Opportunity Recognition… Value, Trend Analysis, &
Design Thinking
Dr. Robert McNameeAcademic Director, Innovation & Entrepreneurship Institute
Assistant Professor, Strategic Management Department
If you enjoy these topics check out…• SGM 0827. Creativity & Organizational Innovation• SGM 3501. Entrepreneurial & Innovative Thinking
What do you sell??
• Companies sell products / services
• Companies [should] create / provide / sell value!!– Understanding how your company creates value, and
looking for ways to add more value, are critical elements in developing a competitive strategy.
– Michael Porter discussed this in his influential 1985 book "Competitive Advantage," in which he first introduced the concept of the value chain.
– Focuses on systems and how inputs are changed into the outputs purchased by consumers
What is Value?
• Value (customer / consumer POV)– What does s/he do and need?– What problems does s/he need to solve?– What improvements does s/he look for?– What does s/he value?
• Value is subjective…vs.
vs.
Discussion – Examples of Value• Automotive Industry – What value is provided by a car?
– Get you from place A to place B… • “in style”… • reliably & safely… • maybe with a number of other people or lots of stuff…
– Maybe while giving you an exciting “driving experience” or entertaining you on the way…
– Creates a semi-private mobile space—a home away from home…
• Telecommunication – What value is provided by a mobile phone?– Connects you to others across town / around the world– Clear signal / no dropped calls / rapid support– Offers entertainment options (“packages”)– Simple billing
Value Chain Activities
$25,000$2.36 / kg $2,600 / lb
A set of activities that an organization carries out to create value for its customers
Value Created – Cost to Create that Value = Margin / Profit
Think about all the activities that are involved
in turning an egg into a chicken sandwich
Or cocoa beans into
truffles & then into a $25k
dessert…
Recognizing Opportunities & Generating Ideas
Creative idea is a new connection between concepts, methods, outcomes, etc… that provides potential value …for an existing problem/need in a new or improved way …for a new problem/need/opportunity
Opportunity (Probortunity): Needs, wants, problems, & challenges Favorable set of circumstances that creates a demand
for a new product, service, business, or other innovation
An idea-opportunity match offers promise if… Attractive (your idea is better than other options) Durable (the need will be around for a while) Timely (you are in the ‘window of opportunity’) Associated with creating value for consumer / customer
(Someone will buy it / delivers substantially more value than corresponding costs)
Opportunities vs. Ideas…• You can “kill” an idea but you can never kill an opportunity!!!
– If you have identified a valid need (opportunity), this need still remains even if your idea turns out to impractical or unfeasible…
– If you have identified an attractive opportunity spend the time to diverge (consider multiple ideas) and evaluate / evolve your ideas.
• On the other hand an opportunity is not the same as an innovative idea – beware of flying cars & time machines!– We all know it would be great to have a flying car
• Be realistic -- others have identified the opportunity before• We don’t have a cost-effective, technologically-feasible solution
– Ask yourself – what makes this solvable now (and by me)?– If you are not sure an idea is technologically / cost feasible…
• Either work hard to figure out if it is feasible / practical• Or move on to think about other opportunities
ACTIVE SEARCH / PROBLEM SOLVING(e.g., Design Thinking)
PRIOR KNOWLEDGE + SOCIAL NETWORKS
ENTREPRENEURIALALERTNESS (e.g., Trends)
It has been said that all new
ideas come from outside of ourselves
Opportunity Recognition
Prior Knowledge & Social Networks (not Facebook)
• Strong Ties– Those you know well / see frequently– Often similar to you– Triadic Closure
• You get to know the people your close friends know well• Creates tight cliques w/ redundant knowledge
• Weak Ties– People you don’t know well / don’t see often– Source of new perspectives, ideas, knowledge (& jobs)– Brokerage > Innovation Opportunity
• When a person connect two disconnected networks
Entrepreneurial Alertness• Opportunities
– Unexpected Occurrences • Unexpected Successes as well as Failures
– Incongruities• When things don’t match up (gaps)
– Process Needs• When something just does not work• We will look at process innovation (but also products)
– Changes in Perception• If you can see things from a different angle you may
come up with some unique ideas
Drucker: Discipline of Innovationhttp://mis.postech.ac.kr/class/MEIE780_AdvMIS/2012%20paper/Part1%20(Pack1-3)/01_intro/1-2)%20The%20Discipline%20of%20Innovation.pdf
Entrepreneurial Alertness• Opportunities
– Industry / Market Changes • Industries and Markets evolve
– Demographic Changes• Millenials, Baby Boomers, etc…
– New Knowledge / Technologies• Stand on the shoulders of giants (e.g., $9 bike, $50 tablet)
• One IMPORTANT take away– Innovation can be systematic and requires hard work– “Know when to research and when to brainstorm”
Obvious opportunities are
frequently no longer opportunities
Drucker: Discipline of Innovationhttp://mis.postech.ac.kr/class/MEIE780_AdvMIS/2012%20paper/Part1%20(Pack1-3)/01_intro/1-2)%20The%20Discipline%20of%20Innovation.pdf
PEST, PESTLE, etc…
• Political• Economic• Social• Technological• [Legal]• [Environmental]
These are high level macro trends that affect all industries…
http://www.youtube.com/watch?v=YFUMZ_o6l2s
Active Problem Solving…Design Thinking
• Tim Brown & IDEO…
“…imbues the full spectrum of innovation activities with a human-centered design ethos…”
“…powered by a thorough understanding, through direct observation, of what people need and want in their lives”
How Design Thinking Happens…
• “The myth of creative genius is resilient: We believe that great ideas pop fully formed out of brilliant minds, in feats of imagination well beyond the abilities of mere mortals…”
• In reality innovation is “…the result of hard work augmented by a creative human-centered discovery process and followed by iterative cycles of prototyping, testing, and refinement.
http://www.youtube.com/watch?v=JkHOxyafGpE
Design Thinking Mindsets…
http://dschool.stanford.edu/wp-content/uploads/2011/03/BootcampBootleg2010v2SLIM.pdf
Ready, Fire, Aim
Design Thinking Process
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