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Formulating a Growth Strategy for the Aging-In Population
- A Market Research Study Presented To CABA -- A Market Research Study Presented To CABA -
By Sandy Bates, Strategyn Inc.
November 19, 2010
Background: CABA and Strategyn Inc.
CABA works to strengthen the Connected Home sector through innovative technology-driven research projects. CABA is proposing a market research study “Formulating a Growth Strategy for the Aging-In Population ” research project.
Strategyn is a global leader in innovation management and a pioneer in “Outcome-Driven Innovation” in the healthcare sector. Strategyn will be contracted to do the research for this study, and the final deliverable will belong to the CABA Steering Committee.
2
The Situation
Baby Boomers are increasingly approaching retirement age. By 2030, 71 million Americans will be over age 65, according to the US Census.
Currently, 90% of elderly Americans prefer to age in their homes in a healthy environment.
Home health care, much of it for the elderly, is one of the fastest-growing segments in the country’s fastest-growing health care industry.
4
Following CABA’s May 2007 “Senior Living” research study, CABA have requested a holistic opportunity assessment of the senior living market with respect to the connected home and the “Aging-In” population. Such a program would enable CABA members to understand where value creation is most desired among this aging population, creating insight for areas of innovative product and service development.
What is the Goal?The identification of a new market space of innovations that help seniors remain longer in their home as long as possible.
To meet this goal, we will identify what aspects of the aging seniors’ home environment needs improvement for them to be feel comfortable and safe.
Areas to explore include Navigating through the home Interfacing with the home Safety within the home Informing others (caregivers) of health/
well-being issues; get assistance when needed
Understand how the decision to stay living at home independently is made, how adult children influence that decision, and how the home environment influences whether the senior can continue living at home.
5
The Center for Social Innovation
The Center for Social Innovation brings together a proven methodology and a platform for collaboration to understand and develop solutions to the world’s most pressing social and economic challenges.
© Tandem Strategies, Inc. 2009
6
Approach Validated in Academia …
7
… And Business
Health Care
Kimberly Clark
Johnson & Johnson
Guidant
Medtronic
Harvard Kennedy School of Government Healthcare Study
California Health Care Foundation
Coloplast
Becton Dickenson
B.Braun
AMO
Deltec
Dentsply
Hollister
Financial Services
Morgan Stanley
Met Life
State Farm
AIG Financial Services
AXA
Washington Mutual
H&R Block
Toronto Dominion Bank
Assurant
PershingTechnology
Microsoft RIM
Hewlett-Packard Nortel Networks
IBM Reynolds
Motorola Ceridian
Intuit Plantronics
Attenex
Vtech
Manufacturing
3M Rohm & Haas
Ecolab MeadWestvaco
John Deere Lexmark
Bosch
Ingersoll Rand
Neenah Paper
Line 6
Consumer Products
Colgate
Unilever
Chiquita
Hallmark
Hill’s Pet Nutrition
Cargill
Simplot
Mead Johnson Nutritionals
Government
CIA
NFPA
8
I Innovation is the process of devising a product or service concept that satisfies the
customer’s unmet needs.
Innovation Stalls for Several Reasons – 1. No Definition
9
There is no agreement on what a need is so…
Delighters
Specifications
WANTSrequirements
BENEFITS
Solutions
desired outcomes
Exciters
must havesWISHES
IDEASexpectations
latentneeds
2. Wrong Inputs
10
Generate ideas
Infer customer needs
Filter out bad ideas
Fine tune good ideas
Ideas-First80% - 90% Failure Rates
Generateideas
Obtain the customer’s voice
Uncover customer “needs”
Determine priorities
TraditionalNeeds-First
70% - 80% Failure Rates
3. Wrong Order
11
2y + yz3 x zy3 + yz3 x zy3 - x2y3z6 + 2x2 + 2y + yz3 x zy3 - x2y3z6 +
2X + Y = 3 and X - Y = 4
x2y3z6 + 2x2 + 2y + yz3 x zy3 - x2y3z6 + 2y = The Optimal Solution
1. Companies must first uncover ALL the customers’ needs - ALL
2. Next, they must determine which are unmet
3. Lastly, they must devise solutions that specifically address the unmet needs
Revolutionary Needs-First Approach
12
Open an artery
Diagnose a health
issue
Prepare / File taxes
Deliver drug therapy
“When customers find that they need to get a job done, they ‘hire’ products or
services to do the job.”
Clayton Christensen and colleagues
“From the customer’s perspective, it is the job that is
the stable, long-term focal point around which value creation
should be centered.”
Anthony W. Ulwick & Lance A. Bettencourt
Paradigm Shift: Make the Job the Unit of Analysis
13
Making The Job the Unit of Analysis
Jobs define the actions for which a solution may be hired ; goals to be achieved; problems to be resolved
Current products are merely point-in-time solutions that enable customers to get jobs done
Customers migrate to products that get the job done best – they are “loyal” to getting the job done
The goal of innovation therefore is NOT to build a better widget. It is to devise ways to help customers get a job or jobs done better.
Job: close a surgical wound
4000 BC+ 1000 BC+ 30 AD+ 1908+ 1980+
14
2y + yz3 x zy3 + yz3 x zy3 - x2y3z6 + 2x2 + 2y + yz3 x zy3 - x2y3z6 +
2X + Y = 3 and X - Y = 4
x2y3z6 + 2x2 + 2y + yz3 x zy3 - x2y3z6 + 2y = The Optimal Solution
Needs Are Constant, Solutions Are Variable
Desired Outcomes on Selling GoodsSatisfaction
Cash Credit PayPal
Minimize the time it takes the buyer to complete a payment transaction
4 6 6
Minimize the time it takes to receive payment 8 6 8
Increase the likelihood that the buyer has an available means of payment
4 6 8
Minimize the likelihood of losing money due to accepting a fraudulent payment
6 4 7
Cumulative Satisfaction 55% 55% 70%
15
And Its Related Job Map – 172 Desired Outcomes
The “Job” of Completing a Surgical Procedure
Outcomes
Minimize the frequency with which a verbal order must be repeated
Minimize the frequency with which blood in the wound obscures the surgical site
Minimize the risk of surgical site infection due to bacteria getting inside a wound
Minimize the risk of complications to a patient due to anesthesia
Minimize the likelihood that instrumentation cords contaminate the sterile field
Assess the patient
Prep the patient
Confirm OR prep
Perform the procedure
Monitor patient vitals
Resolve complications
Conclude the
procedure
16
The Job of Obtaining Health Care
Define Locate Prepare
Execute
MonitorConclude
Modify
17
The Opportunity AlgorithmS
atis
fact
ion
Importance
Opp >15Extreme
Opportunity
Opp >10Solid Opportunity
Opp >12High Opportunity
Under-ServedAppropriately Served
LimitedOpportunity
1
2
3
4
5
6
7
8
9
10
1 2 3 4 5 6 7 8 9 10
Table Stakes
Over-Served
Opportunity = Importance + max (Importance – Satisfaction, 0)
Ripe for Low-end
Disruption
Potential for Low-end
Disruption
See Turn Customer Input Into Innovation, HBR, January 2002
It is possible to discover hidden opportunity in an existing market, locate blue oceans and potential disruptions.
ValueCreation
Opportunities
Low-end Disruption
Opportunities
18
19
What process will we use?
Outcome-Driven Innovation® Process
Select a Market
1
ODI is a strategy and innovation process built around the theory that people buy products and services to get jobs done
ODI links value creation activities to customer-defined metrics; it guides the creation of winning strategies and breakthrough concepts
ODI’s metric-based inputs drive strategic fit and alignment across the organization
What Customer’s Want, McGraw Hill, 2005
2Understa
ndCustomer
Needs
Identify Areas of Opportuni
ty
3Formulat
e a Growth
Strategy
4 5
Enact the Growth
Strategy
Addressunmetneeds
Position current products
License needed IP
Acquire needed products
Create new concepts
Invent new technology
Address consumption jobs
Improve product portfolio
Optimize business model
Ensureprofit-ability
21
Define the Market of Focus
Identify Areas of
Opportunity
Select a Market
Formulate a Growth Strategy
1
Understand
Customer Needs
A market is a group of job executors and the
common job or jobs they are trying to get done.
Giving Customers a Fair Hearing, Sloan Management Review, Spring 2008
Define Markets & Objectives
Market Ecosystem
Select a Market
Evaluate Markets
• Revenue potential• Strategic alignment• Level of opportunity • Ability to create a
solution• Ability to sustain
position• Risk of market entry
20+ criteria• Current
• Adjacent• New
22
Building Contractors – new home and
retro fit
Market Ecosystem – Aging Adults
Government Agencies that support the
elderly
CaregiversFamily, paid caregivers,
friends, etc.
Job Executor Job(s)
Aging Adults General Health and WellnessFood (eating, cooking, etc.)Exercise & FitnessNavigating through the homeInterface with the homeMedical SupportCommunicationsEntertainment
Caregivers Ensure aging adult is maintaining their healthEnsure aging adult has assistance when needed Care for the aging adult
Building Contractors Determine the best design for aging adults
Government Agencies
Determine when an aging adult can no longer live on their own
23
Aging Adults
Understand Customer Needs
Identify Areas of
Opportunity
Select a Market
Formulate a Growth Strategy
2
Understand
Customer Needs
ConceptDefinition
ConsumptionChain Jobs
• Purchase• Receive• Install• Set-up• Learn to Use• Interface• Transport• Store• Maintain• Obtain support• Upgrade• Replace• Dispose
DesignDefinition
• Outcome 41
• Outcome 42
• Outcome 43
• Outcome 44
• Outcome 45
• Outcome 1
• Outcome 2
• Outcome 3
• Outcome 4
• Outcome 5
50 – 150 outcomes (needs) per job
Companies must know the jobs customers want to get done and the metrics they use to measure their successful execution.
The Customer-Centered Innovation Map, HBR, May 2008
Define Locate Prepare
Job Map
Core Functional Job
Confirm
Conclude Modify Monitor Execute
Related Jobs Emotional Jobs
24
Develop a plan to achieve the goal
Execute the plan for achieving the
goal
Overcome obstacles to
achieving the goal
Determine what actions to take to achieve the goal
Determine whether the plan is achieving the desired results
Conclude the plan
Determine the goal that is
desired
Determine the feasibility of the
desired goal
The Job of Achieving a Healthcare Goal (Patients)
Change the plan as needed
Overcome obstacles to achieving the health goal1. Minimize the likelihood of failing to execute the plan because of physical limitations, e.g., injury, sickness, etc.2. Minimize the likelihood of failing to execute the plan because of fatigue, e.g., skipping a workout, too tired to prepare proper food, etc.3. Minimize the likelihood of failing to execute the plan because of time pressure, e.g., job responsibilities, being busy with children, etc.4. Minimize the likelihood of failing to execute the plan because of travel, e.g., unavailability of healthy foods, exercise equipment, disruption of
routine, etc.5. Minimize the likelihood of being unaware of resources that can help attain the goal, e.g., sources of help or information, backups, etc.6. Minimize the likelihood of losing motivation to continue working toward attaining the goal7. Minimize likelihood of engaging in activities that are detrimental to attaining the goal, i.e., reverting to old behaviors
25
Identify Opportunities
Identify Areas of
Opportunity
Select a Market
Formulate a Growth Strategy
3
Understand
Customer Needs
An opportunity is an under-or over-served job
or outcome.
Companies are able to discover segments of
opportunity
Sat
isfa
ctio
n
1
2
3
4
5
6
7
8
9
10
1 2 3 4 5 6 7 8 9 10
Over-served
Under-served
Opportunity = Importance + max(Importance–Satisfaction, 0)
Importance
Appropriately served
Qualified job executors rate the importance and satisfaction of each job or outcome in a survey.
Opportunity-Based Segmentation
26
What is the Opportunity Algorithm?
OUTCOME IMP SAT OPP
Minimize the time it takes for the plant to come out of the ground
9.0 3.0 15.0
Increase the percent of plants that emerge at the same time
8.5 3.5 13.5
Increase the percent of needed nutrients that are absorbed by the plant
8.0 5.0 11.0
Minimize the time it takes the corn to turn green, e.g., produce chlorophyll
7.5 6.5 8.5
• If 90% of the respondents rate an outcome a 4 or 5 for importance, the Importance value entered into the algorithm is a 9.0
• If 30% of the respondents rate an item a 4 or a 5 for satisfaction, the Satisfaction value entered into the algorithm is a 3.0
Opportunity = Importance + max (Importance – Satisfaction, 0)
27
Opportunity Landscape for Patients - Jobs
ZOOM AREA
28
Zoom Area (10.0 or higher)
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 7.6 7.8 8.0Importance Score
Sati
sfa
cti
on
Score
Assess the potential for a health problem Prevent a health problemDetect a health problem Correct a physical conditionTreat an injury Treat an illnessTreat a life-threatening disease
Detect a life-threatening illness at the earliest possible stage
Treat an infectious disease
Determine if potentially harmful toxins are present in the body
Determine if a genetically transmitted condition has been passed down to you
Identify potential problem before it becomes serious
Recognize sypmptoms of illness
Determine potential for developing a disease
Remove potenitally dangerous growths
Obtain an assessment of the body's physical condition
Obtain assessment of mouth
Set a broken bone
Treat an injured joint
Treat pain
Correct eyesight
Reduce high blood pressure
Correct hearing problems
Stich a deep cut
Treat a viral infection
Detect the presenced of an STD
Maintain ideal level of energy
Ensure condition does not worsen
Detect infectious disease
Treat kidney disease
Diagnose the cause of an illness
Detect chronic disease
Determine if previous condition has reoccured
Prevent illness from causing more damage
Treat a bacterial infection
Prevent an avoidable disease
Treat dental problems
Treat liver disease
Treat heart disease
Treat cancer
Opportunity >= 10
29
Segment Descriptions – High Opportunity Segments
This segment has extreme opportunity scores driven by high importance. They find the issue of healthcare very important and not well satisfied across the board. They are concerned with accuracy of diagnosis, getting back to their life as quickly as possible, and making sure they are not being taken advantage of by the system.
Segment 3: Healthy Body
This segment has a higher propensity to use the healthcare system. They are concerned with the basic needs of treating pain and illness and are also concerned with prevention of illness and determining if the body is healthy (has nutrients needed, free from toxins, etc.). They are over-served on pregnancy and mental health jobs.
This segment has a higher degree of chronic conditions with an emphasis on depression. Most of its unique areas of opportunity are around emotional issues and addictive behavioral health issues. They are very concerned about affordability of the healthcare services they receive and that the treatment is effective.
Segment 2: Healthy Mind
Segment 4: Diagnosticians
12%
21%
10%
This segment is very much focused on healthy pregnancies and healthy relationships. The only demographic difference in this group is age with a higher representation of younger workers (18-24). They are concerned with getting the right treatment for their family, being able to afford necessary tests, and having sick children seen quickly.
Segment 6: Future Families
27%
30
Target Areas for Strategic Growth
Identify Areas of Opportunity
Select a Market
Formulate a Growth Strategy
4
UnderstandCustomer Needs
2
Related-marketGrowth
Add a set of features to the core platform to help customers get a related job or jobs done.
2
Markets evolve across six
growth paths. The
opportunities that exist
predict how growth will
occur.
During the final results
session, we will walk the
participants through this
model and how to apply the
data to their innovation
initiatives.
Current Job Executor New Job Executor
Co
re J
ob
(s)
+ R
elat
ed J
ob
s
Core Platform New Value Delivery Platform
A New Perspective on Strategy, Whitepaper, Strategyn, May 2009
31
What can YOU DO with the data?
Select a Market
1 2UnderstandCustomer
Needs
Identify Areas of
Opportunity
3 5
Enact the Growth Strategy
Formulate a Growth Strategy
4
Position current products
Create new concepts
Invent new technology
License needed IPAcquire needed products
Improve product portfolio
Address consumption jobsOptimize business model
Addressunmetneeds
Ensureprofit-ability
If current products address the jobs or outcomes,
then they should be repositioned and new
messaging should be developed
Projects in the development pipeline that address
the top opportunities should be prioritized high
Existing technologies, IP, and M&A opportunities
should be prioritized
New ideas should be developed for those
remaining opportunities
ShortTerm
LongTerm
32
Virtual Lab for Concept Testing, Evaluation, and Prioritization
33
Program Outline
Detailed Project Description
Objective The purpose of this study is to examine and determine potential
connected home product, service and business opportunities based on needs and expectations of the senior consumer market to support aging in place.
• Several core opportunity platforms to explore with consumers will be established based on the final set of sponsoring member companies and their collective interests such as:– Health and Wellness– Food (eating, cooking, etc.)– Exercise & Fitness– Universal Design– Medical Support– Communications– Entertainment
35
Formulating the Growth Strategy
To identify a potential new market space by helping seniors remain longer in their home, specific objectives under consideration include:
Objective 1 - Jobs within the home that affect the aging adult as they move about the home and take care of basic necessities including cooking, communications, medical conditions and hygiene (90% time allocation)
Objective 2 - Other jobs of interest including entertainment, wellness, exercise, etc. (10% time allocation)
Given objectives breadth - Innovation Strategy methodology used to assess multiple market opportunities; allowing for broad coverage, identifying opportunities with greatest potential for new market growth.
Objective 1 – a representative sample of respondents in targeted population, with varying degrees of current health
Objective 2 - extensions to interviews to obtain information for profiling questions.
To uncover jobs to accomplish – qualitative interviews with diverse set of respondents to identify how they engage in these activities and how they measure value in conducting these activities.
36
The Target Demographic
Aging adults ranging in age from 55 – 80+ Secondary audience is caregivers of this age group (both adult children and
paid caregivers). This audience will be appended to the study if we receive over 13 participating organizations.
Diversity among the population to include Geography – US & Canada, as well as a good distribution within these
countries Health – from very healthy to those with chronic health conditions to those in
poor health who need care today Activity levels – from very active seniors to more sedentary Family network – both size and involvement of the network in the senior’s life Attitudes toward, and use of, technology Type of home they are currently living in (will want those that own their
home) Ethnicity, gender and other basic demographics Others defined by the participating organizations
37
The Process
38
Business Objectives Strategyn Actions
Understand the following jobs: Interface with the home Transition within the home Take care of personal needs in the
home, e.g., showering, dressing, cooking, eating, etc.
Ensure safety in the home
Qualitative Research. Using on-site interviews, 1:1 interviews and focus groups, we will uncover jobs that specifically define what respondents are trying to accomplish. The interviews will focus on all areas of the home, different rooms, different types of homes, etc.
Understand how opportunity for value creation differs for different sub-groups (i.e., age, health status, marital status, number of people in the dwelling, type of dwelling, etc.). Uncover opportunity segments through job-based opportunity algorithm.
Quantitative Research: Obtain importance and satisfaction jobs identified by area
Large representative sample of the target population Detailed analysis of emotional needs of target group as they relate to functional jobs to be accomplished
Identify key targets of opportunity for CABA for short term innovation as well as long range strategic planning
Data from quantitative phase to provide exploration of opportunities to develop innovations across multi-dimensions
Short and long term innovations, that may include new technologies and platforms Opportunities for market disruption, etc.
Summary of Jobs to Study
39
Foundational Research
40
Audience 55-65 year olds 65+ Total
Standard sample 200 200 400
Homeowners with physical impairments
100 100 200
Total 300 300 600
Quantitative Sampling:
The quantitative survey instrument to a representative sample of homeowners. A tentative sample design follows (this is for illustration purposes and will be developed during the strategy and framing session):
Qualitative Sampling: Uncovering Customer Needs
Once the framing and strategy is finalized, the data collection process begins. Our objective is to understand in detail the fourjobs that are targeted. In order to best meet the objectives, we recommend conducting ethnographic interviews through 2 hourIn-home visits with at least 7 homeowners to uncover the jobs and outcomes pertaining to ‘interfacing with the home’ . DuringThese visits we will…
* Capture the outcomes on all four stated jobs defined in the scope* Understand the context in which the jobs become more difficult or more complicated
The primary objective of this phase of the project is to capture all of the outcome statements. We will not be attempting to gainan understanding of importance or satisfaction of the jobs and the outcomes during this phase. This will take place during thequantitative phase of the project.
What are the Benefits of the Study?
Identify new market opportunities and new platform creation
Provide inputs necessary for study participant ideation processes - ensuring execution against statistically identified customer needs
Provide quantifiable analysis of where market is under- and over-served, including segments within the population
Provide statistical validity to how study participants can/should connect with target audience on an emotional level - assisting with product design, messaging, marketing and sales
Participating companies will have input into the survey design, a strategy session with guidance on how to use the data, and first insights into this rich area of new market potential. They will also receive discounted options for strategic workshops using this data. 41
Proposed Study Work Plan: Deliverables and Schedule
42
Deliverables:
The jobs that homeowners want to get done as they attempt to live in their home throughout their later years A prioritized list of opportunities for value creation and new market expansion Identification of job-based segments within the homeowner population Targeted opportunities to become inputs into the ideation process
Schedule:
Timeline details will be finalized during the initial planning session. However, we anticipate that the Targeting session can be held within 2-2.5 months of the kickoff session. Therefore, if the project is accepted by the end of November, we can have the project completed by the January/February timeframe.
Project Activity Estimated Time
Kickoff and Project Development Late November/Early December with Steering Committee
Qualitative work including ethnography, phone interviews, netting of final results
4 weeks: November/December
Fielding of Quantitative study (includes programming of survey, fielding, data validation and processing)
2 weeks: December/January
Analysis and segmentation; development of results presentation 2 weeks: January
Strategic Opportunity Session End of January, first weeks of February
Questions and Answers
• NOTE: This CABA program will be executed with the partner organizations through Step 4. Each organization can select whether they would like to engage with Strategyn for any of the Step 5 workshops.
• Step 5 workshops will be available at a discounted price for CABA members including:– Ideation– Portfolio optimization– Messaging and Value Proposition development– Merger and Acquisition evaluation
43
CABA Aging-In Population Research Study: Contact Information
John HallCABA Research Director
[email protected]: 613.686.1814 x227
Ken GallingerCABA Marketing Director
[email protected]: 613.686.1814 x229
CABA1173 Cyrville Road, Suite 210
Ottawa, OntarioK1J 7S6
Phone: 613.686.1814Fax: 613.744.7833
George GrimesCABA Business Development Manager
[email protected]: 613.686.1814 x226