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Opportunity Discovery Process
- 1. 1 Overview of SBI’s OpportunityDiscovery Process (ODP) Prepared by: Dr. Chulho Park Vice President Strategic Business Insights cpark@sbi-i.com October 2015
- 2. 2 Opportunity Discovery Process forValue Creation
- 3. 3 Opportunity Discovery—Incubation Engine Opportunity Profile Trends,SWOT Idea Resurrection New Challenge Refinement Concept Refinement New Challenge Opportunity Discovery EngineInternal and External Sources R&BD R&BD “Failure” Mode Customer Value Creation Customer Value Creation Validation Validation Concept Opportunity Discovery Workshop Opportunity Value Proposition Opportunity Roadmap Opportunity Workbook Opportunity Workbook Opportunity Discovery Workshop Opportunity Value Proposition Opportunity Profile Opportunity Roadmap
- 4. 4 Key Success Factorsfor an Opportunity Address important customer’s (unmet or new) needs Create significant financial value or benefit Develop unique, compelling technical approach Create competitive advantage Fit to the company strategy “Important” Opportunity Product/Service Needs Customer Needs Technology Needs Research & Development Needs
- 5. 5 Opportunity Discovery—The FrontEnd of Innovation in the New R&BD Paradigm Infrastructure: Organization, Resource, Processes Analysis of External Drivers and Dynamics Commercialization Management IP Asset Management Technology (R&D) Management Company Business Vision and Strategy Opportunity (Value) Discovery Value Development (R&D, BD) Creation of Customer Value and Company Profit Infrastructure: Organization, Resource, Processes Analysis of External Drivers and Dynamics Commercialization Management IP Asset Management Technology (R&D) Management Company Business Vision and Strategy Company Business Vision and Strategy Opportunity (Value) Discovery Value Development (R&D, BD) Creation of Customer Value and Company Profit
- 6. 6 Problem Definition andScope Development of Opportunity Profiles Initiation: Preparing Workbook Idea Generation: Brainstorming Ideas Opportunity Clustering: Clustering Opportunities Opportunity Evaluation: Evaluating Clusters Focus Areas Opportunity Ideas Attractive Opportunities Market Needs Technical Needs Opportunity Clusters Industry/Markets Selection Criteria SBI’s Process Involves Creative Brainstorming Followed by Careful Clustering and Screening
- 7. 7 Bring togethermultidisciplinary skills: marketing, R&D, manufacturing, planning Develop critical mass of necessary knowledge quickly: consumers, markets, technologies, competition Encourage knowledge sharing and consensus building Create broad view and perspectives of market and technology landscapes with a specific decision focus Leverage the expertise, experience and genius of others Increase efficiency and productivity for innovative idea generation Break down organizational barriers (silos) Create learning environment through repetitive use of structured brainstorming. Why Structured Brainstorming
- 8. 8 Three Types ofBrainstorming Workshops Positive Negative Multidisciplinary Team Expert Group Scenario-Based Broad view Many diversified ideas Rapid knowledge base development In-depth expertise A few high-quality ideas Effective and efficient for specific cases Through search Comprehensive view Innovative ideas through systematic approach Less productive, and often inefficient Difficult to maintain the quality of ideas Narrow view Prone to be biased Hard to access experts Time consuming and expensive Often less productive Difficult to execute
- 9. 9 Step 1: Preparea workbook for Opportunity Discovery workshop Step 7: Refine the selected opportunities and specify next steps Step 2: Discuss industry trends and issues, and the company’s business/R&D strategy and capabilities Step 3: Identify new business and/or research opportunities Step 4: Segregate the opportunities into clusters Step 5: Develop evaluation criteria and assess their relative importance Step 6: Evaluate and select the best refined opportunities using the selection criteria SBI Conducts the Process via Well-defined Steps
- 10. 10 Step 1: Preparea Workbook for Opportunity Discovery Workshop Describe opportunity discovery objectives: – Who needs opportunity ideas, and why (or for what purpose) – What kinds of outcome needed or desired – How to use the outcomes (next steps) Set specific goals for an opportunity discovery workshop: – Opportunity types: new business, product/service, research, or application ideas – Time horizon: short-, mid-, and/or long-term – Search domain scope: e.g., display, flat panel display, or LCD – Number of ideas to be created – Consideration of its own core businesses or technologies – Consideration of resources (financial or human resources) – Consideration of risk
- 11. 11 Check List forCharacterizing Opportunity Discovery Opportunity Type Basic Science and Research Application Development Product or Service Business or Market Search Scope Existing/Core Areas Only Growing and Emerging Areas Totally New Areas Only No Constraint Time Frame (Examples) Short-term (1 to 2 Years) Medium-term (3 to 4 Years) Long-term (Over 5 Years) No Constraint Technical Capability Req. Low Medium High No Constraint Investment Requirement Low Medium High No Constraint Risk Low Medium High No Constraint Number of Opportunities Small (< 5 Ideas) Average (10 to 20 Ideas) Large (> 40 Ideas) No Constraint Opportunity Search Domain Example: Portable Multimedia Devices (Note) Please make circles where are appropriate. Illustrative Only
- 12. 12 Step 1: Preparea Workbook for Opportunity Discovery Workshop Form a workshop preparation team (typically, a team leader plus 1 to 3 staff members) Set/refine specific objectives and goals for a opportunity discovery workshop Set a tentative schedule of the whole opportunity discovery process Determine a workshop process and desirable contents of a workbook Scout experts for workbook production, and assign tasks Scout experts for a opportunity discovery workshop (typically, a workshop leader, a workshop moderator, a workshop recorder, numerous domain experts in the areas of market, technology, consumer, upstream and downstream industries) Set a workshop date and place, and a tentative agenda for the workshop Prepare workshop materials such as idea cards, blackboard, beam projector, notebooks, etc.
- 13. 13 Typical Contents ofa Workbook Objectives of Opportunity Search – New business development – R&D idea search Technology Analysis: – Technology trends – Emerging technologies – Emerging materials – Technical issues and needs Market Analysis: – Market trends – Emerging markets – New product development – Change in consumer behavior – Market issues and needs Competitive Analysis: – Major competitors: strategies and technical approach – Potential new competitors or entrant Other External Environmental Analysis: – Government science and technology strategy and investment policy – Environmental issues – Regulatory and social issues – Issues in IP and standardization Company’s Business Strategy: – Strategic vision and directions – Business strategy, expansion plan, and new business development plan – Resource availability Company’s Technology Strategy: – Technology strategy and R&D portfolio – Core technologies and core competencies – Resource availability WORKBOOK TABLE OF CONTENTS TEMPLATE (Illustrative Only)
- 14. 14 Step 2: DiscussExternal Environments and Company’s Capabilities and Issues Kickoff the brainstorming workshop: introduction of the workshop participants and agenda Refine and confirm the objective and decision for opportunity search workshop Review the methodologies and processes of the workshop Present a workbook: industry overview and more Discuss about the guideline for the opportunity search Analyze major external and internal driving forces and trends to identify new market and technical needs
- 15. 15 Analysis of DrivingForces and Trends Will Help Identify Needs for Innovation Competitive Business Environments Social/Environmental Changes Disruptive Science & Technologies External Driving Forces Business Opportunities Product/Service Opportunities R&D Opportunities Outcome of Opportunity Discovery Workshop Business & Technology • Strategy • Capability • Resource Internal Opportunity Discovery • Decision-Focus • Goals • Scope Internal Brainstorming Workshop Technology-Driven Opportunities Customer-Driven Opportunities Optional Input Product/Service Needs Customer Needs Technology Needs Research & Development Needs
- 16. 16 Step 3: IdentifyNew Business/Research Opportunities Think about a new business or research opportunities and write the idea in a given standard format. The format includes: – Name of an idea provider – Title of the idea – Description of the idea – Need: market, consumer, and/or technical needs – Skills/technologies required for the idea – Additional notes such as investment, related technologies, competition, experience, synergy, etc. Present the idea to the workshop participants in order to: – Refine the idea and make a bigger idea – Reduce duplication of the same idea – Inspire other ideas to the participants
- 17. 17 Put youridea on a card: – No idea is a bad idea; be creative; take risks Get in line to present your ideas Make your point briefly and precisely (without interruptions by others), so that others may also contribute Post your idea. Give a two sentence description of the idea while posting it Allow others to express their ideas; no “idea killing” behaviors Think of another idea. Build on other participants’ ideas Leverage the knowledge/genius of others and the workbook Only one person speaking at a time; no “sidebar” conversations Rules of Brainstorming Workshop
- 18. 18 Identify positivetrends and find a way to exploit them. Identify negative trends and come up with a way to counteract them. Look at your current activities, portfolio, and interests for ideas that might appeal to others. Watch what your competitor is doing and find a way to do it better. Discovering Opportunity Ideas in Changes Core Knowledge Trend 1 Trend 2 Intersection Knowledge Vectors Focus AreasFocus Areas Core Knowledge Trend 1 Trend 2 IntersectionIntersection Knowledge Vectors Focus AreasFocus Areas Sources of Changes • Technological advances • Social and environmental changes • Competitive dynamics • Consumer trends • Business model paradigm shift
- 19. 19 Contributor: _______________ Description _______________________________________________________________ _______________________________________________ Need _______________________________________________________________ _______________________________________________ Skills/Technologies Required _______________________________________________________________ _______________________________________________ AdditionalNotes (required investment, related technologies, etc.) _______________________________________________________________ _______________________________________________________________ _______________________________________ Sample Format of an Idea Card Product or Service:
- 20. 20 Product or Service:Simple OLED Film Structure Description: Reduce number of films necessary to produce OLED Need Lower manufacturing cost and make flexible TFT-OLED easier Skills/Technologies Required Monomer/polymer synthesis, functionalizing polymers, film deposition Additional Notes (required investment, related technologies, etc.) SDI and SAIT Contributor: Chulho Park Example of an Idea Card Idea Number: 7
- 21. 21 Product: Simple OLEDFilm Structure Example of the Title Card of an Idea 7 Related Idea Numbers: 3
- 22. 22 Step 4: Segregatethe Opportunities into Clusters Review the ideas created Eliminate duplicated or similar ideas Combine ideas that are subsets of other ideas or same kinds of ideas into a new or existing idea Classify ideas in a few groups that can be: – Similar technologies required – Similar applications or products – Same markets or industries Name the clusters Note: – Some ideas can belong to multiple clusters – Clusters can be used for portfolio selection and balancing
- 23. 23 Step 5: DevelopEvaluation Criteria and Assess Their Relative Importance Determine an evaluation method and criteria Determine a scale for each of the criteria – Complexity of a scaling/measure depends on information/expert availability and experience – 3 or 5 levels are appropriate in most cases Describe each level of the scale for the criteria – Describe a level of a scale quantitatively as much as you can – Describe the rest qualitatively Assess the relative importance/weights of the selection criteria Assess the relative importance of the scales
- 24. 24 Success = SDemandx STechnology x SStrategic-Fit x SCompetition Basic Principle of Opportunity Evaluation Demand Commercial Success Technology Competition Strategic Fit Is there a market? Who are the customers Why do they buy (needs)? Market size, growth rate? Price, cost, profitability? Can we make it? When the technology ready? Technology competitive? Capability, resource? Technical risk? Does it fit with our strategy? Strategic fit? Management commitment? Cultural fit? Urgency, priority? Will it be competitive? Competitive advantages? Sustainability? Potential new competitors? Advent of disruptive technologies?
- 25. 25 Small Medium Large MarketPotential < $500 million $0.5 – 1 billion > $1 billion/yr at 2007 Low Medium High Time/Urgency Customers will buy the product (> 4 years) Customers will buy the product (2 to 4 years) Customers will buy the product (< 2 year) Low Medium High Strategic Fit Not fit with strategies and no synergies with current business/ technology Supports the existing Core businesses and technology Global leadership, Leveraging core competency Low Medium High Competitive Position Many pre-existing competitors Significant challenges to sustain advantages Few pre-existing competitors, Sustainable advantages Low Medium HighBiz Development Capability Little expertise in the area Some expertise in the area Leading expertise in the area Low Medium HighTechnology Feasibility Difficult to make or buy, high technology project risk Technology is feasible, med project risk Components Devices < $1 billion $1-3 billion > $3 billion/yr at 2007 Easy to build, Low technology project risk Alternative Approach: Multi-Attribute Weighting Example of Evaluation Criteria and Their Scales Attribute
- 26. 26 Criteria Relative Weight MarketPotential 25% Time/Urgency 25% Strategic Fit to Company 5% Competitive Position 15% Biz Dev. Capability 15% Technology Feasibility 15% Scale Weight High 3.0 Above Avg. 2.5 Average 2.0 Below Avg. 1.5 Low 1.0 Example of Evaluation Criteria Weighting and Scale
- 27. 27 Step 6: Evaluateand Select the Best Refined Opportunities Select an evaluation methodology or tool such as Excel spreadsheet or Analytic Hierarchy Process (AHP), etc. Evaluate the opportunities with respect to the selection criteria Prioritize the opportunities and select a few opportunities for the further review Check the priority with intuition or group consensus Conduct a sensitivity (what-if) analysis by changing relative importance of the criteria and/or ratings of the opportunities Select top-priority opportunities Refine the selected opportunities for the next step
- 28. 28 An Example ofMulti-Attribute Weighting Method Evaluation of Opportunity Ideas Weight: 0.30 0.25 0.15 0.15 0.10 0.05 1.00 Strategic Market Competitive Technology Time/ Total Criteria: Fit Potential Position Capability Availablility Urgency Score Opportunity Ideas Opportunity Idea - 1 2.5 2.0 2.0 1.5 2.0 1.0 0.6750 Opportunity Idea - 2 1.0 3.0 3.0 2.0 3.0 2.0 0.7333 Opportunity Idea - 3 1.5 1.0 1.0 3.0 2.0 1.0 0.5167 Opportunity Idea - 4 3.0 1.0 1.5 1.0 1.5 3.0 0.6083 Opportunity Idea - 5 2.0 3.0 2.0 1.5 1.5 2.0 0.7083 Opportunity Idea - 6 3.0 2.0 2.0 2.0 2.5 3.0 0.8000 Opportunity Idea - 7 1.5 2.5 1.5 1.0 1.0 1.5 0.5417 Scale Weight High 3.0 Above Avg. 2.5 Average 2.0 Below Avg. 1.5 Low 1.0 Illustrative Only
- 29. 29 Step 7: Refinethe Selected Opportunities and Specify Next Steps Refine the selected opportunities using SRI’s NABC format: – Consumer/Market/Product/Technical Need – Compelling Business/Technical Approach – Consumer/Company Benefits – Competition Specify the next step for realizing/implementing the selected opportunities: – Conduct in-depth market research and technology intelligence – Develop executive-summary opportunity profiles (using NABC format) – Develop detailed opportunity profiles for validation, enhancement, and implementation
- 30. 30 Development of anOpportunity Profile
- 31. 31 Opportunity Value Proposition Asimple “NABC” approach can be used for profiling, communication, validation, and promotion of an opportunity Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Customer needs, market and product needs, or technical needs Compelling and unique technical and/or business approach Competitive advantages and disadvantages to technology/market leaders Current status and issues, and next step or action plan Customer benefits and company/R&D benefits
- 32. 32 Introduction Brief descriptionof an opportunity Strategic objectives and goals Time and resource constraints Key Items Addressed in an Opportunity Profile Needs Customer (new or unmet) needs Product or service needs Technology needs or push/drivers Competition Competitors with strengths/weaknesses Compelling competitive advantages Technology gaps, sustainability Next Steps The current status (IP, R&BD stage) Next step to do Resource requirement, or commitment Approach The current leaders’ approaches Compelling technical/business approach Modus operandi Benefits Customer benefits Company benefits Synergy, side effects/benefits 1 65 3 4 2
- 33. 33 Creating a CompellingOpportunity Pitch
- 34. 34 Steps in Creatingan Opportunity Pitch Know your audience – What are they trying to accomplish that your idea can affect? – How do they measure their accomplishment? – Which of those measures would your idea help most to improve? Package your pitch – The Hook – what grabs attention – The Core – your content – The Close – request for action or input The core content is your NABC – …matched against the knowledge of your audience Practice and improve – Both your message and your delivery – Be natural and sincere – Test yourself: Can your spouse or another significant person in your life understand what you are saying? “Elevator Pitch” A concise summary of your Value Proposition in about 150 to 225 words (omit details!)
- 35. 35 Making the FirstDraft Opportunity Pitch Opportunity Profile Description _______________ Core N: ______________ A: ______________ B: ______________ C: ______________ Next Steps _______________ The first draft of opportunity pitch can be easily made by rearranging and connecting the components of an opportunity profile. Try to make a compelling story! Opportunity Pitch Hook _______________ Core ______________ ______________ ______________ ______________ Close _______________
- 36. 36 Example: Pitch forDisposable Hearing Aids Fred Fritz: President Songbird Medical Systems Audience: Opportunity Pitch to a prospective customer HOOK: Are you having trouble hearing? CORE: For the first time, disposable hearing aids are available. Today, high- quality hearing aids cost several thousand dollars and have to be fitted by a doctor. Because they cost so much, they have to be made out of hard, durable materials that do not fit comfortably or tightly in the ear. We offer a disposable hearing aid that costs one dollar a day. It has the best-quality digital sound and, because you throw the units away every month, it is made of a soft material that fits comfortably, securely and invisibly in your ear. You can buy them over the counter in your drug store. CLOSE: Would you like to see one? Source: SRI International
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- 38. 38 Opportunity Incubation Investigatethe selected opportunities Develop opportunity profiles with compelling opportunity pitch Identify and secure sponsors and/or collaborators for value creation Validate the opportunities Evolve the opportunities into important ones with higher value creation potential and commercial success Iterate the phases till ready to commit with confidence Trends, SWOT Idea Concept Resurrection New Challenge Refinement Concept Refinement New Challenge Well-aligned with •Strategic Vision •Customer Needs •Organization •Incentive, Reward Internal and External Sources R&BD R&BD “Failure” Mode CustomerCustomer ValueValue CreationCreation CustomerCustomer ValueValue CreationCreation Validation Validation Trends, SWOT Idea Concept Resurrection New Challenge Refinement Concept Refinement New Challenge Well-aligned with •Strategic Vision •Customer Needs •Organization •Incentive, Reward Internal and External Sources R&BD R&BD “Failure” Mode CustomerCustomer ValueValue CreationCreation CustomerCustomer ValueValue CreationCreation Validation Validation
- 39. 39 Opportunity Validation andPrioritization Demand Technology Competition Who are the customers? Why do they buy (needs)? Market size and growth rate? How much are they willing to pay? When will the technology be ready? Is the technology competitive? What is the technical risk? What is the cost? What are differentiation factors? What are competitive advantages? Are they sustainable in long-term? Commercial Success Success = SDemand x STechnology x SCompetition x SStrategic-Fit Must pass the four tests: Will there be markets? Can we make it? Will we be competitive? Does it fit to our strategy? Strategic Fit Sustainable Leadership Does this fit with the company strategy? Is the company capable of executing this? What is the long-term profitability?
- 40. 40 Opportunity Incubation Customer Value Creation55 Commercial Development44 Researchand Development22 Research Opportunity Discovery11 Commercialization Opportunity Discovery33 Customer Value Creation55 Commercial Development44 Research and Development22 Research Opportunity Discovery11 Commercialization Opportunity Discovery33 Customer Value Creation55 Commercial Development44 Research and Development22 Research Opportunity Discovery11 Commercialization Opportunity Discovery33 Customer Value Creation55 Commercial Development44 Research and Development22 Research Opportunity Discovery11 Commercialization Opportunity Discovery33 Time Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Time Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Important Needs Unique Approach Customer Benefits Dynamic Competition Next Steps, Action Plan Flexible Stage-Gate Approach Validating and Incubating Opportunity with Repeated Use of NABC Approach throughout the Whole R&BD Process
- 41. 41 Next Step: ActionPlan Develop strategic direction for how to create value of the selected opportunity Develop strategic roadmap for value creation Identify potential applications, new products or services for both existing businesses and new business areas Identify key success factors including both technical and non- technical factors Develop milestones for key internal R&BD activities and signpost for uncertain key external driving forces
- 42. 42 Technology Strategy ProfileBased on Opportunity Profile To develop an opportunity-driven strategic technology roadmap, a technology (strategy) profile will be developed based on the opportunity profile as the first of the TRM process Description Need Approach Benefit Competition Next steps Technology Options Best Technology Acquisition Strategy Milestones Product/Service Roadmaps Key Success Factors Opportunity Profile Technology Profile
- 43. 43 TechnologyStrategyProfile Opportunity Roadmap Concept TechnologyRequirements Products/ Services & Key Success Factors Products/ Services 1 A B C Products/ Services 2Products/Services 1 A B C Key Success Factors 1. .……. 2. …….. 3. …. Necessary Techs 1. .….. 2. .….. 3. .…. Opportunity Roadmap Products/ Services Key Success Factors Technology Now By 2010 By 2013 A B C A B C 1 2 3 4 ?