Posts Tagged ‘blogs Circles’

Reduce your budget and grow the business

Wednesday, May 13th, 2015

Reduce your budget and ”Grow the Business” – Now there’s a novel idea!
by Roger La Salle

The business of business is simple

Essentially all businesses are driven by simple arithmetic and at this time of year we start to review our budgets.

In business the aim is to grow revenues and of course profits. The mandate to achieve this is given to the senior executives that form the so called management team.

The message is to grow or risk stagnation – it’s that simple.

The inevitable budget session

Predictably, as our executives develop their next year’s budget you can be sure there will be a requirement for more funds, more money to spend so the department can grow and consequently achieve the forecast improved outcomes.

It’s quite amazing, despite all of the technological marvels we provide to our staff to make them more effective, costs and budgets continue to grow.

Of course in Government departments it is a long held tradition to get together in early June to “blow the budget” by purchasing anything that can negotiate the “system”: before that mystical 30th of June.

Is this a better way?

One wonders what may happen to ever expanding budgets if some inversion to this thinking was applied.

Take for example the head of a department that may have an annual expense budget of, say $20 million. Predictably the executive comes to the budget session with a well justified request for an additional 7% for the next year. Say an increase to $21.4million. Quite a modest increase, but one the executive assures top management is essential to “grow the business”.

It may be interesting to consider what may happen if that very same executive was to be challenged.

“No, instead of seeking more funds, if you can achieve your goals with 10% less, you will receive 75% of the reduction, in this case a whopping $1.4million, as a cash bonus, to be split among your staff in proportion to their salaries.”

Now there’s a novel and innovative approach to management.

What now?

As the budget process starts maybe it’s time to give consideration to this radical, but perhaps very practical way of still achieving the desired results without the never ending need to spend more money.

Instead of more money, find better ways to achieve your outcomes – that’s innovation.
which is not a bad thing to introduce to a business.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Not the what but the whom!

Monday, April 20th, 2015

Not the what – but the Who and How!
By Roger La Salle

Investors
It’s often said that investors invest in people, not products or ideas; and how true this is.

So just how important is your presence and presentation in winning with your innovation, or indeed rising to the top in your profession?

How important is this really?
Anecdotally the CEO of one of Australia’s very large listed businesses gave a speech or presentation to both shareholders and potential investors some time last year.

It seems the message was first class, the business was on track and the future ahead looked rosy indeed. In short this was a “bullish” message aimed at stimulating investment and encouraging shareholders. The effect however was quite the reverse, despite the positive words.

The reason?

The CEO’s presentation was less than lack lustre, it lacked power and passion and some even suggested exuded nervousness. Though this may be hard to believe from a well-seasoned CEO, the effect of the presentation was to wipe millions of dollars off the company value in the hours following. Simply, shareholders were “spooked”.

A study that shocked the room
Some years ago during the study of a business degree we undertook some research as an elective subject into public speaking, presentation skills and the secret of good presence.

During this work experiments were conducted with both shy and retiring types and even the most forthright and confident person in the class. This fellow was “full of it” but within minutes was literally reduced to a trembling wreck as his presentation ensued. All of this was video recorded and some valuable insights and lessons were learned.

The Silver Bullets
Resulting from this work we developed what we refer to as the “Silver Bullets” or lifeboats for presenters.

No matter whom the speaker, even the most accomplished, confident and well researched, at some stage you will encounter seemingly uncontrollable nerves, shortness of breath, trembling and even forgetfulness that is noticeable to any audience, especially those seated closest

Given that this is inevitably the case, and be assured if you are required to present from time to time this will happen, what are the lifeboats or the silver bullets?

In exploring this question, perhaps one may ask, what makes a chat around the BBQ on a Sunday different from a formal speech to the same group at a function?

The difference is stark, the reality is simply, but such a formal session can be delivered as confidently as a joke around the BBQ, once you realise the simple differences.

Is training the answer?
There can be no doubt that training assists in all endeavours, proper training and learning undoubtedly increases skills. But notwithstanding, there are times when the lifeboats or ways to escape the positive and destructive feedback of rising nerves are essential. Indeed even having an awareness of the lifeboat options alone may be sufficient to ensure you never get to the point of absolute failure.

Learn the Art!
For anybody wanting to succeed in business and in life, learning the art of fine presentations will stand you in good stead, build your self-confidence and position you as a leader amongst people.

****** END ******

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Business Insight – Big Blue or Big Data

Wednesday, March 25th, 2015

Big Blue or Big Data?
By Roger La Salle

Violent agreement
My blog on the definition of marketing drew a fantastic response with almost universal agreement that this was the best definition most people had seen.

So we have a definition!
It seems once we agree on what marketing is, and is trying to achieve, then the rest is simply (or perhaps not so simply), how you do it.

Of course there are many mechanisms.

We have all learned the five P’s:
• Product
• Price
• Place
• Promotion
• People

What’s first?
Assuming you actually have a product you wish to sell, advertising in some form is usually the most common customer engagement tool. Obviously if nobody knows you exist there is little chance of a sale.

However, this is where it gets difficult, expensive and somewhat “hit and miss”, or at least that’s how it was in the past.

Traditionally
Both radio and television are the most common promotional means but people are literally “turning off” as we are saturated with advertisers invading our space and time. Even in cricket, where one may have thought an advertisement after every over was sufficient, now we are even getting ads between balls. Indeed, my conspiracy theory is that six rather than eight ball overs were internationally standardised (even at the height of cricket being criticised as being too slow) to provide more advertising time. What next?

Radio, especially in cars, is very effective and in many cases more expensive than TV advertising. In cars there is no escape and driving in traffic is boring, to say the least.

Social media is the new form of getting attention and has more reach to the teens and gen y’s, but again, users are often transparent to the ads. However if you can manage to win their attention, the power of spreading the word via the social media is unstoppable and moreover, tracking the cut through of e-advertising is all powerful. Never before were advertisers able to so accurately see the readership of the message.

Big Data, or data collection resulting from e-connectivity heralds the ability to see and measure effects, something that advertisers, or perhaps more to the point, clients, have been wanting for decades. Well now it is here.

Interpreting “Big Data”
In an address some time ago Professor Freek Vermeulen gave an interesting insight into big data and “statistical Bias”.

It is commonly thought that porpoises have a great love of saving fisherman lost at sea as their boat sinks beneath them. There are many stories of porpoises literally pushing such people to shore and literally saving them from certain death. The conclusion, porpoises save people.

But is this really the case?

In an experiment a large ball was thrown into a pool of swimming porpoises and what was observed was that porpoise simply love pushing things around in the water. They push things everywhere, it’s obviously great fun.

The research also showed that most likely just as many overboard fisherman that were pushed to shore were likely pushed further out to see and downed. However, because the data set we receive is only from the fisherman saved by porpoises we conclude; porpoise save people?

In other words, beware of simplistic interpretation of Big Data and so called “statistical bias”.

A new Paradigm
In the past advertising has been about being noticed and sending the message the marketers thought appropriate, such as Coke represents fun, McDonalds represents kids, Volvo represents safety and so on. Well this is changing fast, new buyers are voting in droves on “likes” and recommendations. The time for “snake oil” products is long gone. Big Data represents the new paradigm, but with a sting in the tail for adverting agencies. The work of these companies can now be measured and judged on real outcomes like never before with quantitative measures that can readily be obtained.

To win in marketing a new form of e-based customer engagement is needed, simple saturation push marketing is now passé.

Marketing, like any other product needs to be innovated endlessly.

Think change, think differently and think new opportunity and new ways of customer engagement.

Be assured, there is always a better way.

****** END ******

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Business Insight – Patents – What Value anyway?

Friday, February 27th, 2015

Patents – what value anyway?
By Roger La Salle

In short, a patent is an instrument of entitlement provided by a government to give an inventor monopoly rights to sell the patented product free from competition in the jurisdiction in which it is granted. Patents generally refer to physical products but patents can also be granted for business processes.

But note, you cannot patent just an idea. For example, I have a wonderful idea that I would like anti-gravity shoes, but I cannot patent this because I don’t know how to do it.

A granted patent can provide up to 20 years of protection, providing annual maintenance fees are paid, or for a lesser grade of patent known as an Innovation Patent, the coverage is eight years.

Should you seek a patent?
One of the biggest mistakes inventors and entrepreneurs make when they have what they believe is a great idea is to patent, patent, patent and seek protection in as many countries as they can afford.

In reality the percentage of patents that actually end up producing “pay dirt” is very small indeed. Unfortunately in many cases inventors spend all their money on patents only to find that in fact nobody wants the products anyway, and/or they are underfunded when it comes to the real and very demanding business of commercialization.

Whilst having a patent may be a great emotional fillip, the real fact is that a patent is only as good as your willingness and ability to defend it. Further, if you really do have a great idea, these days, even if it is patented, you can almost guarantee that soon after you have done the hard work of winning a market, an identical or similar product will soon be there to challenge you.

Most people are unwilling or unable to embark on the expensive and complex legal journey that goes with trying to enforce patent rights. There is an interesting film called “Flash of Genius” about an American inventor, Robert Kearns, and his lifetime battle with the US auto maker giants to enforce his granted patents. This story of trial and heartbreak is truly engaging and although perhaps not rated as a stand out box office success, is well worth seeing.

Finally, one consideration often overlooked with patents is that a published patent discloses all your work and thus allows potential competitors free access to your thinking. In many cases where knowhow and intimate knowledge of a product or process is your competitive edge, it may be better not to patent and trade on the knowhow you prefer to keep secret.

So why bother?
In small vertical niche markets patents can certainly keep potential competitors at bay and may in some cases even make larger companies think twice before deciding to run the infringement gauntlet. In still other cases good corporate citizens may do the right thing and contact a patent owner seeking a licence arrangement.

In the case that your preferred commercialization model is to licence the invention then a patent is all important, as why would anybody pay you a license fee when a competitor could make the identical product free from the encumbrance of paying such a fee?

One way to have your “patent cake and eat it too”, may be to obtain a patent then immediately seek a licensing agreement with a large company that would be prepared to defend it.

Protecting a product, service, design or trade mark on the surface may seem pretty straight forward, in fact the reality is that the subtle nuances of IP registration are far from straightforward.

What now?
1. Seek advice – Many patent attorneys will usually give you brief up front free guidance
2. IP Australia “www.ipaustralia.gov.au” has an excellent web site full of information
3. Carefully and frugally select the jurisdictions in which you seek protection
4. Understand that even if patented, a good product will almost certainly attract competition
5. If you do have a good product, seeking a licence agreement with a major company may have a lot of advantages.
6. Remember, few products do actually end up making money for the inventor; this is a very tough business.
7. If knowhow is your competitive edge, then maybe a patent that discloses intimate knowledge may be a disadvantage.

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

****** END ******

SocialTwist Tell-a-Friend

So what is Matrix Thinking?

Monday, January 26th, 2015

So what is “Matrix Thinking”?
By Roger La Salle

Keep it simple!
Creative thinking methodologies abound, some simple such as asking just one question “what if”, whilst others vary in degrees of complexity.

“Matrix Thinking” was developed on the back of years of real life practical innovation outcomes and aims to be simple and applicable to tangible products, services, processes and the scan for new business opportunities; referred to as ”Opportunity Capture”.

Does it work?
It would seem so with partners now established in some 28 countries with one of the most recent coming on board being “Matrix Thinking – Poland”.

The people in Poland have just held a workshop in the pharmaceuticals industry. Although this was their first foray into pharmaceuticals, the outcomes, evidenced by the feedback below were outstanding.

“..…using the Matrix we prepared almost four hundred innovative solutions. I think everybody was shocked how effective is this method. ..… everything is perfect beginning from materials ending on certificates……”

An overview
A quick and hopefully engaging TED overview presentation on Matrix Thinking can be seen at:

So What?
It doesn’t matter what business or service you provide, if you are not constantly looking to improve and develop your offering you can be sure somebody will soon move in to take your place. The business landscape is littered with the corpses of companies that rested on their laurels and thought they were invincible.

Whatever you do, look to do it better and look to find the next “over the horizon” opportunity. Alternatively prepare for extinction, with the extinction horizon in most industries now having shrunk to some five years.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Business Insight – Finally a Definition

Sunday, December 7th, 2014

Finally – A definition!
By Roger La Salle

The search
For more years than I care to think about I have been searching for a suitable definition for the terms marketing and sales.

Of course we all know they have different meanings, but how so?

My education spanned both electronic and management studies that included marketing. Indeed the definition of marketing I was taught was that “Marketing is the task of matching the customer need with the company capability”. Now this may be all very well, but to me this is pretty well meaningless, so for years I have searched.

Get Connected!
Several months ago I wrote an article called “Get Connected” to the effect that connections are what makes the world go around. Indeed some of the world’s most valuable companies such as Facebook, Google and the like do little more than connect people or perhaps more so in the case of Google, connect people with information.

It was a connection that lead me to the Holy Grail, the perfect definition for marketing.

A little context
Just to put this into perspective, I work in quite a number of countries, one being Colombia, a place that I have visited many times On each visit I have been amazed at their universities, not only in the quality of their buildings and grounds, but also the people that populate these universities.

The last time I was there I had the pleasure of having dinner with a friend, a lady professor of business studies from a university in Medellin.

I asked this lady how she defined marketing, and in a flash she gave me the perfect definition. A definition I might say I have sanitized a little for more appetising consumption.

Marketing, she stated is the art of corrupting the minds of people to have unconditional love of your offering”

What a marvellous set of words!

My now adopted and slightly modified definition:

Marketing: “The art of winning the minds of people to have unconditional love of your offering.”

To me this is perfect, and I acknowledge that this is not my definition, but one plucked from my connection with a very knowledgeable professor in South America.

Of course sales is easy to define:

Sales: “The art of having somebody buy your product whether they want it or not”

Perfect marketing
With this definition of marketing in mind, it may be appropriate to turn one’s mind to the companies that seem to have perfected the art, and none better than Apple.

Try telling an Apple convert that there are better products, it’s completely impossible. In my view, Apple has conducted one of the most successful marketing campaigns in history with its converts having unconditional love for everything Apple.

Apple has succeeded on the grand scale and one way they have done this is by making themselves available. Apple shops are peppered with experts, if you have an Apple problem visit and Apple shop and get help in seconds.

In this age of rapidly moving technology and forever updated software the need to have ready help is obvious. Apple realised that and have risen to the challenge with Apple shops at all major shopping centres. Of late of course SAMSUNG are emulating this model now with SAMSUNG shops. If only IBM and Microsoft would follow the same model.

The Lesson
Make yourself customer friendly and easy to use. Do so and watch the word of mouth message spread as you build your brand

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Is ISO9000 killing your business?

Tuesday, November 18th, 2014

Is ISO9000 killing your business?
By Roger La Salle

Innovate or Perish?
I am not sure how many times I have related the statistic that whereas in the 1920’s the life expectancy of a public company in the USA was some 65 years, by the 1990’s this had fallen to ten years and today is even less.

There is a clear message there of the need for innovation and to be constantly moving your products, services and customers to an ever better place. In short, Innovate or Perish!

Is ISO 9000 the answer?
Many companies have embraced the teachings of the ISO regime and indeed many suppliers demand that their subcontractors be accredited to this standard as there is little doubt there are benefits to be had, at least in the short term.

The system and order delivered by the dictates of ISO certainly improves traceability and documentation and establishes systems and order into what may have formerly been a somewhat chaotic organisation. That’s the good news.

So what’s the catch?
A study done by Mike Tushman of Harvard Business School and Mary Benner of the Warton school showed that the adoption of ISO9000 comes with a “sting in the tail”.

In the years immediately following ISO implementation business outcomes improved in terms of reduced defect, less waste and rework, improved quality and more repeatability in terms of all processes. Customers, especially the bigger ones, loved this and were eager to see all of their suppliers embrace ISO 9000.

Of course in the wake of this many others followed suit, or in some cases were pushed into accreditation by their upper tier customers. However, after several year of working with the system and order dictated by ISO, the innovation of these accredited companies collapsed.

No longer was there so much free thinking and an ability to step outside the boundary dictates of ISO.

The result the study revealed was that within five to seven years at the most, innovation output plummeted, these companies became slaves to the ISO regime and stagnated.

What’s the message?
ISO9000 accreditation may be necessary, especially if you are a supplier to the majors, but beware its downside.

The more system and rigour you bring into your organisation, the greater the need to implement innovation circles as a cultural part of your DNA.

Observe what is happening to your business as staff work to ISO. Observe too the possible downward spiral of innovation output. If you see that happening and you are a slave to the upper tier suppliers, as most of the auto industry providers are, or were, you may well be “ISOing” yourself into extinction.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

How many rings to the Onion?

Friday, October 17th, 2014

Herein my latest business insight, please feel free to pass it on or publish in any forum you may wish.

Still more rings to the onion
By Roger La Salle

How hard can we make this?
How many layers of complexity can we add to the “deep science” of innovation?

Why is it that we have to keep drilling down into what is fundamentally simple and find yet more ways of muddying the waters?

The art of innovation it seems is now being applied to innovation; for no other reason presumably than to keep the ball rolling. It seems little different from the ever innovated software changes from the likes of Microsoft and Apple, changes that in most cases only serve to confuse the user whilst offering no real added value.

Where are we today?
So far a discrete number of strains of “Innovation” bug have been isolated, we have at present:
• Disruptive
• Top down
• Open
• Closed
• Front end
• Middle
• Incremental
• Design led
• Bottom up
• Now a new one has recently emerged, called “Leadership in Innovation
• Innovation”?

I am wondering, can anybody add to this list?

I am moved to ask, does anybody ever go to work in the morning saying “’Today I think I’ll do some Disruptive Innovation, or no, perhaps some “Closed”, or may be “Top Down”.

I would suggest not!

These terms are simply the creation (dare I say innovations) of people in the innovation business. They are retrospective terms used to try and categorise the silos in to which new ideas may fall. Though these titles or silos may be useful in an academic sense, they add little real value to the innovation imperative.

KISS
Innovation is simply defined as “Change that Adds Value”, the trick is to simply identity things that can be changed. To be sure there is nothing in the world that is free from the opportunity for change or improvement. If you wish to disagree with that then essentially what you are saying is that what we do or use today will be the same in, maybe 50 years’ time? Not likely I would suggest.

In short there are only three types of Innovation:
• Product
• Process (including business processes and supply chain)
• Services.

That’s it.

So what’s missing?
The fact is that innovation of any type does not happen until an opportunity is first identified. The secret is not so much in teaching the art of innovation, plain as it is, but more the art of opportunity capture. This is the systematic search for opportunities, and to be sure such a search can be done with great rigour and simplicity with some 40 different ways available to scan the opportunity horizon. Once done, the next step is to implement the simple tools of innovation and hey presto, new things emerge.

What’s the message?
Don’t be confused by the ever growing layers being added to the innovation onion. Keep it simple, identify the opportunity and then innovate.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Why then a Business Plan?

Monday, September 22nd, 2014

So – Why a business plan?
By Roger La Salle

The problem
My last business insight drew a huge response. In essence everybody was agreeing with what I was saying but asking the question – so why bother with a business plan, or better still, how can we avoid the common failures?

Why Bother
Without doubt the biggest problems with business plans are the rubbery figures used to support the business case.

For certain, market forecasts, margins and diffusion rate (the rate of market penetration) are the common failings. However, a well prepared business plan not only makes forecasts but also outlines strategies for achieving these forecasts and the means for building the business. The logical thinking and documentation that underpins the business plan is important to potential investors as it assists in demonstrating the qualities of the entrepreneurs. Indeed it is often said, investors invest in people not ideas and thus a well-structured logical business plan is one way to build investor confidence.

The “maybe” known space
In reality the only business plans that may inspire some confidence in their forecasts are the ones where a clear unambiguous cost benefit can be shown between an investment and a return. For example, a power tool compared with a manual tool. But even then, things can go wrong.

In recent times we were being inspired to install solar panels to lower power bills and even receive power company rebates, but now of course that is all changing and the economics are now nowhere near as good, and will no doubt further deteriorate. So even a clear cost benefit can be compromised as the business or environmental landscape changes, often even before the product is on the market.

A good business plan needs to lay out the cost benefit and at the same time present a sensitivity analysis as to the effects of a changing business and investment landscape. Clearly there is no certainty in any business plan, it is really a best educated guess, but a guess whose accuracy can be heightened with a clearly demonstrable value proposition.

The “Unknown” Space
When it comes to developing a business case for something where it is virtually impossible to estimate sales, this really is guess work.

For example who in their right mind would have invested hundreds of thousands of dollars in tooling for a “Rubik’s cube”, a product with an indeterminate value proposition? Of course somebody did, but what a fluke to get that right.

So too with Twitter, who in their right mind would have predicted the success of Twitter, a system that by its very nature limits the amount of information you can send? But what an amazing success.

How about an improved Twitter, let’s call it “Twitter Plus? A system that uses the Twitter model but removes the character limit, or maybe simply enlarges it to 500 characters. Any investors?

The Advice?
Business plans are important, but the real message they carry is about the people much more so than the wonderful forecasts of great success.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend

Business Insight – Planned Disasters

Friday, August 15th, 2014

Planned disasters
By Roger La Salle

What value is a business plan?
Seldom is any serious business investment undertaken without the prior analysis presented in a well-researched and documented business plan.

Certainly in the case of inventions and new products a business plan that documents the business case is always sought, especially by potential investors.

The problem is business plans are too often prepared by the champion of an idea and these people are already convinced about the likely success even before they start. The task of actually documenting the business case is seen as a necessary and troublesome precursor to getting investment funding.

With this mindset, how could a well-researched and objective business plan be developed? The fact is, it’s almost impossible.

The Process
There are many companies and consultants that write business plans and there are many templates available to assist. The better templates are not ones that simply ask you to fill in some boxes, but instead prompt the writer with the questions they need to be exploring to develop and document the business case.

However, even in these cases the likelihood of an independent and objective outcome is slim, to say the least.

Where businesses most often fail
In essence there are only two risks in starting a new venture or launching a new product:
1. Technical risk, meaning can we do it
2. Commercial risk, which in effect means, can we sell it.

By and large, the most common reasons for business failures is in the market place; and that’s where most business plans get it wrong.

Business plans always provide a spreadsheet with revenues over perhaps four or five years showing start-up costs, revenues, costs and finally profits. If the profit projections are not as high as would have been expected the writer can simply fudge the numbers and “hey presto” a winning business plan appears.

Market research
There is no doubt that in many cases market research is essential, especially where a very large investment is to be undertaken, but beware, market research often gets it wrong.

Possibly the most notable and well documented example would be the FORD EDSEL motor car rolled out by the FORD Motor company in 1958 to a huge fanfare. This car was an unfortunate market failure despite a huge amount or prior market research. Many marketing texts use this as an example of research risks.

Another, also in the auto sector is the TATA Nano from India.

A very low priced car targeted at the bottom end of the market and to all accounts this car has not won wide market appeal despite the delivery of a very good low priced vehicle. One reason cited for this failure was the perception that in buying such a “low end car” you are in essence advertising that the “low end” is your calling. Not an advertisement many wish to broadcast.

The Advice?
Beware the inspired and bullish entrepreneur or inventor carrying a wining business plan and beware the market research that underpins this document.

Right it may be, but very often and unfortunately, it will be wrong.

**** END ****

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms. www.matrixthinking.com

SocialTwist Tell-a-Friend