Rotman Magazine Winter 2010 / 41

MAPPING THEFUTURE IN

UNCERTAIN TIMES

ON PAPER, ROB MCEWEN WAS AN UNLIKELY CHAIRMAN and CEO forCanadian mining company Goldcorp, Inc. With a background infinance, the small, soft-spoken man with the neatly-trimmedmoustache preferred meticulous tailoring to industrial machinery.But despite his appearance, McEwen was a prospector at heart: hehad a fascination with gold and grew up hearing tales from hisfather about miners, prospectors and grubstakes at the dinnertable. So smitten was he with the industry that he hammered out

his own template for what he thought a 21st-century gold-miningcompany should look like, despite never having worked for one. In1989, he made the leap, stepping into a takeover and becomingmajority owner of under-performing Goldcorp.

Some called him crazy for buying what was regarded as a rustbucket of a company. At the time, the gold market was depressed;the mine’s operating costs were inflated and the miners were per-petually on strike. McEwen even received a death threat; but he

Opportunity Maps can help leaders make choices about what to doand what not to do, charting a path for future growth.

by Alonzo Canada

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42 / Rotman Magazine Winter 2010

stuck with it, because he believed the business had a promisingfuture. “The Red Lake gold district had two operating gold minesand 13 former mines that had produced more than 18 millionounces combined,” he once said. “The mine next door had pro-duced about 10 million ounces; ours produced only 3 million.”McEwen believed that the high-grade ore that ran through theneighboring mine was present in parts of the 55,000-acres heowned – if only he could find it.

To turn around his dream company, he needed to find newsources of value within his existing business. He had to make somevery big decisions about where to dig, and he couldn’t afford to bewrong. Inspiration struck him one day at an MIT seminar, wherehe learned about open-source code, wide collaboration and thestory of the increasingly-popular Linux operating system. McEwenrealized that if he could attract world-class talent to the problem offinding more gold in Red Lake, they could potentially transformGoldcorp’s geological data to reveal the most promising places todig. He didn’t need to get lucky: he needed new ways to see wherevalue was hiding on his property.

The rest, of course, is history. McEwen launched the GoldcorpChallenge in March 2000, splaying the company’s proprietary geo-logical data to the world. More than 14,000 scientists, engineersand geologists from 50 different countries downloaded the data forvirtual exploration. The winner of the contest was a collaborationby two groups in Australia, Fractal Graphics and Taylor Wall &Associates, which together developed a powerful 3D graphicaldepiction of the mine. Goldcorp drilled four of their top five tar-gets and struck gold on all four. This new way of looking at thebusiness laid the foundation for McEwen to restructure Goldcorp,increasing its market capitalization from $50 million to more than$13 billion and growing its share price at a 40 per cent compoundannual growth rate.

When McEwen bought Goldcorp, it was failing largely becauseit was unable to see where true value resided on its property. Itsexisting maps were insufficient, because they simply articulatedpreviously-made discoveries, which had obvious limitations. AsAlbert Einstein once said, “the definition of insanity is doing thesame thing over and over again and expecting different results.” Inorder to renew growth at Goldcorp, McEwen needed a fundamen-tally-different way of seeing the world. His approach of poolingexperts to solve his problem is widely celebrated as a benefit ofusing an ‘open innovation approach’. Less-often discussed is theoutput from Fractal and Taylor Wall: the team crunched, reconsti-tuted and synthesized mountains of geologic data into awholly-new map that revealed promising new mining targets. Inshort, they created a map focused on finding value, rather than onverifying existing data, and in the process, they helped McEwenmake savvy bets on the future growth of his company.

Mapping in Uncertain TerritoryThough few executives outside of the mining industry actively digto find new growth for their business, virtually every company’sfuture depends on pursuing bold new ideas with an uncertain pay-back. Just as Goldcorp couldn’t grow until McEwen redrew hisexisting maps, leaders seeking growth must look beyond what iscommonly known to reinvent their core business, develop adjacen-cies and target ‘white space’ opportunities. They need to see theworld differently than their competitors by reframing their marketlandscape to discover previously-hidden opportunities; and, theyneed a differentiated strategy with a roadmap on how to targetthose opportunities over time.

At Jump Associates, we are often asked to help executives cre-ate new businesses or reinvent existing ones. Such challenges areinherently unpredictable: it is simply impossible to guess what thenext big business will be. In response, companies take a variety ofapproaches to pursuing organic growth. Some take pains to avoidpioneering new categories, waiting for competitors to validate thatan idea has legs; others become hopelessly incremental, creatingnew products and services only if they are clear extensions of exist-ing lines. More cavalier companies simply launch as many newthings as they can, waiting for something to stick.

We have found that the best way to manage the inherent uncer-tainty of innovation is to take a page from McEwen’s book and lookbeyond the existing data to find out where value truly resides foryour business. One of the most effective methods for doing this isto create an Opportunity Map – a visual representation of a busi-ness landscape that guides future strategy by synthesizing met andunmet consumer needs, emerging discontinuities such as culturaland technology trends, both direct and indirect competitive activ-ity, and internal and external competitive competencies. Synthe -sizing all of this data helps innovation teams separate the handfulof opportunities that they should target from the dozens theyshouldn’t. In short, it helps managers make better decisions – bothin larger questions of long-term growth strategy and on more short-term concerns about whether a new product category isworth entering.

It’s useful to think of an Opportunity Map as a book with chap-ters: each chapter is a layer of data on the map that visually andverbally articulates a larger narrative about what’s important to afirm, its customers and its short- and long-term growth opportuni-ties. While there are no hard-and-fast rules for how many datalayers to include or which kinds of data are most important in anOpportunity Map, we have found a few to be particularly useful.

1. Begin with a foundational frameworkStart with a ‘foundational framework’ that defines the boundariesand fundamental dynamics of your firm’s business landscape.

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Rotman Magazine Winter 2010 / 43

Spatially map opportunity spaces as ‘islands in an ocean.’ Next, cre-ate a layer that captures existing and potential solutions, futuretechnology trends, direct and indirect competitive offerings, andanalogous points of view within the landscape. To see beyondtechnology and the competition, consider creating a layer formedof descriptions of consumer needs, behaviour and activities. Finally,your map will be most actionable if you add a layer that captures,plots, and contextualizes the central firm’s capabilities and existingand future initiatives.

The structure and dimensions of the foundational frameworkdefine the boundaries and describe the forces that shape a land-scape, embodying a point of view about what is important to a firmand its customers by emphasizing customer needs and market cat-egories that are relevant and excluding those that aren’t. Suchspatial plotting of opportunities also allows a firm to see the rela-tionships between opportunities and more effectively ascertaintheir promise. Unlike an atlas, this is not a map of the world. Forexample, if a firm were making an Opportunity Map for businesstravel, it may or may not include hotels, luggage or airlines. Thesechoices depend on what type of business your company is in.

2. Develop thick descriptionsWithout any underlying thinking, opportunity mapping risksbecoming an exercise in graphic design. To avert this, accompanythe foundational framework and its opportunities with ‘thickdescriptions’ that synthesize what the data means. Thick descrip-tions is a term coined by cultural anthropologist Clifford Gertz,who said that in order for human behaviour to make sense to anoutside observer, a thick description is necessary to explain notjust how people act but the context for their behaviour. Each oppor-tunity on the map should include thick descriptions that synthesizeconsumer needs, existing competitive and analogous solutions,consumer behaviours, cultural trends, technology trends and com-petitive activity. Just as each opportunity area is spatially plottedon the map, the contextual data is plotted as well, providing fur-ther detail about commonalties and interrelationships.

3. Perform strategic evaluationGood data alone does not make for a useful opportunity map; it isjust as important to layer in key strategic criteria. After all, there isno such thing as a universally-ideal opportunity. Getting into digi-tal music players and distribution in 2001 turned out to be a bril-liant move for Apple, but it would have been a disaster forHoneywell. In order to properly assess their potential, opportuni-ties must be evaluated on firm-specific criteria such as brand fit,strategic alignment, barriers to entry, strength of need, competitiveactivity, use of leverageable assets and existing capabilities. Similarly,it’s important to understand where on the map the direct competi-tion will play, both in the short term and in the long term. This isn’tjust about the competition’s current and future offerings, but alsotheir brands, messaging, marketplace positions and key activity sys-tems that might give them advantages. This continued layering ofdata can clarify how a firm can best compete, making certain to playto its own strengths – and not those of its competitors.

Reframing your landscapeSuccessful Opportunity Maps reframe the landscape, turning theassumptions and expectations of a given market on their heads andenabling an organization to follow a clear, differentiated approach.A reframe is much more than an insight or an interesting nugget ofdata: it constitutes a fundamental shift in thinking about how theworld works by not only shedding light on a situation but invalidat-ing previous models. Armed with the right reframe, companies candiscover new value in almost any market.

The discount retail sector provides an example. This industryhas long been focused on living up to its name by selling cheap stuff.Wal-Mart has become the largest company on earth by findingways to drive out cost in everything it sells, building a competitiveadvantage that no one can match – though that hasn’t stoppedother retailers like K-Mart from trying, much to their peril. Theonly large discount retailer that has responded effectively to therise of Wal-Mart is Target, and the reason for this is quite simple:Target is the only company that has a fundamentally different view

SUCCESSFUL OPPORTUNITY MAPSREFRAME THE LANDSCAPE,

TURNING THE ASSUMPTIONSAND EXPECTATIONS OF A GIVEN

MARKET ON THEIR HEADS.

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44 / Rotman Magazine Winter 2010

of discount retail than Wal-Mart’s. Despite its broad appeal, Targetviews its business through the lens of one very important person, asingle ‘ideal guest:’ she’s a 35-year-old suburban mom with two kidswho needs to look out for value but aspires to give her family muchmore than what a rock-bottom price might offer. Everything Targetdoes seeks to delight this woman, from its house-branded productsto the design of its stores to the vendors whose stuff it puts onshelves, which together constitutes a reframing of the market.

Wal-Mart has won by saying people should get what they buy atthe lowest possible price; Target has managed to find its own way tothrive by saying that although low prices are important, discountretail is actually about getting more out of everyday householdgoods than mere functionality. That’s a very different view of theindustry – and one as hard to copy as Wal-Mart’s legendary efficiency,because it plays to Target’s core strengths in marketing, design andtrend spotting.

Bridging Needs and SolutionsEconomics is governed by the principles of supply and demand.Innovation is also governed by fundamental laws, but very differ-ent ones: needs and solutions. Let’s say you’re looking for ways toimprove store efficiency, and you observe that a clerk is havingtrouble getting boxes from a high shelf. You might conclude thathe needs a ladder, but a ladder is merely one of many possible solu-tions to his need to reach the boxes. You could also lower the shelf,raise the floor, give him flying shoes, or encourage him to grow afew inches, to name but a few. Reaching a box is a need; a ladder isa solution. Significantly, needs outlive solutions. Therefore, whenconsidering the long-term potential of the market, it is critical tounderstand both the needs you’re serving and the solutions thatwill be profitable and viable today and in the future. For this veryreason, a good Opportunity Map accounts for present-day solu-tions while also grounding concepts for future development inneeds that will persist over time.

At a recent corporate retreat for the venerable venture capitalfirm Kleiner, Perkins Caufield & Byers, partner Bill Joy present-ed what he called ‘the map of grand challenges’. This chart ofmulti-colored squares tracked the firm’s progress in identifying andinvesting in key categories of green energy technologies, includingtransportation, energy efficiency, electricity generation, energystorage and more. These were the existing solutions that met cur-rent needs for sustainable energy. Joy also left blank spots on thischart that hinted at new technologies that should be possible in thenear future. These spots were the needs that current solutionscould not yet meet.

Because Joy’s map synthesized both needs and solutions, it hascome to represent a rough conceptual outline for the future cleanenergy economy. The firm now uses this map as its playbook, invest-

ing in promising start-ups with nascent solutions and stimulating uni-versities and laboratories to create new technologies in order to meetcritical unmet needs. Basically, if your green-tech idea could solve oneof the blank challenges on Kleiner’s map, they’re interested in talkingto you; if not, it’s a much harder pitch for their investment.

Defining Both the Island and the ‘X’ What good is a treasure map with no X on it? It’s about as useful as a piece of paper that has an X on it but no drawing of the sur-rounding island. Good Opportunity Maps include both ‘fields ofinterest’ (large possible areas for investment and development) andpoints (specific ideas for offerings and businesses.) This not onlyprovides an overview of the realm of possibilities, it highlightswhere to concentrate efforts for the greatest return.

For decades now, it has been apparent that clean technologyand alternative energy had the potential to become remarkablylucrative fields. BP made its first investments in solar energy in 1973,but the promised ‘big green ship’ still hasn’t come in. The last half-century is, instead, littered with the detritus of countless ambitiousprojects that promised to propel the economy and save the earth atthe same time. Forty years later, breakthroughs are still in shortsupply. How could this be? Perhaps the answer is that past green-technology efforts have been too broad and too ambitious.Companies have had maps that show them the islands where agreen economy might one day be built, but they don’t have the Xsmarking the spots where treasure is buried.

GE has been one of a very small handful of large corporationsthat has driven measurable growth through its investments ingreen technologies and alternative energy generation, and it hasdone so remarkably quickly. In 2005, the company announcedEcomagination, a major initiative to tackle the big challenges ofsustainability that have vexed so many others. But GE didn’t mere-ly declare that it was going to the island of green technology. CEOJeff Immelt very carefully noted the specific targets most appro-priate to his organization’s strengths and capabilities. Specifically,he started with efficient lighting (literally the company’s foundingbusiness), hybrid locomotives, lower-emission aircraft engines, andhighly-efficient wind turbines. Following this targeted approachwithin the vast landscape of environmental possibility, GE has rap-idly realized returns from its Ecomagination investments. By nextyear, after just five years, it expects those efforts will constitutemore than $20 billion in revenue, nearly 15 per cent of the entirecompany’s contributions. By creating a map containing both theislands and the Xs, GE has turned the perpetual money sink ofgoing green into, well, green.

Defining Your True CompetitionExecutives often live in fear of being blindsided by their competi-

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Rotman Magazine Winter 2010 / 45

Alonzo Canada is a principal at Jump Associates, a leadinggrowth strategy firm based in San Mateo, California. In additionto consulting with executives at a variety of S&P 500 companies,he teaches design methods at Stanford University.

tion. Unfortunately, many traditional strategic frameworks areinadequate to anticipate possible game-changers, in large partbecause they focus heavily on existing activities. It is doubtful thatanyone applying Michael Porter’s Five Forces Model to the pas-senger rail industry circa 1874 could have guessed that their mostthreatening substitutes would turn out to be automobiles and fly-ing machines. Opportunity Maps, by contrast, synthesize a widevariety of data on both current and future activity, making themparticularly effective at identifying potential moves from incum-bents and new entrants. Moreover, a focus on needs and culturalphenomena means that seemingly unrelated competitors aren’tmissed. This knowledge can lead a team to discover unique insightsabout how it might best address such competitive threats throughdirect competitive moves or strategic partnerships.

Several years ago, the Explore team at Nike was given the man-date to help the larger organization become not just a shoe company,but a sports company. The team met the challenge by creating a mapto identify its most promising opportunities, defining a strategy forgrowth and setting first steps toward a future vision. The team ascer-tained opportunities beyond shoes, like sunglasses, watches, MP3players and sports apparel. The data on their Opportunity Mapincluded consumer needs, societal and technology trends, and theirusual competitive set of Puma, Adidas and Reebok. To maximizethe map’s utility, however, the team also considered indirect com-petitors like MTV, who had a competing opinion about what kidsshould do after school: Nike wants you playing sports, and MTVwants you to sit in front of the tube. Because the team also looked atindirect competing points of view, their work led Nike to consideropportunities that it might have otherwise overlooked, such as newpartnerships that marry sports and digital entertainment, includingthe wildly successful Nike+iPod platform.

Charting a Path to a Better FutureLong-term opportunities are seductive. After all, they’re biggerbets, which means that they carry significantly greater potentialrewards than ideas with a closer horizon. Of course, this also meansthat they carry far greater risks, cost more to develop, and don’tshow results for a longer period of time than most organizationsfind acceptable. As such, it’s rarely a good idea to focus exclusivelyon far-out new ventures, just as it’s a bad idea to pursue only theopportunities that are easiest for your organization to developgiven existing strengths and capabilities.

Successful Opportunity Maps don’t just help companies seewhich opportunity areas they should develop, they allow them toset a clear, phased path from the current state of affairs to a newlong-term strategic position. This is one advantage to making avisual map – it literally depicts far-off opportunities as being fur-ther away from your current position. Moreover, it shows how

success in a few key near-term opportunity areas can set you up toget the most out of more audacious long-term goals.

The San Diego Zoo recently took on several initiatives toexplore new opportunities for growth. Working closely with Jump,the Zoo defined more than a dozen new opportunities that wouldpotentially strengthen its business model while increasing itsimpact as a global conservation and education leader. Some ofthese were extremely ‘close in’, such as using the Zoo as a showcasefor sustainable technologies and leveraging the Zoo’s unique skillsto provide consulting and research services in the emerging field ofBiomimicry. These were made immediate priorities, and the Zoobegan executing upon them virtually from the day the projectended. But promising as they were, these close-in ideas did not, ontheir own, constitute a strategic vision for Zoo’s future. Instead,they are territory to immediately expand into before steppingtoward more ambitious opportunities that would be nearly impos-sible to develop today.

Rather than leaping to the biggest prizes, Opportunity Mapscreate a clear sense of priority and a set order for development.With a good map, an organization can get a clear sense of why it isgoing after certain ideas today, and why it is ignoring dozens ofother interesting ideas.

In closingAny way you slice it, charting a path to a better future is an act offaith. Rob McEwen had a hunch that there was hidden value onGoldcorp’s Red Lake property, and Fractal Graphics and TaylorWall & Associates remodeled the existing data and redrew the mapto discover where to dig. Like McEwen, leaders must navigateuncertainty by following the courage of their convictions aboutwhat is best for their company and the customers it serves.

Forging such conviction can be challenging when siftingthrough the tangle of choices pertaining to a firm’s futureprospects, but Opportunity Maps can help leaders navigate thiscomplexity as they chart a path to future growth for their company.Ultimately, hunches must be substantiated and insights discoveredso that the organization is clear about why it chooses to do somethings and not others – the very essence of strategy.

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