“Finding your Company’s Inner Backhoe”
By Brian J. Majeska
My former business partner and great friend Buddy Clark has a colorful and economical use of the Queens language. He and several of the other partners at Majeska & Associates taught me a great deal, and I am grateful for the time we had together. Let me give you a bit of context on the key milestone at Majeska & Associates of the backhoe.
This blog will cover a few vital topics regarding Innovation from a team perspective. Specifically, we will cover the following:
- Understanding Customer need or hearing the Voice of the Customer (informally).
- Defining a Product (or your inner backhoe)
- Understanding the Phases of Innovation
- Determining Product Attributes.
To provide a bit of context, to the above items, a little background on the formation of Majeska & Associates may be of value to you. And, this will help with understanding the backhoe.
Our team at Majeska & Associates formed out of a choice that we believed we could do something better and different for the paving industry. We knew we could develop something profitable which would help out the agency customer while allowing for each link in the value chain to make a profit, and thereby, make the entire chain stronger. Pretty simple, so how do we decide to advance and create something? We had a number of constraints: we had limited funding, we needed to get started relatively quickly, and we wanted to leverage the capabilities that existed in road construction, and specifically the paving industry.
Understanding Customer Need
So, what product did we innovate with the constraints that we faced? Quite frankly,we were not sure where to begin, and we decided to visit a number of our former customers from the Koch Materials and SemMaterials days, and ask them one very simple question:
What were the things that we did not listen to you when we were a part of these bigger companies?
Probably the most humbling question and series of conversations that we have ever had with a multitude of people. We came away with a few key needs through this informal voice of the customer exercise, the three desires of the agency customer (and a great perspective also as a fourth item) were the following:
- We need a maintenance treatment that is inexpensive and we are willing to trade some service life for lower initial cost with consistency.
- We need help with the potholes.
- We need help with cracking filling. “Whoever develops a great quality crack filler will have invented a billion dollar product.”
And, here was the interesting perspective (the fourth item), the agency customers repeatedly told Buddy and me, not to be upset that we had not heard these requests over the years.
The agency customers had told all the material supplier what they needed, and the materials producers responded with polymer modified systems, and sophisticated emulsions systems, and bundled technologies. They appreciated the advancement and used these products, but they found it interesting that it took us not being part of a materials or asphalt liquid supplier to listen to their needs. They told us no one has ever listened to their needs – Wow, no one worked to understand the basic needs of the end user.
This is how the mastic pavement sealer technologies came about at Majeska & Associates. We began to develop a product with a good price point where we could make some money and help each link in the value chain all the way to the agency customer.
So now we have an idea for developing mastic sealers (mastics are particulate reenforced resins that offer a tough seal to the pavement – our product was based on a cationic asphalt emulsion using Ingevity emulsifiers). So, the mastics was that great million dollar idea – Such phrases as “We are all going to be rich,” could be heard occasionally from our conference room.
And then we needed to convert this idea into a viable technology. We also wanted to make the technology ours so that it would not become a commodity that ruined the margins for all of us. Converting an idea to a technology is the toughest part of the equation in the innovation game. Ideas are easy. Moving an idea to a viable technology is where hard work and determination is needed. Many companies don’t have the stomach for it, and rightfully so. It is a journey that a caretaker does not want to take. Ironically, if your company is not innovating it is making a choice on either managing industry structure or its slow demise.
Once you convert that idea into a worthy prototype or technology (the top of the triangle in the Commercialization Process – Diagram 1) the game is still ongoing. Will the technology work consistently? What about Temperature? Humidity? Application methods? etc.
This gets me back to the wisdom of Buddy Clark. We are about a year into the commercialization cycle (Diagram 1) for the mastic technology, and Buddy and I were going to grab lunch at Red Robbins on 71st Avenue in Broken Arrow. Buddy is a world class NASCAR driver in a pick-up truck, his father taught people how to drive trucks in the Korean War, Buddy will often mention this prior to taking a high speed pass by another vehicle as we are going West on Highway-169 in Oklahoma. For some reason Buddy often mumbles “Jackleg” under his breadth while making the pass. You get the picture, Buddy’s truck going seventy-eight miles per hour passing a vehicle. On this sunny day in Tulsa, we are roaring by a truck that is pulling a backhoe.
Buddy looks at me, and says “‘Bri’ you know what we need? We need a backhoe!” Well at this point we own skid steers, application equipment, trailers, a Cementech unit, and a sealer/emulsion plant… So, I am literally thinking we may need a backhoe.
Now, this is where all of my skills of communication and seeking to first understand before being understood come into to play for yours truly…. I say “Huh, why do we need one?” Is this another angle for feeding the Cementech in Inola? Buddy’s response was priceless, “No Bri, think about that guy pulling the backhoe behind his truck, everyday he gets up, and he knows what he is going to be doing. He could be digging a trench, or a foundation, or helping put in a sewer, but everyday he knows that he is going to be running that backhoe, and he knows how it works. He has confidence in the task at hand for his job.
Defining a Product
This is when we began to deeply learn the difference between our technology and a product. Our technology was too inconsistent. We did not have clarity on product attributes and performance. It was not a backhoe that customers could rely on and use. As Buddy put it, “We need a backhoe.”
The leap from technology to product is the money-making step of innovation. Once you have a concept in the Commercialization Process, you still have many more steps to go, such as:
- Attribute development
- Technology to product conversion
- Entrance into the test markets,
- New market expansion,
- Growth and expansion.
But, going from technology to product is usually where the innovators perish. There still is uncertainty. How does a firm convert this form of uncertainty into risk that can be managed and ultimately de-risked (Thanks to Joe Lorenc for the continued emphasis on de-risking the opportunities at Adventus).
Recall the commercialization diagram (Diagram 1). A technology or product must pass through a development phase, and understanding the process doesn’t change the amount of work, but it does reduce the surprises (code word for uncertainty). Successful product development is about limiting surprises.
Product development and much of business is the art of risk management. By defining risk and uncertainty we can begin to bring a better degree of predictability
Uncertainty: something that is doubtful or unknown (Merriam-Webster)
Risk: … The degree of probability [of loss] (Merriam-Webster)
Mitigating the failures of the innovation process in a manner that reduces uncertainty while bracketing risk is where business wealth is created in innovation.
So we are talking about commercialization, what does a backhoe and the definitions of uncertainty or risk have to do with getting a product successfully into a market?
Phases of Innovation
Please indulge me with one more diagram to answer the backhoe question.
A business does not own a backhoe until it has a reliable product. Everything else is a dream, or a hope, or something that is fascinating but does not merit commercial development. Where does a company go from uncertainty to risk?
In an effective commercialization process there are a few low cost steps to de-risking an opportunity.
Okay, here are the keys to de-risking in the innovation process:
- Development of a Point of View (POV). This is the development effort where a combination of research and thinking take place. For example, identifying the major trends and issues facing society or the industry, and then applying these insights to your business.
- External (Customer) Need. This can also be defined as Voice of the Customer (VOC), this is the step of identifying the key benefits that a customer needs along with understanding the cost-benefit of the prospective product.
- Idea to Technology. This is where a great deal of time and investment is undertaken by a company, and it is where companies often stop.
- Technology to Product. The area that is almost always overlooked. In road construction your specification is your product. Prior to an accepted specification, your product remains a technology.
In my opinion, there are two areas that offer the greatest degree of de-risking. The first is development of a Point of View. The POV allows a company to validate or invalidate an idea prior to investing time or resources. Then next key area is gaining insight on the anticipated product during the technology phase. This is where marketing needs to be working very closely with Technical — it is prior to a product being created, but the team is developing the needed attributes for the products success.
Determining Product Attributes
This brings us to the next key phase in alignment on the innovation process. This is the step of product attribute development. What is the jewel that your customer really desires pertaining to your product?
What is an attribute as defined by Merriam-Webster (By the way, if I go to a definition with Webster, it is because the word is massively simple and often misunderstood).
Attribute: Usually a good quality or feature that someone or something has: an inherent characteristic.
To review, the phases of innovation include, developing a POV, gaining insight on customer need, and developing a product. The magic of attributes, is to begin defining the most important needs that customer has regarding the product under development. And, we have two sets of attributes, which are described below:
Technical Attributes. These are product characteristics that could be evaluated in the laboratory and objectively measured. For example, instead of saying the speed of break needs to be fast, it must be quantified in a test such as a cohesiveness parameter that can be objectively tested and measured.
Performance Attributes. These are product characteristics that can be evaluated in the field with confidence and clarity. For example, speed to traffic release can be measured with a high degree of confidence if humidity, temperature, pavement temperature, and wind conditions are understood in terms of green strength development with an emulsion based mastic.
Attributes need to be forced ranked and there needs to be an aged upon cross functionally. Also, attributes are often a series of compromises. In water based emulsion systems, for example, storage stability and pump stability can often be a compromise with speed of break.
Product attributes are where customer need, profit, and scientific realities collide with speed to market. It is an area of productive organizational conflict, and is worthy of the journey and the discomfort. This realm of discomfort is where extraordinary companies engage in the internal conversations to avoid the commercial setbacks. Spend the time in this realm of productive discomfort.
Finding your inner backhoe is pretty simple but it takes a high degree of discipline that includes:
- Understand your customer need
- Define your product (backhoe)
- Have clarity in the phases of innovation and don’t get suckered into confusing a technology with a product.
- Clarity on attributes is powerful for wealth creation in innovation.
Dear Reader, I have have two favors:
- Feedback is a gift, please tell me one or two thoughts that would have made a product development better based on the insights from this blog.
- Forward this blog to someone and suggest that they ask to be included in the distribution.