background in science and computer science, his Startup journey and how he nearly founded Airbnb and Shopify. He introduces Estimatic, his latest venture, software designed to model uncertain projects and ideas.

The episode addresses the concept of innovation accounting, common misconceptions in business case analysis, and the value of information by connecting learning to financial outcomes. The episode challenges traditional practices in organizations and focuses on the importance of understanding human behaviour to achieve success for new products and organisational change management.

Throughout this episode, the duo explores a myriad of topics central to innovation-related decision-making and highlights the value of information, connecting it to financial outcomes. Unravelling the concept of innovation accounting, Peter debunks the common misconceptions prevalent in business case analysis. The episode challenges traditional practices and underscores the pivotal role of comprehending human behaviour in achieving success, whether for new products or the intricacies of change management within organizations.

[01:43] Understanding Human Behavior in Change Management

• Products succeed or fail based on human behavior, as do organizational changes. Understanding human behavior is therefore crucial.
• Peter recommends checking out Lean Change Management and gives a shoutout to Jason Little!

[05:23] Peter’s Background

• Peter’s background as a software engineer.
• How he transitioned from science to computer science at the University of Waterloo.
• His journey into the startup world.
• How Peter launched Airbnb and Shopify (kinda).
• Peter’s experience working on web development and e-commerce projects.

[16:15] Estimatic

• Peter explains his startup, Estimatic, a Monte Carlo tool for modelling uncertainties.
• The importance of accurately depicting uncertainty in business models.
• Critique of the misleading hockey stick growth projections in startup presentations.
• The need to provide a range with a probability of future outcomes instead of point predictions.

[25:51] Challenges in Corporate Innovation Decision-Making

• Addressing the challenges of making decisions in large corporations.
• Mentioning the lack of recognition for risk management in decision-making.
• Highlighting the absence of structures rewarding risk management.

[26:53] The Concept of Innovation Accounting

• Elijah and Peter delve into the concept of innovation accounting and its evolution.
• Explain how innovation accounting combines the uncertain nature of innovation with concrete numerical measurements.
• Emphasize the importance of connecting learning to financial outcomes.
• Discussing the use of Monte Carlo simulations in innovation accounting.

Quantifying Learning and Progress...