The Innovation Bet — Cobalt Coatings' Renewal Portfolio

A four-round, advanced corporate-strategy and innovation-portfolio simulation set inside Cobalt Coatings NV, a Brussels specialty-coatings maker (€420M revenue, 16% EBITDA, 1,180 staff). 78% of revenue (€328M) still comes from solvent-based chemistries declining 4–6% a year under REACH/VOC pressure, and the board has issued a strategic-renewal mandate: at least 25% of revenue from products or models that did not exist in 2025, by 2031. As the new General Manager you have one annual planning cycle and a €21M innovation envelope to place the bets that decide whether Cobalt renews itself or manages a graceful decline. Round 1 — diagnose the Three-Horizons portfolio (11 projects, 92% incremental) and quantify the renewal gap. Round 2 — choose build-vs-open-innovation for a bio-resin platform: build in-house (€9M/yr, 45–55% success, 4+ years), co-develop with the NovaResin spin-off (€6M/yr, TRL 6, ~2 years saved, cedes 40% of margin), or take a 30% equity option (€18M) — and set the governance and downside protection. Round 3 — allocate the €21M envelope across sustaining commitments (€8M, partly cuttable), incremental water-based defence (€4M, 85% success, €14M NPV), the disruptive bet, and a discretionary reserve, deciding what to cut, whether to stage-gate the bet with kill points, and how it closes the renewal gap. Round 4 — defend the portfolio to the board: justify the biggest bet and its kill criteria, model the cannibalisation of the solvent core, and commit to 12-month milestones. The math applies Three Horizons, the Innovator's Dilemma, real-options/stage-gating, ambidexterity and open-innovation governance, and punishes the five classic errors: funding the wish list beyond €21M, hero-bet concentration that starves core defence, comfort-zone incrementalism that misses the mandate, an ungoverned NovaResin partnership exposed to a competitor acquisition, and ignoring the cannibalisation that erodes the cash engine funding the renewal. Final KPIs track renewal coverage toward 2031, blended portfolio expected value (€M), core-business resilience and resource efficiency against the envelope.