Snow Melts From the Edges
RGM Newsletter

https://mail.google.com/mail/u/0/?shva=1#label/BLOG/FMfcgxvzKQhBBqCRGJlgfSmBvlLQqMJF



This is an incredibly powerful metaphor: your markets/business can erode at the edges. Do you have the systems in place to detect and deal with it.Go to the article to see Rita McGrath's comments

Andy Grove, Intel’s fabled former CEO and author of Only the Paranoid Survive observed that “When spring comes, snow melts first at the periphery, because that is where it is most exposed”. For people running organizations, this has important ramifications – if snow melts from the edges, how do we make sure we see when this is happening? Below are some questions to ponder upon.

Do I have mechanisms to come in direct contact with the ‘edges’? 
Am I regularly gaining exposure to diverse perspectives?
 
Am I trusting and empowering small, agile teams?
 

Do I have mechanisms for fostering ‘little bets’?
  
Do I regularly get out of the building to see what’s going on?
  
Are incentives aligned with gaining uncomfortable news?

 
Am I making sure I’m not in denial?

 

 

Strategy for Start-ups
Joshua GansErin L. ScottScott Stern
HBR, May-June, 2018
https://hbr.org/2018/05/do-entrepreneurs-need-a-strategy#strategy-for-start-ups

This is a super article that I recommend you read in its entirety (HBR reprint R1803B)

The Entrepreneurial Strategy CompassStrategic opportunities for new ventures can be categorized along two dimensions: attitude toward incumbents (collaborate or compete?) and attitude toward the innovation (build a moat or storm a hill?). This produces four distinct strategies that will guide a venture’s decisions regarding customers, technologies, identity, and competitive space

A Short Guide to Strategy for Entrepreneurs
Kevin J. Boudreau
OCTOBER 17, 2017

https://hbr.org/2017/10/a-short-guide-to-strategy-for-entrepreneurs

Very similar to our model

Strategy is hard work, and there are no magic shortcuts. What is offered here is a starting point: the most basic questions that every successful business must answer. Entrepreneurs who design their business around these questions will have a leg up when it comes to crafting strategy:

What Value Are You Intending to Create, and for Whom?Customers buy products and services because they perceive value in them. The first step toward a successful strategy is to clarify how you plan to create value, and for whom. That means defining who your customers are
How Do You Plan to Deliver That Value?In plotting your position in the market, defining how you’ll create value and for whom, you also need to define your operating model. The operating model is the set of choices and practices defining how to carry out the business. This will typically imply a set of trade-offs in trying to find a combination of activities that allows you to stake out your position — delivering certain dimensions of your solution better than the competition.
What Is Your Competitive Advantage — Your Sources of Uniqueness?The last question on the index card is perhaps the central question of strategy: Why won’t you be copied? Even if you’re delivering a great product that customers love and making money doing it, if competitors can easily enter the market and copy you, economic theory suggests they’ll drive your profits down to zero

Why the Lean Start-Up Changes Everything
Steve Blank

https://hbr.org/2013/05/why-the-lean-start-up-changes-everything

Incredible article. Two  concepts have been the literature for a while—Lean Startups and Design Thinking. They are fundamentally based on creating, rapidly testing and validating concepts. If we look at the Market Driven Growth model (MDG), we basically show how to do this from concept creation, concept validation, resourcing (often ignored in other discussions), and then execution. Leadership Framing, critical in MDG is again often ignored in discussions of these processes. .

Going forward, I will be sharing some tools that have not been incorporated into our Kellogg class but I think our valuable

Launching a new enterprise—whether it’s a tech start-up, a small business, or an initiative within a large corporation—has always been a hit-or-miss proposition. According to the decades-old formula, you write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as you can. And somewhere in this sequence of events, you’ll probably suffer a fatal setback. The odds are not with you: As new research by Harvard Business School’s Shikhar Ghosh shows, 75% of all start-ups fail. 

But recently an important countervailing force has emerged, one that can make the process of starting a company less risky. It’s a methodology called the “lean start-up,” and it favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Although the methodology is just a few years old, its concepts—such as “minimum viable product” and “pivoting”—have quickly taken root in the start-up world, and business schools have already begun adapting their curricula to teach them continually learn from customers. 

One of the critical differences is that while existing companies execute a business model, start-ups look for one. This distinction is at the heart of the lean start-up approach. It shapes the lean definition of a start-up: a temporary organization designed to search for a repeatable and scalable business mode. 

After decades of watching thousands of start-ups follow this standard regimen, we’ve now learned at least three things:1. Business plans rarely survive first contact with customers. As the boxer Mike Tyson once said about his opponents’ prefight strategies: “Everybody has a plan until they get punched in the mouth.”2. No one besides venture capitalists and the late Soviet Union requires five-year plans to forecast complete unknowns. These plans are generally fiction, and dreaming them up is almost always a waste of time.3. Start-ups are not smaller versions of large companies. They do not unfold in accordance with master plans. The ones that ultimately succeed go quickly from failure to failure, all the while adapting, iterating on, and improving their initial ideas as they continually learn from customers.

The lean method has three key principles:

First, rather than engaging in months of planning and research, entrepreneurs accept that all they have on day one is a series of untested hypotheses—basically, good guesses. So instead of writing an intricate business plan, founders summarize their hypotheses in a framework called a business model canvas 

Second, lean start-ups use a “get out of the building” approach called customer development to test their hypotheses. They go out and ask potential users, purchasers, and partners for feedback on all elements of the business model, including product features, pricing, distribution channels, and affordable customer acquisition strategies. The emphasis is on nimbleness and speed: New ventures rapidly assemble minimum viable products and immediately elicit customer feedback. 

Third, lean start-ups practice something called agile development, which originated in the software industry. Agile development works hand-in-hand with customer development. Unlike typical yearlong product development cycles that presuppose knowledge of customers’ problems and product needs, agile development eliminates wasted time and resources by developing the product iteratively and incrementally. It’s the process by which start-ups create the minimum viable products they test.

The founders of lean start-ups don’t begin with a business plan; they begin with the search for a business model. Only after quick rounds of experimentation and feedback reveal a model that works do lean founders focus on execution

The 10 Principles of Organizational DNA

https://www.strategy-business.com/blog/The-10-Principles-of-Organizational-DNA?gko=c5b42&utm_source=itw&utm_medium=20180531&utm_campaign=resp

Very interesting article

Amid the turbulence of changing business environments and personnel, 10 precepts have remained useful, for empowering people and unlocking any organization’s potential. 

1. There are only a few organizational personality types. Every company may seem unique, but in their enterprise-wide behavior, they fall into just seven behavioral patterns (in order from the least to most effective at execution): passive-aggressive, over managed, outgrown, fits-and-starts, just-in-time, military-precision, and resilient. People who take our online survey (the Org DNA Profiler®) continue to identify their company as one of these archetypes, regardless of industry and geography. That means that, no matter how pernicious a performance problem may seem, other companies have undoubtedly faced it before —and some have prevailed, often by changing their organizational personality. 

2. Companies are mosaics of personalities. Most companies contain a mix of personalities—having two or three, or more business units that fall under different archetypes. This is especially true of companies that have made major acquisitions. For example, a 20-year-old technology powerhouse might be a resilient organization. But its newly acquired health-tech division matches the fits-and-starts profile, characterized by smart entrepreneurial talent but a lack of collective discipline. 

3. Weak execution is prevalent. The connection between the organization’s personality type and how well the organization executes on strategy is always strong. When we analyzed our most recent data set (more than 20,000 respondents), we discovered that a whopping 48 percent fit a profile distinguished by weak execution. And 11 percent fit into the most vexing of those profiles: the passive-aggressive organization, in which people pay lip service to results but consistently undermine the necessary efforts. 

4. Strong execution is not self-sustaining. The 52 percent of respondents with a strong-execution archetype can’t afford to be complacent. In our experience, even a company with the most desirable profile, the resilient organization, must continually work to stay at the top of its game. For example, its leaders should relentlessly seek feedback from those closest to the market, encouraging and acting on criticism from customers and front-line employees, and taking action to address minor issues before they become bigger problems. 

5. Performance is based on interdependent factors. Your organization’s DNA is made up of four pairs of building blocks: decision rights and norms, motivators and commitments, information and mind-sets, and structure and networks. The way that the building blocks combine determines your company’s aptitude for execution. It is crucial, then, for companies that want to improve their execution to consider the building blocks as a whole and not individually. 

6. The org chart isn’t the solution. Many company leaders fall into a common trap: They think that changing their organization’s structure will solve their problems. They may remove significant management layers and temporarily reduce costs that way—but all too soon, the layers creep back in and the short-term efficiencies disappear. We see structure as the capstone, not the cornerstone. It’s better to change other formal elements first, like decision rights, motivators, and information flows, and then figure out the structural changes needed to support the revitalized company. 

7. Intangibles matter. Those formal organizational DNA elements are attractive to companies because they’re tangible. They can be easily defined and measured. But they’re only half the story. Companies often realize this after they’ve made significant changes—reassigned decision rights, reworked the org chart, established new incentives, or set up knowledge-sharing systems—yet don’t see the results they expect. That’s because they ignored the informal, intangible elements. These include norms (what people think is the right way to behave), commitments (the promises people feel motivated to keep) mind-sets (deeply held attitudes and beliefs), and networks (connections among employees outside the formal structure). They add up to influence the ways people think, feel, communicate, and behave. Until you learn to influence these factors, your efforts to build performance will be unbalanced. 

8. Decision rights and information flows deliver. Decision rights and information traits are twice as powerful as structure and motivators in driving organizational effectiveness. We analyzed dozens of strong-execution companies and discovered that information had the strongest correlation to execution, at 54 percent, and decision rights correlated at 50 percent. Structure came in at 25 percent. That may be why we see more and more companies making smart use of digital information technology to differentiate themselves. But these changes can also be low-tech. One company boosted its performance by setting up regular meetings to ensure that people at the top and the bottom of the hierarchy were regularly talking together, and information flowed more effectively among them. 

9. Informal factors change when you focus on what works. The best approach for improving intangibles like norms and commitments is to use them as a force for transformation. So, instead of trying to change the culture of your company, use your intangible strengths to help improve it. Suppose your company is losing customers despite having a deep commitment to customer service. By focusing attention on a few powerful and positive behaviors, you can draw out that commitment and boost customer retention rates. 

10. High performance can’t be isolated. Rarely do departments or business units work in isolation. Changes are more likely to last when they’re made holistically, across a company or division. Manufacturing needs to know what sales intends to sell, and sales, in turn, needs to know what marketing will promote. The more connectivity among different groups or functions, the more effective they can become.

WHY MARKETING ANALYTICS HASN’T LIVED UP TO ITS PROMISE


Carl F. Mela
Christine Moorman

https://hbr.org/2018/05/why-marketing-analytics-hasnt-lived-up-to-its-promise


A very important topic and really worth going to the article for greater insight

We see a paradox in two important analytics trends. The most recent results from The CMO Survey conducted by Duke University’s Fuqua School of Business and sponsored by Deloitte LLP and the American Marketing Association reports that the percentage of marketing budgets companies plan to allocate to analytics over the next three years will increase from 5.8% to 17.3%—a whopping 198% increase. These increases are expected despite the fact that top marketers report that the effect of analytics on company-wide performance remains modest, with an average performance score of 4.1 on a seven-point scale, where 1=not at all effective and 7=highly effective. More importantly, this performance impact has shown little increase over the last five years, when it was rated 3.8 on the same scale. 

How can it be that firms have not seen any increase in how analytics contribute to company performance, but are nonetheless planning to increase spending so dramatically? Based on our work with member companies at the Marketing Science Institute, two competing forces explain this discrepancy—the data used in analytics and the analyst talent producing it. We discuss how each force has inhibited organizations from realizing the full potential of marketing analytics and offer specific prescriptions to better align analytics outcomes with increased spending.

The Data ChallengeData are becoming ubiquitous, so at first blush it would appear that analytics should be able to deliver on its promise of value creation. However, data grows on its own terms, and this growth is often driven by IT investments, rather than by coherent marketing goals. As a result, data libraries often look like the proverbial cluttered closet, where it is hard to separate the insights from the junk. 

In most companies, data is not integrated. Data collected by different systems is disjointed, lacking variables to match the data, and using different coding schemes……..What’s more, most companies have huge amounts of data, making it hard to process in a timely manner. Merging data across a vast number of customers and interactions involves “translating” code, systems, and dictionaries. Once cohered, vast amounts of information can overwhelm processing power and algorithms. Many approaches exist to scale analytics, but collecting data that cannot be analyzed is inefficient.An irony of having too much data is that you often have too little information 

The Data Analyst ChallengeThe CMO Survey also found that only 1.9% of marketing leaders reported that their companies have the right talent to leverage marketing analytics. Good data analysts, like good data, are hard to find. Sadly, the overall rating on a seven-point scale, where 1 is “does not have the right talent” and 7 is “has the right talent,” has not changed between the first time the question was asked in 2013 (Mean 3.4, SD =1.7) and 2017 (Mean 3.7, SD =1.7)… 

……In light of the exponential growth in customer, competitor, and marketplace information, companies face an unprecedented opportunity to delight their customers by delivering the right products and services to the right people at the right time and the right format, location, devices, and channels. Realizing that potential, however, requires a proactive and strategic approach to marketing analytics. Companies need to invest in the right mix of data, systems, and people to realize these gains

Liberate Your Team with Clearer Processes
Elizabeth Doty

https://www.strategy-business.com/blog/Liberate-Your-Team-with-Clearer-Processes?gko=b4eb7&utm_source=itw&utm_medium=20180522&utm_campaign=resp

The age old debate/feeling about process---could not have explained it any better:

Effective processes are not about adding red tape — they are about enabling “flow.”

Ask the members of any team if they want to institute better processes, and be prepared for them to roll their eyes. “‘Better processes’ means ‘more bureaucracy,’” someone will mutter. But ask that same team how much they enjoy doing projects the hard way — duplicating efforts, scrambling to meet deadlines when someone drops the ball, or bearing the brunt of customer fury — and you can expect the floodgates to open.Why do people love to hate “process” but rail against disorganization? It is because most people associate processes with checklists, forms, and rules — the overseer breathing down their necks. Not surprisingly, leaders wanting to foster innovation and creativity are reluctant to institute such rigid controls and procedures. 

In one sense, this aversion to processes is justified. Historically, formal procedures have been used to maintain control, not to simplify work. Process engineers can get carried away with forms and spreadsheets. However, a culture of “winging it” can be just as frustrating. In their 2011 book, The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, Harvard professor Teresa Amabile and developmental psychologist Steven Kramer show that employees are least motivated on days when they face setbacks that inhibit their work. And sociologist Randy Hodson has found that coherent production processes are a key driver of trust in management. Hassles, exceptions, and “gotchas” increase stress, sap the feeling of progress, and force your team to fight the same fires over and over. Even worse, winging it tends to erode safety and quality, and increase the risk of ethical drift. 

At their heart, effective processes are not about adding red tape — they are about enabling “flow.” According to management thinker Eli M. Goldratt, the real innovation behind Ford’s production lines, the Toyota Production System, and “lean” production is the shift from managing resource efficiencies in isolation to managing the flow of value generated by a system. Wherever there is an activity that happens repeatedly in your business, there is a potential flow. As a leader, you have the choice to leave this flow to chance, to control it, or to channel it. 

At their heart, effective processes are not about adding red tape — they are about enabling “flow.” 

Think of a river. If the banks are not strong and defined, the river dissipates across the countryside and has little force. This is like the operation in which employees are given little guidance, and whose efforts meander or collide. Another river may have locks that strictly regulate how much water can flow when and where. This is a company that tries to control every step every employee takes every day. The entire system is rigid and slow, because management can never keep up with the exceptions and re-prioritizations, and employees’ time is consumed by filling out forms and following procedures.

By contrast, a company with effective processes is like a river with strong banks. People’s attention and energy are channeled where they will have the most impact. The work environment, habits, tools, and methods guide people into doing things right the first time, based on a continually evolving set of shared best practices. No locks are required: Instead, employees are liberated to focus their creativity on developing new best practices, delighting customers, noticing changes in the competitive landscape, or tackling their company’s next moon shot. 

Designing processes this way involves looking at how work naturally gets done and where simple structures can increase the throughput of value — much the way Japanese gardeners will design the paths in a garden after seeing where people walk. There are several approaches that incorporate this idea of flow, including Goldratt’s “theory of constraints” (and its project-based counterpart, “critical chain”), agile project management, and lean production’s “pull-based” scheduling. Whatever method you choose, here are three core ideas that I’ve found lead to the biggest breakthroughs:• Make sure everyone sees the big picture. When people focus on efficiency in one part of a process, they suboptimize the system as whole — because they don’t weigh the impact of their actions on downstream groups or on the customer. To improve the flow, ensure everyone understands how their work fits together and how to prevent downstream defects through clearer handoffs, giving other departments sufficient lead time, and prioritizing based on overall goals. 

• Love your bottlenecks. As Goldratt has shown, every flow has a capacity constraint — a “Herbie.” Instead of blaming your bottleneck, treat it as scarce resource whose capacity should never ever be wasted. Does it receive top-quality inputs from other groups? Is it ever left idle? Do you squander capacity by constantly switching priorities? A meta-analysis of Goldratt’s methods found companies reduced lead times by 75 percent and improved on-time performance by 50 percent. 

• Do the right things more reliably. As management theorists W. Edwards Deming and Joseph Juran have shown, variability kills quality. Your team may produce excellent work most of the time, but if it is inconsistent, people will be forced to waste time checking to ensure no one drops the ball. Did you call the client with the update? Should I? You can reduce workload and increase the psychological experience of flow by identifying a few best practices and making them into solid habits. 

What flows do you need to master in your business? Launching apps? Integrating mergers? Hiring and retaining employees? Select one that will increase your firm’s competitive advantage, set a goal, and then support your team in using one of the methods above. Don’t wait until the fires are out — firefighting is a symptom of poor processes. Instead, dedicate small chunks of time to improvement, chipping away at the biggest time wasters first. A Pareto chart can help you rank problems by frequency or cost. Wherever possible, listen to your team and adopt their recommendations, but insist on rapid feedback so they learn which solutions work. In the end, working on processes in a collaborative way is one of the fastest, most effective vehicles for building engagement and translating values into action.

Create Three Distinct Career Paths for Innovators
• Gina Colarelli O’Connor
• Andrew Corbett

• Ron Pierantozzi
https://hbr.org/2009/12/create-three-distinct-career-paths-for-innovators?autocomplete=true


Remember our work at Kellogg and MDG—we need the right skills along the growth journey

Big companies are much better at incremental innovation than they are at radical innovation. That’s as true now as it was 20 years ago, despite countless programs aimed at strengthening innovation capabilities. To understand why, researchers at Rensselaer Polytechnic Institute studied 21 large companies’ efforts to build a capability for breakthrough innovations over several years. They found that even though companies pay lip service to innovation, most fail to provide the formal structure and support that programs need to succeed, such as an autonomous organization, processes tailored for highly uncertain work, and well-designed metrics. 

What’s more, the research reveals that companies fundamentally mismanage their innovation talent. Typically, large companies rotate high-potential managers in and out of the innovation leadership role on a regular basis. That may give the rising stars broad experience, but it deprives the company of any real innovation expertise at a senior level. Even more damaging, companies don’t provide meaningful growth opportunities for their innovation professionals. So although there are plenty of great jobs in innovation, there are no careers. One member of an innovation hub in a large consumer products company explains, “I could help launch $4, $5, $6 billion businesses over the next five years, and I won’t get promoted into leadership for this company.” 

To remedy that problem, companies must first understand that breakthrough innovation consists of three phases: 

Discovery: Creating or identifying high-impact market opportunities.Incubation: Experimenting with technology and business concepts to design a viable model for a new business.Acceleration: Developing a business until it can stand on its own.

Consider the unique competencies each phase requires. During discovery, employees often do bench science or technological experimentation as they think about how an innovation might satisfy a marketplace need. During incubation, employees experiment recursively with technology and market opportunities and try to anticipate the impact the breakthrough business may have on the company’s strategy. During acceleration, established-business capabilities such as scaling up processes, imposing discipline, and specialization are needed. Each phase lends itself to distinct career paths, as well. The bench scientist, for instance, may eventually want to be involved in policy discussions about emerging technologies and how they may influence the company’s future. The incubator may want to pursue a technical path—managing larger, longer-term projects—or to manage a portfolio of emerging businesses. And the accelerating manager may want to stay with the business as it grows, take on a leadership role in a functional specialty, or move into other general-management roles in the corporation. 

Rather than develop those paths, however, many firms assume that an individual will be promoted along with a project as it grows from discovery through to acceleration. In reality, individuals with that breadth of skill sets are extremely rare. In other words, companies have essentially been setting their innovators up to fail. Imagine how much a company might improve its innovation if it allowed workers who excelled in, say, the discovery phase to focus on emerging innovation opportunities rather than forcing them to acquire the skills needed for incubation or acceleration. The accompanying exhibit can serve as a guide for executives who are ready to build career paths for their company’s innovators—and to reap the rewards of a sustainable innovation function.

Four Business Models for the Digital Age
John Sviokla

https://www.strategy-business.com/blog/Four-Business-Models-for-the-Digital-Age?gko=67c74&utm_source=itw&utm_medium=20180417&utm_campaign=resp

Start thinking the future

Digitization, which is of course happening all around us, is opening up a whole new spectrum of opportunities to create value. But how do you navigate this new horizontal world? 

Opportunities for companies in every industry are occurring on two critical dimensions: knowledge of the end customer and business design, i.e., breadth of product and service offerings. These dimensions combine to form four business models for creating value (see exhibit): Suppliers, Multichannel Businesses, Modular Producers, and Ecosystem Drivers. 

Suppliers, in the lower left quadrant, have little direct knowledge of the preferences of their end customers, and may or may not have a direct relationship with them. These companies sell their products and services to distributors in the value chain. Due to the ease of digital search, they are vulnerable to pricing pressures and commoditization as customers look for less expensive alternatives. Washing-machine manufacturers are a good example of Suppliers, as are companies that create mutual funds sold by someone else. 

If you are a Supplier, you need to make sure your operations are as efficient as possible, but that’s only the first step. As digitization continues, end customers will increasingly expect you to cater to their likes and needs. So if you don’t know much about your end customers and aren’t intent on solving their problems, you’ll need to find other ways to ward off commoditization. That means making sure that your product is highly differentiated or that it goes through a distribution channel other than one controlled by an Ecosystem Driver, another of the business models, which has a broad supply base. Otherwise, you risk losing all the value your enterprise has created 

Haier, the world’s largest manufacturer of white goods, has deployed various strategies to differentiate itself from competitors. It has developed a variety of niche products, including washing machines that accommodate the long gowns worn by women in Pakistan, and freezers that can keep food frozen for 30 hours in the event of a power outage in Nigeria. More recently, Haier used the Internet to open up its innovation process to people outside the company, enabling an unprecedented level of customization. 

Multichannel Businesses, in the upper left quadrant, have deep knowledge of their consumers because they enjoy a direct relationship with them. Companies in this category provide access to their products in various digital and physical channels to ensure the seamless experience their end customers have come to expect. Many banks and brokerage houses are Multichannel Businesses, as are some retailers and insurance companies. 

If you are an Multichannel Business, there’s no such thing as too much customer knowledge. Broadening your understanding your customers’ life-event needs is essential for building out the integrated experience that will retain existing consumers and attract new ones. 

IKEA, the world’s largest furniture company, is an example of an Multichannel Business that continues to find ways to enhance the range of offerings within its value chain. Building upon its global presence — currently more than 300 stores in 41 countries — IKEA used its extensive knowledge of its customers (gleaned through visits to homes, for example) to develop “products for an everyday life” — from bedroom furniture to prepared food, all under IKEA’s iconic brand. After decades of focus on the customer experience in its stores, IKEA recently launched online shopping, making the purchasing experience truly seamless and gaining a way to learn even more about its customers.Modular Producers, in the lower right quadrant, offer a distinct capability that spans the ecosystem, but they have little direct knowledge of the end customer. Their plug-and-play offerings can work with any number of channels or partners, but they rely on others for distribution as well as for guidance on what the customer needs. A good example is payment companies that enable the consumer to pay for a wide range of goods and services, such as groceries and college tuition. 

If you are a Modular Producer, you need to be the best at everything. As is the case with Suppliers, competition is fierce, so your offerings need to be innovative and well priced.Square Inc. fits the profile of a Modular Producer. Founded in 2009, the B2B payments company has continuously launched innovative software and hardware products that are ecosystem-agnostic. Square’s point-of-sale, payroll, employee management, and appointment apps can be used on Apple and Android devices alike, as can its chip and magstrip readers. 

Ecosystem Drivers, in the upper right quadrant, have the best of both worlds: deep end-customer knowledge and a broad supply base. They leverage these dimensions to provide consumers with a seamless experience, selling not only their own proprietary products and services but also those from providers across the entire ecosystem. Thus, they create value for themselves while extracting rent from others. Large internet retailers in the U.S. and China are good examples of Ecosystem Drivers, as are some healthcare providers. 

If you are an Ecosystem Driver, you’ll want to keep pushing the boundaries in both dimensions, increasing your knowledge of end customers and the breadth of offerings available to them… 

…research demonstrates, the prospects for creating value are greatest for companies that participate in ecosystems rather than in value chains, so Ecosystem Drivers have the greatest potential for value creation and Suppliers the smallest. All four paths are viable routes to enduring success, provided you are clear on what your generic strategy is and what that strategy requires. If, however, you are losing customers or growing more slowly than your market, you should consider moving to a different quadrant, either by expanding your knowledge of your end customers or by becoming more of an ecosystem.Or even by doing both: GE is moving from being a Supplier of industrial products to an Ecosystem Driver in the Industrial Internet of Things, with the help of Predix, the cloud-based operating system it launched last year. Serving as a platform for services provided by third-party vendors as well as GE business units, Predix helps companies collect, analyze, and leverage operational data so they can optimize the performance of their entire system. As Predix’s customer base grows, so will GE’s status as an Ecosystem Driver. 

As digital becomes the new normal, the paths to success are there for the taking. But be sure you know your destination before setting out.

Office Politics make BEST PEOPLE quit.
https://www.linkedin.com/pulse/office-politics-make-best-people-quit-oleg-vishnepolsky/

Oleg Vishnepolsky

Strong Cultural issues

Office politics are defined by self-interests and agendas that run ahead of business goals. Management is ready sacrifice success in order to look good or to maintain control.
Sure signs of a highly political environment:

Office Politics 101: Blame-games, finger pointing

Office Politics 102: Mind-games and manipulation.
Office Politics 103: Managers operate by pressure - not by inspiration nor by support.
Office Politics 104: Setting up people to fail.
Office Politics 105: Honesty is considered to be a threat.
Office Politics 106: Not sharing relevant information in order to maintain control.
Office Politics 107: Responsibility avoidance and dilution.

Office Politics 108: Not hiring nor promoting strong performers so as not endanger own position.
Office Politics 109: Spreading rumors to damage someone’s reputation.
Office Politics 110: Misrepresenting own accomplishment to make oneself look better at expense of others. Taking credit for other people's successful work, and "crediting" them when their efforts fail
Office Politics 111: Favoritism and nepotism.
Office Politics 112: False promises to get someone to do something, e. g. to accept a job or a responsibility.
Office Politics 114: Micromanagement and excessive control.

Sure signs that you work in a healthy environment free from toxic politics.
1) Leadership is open, fair, authentic, honest, friendly and supportive.
2) Failures and mistakes are treated as lessons. Finger-pointing is frowned upon.
3) Employees are trusted and empowered.
4) People are promoted and rewarded on the basis of their accomplishments, not political favors.
5) Leadership takes real risks for employees, stands up for them, gets them what they need, is there for them when they run into problems.
6) Best ideas win.
7) Employees come first.
8) Loyalty, talent and hard-work are appreciated and recognized.
Seek respect, not attention. It lasts a lot longer.
Seek loyalty, not obedience. It is worth a lot more.

Why Companies Need to Build a Skills Inventory
Jeff Hesse

https://www.strategy-business.com/blog/Why-Companies-Need-to-Build-a-Skills-Inventory?gko=8b016&utm_source=itw&utm_medium=20180425&utm_campaign=resp

Critical for the future –dollars are fungible, people are not

Here’s a question every leader should answer: Do you have a clear understanding of your people’s skills, and where the gaps are? 

Odds are, the answer is no. Although the cloud, digitization, and the Internet of Things allow businesses to gather and analyze all sorts of data, few organizations today have a system in place to track the skills they have. And even fewer apply that knowledge to gauge what skills they lack, both now and in the future — which presents a challenge, given that in tomorrow’s automation- and data-driven workplace, talent will be scarce and the needs of your organization will change often. 

It’s clear that digital disruption is already here. In our Workforce of the Future study, which draws on research begun in 2007 by a team from PwC and the James Martin Institute for Science and Civilisation at the University of Oxford’s Saïd Business School, we envision what the workforce will look like in 2030. While it’s impossible to predict exactly the skills businesses will need even five years from now, every scenario we imagine will require workers and organizations to be ready to adapt. PwC’s most recent CEO survey found that more than half of CEOs said they were exploring how machines and humans can work together. And 39 percent said they’re considering the effect automation will have on their workforce. 

Even now, with automation still in its early days, CEOs told us that finding the skills they need has become the biggest challenge to their business — a situation that will only get more acute as technology evolves and competition for talent tightens. Companies in a range of industries are scrambling to find people who can work with AI or train industrial robots, disciplines that may have been esoteric just a few years ago.Given the dynamics, it is vital for you to have a system in place that can track and analyze the skills your people already have — and those they may need soon. Building such a system is a significant undertaking. Breaking it down into four steps can help you get started. 

Step 1: Make an inventory of your people’s dynamic skills. Before you can even begin to think about the future, you need to know what skills your people have. Start by considering the particular skills your business needs, and then categorize them. This categorization could be done by functional skills, such as financial modeling or accounting, or by technical skills, such as programming. While doing so, you should also categorize the level of those skills, from novice to expert. It’s also important that employers look beyond workers’ job titles to consider what skills they have that they may not be using.Next, think about the best way to inventory those skills. Organizations that are small- to medium-sized don’t necessarily need a high-tech solution to create this inventory — it could be a simple system in conjunction with your HR platform, or even just a spreadsheet.Larger companies with hundreds or thousands of employees will need a more advanced technological solution, such as an app. At PwC, we created a widely available app called Digital Fitness Assessment. We’ve been using this easy, intuitive workforce platform to help our people assess their own technology skills and create personal learning paths to improve professional development. Imagine if your organization had a candid assessment of your people’s digital proficiency.Creating an inventory can’t be a one-time exercise, or a static project. You’ll need to update it as your people’s skills evolve, as your organization’s needs change, and as people come and go. 

Step 2: Organize your inventory. Once you have the basic inventory in place, begin to organize it in a way that makes it highly searchable. The key here is to make sure you can search and access the data quickly, with good results. The inventory won’t be useful if you can’t efficiently search for a specific skill or attribute, or easily access the information you need.CEOs told us that finding the skills they need has become the biggest challenge to their business.Free-form keywords aren’t reliable, because someone might refer to a certain skill using one term, while someone else might call it something different. One person’s “coding” might be another person’s “software writing,” or people may describe sales skills in fundamentally different ways. So it’s critical to figure out how you can organize the data to produce useful query results. Or you can implement a powerful search engine that doesn’t rely on how the data is organized. 

Step 3: Analyze your skills. With the data in place, you can begin analyzing it. This can be simple (comparing rows on a spreadsheet) or more complex (using people analytics or apps to find and assess certain skill sets). The goal here is to gain insight into where your employees’ skills are the strongest, where they’re thin, and where the gaps are, and then whether those gaps are on the functional side or the technical side.As with building the inventory, analysis isn’t a one-time exercise. How closely you track your people’s skills depends on the needs of your business. In manufacturing or retail, where a lot of people may be doing the same job, you might not need to track skills too closely (unless you’re looking at roles you’re seeking to transform). But if your organization demands certain unique skill sets, such as those in financial services, pharmaceuticals, or some highly technical industries, you’ll want to give skill tracking more time and attention. 

Step 4: Plan for the future. Once you’ve built an inventory and analyzed your people’s skills, you can start planning for the future. Trying to gauge the skills your company will need two to three years down the road with a few viable scenarios can be a valuable exercise. Rather than being caught off guard by a sudden gap in skills or having to hire people with certain skills at the last minute in the open market, companies armed with such knowledge can plan ahead through hiring, training, and career development strategies. 

These steps inform a broader workforce strategy. It’s important not to forget that planning your strategy shouldn’t happen in a vacuum — it should always be connected to larger, unified business goals. All functions must work together to build a skills plan for the future. 

There’s a lot we don’t know about tomorrow. But workers and organizations should be as ready as possible. By identifying the skills you need and starting to concentrate on how to build them, you’ll be better prepared for the changes coming your way.

Exploring the Rich Tapestry within the Three Horizon Framework

Posted on August 22, 2016 by @paul4innovating

https://paul4innovating.com/2016/08/22/exploring-the-rich-tapestry-within-the-three-horizon-framework/

Very interesting discussion on the Three Horizon model we deploy and teach on our Market Driven Growth process at Kellogg.

Within our ‘business as usual’ attitudes, there actually lies the seeds of destruction. Today there is a relentless pace; we are facing stagnation in many maturing markets if we don’t evolve.Yet we actually subvert the future to prolong the life of the existing. We need to frame our innovation needs differently for exploring and exploiting innovation across different time horizons to move beyond the usual.
 Commonality within innovation is becoming increasingly important. We need to build clear common languages of innovation, frameworks, methods and approaches.There is a pressing need to frame innovation in different ways, to meet change that lies in the future. We are in need to clarify our options and this requires multiple thinking horizons to work through to deliver a richer tapestry of innovation discovery.Innovation is constantly facing disruption; it is constantly going through life cycles and new waves of different activities and we begin decay faster today than ever. We run an increasing risk that we begin to lose any dominance or competitive position increasingly. We need to innovate to sustain ourselves and maintain our market positions in a rapidly evolving world. 

The key requires us to manage this transition, not let others manage it for us. We need a far more robust, well thought-through way to apply our innovation resources to meet and anticipate these changing events. It is how we manage this transition becomes so critical. 

The three horizon framework needs to become the innovation space for dialogues, planning, portfolio debates, differentiating the distinctions between the three time line perspectives and generally arguing for inclusion, the value and importance of the thinking and then applying the appropriate resources needed in the management of innovation across these three different timelines.The 3H framework is a powerful enabler.The value of the weak signals needs amplifyingWe need to exploit developing trends that are emerging in the different but future horizons and begin to tune in and discover the emerging possible options in the future.The discussions in any forecasting or futuristic planning often have conflicting views of the future, compared to the existing realities based on those products and services that are providing the returns for today’s business. Yet the future is also equally rooted in the present, often called ‘weak signals’I am a great follower of Dave Snowden’s thinking and work over at www.cognitive-edge.com on “making sense of complexity in order to act” which includes SenseMaker® and the Cynefin Framework, which I have written upon in its value, in this post “use of the Cynefin model for innovation” ,and within his work equally are clear views of managing change. 

Dave Snowden’s has a view that works for me in applying the thinking around the three horizons, this fits so well. He argues instead of trying to tackle the unknowable, as it is inherently unknowable, he rightly suggests 1) we fully explore the evolutionary potential of the present, 2) bring in as wide an engagement of views to find a more sustainable or resilient set of solutions to emerge and 3) in his view, and most probably the most important point, it is how you build the narrative and descriptors, as the danger becomes the more you attempt to predict and evaluate, the more you can close down options, some far too early. 

He suggests the more you can hold onto this descriptive level, the longer you have in widening the range of intervention points as more knowledge becomes available. You spend less time on (predicting) outcomes and more time on measuring vectors (velocity, acceleration, magnitude, force of direction) which for me, allows the progressive build of the right future capabilities, in more evolving and evolutionary ways of learning from exploring and experimenting, the key transition point of Horizon 2 (h2). 

Resisting the early decision.It is often the cases we can detect change but we consciously ignore it or dismiss it out of hand. This is often the place where the disruptor is presently at work, both existing or new competitors, exploring or exploiting different options, working at displacing your products and market positions. The combinations of new technologies, concepts and business models are constantly emerging and we need to be pioneers these as well as detect them as they emerge, anticipating the change these might bring and focus on building the capacity and capabilities to advance on your own curve of understanding.We need to separate and structure different mindsets to developing innovation capabilities to explore and prepare for the future, as well as deepen the exploration, to leverage the present. Structuring the approach, by looking across multiple horizons, allow you to evolve the entire innovation portfolio and begin to recognise the many gaps that exist within your thinking, within your capabilities and capacities to innovate.Separating the horizon lenses 

By looking at this through separate horizon lenses does equally assist you in allocating the appropriate but usually different resources that are needed to be applied, to each of the time horizons and challenges that are identified and lie within them.The three horizon framework has the clear intent to grow awareness and offer a better understanding of how innovation works and fits, with also its great value for clarifying the structuring and allocation of innovation’s management. It can be used for portfolio alignment, resource structuring and the mechanism for broad dialogue of explaining decisions and describing the growing consensus of the future direction.The three horizon framework  can offer a vital part within all the organisations thinking around working through its innovation ambitions, not just for the present but for the future and how these can transition, connecting the reality of the present with the concepts of the future.The need is we all should make the case that different types of innovation operate and evolve over different time horizons and need thinking through differently.The three horizon framework  goes well beyond simply a planning tool, it does provide a valuable evolutionary perspective that dialogues can be formed around, so decisions on where to focus and what resources need to be applied can be made for delivering a constantly evolving ‘state’ of innovation development. Dialogues that deliver that then get translated into more plausible and coherent set of activities, projected into the future, searching for emerging winners that can change and challenge your existing business.The three horizon framework is about having strategic conversations about the future, that feeds the discussions about your innovation direction, shaping the longer-term portfolio and capability understandings. It is increasingly vital to understand all of its ways to contribute to your innovation developments and needs.Its value – if well-managed – can offer a helpful way for a significant series of dialogues and tensions to surface, but through this engagement and respect for different positions, you can find mutual ways of connecting your innovation activities and resolve these different opinions, emerging over the different horizons and diverse thinking. You are managing uncertainty in better ways, as a team or organisation through this framing dialogue.If you would like to explore all the different ways that give the three horizons framework a much richer return in its value and use, then let me know.

Reflecting on our Innovation Practices

by Paul Hobcraft

http://innovationexcellence.com/blog/2018/03/13/reflecting-on-our-innovation-practices/

Very interesting article

Innovation has been rapidly changing and much of its basics have been swallowed up by some newly defining frameworks that have raced up to the top of the innovation agenda. They have driven much of our thinking and reacting. It is right that we all respond to these but we often forget much of the rest of what innovation needs to be built upon.

 Doesn’t the innovation needle keep shifting constantly?The basics of innovation still form around building the engagement, leadership, and involvement, in constructing a culture, the climate and environment needed, so as to allow innovation to evolve and thrive. Then there is that need for a constant investment in people, in our networks and relationships, that all need to come together. These are the foundation to build innovation capacities. 

Then, we have the investments in structures, systems, and governance, making sure these are flexible and robust enough to make what we work upon, as responsive, agile, adaptive, exploitative and exploratory. All coming together so we can end up with great new ideas, things and most importantly, in winning successful concepts that grow our business. The shifts taking place around innovation have been significant in their impact. The shifts taking place has been hugely shaped by how digital transformation continues to grow in its importance. how it is influencing much that is surrounding innovation, as it continues to disrupt in faster, demanding ways, where it deconstructs and then, it is forcing us to reconstruct our innovative thinking, so as to gain from all this transformation occurring all around us. The other real forces of innovation change in this relatively short period have come from a great explosion of Lean Management principles and practices and the incorporating of Design thinking  (embodied in MDG and our class at Kellogg) into our work. Both of these are being rapidly embraced by our organizations, large and small. How these are fully and successfully integrated remains a challenge for most to resolve today.

 

The raw power of knowledge needs harnessing and translating It is this ‘raw’ power of technology, pushing the flow of knowledge and exploiting the different social mediums that are swirling around us, with many suggested designs and frameworks that need deeper capture and translation, so as to extract new value.We all need to think through the value of the pivot, prototype, the constructing of minimal viable products and rapid experiment and design to increase in focus, so as to accelerate innovation discovery and delivery.We are learning faster, shutting down what does not work as we go, adapting faster than before with our innovative concepts, by being engaged and constantly informed by customer needs.