Strategic planning and technology management

INL

Strategic Planning &

Technology Management

Dan Yurman, Strategic Planning OfficeIdaho National Laboratory, Idaho Falls, ID 83415July 17, 2001

Contents

• Situation Analysis (SWOT)

• Priority Issues

• Mission, Vision Statements

• Strategies

• Accountability & Reviews

Quality Quotation

In a process in which requirements are not set or vague, nonconformance and quality will be randomly distributed!

Dan Yurman, INEEL 1991

Strategies

• Measures of success– Expected accomplishments over time– Critical mission elements

• Expected performance– Financials– Program measures

Accountability

• Senior management reviews accomplishments against strategies– Quarterly quantitative & qualitative measures

• All managers held accountable for results relative to commitments in strategic plans at their respective levels

What Does Management Want from Strategic Analysis?

• Is it real?– Product, market?

• Can we win?– How competitive is our product, company?

• Is it worth it?– Risk, return?

Market Research RoadmapMarket Research Roadmap

Is It Real?Is It Real?

Can We Win?Can We Win?

Is It Worth It?Is It Worth It?

Is The Market Real?Is The Market Real?

Is The Product Real?Is The Product Real?

Product Competitive?Product Competitive?

Company Competitive?Company Competitive?

Will It Be Profitable?Will It Be Profitable?

Satisfy Other Needs?Satisfy Other Needs?

Is There A Need/Want?Is There A Need/Want?

Can/Will The Customer Buy?Can/Will The Customer Buy?

Will It Satisfy The Market?Will It Satisfy The Market?

Can It Be Made?Can It Be Made?

Differentiation?Differentiation?

Low Cost Position?Low Cost Position?

Industry Structure?Industry Structure?

Organization Effectiveness?Organization Effectiveness?

Is The Return Adequate?Is The Return Adequate?

Is The Risk Acceptable?Is The Risk Acceptable?

Support Company Objectives?Support Company Objectives?

MarketOpportunity

Research

TechnologyAssessment

Competitive Analysis

-Companies-Industries

Other Factors?Other Factors?

ManagementDecisions

TELTECH.PPT/YURMAN

Ten Killer Questions

1. Is the proposal technically valid / feasible / defensible?

2. Is it technically interesting, a paradigm shift, something worthy of our firm?

3. Who else besides you thinks this is a good idea? What would our competitors think?

4. How much investment is required to succeed?


5. What is the near-term sales potential (12 -24 months)?

6. What effect will this have on other new business or existing business?

7. Describe any required investments, obvious advantages or likely difficulties?


8. Does the proposal have strategic value, e.g., does it advance the firm”s collective future?

9. What is the likelihood of failure?

10. If our decision to proceed were to be reported in the Wall Street Journal, would we look good?

Strategic Intent

• Based on product offerings and customer needs

• Derived from situation analysis

• Focused on business objectives for sales and profits

• Driven by competitive pressures

• Satisfied in bottom line results

How to Evaluate the Opportunity

• Fit with business strategy?

• Durability of advantages gained?

• Competitive position of the technology?

• Risks of technical / business success?

• R&D Costs v. ROI?

• Time to Market v. Competition?

What to Look For in Strategy

• Talent – ability to recognize market opportunities and customer needs

• Technology – capability to deliver an innovative product or service to market

• Capital – capacity to commit a pool of funds

• Know How – synergy between talent, technology, and capital

Competitive Advantage

• Market position

• Competitive impact of technologies

• Assessment of market pull

• S.W.O.T.

• Marketing mix

Core Competencies

• Specific expertise of the firm

• Combines a company’s knowledge, skills, and values into cohesive units

• Provides distinct values to customers

• Basis for technology differentiation

• Sets the firm apart from the competition

• Difficult for others to imitate

Core Competencies

• Most firms have two-or-three tops

• Examples– Honda; engine design and manufacturing– Cannon; lasers and optics– Dell; mass customization of personal computers– Texas Instruments; digital signal processing

semiconductors

Key Capabilities

• Form the basis for core competencies

• Specific science, engineering, and business disciplines

• Excellence in business practices

• Management skill in organizing talent, technology, capital, and know-how

Technological Competitive Advantage

• Benefits of crafting a product portfolio

• Concept of technology differentiation

• Concept of technology maturity

• Benefits of competitive advantage

• Strategies for success in the marketplace

Benefits of Crafting the Product Portfolio

• The firm is able to articulate why it is investing in specific technologies

• The importance of these technologies can be tied to the company’s long-term success

• Each technology is part of a portfolio that balances short-and-long-term risks and rewards

Technology DifferentiationKey Questions

• What is the fit between each technology project and the overall company strategy?

• What is the position of each technology in its life cycle (maturity)?

• What are the past and future contributions of each technology?– Sales, Market Share, Profits?

Technology Maturity

• Value of investments to date v. expectations of new products in the future?

• Risks and rewards of using “time-to-market” as a driver of profitability?

• Is it an augmentation or replacement technology in terms of industry impacts and customer acceptance?

Technology StrategyKey Questions

• Does the firm have a strategy for its portfolio of technologies or is it just a collection of projects?

• How does the company’s technology strategy compare with the competition’s?

• Is the company making effective use of partners, joint R&D projects, and strategic alliances?

Technology Strategy

• Decide whether the relationships between risks, rewards, and time-to-market justify each project.

• Ask whether customers really need / want the technology, and if so, are they willing to pay for it, and, at what price?

Technology Strategy

• Convert technology development and uncertainties to probabilities of success at each stage of development

• Define each technology development stage in terms of success factors, e.g., market needs, functionality, that are necessary to proceed to the next stage.

Technological Competitive Advantage

• Measures the degree to which a company has mastered the key technologies in its industry

• Compares overall mastery in core competencies among key competitors

• Effectively promotes technologies in terms of products, pricing, distribution, and direct marketing

Competitive Positioning

Pacing Technology

• Potential to change the entire basis of competition, but is not yet embodied in a product

• Often develops into products, but sometimes forms the basis of a key capabilitiy


Key Technology

• Most critical to competitive success

• Offers opportunities for process or product differentiation or cost competitiveness

• Offers genuine competitive advantage when embodied in a strategic plan

• Must be exploited intelligently or not at all


Base Technology

• Necessary and essential to the business

• Offers less potential in terms of competitive advantage

• Typically in widespread use in the industry

• Can descend into commodity pricing

Key Questions for Setting the Marketing Mix

• Product – is the offering a product, service, or both?

• Price – what is the value of the technology to the customer? Commodity or Premium?

• Distribution – how is the product / service made available to the customer?

• Promotion – how is the offering marketed?

Gaining Acceptance

• Subject business plans to reality checks– Technical expertise is not a substitute for

market knowledge

• Get direct funding for projects– Internal customers will pay for results

they really need

Keeping Your Sanity

• Never put a frog in lukewarm water– “Disruptive technologies can sneak up on you

• You can lead a fish to water but you can’t make it leap– There will always be resistance to adoption of

new technologies

Keeping You Sanity

• Stuffing is for turkeys– The “value proposition” of a new technology must be

immediately obvious. If you have to bury your customer in paper to explain it, your product may not be ready for market.

• Choose honor before elegance– A working technology beats hype nine times out of ten

Business

Strategic planning and technology management