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27th InternationalConferenceofthe
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August1618,2016Johannesburg,SouthAfrica

TOC for Innovation

Henning du Preez, TMARA Pty (Ltd), South Africa

17th 18th August, 2016

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Henning du Preez
Born in South Africa, I have followed a journey of game
changing in my life. Never satisfied with the status quo and
always trying to find the breakthrough, this journey has
brought the birth of potentially the single biggest disruption
in the innovation space. Standing on the shoulders of giants
like Dr Eli Goldratt (Theory of Constraints), Elon Musk
(Probable Entrepreneur of the century) and Everett Rogers
& Geoffrey Moore (Innovation Adoption Lifecycle), I
have recognized that the odds of success in the innovation
eco-space has never really improved, and have made it my
single biggest challenge to ultimately over-turn the odds. I
have discovered a way to leverage the first principles that
governs a disruptive innovation (a game-changer), by henning@tmara.biz
changing from pushing the innovation towards the market, henning@goldratt.co.za
to getting the market to pull the innovation.

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From Start Up to Lift Off

Enable the future

Enable your businesss future

Enable your customers future

TMARAaspireandhonorinnovatorsandinnovationsthatenabledourfuture

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INNOVATION
The Problem
The Solution
The Process

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PerceptionofValue
(Productmarketfit)

R20

High

High

Value?

Inventors
perception
ofvalue
Markets
perception
ofvalue
Low

Value

Low
Match

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IDEAS never fail only START Ups

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MarketAdoptionConstraint
High

High

Inventors
perception
ofvalue

Markets
perception
ofvalue
Low

Low

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Market Adoption Constraint

Natural process of matching

100

50

MarketAdoption%

75

25

0
Visionary

Early
Adopter

Early
Majority

Late
Majority

Laggards

TIME
InnovationMarketAdoptionLifecycle
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How can we assess and affect the

adoptability (level of match) of an
invention faster and early in the
game?

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INNOVATION
The Problem
The Solution
The Process

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First Principles

1. Innovation can bring benefits, if and only if, it

diminishes a limitation (Intrinsic Value)
2. Innovation is necessary but not sufficient, the
market must adopt new rules to realize the
full benefits (Realizable value)
3. Putting your money where your mouth is, is
convincing (Guaranteed Value)

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Removing Limitations = Intrinsic Value

What was impossible in the life of the market,
that is now possible with the new invention?

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Example
The water bucket (container)
innovation broke a major
limitation for the human. Before
the water bucket it was
impossible to live far from a
natural water source.

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Example
Before SodaStream people could
only satisfy their craving for sparkling
soda drinks by buying ready made
sodas!

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Example
Before Uber, people and taxis did not know about
one another in real time. You had to use other
ways to find one another.

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TOCPA

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First Principles
1. Innovation can bring benefits, if and only if, it
diminishes a limitation (Intrinsic Value)
2. Innovation is necessary but not sufficient, the
market must adopt new rules to realize the
full benefits (Realizable value)
3. Putting your money where your mouth is, is
convincing (Guaranteed value)

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People and markets adapt to their environments. If they

experience a limitation in their environment then they will
adopt specific traits or rules to exploit the maximum value
given the limitation.

Limitation with Rules

Limitation with no Rules

Human Nature

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As long as the old rules / traits that helped us to

accommodate for the limitation are obeyed the end result is
the same as if the limitation still exists. In other words, we
cannot expect to see any significant benefits.

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The OLD rules

We have a lifespan limitation of around
100 years. We have adopted rules to
optimize this time. What happens around
20 years, around 30 years, around 65 years,
around 80 years?

We have now found a new chemical that extends life by

another 100 years GREAT- but if we continue to follow the
old rules, what value will we get from the expansion?
What rules should we change?
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Example

Before UBER, what were the rules / traits to help

when the Taxi and the client did not know about
one another in real time.

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New Rules to
Realize New Value

Before MRP, people had to manually calculate the net

requirements for any manufacturing business. It took a lot of
people and a lot of time to get it done. As a result the old
rule was calculate it ones a month. MRP broke the
limitation and you could do it overnight.
If we implement MRP and keep the old rule what benefits will
we see?
What is the new rule that will unlock the new value?
What enabled the new Rule that unlocked the New Value?
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First Principles
1. Innovation can bring benefits, if and only if, it
diminishes a limitation (Intrinsic Value)
2. Innovation is necessary but not sufficient, the
market must adopt new rules to realize the
full benefits (Realizable value)
3. Putting your money where your mouth is, is
convincing (Guaranteed value)

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Product Guarantee to
Value Guarantee

MRP offer (Value Guaranteed):

If you are prepared to change your monthly net
calculations to weekly, then MRP will guarantee
(money back) a reduction in inventory, lead time
and improved customer service on the basis that
you install the MRP system to enable the new weekly
rule.
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CHANGER

A U
M L
E E

Estimates are that 9 out of 10 GAME CHANGING

Start Ups do not clearly consider the new rules
required by the market to extract the full value!

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INNOVATION
Limitation:
Market Adoption Constraint (Uncertainty)
Old Rule / Strategy:
Promote the benefits and features of the new
invention to induce market adoption.

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Pushing
your
innovation

STOP

Market
Adoption
Constraint

Pulling
your
innovation

START

Benefits

Intrinsic Value

Features

Realizable Value

Product
Guarantees

Guaranteed
Value
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INNOVATION
The Problem
The Solution
The Process

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Push System
TrialandError

Startup

Market
1st Attempt

Testingyour
offeringtoseeif
itwillhitthe
marketssweet
spotortipping
point

2nd Attempt

3rd Attempt
4th Attempt

Hope itisgoingto
workthistime

Elusive
Sweet
Spot

X
X

Youneeddetermination,becauseitisgoingtobeacaseofhitandmiss!You
willneedtofailfastandlearnfast!

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Value Matching Process

Value

Match

RiskMapping

Gate1
Risk of
mismatch

Risk of a
mismatch

Gate2

Gate3

Risk of
mismatch

Risk of

POV(i)>> POV(m)
Market
Adoption
Constraint

Possible
Match
(Intrinsic Value)
Principle:
Intrinsic Valueforthe
customer
(Removinga
significantlimitation)

Probable
Match
(Ease of
Realization)

Principles:
Easewithwhichthe
customercanrealize
thefullvalue(New
ValueRules)

Proven
Match
T

POV(i)<< POV

(Value
Guarantee)

Principles:
Puttingyourmoney
whereyourmouthis,
isconvincing

TMARAFoundingPrinciples
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(m)

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TMARA MAPPING
Target Market Adoption
Risk Assessment

TMARA StartUpPhase
Questionnaire

2.Howsensitiveareyourcustomerstoyourprice?

U
n
d
e
r
H
i
g
h

3.Howwelldopotentialcustomerscopewithout your
productorservice?

W
e
l
l

4.Areyouconsideredbythecustomersasastrong
competitorforthistypeofproduct/service?

S
t
r
o
n
gW
e
a
k

5.Howstrongiswordofmouthregardingyour
productorserviceinthemarket?
6.Arecustomersfindingadditionalwaystogeteven
morevalue fromyourproductorservice?
7.Arecustomersshowingaconsistentuseand/or
returningformore?

L
o
w

L
o
w

high
O
v
e
r
L
o
w

N
o
t
W
e
l
W
el
a
k
S
t
r
o
n
g
H
i
g
h
H
i
g
h

Level of potential value

1.Arecustomersingeneralunder orovervaluingyour
product/service?

A
v
e
r
a
g
e

35
High
Potential
Low
Realization
MediumRisk

+35
High
Potential
High
Realization
LowRisk

+35

A
Low
Potential
Low
Realization
HighRisk

Low
Potential
High
Realization
MediumRisk
35

low
low

Level of ease of
realization

27th InternationalConferenceoftheTOCPractitionersAlliance TOCPA

high

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MarketPullSystem
DefineandAlign
MarketSweetSpotCharacterization
1. Limitation
2. CopingRules
3. AssociatedPenalties

Startup
DeRisking

Alignyour
offeringwiththe
marketssweet
spotortipping
pointthrough
the3gates

Market

Elusive
SweetSpot

Gate1
Gate2

Intrinsic Realizable
Value
Value

Gate3

X XX

Guaranteed
Value

IdentificationofTargetMarkets
throughtheIntrinsicpowerofthenew
innovation

Copyright2016TMARA
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THE GOAL
High

High

Inventors
perception
ofvalue

Markets
perception
ofvalue
Low

Value

Low
Match

Copyright2016TMARA
27th InternationalConferenceoftheTOCPractitionersAlliance
TOCPA

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ThankYou

27th InternationalConferenceoftheTOCPractitionersAlliance TOCPA