Watch the full episode on YouTube: https://youtu.be/VrfoCFaFpI8
Evidence-based innovation replaces opinion with proof. In the first of a three-part series on The Innovation Show, Alexander Osterwalder, creator of the Business Model Canvas and CEO of Strategyzer, shows Aidan McCullen the playbook he uses with companies like Honeywell to decide which growth projects deserve investment and which should be changed or retired.
Alex opens with a provocation. When a team presents a business case for a new idea, it presents a fantasy. Spreadsheets, in his words, are a fantasy made explicit. They are not a metric. What you can measure is the evidence that the business case could work — and that shift, from judging ideas to judging evidence, changes how leaders invest.
Why business cases are fantasy
A few years ago, Alex worked with a consortium including Bosch, Cargill and Nestlé on one question: how can we score growth projects to know which ones to invest in? Their first rule was blunt. Business plans and high-level market research are not evidence. A consulting report that says there is a big market is a hint, not proof that anyone will buy from you.
The danger has grown in the age of AI. Because teams can build so fast, they build first — and build the wrong thing a hundred times. Instead, Alex argues, test the customer needs and the willingness to pay before you build anything. Think for half a day, then go and talk to customers. Overthinking and under-experimenting is analysis paralysis.
Evidence-based innovation: the five levels of evidence
Level one is what people say in interviews — voice of customer. Level two is still what they say, but in reaction to a concrete artifact such as a data sheet or storyboard. Level three adds skin in the game: a landing page where prospects sign up for a sales call. Level four is a stronger commitment, like a signed letter of intent or a customer CEO flying in for a co-creation workshop. Level five is the real world: down payments, actual purchases, or watching customers work in their own plant.
Each project then gets a scorecard across desirability, feasibility and viability. At Honeywell’s Growth Symposiums, which Strategyzer runs in Shanghai, India, Europe and the US, teams do not just present ideas. They present their scorecard of evidence, and it is the scorecard that gives leadership confidence to invest. As a result, you get a real funnel, not a tunnel.
The LEGO comparison makes it concrete. When LEGO invested in LEGO Movies, every score started at zero — the company knew nothing about making films. LEGO Friends, by contrast, started at level-five feasibility because the supply chain already existed. Same company, radically different risk profiles, visible at a glance.
Explore versus exploit
In ninety percent of companies, Alex says, everybody wears exploit glasses. Leaders trained to run the existing business demand hundred-year spreadsheets from projects built for a future nobody knows. Aidan recalls Steve Blank’s line that opens Lead and Disrupt: “Exploitation pays your salary, exploration pays your pension.”
Amazon shows the scale in action. Opening a new distribution warehouse sits close to exploit. Launching the Kindle sits further out. Amazon Web Services was pure exploration — and Amazon never invested in an AWS business case. It experimented.
Alex is not dogmatic about it. Investing without evidence is allowed, but it must be explicit. When a leader claims “we just know customers care,” he writes down: Mark said in the meeting on this date that we know. Once their name is on a faith-based bet, leaders backtrack very quickly. Today’s differentiator, he argues, is the dual mindset — world-class at running the business and world-class at reinventing it, whether that is Jeff Bezos or Logitech’s Bracken Darrell, an entrepreneurial leader who was never an entrepreneur.
From books to playbooks
Nobody has time for training, so Strategyzer moved from books to playbooks: step-by-step, say-do cycles where learning is a byproduct of working on your real project. Alex demonstrates the market-readiness assessment live. Map your initiative on the explore-to-exploit scale, then score the evidence for your first customer segment — and catch yourself when the score is inflated. Ten interviews with no concrete artifact is level one, not level two. Repeat for solution evidence and willingness to pay, and you end with an overall readiness score.
The payoff is cultural as much as technical. The conversation moves from the leader’s opinion versus the team’s opinion to the team’s evidence and its score. As Aidan puts it, quoting Upton Sinclair, it is difficult to get a man to understand something when his salary depends on not understanding it. Evidence takes that out of the room.
This is part one of a three-part series with Alex. Part two, on value propositions, follows next week.
About the guest — Alex Osterwalder
Alexander Osterwalder is the creator of the Business Model Canvas, co-founder and CEO of Strategyzer, and author of Business Model Generation, Value Proposition Design, Testing Business Ideas, The Invincible Company and High-Impact Tools for Teams. He works with leadership teams worldwide on growth, strategy and reinvention, and has moved Strategyzer from books to playbooks — step-by-step guides teams apply directly to their own projects. Find the playbook library and resources at strategyzer.com.
About the host — Aidan McCullen
Aidan McCullen is the 2025 Thinkers50 Innovation Award recipient, a keynote speaker on AI, disruption, innovation and change, host of The Innovation Show, and author of Undisruptable: A Mindset of Permanent Reinvention (Wiley). A former professional rugby player turned change and innovation specialist, he runs workshops that help leadership teams reinvent before they have to. Connect with him on LinkedIn or at theinnovationshow.io/about-aidan-mccullen.
About The Innovation Show
The Innovation Show is the Thinkers50-recognised podcast where square pegs find their place in a world of round holes. Each week, Aidan McCullen hosts world-class authors, scientists and practitioners on disruption, innovation, change, transformation, leadership and creativity. This series is brought to you by Kyndryl, who run and reimagine the technology systems that drive advantage for the world’s leading businesses — learn more at kyndryl.com. Win a copy of one of Alex Osterwalder’s books by signing up for the Kyndryl Institute and sending us a screenshot, with thanks to Kyndryl.
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Frequently asked questions
What is evidence-based innovation?
Evidence-based innovation means investing in growth projects based on measurable proof rather than opinions or upfront business cases. Alex Osterwalder argues a business case is a fantasy until it is validated; what you can measure is the evidence that the business case could work, collected through interviews, experiments and real customer commitments.
What are the five levels of evidence?
Level one is what people say in interviews. Level two is what they say when reacting to a concrete artifact like a data sheet or storyboard. Level three adds a small commitment, such as signing up on a landing page for a sales call. Level four is a stronger commitment, like a letter of intent or a customer CEO joining a co-creation workshop. Level five is real-world proof: down payments, purchases, or observing customers in their own environment.
What is an evidence scorecard?
An evidence scorecard rates a project’s proof across three dimensions — desirability, feasibility and viability — each on the five levels of evidence. At Honeywell’s Growth Symposiums, teams present their scorecard rather than just their idea, so leadership invests in evidence, not enthusiasm. A project can legitimately start at zero everywhere, as LEGO Movies did.
What is the difference between explore and exploit?
Exploit is running and improving the existing business, where business cases and spreadsheets work well. Explore is searching for new value propositions and business models for a future nobody can predict, where the honest position is “we do not know yet” and investment should follow accumulating evidence. Most companies fail at innovation because they judge explore projects with exploit metrics.
What is a Strategyzer playbook?
A playbook is a step-by-step, say-do guide that turns methods like the Business Model Canvas into applied work sessions: learn briefly, then immediately apply the step to your own project. Strategyzer offers a publicly accessible playbook library plus custom playbooks for organisations, including one that assesses how market-ready a project is.
Who is Aidan McCullen?
Aidan McCullen is the 2025 Thinkers50 Innovation Award recipient, host of The Innovation Show, keynote speaker on AI, disruption, innovation and change, and author of Undisruptable: A Mindset of Permanent Reinvention (Wiley). He works with organisations worldwide on transformation and reinvention.