Ply Gem Industries, headquartered in Cary, North Carolina, is a national manufacturer of exterior building products It recently acquired a potential industry-changing technology and wanted to maximize its potential. This is the beginning story of its exploration into new territory, told here by Ply Gem innovation officer Lee Clark-Sellers.
Not wishing to treat this opportunity as a “business as usual” project, we established a core team of dedicated individuals along with a virtual support group drawn from our various business units and functions to develop the technology, marketing plan and overall business model.
We also planned to leverage this new project to vet our new innovation methodology, which is based on both industrial experience and academic methodologies. This provides us a great opportunity to evolve our methodology, which includes technology readiness evaluation, product and market evaluation, external and internal market force analysis, and financial determination of payback.
Ply Gem’s core competency is in lean manufacturing and employee safety. Our culture is also reflective of a manufacturing company in the drive to meet operational objectives and not take risk. Leveraging these new methodologies and new technologies is a leap of faith, but a leap we are willing to take.
An external technology scout brought this new technology to us. In my previous companies, we were often less receptive about ideas coming from the outside because we saw ourselves as the most knowledgeable. It was refreshing hearing an outsider talk about the potential of this new technology. He was not burdened by the organizational and market constraints within our business, and consequently could see potential that we did not have time to see for ourselves.
With a focus on meeting operational guidelines and today’s market share, it is sometimes difficult to take a break and see what else is going on. With the support and vision of our CEO and a good vetting of the technology, we decided to move forward.
To ensure we started on this new project with fresh eyes and not jump immediately into the operational aspects, we chose to use several new techniques. This required— and still requires—that learning be done with the team. As we learn these new methods, we apply them to this project and determine what works and what doesn’t. This will feed back into our innovation methodology.
Our first step was to look at all the potential products and markets associated with the technology. This is often referred to as the T-P-M model. Too often companies look at only one technology, one product, and one market and miss the potential of entering adjacent markets. By considering multiple products and markets, we are designing our R&D phase to have multiple parallel streams of activities. We can leverage each stream to accelerate the others, thereby shortening the overall time to market for several new products.
This is also a way to manage the risk of a new technology. If one product does not meet expectations, hopefully the other one or two will.
With a better understanding of the product and market targets, we then looked at our current business model. Using the IBM technique, Business Components Models (BCMs), it became apparent that if we tried to fit this new product family into today’s channels, customers, supply chain, etc., we would be limiting the potential for creating new customers, channels and suppliers. With this awareness, we then looked to the Business Model Generation canvas to create a new business plan (1).
We are now looking at the nine building blocks of the “canvas” to articulate a clear understanding of how our business model should be designed. The building blocks include such areas as customer segment, value proposition, channels, revenue streams, key resources, and key activities.
This activity will be completed with the core and virtual development team assigned to this project. This development team represents a cross-functional, cross-divisional group of individuals to ensure we capture multiple perspectives and gain buy-in from the groups early. It is always easier to change when people have a say about how the change should be done.
Our next steps include detailed SWOT analysis, supply chain analysis and Michael Porter’s five-force analysis combined with the Business Model Generation. Most of these are part of the CIMS TEC algorithm, which has been used successfully by other companies and government tech transfer programs (2).
We are at the early stages of this journey and not sure whether this program will be successful or not. Stay tuned for the next update when I’ll be able to share the outcome.
1. Alexander Osterwalder and Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, John Wiley & Sons, 2010.
2. Barr, S.H., Baker, T., Markham, S.K. and Kingon, A.I. “Bridging the Valley of Death: Lessons Learned From 14 Years of Commercialization of Technology Education.” Academy of Management Learning and Education, Vol.8, No. 3, 2009, pp. 370-388.
Innovation officer, Ply Gem Industries