2. Today’s Purpose
• More PROFITABLE
products or services
MATRIX
Teach a
Reliable System
for Accelerating
(new or improved)
• More PROFITABLE
customers & markets
Profitable Growth
4. MATRIX
History
1. Founded in 1989
2. By George P. Burdell after he was laid off
3. Created Red Devil Security System in his Garage
5. THE RED DEVIL
Security System
MATRIXUnique Features
• Cross Zone
• Flash Memory
• AES
• Sleek Control Panel
6. THE RED DEVIL
Security System
Primary market is the 6,000,000 Small Businesses
Misc. Small
MATRIX Businesses
Jewelry
Stores
Consumers
7. THE RED DEVIL
Security System
Sales Trend
US Competition Cloned Us
MATRIX
China Competition
Introduced
Won Bid
Lean
for Tiffanys Made Us Price
Competitive
8. Owner and Founder
George P. Burdell
MATRIX
Has gone to Hawaii to celebrate the
Lean Turnaround.
He’s not had a holiday since 1989.
9. THE RED DEVIL
Security System
Sales Trend
MATRIX
Today
10. MATRIX
The team has analysed what’s
happened ... and sent a report
to George...
11. We Need Ideas For
MATRIX
PROFITABLE GROWTH
5 Minutes
to work with your team
16. Innovation Success Factors
Discovered by
REVERSE ENGINEERING
what separates winners from losers
MATRIX
4,000+ ideas were studied
Over 2,000 Academic Journal Articles Reviewed
23. “If you’re not Monopoly
unique you’d
MATRIX
better be
cheap.”
Doug Hall
Commodity
24. Quick Test for Meaningful Uniqueness
Are your profit margins...
10% 20% 50%
MATRIX
higher than your industry?
If not, then you are
NOT meaningfully unique
25. Why the Focus on
PROFITABLE GROWTH?
Only 1 in 7
MATRIX
small businesses
close leaving debt
Over 80% Close Because
“It’s not worth the effort”
32. 6 Key Learning Concepts
1. Dramatic Difference
2. Overt Benefit Difference
3. Real Reason to Believe Difference
MATRIX
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
Agenda --- Basic then ADVANCED
33. Your Simulation Workbook
Put your name on it!
Everyone has a different COLOUR
on the front of their workbook
MATRIX
Notes from the presentation
are placed throughout the book
34. Why Are We Here?
Why do we at Buzz Electronics
need to change our system for
MATRIX
accelerating profitable growth?
10 Minutes
to work individually
& with your team
Handout + Pages 4 & 5
36. 6 Key Learning Concepts
1. Dramatic Difference
2. Overt Benefit Difference
3. Real Reason to Believe Difference
MATRIX
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
Agenda --- Basic then ADVANCED
37. Dramatic Difference
You TRIPLE your odds of success when
you offer a DRAMATIC DIFFERENCE in
Overt Benefit & Real Reason to Believe
MATRIX
Dramatic Difference
Low Dramatic Difference
Probability of Success
14%
Medium Dramatic Difference 40%
High Dramatic Difference 53%
38. Average % Profit Margin vs Core Business Strategy
16
15
14
13
MATRIX
12
11
10
9
8
7
Low Cost Quick Delivery Voice of Customer High Quality Innovation
Georgia Institute of Technology
n=738
39. 370%
Greater chance
MATRIX
of profitable
success for ideas
that are
Extremely/Very
Unique
40. RADICAL Innovation
versus Incremental Innovation
Company
MATRIX
Valuation
Marketing
7X
Effectiveness 9X
41. Companies That It’s NOT the
Patent Grow Certificate
5X Faster
MATRIX
It’s the
MINDSET!
43. 6 Key Learning Concepts
1. Dramatic Difference
2. Overt Benefit Difference
3. Real Reason to Believe Difference
MATRIX
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
Agenda --- Basic then ADVANCED
44. Overt Benefit Difference
You TRIPLE the effectiveness of
your marketing efforts by OVERTLY
communicating your customer benefit
MATRIX
Low Overt Benefit
Probability of Success
13%
Medium Overt Benefit 26%
High Overt Benefit 38%
45. Features are not Benefits
Features are the
- Facts
MATRIX
- Figures
- Technology
- and Details
That make up your offering
46. Benefits are…
WHY should I care?
I = the customer
MATRIX
“Our product will make you
Smarter...
Faster...
Healthier...”
47. MATRIX
feature benefit
stabilisation reduces
control rollover risk
51. WHY should I care?
WHY should I care?
MATRIX
WHY should I care?
WHY should I care?
WHY should I care?
52. Features to Benefits
Turn 3 Unique Features
of the Red Devil
into OVERT Benefits
MATRIX
Work individually then
work with your team
15 mins
Pages 6-7
54. Target
compete
In BBQ
MATRIX
Audience =
Those who
Cookshack Cookers
Send You to The
Competitions Winners Circle 1,000+ Wins
55. NEW Target Audience
Those who don’t compete
WARNING
MATRIX This Electric Cooker is
ILLEGAL in Competitions
It gives the user an
UNFAIR ADVANTAGE
as the even heating
makes it too easy to
Make Perfect BBQ Every Time
56. 6 Key Learning Concepts
1. Dramatic Difference
2. Overt Benefit Difference
3. Real Reason to Believe Difference
MATRIX
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
Agenda --- Basic then ADVANCED
57. Overt Benefit Real Reason to
Difference Believe Difference
MATRIX
gets customers closes the sale
excited
58. If you’re promising a
BENEFIT DIFFERENCE
Then…
MATRIX
You MUST Be Doing
SOMETHING DIFFERENTLY
(i.e. have a “Reason to Believe” Difference)
59. Real Reason to Believe Difference
You DOUBLE your odds of Success when you
Communicate a REAL REASON TO BELIEVE
That your OVERT BENEFIT will be delivered.
MATRIX
Real Reason To Believe
Low Real Reason to Believe
Probability of Success
18%
Medium Real Reason to Believe 29%
High Real Reason to Believe 42%
69. Five Strategies for adding
Real Reason to Believe
Probability of Success
MATRIX
Holding all else constant
• 1. Tell the Truth 42%
2. Testimonial 41%
3. Pedigree (Methods, Materials) 41%
4. Data or Demonstration 45%
5. Guarantee (That’s “risky”) 60%
“risky” to you, not to the client
71. expert TESTIMONIAL
The Service: Laser Vision Correction
MATRIX
The Benefit: Near Perfect Vision
The Real Reason to Believe:
Testimonials from DOCTORS who have
used this DOCTOR for Eye Surgery
72. PEDIGREE
“Arguably the Best Whisky in
the World.”
Dave Broom
Whisky Magazine
“The Greatest All Rounder in the
MATRIX
World of Malt Whisky.”
Michael Jackson
Whisky Expert
“The world’s greatest distilled spirit
at the present time. Buy what ever
you can find.”
Paul Pacult
Spirit Journal Retaste 12.07
Overt Communication of
Pedigree Grew Sales 30%+
82. Like when you FIRST started your
company or started your job…
MATRIX
83. 6 Key Learning Concepts
1. Dramatic Difference
2. Overt Benefit Difference
3. Real Reason to Believe Difference
MATRIX
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
Agenda --- Basic then ADVANCED
84. Leverage Diversity
Diversity multiplies the impact of stimulus.
MATRIX
Diversity of Thinking
Low Diversity
# of practical ideas invented
19
Medium Diversity 30
High Diversity 46
98. Confusion Clarity
Barrier compositions and articles Cancer-Safe Fast Food Tub
produced with the compositions
A stable, aqueous barrier coating
composition includes: (a) prolamine;
(b) cold water insoluble polymer; (c)
The first biodegradable fast food
water; (d) water-soluble co-solvent;
MATRIX
sandwich container that provides
and (e) stabiliser. The composition, grease protection without the
when applied to a substrate, chemicals that have been found to
produces an article having a high cause cancer.
surface energy and resistance to oil
and grease penetration. A method of
producing the article involves
applying the composition to a
substrate...
99. Hot Water Tap
Confusion
The finest quality tap available. Clarity
Made from heavy cast brass
patterns, copper tubing with Our Industrial Water Taps...
MATRIX
stainless steel and aluminium
accessories, these faucets are
designed, built and tested to last
1. Provide 2 times greater flow
19 vs. 6 gallons per minute at 25 psi
for the life of your plumbing
2. Installs in half the time
system. Use a standard 1 3/8ths drill bit
vs. Chiseling a 3 inch hole
They’re the BEST Available!
107. Golden Rule of Clarity
Let a customer say NO…
because what you offer doesn’t apply to them.
MATRIX
But NEVER let a customer say
NO because they don’t
understand what you’re offering.
113. The Innovation Systems Way to Leverage Group Diversity
1. INDIVIDUALS 2. CREATE with Partner
Explore STIMULUS Leverage DIVERSITY
10 Minutes
MATRIX 20 Minutes
3. LISTEN & LEARN from Team
Drive Out FEAR
20 Minutes
116. Best Place To Look for Stimulus
Competitive
/ Customer
MATRIX
Scouting
Technology 5X
Scouting More Effective
Journal of Product Innovation Management 2005;22:258
118. OPEN INNOVATION
is the Future
Old World New World
MATRIX
All Smart People
work for us and we
do it all ourself
Connecting Outside means
85% Increase in R&D
productivity
Not invented here Reapply with Pride
We don’t partner with Our biggest competitor is
competitors our biggest customer
120. Companies are Desperate
Innovation Success is Poor
Only 4.5% of projects
meet ROI Goals
Success
MATRIX
Failure
Boston Consulting
Group 32% Odds versus 4.5% odds
124. the three stages of the system…
Evaluate Launch
Create Ideas
Ideas
MATRIX
Ideas
A system for A system for picking A system for getting
creating as many ideas with the highest ideas to market with
ideas as possible. probability of success. the minimum of time,
money and risk.
125. Some examples of Open Innovation Marketplace s
Where Innovation Buyers, Sellers, Investors & Distributors
Speak the Same Language
e.g. http://www.innovationsupplychain.com/
MATRIX
Seller BENEFIT
60 Second
Business Credibility
Inventor’s ideas are taken more
Buyer BENEFIT
Smarter, Faster, Cheaper
Innovation Development
Companies can painlessly access a
virtual Innovation Department that is as
seriously by companies because each
idea comes with an independent much as 3X times more successful, 85%
research report and sales forecast that more efficient and requires 50% less
can be understood in 60 seconds. capital investment.
132. Buzz Ideas
PAIR UP to INVENT IDEAS
for new PRODUCTS/ SERVICES
for BUZZ ELECTRONICS
MATRIX
ON Pages 16 & 17
using Open Innovation
stimulus from pages 14 & 15
15 mins
152. THINK:YOURCOMPANY
MATRIX
Let’s use your homework.
Create a FRESH Idea
Create a NEW Idea
153. The Truth is...
DRAMATICALLY DIFFERENT IDEAS
MATRIX
Cause Operational
CHAOS CHAOS
154. SOLUTION = Fix the SYSTEM
“94% of failures
MATRIX
are due to the SYSTEM
6% are due to the
worker”
155. System Based on the
Masters of Innovation….
MATRIX Up
Start
Companies
156. Start Ups Are…
The Real EXPERTS of Innovation Commercialisation
MATRIX
% of Innovations
Still in Business after 3 years
157. The Simultaneous Engineering Approach
1. Plan
Product
4. Act 2. Do
Development
3. Study
MATRIX
Fail Fast - Fail Cheap
Rapid Cycles
of Test &
Learn
Business
Marketing
Model
Development
Development
158. How to START UP like a START UP
Open Innovation
MATRIX
“Borrow don’t build or buy”
Manufacturing – Distribution Investment - Ideas
159. The SCOUT
(project General Manager)
Is the HUB of the WHEEL
R&D / Engineering
MATRIX
Finance SCOUT
Market Research
Sales / Marketing
Manufacturing / Operations
161. The Simultaneous Engineering Approach
Product
Development
MATRIX Rapid Cycles
of Test &
Learn
Business
Marketing
Model
Development
Development
162. Innovation is about “Whack-a-Mole”
Product /
Service
Reality
MATRIX Customer
Rapid Cycles
of Test &
Learn
Profit
Promise Formula
163. The Deming Cycle
Scientific Method
1. Plan
MATRIX
4. Act 2. Do
3. Study “Fail Fast Fail Cheap
Get Smart”
164. Old World
“Proper & Mature”
Business Innovation
Fail Fast - Fail Cheap
System
Get Smart
Expensive & Slow
1. Plan 1. Plan
MATRIX1. Plan
2. Study
2. Study
2. Study
2. Study
2. Study
2. Study
2. Study
2. Study
4. Act
3. Study
1. Plan
2. Do 4. Act
3. Study
1. Plan
2. Do
4. Act 2. Do
2. Study 4. Act 2. Do
2. Study
2. Study 3. Study
3. Study
2. Study
168. Approach
Focus on Biggest Threats or “Unknowns” First
MATRIX KILLER
Death Threat
Small Small Small
Problem Problem Problem
169. P&G Does the Same
Focus First On Project
Death Threats
MATRIX
“Teams like to address easy issues first. At P&G we
have flipped the sequence. Teams must identify so-
called “killer issues” - problems that must be solved
for the innovation to succeed.”
A.G. Lafley
Retired CEO
170. Focus on Biggest Threats First
Turn KILLER Threats
Into Manageable Threats
1. Plan
MATRIX
What Death
Threat?
4. Act
Apply 2. Do
Revise Learn
Stop
3. Study
KILLER What learned?
Death Threat
Manageable
Threat
174. Situation: Bill a home brewer thinks he's invented a
beer that prevents hangovers. He uses a secret
collection of herbs to make it work.
MATRIX
Death Threats: Bill meets with an investor who
is interested in the idea. However, the
investor has identified two Death Threats that
he's asked Bill to address before he invests.
1. Is it legal to sell it?
2. Does it really work?
175. 1. Is it legal to 2. Does it really
Death Threat
sell? work?
Ask for Advice Ask the herb
Innovation Supply Chain
Customer Feedback company to
- Problem
- Idea / Product investigate
Do the Numbers
•Estimate Sales
MATRIX
•Estimate Cost
•Reduce Uncertainty
Dig for Truths
•Data & Research Dig
• Technology & Patent Dig
• Inventor & Expert Dig
Make it Real Test it with 10 people
•Feel the PAIN (Problem)
•Fast “Works Like” Prototype who typically get
•Fast “Looks Like” Prototype hangovers
176. We’re not trying for a TOTAL Solution
Just trying to remove it from DEATH THREAT LIST
MATRIX
Give attention to the plate that is about to fall just
enough to keep it spinning.
177. Buzz Plan
THINK
Fail Fast
MATRIX
Fail Cheap
Get Smart
Methods
15 Minutes
to work as a team Page 26
179. Some Ideas Get Accelerated NOW
But no ideas are
MATRIX
THROWN
AWAY
180. Pipeline Management of Innovation
High Probability Correct
Ideas (£/€) Understanding of
MATRIX
=
Medium Probability
Ideas (£/€)
Low Probability
Value
Max Chance of
Hitting Growth
Ideas (£/€) Targets From
Innovation
181. A Simple Pipeline Management System…
Conservative Most Likely Aggressive Development Proprietary
IDEA Forecast Forecast Forecast Status Status Trailblazer
ACTIVE
Project #1 £0 £0 £0 1 to 5 1 to 5 name
Project #2
Later
Project #3
MATRIX
£0
£0
£0
£0
£0
£0
1 to 5
1 to 5
1 to 5
1 to 5
name
name
Project #4 £0 £0 £0 1 to 5 1 to 5 name
TOTAL £0 £0 £0 average average
182. Good
News
MATRIX
Profitable Growth
is Not Random
183. Leading Profitable Growth
1. Dramatic Difference
2. Overt Benefit Difference
MATRIX
3. Real Reason to Believe Difference
4. Explore Stimulus
5. Leverage Diversity
6. Drive Out Fear
185. • Cross-border trade advice
Whatissues of taxation, regulations, etc (see Simple Guide
Dealing with
information we can
• Sectoral reports
provide
to Cross Border Business)
In-depth reports on sectoral dynamics and cooperative
MATRIX
opportunities (eg: construction materials, agri-food, etc)
• Company leads/databases
Details of potential leads by sector, size and region
• Size of the all-island marketplace
Trade and business sentiment statistics to help companies take
informed decisions (see http://www.intertradeireland.com/trade-
statistics/ )
186. • Business Information Centre - specialised electronic databases for:
Business Information Centre and
• Company information: Search by location, size, activity to find
potential customers, competitors or new suppliers
Enterprise Europe Network
• Market Information: Market size, forecasts, channels to market, key
players, and more
MATRIX
• Enterprise Europe Network NI
- one of over 500 contact points in Europe backed by the European
Commission advising companies on EU
legislation, programmes, opportunities, selling to the public sector
• To make an appointment: Tel: 028 9069 8135 E-mail:
bic@investni.com
• See sector guides:
http://www.investni.com/index/publications.htm?filter=S
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