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Championing breakthrough ideas product camp sv 2013
- 2. Learning Objectives
• How to assess and articulate your company’s strategic
portfolio even when one doesn’t exist?
• How to position the strategic opportunity that your
innovative idea represents within this portfolio matrix?
• How do you capture Voice of the Customer data to
substantiate the significant opportunity your innovative
idea represents?
• How do you build a compelling business case that not only
captures the opportunity but a realistic assessment of
the costs to successfully bring an innovative product
to market?
• How to shape metrics and evaluation criteria to get
your business case approved when financial thresholds
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are in place?
© 2002-2003 Copyright Vision & Execution
- 3. Defining a Product Portfolio
• ….where none exists
– Define what business you are in
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© 2002-2003 Copyright Vision & Execution
- 4. Portfolio Management
• Decision-making process where a
business’ list of active projects is
periodically reviewed and revised
“There are two requirements for a business to
succeed at new products:
doing projects right and doing the right projects”
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© 2002-2003 Copyright Vision & Execution
- 5. Goals of Portfolio Management
• These main goals dominate the thinking of firms successful at
Portfolio Management:
1. Maximize Value
To allocate resources so as to maximize the value of the portfolio in terms
of company’s key objectives (such as profitability, ROI, acceptable risk). A
variety of methods are used to achieve this maximization goal, ranging from
financial methods to scoring models.
2. Achieve Balance
To achieve a desired balance of projects in terms of a number of
parameters: risk versus return; short-term versus long-term; and across
various markets, business arenas and technologies. Typical methods used
to reveal balance include bubble diagrams, histograms and pie charts.
3. Align Business Strategy
To ensure that the final portfolio of projects reflects the company’s business
strategy and that the breakdown of spending aligns with the company’s
strategic priorities. The three main approaches are: top-down (strategic
buckets); bottom-up (effective gating and criteria) and top-down & bottomup (strategic check).
Source: Robert G. Cooper, Product Management Institute
© 2002-2003 Copyright Vision & Execution
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- 7. What is a Strategy Portfolio?
• A coherent portfolio of options that
address new capabilities and new,
potential markets which enables tactical
opportunism within the company’s longterm mission.
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© 2002-2003 Copyright Vision & Execution
- 8. Why Does a Strategy Portfolio Matter?
• Allows you to reposition the company
more quickly than your competition
– Uncovers hidden constraints in your
company’s future
– Establishes a process to minimize the cost
of creating and maintaining the portfolio
– Optimizes your strategy faster and easier
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© 2002-2003 Copyright Vision & Execution
- 9. Defining a Strategic Portfolio
• ….where none exists
– Define what business you are in and where
your product fits
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© 2002-2003 Copyright Vision & Execution
- 10. Laying the Foundation
1. Do you know your unique leverage
points?
Financial Relationships/Assets
Intellectual Property/Technology
People/Culture
Scale/Efficiencies/Processes
Partners
Distribution
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© 2002-2003 Copyright Vision & Execution
- 11. Laying the Foundation
2. Do you know what are the top 5
most disruptive events that would
cause your business to fail?
3. Do you have a plan to address
each of these events to prevent
them or survive them?
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© 2002-2003 Copyright Vision & Execution
- 12. Laying the Foundation
4. Do you know what are the top 5
trends that could positively impact
your business?
5. Do you know what resources/
changes you would have to put in
place to address those
opportunities?
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© 2002-2003 Copyright Vision & Execution
- 13. Laying the Foundation
6. Do you know what are top 3 direct
and top 3 indirect competitors?
7. Do you know their greatest
strengths and vulnerabilities?
8. Have you identified which tactics
you could pursue to weaken your
competitors’ position?
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© 2002-2003 Copyright Vision & Execution
- 14. Laying the Foundation
9. Are your responses consistent with
your corporate mission?
- If not, should you be changing your mission,
or your response?
10. Are your responses consistent with
the burning needs of your target
market?
- If not, are you pursuing the most financially
attractive or most strategic market segments?
Or should you change your response?
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© 2002-2003 Copyright Vision & Execution
- 15. Laying the Foundation
11. Are your internal resources
(capital, people, culture,
technology, partnerships) able to:
- rise to the opportunities?
- stand up to the threats?
12. Can you finance your strategic
options of choice?
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© 2002-2003 Copyright Vision & Execution
- 16. What is Your Revenue Potential?
• Why would anyone buy this general
type of product or service?
• Why will someone buy our
product/service?
• Why will we meet our volume and
profit goals?
• If this new product was not
available, what would someone do
instead?
Solution
– Buy something else?
– Make something?
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– Do nothing?
© 2002-2003 Copyright Vision & Execution
- 18. Prioritize for Maximum Market Opportunity
Region 1
…Channel 1
Region 2
…Channel 2
Region 3
…Channel 3
Region 4
…Channel 4
Segment 1
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Segment 2
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Segment 3
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Market size
Market growth
Likelihood to adopt
Key features
Segment 4
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© 2002-2003 Copyright Vision & Execution
- 19. Customer Input Matters at Every Stage
VISION
Ethnographic
Customers
research
Concept
evaluations
Strategic client
requirement
Sales/account
management
Support
DEFINITION
Demand
validation
Feature
Prioritization/
Trade-offs
DEVELOPMENT
Working
prototype
evaluations
Process
engineering
Prototype
evaluations
DELIVERY
Beta test
Pilot program
User groups
Bug data
Feature request
button
Usability/
human factors
Customer
satisfaction
CONTINUOUS PROCESS OF INDUSTRY RESEARCH, COMPETITIVE
ANALYSIS, COST / BENEFIT ANALYSIS & METRICS
© 2002-2003 Copyright Vision & Execution
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- 20. MRD—Business Case—PRD: How They Interrelate
MRD
BUSINESS CASE
PRD
Written by Marketing
Written by Marketing
Written by Marketing
Vision phase
Business Definition phase
Product Definition phase
Major functional input
Major functional input
Customer value proposition
Key product functions,
features, benefits (general)
Market: size, growth rate,
trends, other characteristics
Competition, competitive
differentiation
Pricing, margin
requirements
Other: market plan, sales
channels, distribution,
service, etc.
from Eng., Mfg., Fin.
Customer value proposition
Market opportunity, trends
from Eng., Ops., Sales, Fin.
Detailed product functions
& features
over 3-5 year period
Costs / expenses:
development, marketing,
manufacturing, support
Forecasts: pricing, sales,
margins, profits for 3-5 years
Product cost targets
Customer user experience
Service, support & other
requirements
ROI
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© 2002-2003 Copyright Vision & Execution
- 21. Monitoring Risk Maintains Agility
•
Prepare for change agents
–
–
Track shifts in customer behavior/needs
–
Monitor for new game changing delivery mechanisms
–
Track changes in regulatory environment
–
•
Monitor for unexpected competition
Monitor for changes in supplier sourcing/costs
What 3-5 metrics could avert crisis?
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© 2002-2003 Copyright Vision & Execution
- 22. Metrics that Matter to Management
Timeliness
Timeliness
Quality
Productivity
Financial
Time to
Market
Customer
satisfaction
Patents
ROI
Time to
Revenue
First-time right
% Part reuse
Profitability
Function
points for
software
Margin
% on-time
Delivery
Warranty costs
Engineering
Change Cycle
Time
R&D as % of
revenue
Market
Impact
% Revenue
from new
products
Market share
Access to new
markets
Days to close
sales
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© 2002-2003 Copyright Vision & Execution
- 23. Key Take Aways
• Ask senior management to articulate your company’s strategic
portfolio, and if they can’t develop your own
• Identify where your product fits in the portfolio and where
you’d like to be working in the portfolio matrix
• Use your internal leverage analysis to surface “white
spaces” within your company or new markets to target
• Use traditional market opportunity assessments to evaluate the
potential and fit of the strategic opportunity that your
innovative idea represents within this portfolio matrix
• Use Voice of the Customer data as well as internal cost data to
substantiate the significant opportunity via a business
case your innovative idea represents
• Shape metrics and evaluation criteria to get your
business case approved based on current evaluation tools or
make case for new ones
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© 2002-2003 Copyright Vision & Execution
- 24. What Will You Do Next?
Create a portfolio matrix
Position your idea in matrix
Visit
Validate market opportunity
http://www.visionandexecution.com/do
wnloads_tools.html
Influence R&D to support
new opportunity exploration
for tools to
complete next
steps
Build your business case
Prioritize metrics to support
business case
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© 2002-2003 Copyright Vision & Execution
- 25. How to reach Patrina
•
•
•
•
•
•
Phone: +1 650 233 0256
Cell: +1 650 380 2627
Skype: patrina.mack
eMail: pmack@visionandexecution.com
Twitter: @visionexecution
Blog:
www.visionandexecution.com/blog
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© 2002-2003 Copyright Vision & Execution
- 27. What Is Innovation?
An iterative process
initiated by the perception of a
new market and/or new service opportunity
for a technology-based invention
which leads to development, production, and
marketing tasks striving for the
commercial success of the invention
OECD, 1991
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© 2002-2003 Copyright Vision & Execution
- 28. Defining Levels of Innovation
• Garcia & Calantone
–
–
–
–
Radical Innovations
Really New Innovations
Discontinuous Innovations
Incremental Innovations
“This iterative nature results in a variety of
different innovation types, typically called ‘radical
innovations’ for products at the early stages of
diffusion and adoption and ‘incremental
innovations’ at the advanced stages of the product
life cycle.”
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© 2002-2003 Copyright Vision & Execution
- 29. Defining Levels of Innovation
• A technological invention only becomes an
innovation when it is introduced to the
market, having passed through production
and marketing, to become adopted and
diffused in the marketplace.
– “A discovery that goes no further than the
laboratory remains an invention. A discovery that
moves from the lab into production, and adds
economic value to the firm (even if only cost
savings) would be considered an innovation. Thus,
an innovation differs from an invention in that it
provides economic value and is diffused to other
parties beyond the discoverers” (Garcia &
Calantone, ibid. p. 112).
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© 2002-2003 Copyright Vision & Execution
- 30. Defining Levels of Innovation
• Clayton Christensen – Innovator’s Dilemma
– Sustaining Technologies
• Discontinuous or radical or incremental
• Improve performance of established products, per
historic values of mainstream customers
– Disruptive Technologies
• Near-term worse product performance
• Introduce a different value proposition
• Offer features that fringe customers value – cheaper,
simpler, smaller, more convenient, etc.
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© 2002-2003 Copyright Vision & Execution
- 31. Product Strategy
• A strategic master plan that guides your
business’ new product war efforts
(Robert G. Cooper)
– Arenas of strategic focus
– Goals for business’ total product
development efforts
– Role of product development
– Resource allocation
– Go to market strategy
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© 2002-2003 Copyright Vision & Execution
- 32. Platform Strategy
• A core development project that typically has
a design life of several years and establishes
the basic architecture for a set of follow-on
derivative projects
– Many firms inexplicably develop one product at a time,
and by doing so fail to embrace commonality,
compatibility, standardization, or modularization
among different products and product lines
– Examples of product platform leadership
• Hewlett-Packard, EMC, Black & Decker, and Boeing
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© 2002-2003 Copyright Vision & Execution