Then, how are opportunities evaluated, selected, pursued, developed, piloted, scaled, commercialized to deliver revenue and profits? Unfortunately, most companies are not equipped for opportunity analysis or successful in developing opportunities to commercialization. What are corporations good at?
Corporations, large or small, focus on monthly, quarterly, annual performance results. These are normally year-over-year, across all business units and down into the weeds. The purpose is to ensure operational performance improvements. Corporations are mostly successful in this process.
In my consulting journey, scorecards and dashboards were developed to identify any change in operational performance during the project. The metrics captured a broad base of current data that was compared to an approved baseline. These measurements demonstrated that the project was on track to deliver expected levels of operational improvements.
Managers/leaders in existing businesses have problems presented to them constantly and addressed at operational reviews. The problems require action to eliminate and return to normal or higher performance levels. This most likely allows no room to see opportunities.
There is a balance between the existing business and what’s next. They are inseparable. Peter Drucker in Innovation and Entrepreneurship provided an example of the twofold review process that included the existing business performance and opportunity focus. To implement a twofold review process will require management and leadership to undertake a process and behavior change. The process change will require management/leadership to accommodate an existing performance and opportunity reviews in the same month. The behavior change will necessitate that management/leadership focuses their vision on opportunities. Drucker explained, “people see what is presented to them and what is not presented tends to be overlooked.” Drucker cited an example of the twofold process in Innovation and Entrepreneurship.
The company held an operation’s review meeting twice a month. This meeting focused on the typical operational results, the problems that impacted performance, the required action items and follow-up. Another meeting was held monthly with a focus on opportunities: areas better than expected, any product sales growing faster than expected or orders for new products coming in from unexpected markets that the product was not designed for. While these are important discoveries, the CEO stated, the meetings “are not nearly as important as the entrepreneurial attitude which the habit of looking for opportunities creates throughout the entire management group” (Drucker. p 157).
The opportunity practice requires specific follow-up steps. The opportunities that are identified by an individual or team should be assigned specific responsibilities, accountabilities and deliverables to advance the opportunity to a decision point. The company example included the following points (Drucker. p 158):
- Submit, in a reasonable time, “a working paper to the presiding senior and to their colleagues in the session, in which they try to develop their idea.”
- What would it look like if converted into reality?
- What in turn does reality have to look like for the idea to make sense?
- What are the assumptions regarding customers and markets?
- How much work is needed?
- How much money?
- How many people?
- How much time?
- Expected results?
- My personal point for management/leadership is to recognize, reward the individual or team regardless of outcome.
This type of opportunity falls under what Drucker called “unexpected success.” From the standpoint of opportunity, these opportunities are with the least amount of risk. Drucker identified six other opportunity categories to pursue by any company. The additional six categories will be covered in the future. A company should consider the importance of an opportunity focus analysis platform and accept it as a regular practice.
The review process is simple, bite size but carries significant steps and the reward could dramatically impact the existing business. The commercialization of the opportunity needs to be the objective, revenue and profits in order for the company to be durable.
All the best in your opportunity journey – identification, developed, piloted, scalable, commercialization.
Please check out Innovation Advantage LLC Website for more information on compass heading, existing business and innovation.