Innovation And Opportunity Capture

However, nothing can be properly innovated until we first see an opportunity, so the thinking paradigm of opportunity capture is vital. In this case we define opportunity as 'an observed fortunate set of circumstances'.

The following are serial case studies of how matrix thinking has been applied to many businesses and in many situations.

Product innovation

• The product - The front-loading washing machine
  
  A session was conducted with a major white good manufacturer and the product to be innovated was a front-loading washing machine.
  
  The seed chosen was 'change'.
  
  Teams involved used of three catalysts initially:
  
  
  • Tracking - watching people use the machine
  • Frustration - what annoyed most people?
  • I Wish - if they could change something what would that be?
  
  After a short time groups were asked to present their finding and the most common wish and frustration was identified. This was the need to bend over to load and unload the machine.
  
  With the in mind the re-question catalyst was explored and we asked a better questions, not how to reduce bending over, but in fact “why bend over?”
  
  A solution was soon found.
  
  Lift the machine off the ground by placing a separate bench that could be a cupboard with drawers underneath. In other words, entirely remove the need to bend over by lifting the machine to an easy usable height, thus bending was eliminated. At the same time a new product was created, the bench to place under the machine.
• The product - Tent poles
  
  A company that had developed a machine to make tent poles (poles to hold up camping tents). Their machine did everything automatically without any human intervention from flat rolled steel sheet to the finished packed tent poles even packaged ready for shipping.
  
  The problem, how can we build our business?
  
  The solution was to use complementary product and channel enhancement since it was going to be very hard to innovate the actual tent pole.
  
  As it happened the company already sold its tent poles through 240 distributors Australia wide to tent and camping shops. In other words the company was a trusted supplier with one product, the tent pole, and they now had a channel.
  
  With that in mind, the workshop focused on first finding products that would complement tents and tent poles.
  
  The easy answers were, tent pegs, tent ropes, and tent rope straining blocks and even large moulded tent pegs for use in sandy soils. The workshop even then went further to look at the issue of innovating the tent ropes and realised the frustration of tripping over these in the dark. The result was an innovated rope, one the glowed in the dark.
  
  With these new products in hand it was an easy matter for the company to win orders via its existing channel, as they were already a trusted supplier.
• The product - Electrical test instrument
  
  Telephone test now used worldwide.
  
  It is commonplace for telephone repair technicians to use to cable pair identifier. This is a device that sends an electrical signal in the audible frequency range down a telephone wire (pair) to enable the same pair of wires to be located at the far end of the line using a probe that an detects the signal by capacitive coupling, even without direct contact to the wires. The distance may be as far as 20km.  
  
  The problem is that the person connects the tone sender at one end then travel to the other end to find the correct pair, but at that end the person is unable to do any testing because the tone sender is connected at the other end. This frustration was a curse made by a repairman and overheard by the inventor (in this case Roger La Salle). The reasons for the frustration then identified.
  
  With that knowledge in hand a solution was found and patented of a remote controlled tone sender.
  
  This created a multi-million dollar company that still exists today, some 30 years later.

Service innovation

• The service - Bank Letter of Credit (LCs)
  
  The bank had problems in selling its letter of credit service with the problem identified being that it cost $100 for the client to have the bank raise the appropriate paperwork. The workshop thus focused on how to lower the cost.
  
  Literally tracking customers and observing their problems with LCs explored this issue.
  
  In fact it was discovered that the real issue was not at all the cost ie. if you are raising $500K LC why would the additional $100 be an issue. The real problem was the time and paperwork involved. This was an example of re-question, what was the real question to be answered? In fact this question was 'why was it so difficult and time consuming?'
  
  With that in mind the system of raising LCs with trusted customers was revised and the time and effort considerably reduced.
• The service - Insurance company
  
  The company sold home insurance to some two million people but wanted to find a way to make their customers love them. (People hate paying for insurance they hope they will never need).
  
  Channel enhancement was used in this case and tracking. The aim was to find a common need for two million people.
  
  It turns out they all would like a 90cm colour TV, then selling for more than $1500.
  
  The suggestion, ask all you customers if they would like to take advantage of the vast number of clients the company had (their channel) to see if they would like a TV at just $200.
  
  Of course most people jumped at this and thus with an order in hand for almost two million colour TVs the company was able to purchase direct from the manufacturer and pass these on to their channel at no profit, but to make the customers love their company and also of course spread spreads the word.

Opportunity innovation

• The opportunity - Selling chocolates
  
  A small company that made wonderful chocolates but could not afford widespread advertising to compete with major brands. The question was how to get to the target market without incurring great costs.
  
  The only fact known was that some 83% of chocolates are purchased by women.
  
  With this in mind we explored the predictable / widespread and repetitious habits of this group, essentially well to do or cashed up women.
  
  The answer, they all go to the hairdresser every six weeks. Of course when they are there, for maybe three hours, they get coffee and even champagne.
  
  Now we give them a free chocolate and a small card telling them of the virtues of these chocolates and that they can be purchased at the shop just around the corner and with this card they get a 10% discount.
  
  This in essence got to 100% of the target market for little cost, created people in nearby shops now wanting to stock the chocolates and even allow measurement of the effectiveness of this as the stockist had to return the card to get his 10% rebate.
• The opportunity - Mobile phone carrier
  
  A cell phone carrier in a small island nation that held the only license. The Government then decided to deregulate and allow competition to enter the market. The question for the existing cell phone provider was - 'how to retain our customers?'
  
  Workshops were held which explored the habits (tracked) the people of that country and looked that their predictable, widespread and repetitious behaviour; only to discover that all of them paid all of their bills by cash.
  
  They paid their council rates at the council office with cash, their gas, their electricity, their insurance, you name it, all bills were paid in cash by people visiting their supplier.
  
  With this in mind we used the 'transfer' catalyst and explored how banks (and we all hate our bank) still manages to hold us. The answer is that the bank has made it too hard to leave with our accounts, direct debits, credit cards and the like. It's just too much trouble to churn to another bank that probably gives much the same service in any case.
  
  With that in mind the carrier introduced a Bill Pay service where their cell phone customers could go and pay all their bills, essentially a one-stop shop.
  
  This has worked brilliantly and despite a very cashed up and aggressive competitor, the carrier has retained 85% of their market even after six years of competition.
• The opportunity - Selling toothbrushes
  
  A question was asked at a conference of a top executive in a major company that has 50% market share of toothbrushes in a country of some 24 million people. His answer "No Idea!"
  
  If you use the opportunity matrix the answer becomes obvious.
  
  Assume each person changes their toothbrush three time a year (a sensible estimate) this means there are 24 x 3 million tooth brushes sole annually in that market. They have 50% shares so they sell 36 million per year.
  
  This is how you can use the opportunity matrix, but it gets better.
  
  What’s the biggest annoyance or frustration about deciding to use a new toothbrush - opening the packet?
  
  Thus you want to sell more toothbrushes - simple - make the packet easy to open.
• The opportunity - Car brake lights
  
  In a large city, say Istanbul of 14 million people, it takes two hours to drive to work each morning and one hour with you stopped with your foot on the brake and brake light 'on'.
  
  If the combined brake light power in a car is 100 watts, and two million people are driving to work each day, this equates to some 100Watts x 2 million people x 1 (hour)  = 200 million Watt hour of electricity used every morning in just one big city.
  
  Innovate that to provide a solution. (This is something I am perusing and have yet to lodge a patent)
  
  The opportunity Matrix reveals this when used to look at the activity of people.
• The opportunity - Mobile phone charging
  
  Looking at the widespread predictable and repetitious activity of people.
  
  There are some 8 billion mobile phones in use worldwide. Assume it takes 2 Watt-hours to charge a phone and this is done daily. This equated to 16 BillionWatt-hours of power used to charge phones daily. Power we did not even think about 15 years ago.
  
  Solution, give everybody a small solar cell with attached battery with each phone they own and charge the phone overnight from the solar charged battery.