Weitere ähnliche Inhalte Ähnlich wie Agile business development (20) Kürzlich hochgeladen (20) Agile business development1. Bringing Agility to Business Development
Somik Raha, Associate
SmartOrg, Inc
smartorg.com
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2. Legal Stuff
This deck is licensed under the Creative Commons – Attribution – No
Derivatives 3.0 License.
Please feel free to contact sraha@smartorg.com if you have any
questions.
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4. Definition of Business Development
Business Development is the turning of an idea into a
marketable business asset
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5. Agile Software Development greatly increases
quality and productivity
The Agile Manifesto
We value…
Collaborative development
Working software
Customer collaboration
Responding to change
OVER
Processes and tools
Comprehensive documentation
Contract negotiation
Following a plan
That is, while there is value in the items on
the right, we value the items on the left more.
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6. Current Business Development vs. Agile Business
Development
CURRENT BUSINESS DEVELOPMENT FOCUS
Processes and tools
Comprehensive paperwork
Contract negotiation
Following a plan
AGILE BUSINESS DEVELOPMENT FOCUS
Collaborative Development
Working business models
Customer collaboration
Responding to change
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NON-AGILE SOFTWARE DEVELOPMENT FOCUS
Processes and tools
Comprehensive documentation
Contract negotiation
Following a plan
AGILE SOFTWARE DEVELOPMENT FOCUS
Collaborative Development
Working software
Customer collaboration
Responding to change
7. Poll: What role do you play in your organization?
1.
2.
3.
4.
5.
6.
7
Business Development
Marketing/Sales
Product Management
Product Development
Project Management
Engineering
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8. Agile practices support the Agile manifesto
Collaborative Development
Working business models
Customer collaboration
Responding to change
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9. What practices get us to the goalpost?
Collaborative Development
Working business models
Customer collaboration
Responding to change
?
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10. Agenda
Business
Development:
Turning idea into
marketable
business asset
Introduction
Market
Performance:
Given business
development has
succeeded, how
will this product
fare in the
market?
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Evaluate
option
value
Combined Value:
What dollar
amount represents
our option value
of developing this
idea as a business
given where we
are right now?
14. We will communicate Agile Business
Development with a catalog of patterns
“Each pattern describes a problem which occurs over
and over again in our environment, and then describes
the core of the solution to that problem, in such a way
that you can use this solution a million times over, without
ever doing it the same way twice.”
“What is a design pattern?” from Design Patterns: Elements of Reusable ObjectOriented Software by Gamma et al., 1995
Elements of a pattern: pattern name, problem, solution, image* and
consequences
* optional
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16. Pattern: Evidential Work
When investing serious money behind an idea, it is easy to be
distracted away from the evidence needed to justify the investment
by the work that needs to be done.
Therefore, design work to deliver evidence as quickly as possible
Consequences
A clear idea of the proof needed to justify investment, the work
needed to deliver that proof, the cost and the schedule of that
work
Related Patterns: Communicate evidential work with “Learning
Plans”
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17. The Mortgage Question
What do you need to see before mortgaging
your house to fund this project?
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18. Simulation: βCorp
Makes statistical data
analysis products
What evidence do you need to see before mortgaging your house on this product?
New
Product
Allows analysis of the effectiveness of marketing campaigns
by examining social media chatter for emotional content
around the product.
This product will help βCorp enter the social media space.
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19. Simulation: Evidential Work
Phase 1: Develop
Value Proposition,
Get Approval
Phase 2: Prove Value
Proposition with
Customers
• Customer Enthusiasm
• βCorp Sponsorship
• Technical Performance
• Customer Commitment
•
•
•
•
• Conduct 2-4 customer pilots across
areas - map processes, demonstrate
value
• Fill gaps in platform and services
• Capture learning
• Build resources / PMO
• Plan G2M / business
• Extend / revise roadmap
• Advance needed technology
• Define full platform
Investment: $4M
20 FTE x 1 year x $150K = $3M
Expenses, capital = $1M
Solicit pilot customers
Business case analysis
Obtain right to pursue
Requirements / gap analysis =>
technical roadmap
• Preliminary offer
• Pre-sales, talk to customers
• Incubation structure defined
Investment: $0.5M
4 FTE x 6 month x $200K = $400K
Expenses = $100K
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Phase 3: Prepare to
Scale
• Robust Pipeline
• Scalable Business Case
•
•
•
•
•
•
•
•
Complete, harden platform
Establish channel / G2M
Sales / BD
Marketing / communication
Set up P&L / organization
Deliver operationally to first pilots
Conduct additional pilots of new kinds
Support structure
Investment: $6M
Team, Expenses as in Phase II = $4M
Sales, Business Development = $1M
Support, infrastructure = $1M
21. Pattern: Learning Plans
When communicating development plans, it is easy to lose sight of the
learning needed to justify further investment.
Therefore, depict key stages of evidence needed and the work
needed to deliver that evidence on a timescale
Consequences
A simple timeline that communicates key evidential stages, the work
involved (details and investment) and the sequence.
Related Patterns: Evidential Work and Evidence Assessment
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22. Simulation: βMark Learning Plan
Q1
Q2
Q3
Q4
Q5
βMark
•
•
•
•
Solicit pilot customers
Business case analysis
Obtain right to pursue
Requirements / gap
analysis => technical
roadmap
• Preliminary offer
• Pre-sales, talk to
customers
• Incubation structure
defined
Investment: $0.5M
4 FTE x 6 month x
$200K = $400K
Expenses = $100K
Q7
Q8
Technical performance,
Customer commitment
Customer
enthusiasm, βCorp
sponsorship
Phase I – Develop
Value Proposition,
Get Approval
Q6
Phase II – Prove Value Proposition with
Customers
• Conduct 2-4 customer pilots across areas - map
processes, demonstrate value
• Fill gaps in platform and services
• Capture learning
• Build resources / PMO
• Plan G2M / business
• Extend / revise roadmap
• Advance needed technology
• Define full platform
Investment: $4M
20 FTE x 1 year x $150K = $3M
Expenses, capital = $1M
Major Phase
• Work during phase
• Phase Investment
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• Proof points at milestone
Cumulative investment
through launch
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Q10
Robust pipeline,
Scalable business case
Phase III – Prepare to Scale
•
•
•
•
•
•
•
•
Complete, harden platform
P&L commit May 11
Establish channel / G2M
Sales / BD
Marketing / communication
Set up P&L / organization
Deliver operationally to first pilots
Conduct additional pilots of new kinds
Support structure
Investment: $6M
Team, Expenses as in Phase II = $4M
Sales, Business Development = $1M
Support, infrastructure = $1M
Total: $10.5M
Key:
Q9
24. Pattern: Evidence Assessment
Different people understand different things when talking about
uncertainty in a qualitative fashion, which makes communication
difficult.
Therefore, assess calibrated probabilities for each point of
evidence, multiplying to get overall probability of success
Consequences
A simple quantitative understanding of uncertainty that is
comparable across projects.
Related Patterns: Evidential Work and Evidence Assessment
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25. Simulation: Comparing projects by their phase
allows us to calibrate
Why does a Phase 1
project have such a high
probability?
Idea
Prove
Scale
After recalibrating
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Idea
Prove
Scale
26. Pattern: Reasons Behind Numbers
People can get into a mindless number game and lose sight of the
real purpose of uncertainty assessments – to discover learning
gaps.
Therefore, before accepting numbers, obtain reasons for them.
Consequences
The logic behind the numbers is made transparent, facilitating
team learning.
Related Patterns: Evidential Work and Evidence Assessment
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27. Pattern: Blind Polls
People can follow power and feel shy to share what they truly know.
Therefore, disallow calling out numbers in a group, forcing each
member to write down their number and then collect it when all are
done
Consequences
Differences in numbers become transparent and drive discussion in
learning gaps, leading to possible adjustment after the group has
new knowledge
Related Patterns: Evidential Work and Evidence Assessment
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28. Simulation: Evidence Assessment of Phase 2:
Prove Value Proposition with Customers
Phase 1: Develop
Value Proposition,
Get Approval
• Customer Enthusiasm
• βCorp Sponsorship
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Phase 2: Prove Value
Proposition with
Customers
• Technical Performance
• Customer Commitment
© 2000-2012 SmartOrg. | Confidential and Proprietary.
Phase 3: Prepare to
Scale
• Robust Pipeline
• Scalable Business Case
29. Simulation: Evidence Assessment of Phase 2:
Prove Value Proposition with Customers
Phase 1: Develop
Value Proposition, Get
Approval
Phase 2: Prove Value
Proposition with
Customers
• Customer Enthusiasm
• βCorp Sponsorship
• Technical Performance
• Customer Commitment
Phase 3: Prepare to
Scale
• Robust Pipeline
• Scalable Business Case
Technical Performance
Run Human Control Group,
• βMark picks 90% of all actual chatter
• βMark distinguishes correctly between +ve and –ve
feelings at least 90% of the time
Customer Commitment
•
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At least one customer signs up for company-wide
adoption
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30. Simulation: Evidence Assessment of Phase 2:
Prove Value Proposition with Customers
• Technical Performance
• Human Control Group confirms that βMark picks 90% of all
actual chatter
In your chat:
List reasons for success
List reasons for failure
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31. Simulation: Evidence Assessment Summary
Human Control Group confirms that βMark picks 90% of all
actual chatter
Reasons for Success
• Lab results promising
Success
Given these reasons for success
and failure, what is your probability
of success?
Failure
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Reasons for Failure:
• We’ve never done this
before
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32. Simulation: Probability of Success of Phase 2
βMark Evidence Assessment
Forward
chance of
success
Phase I: Develop Value Proposition, Get Approval
Customer Enthusiasm – 50%
βCorp Sponsorship – 75%
37.5% 3.88%
Phase II: Prove Value Proposition with Customers
Technical Performance
Coverage Accuracy – 90%
Emotional Accuracy – 80%
Customer Commitment – 60%
43.2% 10.4%
Phase III: Prepare to Scale
24%
Robust Pipeline – 60%
Scalable Business Case – 40%
Overall Probability
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3.88%
24%
33. Simulation: Probability of Success of Phase 2
βMark Evidence Assessment
Forward
chance of
success
Phase I: Develop Value Proposition, Get Approval
Customer Enthusiasm – 100%
βCorp Sponsorship – 100%
100% SUCCESS
Phase II: Prove Value Proposition with Customers
Technical Performance
Coverage Accuracy – 90%
Emotional Accuracy – 80%
Customer Commitment – 60%
43.2% 10.4%
Phase III: Prepare to Scale
24%
Robust Pipeline – 60%
Scalable Business Case – 40%
Overall Probability
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10.4%
24%
39. Pattern: “Evidentially Assessable Factors”
Economic factors that are hard to support with evidence can be
easily manipulated to distort our understanding about opportunity
size.
Therefore, decompose economic models such that factors that are
hard to support with evidence are derived from other factors that
are easy to assess on the basis of evidence.
Consequences
Assessment conversations remain rooted in real world knowledge
instead of devolving into the abstract. Numbers produced are of
much higher quality.
Related Patterns: “Extreme Credible Ranges” and “Most Leveraged
Uncertainties”
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40. Simulation: Decompose economics to identify
assessments and calculations
Total Addressable
Market
e.g. 10K units in
year of launch
Penetration
e.g. 20%
Market
Share
e.g. 25%
Unit Cost
e.g. $2K
Units Sold/yr
e.g. 500
Unit Price
e.g. $70K
Revenue
e.g. $35M
Annual Profit
e.g. 29M
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Variable Cost
e.g. $1M
Fixed Cost
e.g. $5M
41. Pattern: “Extreme Credible Ranges”
Groups have a tendency toward groupthink and compromise, which
prevents discovery of important information gaps on factors that drive
economics.
Therefore, get groups to dwell on the credibly extreme ends of each factor
and capture both ends of the assessment as a range, along with a realistic
assessment.
Consequences:
Those who have a difference of opinion are no longer ignored, but
factored into the decision-making process. We are no longer anchored to
the optimistic or pessimistic, but have both along with a realistic scenario.
Related Patterns: “Evidentially Assessable Factors” and “Most Leveraged
Uncertainties”
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42. Simulation:
Market Share for βMark
40%
High
40%
30%
20%
30%, 2
0%, 20
%
20%
10%
5%
Reasons for High
• Not much competition
yet
Base
25%
Low
Reasons for Low:
• A big competitor may
get in before us
5%
42
Total Addressable Market (TAM): 5-10-20
thousand units
Penetration of similar technology: 10%20%-30%
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44. Pattern: “Most Leveraged Uncertainties”
It is easy for us to fixate on uncertainty in economic factors that are
in front of us, or the factors with the highest leverage, as opposed to
looking at both and finding the ones that really matter.
Therefore, identify the most leveraged uncertainties
Consequences:
• Conversations can now focus on uncertainties that have the
most leverage, instead of just focusing on swing in uncertainty or
leverage by themselves.
• Discussion focused on obtaining upside and containing
downside
Related Patterns: “Extreme Credible Ranges” and “Evidentially
Assessable Factors”
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45. Simulation: The top bars in the Tornado identify
the uncertainties with the highest leverage
Top 4 factors
capture most
of the variance
in NPV
45
The 10-50-90 bar summarizes overall
uncertainty into a single range:
Low: -18M Base: 44M High: 197M
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48. Pattern: “Simple Options Valuation”
Placing dollar values on development opportunities is a task that
can be obfuscated by complex financial models, which shift the
focus away from collaborative learning discussions toward magic
numbers.
Therefore, use simple options valuation to make clear the logic
behind development opportunity valuation.
Consequences:
The equivalent dollar amount in a simple
valuation incorporates the uncertainty in the
opportunity and is directly traceable into its
constituent components.
Related Patterns: Uncertainty-Value
Screen, Productivity Ordering
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49. Simulation: Simple Option Valuation
Think of this as an
equivalent value
representing the
uncertainty in this
deal
The equivalent
value just went up
because of
development
success
These numbers come
from the 10-50-90 bar
$0.75M
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$82M
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50. Pattern: “10-50-90 Bars”
Focusing on single number valuations of projects hides the
underlying uncertainty in the upside and downside of that project.
Therefore, use 10-50-90 bars to characterize uncertainty in each
development project.
Consequences:
• Shows the biggest upsides and downsides
that need to be managed
Related Patterns: “Productivity Ordering”,
“Uncertainty-Value Screen”, “Most Leveraged
Uncertainties”
Value
50
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51. Simulation: Compare Uncertainty for βCorp
Zoom can lose
a lot of
money, but it
can also make
the most money
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52. Simulation: There is a big gap in market
understanding for Zoom
The top 4
uncertainties have to
do with market
understanding
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53. Pattern: “Uncertainty-Value Screen”
People can get emotionally attached to pet projects and lose sight
of the big picture.
Therefore, use uncertainty-value screens to understand where
development projects fall and how they need to be managed.
Consequences:
• Facilitates a rich conversation on how to
feasibly move projects to a better place
• Great projects can be picked over good
ones, with transparent logic as opposed to
political posturing, making hard decisions
more acceptable to people.
Related Patterns: “Productivity Ordering”,
“Learning Plans”, “Evidence-Driven Funding”
Also known as: Innovation Screen
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54. Probability of Development Success
Simulation: Uncertainty–Value Screen for βCorp
What can we do
to move these
projects out of
this quadrant?
Zoom seems fairly
speculative –
need to get some
market thinking
going on it
Value given development success
54
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55. Pattern: “Evidence-Driven Funding”
Investments in large opportunities with low chance of success are
necessary and yet, perilous.
Therefore, invest by evidence delivered in preceding phase.
Consequences:
• Investments are not arbitrary but thoughtful
• Investments are connected to delivery of evidence
• Projects not tied to P&L statements, which would kill innovation,
and instead managed through learning plan progress.
Related Patterns: “Learning Plans,” “Evidential Work” and
“Uncertainty-Value Screen”
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56. Pattern: “Productivity Ordering”
Organizations use budgets as a given constraint when making
funding decisions, without clearly communicating the value of
securing more resources to fund development.
Consequences:
• Provides feedback on the value-cut that
goes together with a cost-cut
• Emphasizes why the CFO was hired – to
obtain funding for important opportunities!
Related Patterns: “Uncertainty-Value Screen”
Also Known As: CFO Chart
Cumulative Value
Therefore, order development projects by their productivity on a
plot of cumulative value versus cumulative investment.
Extra Value
Extra Cost
Budget Line
Cumulative Cost
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57. Simulation: CFO Chart
Cumulative Value ($ millions)
Oyster
Pearl
Zoom got cut down to
size because of the
inherent uncertainty
Oyster
Cumulative Cost ($ millions)
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© 2000-2012 SmartOrg. | Confidential and Proprietary.
59. Analytic Practices of Agile Business
Development are the platform for collaboration
Proof
Points
Work to deliver
proof points
Learning
Plan
Development
Uncertainty
Assessable
Economic
Factors
Extreme
Credible
Ranges
Most
Leveraged
Uncertainties
10-50-90
Summary Bar
Watch
downside, swi
ng for upside
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© 2000-2012 SmartOrg. | Confidential and Proprietary.
Simple Option
Value, Value-Unc
Screen, CFO Chart
60. The analytic practices propel us toward the
goalpost
Collaborative Development
Working business models
Customer collaboration
Responding to change
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61. Continuing the Conversation
Learn More
• Include Business Design in Innovation
• Tornado Diagram: Resolving Conflict and Confusion with
Objectivity and Evidence
• Try SimpleTornado – open source
LinkedIn Group
• Invitations will be sent to attendees to join the “Agile Business
Development” group
Connect with me
• Please feel free to reach out at sraha@smartorg.com
61
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63. Pattern: “Purpose Values”
Dry intellectual logic does not motivate people to reach excellence.
Therefore, find the values that define the purpose of the
organization and align business opportunities and strategy to deliver
on these values.
Consequences:
People rally around the chosen opportunities and are excited to
make it happen
Read More: http://smartorg.com/2012/06/valuepoint6/
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64. Simulation: Show Purpose Values of βCorp
Answer “What transformation in the world do you want
to bring about through the work of this company?”
Keep asking “Why?” When you can’t answer anymore,
those are your purpose values.
How well does the opportunity under development
support the purpose values?
64
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Hinweis der Redaktion Instructions: Poll title “State of business development in your organization”We do not have a formal business development processThe term business development is often confused with salesWe have a formal process but are not agileWe have a formal process and are agile Instructions: Please prepare this poll as follows with the title “What role do you play in your organization?”: Business Development Marketing/Sales Product Management Product Development Project Management EngineeringThis should be multiple-choice – more than one can be picked. Instructions:Show chat window; title of chat window “What evidence do you need to see before mortgaging your house to fund BetaMark?”When we move to the next slide, the chat window should move on the side, visible only to speaker and moderators. Instructions:I will refer to the chat window to make points connecting with this slide. After this slide, this chat window is no longer needed. Nothing to be done here. I will just show this slide, and ask people for questions in Q&A Instructions:When animation goes to “List reasons for success,” Chat Window opens up with the title “List reasons for success”. When animation goes to “List reasons for failure”, new Chat Window opens up with the title “List reasons for failure”. The earlier chat window remains open, both are side-by-side, and editable.When we move to the next slide, these chat windows move to the side so only moderators and speaker can see them. Instructions:1. Somik will read out reasons for success that he likes and wants added underneath “Lab results promising”. The color should be green and font should be “Arial” and size 162. Somik will read out reasons for failure that he likes and wants added underneath “We’ve never done this before”. The color should be red and font should be “Arial” and size 163. When the animation moves to the green box “Given these reasons …,” Somik will cue and ask people to answer a poll. The following poll should open up:Poll:Given the reasons for success and failure, where does your probability of success fall?80-100%60-80%40-60%20-40%0-20%4. When Somik concludes the poll, two chat windows should open up, with the titles “80-100%” and “0-20%”. Somik will ask each camp to put their reasons in the respective windows and respond to each other’s points.5. Somik will make some final comments, “This is how we facilitate a discussion.” Chat windows will disappear after we move to the next slide. Nothing to be done here. Nothing to be done here. Instructions: Chat window opens up with the title “Please enter reasons for the market share percentage being high”. I will start with that prompt.Enter reasons that I identify below “not much competition yet.” The color should be green and font should be “Arial” and size 16.I will then ask “How high is high?” The previous chat window closes, and a new one opens with the title “How high is high?”I will then ask “Now let’s look at reasons for low”. A new chat window opens with the title “Please enter reasons for the market share percentage being low.” Enter reasons that I identify below “A big competitor may get in before us.” The color should be red and font should be “Arial” and size 16.I will then ask “How low is low?” The previous chat window closes, and a new one opens with the title “How low is low?”I will then ask “What is your over-under number?” The previous chat window closes and a new one opens with the title, “What is your base number?”When I move to the next slide, the chat window closes. Read More: http://smartorg.com/2011/10/tornado-diagram-resolving-conflict-and-confusion-with-objectivity-and-evidence/