Unlocking Opportunities for Growth: How to Profit from Uncertainty While Limiting Your Risk

by Alexander Van Putten, Ian C. MacMillan, van Putten, Alexander B.

Book Overview

"This book is a must for any Business Development Manager, Corporate Strategist, R&D Director, and anyone else who is accountable for growth in a corporation. It is an easy read that is practical and... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0132237903
• ISBN13: 9780132237901
• Release Date: January 2008
• Publisher: Wharton School Publishing
• Length: 161 Pages
• Weight: 0.80 lbs.
• Dimensions: 0.8" x 6.3" x 9.0"

Customer Reviews

Developing a new venture - practical help in these pages

I put off reading this book because I was so busy. But, finally, I bit the bullet and guess what. This book is so short and engagingly written that I had it read (cover-to-cover) in two hours. Admittedly, I was already familiar with the concepts of DDP, real options, marketbusting, etc. My job is new business development in a large corporation, and this is my tool-set. But this book is a little gem in how it simplifies, lays out, and gives examples of the soft and hard analyses you can do to enable to you work through an uncertain business proposition in a company that craves certainty. In the current difficult economic environment, innovation has taken a big hit. So for me, this was a shot in the arm, and a timely reminder of how to build a new business without arm-waving. A colleague recently asked me to help her build a case to wake up her business area to missed opportunities and I was planning to use a reverse income statement. But the new terminology in this book is so appealing to engineers (which my company is comprised of) compared to the older, more financial nomenclature that I'm going to switch to this version. I'm also going to try out the new software. Never needed it more than now.

The essential approach to new venture valuation and planning

If you're a business leader who currently uses Net Present Value (NPV) / Discounted Cash Flow (DCF) to measure the value of new ventures, you may be overlooking scores of high worth opportunities. NPV doesn't take into account your ability to undertake low cost information gathering exercises that help you better estimate the potential payoff of future events. Why neglect a new venture when you have low risk paths to huge upside ? Van Putten and MacMillan present a new approach: Opportunity Engineering. Unlike NPV, Opportunity Engineering (OE) is an interactive approach to valuation: you, as a leader, are prompted to introduce information-intensive project CheckPoints, such as research phases or product trials, that give you better insight into future pay-offs and provide you with calculated exit opportunities. With positive information at the CheckPoint, you continue the planned project with better assurance of profits. With negative information, you abandon for a significant salvage value. Opportunity Engineering is unique: for the first time, new venture valuation and planning are integrated into an interactive cycle that lowers risk and heightens upside at each iteration. Opportunities are no longer just stumbled upon: they can be engineered. van Putten and Macmillan's genius is in the simplicity of the approach and the conciseness and clarity of their explanation. Supporting software, from cameronassociates.biz is available and provides you with an intuitive interface to plan, value, re-engineer, and monitor your new ventures. This book is a must for corporate leaders, entrepreneurs, and business students - it will revolutionize the way you value and plan new ventures. Finally, you have, in this book, the practical tools you need to not just see opportunities, but to purposefully engineer them.

Brilliantly accessible

As someone who has worked with real options and discovery of opportunity in uncertainty, I might have been predisposed to split hairs, find faults, and nitpick a book such as this. Instead, my experience led me to be thunderstruck at the unbelievable clarity the authors achieved in this very accessible work. They have taken some very deep and profound ideas and put them in a form that is quite understandable, and reduced them to practice in a way that makes them clearly actionable. I recommend this book to anyone engaged in planning for an uncertain future.

High growth, low risk - it's all in the management approach

It's tragic, but true. All too often in the pursuit of growth opportunities, companies fail to use the right disciplines that make sense in the context of a project that's uncertain. In this book, Alex van Putten and Ian MacMillan take their readers step-by-step through a time-tested and proven approach to capture high upside potential while minimizing the downside risk. While the book is based on very sophisticated ways of thinking about risk - including considering investments to create flexibility, real puts, real calls and planning without making excessively early commitments - it is approachable, accessible and extremely practical. This is one of those gems of a book that will cause you to think differently about risky, but high potential opportunities. If you are an entrepreneur, corporate new business development director, or even a CEO or Board member looking to give your company some concrete guidance for getting into new areas, this is the book for you. Those of you familiar with van Putten and MacMillan's work on discovery driven planning, competitive interaction and financial modeling will be delighted to find a road map through their thinking in this approachable, practical and sensible book.

A Framework to make CHANGE an Ally to a Business rather than a threat

This book is not merely the theoretic work of two well known Wharton professors, Alex Van Putten and Ian Mc Millian; it includes their insights of actually putting this framework into practice. Through a software program the team developed they have implemented this framework into a number of companies.. Currently, the vast majority decision makers view the landscape of opportunities in a very narrow band. This narrow focus is most likely caused by the current models used to value opportunities. The vast majority of them is based on a Net Present Value discipline that yields to a Go or No Go decision which inevitably leads to "Buy/Build and They Will Come" mentality. Unlocking Opportunities for Growth gave me a whole new framework to think about evaluating my ideas and others that are presented to me. The authors actually lead the reader to start thinking about what is the value creation of each stage of development. This innovative framework gives the tools to map out and value multiple possibilities at each stage rather than the existing models in which one merely changes the projection of the original idea. This is a radical departure from the way I use to think of projects. Now future environmental changes become an opportunity rather than a threat to the project. A company that truly adopts this innovative framework will "future proof" theirs companies giving them the agility to capitalize on these most volatile of times.