What would a business GPS be worth to you?
While there is no such thing as a business GPS, but the concept is intriguing. Think about it, a tool that assists leaders in driving the business toward a specific destination. It would be awesome, right? Well, there is something kind of like that available to business leaders but the difference is, the business leaders have to build it and its called an opportunity map.
An opportunity map is a business development tool to help businesses systematically plan for and target opportunities to grow the business in three areas. Business leaders use opportunity mapping to take a long term view of opportunities as well as the cost and risk associated with them. Typically, opportunities are viewed from present to time to three to five or more years. Where opportunity mapping is valuable is in the specificity by which opportunities are prioritized and targeted. An opportunity mapping model will view possibilities from the perspectives of in the business, on the business and out of the business. In the business refers to the opportunities that will enhance the internal operations and/or the infrastructure to better support the objective of meeting the needs of customers more efficiently and effectively. These tend to be in the incremental and continuous improvement area as well as sometimes the business model innovation types of opportunities. On the business opportunities are that grow the footprint of the business within the ecosystem. This could be mergers and acquisitions or new business units or value proposition that expand offerings of the firm. Out of the business opportunities are those that redefine the business.
Here’s an opportunity map template that could be used in the development of a growth or innovation strategy. As you can see, it’s a matrix style diagram with the category of opportunity representing the rows and the periods that the opportunity will impact reflected in the columns. While the categories for the types of opportunities will likely not change, the periods used can be weeks, months, quarters, or years depending on the purpose and perspective view of the overall strategy that it will be used to plan. For example, a client created an out-year growth strategy that was conducted at the beginning of 2019, and as initiatives were launched and costs were incurred the client developed a shorter-term map to ensure milestones were met and costs remained in budget as well as providing the leadership team with a real-time view of progress against the plan. Within each category of opportunity, an arrow symbolizes the opportunity and its duration for periods reflected on the map. Within each period, the expected revenue, profitability, and resources for the opportunity are reflected by a monetary range.
In addition, to this overview of the opportunities in, on, and outside of the business, another useful element of an opportunity map would be the risks associated with each. Again, these would be very broad risks that may or may not have a material impact but better documented than not. Risks whether material or immaterial should be brought to the relative awareness of readers of an opportunity map to be considered in the context of the execution of the opportunity.
Value of an Opportunity Map
The value of an opportunity map is fairly straight forward in that it helps business leaders think through future investments broadly but systematically. The exercise in it itself serves as an opportunity (no pun intended) for the leadership team to get focused on a single direction for in the business, on the business and out of the business. That’s not to say that only a single opportunity per category can be presented and evaluated using an opportunity map, but rather the value is in its versatility and its capacity to customized for the type and number of opportunities to be considered. For example, a corporate development team may want to just focus on opportunities “in” the business, while the operations team may take on the opportunities “on” the business and the business development team spearheads the task of identifying opportunities “out” of the business.
Conversely, in a firm that is much less compartmentalized like a small business, the founder may only have the capacity to focus on opportunities in and out of the business within a fiscal period. This leaves opportunities on the business to be neglected but with a document opportunity map of past plans, current opportunities can be plugged in and evaluated within the context of an opportunity portfolio. Besides its intrinsic value, an opportunity map has value in a growth or innovation strategy. In this instance, an opportunity map’s value is enhanced due to it being a component of the larger strategic toolkit. In the development of a growth strategy, the toolkit may include in addition to an opportunity map, a scenario plan, risk analysis matrix, Porter’s 5 Forces analysis, and a balanced scorecard. In developing an innovation strategy, in addition to an opportunity map and some of the same artifacts used in the growth strategy toolkit, a concept disruptiveness test, and analogy thinking are among some of the tools that would be used in driving innovativeness and included in an innovation strategy toolkit.
Developing an Opportunity Map
Preparing an opportunity map involves looking for opportunities through the lens of the leadership’s vision, core values, and the firm’s mission. Trying to find opportunities that contradict these pillars would be a preventable mistake. Ideally, starting the search for opportunities would begin with understanding where the organization is now compared to where the firm wants to go based on the pillars. As opportunities are identified, the prerequisite due diligence needs to occur. While every organization is different and has different circumstances, the bottom line is that evaluating an opportunity should be consist of the potential revenue, profitability, and resources required. Obviously, some assumptions need to be made to get to realistic values for these variables, but the goal needs to really be to get estimates as close to real as possible. Comparing similar projects and other research should net relatively accurate estimates for an opportunity map. In addition, any values on the opportunity map should be properly vetted to ensure that they aren’t just someone’s guess. Lastly, an opportunity map wouldn’t be complete without presenting potential risks in, on, and out of the business. As with all the estimates presented on the opportunity map, the risks should be presented in a way that allows for more in-depth evaluation as selected opportunities are implemented.