The analysis is done, the decisions are made and your charter is clear. Now, you need to set up a strategic innovation team and move your organization toward a new product or services business model. What are your next moves?
One of my favorite observations is that most major errors in a program are made in the first 15 minutes of its existence – making it very important to take a step back to plan and capture the entire scope of what will need to be done for the project. Typically, there is a passionate team that wants to “get started” on the “real work,” which generally means the part that they are most interested in. While this natural interest is useful and vital, it is up to you as the program lead to take the reigns and make sure that work gets done on the highest leverage areas first – and not only on the “bright shiny object.” Left unchecked, you will be well down a side road when the unseen major obstacle makes itself known – and sets you way back.
What I’m going to share with you below is a set of basic tools that will allow you to get at the real core change issues associated with your project, and avoid missing key elements of the scope – in particular, the impact to other teams internal to your organization.
Keep in mind that for the duration of the program, you have a new role for your organization:
To take a passionate minority view and turn it into the majority view – on time and under budget.
Task #1: Assemble Your Tools
The first thing you must do is take the strategic imperative and clarify and repackage it into three forms that will allow it to be easily consumed by both your organization at large and your external partners. These three forms of communication include the narrative, the drawing and the analysis. Pulling these together into a clear and compelling 2-3 page document is your first key task.
Create a narrative in plain English that details the who, what, why, when, where and how of this innovation. This narrative must include three written snapshots:
- The “as-is” case as it applies to the innovation.
- Where you are moving to in the time frame of your innovation team.
- The vision of where you are headed. This is best done from a customer use case perspective. “Use case” is a fancy term that software engineers use to describe the clear, specific and compelling reason a customer uses your product or service.
The usual error here is understating the “as-is” part of the project or program. Being able to clearly restate to your stakeholders where you are today is always the first step of awareness, but also of the trust-building process. This process is akin to active listening – for example, restating what you have heard before adding to it.
A visual of the new model that is easy to grasp and speak to will allow you to activate the more than 60 percent of our brains that are object oriented. You will use this visual to have “napkin chats” with as many people as possible about what it is you’re working on and how it fits both your business – and more importantly – the market at large. It is very important to socialize it with people outside your business – trusted partners, customers and those you respect and have confidential relationships with. Capture all these learnings and improve the graphic until it is powerful and easily graspable. When creating your graphic, think about Clayton Christensen’s question often – “Just what job is the customer hiring us to do?”
Here are a couple of visual examples that provide great context:
- A market position map for smart grid players – takes a complex subject and provides a quick grounded view.
- An industry value chain provides a strong orientation – this is one of the Internet.
- A company value chain is useful for aligning the internal players and their contributions.
- The business model canvas provides a great capstone tool for capturing both the internal and external view – with a strong customer focus. Here is one for Netflix.
There are many others; I always suggest people start with a Google image search – no need to reinvent a format.
Lastly, you need to have a fact-based analysis that shows that there is a mathematical and financial set of assumptions that support the narrative and visual. My recommendation is to borrow from decision science here, and rather than get fixated on a singular value, work hard to understand the endpoints.
For example: with worst case market acceptance rates and lowest margins, our three-year profit for our new widget will be x. If we can achieve the optimistic market share and gross margins, our upside profit will by y.
The hard work is then to make sure you can build a business even if the worst case comes your way. You are going to have to work hard to not make the worst case a “scorched earth” scenario. It’s a good idea to employ the opinion of the best front line experts you can find to make sure your analysis is conservative – but real.
Task #2: Putting the Tools to Work
The unique part of this process is how you use these three well-prepared tools. My advice is to take over a conference room and make two wall-sized copies of a large business model map and a stack of large Post-it notes. The first version needs to be a representation of the “as-is” business model and the second should be a model of the new innovation you are bringing to the group. You need to use this tool three ways:
- Have several sessions with the core team to detail out the “as-is” business model as completely as possible. Then turn your attention to the snapshot of the new innovation, and detail that one, as well. You’ll want to go very deep on customer value here.
- Now bring key subject matter experts and leaders into the room and give them a chalk talk of the new charts. Make careful notes of changes and additions to the model. Also pay attention to verbiage and vocabulary – the words used are loaded with meaning – take time to understand what they are really saying.
- The next step is to bring the most skeptical and strongest proponents of the team in (and ideally seat them on the same side of the table) and listen to them carefully. After they have given you all their concerns ask the simple and powerful question – “what would it take for this to be a viable solution?” Then take careful notes.
Keep the narrative and analysis on an LCD projector to allow for real-time modification and improvement (with the document autosaved at appropriate intervals).
This next piece is very important: You and the team need to stack rank the objections and issues according to their (numerical) potential impact on the business case. The classic tool for working these variances is called a tornado chart.
By deploying effort to de-risk those areas, you will be building trust step by step. And while it is very important to manage scope, cost and time:
Trust is the key control variable for this kind of project.
In future newsletters we’ll cover many more issues like governance, beta testing and customer avatars. If you have questions or an area you’d like to see me tackle first, please drop me a line. If you’d like to read the rest of this newsletter, please subscribe.