When You Need To Quantify, But Really Don’t Have The Information - The BareBones NPV ToolOct 04, 2022
I’m pretty skeptical about using NPV as a rule for guiding investment in new capabilities (and have great company in the form of this article by Clay Christenson and collaborators). Recognizing this sense of unease, however, doesn’t change that fact that for many managers, an NPV calculation is non-negotiable when it comes to making the case for an important resource commitment. Therefore, when my co-author and I were working on our book Discovery Driven Growth, we created an Excel-based tool that simulates an NPV calculation.
Over the years, the tool got a little long in the tooth and we ended up taking it down to work on it. But — it’s back! In a new and usable format.Trying to figure out what a new initiative might do for you? A traditional approach is the net present value calculation. This nifty little tool offers an alternative with just 9 input metrics.