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325M Sharon Park Drive Menlo Park, CA 94025 www.visionandexecution.com Championing Breakthrough Ideas Product Camp Silicon Valley 2013 Patrina Mack Managing Partner

Championing breakthrough ideas product camp sv 2013

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Learn how to develop and sell internally breakthrough ideas to enhance your company's sales

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Page 1: Championing breakthrough ideas product camp sv 2013

325M Sharon Park Drive

Menlo Park, CA 94025

www.visionandexecution.com

Championing Breakthrough Ideas Product Camp Silicon Valley 2013

Patrina Mack

Managing Partner

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© 2002-2003 Copyright Vision & Execution

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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 are in place?

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Defining a Product Portfolio

• ….where none exists

– Define what business you are in

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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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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 & bottom-up (strategic check).

Source: Robert G. Cooper, Product Management Institute

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Portfolio Management Tools

Approach 1 Approach 2

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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 long-term mission.

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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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Defining a Strategic Portfolio

• ….where none exists

– Define what business you are in and where your product fits

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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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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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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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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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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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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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• 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?

– Buy something else?

– Make something?

– Do nothing?

Solution

What is Your Revenue Potential?

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Anticipate Options for Growth

Extend Business

Enrich P

roduct

Core

Product

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Prioritize for Maximum Market Opportunity

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

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 1

Segment 2

Segment 3

Segment 4

Region 1 …Channel 1

Region 2 …Channel 2

Region 3 …Channel 3

Region 4 …Channel 4

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Customer Input Matters at Every Stage

Ethnographic research

Concept evaluations

Strategic client requirement

Sales/account management

Support

Demand

validation

Feature

Prioritization/

Trade-offs

Prototype

evaluations

Working

prototype

evaluations

Process

engineering

Usability/

human factors

Cu

sto

mers

Beta test

Pilot program

User groups

Bug data

Feature request

button

Customer

satisfaction

CONTINUOUS PROCESS OF INDUSTRY RESEARCH, COMPETITIVE ANALYSIS, COST / BENEFIT ANALYSIS & METRICS

DELIVERY VISION DEFINITION DEVELOPMENT

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MRD—Business Case—PRD: How They Interrelate

Written by Marketing

Vision phase

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.

MRD PRD BUSINESS CASE

Written by Marketing

Business Definition phase

Major functional input

from Eng., Mfg., Fin.

Customer value proposition

Market opportunity, trends

over 3-5 year period

Costs / expenses:

development, marketing,

manufacturing, support

Forecasts: pricing, sales,

margins, profits for 3-5 years

ROI

Written by Marketing

Product Definition phase

Major functional input

from Eng., Ops., Sales, Fin.

Detailed product functions

& features

Product cost targets

Customer user experience

Service, support & other

requirements

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Monitoring Risk Maintains Agility

• Prepare for change agents

– Monitor for unexpected competition

– Track shifts in customer behavior/needs

– Monitor for new game changing delivery mechanisms

– Track changes in regulatory environment

– Monitor for changes in supplier sourcing/costs

• What 3-5 metrics could avert crisis?

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Metrics that Matter to Management

Timeliness Productivity Financial Market Impact

Time to Market

Time to Revenue

% on-time Delivery

Engineering Change Cycle Time

Quality Timeliness

Customer satisfaction

First-time right

Warranty costs

Patents

% Part reuse

Function points for software

ROI

Profitability

Margin

R&D as % of revenue

% Revenue from new products

Market share

Access to new markets

Days to close sales

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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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Create a portfolio matrix

Position your idea in matrix

Validate market opportunity

Influence R&D to support new opportunity exploration

Build your business case

Prioritize metrics to support business case

Visit http://www.visionandexecution.com/do

wnloads_tools.html

for tools to complete next

steps

What Will You Do Next?

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How to reach Patrina

• Phone: +1 650 233 0256

• Cell: +1 650 380 2627

• Skype: patrina.mack

• eMail: [email protected]

• Twitter: @visionexecution

• Blog: www.visionandexecution.com/blog

3/25/2013

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Appendix

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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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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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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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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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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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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