We generally ask business teams we are working with, the question: “Why can’t you grow?” The answers are captured and filed away for future reference. We codified the data into subject matter that fell into three categories – Leadership Mindset, Organizational Skillset, and Operational Toolset. In our first article, chapter 1, we defined and described each of these “SETS”. We addressed leadership Mindset in chapter 2, and In this article we will explore the organizational skillset.
Chapter 3. Organizational Skillset
We were asked by a client to evaluate about 30 growth initiatives they had in the works across several businesses. They had recently applied some six sigma methods to upgrade their growth process. Although not originally central to our diagnostic, what we found were deficiencies in the organization’s skill levels. Obviously, the skill levels varied among the teams, and the mechanics of using their upgraded growth process seemed to be alright (they still had blackbelts monitoring their adherence to the process), but we found significant weakness in three major areas: Market Learning quality; Transforming learnings to a value proposition; and Building a robust business case
Below is a more in-depth description of the three areas, how it impacts quality, and potential remedies to strengthen each of the areas.
Market Learning Quality: Market driven innovation differs from the traditional product driven approach in that a clear and analytic knowledge of the market drives the innovation process. In the latter, development is focused on making the product better because that is what we do. Market learning requires three critical skills:
· Developing and utilizing a robust interview guide that engages specifiers and influencers. The interview guide properly constructed is a powerful tool to address issues raised above. It provides the basis for assuring you have included all relevant information required for effective learning. Interview guides should begin at the general or more strategic questions and dive down into the specifics. It can be modified to be more relevant to different types of audiences including downstream specifiers and external influencers. It should be upgraded as the learning process progresses. An interview guide also serves as a check to assure that all the right questions are raised and answered to your satisfaction.
· Interviewing key players (specifiers and influencers) in the market. Most of the people we worked with had poor skills in both planning and conducting interviews. Some were so unsure of themselves; they either hired external interviews (a no-no) or utilized focus groups which in many cases were not as effective as qualitative interviews for early learning. Building confidence comes from practice and role plays make excellent practice. Another performance builder is to find a ‘Friendly’. Someone in the market space that you know and feel comfortable around. Try your interview skills out on them and be sure and ask for honest feedback. Finally, here are where experienced coaches can help. Coaches can help prep for the interview and participate in early interviews as a resource, and critique post interview. It often takes no more than a couple of interviews to reach your stride.
· Utilizing market structures and value adding chain influences to scope concepts to be evaluated. The Market drivers define specifiers unmet needs, desired outcomes, and benefits to be obtained. Knowing market structure also provides guidance on whom to interview, and key strategic questions to be asked. Most spent most of their energy on the easier to engage direct users, especially those who already were customers, and as such, learned only a small portion of what they need to know.
Transforming Learnings Into a Value Proposition: Many consultants suggest that the only purpose of the qualitative interviews is to learn what the customer has to say. Not so! It is critical that you begin the task of testing your concept statement early in your learning phase. Concepts are the genesis of the value proposition. The transformation of the concept into a value proposition results from both the early qualitative interviews and the later more extensive quantitative assessment.
This may surprise most of you, as it did us when we recently reviewed over 20 project charters; we found that many of the charters did not contain well defined concept statement and description. Discussions with other innovation coaches supported our findings. Although teams can describe what they are working on and why, they were not able to translate those thoughts into a defined and described concept.
· We probably should start with our definition of a concept statement. A concept statement has three key elements:
o What benefits do we propose to bring to the market with the concept
o What form will the concept need to take to be usable by the market
o And, what technology will provide the basis for assuring the concept will be meaningful and unique
· At the end of every interview, once you have exhausted your learning questions, put your concept in front of them, and find out their reaction. Ask about their overall impression; what part of the concept they most value; what part do they not have value, why; and how they would upgrade the concept to more completely meet their needs.
· Modify your concept as you learn and test your modified concept as you continue your interview process. Remember the interviews are exploratories, and not to be confused with the more structured quantitative assessment.
· Once you have a concept tested qualitatively, now you can test the value for the concept quantitatively using one of the more common concept testing approaches such as Van Westendrop. Concept testing should be entrenched in your operational toolkit which we will cover in the next chapter. No project should proceed to development unless it passes the concept test.
Building a Robust Business Case: The business case answers the question: “Can we make money on this concept and why we do we want to pursue development of our concept/value proposition into a commercial venture. Is this the best utilization of our resources?” The business case serves as the proof of effort. What you need to build a robust business case is:
· How much value does the market have for our value proposition? (determines the unit value)
· Who in the market has this value? (defines the demand by segments)
· What do we need to do to create this value? (defines the development task)
· What must we do to bring this value proposition to market? (projects the marketing expense)
The most common push-back of project teams are: “How can we estimate market value and size, let alone what the cost of our product gleaned from the value proposition will be?” That barrier alone causes much of the friction between leadership and project teams.
A well constructed quantitative survey which we will discuss in the next chapter can provide us with all the information we need to build the business case. The primary unknown at this time is the cost of developing and delivering the value proposition. However, the well-constructed quantitative survey should provide the development team with the customer specifications necessary to guide the development team in their work.
Additional benefits arise from generating business cases including:
· Understanding the cause and effect of the market learnings from the early qualitative work.
· An objective mechanism to evaluate and compare alternative projects, using the same yardstick. With limited resources, only the few potential winners should be competing f or resources.
· Increased alignment from communicating benefits across the organization.
· Profitable business growth.
So far we have discussed Leadership Mindset and Organization Skill Set as independent SETS. However, it is obvious of the interdependency of each set on the other. Effective leadership mindset would uncover these weaknesses in skill set by both staying engaged and asking all the right questions. They would establish performance standards that address market learning, value propositions, and business case generation before allowing the project team to enter into the development phase. Too often leaders make judgments on less than robust data that generally end up in wasted development time and misuse of scarce technical resources.
On the other hand project teams who have a quality market learning, value proposition development, and business case generation process can influence and even change Leadership behavior. They can make it difficult for Leadership to say no. It is easier to sell a project with well-founded market learnings.
In Chapter 4, we will discuss the importance of an Operational Toolset to bring the well defined market back learnings to reality.