Editor | On 27, Oct 2008

Jack Hipple

I’d like to share with you a very simple, but powerful strategic analysis tool that I’ll just describe as the “tic-tac-toe” approach to strategic analysis. It comes from my experience with TRIZ, but it’s a much broader thinking tool and can greatly support your efforts to think strategically about innovation and where your organization is heading.

Put yourself, your product, or your business in the middle of the 9-Box diagram. Above you is the customer you supply. Underneath are your suppliers and the materials you buy. This box could easily be 12 or 15 boxes depending upon the depth of the supply chain and the steps involved in making your product or the needed raw materials needed for your product or service, but for simplicity we’ll just consider 9. To the left of your current box in the center is your past technology. To your right is the future. This same logic applies to the levels above and below you.

I propose that if you cannot complete in some detail all nine boxes, you do not know your business very well. Let’s look at a couple of simple illustrations. First the automobile. You are Ford, GM, or Toyota at the middle level. To your left is some aspect of previous car design, say windshield cleaning (note that we need to talk FUNCTION and not how it’s done). To the right might be the future of windshield cleaning and how it might be done (variable speed? responsive to auto speed? No wiper?). Above you is the integrated system, in the middle say, the car (of which the windshield is a part). Below you are the raw materials you buy to make a windshield wiper, say rubber strips. In the lower left is a description of a previous wiper raw material, say natural rubber (with little flexibility and a tendency to become brittle). To the right on the bottom are the materials envisioned for the next generation of wiper blades. In the upper left hand corner might be the car of the past with no wiper blades and to the right might be a windshield “cleaning system” (note I did not say wiper blades, I am describing the function needed and not how it’s done), possibly not requiring a wiper blade at all (think about how this might be done).

If you cannot complete all 9 boxes to some degree, you do not understand what is going on in your universe. The history of technology evolution clearly tells us that products and systems are integrated upward into their super-system. Said another way, your customer, despite what they might tell you, is trying to figure out how to get the function or value you provide without the use of your product or service.

If you are not thinking the same way, you are in for a rude awakening one of these days. Bank deposit systems that eliminate the need for deposit slips and envelopes are arriving. Want to be in the envelope business? Deposit slip printing business? Wouldn’t be a lot better to be in the optical scanning business rather than reducing the cost of envelopes? You’ve have heard the story of the buggy whip manufacturers who were making better buggy whips when the box above them moved to the right in one of these diagrams and better, cheaper buggy whips were irrelevant. The car provides a transportation service which is occasionally used to meet with other people. Maybe working on better Internet based communication systems is a smarter long term business, but that’s hard for GM and Ford to do, isn’t it?

To push a bit further, consider a cube and not a one dimensional diagram. Parallel ways of getting the same result. Cars are not the only way to get from here to there. Airplanes are another. If you make airfares low enough, who cares about the comfort factors of a car? Draw a simple tic-tac-toe diagram on a piece of paper and put your product or service in the middle box. To the left write in the past generation of this technology or service. To the right describe what you think future opportunities for improvement and development are. Now, one box below, write in a raw material or service you buy and use. While you are thinking about the path of evolution of this product or service, begin thinking about how your product or service could be performed without using it.

Now look at our customer above. What function does your product or service provide? Where is their product or service heading? How could they get the result they get with your product or service without you? What will their next generation need be? Do you have any idea how to provide?