US Department of Defense (DOD) Research and Development (R&D) organizations must continually examine their positioning and performance in the markets in which they operate and enhance their strategy to achieve their ultimate objectives. With a future operating environment likely characterized by increasing budget uncertainty, interest in multi-domain solutions, acute climate change dilemmas, and renewed competition between the great powers, it is incumbent upon DOD R&D organizations to increase innovation not only in their products but also in their business practices. These conditions expose both significant risks as well as great opportunity for US government defense R&D.
Leading organizations must have a strategy for all aspects of their business, from overall strategic positioning, to focused strategies in support of new or expanded market pursuits. The foundation of this strategy is built upon the disciplined capture, storage, curation, distribution and exploitation of internal and external data. R&D organizations contain vast amounts of data, which is only a fraction of what is available externally. Additionally, while typical internal data management, curation, and exploitation processes and systems often have room for improvement, they are generally more functional than those focused on external data exploitation. In response to this strategic challenge, Guidehouse developed an approach that accounts for data deficiencies, efficiently identifies potential growth areas, tailors strategies for growth, and improves enterprise-level business development pursuits.
The solution developed by Guidehouse is an iterative approach to opportunity identification. Using background knowledge gained through our 20-year history with federal government and private sector R&D organizations, Guidehouse designed a workflow to efficiently identify, quantify, vet, and pursue funding and positioning market opportunities.
While the workflow below is laid out in a linear fashion, in reality the approach moves repetitively through the first four steps as due diligence is conducted.
Step 1 – External Budget & Strategy Review: DoD and national security Research, Development, Test, and Evaluation budgets and published strategies are used to find aligned programs of interest within the organization’s “sweet spot” and where Guidehouse due diligence suggests both significant potential growth and untapped potential in terms of the organization’s current penetration. This due diligence serves to support growth platform identification and establish total market and target market sizing estimates.
Step 2 – Internal Data Review: Organization datasets are mined to develop an understanding of the current distribution of funding across the R&D investment portfolio. Guidehouse specifically looks for areas of the existing portfolio that demonstrate a reasonable foothold (i.e., where there is enough internal inertia with respect to competencies, history, relationships, etc.). This approach allows Guidehouse to design strategies and outreach approaches built upon an existing foundation of thought and research leadership, with the goal of increasing the probability of implementation success.
Step 3 – Trends Analysis: To ensure contextual reference, major trends are reviewed and factored into the Guidehouse market analysis. However, it should be noted that a review and analysis of national security trends are an ongoing element running throughout the approach. The trend review gives Guidehouse clues related to market durability as well as how current politics will impact outcomes—factors that also help to refine market sizing calculations.
Step 4 – Opportunity Synthesis: Opportunities for growth are identified in areas where the organization has unique strengths but may not be fully exploiting the opportunity space. Identified Opportunities are then placed on an implementation timeline with estimated funding size and alignment to internal organizational functions and/or divisions. Understanding the customer, exploiting available forecasting clues, and employing a disciplined opportunity pursuit approach are the hallmarks of successful R&D service organizations.
Step 5 – Internal Perspective: Discussions with organizational stakeholders are used to refine the focus for the tailored strategies and address unique business development/opportunity pursuit challenges identified through earlier steps. Often an organization’s resource constraints prevent pursuit of all available opportunities, especially at the enterprise level. Therefore, when a pursuit decision is made, the opportunity must be carefully vetted to include an awareness of cross-organization capabilities, an analysis of competing products and services, and an understanding of external market trends.
Step 6 – Strategy Development: Following collaborative discussions with organizational leadership, opportunities are prioritized for additional Guidehouse investigation. Guidehouse then develops opportunity pursuit strategies with suggestions for enhanced market penetration. Strategies incorporate market trends, specific opportunities, potential customers, points of contact, and synergistic competency combinations. Additionally, each strategy document outlines specific federal government budget items aligned to the organization’s competencies, as well as detailed pursuit strategies. Identified actions include suggestions for more effective communication of the organization’s differentiated value proposition, tailored approaches for external stakeholder engagement, and ways to shape the opportunity space to best fit the organization’s strengths.
The Guidehouse solution described here relies on extensive DOD R&D institutional knowledge, but also on specialized open-source search and technology scouting tools and competencies to accelerate due diligence. The proven Guidehouse capabilities, processes, and tools allow for a tailored approach that can adapt to unique organizational situations regardless of the level of data management and business process maturity.
In recent growth and innovation strategy work, Guidehouse authored four foundational growth strategies, for a DOD R&D center partner, to support the pursuit of new and expanded funding sources in the areas of resilient installations, wildfire support, arctic operations and installations support, and biotechnology. Guidehouse estimates that these four strategies represent approximately $253 million in potential federal funding, with additional funding, shaping, and partnering opportunities identified at the state, local, and international levels.
It is incumbent upon DOD labs to expand beyond discussions of assets and capabilities and ensure a robust view of the external market, emerging needs, problem statements of broad significance, and how people, facilities, and competencies can be marshaled to offer customers highly successful solutions. Insight trumps data, and true insight often sits at the intersection of multiple data sources, data types, and data elements. Such is nearly always the case with due diligence. No one data element tells the story—the analyst must uncover as many data points as he/she can, understand each for its relevance and importance, and then assemble all into a cohesive understanding. Ultimately, effective growth and innovation initiatives should drive an organization’s understanding of itself, its positioning within the broader market, and more coherent decision-making.