Our Methods, Your Success

We arrive at this level of understanding by focusing narrowly and deeply on the few, most diagnostic issues. We put these issues under the microscope, so to speak. We use a deceptively simple, but highly revealing, series of questions to uncover how current solutions are achieved now, what they cost, where they fall short and what value would lie in correcting shortcomings.

In this process, some discovered facts turn out to be more important than others. Our methods of Opportunity Analysis keep the focus on the critical “make-or-break” issues. We find and interview individuals who know the most about these critical issues—who often turn out not to be managers, rather line workers, QC personnel, specifiers and other detail-oriented individuals having intimate insight into the key issues. After each in-depth interview, we thoroughly analyze the findings against the hypotheses that guide the research. We may need to modify our guiding hypotheses on the basis of the findings during initial interviews, so we mid-course correct on the basis of the new information. In this way, we are able to drive to a deep enough understanding about each critical issue so that the summarized findings can inform our clients’ management decisions to move the project forward, change its direction, or shelve it.

The astute reader will realize that we have said nothing yet about opportunity size. One would never launch a product into a market without a good idea of its potential. We have found over many successful projects that, early on in the development cycle, when Opportunity Analysis can contribute the most value, qualitative insight is more important that quantitative information. It makes no sense to start out trying to estimate a new product’s potential until the boundaries and value of a specific opportunity are well understood. Once the opportunity is shown with understanding to exist, finding and summing the potential of all members of the market segment thus defined is relatively straightforward using standard market research techniques.

That being said, we have found that if the value associated with the most attractive opportunity that could be served by a technology is too small to justify continuing work on it, combining multiple segments to achieve a composite opportunity is rarely a good idea.

Analyzing opportunities

Because our research is guided by the search for maximum understanding, we have found it best to test several contrasting hypotheses simultaneously. We use multiple business models to develop these hypotheses, and we find that viewing an opportunity through the lenses of these several models yields considerable information about it. A single vantage point, like a focused beam, yields useful insight, but many unknowns can stay in the shadows.

On the other hand, experiments based on hypotheses driven by several theoretical models, like many beams of light from different directions, yield clarity and reduce hidden unknowns. If the information from one model conflicts with that of another model, there is probably an underlying reason. And in our experience, there is useful and insightful information in the contrast.

So, a much clearer picture is developed by contrasting and summing the information revealed through these different viewpoints. Guided by multiple hypotheses, and refining these in real time during the project, Opportunity Analysis brings an unparalleled clarity of understanding. And just as models guide hypothesis development, the experimental designs for testing the hypotheses are driven by what needs to be learned. These “experiments” take on various forms, but the two main ones are explained below.

Personal Interviews

The knowledge we seek resides in the minds and experiences of many different individuals, but we almost never find any one individual who has a full understanding of all the critical issues. Some of the insights are internal to the client. So, our first task is to exhaust the available internal knowledge about the opportunity. We speak first with client employees to capture all that is known or believed within the client organization. We often find that those working on technical development have great insight into potential targets, but it is not in their sphere of concern to investigate them. Similarly, individuals with customer interface responsibility, including sales and technical service, often are aware of emerging customer interests and can be high value contributors in shaping the understanding about a new opportunity.

This in-depth effort is followed by conducting a small number of interviews with knowledgeable individuals in the field of the opportunity, those with the greatest understanding of the needs and competing ways of fulfilling them. In our experience, personal interviews with these few knowledgeable and accessible resources are indispensable. E-mails, texts, and even video conferencing have limits, so we strive to conduct all these meetings in person, face to face. The reason a small sample size suffices is that we “power” the sample by selecting those most knowledgeable to interview and then focusing on the critical details during semi-structured interviews. These discussions often have technical components, so it is incumbent on the analyst to be conversant in the technology…both to understand and to ensure the interviewee is credible. We achieve this insurance by testing the logic behind certain statements. After each interview (experiment) we review the findings against the hypotheses and recast the hypotheses where necessary to better understand the opportunity. It is a bit like a “steepest ascent” experimental design, deciding the next step based on first results, only the constant revisions to hypotheses based on new insights gained from each interview make our Opportunity Analysis approach even more efficient.

Note that we do not set out to fill in a pre-determined checklist of questions nor to guide the interview to address specific features of the product or technology we have in mind. We should point out that the best analyst is one who has no vested interest in the project outcome. Confirmation bias, or listening only for positive responses, has led many undisciplined early-stage investigations astray. The interview process is flexible and only structured to the extent that the interviewee sees it following a logical track. The ideas, insights, expressions of need and desired outcomes all come from the interviewee. In this way we ensure that the person most knowledgeable about the subject matter has a relatively unbounded opportunity to talk about what is important to him or her and to clarify why. We are almost always surprised in some way with the new insights expressed in these interviews.

We have found it very helpful to interview several members of the marketing channel. Understanding, in depth, the needs and requirements of these channel members leads to a deeper understanding of need and value…usually beyond the customer’s own understanding.

Value Analyses

Beyond these interviews, and whenever needed, we develop economic models to understand the value implication of an opportunity. This is especially the case when we are trying to understand the worth of correcting what is wrong with current solutions or to understanding the true value of improvements. Modeling helps uncover the economic bases of value, shows what the crucial parameters driving value are, and generates additional hypotheses to guide interviews. Economic value bases may include reduced costs, increased efficiencies, labor savings, utilization rates, capital efficiency and so on.

And while these calculable impacts are critically important, we find that in many cases there are also emotive bases of value to be understood. Thus, the total value of an opportunity may be much greater (or much less) than a calculated value, with the adjustment based on less quantifiable elements such as an appeal to the senses or even psychological factors. This is why a focused value model in combination with an assessment of sense-oriented decision elements are often both required to fully understand the drivers of an opportunity, and it is why all bases of value are important to understand.

Putting It All Together

Building a complete story requires putting together all related information gathered through the interview process and modeling. We usually find that no one in the market space has all the insight, and more than likely, no one has ever tied together all these pieces of the opportunity puzzle. That is why it is possible for us to synthesize more understanding about a specific opportunity and its value than any of the individual contributors has. And just as knowledge is power, this insight gives our clients a unique leverage of understanding. With reduced risk, they are able to act with confidence.

As an aside, we have been told many times by the interviewee after we have conducted an Opportunity Analysis interview that they had never been asked such pertinent questions and had only rarely been able to voice their full view and understanding about the issues they face. For the supplier, this is equivalent to mining a very rich vein of information and insight. And it is a key reason why the risk of making a wrong turn with a new product idea is practically zero with well-done analysis.

Models often used in Opportunity Analysis:

We have said a lot about models and their importance to scientific investigation. Models are frameworks that attempt to describe how the world really works. They are inherently incomplete in and of themselves, and no single one can fully describe reality. But models help with critical thinking; they improve depth of understanding, and they guide the analyst to develop insightful understanding about the opportunity. They also serve as a prompt to be sure all important facets of a problem are addressed. In our investigations, we use several business models to guide the creation of the hypotheses that in turn focus our investigation. Here are some of the most useful:

• Product-Market definition model (a Planned Innovation® model)

• Needs-Requirements Model of Planned Innovation®

• Basis of Value Model of Planned Innovation®

• Adoption theory

• 4-P’s marketing mix model

• SWOT analysis

• Nature of Competition Model

• Broken Stick competitive share rule

• Marketing Channel Model

• Competitive Opening Model

• Competitive Advantage Model

• Cascade of Needs Model (a proprietery Opportunity Analysis Associates product)

• Product-Market Life Cycle

• 4 Framework questions model

The Planned Innovation® Model of Requirements for Successful Innovation is the single most important model in Opportunity Analysis. This focal-domain model guides the investigation in an organized and nothing-important-is-ever-overlooked manner. The domains of evaluation are the market, product, economic, resource and competitive requirements of an opportunity. The critical requirements for these domains are understood in sufficient depth to guide development activities before major expenditures are made on manufacturing and marketing efforts.

Client Success

Over years of conducting the kind of Opportunity Analysis described here, we have enabled our clients to make decisions about fledgling opportunities faster and with more confidence than was otherwise possible. One retrospective study of over 50 projects for which our groups provided early stage assessment showed that those applications that ultimately turned out to be commercial successes all had two things in common. First, they all showed strong evidence of unmet need with sufficient value to meet the the client’s requirements. Secondly, these confirmations were all determined with only a few interviews and very early in the development cycle.

In cases where the initial hypotheses were not right on target (which is sometimes the case), the unique investigation process revealed adjacent and related opportunities with slightly different requirements. On the other hand, opportunities for which the early analysis did not confirm a market need, or an unfavorable competitive condition was uncovered, almost always turned out to have low success rates. If the client persisted with them, they took longer to develop, were smaller, required more resources and in many cases were abandoned after the efforts did not pay off. Management teams persisting with these opportunities that the analysis showed to be “duds” rarely found satisfactory commercial results from them.

This ability to predict the likelihood of success with such rapid assessment is a testimony to our adhering to the methods of Opportunity Analysis described here. The clearer understanding of needs and requirements of a product-market, often beyond the understanding of the customer who has them, together with the ability of clients to move resources from “non-starters” to the more promising opportunities, have been key drivers for successful and efficient development.