September 2011

© Strategyn Consulting, LLC

Why Your Idea Is Worth Nothing

Tony Ulwick

... and how to create growth plans that work.

Innovation Begins with an Idea

Brainstorming

There Are No Bad Ideas

Open Innovation

IBM Idea Jam: 46,000 Ideas

Ideas Drive Innovation

Audience Question 1:

Do you agree or disagree that this thinking drives the types of innovation practices your company uses today?

AgreeDisagree

Endless Supply of Bad Ideas

It is exceptionally hard to have an idea that will accelerate a company’s growth.

“PC jr is a flop.”

WSJJanuary 1984

17%

< 2%

≃ 0%

Your Idea Is Worth Nothing

NeedsMarket Strategy

Your Idea Is Worth Nothing

Isn’t in an attractive market

Isn’t in an attractive market

Doesn’t address theright needs

Doesn’t address theright needs

Isn’t strategically sound

Isn’t strategically sound

Your Idea Is Worth Nothing

Growth Is Left to Chance

Idea

Growth Is Left to Chance

Idea Market

Growth Is Left to Chance

Idea Market Needs

Growth Is Left to Chance

Idea Market StrategyNeeds

Idea

Eliminate the Chance

Market Idea

Eliminate the Chance

Market Needs Idea

Eliminate the Chance

Market StrategyNeeds Idea

Eliminate the Chance

Creating Ideas for Growth

NeedsMarket Strategy

Creating Ideas for Growth

What is an Attractive Market?

Financially Attractive

Market potential is price times products times buyers.

Traditional Method

Philip KotlerKellogg, Marketing Management

Market potential is price times products times buyers.

The iPod Market

iPod Growth

-20%

20%

60%

100%

140%

180%

220%

06Q1 06Q3 07Q1 07Q3 08Q1 08Q3 09Q1 09Q3 10Q1 10Q3 11Q1 11Q3

0%

Source: Apple Quarterly Reports

Marketwatch July 29, 2009

“The market reception for Zune is so disappointing that many retailers have even stopped selling it

altogether.”

Audience Question 2:

What do you think the chances are that any given idea will be in a market that is financially attractive to the company?

less than 5%6% - 10%11% - 25%26% - 50%Over 50%

Traditional Markets

1948 1962 1984 2001

Products = past

Customers don’t want iPods any more than they want CDs or 8-track tapes.

Job:

Listen to Music

MarketJob Executor

= +

Market potential is number of job executors times

willingness to pay to get the job done better.

Get a Job Done Better

1948 1962 1984 2001

Get a Job Done Better

1948 1962 1984 2001 2005

80 million90,000 per day

Creating Ideas for Growth

NeedsMarket Strategy

Creating Ideas for Growth

What is a Customer Need?

What is a Customer Need?

95%Don’t havedefinition

MIT Sloan Management ReviewMay 2008

Voice of the Customer

Voice of the Customer

Focus on the Job

50 - 150 Customer Metrics

PredictablyQuickly Successfully

StabilitySpeed Output

150 BC 19851940 19991670

150 BC 19851940 19991670

0% Growth

Customers don’t want radios any more than they want

megaphones or smoke signals.

Communicate in a dangerous situation

Minimize the time it takes to confirm receipt

Minimize the time it takes to confirm receipt

Direction Object of ControlMetric

Minimize the time it takes to confirm receipt of a communication

Minimize the likelihood that the communication is interrupted

Minimize the likelihood of interference when communicating

Increase the likelihood that the communication is discreet

Minimize the likelihood that a message is misunderstood

Minimize the time it takes to establish a record of the communication

Minimize the likelihood that the communication is intercepted

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Market Opportunities

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Market Opportunities

Minimize the time it takes to confirm receipt

IMP SAT OPP

7.3 3.2 11.4

“ODI was used to create two of our bestselling radios to date.”

Bob PennisiAdvanced Technology Center

From 0% to 18% Growth

Dr. Pennisi is currently a senior Strategyn professional

Audience Question 3:

What do you think the chances are that any given idea will better satisfy a significant number of the right 50 to 150 needs in a market?

less than 5%6% - 10%11% - 25%26% - 50%Over 50%

Creating Ideas for Growth

NeedsMarket Strategy

Creating Ideas for Growth

Product Strategy

SustainingProduct

Improvement

Low Cost Disruption

Breakthrough or Radical

?

50% 20%

20% 10%

?

30% 10%

10% 50%

?

Audience Question 4:

What do you think the chances are that any given idea will have correctly chosen the right product strategy?

less than 5%6% - 10%11% - 25%26% - 50%Over 50%

The Market Decides, Not You

SustainingProduct

ImprovementLow Cost Disruption

Breakthroughor Radical

Opportunities Dictate Strategy

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Opportunities Dictate Strategy

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Opportunities Dictate Strategy

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Product Improvement

Existing Platform

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Product Improvement

Existing Platform

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

New Platform

Breakthrough - Radical

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

New Platform

Breakthrough - Radical

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Sustaining

Existing Platform

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Sustaining

Existing Platform

Low Cost Disruption

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

Low Cost Disruption

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

New Platform

Low Cost Disruption

0

2.5

5.0

7.5

10.0

0 2.5 5.0 7.5 10.0

Sat

isfa

ctio

n

Importance

New Platform

Dissatisfaction Getting the Job(s) Done

Inab

ility

of C

urre

nt P

latfo

rm to

Add

ress

Nee

ds

- +-

+

SustainingProduct

Improvement

Low Cost Disruption

Breakthrough or Radical

Eliminate the Chance

Market Needs Strategy

Eliminate the Chance

Market Needs Strategy Idea

Idea Types

FeaturesBiz Model

Idea Types

Platform Go To Market

FeaturesBiz Model

Sequence

Platform Go To Market

1 2 3 4

Criteria to Judge= Metrics

Metrics, Cost, Risk

Experts

TechnicalDomain

Triggers

Triggers

Platform Biz Model Features

26 41 14

Criteria

Minimize the time it takes to confirm

receipt

Experts

Idea GenerationType Triggers

Growth Is Left to Chance

Idea Market StrategyNeeds

Growth Is Left to Chance

Idea Market StrategyNeeds

25% x 5% x 25% = .003%

Predictable Growth

$500M

Predictable Growth

$500M 95%

Predictable Growth

$500M 95%95%

Predictable Growth

$500M 95%95% Idea

5x Better

Source: Strategyn Track Record Study. Sample size: 22 launches. 19 declared a successes by the companies based on revenue, customer satisfaction, or industry awards. Study available upon request.

86% Success

Source: Strategyn Track Record Study. Sample size: 21 launches. 18 declared a successes by the companies based on revenue, customer satisfaction, or industry awards. Study available upon request.

Companies 43

Products 49

Pipeline 28

Launched 21

Success 18

Rate 86%

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