Glossory

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• Process to shape and reshape a business idea into the best possible business model and value proposition; early iterations use intuition, later ones use evidence from testing. Business Design
• Rationale of how an organization creates, delivers, and captures value. Business Model
• Strategic management tool to describe how an organization creates, delivers, and captures value. Business Model Canvas
• A repeatable configuration of business model building blocks that strengthens a business model; can help new ventures or enable shifts in incumbents. Business Model Pattern
• The collection of existing business models a company exploits and the new ones it explores to avoid disruption and ensure longevity. Business Model Portfolio
• An organization’s transformation from a declining or expired business model to a more competitive one. Business Model Shift
• Activities to spot, create, test, de-risk, and invest in a portfolio of novel business opportunities; complements tech/product R&D. Business R&D
• Strategic tool to understand, design, test, and manage the corporate culture you want to realize. Culture Map
• The risk a business will die or be disrupted due to emerging vulnerability or external threats; decreases with protective moats. Death and Disruption Risk
• Risk that the target market is too small, too few customers want the value proposition, or the firm can’t reach/acquire/retain them. Desirability Risk
• Data from an experiment or field collection that proves or disproves a hypothesis, customer insight, or belief. Evidence
• How lucrative a business idea could be for a company if it succeeds. Expected Return
• A procedure to validate or invalidate a value proposition or business model hypothesis that produces evidence and reduces uncertainty. Experiment
• Portfolio of existing businesses/value propositions/products/services mapped by return and death/disruption risk. Exploit Portfolio
• Portfolio of innovation projects/new business models/value propositions mapped by expected return and innovation risk. Explore Portfolio
• Risk that a business can’t manage, scale, or access key resources, activities, or partners. Feasibility Risk
• Activity of keeping existing business models on a growth trajectory by scaling, renovating, and protecting them. Grow
• Context for portfolio management that guides resource allocation, investments/divestments, and exploration focus. Guidance
• An assumption your value proposition, business model, or strategy builds on; tied to desirability, feasibility, viability, or adaptability. Hypothesis
• Mechanism to explore/test many ideas, narrow them by evidence, then invest with metered funding. Innovation Funnel
• Tools to measure risk reduction and uncertainty of new business ideas before scaling. Innovation Metrics
• Risk that a seemingly convincing business idea will fail; decreases as evidence accumulates across the four risks. Innovation Risk
• Funding practice where investments increase incrementally with evidence, shelving projects that don’t produce it. Metered Funding
• Decision to make a significant change to one or more elements of the business model and value proposition. Pivot
• The risk that a business won’t be able to adapt to the competitive environment; technology, regulatory, social, or market trends; or that the macro environment is not favor- able (lacking infrastructure, recession, etc.) Adaptability Risk

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