Real Options at work
March 21, 2024
Finance and Agile: How to Tell if Your Agile Innovation Initiative is Worth it
Claus HIRZMANN, President founder of Strategic-Finance
Have you ever wondered if you should go forward with an Agile project, but have no idea how to evaluate it?
Claus HIRZMANN
Ingineer, MBA
Claus’ passion is about the intersection of strategy, innovation and finance. He has been working during 25 years in according roles & responsibilities in various international companies, and teaches classes on Strategy and Finance in executive education and masters programs at multiple business schools, including HEC Paris and EDHEC Nice
Tactical Tuesday: Improving Portfolio Outcomes with Real Options
Joe Vallone
What is Real Options and why is it an attractive financial framework for Lean-Agile development? Joe Vallone explains in today’s episode of the SAFe Business Agility Podcast.
Is your funding rationale the best match for your organization’s MVPs and development value stream? In today’s episode, Joe Vallone, SPCT and SAFe® Fellow describes the Real Options financial framework and why it’s attractive for funding Lean-Agile development. Read the article Joe mentions in the podcast.
Joe Vallone
SAFe Fellow, Scaled Agile Inc
Improving Portfolio Outcomes with Real Options.
Co-authored Claus HIRZMANN, Strategic-Finance
Because traditional valuation tools such as NPV ignore the value of flexibility, real options are important in strategic and financial analysis.
McKinsey Quaterly, The real Power of Real Options, June 2000
NPV (Net Present Value) estimations that are ill-suited for funding complex systems development in the 21st century [2]. SAFe and Real Options work together to quickly leverage compelling yet uncertain business opportunities and provide greater transparency of financial risks. Thereby, Real Options can help C-level leaders fund initiatives using a Lean-Agile approach, resulting in acceptance of SAFe adoption for the enterprise. This ensures the quality and success of lean-agile transformations.
Joe Vallone
SAFe Fellow, Scaled Agile Inc
June 13, 2023
Link to the article
NPV doesn’t work for risky, high-potential project. Here’s abetter approach.
Co-authored with Claus HIRZMANN, Strategic-Finance
The net present value rule is a terrible way to allocate resources to innovation. It presumes you know more than you do. It under-values game-changing innovation and over-values incremental innovation. It forces teams to make false promises to sell their projects. It also forces the wrong behavior – big teams and money up front before you have any idea of what you are doing. But there is an alternative, which is thinking of investments in innovation as real options. An exciting bit of news is that my colleague Claus Hirzmann has come up with a practical way of valuing a project using the theory to give you a better estimate than a net present value calculation. We spell it out here.
Rita McGrath
Best-seller Author,
Well known speaker and strategic advisor.
Professor at Colombia Business School
May 23, 2023
Link to the article
Lean startup experience
Christian Auriach, Président de Scenent
Le Lean Startup Day est une occasion unique de se rencontrer entre acteurs de l’innovation. Tous les participants ont en commun une attirance pour le neuf et surtout pour les mécanismes, stratégies, comportements et processus concourant à son émergence et à son déploiement. En particulier, la gestion du risque et la finance de l’innovation sont des thèmes très présents au cours de cette journée, témoignant de leur actualité. Ces disciplines atteignent clairement un palier de maturité après 25 ans de modes changeantes, de tâtonnements, de faux et de vrais espoirs.
Maturité / L’approche stratistique d’Alexandre Osterwalder / Claus Hirzmann et les options réelles
Christian Auriach
Management de l’innovation, édition, stratégie, processus & organisation, transition digitale, conduite de grands projets, art et entreprise
May 23, 2023
Lean startup experience
Claus HIRZMANN, Président de Strategic-Finance
Le Lean Startup Day est une journée de conférences dédiées au développement d’une culture de l’innovation et de la transformation Lean. Plus de 40 intervenants présentaient leur expertise et savoir-faire, parmi les quelques Claus HIRZMANN: “Comment les Options Réelles permettent d’évaluer financièrement l’Innovation“.
Ci-dessous une vidéo résumé.
Claus HIRZMANN
Ingénieur, MBA
Claus enseigne également la stratégie et la finance de l’innovation à HEC Paris et EDHEC Nice.
Strategic-Finance 