STRATEGIC GROWTH AND INNOVATION

Transcription

1 STRATEGIC GROWTH AND INNOVATION Building Growth and Business Value Rapidly Through Execution DOMESTIC MARKETS EXPANSION PROGRAM (DMEP) Presented by: Roy Luebke Business Growth Consultant

2 We are the U.S. Department of Commerce/NIST Manufacturing Extension Program of Virginia A unit of the Commonwealth of Virginia Part of the Department of Commerce / NIST network of Centers across the country (60 centers, 1500 staff nationally) 20 years of success supporting Virginia businesses Since 2000, the #1 Bottom-Line and Top-Line Impact Producer in the system nearly $3 Billion reported Over 8,400 industrial Jobs created / retained 32 staff including two sub-recipient partners, The Manufacturing Technology Center in SW VA and Old Dominion Univerity in Hampton Roads 2

3 What is VA DMEP? Sequestration had a significant impact on the Virginia economy To sustain the economy and maintain jobs, Virginia companies need to redirect efforts toward growth in non-dod awarded business. Many small to mid-size companies don t have the in-house capability or access to affordable, professional consultants to meet these challenges. To help mitigate the impacts and facilitate this transformation, GENEDGE has received funding to create the Virginia Domestic Markets Expansion Program (VA-DMEP). Specifically focused on helping small to mid-sized companies establish and execute strategies to expand into non-defense domestic markets. 3

4 How did the DMEP program work? Who funded the program? DoD Office of Economic Adjustment Who was eligible? Department of Defense supply chain companies with greater than 20 and less than 500 employees Companies significantly affected by sequestration Where is the program being offered? VA DMEP is a state-wide program. Any Virginia company that met the criteria for eligibility attended an introductory workshop and applied to the program. 4

5 Why They Used GENEDGE Are you Struggling to Grow or Maintain your Business? Loss of Existing Business New or Increased Competition Finding New Customers What does your future look like? Do you Want or Need? New Markets New Product or Services New Channels to Customers Pipeline of various options 5

6 Initial Workshop: Goals Experience a SYSTEMATIC way to: Identify and focus on critical market and industry opportunities Create new Value Propositions for your business Execute on new business ideas faster and with less risk Key To Commercial Success: Executing on a well-defined customer problem 6

7 Strategy and Innovation Two sides of the same coin 7 7

8 Strategy is #1 What Is Your INTENT? Balancing The Factors Which Game To Play How to Win Costs Strategy Framing Channels Customers 8

9 Innovation - Driven By Strategy INTENT: PROFIT GROWTH Positioning Making choices Establishing barriers to imitation Create value Product value erodes over time 9

10 Common Innovation Definition Creating something new that delivers Economic Value It is a RESULT, a combination of research, creativity and invention that is taken to the market and creates Customer Value Incremental. Transformational 10

11 To Define An Innovation Solve a customer PROBLEM and meet a need State an overt benefit with a PROMISE Provide PROOF You Can deliver on the promise Meaningfully Unique 11

12 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas; develop, select, and prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 12

13 Balancing Risk and Uncertainty Create portfolios of options Focus and maximize investments Chose among strategic alternatives Senior leader s tolerance for pushing the envelope 13

14 Opportunity Portfolio Which projects need to be launched? Which projects already underway need added resources and focus? Which projects should close-out to free up resources? Which projects are underway, getting results, and can move into sustaining themselves? 14

15 The Future: How must your business model change? 15

16 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas; develop, select, and prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 16

17 Leadership s Job Know the Answer to Two Questions: 1. Where do we CHOOSE to be in three to five years? 2. By what METHOD will we reach this goal? 17

18 Strategic Assessment: CAPABILITIES - Customer Segments - Markets - Technologies - Partnerships and Alliances - Channels - Skills - Organization - Offerings (products or services) - Brands What we do today 18

19 Strategic Assessment: BUSINESS PROCESS - Researching customer needs - Generating new ideas - Evaluating ideas - Building competitive solutions - Creating products, processes, services - Commercializing the things you offer - Innovation Leadership - Project Management - Lean Product Development How we do it 19

20 Initial Leadership Opportunity Assessment B G?? C E C F A?? D E A Logistics Support B Inventory Management C Program Management D Repair & Maintenance E Testing F Simulation Training G Training/Certification H Configuration Management I Project Management?? Current DoD Non-DoD Potential Past or Current DoD New or 20 blue sky

21 Revenue Opportunity Matrix SERVICE or PRODUCT Historic Revenue (%) OPPORTUNITY TTM Revenue (%) 12-Month Forecast Logistics Support 60% 20% 0% Inventory Management 0% 40% 70% Program Management 0% 0% 0% Repair & Maintenance 5% 20% 10% Testing 5% 0% 0% Simulation Training 5% 0% 0% Training/Certification 5% 20% 10% Configuration Management 20% 0% 0% Project Management % TTM - Trailing Twelve Months Capabilities are the Key to Strategic Growth, Value Proposition Development & Commercial Success! 21

22 SPOT Matrix: A DMEP Example 22

23 PRODUCTS / SERVICES Opportunity Matrix CUSTOMERS / MARKETS Current New New Typically Current 23

24 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas, develop and select prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 24

25 A Broad Set of Commercial Possibilities Lowest risk lowest payoff Lots of things we could do Highest risk highest payoff Spectrum of New Service & Product Opportunities Service / Maintenance Enhancement Add/Change client interface Delivery system upgrade New technology integration Only a couple of things we should do! New service concept / business model * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

26 Start Here: Industry Analysis 26

27 Rapid Process for Deeper Thinking Decision Makers Persona Brief Applicable Offering Line(s): Description of Persona 1 Persona Name: 2 Persona Overview: 3 Physical Description of Persona: 4 Personality Traits: Date Submitted: Revision Number: Submitted by: Persona Interaction with Product or Service (Persona Story - why is this very important to the Decision Maker & Final Customer) Persona Preferences Desired Benefits (what are the benefits received by the decision maker and customer): Documentation of a specific market/customer experiencing a specific problem Negatives / Irritants (from decision maker's & customer's perspective - what is the problem): Exclusions / Constraints (not interested in; constraints on time, resources, investment, etc.): Influence on Buying Decision Our company s offering to solve the customer s problem * Some content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

28 Developing a Competitive Offering Requires Research Insight: Opinion Leader Context Competitor Analysis Industry Analysis Industry Trends Technology Trends Customer Segmentation vs. the Competition: Which of your Capabilities Could Be Distinguishing in a Particular Market? 28

29 Conducting Research Know your users Know the context Understand Purpose Test A Hypothesis Discovery 29 29

30 Context Map: 30

31 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas, develop and select prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 31

32 Context is Key 32

33 Ideas from All Sources Ideas based on Persona & Research Formal Business Case Development How the Pipeline is Built Idea Clarification Business-Case Validation and Project Prioritization * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

34 Set Clear Priorities for Development * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

35 Clarity is the Key to Commercialization Does your unique concept have a clear Value Proposition? * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

36 Developing a Value Proposition 1. Specific, identified customer/industry 2. Un-met customer expectation(s) identified 3. Validation of customer expectation and priority 4. Knowledge of competitor offerings 5. Company offering addressing the un-met expectation 36

37 Value Proposition Should Address Your Mission: Know & Mitigate Some Unknowns 37

38 Elements of a Value Proposition 38

39 Value Proposition Design Big Picture 39

40 User Insight: Customer Persona Persona Description Personality Traits Interaction with Product or Service Preferences Influences on Buying Decision Clearly understand who the customer is and what drives them 40

41 Key Leadership Tool for Alignment Decision Makers Persona Brief Applicable Offering Line(s): Description of Persona 1 Persona Name: Date Submitted: Revision Number: Submitted by: Persona Interaction with Product or Service (Persona Story - why is this very important to the Decision Maker & Final Customer) 2 Persona Overview: 3 Physical Description of Persona: 4 Personality Traits: Persona Preferences Desired Benefits (what are the benefits received by the decision maker and customer): Negatives / Irritants (from decision maker's & customer's perspective - what is the problem): Exclusions / Constraints (not interested in; constraints on time, resources, investment, etc.): Influence on Buying Decision * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

42 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas; develop, select, and prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 42

43 Converting Insights Into Problem Statements What is happening? When does it happen? Where does it happen? To whom does it happen, or who causes it to happen? How does it happen? 43

44 Move From Insights To Solutions First Understand The Problem Then Create the Solution 44

45 Concept BluePrint 4. KEY Competitive Factors What key resources or activities from our company (people, processes, technology, information) are critical to our value proposition for making the new solution work? Indicate whether we will have to adapt, modify, acquire, or train. Focus on resources or capabilities that the competition cannot or will not do. 1. Opportunity State clearly and concisely who the customer is; what specific job they are trying to complete; and what problem(s) may be preventing them from completing the job. 2. Concept Elements Borrowing from the Concept Elements quad chart, draft a potential offering that might add value to the identified customer(s). 3. Value Proposition Outcome Use your Concept Outcomes worksheet to state your proposed offering by documenting how it works and the outcomes of your value proposition. Enhance the value proposition by listing, summarizing, bulleting or drawing the what or the how that your company is uniquely different from current market offerings. 5. OUTPUTS (Benefits) Summarize Will the customer care? by listing the top 3 benefits produced by the new solution. Benefit #1: Benefit #2: Threats that need to be addressed: Benefit #3: Your Signature 45

46 1. Opportunity Statement Specifically, describe what is occurring; the specific shortcoming vs. the job goal they are trying to achieve be specific and numeric if possible. The problem has a major impact, resulting in an adverse or material impacts; who/what is affected. If this continues, explain why it s important to the customer s future. Write a sentence in the space below using this format: Customer(s) (name the specific customer) in the (specific market or industry) are having trouble with (name the job) because (name the barrier(s), emphasizing the top barrier) is preventing them from achieving (describe the ideal output). The market/customer is having trouble with 46

47 NEXT STEP: Transfer the Product or Service Offering sentence to Box #2 on the Concept BluePrint. 2. Concept Elements Your name Describe potential elements of the customer job that could be or should be - - positively impacted by changing the way things are done now. Customer name Date Technology, Service & Information Elements What types of systems, information, data or technologies are needed? Who needs information and what specific information do they need to complete the job? Does the job itself require the customer to create information to be used in a product or service? If so, what specific information will be produced? What types of services does the customer require to complete the job and how are they acquiring those now? Process Elements Describe specifically which process steps in the job could be positively impacted and outline the key differences in how the customer might interact with a new product/service vs. the current state. Explain specifically how those interactions might be better than they way things are done now. People Elements Describe how the people directly and indirectly involved in the job might be helped, and describe how they might be positively impacted. Think internal customers, external customers, suppliers, partners, employees, etc. Circle the people you think are the primary recipients of a new offering s benefit. Product or Service Offering Write a sentence below using this format: The market needs (type of product/service), the first/an alternative (product, process, service or business model), specifically for (target customers) to help them achieve (benefit), enabling them to overcome (barrier to completing job or performance expectation) when/during (Job To Be Done). The market needs: 47

48 2. Concept Elements Product or Service Offering Write a sentence in the space below using this format: The market needs (type of product/service), the first/an alternative (product, process, service or business model), specifically for (target customers) to help them achieve (benefit), enabling them to overcome (barrier to completing job or performance expectation) when/during (Job To Be Done). The market/customer needs 48

49 NEXT STEP: Transfer the Value Proposition Outcome to Box #3 on the Concept BluePrint. 3. Our Company s Value Chain Enablers Using the Concept Elements worksheet, build a proposed offering and turn it into an Enabling Value Proposition for your company based on your company s unique capabilities or access to relevant solutions. Your name Customer name Date Our company s unique TECHNOLOGY, SERVICE & INFORMATION value chain enablers Which technology, service or information elements might you access to support your proposed offering for the customer? What makes them unique, and what is the reason(s) the competition either does not or cannot bring this technology to market on this scale. Our company s unique PEOPLE value chain enablers What aspects of your people, brand, human resources, expertise or past performance exceed what the competition can offer? What unique strengths do you have (or might you develop) that give you and your customer an advantage vs. what the competition can offer? Our company s unique PROCESS value chain enablers What processes, patents, trade secrets or supply chain capabilities do you possess (or might you develop) that uniquely support this proposed offering? Where and how exactly will the customer interact with the proposed offering and what specific advantage will be given to the customer vs. what is happening now? Our Enabling Value Proposition Create a draft value proposition by documenting the outcomes that your company can uniquely bring to the situation. Document as follows: Our Company) is the only company that will: (a) the direction of the action (minimize, increase); (b) the unit of measurement (time, cost, probability, errors ); (c) the object of control (what it is you re influencing and the unique way in which way that only your company can do it; (d) the context (market circumstances, where, under what circumstances, and specific customer persona). Our company is the only company that will 49

50 3. Our Company s Key Value Chain Enablers Our Enabling Value Proposition Create a draft value proposition by documenting the outcomes that your company can uniquely bring to the situation. Document as follows: Our Company) is the only company that will: (a) the direction of the action (minimize, increase); (b) the unit of measurement (time, cost, probability, errors ); (c) the object of control (what it is you re influencing and the unique way in which way that only your company can do it; (d) the context (market circumstances, where, under what circumstances, and specific customer persona). Our company is the only company that will 50

51 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas; develop, select, and prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 51

52 Starting to Build a Business Case Product Business Case Brief Date First Submittal: Product Designation Revision Number: Description of Opportunity 1. What specific customer problem(s) does the new product solve? 2. Description of target customers / market segments 3. Key differentiating features / performance levels Key differentiating benefits Critical physical characteristics (weight / dimensions / etc.) Describe the Concept 6. Critical performance requirements / features 7. Other critical requirements / mandates for competitive parity * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

53 Address Risks * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

54 Documenting Risks * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

55 Business Case Brief Product Business Case Brief Date First Submittal: Submitted by: Product Designation Revision Number: Prepared by: Description of Opportunity Financial / Risk Analysis 1. What specific customer problem(s) does the new product solve? 1. Market Forecast Sales Volume Minimum "Most Likely" Optimistic 2. Description of target customers / market segments Year 1 Target Market Price = Year 2 Target Mfg. Cost = 3. Key differentiating features / performance levels Year 3 Target Entry Date Risk Analysis 2 3 Risk Impact [1 (low) - 5 (high)] Description of Critical Risk(s) 4. Key differentiating benefits Market Risk 1 2 Technical Risk 3 5. Critical physical characteristics (weight / dimensions / etc.) Schedule Risk Cost / Quality Risk 6. Critical performance requirements / features Max Risk = 3. Investment 7. Other critical requirements / mandates for competitive parity Total Non-recurring investment = Capital = Labor = Total = 0 4. Profitability Calculations: Net present value (NPV) = Risk-adjusted NPV = Based on 3-year "most likely" sales NPV / Max. Risk Impact Strategic Assessment Opportunity Assessment Description of Strategic Alignment: Step 1 - Estimate the number of design / development hours required to commercialize the new product Non-recurring Engineering (NRE) = Assessment of Strategic Impact (1-10 scale) 1 Supports retention of existing customers Step 2 - Calculate the "Productivity Metric" for the proposed new product 2 Contributes to growth of market share (Risk Adjusted NPV / Estimated NRE) 3 Encourages pull-through of other products Project Productivity Metric = 4 Supports development of new markets 5 Contributes to product line cost reduction Step 3 - Calculate Overall Project Rating 6 Contributes to image of the firm in the marketplace (Productivity Metric x Total Strategic Score) 7 Increases "mindshare" among customers Overall project rating = 8 Enables implementation of new technologies 9 Supports development of core competencies Notes and Comments: 10 Supports overall strategic roadmap Total Strategic Score = 0 * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

56 Addressing Alignment and Risks Strategic Assessment Description of Strategic Alignment: Submitted by: Can we make a profit? Prepared by: Financial / Risk Analysis Assessment 1. Market of Strategic Forecast Impact (1-10 scale) 1 Supports retention of existing customers Sales Volume Minimum "Most Likely" Optimistic 2 Contributes to growth of market share Year 1 Target Market Price = 3 Encourages pull-through of other products Year 2 Target Mfg. Cost = 4 Supports development of new markets Year 3 Target Entry Date+ 5 Contributes to product 2. line Risk cost Analysis reduction Opportunity Assessment Risk Impact 6 Contributes to image of the firm in the marketplace [1 (low) - 5 (high)] Description of Critical Risk(s) 7 Increases "mindshare" among customers Step 1 - Estimate the number of design / development hours required to commercialize the new product Market Risk Non-recurring Engineering (NRE) = 8 Enables implementation of new technologies 9 Supports development of core competencies Technical Risk Step 2 - Calculate the "Productivity Metric" for the proposed new product 10 Supports overall strategic roadmap (Risk Adjusted NPV / Estimated NRE) Total Strategic Schedule Risk Score = Project 0 Productivity Metric = Does it fit our business? Cost / Quality Risk Step 3 - Calculate Overall Project Rating (Productivity Metric x Total Strategic Score) Max Risk = Overall project rating = 3. Investment Total Non-recurring investment Notes = and Comments: Capital = Labor = 4. Profitability Calculations: Net present value (NPV) = Risk-adjusted NPV = Total = 0 Based on 3-year "most likely" sales NPV / Max. Risk Impact How does this concept compare to other concepts? * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

57 6-Step Structured Growth Process 1. Assess business capabilities and resources 2. Understand and align with very important opportunities or customer problems 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions 4. Create ideas, develop and select prioritize concepts 5. Validate concept s commercial opportunity 6. Execute on strategically aligned concepts to develop new products, services and markets 57

58 EXECUTION on 3 Fundamental Growth Principles is the Key to Success Business Case Clarity New target markets or customers what do they value? Clear Value Proposition to New Customers Your unique strengths & capabilities New commercialization business strategy Executing with the right resources at the right time 58

59 Deliverables Roadmap * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

60 Level Of Effort and Loading * Content of this slide courtesy of Ron Mascatelli, Technology Perspectives, Copyright

61 Recap

62 6-Step Structured Growth Process 1. Assess business capabilities and resources Maturity Curve Competitive Matrix (product) Skill Matrix (service) 2. Understand and align with very important opportunities or customer problems SPOT Insight & Preliminary Market Research Vision & Bold Steps for non-dod commercialization End User Persona or Market Persona Key Deliverable: End User or Market Persona [e.g. what need is not being met] - Process does not continue without a clear Problem identified 62

63 6-Step Structured Growth Process 3. Clarify opportunities and begin to build a continuous pipeline of potential solutions based on Personas Context Map Value Proposition of Concept 4. Create ideas; develop, select, and prioritize concepts Preliminary Concept Blueprints Finalized Concept Blueprints Business Model Canvas 63

64 6-Step Structured Growth Process 5. Validate concept s commercial opportunity Market or technology specific research Risk Analysis Industry Analysis Business Case Brief 6. Execute on strategically aligned concepts to develop new products, services and markets Deliverables Roadmap Level of Effort 64

65 Thank You Roy Luebke Cell: