Innovation of Business

and the
Business of Innovation™
 
Justifying Innovation - Part 4

Presenting the Six Proofs

Communication habits are hard to break.  That is, innovating communication isn’t easy.  Natural instincts tell us to speak and write about what we do or have done.  About what our business is our will be.  About the features and functions of our products.  In short… about ourselves.

Relationships teach the opposite:  The benefits to listening to others.  Of learning from them.  Of reciprocal interactions rather than one-sided conversations.  Of trying to understand the world through the mindsets of relationship partners.  And especially the importance of those skills if we want others to do something for us.  Selfishness in our own language and behaviors makes it hard to persuade others to invest in our ideas or ourselves as people.

Our biggest problem is not knowing when we fail.  We do the best we can through our own paradigms, then scratch our heads in wonder when the other side just doesn’t get it.

In Parts 1 - 3 of this series, we focused on R&D justifying development of a new product entering a crowded product pipeline.  The same issues must be faced in each stage of product development, including launch of businesses and products.  Part 3 recommended elements of communication.  This step addresses packaging and presenting of justifications.

 

Six Proofs

The six proofs already force a more broad view of communications.  Each justification goes beyond technical issues.  Justifying an innovation depends on technical success, yet the real impact of R&D is enabling better business decisions by management, whether in industry, academia, or government.  Quality of research never justifies new product development.  Management requires coherent, persuasive answers on at least six levels:

Technical Proof: (It works!) 
Control Proof: (We own it!) 
Safety Proof: (We are free of liability!) 
Value Proof: (Customers will want it!) 
Economic Proof: (A sufficient market exists!) 
Attractiveness Proof: (The company needs it!) 

Parts 1 and 2 considered each proof.  Part 3 suggested that we no longer think in terms of proposing an R&D result.  Instead, we propose a “product not yet completed.”  We no longer present a step toward an end.  We present a clear vision of the final form, ready for market.

That is, we don’t present proofs for an R&D project, but attempt to connect research to potential innovations that reach markets.  We shift gears from the research we’ve done (costs and risks) to what management can perceive as a product (costs, risks, and returns on investment).

Tough Questions

To start this next step, here is a bold statement.  To close any deal, we must convince management, investors, allies, and customers to form positive answers to the following “Tough Questions”.  Remember them with the mnemonic “NUCUC” for need, urgency, credibility, uniqueness, and cost-effectiveness.

•    Why do we need this (R&D) product?
•    Why do we need it now?
•    How do we know it works (or will work)?
•    Is this the best way to reach our goals?
•    Is this the most cost-effective way?

These questions are universal.  To see why, ask yourself what would happen if any of the answers were “No,” or “I don’t know,” or “I don’t think so.”  Could we expect funding with such doubts in the minds of management?  Not likely!

All of the Tough Questions must be answered as we present the proofs.  That is, success implies going beyond persuasion of opportunity to persuasion of urgency.  Beyond demonstrating that opportunity exists to proof of an unique prospect.

Tough Questions can be used to structure and evaluate communications to decision makers.  For instance, if management does not recognize need for the “product not yet finished,” everything else is a waste of time.  If this opportunity is the same as available to others in the market, management may accept it, yet with little enthusiasm.

If the six proofs cannot be made and made well, don’t waste management’s time.  If the proofs are perfect, yet tough questions remain unanswered, the project will not get the support it deserves.

Is your head spinning yet?  Six proofs matrixed with five questions begins to sound like an awful mess.  Hang on for a bit.  We have another criterion to apply to that whole matrix.

 

Audience Center

Communications come in two basic styles.  Self centered (about us and what we want) and other centered (about our audience and what they want).  We want management to sponsor our project for further development, and our presentation could be done that way.  Or, we could learn what management need and demonstrate how funding this project will meet those needs.

Further, our presentation language could be ours (technical) or theirs (marketing, finance, revenues, returns, share, margins, basis, timing, growth, obsolescence, as organized in spread sheets and quarterly bottom lines).  We could lose their attention in minutes by talking about research they don’t understand in language they don’t understand.  Or we could learn the language with which management makes its decisions, and present in that language.  And we could rewrite everything to speak to their needs, sense of urgency, requirements for credibility, concerns about uniqueness, and bottom line cost-effectiveness (the Tough Questions).

If we want their rapt attention, we need to speak in their comfort zone.  We don’t need to be perfect.  This isn’t a technology with tiny failure tolerances.  We need just enough to capture their imagination.  High quality estimates (e.g., of economics) build credibility, but our objective is to help them do their job ? make great business decisions.

Also consider the gap between R&D and marketing.  Our job is to get marketing to take our projects seriously enough to do their job, part of which is to complete the economic proof.

Speaking the language of management builds confidence.  We become better communicators and negotiators.  And we’ll bring home more funding!

Choose the audience center, whether in spoken, written, or visual presentations.  Audience center enables relationships, and relationships are the core of good business.

 

Presenting Opportunities

Six proofs, five questions, and a center.  All we need now is a perspective.  My recommendation is that everything be seen and presented as opportunities.  Not as decisions or proposed tasks.  Not as costs or risks.  Not as technology or operations or progress achieved, but as opportunities.

To get the attention of management, define the business opportunity in four pieces.  Those four elements of presentation naturally address the proofs and answer the tough questions.  A focus on opportunity will help to achieve an audience center.  The topics with proof/TQ content are:

•    Market Opportunity:  Proofs:  Value, economic, attractiveness.  TQ: Need.
•    Competitive Opportunity:  Proofs:  Value, economic, attractiveness.  TQs:  Urgency, uniqueness
•    Solution Opportunity:  Proofs:  Technical, control, safety.  TQs:  Credibility, uniqueness, cost-effectiveness
•    Financial Opportunity:  Proofs:  Economic, attractiveness.  TQs:  Cost-effectiveness.

Don’t let the simplicity of an outline tease you into thinking this will be easy.  It will require either new skills in R&D or development of partnerships with marketing and finance. 
Don’t assume this outline will work for you in all cases.  Use it as a reminder to define order of presentation best for your situation and product.

Don’t let the proofs intimidate you.  Parts 1 and 2 of this series indicated how to answer the proofs. With a little effort, you will know these issues well enough to stimulate the due diligence of marketing and management.  Indeed, you will have shown yourselves to be worthy partners in developing opportunities.

Don’t let the presentation itself intimidate you.  It is an opportunity for you to influence management by helping them make excellent business decisions.  Part 3 provided guidance for capturing attention with a focus on value.

Opportunity Prospectus

Executive Summary
Technical Context
The Market Opportunity

Value Proposition
Customers and Their Needs
Markets and Their Sizes
Projected Revenues
The Competitive Opportunity
Alternatives in the Market
Uniqueness, Differentiation
Timing
Barriers to Market Entry
The Solution Opportunity
Project as of Now
Options for Completion
Patents and Intellectual Property
Quality and Safety
The Development Team
The Financial Opportunity
Costs to Complete
Required Investment and Timing
Return on Investment
Mutual Commitments

Indeed, this whole process is turns R&D into an engine of opportunities.  As you help management make great decisions, you open doors for new investments in R&D that lead to new “products not yet completed”.  Opportunities lead to relationships lead to trust leads to new opportunities.

 

Conclusions

R&D has been used as a metaphor for a wide range of situations in which a person, team, or business needs support for an idea.  Justifying innovation happens in all parts of businesses, including the proving the business itself.  Learning how to justify opens doors to positive change at every level of the business, including entrepreneurial founding of totally new businesses.

With basics understood, adapt each new opportunity.  A few possibilities:  a raise or promotion for yourself, new hires for your team, new resources for your lab, … … … , marketing your company for acquisition.  Each will require adaptations. 
Learn from every attempt.  Customize to the realities of your situation and environment.  In other words, innovate the process of justifying innovation.  I certainly don’t have all the answers.  Go beyond my notions.  Take leadership.

If you do, you will begin to share the power of management decision making in ways never thought possible.  The time for innovation is now… and it always will be.

 


 

47. Mathematical education and maturity are more important in managing large software projects than in working on such projects. (Harlan Mills)

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