Innovation Leadership TrainingDay TwoStrategy Mapping

February 6, 2009All materials NetCentrics 2008 unless otherwise noted

WelcomeWell spend the next hour or so examining Blue Ocean concepts for discovering unmet, undermet and undiscovered opportunities using a Strategy Map.

What We Want to Accomplish

Goals for this sectionMap an existing market, opportunity or industry to understand the value driversSeek out overserved, underserved or unserved needsMap a new product or service offering against the industry

Key PointsInnovation often occurs when a product addresses an underserved or overserved needSeek out opportunities to differentiate in existing products or servicesInnovation always occurs when we identify and serve unmet or undiscovered needsThese can become the Blue OceansIts important to understand what the industry or market thinks is valuable, and compare/contrast that with what the customers think is valuable

Need HierarchyExamine needs and solutions more carefullyA more fine grained approach addresses:Undermet needsOvermet needsUnmet needs Undiscovered needsUsing this paradigm we can investigate innovation opportunities

Overmet / UndermetOvermet needs are needs that the current offering or solution provides more functionality or benefit than the customer wants or can useUndermet needs are needs that are partially met by the current offerings or solutions, but dont fully satisfy the customer expectationBoth of these situations are instances where innovation is possible.

Strategy MapThe strategy map, or strategy canvas, is a concept suggested by Lee and Mauborgne in Blue Ocean StrategyThe concept seeks to map the average offerings in the industry on a number of value segments to identify overmet, undermet and unmet needs or requirements

Identifying Overmet / Undermet NeedsThese needs were undermet by the existing airline industryThese needs were overmet by the existing airline industryFrom Blue Ocean Strategy by Kim and Mauborgne

Southwest AirlinesSouthwest identified a segment of the population that did not care about frequent fliers, seat choices and meals. They felt the existing airline industry was overly focused on these issues and many clients didnt careSouthwest also identified some undermet needs friendly service and speed that the existing airline industry did not address

Unmet needsNote as well that Southwest identified an unmet or undiscovered need frequent departuresFrequent departures was not one of the value drivers that the airlines delivered or competed onSouthwest built its operational model on the fast turn frequent departures that the majors have yet to copy

Strategy MapUsing the Strategy Map in your organizationWeve found it useful when considering opportunities to innovate in an existing market, or to discover new opportunities

Strategy MapPlace the key value drivers along the bottom axis, and map a competitor or industry in their provision of those value propositions. Also, consider how valuable or important these value drivers are to the customer.

Creating your own curveThere are four actions you can take for any of these value drivers to create a new curve on the strategy map:Reduce the delivery or emphasis of a factorRaise a factor well above industry standardEliminate a factor all togetherCreate a new factor that hasnt been offered

Southwest ExampleFor the existing airline industry, Southwest chose to:Eliminate seating choices, food and hubsReduce pricingIncrease friendliness and speedCreate frequent departures

TakeawaysInnovation can happen by reducing or eliminating an existing factor or providing even better solutions along an existing factor (generally incremental innovation)Innovation can happen by identifying a completely new market or undiscovered need (generally disruptive innovation)Use a Strategy Map to identify what the market thinks is important and identify what the customer thinks is important

Questions

Exercise

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