Expo V4


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a presentation about tools and techniques to help companies be more market driven

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  • BackgroundIntroduced in 1976IBM PC 1981, Apple IIe 1977, years before their graphicsOutbound problemsWhere to sell it, what to say, $ salesMissing features, not complete productCustomersNavy, USFS, Duck’s Unlimited, Labs, publishingInbound problemsRequirements were all over the mapHow do you prioritize?
  • Value is the perception a customer has of the difference between the benefits she will derive from using your offering under a particular situation, to achieve specific objectives — and the costs she will have to pay
  • This kind of deliberate collaboration and co-innovation often leads to:optimal solutionsprofitable growthmarket transformationswhich exceed the expectations of both vendors and customers
  • Product – shall have a resolution of less than 1/8 inchBusiness – shall increase recovery by no less than 3 percentNon-functional – lasers can be replaced in less than ½ hourConstraints – shall have a manufacturing cost of less than $40K
  • Expo V4

    1. 1. Define Your Requirements Not The Product Features: Effective Skills To Improve Co-Innovation<br />By:<br />Miki Tokola, MICOM Consulting<br />Roger Hicks, RHC LLC<br />
    2. 2.
    3. 3.
    4. 4. What’s Happening?<br />Customer Expectations have Expanded<br />Evaluating the whole solution not just the product features<br />Market Relationship Structures are Complex<br />Supply chains being replaced by ecosystems<br />High Need for Agility<br />High uncertainty about future and less control of outcomes<br />Co-Innovation is an Imperative<br />More situations where customers don’t know and vendors don’t know<br />“The future ain’t what it used to be”<br />- Yogi Berra<br />
    5. 5. Customer Expectations Have Expanded<br />Ideal Product<br />A unique Service that extends Value in Quality, Price, Delivery and defers / minimizes customer costs<br />Best<br />Price / Cost<br />Better<br />Expected Product<br />Base Price, Delivery <br />and Quality Levels<br />Good<br />Generic Product<br />The right components and related design support<br />Features / Capability<br />Changing Definition of the “Product”<br />
    6. 6. Relationship Structures Are More Complex<br />Supply Chain<br />Value Delivery Network<br />The Market Relationship Model Has Changed<br />
    7. 7. High Need for Agility<br />Adaptive Market Navigation<br />(agility - move fast to stay aligned <br />with constant changes)<br />Many<br />Transformative Collaboration <br />(co-create goals and work together on a possible future)<br />Future Conditions That Are Hard to Predict<br />Envision the Future<br />(define and invest in <br />a clear set of objectives)<br />Contingency Planning<br />(extra efforts to analyze & position accurately)<br />Few<br />Few<br />Many<br />Number of Success Factors That Are Not Easy to Control<br />
    8. 8. Co-Innovation is an Imperative<br />Customer Requirements<br />Supplier Driven -Sales, Proposal & Promotion Processes<br />Customer & Supplier Co-Innovation and Value Discovery<br />Processes<br />Incipient<br /> wants<br />Unknown<br />Latent wants<br />Customer Driven – Operational Efficient Purchasing & RFQ Processes<br />Supplier Driven - Needs & Product Requirements Definition Processes<br />Existing wants<br />Known<br />Supplier Offerings<br />Un-known Solutions<br />Known Products<br />Changing Emphasis in the Customer/Supplier Interaction Processes<br />
    9. 9. Is There a Better Solution Creation Process?<br />A Co-innovation approach that is market driven<br />High<br />A new approach is needed to achieve better results with less effort<br />A needs discovery approach that is product driven<br />Impact on Results<br />Optimal Solution<br />Requirements Based Solution<br />Requested Features<br />Challenge of collecting and integrating useful input for better solutions<br />Low<br />Low<br />High<br />Effort Needed to Get Results<br />
    10. 10. Market-Driven<br />Strategy and culture<br />superior business performance<br />enabling<br />on chosen markets<br />focusing<br />to deliver superior value<br />operating<br />working<br />collaboratively<br />current and future problems<br />solving<br />
    11. 11.
    12. 12. A Cautionary Tale<br />
    13. 13. Benefits of Market-Driven<br />31% more profitable<br />2X faster to bring products to market<br />20% higher satisfaction rates<br />Command higher prices<br />Gain higher market share<br />
    14. 14.
    15. 15. Product Driven<br />
    16. 16. Market Driven<br />
    17. 17. Definition of Value<br />Value = benefits – costs<br /><ul><li>All value is in the mind of the customer
    18. 18. Value is situational
    19. 19. Value implies tradeoffs
    20. 20. Value has several dimensions</li></li></ul><li>The 5 Dimensions of Benefits<br />Economic<br />“I need to reduce costs”<br />Operational<br />“I need to improve throughput”<br />Network<br />“I want to leverage other people’s knowledge”<br />Emotional<br />“I want to feel that I own the best”<br />Technical<br />“I need to solve a problem”<br />
    21. 21. The 5 Dimensions of Cost<br />Troubles<br />“How troublesome will the installation be?””<br />Resources<br />“What additional resources will I need”<br />Risks<br />“What are the risks if it does not work as planned””<br />Monetary<br />“How much is it going to cost?”<br />Lost Opportunities<br />“What are the risks if it does not work as planned””<br />
    22. 22. Co-Innovation<br />New style of market-oriented engagement<br />Improved relationship with supply chain<br />Clearly define problems<br />Requirements, not features<br />Suppliers discover latent needs<br />
    23. 23. Innovation Perspectives<br />Innovation<br />is the profitable implementation of ideas and is used by suppliers to bring “new value” to their customers.<br />Co-innovation<br />is the ability of a company to improve productivity by collaborating with their value network to identify, characterize and address specific problems; thus, creating innovative solutions, which would otherwise not be possible.<br />
    24. 24. [Veneer lathe video]<br />
    25. 25. Kano Model<br />delighted<br />Delighters<br />Satisfiers<br />done poorly<br />or not at all<br />done well<br />Dissatisfiers<br />disgusted<br />
    26. 26. Market Research<br />
    27. 27. Primary Research Tools<br />Ethnographic Studies<br />Customer Panels<br />Usability Testing<br />In-person Interviews<br />Focus Groups<br />Telephone Interviews<br />Print Surveys<br />Web surveys<br />
    28. 28. Primary Research Tools<br />Qualitative<br /> Deep knowledge about a few<br /> Insights below the surface<br />Discover unknown needs<br /> Implicit info<br /> Early stages of product process<br /> Tip of the iceberg<br /> Thin knowledge about many<br />Quantitative<br /> Later stages of product process<br /> Explicit info<br />Info about know needs<br />
    29. 29. 5 WHYS<br />Help customers reflect their true needs<br />Root message – most fundamental message<br />Get to actionable input<br />
    30. 30. Finding Unstated Requirements<br />How do you feel about this software product?<br />It is very difficult to use.<br />The menu system is not intuitive<br />Tell me more.<br />Tell me why it’s not intuitive.<br />I get lost all the time.<br />
    31. 31. Finding Unstated Requirements<br />Well, there are too many layers and no way to get back.<br />Why do you think you get lost using the menu?<br />Root Message: The menu system has too many layers and no way to get back which makes customers feel that the product is too difficult to use.<br />
    32. 32. Outcome to Feature<br />Desired outcome<br />The fundamental measures of performance inherent to the execution of a specific job<br />Product requirement<br />What the product shall be able to do/have to satisfy customer needs<br />Product feature<br />A functional attribute of a product that is included in the design specification<br />
    33. 33. Desired Outcome<br />Unit of Measure<br />Minimize the time it takes to change a blade<br />Desired Outcome<br />Direction<br />
    34. 34. Outcome Analysis<br />
    35. 35. Types of Requirements<br />Product<br />Business<br />Non-functional<br />Constraints<br />
    36. 36. Voice to Req’s to Specs<br />1<br />Customer voices, images and outcomes<br />2<br />Requirements<br />3<br />Features and attributes<br />4<br />Concepts<br />5<br />Engineering specification<br />
    37. 37. Voice of Customer Research - An Overview<br />Plan it out<br />Why is the VOC necessary?<br />What questions need to be answered?<br />Who are the participants?<br />Where will you go?<br />How will you document?<br />Investigate<br />Discussion guide<br />Interviews prep<br />Probe and listen <br />Observe & capture<br />Supplemental surveys<br />Interpret<br />Extract key points<br />Analyze and organize<br />Note key statements <br />Record useful images<br />Extract insights<br />Translate into requirements<br />Stages of a VOC Research Project<br />
    38. 38. What to Look For with VOC in Market Driven Process<br />
    39. 39. A VOC Story<br />Question – what do wine makers need to help them process grapes?<br />The VOC Project - 2009<br />Talk to over 30 wine makers. <br />Listen and learn to understand how the wine making process works. <br />Understand the business challenges. <br />Gain insight into what the value drivers are for wine makers.<br />Size the potential market segments. <br />Pick an area of focus.<br />Result - November 30, 2010 – Key Technology introduces its family of Crush Pad Equipment Solutions for wineries. <br />The sorting table is the critical link between the vineyard and the winery.<br />Key developed the Grape Receiving and Inspection Platform along with other modular equipment to help small and medium sized wineries produce the highest quality product possible in a highly efficient and operator friendly process.<br />
    40. 40. Closing Remarks and Recommendations for Action<br />
    41. 41. How Do Companies Create Value?<br />Successful companies do not just add value, they reinvent it!<br />To achieve superior results companies should strive to be more market oriented and focus on how they can co-produce value with other stakeholders in their eco-system.<br />
    42. 42. Understand the Business Problems You Want to Solve<br />Late to the market<br />Low market share<br />Weak brand position<br />Insufficient product and service capabilities<br />Costly relationship management<br />Low Customer Satisfaction<br />Poor financial results (growth and profits)<br />Damage from un-managed risks<br />High cost marketing and selling channels<br />Poor win-loss statistics<br />??<br />
    43. 43. What Should We Be Working On?<br />A Rethinking of the Approaches Used to Create and Develop Solutions<br />Gaining Deep Insight into Customer/Market Needs<br />Know enough to appreciate the unspoken wants<br />Know enough to anticipate market trends and new requirements<br />Real Understanding of Markets and Segments<br />Align with and serve target groups that desire common benefits<br />Profiling of customer clusters based on the benefits they value<br />Competencies to Rapidly Discover and Implement Ideas<br />Coordinated actions to profitably deliver whole solutions with superior value<br />Supplier partnerships to quickly bring new innovations to market<br />
    44. 44. Recommendations for Action<br />Identify one supplier and start focusing how you can help them to understand your problems and co-innovate with you.<br />Forget about features, it’s all about value creation.<br />Build a Outcomes Table to help you explain your problems and objectives.<br />Practice the 5-why’s on anyone you can.<br />
    45. 45. Thank You For Your Attention<br />For More Information or to Continue the Discussion Please Contact Us<br />Roger Hicks – roger.hicks@comcast.net<br />Miki Tokola – miki@micomconsulting.com<br />Jose Campos - Jose@rapidinnovation.com<br />Or Visit:<br />www.beMarketDriven.com<br />