Monday, June 22, 2009

Strategic planning: Three tips for 2009
Even in these tumultuous times, strategic planning doesn’t have to be an exercise in anxiety—or futility.
McKinsey APRIL 2009 • RenĂ©e Dye, Olivier Sibony, and S. Patrick Viguerie
Source: Strategy Practice

I hope I do not seem obsessed with the impact of today’s economic situation on how we plan for the future, but I believe it is critical. Positioning you company to get through these times as well setting the stage for substantial growth as the economy emerges is an essential job of leadership. I thought the following three tips on planning to be quite worthwhile:

"Be realistic about scenario planning
In a highly uncertain environment, the advantages of scenario planning are clear: since no one base case can be regarded as probable, it’s necessary to develop plans on the assumption that several different futures are possible and to focus
attention on the underlying drivers of uncertainty.

Intensify monitoring
The company’s strategy, in short, must account for many more contingencies than it has until recently. Since the effectiveness of such a strategy depends on an organization’s ability to adjust rapidly as the fog starts to lift, managers must identify and intensively monitor key indicators suggesting which scenario might unfold.

Look beyond the crisis
Given the vastness of the
economic change now under way, the temptation for many planners will be to gaze, mesmerized, at the unfolding crisis. That’s a mistake, for at least two reasons.

First, devastating as the current downturn may be, it cannot roll back
fundamental market trends—such as the aging of consumers in Europe and North
America or the continued economic development of Brazil, China, India, and
Russia—which will continue to create strategic opportunities and threats.
Managers must focus their eyes—and resources—on these trends no matter what

Second, planners who become fixated on current economic events run
the risk of overlooking a core responsibility: evaluating the effectiveness of
current strategies. Although the crisis may force companies to suspend or
redirect some of them, others will remain relevant even in the changed
environment. This year’s strategic-planning process is a time to encourage
managers to sort out which current strategies the crisis has helped, hurt, or
failed to affect and to ensure that a system and metrics are in place to track
their performance. While all this may sound like common sense, extreme
uncertainty makes it easy to overlook "

Friday, June 12, 2009

Utilizing consumer feedback for improvement and breakthrough innovation

We constantly preach on the importance of innovating across the full Business Design (as we define Business Design):

It all starts with gaining deep insights into the target customers by uncovering new needs to satisfy or creating new outcomes uniquely vs. competition. How do you get these insights? Do you ask the customer or do you study them? Ellen affords interesting insights that I wanted to share in this posting (consumers in this context are both business-to-consumers and business –to- business customers):

”The way consumer research is utilized in your innovation process should depend
on the degree to which you are improving an existing offering or trying to
develop a breakthrough……..
…….Consumers can be asked about what they like or
dislike about certain products, or why they use or don’t use them. This
information can be used as criteria to guide improvement programs……
…….On the other hand, utilizing consumer research to guide the development of a
breakthrough is not straightforward at all. Consumers can be asked about their
reasons for doing what they do, but they cannot be expected to tell you what to
do. The goal should be to discern their decision process, the motivations that
drive their decision processes, and the values through which all choices are
filtered. This information should then be translated into criteria by which
successful solutions can be chosen…..
…….When the goal is to develop a breakthrough, it is important to focus on what motivates a consumer to engage in
specific behaviors that help them to accomplish their goals. Knowing how
consumers decide what to do in different situations is the key to understanding
these motivations, and criteria for success will ensure that the consumer will
perceive your new offering as necessary to their success.”

Clearly, studying customers is critical for breakthrough-type projects regardless of the type of offering. Be cautious how you use the term “voice of the customer” because it can be deceiving. You must discern not only the type of improvement you hope to make and therefore the approach to gaining the insights but also you must understand who the critical decision makers are the customer.

Friday, June 05, 2009

7 Ways Innovation Can Recession-Proof Your Business
March 13, 2008 by Stephen Shapiro

The ultimate outcome of innovation is profitable growth by achieving competitive separation, i.e., the attributes of your offering must excel vs. competition in the eyes of your target customers. However, in times like these many companies are striving for survival or the very least improving their balance sheets. I thought this was an interesting summary of innovative approaches to enhance the quality of your businesses

1. "Use Open Innovation to Reduce R&D Costs
Sometimes it can be less expensive to have others do your innovating for you. Organizations like InnoCentive enable you to define the “value” of a new idea and then post your request to a large community of expert solvers
2. Process Innovation to Reduce Operating Costs
3. Use Innovation to Match Supply and Demand During
the 2001 dot-com bubble burst, they (Accenture) used a different approach.
Instead of handing out pink slips, they offered a leave of absence for a period
of time. The employee on sabbatical would get 20% of their salary (plus
benefits) and would be assured a job upon their return.
4. Solve Your Customers’ Pain
During a recession, your customers will probably reduce
spending, especially on discretionary items. But they may be willing to invest
in products or services that eliminate their pains
5. Fail Cheaply
6. Before You Can Multiply, You Must First Learn to Divide The idea is that if you want to grow your business, you must learn to partner with others - and give them a slice (and a vested interest in YOUR success). This means you take a smaller slice of a bigger pie. With the economic downturn, this philosophy is
even more appropriate.
7. Use Innovation to Improve Your Suppliers’ Business "

If any of you have experienced such innovation efforts at your companies, please share it with the group.