Tools for Tournaments

Monte Carlo Simulation of Horizon 1 opportunities

This Excel file supports a Monte Carlo analysis of the profitability index of Horizon 1 opportunities. You can enter the key (uncertain) parameters that influence the profitability index and their statistical distributions. The Excel file then simulates the financial pay-offs. (See Figures 6-4 and 6-6 on pages 111-113 in Chapter 6.)

Simple analysis of Horizon 1 opportunities

This Excel file provides a simple net present value analysis of a Horizon 1 opportunity. You can enter the development cost and development time as well as unit costs and the revenue trajectory. The Excel file than computes the net present value. (See page 109 in Chapter 6.)

Decision tree analysis for Horizon 2 opportunities

The Excel analysis helps in the creation of simple decision trees reflecting different outcomes (scenarios) associated with Horizon 2 opportunities. Your opportunities can have up to two stages and three different outcomes at each stage. You enter pay-offs and probabilities and the Excel file creates the trees and does the financial analysis. (See Figure 6-7 on page 116 and the calculations discussed on p. 120.)

Innovation return curve

This Excel file creates an innovation return curve for you, which can be tedious to construct in Powerpoint. You enter the opportunities, their investments, and their profitability indices and the Excel file creates the corresponding return curve. (See Figure 6-2 on page 107 in Chapter 6 as well as the Introduction chapter.)

Real Win Worth-it Check List

This Excel file has no built-in functionality. It simply provides you with the check-list that we discuss in Chapter 4 (Table 4-3) so that you can easily apply it to your own opportunities.