Many innovation projects die due to a lack of synergy with other areas of the company. Therefore, it is vital that the opportunity explored succeeds in all dimensions of the company – not just in its ability to deliver the project or in the customer's need.
At this stage, then, we need to develop a Functional Assessment, which is an in-depth analysis of the opportunity, which should be done in conjunction with the areas of Marketing, Technology, Legal, Operations, and Finance to examine potential flaws, test hypotheses, understand the value of the idea and help estimate its potential.
These assessments should be carried out for each product offering discussed in the OPP Model, which should be reviewed whenever any functional areas make discoveries that may impact the product concept.
At this stage of functional assessment, the final decision is usually made regarding the construction of the case for presentation to the company's board.
In Functional Assessment, we make the following decisions:
- Continue with the project and build a case.
- Stop working on the project and put it in a database for reference and future learning. (Knowing what doesn't work is as important as knowing what works.)
- Redefine the concept of the product based on the information that was presented in the functional evaluation.
It is important to note that you may not be talking to functional areas only once. There will be several conversations because the offer should be reevaluated by everyone every time it is refined.
What should be discussed with each area
Check out some general points that should be discussed with each of the areas participating in the assessment.
- Patents and Copyrights
- Trade Secrets
- Technology Licenses
- Market Potential
- Direct and Indirect Competition
- Potential Partners
- Expected Market Share
- Product Attributes
- Suggested Selling Price
- Distribution Channels
- Customer and Personas Segment
- Communication Strategy
- Market Readiness Level (MLR)
- Compatible architecture
- Development stage and TRL (Technology Readiness Level)
- Potential Implementation Barriers
- Skills Needed
- Complimentary Supplies Needed for Production
- Quality of Delivered Offer
- Confidence in Production
- Volume (do we have enough volume that justifies the initiative?)
- Flexibility to meet product changes
- Potential Cash Flow (short and long run)
- Initiative Risk
- Investment needs
- Total cost of the operation
- Price evaluation and its elasticity.
Three questions for each area
After asking all these questions, it is crucial to establish a survey for each area with three simple questions: - 1 - How confident is the area to decide on that offer? (1 to 5 points); - 2 - How much does the area believe in its ability to deliver the offer with quality? (1 to 5 points); - 3 - How much return does the area believe the initiative can bring to the company? (1 to 5 points). The first question serves with feedback to understand if your work is complete by now – or if the idea should have already been dropped.
The second question helps prioritize what should probably work in your business. This question should be used to build the radar chart that should be presented to decision-makers. This graph shows which areas the project has the most support, which are the areas that the project has the minor support and need to be treated more carefully to develop the outstanding points and brings to the decision-makers the vision of the acceptance of the project before the other areas of the company, thus reducing the risk of the project.
Radar graph model
The third question shows how much a particular area will strive to help the project. If it does not see value in the initiative, it probably will not devote itself, even if it can evaluate the offer and deliver the opportunity. The third question shows how much support the board will need to communicate to the area the importance of the project.
It is important to understand that this step is critical. In it, you are creating engagement with the product since all company areas feel equally important and participate in the process. It is worth remembering that innovation is an attractive theme and people like to participate and be heard in these conversations, which facilitates the synchronization of agenda between areas.
Simultaneously, by performing this step in the best possible way, you reduce the risk of taking a flawed proposal for board approval, which could damage your professional reputation.
You should leave this step with an interdisciplinary assessment of the opportunity in which experts in their areas analyze strengths and weaknesses and needs for correction or change.