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It’s a question most companies cannot answer. Because they simply don’t know. Despite decades of innovation experience, executives struggle to predict – let alone prove – their ROI. With no clear evidence, over time, management confidence evaporates. Budgets are cut. Brilliant pioneering work collapses. And the cycle keeps repeating. It’s a vicious circle.
Frustratingly, this problem isn’t caused by lack of effort. Innovation teams produce endless metrics such as R&D expenditure, patent filings, and stage-gate compliance stats. Yet these measures consistently fail at the critical moment. Why? Because traditional metrics measure effort, not outcome. They cannot convince CFOs who control budgets.
But one man, very likely, can…
As the CEO of Wazoku, Simon Hill has worked with giants – such as Microsoft, Shell, AstraZeneca, Nissan, Diageo, NASA plus multiple US and UK government departments – to deliver verified, very significant, innovation value.
From these successes, he has developed a unique methodology that potentially changes everything. It assesses expected values in real-time. It turns instinct and intuition into numbers. It also surfaces champions and eliminates expensive failures – from the outset. You know your ROI – Return On Innovation – before you invest a penny.
Hill’s breakthrough came from an unlikely source: football.
The Expected Goals (xG) algorithm has revolutionised football analytics by predicting match outcomes based on real-time pitch activity. Every shot carries an xG value – a percentage chance of becoming a goal based on distance, angle, defensive pressure, and many other factors. Analyse these throughout a match, and you get a far more accurate picture of performance than any final score could reveal.
Hill recognised the parallel immediately. What if innovation ideas could be scored the same way? Rather than relying on pitch deck optimism or gut instinct, what if you could quantify the expected value of an idea – at any stage of development?
These ‘what if’ questions gave birth to an empirical answer: Expected Value (xV). The innovation world’s answer to Expected Goals.
The xV methodology refines four measurable components into one definitive efficiency valuation:
1. Confidence (risk adjustment): 0-100%
The first priority is to replace emotional belief with empirical confidence. All assumptions underpinning an innovation decision must be validated by real-world data.
Viable innovation requires much more than a flaky confirmation that people like a concept and might consider buying. To reach the threshold of trust, demands definitive evidence. The tipping point of proof that real humans will extract real money from real wallets to become real customers.
2. Predicted value: Hard currency
What will innovation actually deliver – financially? What does the evidence suggest it’s worth right now, at this stage of development?
This demands brutal honesty. Hill insists on standardised currency and realistic projections that acknowledge current maturity. Optimism gets quarantined until confidence increases.
3. Time sensitivity (urgency): accelerate or decelerate
Should you rush an idea to market or deliberately slow it down? Competitive threats may demand acceleration. Market immaturity may require patience. Some innovations need the ecosystem to catch up before they can succeed.
These factors can index the calculation up to 1.5 times. Timing isn’t just important – it’s often everything.
4. Strategic fit: Right idea. Right company. Right time.
Is this the right innovation for your specific organisation at this precise moment? Consider four critical factors: strategy alignment, available resources and skills, market positioning, and competitive capability.
Hill cites Fujifilm’s decision to pivot from photographic film to cosmetics as a masterclass in unexpected strategic fit. On the surface it looked bizarre. In reality, Fuji’s expertise in collagen manipulation transferred perfectly. The company understood the chemistry, the manufacturing, and the quality control. The strategic fit was surprisingly strong.
One number. These four components are distilled into a single xV figure. The result is what Hill terms ‘xV efficiency’: the cost to generate each pound of expected value. If you are spending £4 to create £1 of value, you have a problem. The xV methodology exposes this blunt reality before you burn your budget.
Theory matters, but boardrooms demand proof. Imagine this fact-based scenario…
For many years, a major retailer has operated a loyalty app with millions of users, strong engagement metrics, and a £40 million annual spend. Then the innovation team proposes upgrading to a ‘Smart Behavioural Loyalty Engine’ – transitioning from static, blanket offers to dynamic, personalised rewards using predictive incentives and gamification. On the face of it, this is all sounds very logical.
The pitch projected £10 million in additional value over three years. The requested pilot budget was just £4.1 million. In most organisations, this proposal would sail through any approval process. The strategic fit was undeniable. The engagement data was compelling. The customer base was rock solid. And the alignment with digital transformation priorities was pure perfection.
But, the xV analysis delivered a one-word verdict: Kill.
Not because the idea was fundamentally flawed. Not because the team lacked capability. But because the numbers told an uncomfortable story. Despite the strong strategic fit, the idea would have generated only £1.05 million in expected value. The xV efficiency revealed the organisation would spend £3.90 to create £1.00 of value – an economically untenable proposition.
This is where xV flexes its real power. Forensic evaluation quickly supressed confidence. It deepened doubts that personalised behavioural incentives would change customer behaviour enough to justify the investment. But xV didn’t declare the idea dead and buried. Instead, it prescribed specific validation steps and recommended a maximum initial investment of around £100,000 to gather the necessary evidence.
The message and recommendations in this scenario are very clear: Run targeted pilots. Conduct rigorous customer interviews. Prove the behavioural assumptions before committing millions. If positive evidence emerges, confidence will increase, the xV rating will rise and the business case will be transformed. Conversely, if it doesn’t, you’ve saved £4 million and learned something valuable about your customers.
Unlike static financial models, xV operates as a dynamic system. Just as Expected Goals will shift with the tide of play, xV scores change continuously as reality unfolds.
Pilots run. Customer interviews happen. Competitors move. Market conditions evolve. Regulations shift. Each development changes the confidence score, predicted value, urgency, or strategic fit. The xV recalibrates accordingly.
Hill recommends automated triggers when the xV jumps significantly – 20% is his suggested threshold. A sudden spike might indicate an idea deserves acceleration. A sharp drop signals trouble that needs addressing before further investment.
The methodology also introduces ‘kill credits’ – a balance sheet for intelligent failure. When you terminate a project, the xV at that point becomes a learning credit applicable to future initiatives. When assumptions are proven through a failed project – even if the overall idea didn’t work – that validated knowledge improves confidence scores in related future innovations.
Failure becomes an asset, not just a write-off.
The xV methodology’s deepest impact isn’t mathematical – it’s cultural.
Perhaps most critically, the xV platform creates a common language spanning innovation teams, strategy departments, and finance. For the first time, all three can discuss innovation using the same vocabulary: profit and loss figures, balance sheets, expected returns, efficiency ratios.
CFOs don’t need to become innovation experts. Innovation teams don’t need MBAs. Everyone just needs to speak xV.
Hill’s clients typically begin with small pilot groups evaluating 3-8 ideas before scaling to comprehensive organisational tools that integrate with finance systems. The methodology acknowledges its own advice: start small, validate assumptions, and build confidence before committing fully.
Early implementations consistently reveal that organisations should focus on fewer, larger initiatives rather than spreading resources thinly. The xV scores expose which ideas genuinely deserve investment and which are consuming resources that could be redeployed more effectively.
And that investment can be very modest. Multiple users now champion the cause of rapid, low-cost experimentation. Instead of placing large, early-stage bets, there is abundant evidence that numerous pilot investments – each costing less than £10,000 – deliver far greater value. The xV methodology reinforces this discipline by revealing precisely when insufficient evidence exists to justify substantial investment.
Hill is a realist. He readily admits that no methodology – not even xV – is perfect…
Assumption sensitivity: ‘Garbage in, garbage out’ remains true. If your predicted value or confidence scores are wildly optimistic, xV will be equally misleading.
However, Hill argues that other business functions have successfully standardised their forecasting approaches despite significant uncertainty. Sales teams forecast revenues. Finance teams project costs. Neither achieves perfection, but both establish organisational rules that enable comparison and accountability.
Innovation is no different. The key lies in leveraging AI and organisational standards to maintain consistency while remaining context aware. The algorithm provides a framework; organisational discipline makes it work.
Strategic vs. economic value: Not all innovation value is economic. Social benefit, environmental impact, strategic positioning – these matter profoundly.
Hill acknowledges this reality but argues that economic value remains essential in capitalist systems where finance teams wield ultimate budgetary authority. Successfully quantifying economic value alongside other benefits will strengthen – not weaken – the overall case.
Hill describes his work as “standing on the shoulders of giants” – synthesising insights from sports analytics, behavioural economics, and traditional finance rather than claiming revolutionary genius.
But the impact is genuinely transformative.
For the first time, innovation teams can demonstrate ROI before spending budgets. Finance teams can evaluate innovation requests using familiar frameworks. Strategy teams can prioritise systematically rather than politically.
The vicious circle has been broken. Innovation budgets have become defendable. Promising work gets appropriate investment. Talented innovation teams can drive initiatives in the confidence that proven ideas will get the backing they deserve.
Is your innovation programme a valuable asset or a budget-burning vanity? That opening question now has a definitive answer.
And knowing changes everything.
If this article has inspired you to learn more about the xV platform, we can connect you with Simon Hill via this link: innovation@clustre.net
© Ian Spencer. Clustre
