Opportunity Recognition…
Value, Trend Analysis, &
Design Thinking
Dr. Robert McNamee
Academic 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)
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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?
vs.
• Value is subjective…
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?
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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
 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…
$2.36 / kg
$2,600 / lb
$25,000
Recognizing Opportunities & Generating Ideas
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Creative idea is a new connection between concepts,
methods, outcomes, etc… that provides potential value
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Opportunity (Probortunity):
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…for an existing problem/need in a new or improved way
…for a new problem/need/opportunity
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…
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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)
It has been said
that all new
ideas come from
outside of
ourselves
Opportunity
Recognition
ENTREPRENEURIAL
ALERTNESS
(e.g., Trends)
PRIOR KNOWLEDGE
+ SOCIAL
NETWORKS
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 Innovation
http://mis.postech.ac.kr/class/MEIE780_AdvMIS/2012%20paper/Part1%2
0(Pack1-3)/01_intro/1-2)%20The%20Discipline%20of%20Innovation.pdf
Entrepreneurial Alertness
• Opportunities
– Industry / Market Changes
Obvious
opportunities are
frequently no longer
opportunities
• 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”
Drucker: Discipline of Innovation
http://mis.postech.ac.kr/class/MEIE780_AdvMIS/2012%20paper/Part1%2
0(Pack1-3)/01_intro/1-2)%20The%20Discipline%20of%20Innovation.pdf
PEST, PESTLE, etc…
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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/wpcontent/uploads/2011/03/BootcampBootleg2010v2SLIM.pdf
Ready, Fire, Aim
Design Thinking Process