The desire for growth is built into our DNA. Today, growth is not just expected but demanded from every company. Somewhere along the way, the definition of business growth skewed and became synonymous with an increase in size, number, value or strength. We have seen too many examples of bad growth driven by short-term focus on the wrong measures of performance. Classic examples are the dot-com bubble burst, Enron, implications of population growth on our natural resources, and even the growing pains felt by firms, including Google.

I found Robert M. Tomasko’s definition of growth refreshing: moving beyond your self-imposed boundaries and constraints to achieve your full potential and deliver unique value (Bigger Isn’t Always Better: The New Mindset for Real Business Growth). As he outlines, the growth process, as with purposeful change management, involves:

1. putting aside old ways of perceiving the situation;
2. leading change, first within yourself and then within the organization, towards this new perspective;
3. building capabilities to support this new perspective;
4. reorienting and readjusting your value delivery chain and ecosystem to align with this new perspective;

I previously wrote about creativity, invention and knowledge and how they are the foundation for innovation. Here, innovation, implementation of a new idea for the purpose of creating value, is the fuel for growth. And, innovation management is your control system. Combined, they will help achieve sustainable growth for your firm. So, here are the necessary conditions for sustainable growth.

• Offer clear value and benefit to the company, customers, suppliers, industry and the market through this change or new perspective. It is ultimately about people: it is a change of behavior, processes, how people work and produce work. If there is no clear and compelling benefit, it won’t stick. So build close linkages with your workforce, lead users, customers and suppliers. Strive to go beyond relationship building to achieve an emotional connection with them. As Guy Kawasaki stated, make evangelists, not sales (Rules For Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services).
• Recognize that growth is not a destination, but a path and on-going process. It requires developing the needed capabilities and competencies in awareness, adaptability, and building a learning organization. It requires much mindfulness, being aware of the present moment to exploit opportunities so as to keep the bigger picture and vision in mind. At the same time, it requires effective risk management: understanding/recognizing possible uncertainties and unexpectedness’, adjusting and adapting as needed. It is about impermanence, understanding that everything changes and is in flux, and learning to let go and adapt.
• Be resilient. You’ll have plenty of failures, nay-sayers and set backs. So, build your capacity for change and dealing with change, even under negative and unexpected circumstances. I once heard that forgiveness is hoping for a better past. So, don’t dwell in your past failures. Failure is inevitable and it is part of your learning process. The key to success is to fail early, learn from it and move on with greater understanding. Just remember Guy’s coin phrase: churn, baby churn.
• Utilize both sides of your brain: don’t just be creative but also be analytical to successfully exploit the opportunity. Think out of the box, look for connections even seemingly unrelated, be open to and seek new experiences and ideas, be observative and keenly inquisitive. Know that the future is unwritten and full of opportunities. Be positive, hopeful and optimistic, regardless of the current situation. But, while dreaming big, start small, simple and with focus. Iteratively build on your previous successes, and create your future one step at a time.
• Build a culture of trust, commitment, accountability and focus on results. Commitment is key, and it should not be confused with consensus, as it is about having the courage and wisdom to move forward even when not everyone agrees. Accountability is about the personal ownership for delivering the agreed upon performance to the company and to the team. Focus on results is recognizing what really matters and what ultimately delivers value.
• Achieve the right balance between:
  • long-term and short-term;
  • leading and managing;
  • idea-generating and doing;
  • being supportive and driving the needed change, however uncomfortable;
  • providing resources/funding and placing constraints, even if they are artificial;

So, instead of pursuing the popular definition of growth, contemplate your unique value and how to further it. Whether it maybe building the next great product/service, or how you go about developing and delivering it. Whatever it is, keep the focus on achieving sustainable growth.

Technorati Tags: Robert M. Tomasko, Bigger Isn’t Always Better: The New Mindset for Real Business Growth, innovation, sustainable growth, conditions for sustainable growth

I’m always amazed to hear what kids pick up from conversations, TV shows, books, friends, … Recently I heard my 9-year-old tell his friend that the Nintendo Wii has “bad graphics”, but he doesn’t care as he enjoys the games. Turns out he was repeating what he heard during a game console comparison on Cartoon Network. The source of this propaganda is irrelevant, but it gives us an opportunity to discuss the characteristics of disruptive innovations.

Clayton Christensen first defined the concept of disruptive technologies in his book The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials). The concepts that he described have become the reference work on disruptive technologies, particularly for large and established firms. Christensen defined disruptive products as follows.

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

I am a fan of James Burke’s PBS TV series Connections (Connections 1, Connections 2 DVD Set, Connections, Vol. 3). In his shows, he explains disruptions occurring from coincidental inventions, changes in regulations and society, exploding demand for new products as well as growth in complementary technologies created through strange connections. With that broader context, it is possible to further define disruptive technologies and products as follows.

• They create new markets and customer segments that previously did not exist or were thought unattainable;
• They initially target underserved customers;
• They are perceived as inferior by existing mainstream customers;
• They attract early adopters and create loyal followers as they offer new performance vectors previously unmet;
• They reduce complexity and are simpler in design and easier to use;
• They specifically target breakthrough improvement in a new performance vector;
• They can require a new business model or distribution method;

Nintendo’s focus has been continuous improvement of customer experience through innovative products, such as the release of Nintendogs that enabled gamers to train virtual puppies. They also made it to the Forbes‘ list of The Top 10 Disrupters Of 2006. With the introduction of Nintendo Wii, they have seriously impacted the status quo of console videogaming especially from the perspective of how, who and why:

• how we interact with the virtual world of gaming;
• who plays with these games;
• why we play them;

With that, Wii certainly had a disruptive impact on the society and its ecosystem, which not only enabled Nintendo to change the way it competes, but also enable revenue growth through new high-value customers that was previously not attainable. It is important to note that even the name Wii was chosen to bring a sense of inclusiveness and togetherness.

Many hard-core mainstream customers might disagree that we reached a point of diminishing returns in graphics. As Sony and Microsoft concentrate on more graphics power and beefier consoles, Nintendo is focusing on changing the rules of the game by coloring outside the lines. With the motion-sensing controller, they are redefining how we interact with video games where the players take a very active part in the game, and burning calories in the process. I was personally surprised to see how entertaining Mario Party 8 is for both the players and the spectators. As the games are more interactive, parents are more willing to let their kids play the video games, and also more likely to play along.

With more graphics power and beefier consoles, Sony and Microsoft are leading the pack with more realistic graphics which are also more complex in nature. For me it is a challenge to remember all the push buttons and movements on a controller. However, Nintendo Wii’s motion-sensing controller broke down barriers by removing complexity in playing games. It made real life games, such as tennis, boxing, baseball, more fun and simple to play, thereby entering into a market, ages over 35, that was not accessible to the videogaming industry previously. Today, it is not unheard of for grandparents to buy a Wii system for themselves after playing with their grand kids.

Nintendo Wii is also opening up doors to new uses beyond gaming. Glenrose Rehabilitation hospital in Canada is using the consoles to help patients with movement and balance issues. Wii Big Brain Academy enabling all ages to participate and keep brain sharp, but also connect with WiiConnect24 to network and measure how they are doing against other kids. The educational and health-care arena is a new market previously untapped by the videogaming industry.

Nintendo has proven the validity of motion-sensing and control technology. With that, we’ll see rise of new markets and industries utilizing the motion-sensing technology, where it will be embedded into everyday technology from cell phones, TV remote controls, computers, cars …

So, when is it important for you to look for disruption in your product lines and technologies?

• Your definition of competition has been to match competitors functionality and feature set. You feel like you are fighting them in their battlefield and not making any headway towards the hill. So, it is time to look for a new hill with your own rules.
• Your mainstream customers are more interested in price than feature set or functionality. They are starting to highlight good-enough products that are cheaper from your competitors.
• You are praying for a miracle and your growth is mainly driven through mergers and acquisitions.
• You are noticing and dismissing new entrants that are penetrating your market through your under-served customers.
• You lost touch with your lead users and have been stuck in a never ending cycle of continuos improvement.
• Your market is shrinking, yet there is clearly untapped markets and customers to be reached.

Ultimately the powerful disruptive innovations are about the people. It is not as much about the impact they may have on industries or markets, but how they transform our lives. Just think back to the introduction of glucose meters and how they improved the lives of diabetics, or iPod/iTunes on how we listen to our music, or blogging technology and YouTube on enabling anyone to become the content creator and publisher, or Internet enabling globalization. Anyone, any where, any age, any skill-level now have access to the products and technologies, inexpensively, easily without dealing with the previous complexity.

There is obviously more to disruptive technologies than what we just discussed. Though the risks are high and the immediate return on investment is not obvious, with well planned technology/product management, clear focus on customer and good timing the results can be spectacular.

Technorati Tags: Clayton Christensen, James Burke, disruptive technologies, Nintendo Wii, disruptive innovations

This is the continuation of my previous blogs on roadmapping:

• Roadmaps and Roadmapping: What and Why
• Successful Product-Technology Roadmapping
• How To Manage The Initiation Phase For Successful Product-Technology Roadmapping
• Get Down To Business: Developing Your Product-Technology Roadmap

Once the roadmap is developed, the next step in the process is its communication and implementation. If you thought the hard work is behind you, think again. This phase can be one of the most challenging activities for an organization, especially if the recommendations require complex cultural and leadership changes.

Conversant has defined a conversational model which they referred to as the cycle of value. The cycle of value promotes establishing a shared purpose, ownership, accountability and building a foundation for learning and improving. This model also fits well with the steps required for a successful dissemination of our roadmap.

The cycle of value has 3 distinct phases:

• Align — conversations are focused on building a shared purpose and understanding;
• Act — conversations are centered for successful launch of initiatives and clarification of accountabilities;
• Adjust — conversations are all about reviewing results, learning and improving;

Lets examine these phases from the perspective of disseminating our roadmap. You can read more about the cycle of value and other conversational tools in the Communication Catalyst: the Fast (But Not Stupid) Track to Value for Customers, Investors, and Employees by Mickey Connolly and Richard Rianoshek.

Align

The goal of this phase is to create a shared purpose and vision for our roadmap: know-why, know-what, know-how and know-when. With that, it not only requires communication of the roadmap, but also the validation and critiquing by all stakeholders. The communication methodology should enrich the roadmap by enabling collection and processing of the insights gathered during discussions. In addition, this phase should also include:

• Evaluation of risk vs. return;
• Deciding among the alternative strategies;
• Agreement on the prioritization of activities and projects;
• Plan for change;

Act

Once the alignment is achieved, next step is to put in motion the needed projects and activities as agreed by the roadmap. This includes:

• Initiation of relevant projects and partnerships;
• Commitment of resources and budget;
• Agreement on the performance measures, targets and key milestones;
• Announcement of clear owners and accountabilities;

Adjust

The value of your roadmap is directly correlated to whether its information is kept current and up to date. However, keeping the roadmapping process alive is one of the challenges that an organization faces. As such, investigate ways to incorporate your roadmap review/update process to your business strategic planning or budgeting cycles. Also, identify clear owners, frequencies and method of review/update cycle that will be used for keeping your roadmap current.

Adjust phase should include concise summary of accomplishments, challenges/disappointments, new insights, changes in the competitive landscape as well as the review/status of the critical success factors for successful roadmap implementation that were previously identified. Based on the review, any needed updates to the roadmap should be initiated and followed with dissemination of the roadmap as discussed. Below is the visual summary of the roadmapping process steps I have laid out: initiation, development and dissemination.

Technorati Tags: roadmapping, product-technology-roadmapping, roadmap, cycle of value

This is the continuation of my previous blogs on roadmapping:

• Roadmaps and Roadmapping: What and Why
• Successful Product-Technology Roadmapping
• How To Manage The Initiation Phase For Successful Product-Technology Roadmapping

The development phase of the roadmapping process involves building an action plan and clearly answering why-what-how-when questions for achieving the objective that was defined during the initiation phase. As I mentioned before, roadmapping is a flexible process and it can come in many different forms: market, technology, product, service, capability, science/research, product/technology, etc. This blog specifically focuses on product-technology roadmaps and roadmapping process.

The product-technology roadmapping process may start with the needs of the market and customers, customer/market focused roadmap, or maybe focused on identifying markets and customer segments that could be served with a specific product or technology, product/technology focused roadmap. Regardless, product-technology roadmapping is a needs-driven planning process, where key technologies are identified and linked to the product or product lines to satisfy the strategic intent of the firm over a given period of time. The strategic planning activity links three critical elements: customer/market needs, products and technologies.

Given the intensity of the roadmapping activity, it is important to define and manage the process accordingly. I have outlined a generic process based on my experience that you can customize to your needs. Finally, keep in mind the 9 critical success factors as you launch into the development phase.

Say “no” to paralysis by analysis

The research portion of the development phase is focused on gathering data on market, customer and technology within the scope and boundaries defined during the initiation phase of the roadmap. SWOT, Porter’s 5 Forces, STEEP, forecasting, and ecosystem mapping are some of the tools that can be utilized for information gathering and organizing. There are many sources available in the public domain including marketing data, patents, industry standards, industry publications and analyst reports. Where applicable, research adjacent markets, emerging technologies, collaboration sources and value networks. The goal is to build deep understanding of the market, customer and technologies by investigating the trends, drivers, needs, and noting relevant specific and quantifiable targets.

Information collected during the research stage is then processed during the brainstorm portion of the development phase. The goal at this stage is to sift through all the data to identify and align key needs, benefits, drivers, features, products, customer segments, partnerships, and technologies that can support the strategic intent of the firm. This is also where strategic opportunities and strategic problems are captured. Scenario planning can be useful for discussing alternatives, trying out different approaches, or to just get the creative juices flowing. At this stage, it is important to look beyond the data and challenge known assumptions, as it will lead to more creative and innovative ideas for the analysis stage.

During the analyze portion of development the goal is to develop hypothesis, paths, options and determine the critical solution requirements for the product-technology roadmap in question. Ideas need to be analyzed for strategic fit, core competency alignment, and implementation feasibility; checked to see if fits within the boundaries; and prioritized. To be most effective, asking questions and challenging assumptions is most needed for this aspect of the process. Here, scenario planning can also bring flexibility into the roadmapping process by establishing alternatives that would drive the decision making for things such as technology selection, patent protection or standards compliance.

The drafting of the roadmap is the process of distilling the needed information into a format that is ready for communication and sharing. I have captured the minimum set of information that should be on your roadmap report as part of your checklist.
You should also visually represent your roadmap in whatever form best meet your needs, as long as you keep in mind to show the integration of key pieces of information in a multi-layer format with a time-line.

Finally, before launching into the dissemination phase of the roadmap process, you need to verify & validate your draft roadmap. This includes checks for completeness and validation of the roadmap through reviews with various stakeholders and groups, and hopefully agreement for the implementation and ownership of the roadmap.

Cartography of roadmapping

At a minimum, the draft roadmap report needs to include relevant information and assumptions used for developing the roadmap.

• Analysis and synthesis of market, customer and technology trends, drivers, challenges and opportunities;
• Relevant information on historical data about enabling/inhibiting economic and social dynamics: learning curves, adoption curves, inflection points, …
• Critical solution requirements, where applicable include specific and quantifiable targets;
• Key competencies and skills required for success in the future and identification of existing gaps;
• Key opportunities for innovation and differentiation;
• Critical success factors for a successful roadmap implementation;
• Options and alternatives for technology commercialization and technology diffusion including make/buy recommendations;
• Prioritized recommendations, including implementation recommendations;
• Key takeaways from the sessions in regards to short-term, mid-term and long-term directions;

The idea of integrating key pieces of information in a multi-layer format with a time-line is quite simple. However, actually putting that on a piece of paper, such that it can be easily communicated and maintained can be another story. There are many roadmapping software products in the market, however I have not personally used any of these tools. If you have experience with these tools, please share your observations. However, here are two basic layouts that you can customize for your needs.

Technorati Tags: roadmapping, product-technology roadmaps, strategic planning

This is continuation of my previous blog: Successful Product-Technology Roadmapping.

The initiation phase of the roadmapping process basically involves identifying team members, establishing executive-level sponsorship and defining scope and boundaries of the activity. As simple as these sound, I have seen time and time again activities come to halt when team doesn’t have the right skills, or is confused on the scope of their responsibility and does not have a sponsor who is able to remove the barriers that they are facing.

Team… Which team?

First and foremost, you need to identify a good facilitator to help drive the activities. This could be the person that is in the leadership role, or someone from outside the team, or maybe a set of individuals that rotate the facilitation responsibilities. However it is done, the chosen facilitator needs to exhibit certain characteristics:

• should have some level of experience as a group leader;
• recognizes that it is about the goals and accomplishments of the group, and objectively separates her personal opinions;
• continuously drives shared responsibility and ownership in the group, but not afraid to jump in to get the ball rolling when needed;
• quite comfortable with different personality styles, and not afraid of tension and conflict;
• understands the processes, and utilizes available tools when needed to help the team with idea generation, creative exploration, consensus building, team building, …
• effective listener, careful observer, good communicator, and motivator;

The Tuckman model of team development highlights 5 phases that teams go through: forming → storming → norming → performing → adjourning/transforming. It is the facilitator’s role to efficiently and effectively move the team through each stage.

The development phase of the roadmapping activity is intense. It requires knowledge and experience in the industry, market, customers, competitors, products, and technologies, as well as skills in analysis, problem solving, critical thinking and planning. Given that, you need a cross-functional team, subject matter experts, and individuals with diverse backgrounds and styles. Studies have shown that there is an inverse correlation between the team size and team effectiveness: the larger the team, the more complex communication, coordination and collaboration becomes. If you end up with less than an ideal team size of 5-9, experiment with different team structures, such as core vs. extended team, sub-teams, steering committee, advisory councils, etc. Your ultimate goal is to ensure that the collaborative roadmapping activity will result in shared ownership and accountability.

Did someone say sponsor?

Executive sponsorship and management commitment is crucial for a successful roadmapping process. For product-technology roadmaps, this is usually the business unit manager. However, in technology driven firms the activity is quite often sponsored through the R&D Director.

It is one thing to have an executive sponsor and another to have an effective working relationship with her. A sponsor can be a great benefit when steering through political and organizational waters, refining scope and boundary, removing barriers, identifying stakeholders and providing general guidance and coaching to the team. To build that relationship, agree on regular meetings for status updates and to raise and resolve issues. Anyone that had the pain of scheduling meetings for many busy senior-level managers will certainly appreciate getting help from your sponsor, such as using her staff meetings for regular team updates.

What is my box?

Before launching into the Development Phase, the team needs to clearly define the scope and boundaries: what is in and out, where does the activity begin and end. Developing a solid scope and getting an agreement with the team, sponsor and stakeholders is critical to the success of the team, and it is a negotiation and validation process.

The executive sponsor is ultimately responsible for stating and approving the need and timeframe for the roadmapping activity. This could be anything from achieving market leadership in 3-5 years, to building a competitive position with existing resources and budget in a new market in 3-5 years. However, this objective is what drives the activity, deliverables and analysis of alternatives.

To help define your scope and boundaries, here are some starting questions to think about:

• What products and technologies are included in the scope of the activity? What markets, customers and technologies are off the table?
• What organizational value chain processes (support, sales, services, manufacturing, …) are not included in the scope?
• What are the organizational and cross-organizational boundaries that should be considered?
• Are there any unspoken assumptions that needs to be clarified?

Technorati Tags: roadmapping, product-technology roadmaps

There is an interesting article in BusinessWeek (Special Report, May 4, 2007; The World’s Most Innovative Companies) regarding the innovation fatigue that CEOs are starting to feel, perhaps from innovating harder, not smarter. It is an important reminder for internalizing that innovation is a marathon, not a sprint. With that, it requires different training methods, tools and perspectives. Roadmapping is one of the strategic planning tools that will help with your innovation journey, identifying capabilities and assets that are required for success.

As I mentioned before, there are many types of roadmaps. This blog specifically focuses on the product-technology roadmaps and roadmapping process. Product-technology roadmaps lay out the evolution of a product over time, and articulate vision, product strategy, and strategic intent that the firm wants to achieve at a future point in time. The planning activity links three critical elements: customer/market needs, products and technologies.

The roadmapping process is an organizational commitment: the process is iterative, requires patience, and takes an average of 3-6 months. It should be driven by a clearly articulated business need. You should consider developing a product-technology roadmap when you need to:

• Integrate your market, product and technology business and investment decisions;
• Make the transition to customer or market focused product development from technology-driven development;
• Expand into new markets, explore platform strategies and identify alternative technology investments;
• Explore new business models, markets or customer segments by leveraging existing assets and capabilities;
• Discover ways to leapfrog your competitors, establish barriers to entry, and identify sustainable competitive advantages to build upon;
• Develop project plans to ensure that required technologies and partnerships will be available when needed;

The process should answer the why-what-how-when questions: Why are we doing this? What do we want to achieve? How will we get there? and When do we need it? Your process should be designed to answer these questions effectively and efficiently. The roadmapping process can be broken into 3 phases: initiation, development and dissemination. In follow-on posts, I’ll dive into each of these three phases in more detail.

• Initiation — This phase is your foundation and it is critical to the successful outcome of the roadmap initiative. Critical success factors for a good foundation are to build the right team and team structure, establish executive sponsorship and commitment, and clearly define scope and boundaries of the initiative. At the end of the phase, the team should have a well defined operating model, a good understanding of expectations, boundaries and timelines, and an established communication plan to enable the collaborative process within the organization and with partners.
• Development — The development phase is all about answering the what-how-when questions. The process deep dives into analysis of market, customer and technology trends and drivers, and outlines differentiation opportunities, key products and technologies, partnerships, dependencies and risks. The roadmapping may start with the needs of the market and customers, customer/market focused roadmap, or maybe focused on identifying markets and customer segments that could be served with a specific product or technology, product/technology focused roadmap. The outcome of this phase is a product-technology roadmap that is ready for dissemination.
• Dissemination — This phase is all about communication and implementation of the developed roadmap. Roadmaps and implementation plans should be regularly reviewed and updated. As a roadmap extends in time, associated uncertainty also increases. The review and update cycle provides adjustments to a roadmap and its implementation plan based on the latest available information. The review cycle may be based on the organization’s planning cycle.

As they say, that’s all folks. In summary, roadmapping is a flexible process that can benefit your firm greatly. However, before you dive into the process, please keep in mind the following 9 critical factors for successful roadmap outcome.

• Clearly articulated business need.
• Committed sponsorship, senior management participation and dedicated funding.
• Accountable, competent, dedicated, cross-functional and diverse team that is also objective.
• Time commitment and focus of everyone involved.
• Good facilitation to drive the process, coordinate interaction among the team and guide deliverables.
• Collaborative process that drives ownership within the organization.
• Access to the needed information and knowledge: market, customer, technology;
• Skills, experience and expertise in planning, analysis, processes, technology and product areas.
• And finally, don’t short-cut the communication and implementation plan. This is just as important as the actual roadmap development.

Technorati Tags: strategic planning, roadmapping process, product-technology roadmap, critical factors for successful roadmap

In a previous blog, I discussed the various barriers to innovation that you might have experienced or will experience at one time or another. Although the roadmapping process will not address cultural or organizational issues, it is a flexible approach that when combined with other strategic planning tools will help drive focus, alignment and understanding for your innovation portfolio.

A firm’s strategic intent is its vision of what is possible and what it plans to achieve in the long term. As Porter stated, essence of strategy “is not doing something better than your competitors but doing something different - choosing a unique and reliable position that is rooted in systems of activity that are difficult for others to match.”

Roadmapping provides a structured framework for exploring and defining potential paths and gaps that will aid in achieving the future state the firm desires. If the strategic vision is the general direction with a destination in mind, roadmapping is a process that aids in a step-by-step plan that shows how to get there, with the roadmap as the output. Basically, roadmapping is a strategic planning process that:

• aligns and communicates the business need: know-why;
• outlines actionable steps and interdependencies between the steps: know-what;
• drives an understanding of the alternate routes and tradeoffs to optimize resources and risks: know-how;

Roadmapping is a flexible process that integrates various views of a business (product, technology, market, capabilities, …) as a multi-layer time-based presentation. It was first used in the semiconductor industry in the 1970s to align technology, market and product directions. Today it is used quite widely in industry as it delivers many direct and indirect benefits to the organization. In summary, roadmapping and roadmaps:

• Organizes and integrates cross-functional views (market, industry, customer, R&D, …) as well as business and technical issues;
• Documents complex decisions and dependencies in an easy to digest form;
• Gives a long term direction by combining different planning horizons (product, market, technology, operations, processes, …);
• Requires multi-disciplinary, cross-functional effort which can result in better teamwork, shared ownership and communication, thereby generating alignment and engagement across sites;
• Establishes clear understanding of what needs to be done, by which order, and forces to firm to prioritize investments and make the needed tradeoffs;
• Helps identify gaps and competencies that need to be developed to be successful in the future;
• Offers an effective communication tool to be used with customers, suppliers and partners to gather reactions, and establish synergies;
• Provides continuity in strategic planning process by integrating planning and vision phases;
• Enables the firm understand and fund the capabilities and assets needed tomorrow to be successful today;

Roadmapping is an effective process that will help identify key synergies, dependencies and gaps within a strategic plan. It also aids in effective decision making and enables better communication and alignment, especially across disparate teams and organizational boundaries. This is a process where the journey, i.e. roadmapping process, is just as important as the output: roadmap.

As roadmapping is a flexible process, it comes in many different forms: market, technology, product, service, capability, science/research, product/technology, … You can represent your roadmap in whatever form best meet your needs, as long as you keep in mind to show the integration of key pieces of information in a multi-layer format with a time-line. Following Porter’s guidelines on strategy, your roadmap should answer the questions to: how your firm will compete, how your firm will deliver a unique value, and how your firm will maintain that unique position in the market.

You can get a glimpse of a firm’s roadmap, even when it is not explicit. Basically start with the firm’s vision/mission statement and strategic intent, and analyze its past and present product, service and technology offerings. This will give you a good idea where the firm is today and where it will most likely explore tomorrow. Here is a quick look at Motorola, Dell and Google, as examples.

Motorola is one of the pioneers in utilizing technology/product roadmaps. Given that, it is baffling to see how they got caught without a 3G phone, and didn’t recognize the changes in their end-customer tastes and desires. I previously blogged on Motorola’s product line, and what looks like a single minded focus on their innovations. An accurate, non-biased roadmapping process should have clearly highlighted these risks and shifts in the marketplace. However, based on a recent WSJ article (you’ll need a subscription), in-fighting might be the reason behind their problems. Motorola also indicated the challenges of achieving bottom line growth as they mainly focused on new product development, without focusing on the process or operational improvements. Again, the roadmapping process can help integrate and align market, product, technology and process activities and investments across the firm’s innovation portfolio.

Dell’s mission “is to be the most successful computer company in the world at delivering the best customer experience in markets we serve”. Their 2006 strategic corporate initiatives are: “driving Global Growth, achieving Product Leadership, enhancing the Customer Experience and developing our Winning Culture“. Given this, coupled with challenges of the direct sales model in emerging markets, it is no wonder to hear the rumors that Dell is considering channel sales. However, Dell will need to do more than just another cheaper PC, or Linux bundled laptops, or more customized/personalized color options on their systems to yet again achieve the most successful computer company in the world. What do you think will be the next business model innovation in the computer industry?

Google’s mission is to organize the world’s information and make it universally accessible and useful. With that, Google’s Office Suite (Google Docs and Spreadsheets, and now Google Presentations), and other collaborative products seems out of place, as they are about collaborative content creation. However, looking at the fact that Google is mainly known for its global presence, collaborative tools could provide the leverage Google is looking to create virtual groups, and organizing information along that vector. Although today, these tools work only online, given the growth in emerging markets, and customer desire for maintaining local data, it is quite likely to see a future architecture that would combine the local data with online content, perhaps building on top of Google Desktop. On another tangent, one of the biggest challenges for Google is the low switching costs associated with search engine. With that, integration of analytics, better and more targeted search technologies, and APIs increases the switching costs for customers, so I would expect to see more targeted and personalized search results, as well as additional products along the lines of analytics and SEO in the future. At the same time, there is a growing concern towards Google for knowing and collecting too much information about anyone and anything. Given that, what are potential products, customer services or business models Google might bring up in the future to combat that concern?

Next time, I plan to dive into building roadmaps, specifically in the context of technology/product roadmapping process.

Technorati Tags: roadmapping, strategic planning process, roadmaps

In a previous post, I mentioned using SWOT analysis for analyzing the forces impacting your innovation. SWOT (Strengths, Weaknesses, Opportunities, Threats) is a flexible and simple tool that can be used in many different contexts: strategic planning, organizational evaluation, career evaluation, technology competence analysis, product or service analysis, strategic partnership evaluation, and so on. There are numerous sites that cover the basics of SWOT analysis. As such, instead of going into the HOWTO of SWOT, this post will focus on best practices for SWOT.

In basic terms, SWOT is a great tool for structured brainstorming, with an intent to map out the landscape of the strategic question being evaluated, and determining the potential next steps that the organization should take action on. A successfully conducted SWOT will give insights on existing strengths to maintain, build and leverage on, weaknesses to minimize or remedy, potential threats to counter or minimize, and opportunities to prioritize and exploit.

Given the simplicity and the flexibility of SWOT process, it is quite easy to fall into traps that would result in inaccurate, incomplete and subjective analysis. However, by keeping a few best practices in mind, you can ensure that you have a comprehensive, methodical and objective study. Here are some of the practices that worked for me in the past; please add on to this list.

Emphasize Detail

The simplicity of the process can easily result in 2-3 word phrases that don’t mean anything:our technology platform is superior. Remember, the goal is to come away with insightful and actionable areas. One method to achieve that would be to ask the Why? question at least 5 times.

1. our technology platform is superior — why?
2. it is superior because we have a flexible platform architecture — why?
3. it is a flexible architecture because we had to implement some specific functionality for a few customers — why?
4. we needed to enable our customers to optimize their operations — why?
5. they needed to streamline the workflow and customize the starting point for improved job flow and they didn’t find any company or product to do what they needed, so we quickly did the work for them

With these 5 quick questions, you just identified your strength in building customized solutions, and opportunities to market the strength of your product architecture, to investigate new product extensions to support this existing need, and the potential of offering customized solutions.

Another method for getting to details is to do a further breakdown of the given statement and analyze each attribute separately. As an example, our product quality is poor could be further broken down to:

• Product quality — does the product meet the agreed upon specifications;
• Product specification — does the product specification reflect the customer needs, benefits and problems;
• Product usability — is the product easy to learn and use;
• Product performance — does the product performance meets the customer needs;
• Quality assurance (QA) process — is the QA process effective;
• …

The bottom line is that there are many things that could contribute to overall product quality, and some more important than others. Again, by focusing on the details, you have more accurate information for your decision making process.

Apply/Do Objectivity

Unfortunately, SWOT’s simplicity can also result in a biased analysis. However, even in the areas of high subjectivity, you can apply objective analysis by bringing in varying opinions. If you haven’t already done so, visit the Periodic Table of Visualization Methods, and check out potential tools that you can use for aiding on your objective data analysis, such as performance charting or radar charts. But, remember, quantitative is not automatically synonymous with being objective. As human beings we tend to be optimistic, even when we think otherwise.

Align With Organizational Strategy

The SWOT process does not have favorites; it just states the findings and observations. However, you can link the analysis results with your strategy, previous market and competitive analysis reports. This creates a personalized SWOT analysis that would better aid in your decision making process. After all, not every opportunity and threat is equal, and your strategy will highlight the necessary tradeoffs: what are we not doing. During your objective analysis, you can weight and rank each of the areas. This can be as simple as using a scale of 1-5, or percentage based evaluation.

Your strategy also will highlight the evaluation of important intangible resources: capabilities, competencies and reputation. Although these may not come up during your SWOT analysis, these intangible resources play into a firm’s competitive differentiation. Through this analysis, you can identify opportunities (ex. new application of existing technologies) as well as threats (ex. revamping of the workforce with new technologies).

Recognize The Moving Target

SWOT analysis captures the landscape at a given point in time. Today, everything moves at the speed of light. However, with some additional work, investigation and competitive intelligence gathering, you can distinguish between where your organization is today and where it can be in the future. This is where the gap analysis can help to identify potential strategic and tactical actions your firm can take.

Technorati Tags: SWOT, best practices, decision making process

Every once in a while, we all need to be reminded of challenges of managing the innovation process and forces at play that influence an innovation’s commercial success. Over the weekend, I watched the documentary, Who Killed the Electric Car? For anyone that is knee deep in driving innovation in her organization, this is a good documentary to watch. It reminded me of all the various internal and external factors that could support or hinder an innovation’s potential success.

This post, without going into politics, will look at the available tools and methodologies for performing impact analysis. Once you have the results, what you do with them (strategic planning, risk management, etc.) would be part of your innovation and technology management process. It is also important to note that this analysis provides a snapshot view point in time. As such, depending on how turbulent your business environment is, you should consider a continuous scanning process.

Porter’s 5 forces framework (Competitive Strategy: Techniques for Analyzing Industries and Competitors) is a good starting point for analyzing the attractiveness of your market. The inter-relationship between the four external actors (potential new entrants, potential substitutes, buyers and suppliers) and the rivalry between the firms within the industry forms the five competitive forces. In summary, the greater the strength of the competitive forces, the greater the intensity of competition in the industry, and the less profit potential. These forces are summarized as follows.

• The threat of new entrants into the industry — potential entrants reflect the firms that are not yet in your market, but potentially could be lured in for various reasons, usually related to the similar factors as outlined in the ‘intensity of rivalry’ (below). However, these potential new entrants have to deal with several entry barriers:
• economies of scale that maybe available to large incumbents;
• experience curve effects already benefitting the existing competitors;
• access to channels & complementary assets;
• The threat of substitutes for the industry’s products or services — these are alternative but equivalent solutions. Threat of substitution is influenced by all factors effecting the potential entrants as well as the competition among the firms. Additional attributes to consider are:
• buyer’s switching costs to the substitute;
• relative price/performance, and how fast it is improving in the substitute’s industry;
• The bargaining power of buyers of the industry’s products or services — this represents the relative relationship between the firm and its customers. The factors effecting the buyer’s bargaining power is similar to the factors influencing the suppliers.
• buyer concentration;
• buyer’s switching costs;
• threat of backward integration: buyer set up subsidiaries that produce some of the inputs used in the production of its products;
• The bargaining power of suppliers of products or services to the industry — this measures how much a supplier can raise prices without the firm retaliating or switching suppliers. Suppliers include material and component suppliers, as well as skilled labor, technology, software and other inputs to the final product/service. The factors influence the supplier’s bargaining power are:
• importance of the factor to the user: the more important the given component/factor to the user, the more likely the firm has to accept unfavorable terms;
• supplier concentration: the fewer the suppliers, the more bargaining power the supplier has;
• firm’s switching costs: the higher the switching costs, the less likely the firm will switch suppliers;
• threat of forward integration: if the supplier can enter the buyer’s industry with its own competitive product, it has additional bargaining power;
• The intensity of rivalry among firms in the industry;
• growth rate of the market: slow-growth markets may increase intensity of competition among existing competitors;
• number of competitors: the more contenders, the more intense the competition;
• buyer’s switching costs: low switching costs make it easier for competitors to steal each other’s customers;
• firm’s exist costs: the higher exit costs, the more likely the firms will stay in;
• brand loyalty: less brand loyalty, more likely buyer’s will switch vendors;
• buyer’s price sensitivity: the more price sensitive the customers are, the more likely lowering price would entice customers’ to switch vendors;
• ability to differentiate: less opportunities for differentiation indicates less likely to keep existing customers’ loyalty;

Complimentary and Supporting Industries has been added as the Sixth Force to Porter’s model. A product’s complements enable its users to experience the full benefits of the product, such as the iPod and its infinite number of accessories. An industry with easy access to related and supporting industries may benefit from cross-compilation of ideas, common pool of technical talent, opportunities for joint innovation, and opportunities to share infrastructure and/or distribution channels. These opportunities can enable creative and innovative linkages with the complementer to further differentiate your product. However, at the same time, the threat comes if the complementer becomes a new entrant by integrating the offer into their product, thereby becoming a competitor.

We can further Porter’s forces by looking at the external forces that impact the business environment utilizing STEEP forces analysis (Social, Technological, Economic, Environmental, Political).

• Social —what are the current trends in the communities and relationships, and how the industry and technology influences those trends, such as: demographic factors (population distribution, age distribution, education and income levels), attitudes towards capitalism, individualism, environmentalism, church and religion, health and nutrition;
• Technological — what are the technological changes and their potential impacts, what is the efficiency of the infrastructure (transportation, education, health care, communication, etc.), cost and accessibility to power, new technologies, manufacturing processes and overall industrial productivity;
• Economic — how are the economics changing in the industry, such as:  economic growth, unemployment and inflation rates, consumer  and investor confidence, currency exchange;
• Environmental — what are the environmental trends and influences: impacts to firm’s production processes, affects on customers’ buying habits, perception of the company or product;
• Political — what is the political climate, its stability and risk, what are the various government policies and mandates, export restrictions, taxes and tax breaks, copyright and patent laws, environmental protection laws, union laws;

You can assess the impact of these forces using a range of –/++ to indicate how favorable (++) or unfavorable (- -) a given force is. You can also do further sensitivity analysis on your findings and by exploring what ifs: what if a given force changes by X value, or what would it take to make a given factor favorable? You can also funnel these learnings to your strategic plans and risk management activities. Again, the speed that your business environment is changing should dictate the frequency of this activity. For emerging and highly turbulent markets, you should consider putting in place a continuous environmental scanning process.

On a different note, ecosystem modeling allows you to visually diagram the interrelated roles, interactions and influences for your product. This will be a future blog topic.

The next step in your analysis should include the examination of internal organizational dynamics for additional insight. As Christiansen points out in The Innovator’s Solution: Creating and Sustaining Successful Growth:

A surprising number of innovations fail not because of some fatal technological flaw or because the market isn’t ready. They fail because responsibility to build these businesses is given to managers or organizations whose capabilities aren’t up to the task. Corporate executives make this mistake because most often the very skills that propel an organization to succeed in sustaining circumstances systematically bungle the best ideas for disruptive growth. An organization’s capabilities become its disabilities when disruption is afoot.

Radical innovations especially challenge the established firms as the conflicts can occur within existing resources, established processes and organizational values. Fear of cannabilizing their existing products, and concern for disrupting their well-oiled cash machine can quickly kill new and different ideas. Even when the products make to the market, sales force, unsure of the product and/or compensation models can easily drive potential customers away. This is why the role of senior executives is important, as they can create the needed interference between the new business and mainstream business, and also sense and redirect the business as the circumstances changes and new challenges emerge.

Christiansen also points out that the issue with disruptive innovations are rarely with the technology, but how the market is managed. Sustaining technologies continuously provide improved product performance, at least in theory. (I just had a flash back to the Microsoft Word 6.0 release…) Disruptive technologies on the other hand provide the market a different value proposition. They also tend to lack in product performance, at least in the near term.  However, they certainly provide benefits that niche customers demand. As such, identifying this segment of the market, captivating the visionaries and ideal spokes-persons, and selling the value proposition and benefits of the product (selling sushi vs. selling cold dead fish) becomes a key management issue.

These main internal and external factors can also be captured as part of your SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), which deserves a separate post of its own. These tools can collectively provide the needed extra insight for your innovation’s success, as you will have a better understanding of what are the forces, i.e. opportunities and threats — internal and external, surrounding your innovation. Now, grab a pen ‘n paper, and brainstorm forces impacting your innovation while watching the documentary. As always, a bulleted list of items by themselves are not useful on their own, so make sure to funnel them to your innovation and technology management process.

Technorati Tags: innovation process, impact analysis, strategic planning, technology management, Porter’s 5 forces, STEEP forces

Innovation is about the implementation of a new idea for the purpose of creating value: value for the firm and value for the consumer. Just as the definition implies, innovation:

• can be large or small;
• is not absolute, but multidimensional;
• can include anything that the firm and its customers find useful and valuable;
• can be evolutionary, but not duplicative;

Innovation as the ‘implementation of a new idea’ has multidimensional qualities that distinguish the newness in its innovativeness: degree of change in its originality, value and impact. The value of the innovation is certainly in the eye of the beholder, such as in the case where the innovation can be a significant value for the firm, while delivering marginal (if any) improvement for the users.

As mentioned before, innovation occurs across a list of varying dimensions: technology, process, product, service, business model, value-delivery, brand, design, quality, market, customer/segment, … The newness aspect of the innovation can be seen as incremental (continuous, evolutionary, sustaining), radical (discontinuous, revolutionary, breakthrough, disruptive), or anything in between. By utilizing applicable innovation attributes one can measure the perceived innovativeness of the innovation: cost, adoptability, novelty, quality, risk, profitability, usability, viral-ness, image, originality, usefulness, …

Radar charts (spider diagrams) can be quite useful in mapping out your innovativeness in the dimensions that are relevant to you, to your innovation, and to your market. Furthermore, they can help you analyze how you compare against your competitors, your market and your industry. Although there is no standard methodology for determining the degree of innovativeness of your innovations, the process itself can be quite valuable.

• Measure your competitiveness: the more dimensions you are innovating, the more difficult for your competitors to copy you, and more competitive you are.
• Benchmark and measure your innovativeness: the process enables benchmarking against your previous innovations, your competitors, markets and industry. Process can provides insights and new opportunities for innovation.
• Manage according to innovation newness: radical innovations requires a different innovation management style than incremental ones. Utilizing supportive management tactics will improve the success rates of your innovation.
• Improve your portfolio: understanding where you are innovating helps boost your innovation portfolio ensuring better balance and comprehensive coverage.

Further, this innovativeness can be collectively assessed as to its overall impact on the business unit, the firm, the market or the industry. As an example, the Fast Company article “Expand Your Innovation Horizons” highlights this portfolio exercise for your products and services utilizing the ‘horizon’ concept.

• horizon 1 innovations: incrementally extend existing business;
• horizon 2 innovations: aim to create new categories in existing markets;
• horizon 3 innovations: aim to disrupt existing markets via new business models, processes or technology;

Technorati Tags: innovation, innovation management, innovation portfolio