Jacob DuttonCorporate Innovation | Venture Building | Value Creation

Principle 3 on how to think like a VC: Allocate Resources Wiseley

26 Apr 2023 · 1 min

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In this segment Jacob Dutton explains that the core of successful innovation management is disciplined resource allocation. He emphasizes that leaders must make hard choices about whether to keep funding a project or to pull the plug, and that these decisions require clear evaluation criteria—often framed as an "investment thesis"—to determine which ideas deserve cash, talent, and political capital. By tying resource allocation directly to performance outcomes, an organization creates a culture of accountability and results‑driven incentives, motivating teams to deliver rapid progress and improve the overall success of the innovation portfolio.

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More than anything else, what they should be focused on is that resource allocation. You know, some projects are bound to fail. So their job is to make sometimes quite tough decisions on when to continue funding ideas versus, you know, understanding when it is that they should pull the plug. So they'll need some really clear evaluation criteria in order to help them to do this. You know, VCs would call them, you know, maybe an investment thesis. And that's what's going to help them to make these sorts of informed decisions and make sure that resources, you know, be that cash, be that talent, you know, maybe their own political capital, are allocated to the most promising projects. And this is good for you as an innovation team or an innovation leader because it fosters this culture of accountability. You know, if the board are tying resource allocation to performance, then as a team, you're way more incentivized to deliver results and demonstrate that really quick progress. And it's this results-driven culture that really helps you to drive the success of the overall portfolio.