Richard Caelius is the team leader of the 2004 Most Innovative MBA Team in the World from Instituto de Empresa. Now he lives and works in Vancouver, Canada.
Here the second part of an essay containing some tips and tricks on what helped us win last year’s Innovation Challenge. This part covers the steps from generating the concept to figuring out the details and presenting it.
Step I - Laying the Foundations
Before you and your team go off and explore ways to improve and innovate around the business model of one of the sponsors, you’ll have to cover the basics. We gave the provided materials a very thorough read and made sure we had a firm grasp on the data and the concepts. We topped up our research with information published on the websites of the companies – focusing on the value propositions and the image that the companies were communicating. The same research methodology we applied to the main competitors. During this phase we looked for differentiation criteria and the various positions that the competing companies had taken up in the market. Our goal was to get a good idea of what the key dimensions were along which companies were evolving and trying to differentiate.
After covering the basics, we did some “primary market research” by talking to people around us, asking them what they considered the most important aspects, for instance, when it came to staying in hotels. This gave us an idea of which different parts of the experience or the product had value to different people. Specifically we asked some of our friends and colleagues, what part of the experience of staying at a hotel they remembered most and what types of services they enjoyed or disliked. We also consulted some consumer opinion sites to find out about the negative and some positive experiences with regard to a specific product or service.
Step II - Beam me up Scotty
After having finished the groundwork, it was time to take a more creative and more top-down perspective. During this “creative phase” we adhered to the basic rules of brainstorming which most importantly were about not shooting down any ideas as they emerged – I recommend you have a look at Chic Thomson’s article on how to avoid negative and restrictive thinking whilst maintaining a more positive “can do” mindset during idea creation.
We chose to brainstorm after we had familiarized ourselves with the information, as we thought it to be easier to discover feasible improvements to the business. In a way I realize that this may sound restrictive but we chose this route after we had to concede that with an established business, such as hotels, the innovation comes from important details and by looking to apply ideas and concepts from different intellectual and business domains.
After the first wave of brainstorming we did two things - First we played with the dimensions of differentiation and change which we had identified previously, testing whether the brainstorming had created any ideas that could be applied within these change dimensions. To illustrate this concept, here an example: One of the differentiators for hotels was the entrance and the check-in time and process, one of the brainstormed ideas was based around localization using triangulation of mobile phones, so matching these two together we were thinking about asking the customer whether he would permit us to use his mobile phone to personalize or speed up his checking-in experience. We hence applied a business model from the domain of a mobile phone operator to the lobby of a hotel for the check-in – in the end we didn't use this concept but I’ll leave it up to you to figure out why.
Second, we did something I will refer to as World-building. We used the ideas and concepts previously generated to create an ideal and comprehensive “world”. We would walk through the entire experience of using the new product or service discussing different aspects in detail. These discussions often led to a refinement of not only one specific part of the concept but would spawn new ideas which would complement the “world”. An example of these knock on ideas, again in the context of hotels, would be the membership key-card which we were going to use in the elevator for a quick-check-in. The elevator would have a plasma screen with a virtual assistant to welcome the guests and help with the check-in procedure. The computerised assistant then spawned a series of other ideas ranging from him/her functioning as virtual city guide or digital concierge to offering a real life dating service in the lounge-bar.
For each individual aspect of the concept we quantified the cost side by looking at different Capex and Opex items that would be required as well as the timing of the investment. On the revenue-side we considered demographic and socioeconomic purchasing patterns and sales data provided by sponsors to determine a theoretical market size from which we estimated an uptake percentage. To determine the pricing we used existing pricing models, market prices or cost-plus depending on the situation and information available. These models served as the basis for our cash flow and NPV estimations. We assessed the financial feasibility very superficially at first which served as a reality check to eliminate parts of “our world” which we saw no immediate commercial potential for.
On a more theoretical level I would describe this process as: Aspect extraction, refinement and qualification. Since we looked at one aspect of the “experience value chain” played it through with concrete examples refining our ideas and in some case generating new ones and then going over this one aspect to quantify and assess its feasibility. What we ended up with were a few aspects distilled out of a larger pool which formed an overall concept that was commercially viable and offered a compelling value proposition.
Phase III – The Essentials about Presenting a Great Concept
We chose not to present as a team (at the final round) and were even asked by one of the judges why – our answer was simply that with only a very short time to present it is quite difficult to make a presentation flow and get the timing right with more than 3 people. There were never any hard feelings or discussions about this decision and the rest of the team supported the presenters by giving candid and constructive feedback during the many practice runs. (Practice makes perfect and we really saw a tremendous improvement with every practice run we had time for.) Finally my last piece of advice would be to make the presentation personal and unique by using concrete examples, where possible from your own experience – it gives credibility and authenticity to your concept and the examples often allow the audience to get a better grasp on the concept.
So far so good, I hope that sharing some of these experiences will help you with the crafting of your own concepts. I wish you all the best of luck and should you make it to Arizona, win or lose, it will be a few days in your life you will never forget.
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