Develop market-leading and game-changing brands, products, services, and experiences that make your business fit for the future.
It is widely accepted that innovation fuels most of the world's long-term productivity and economic growth. Innovative companies significantly outperform non-innovators in terms of both revenue and growth. The most successful companies nurture a corporate strategy focusing on spotting opportunities as early as possible and exploiting them successfully before the competition.
Real innovation strategy happens when an organisation finds and exploits a change in the business landscape, technology or how humans perceive the world, driving this opportunity with speed, skill, and determination.
Contrasting Reality
This message contrasts with reality, where most executives develop a strategy using 360-degree feedback, outsourcing, creating internal alliances, cutting costs and other similar methods.
Experts argue that most ‘strategic plans’ are only rolling resource budgets and market-share projections. While undoubtedly important, they won’t transform a company’s performance and cannot deliver what senior managers want: a pathway to substantially higher performance.
Additionally, given their available skill sets and operations structure, most companies lack the ability and resources to identify market changes on the horizon and act quickly and decisively to create growth momentum.
Up to the 80th, the established wisdom was to decentralise strategy into business units, each generating a strategic plan that would then be presented up the hierarchy to senior management.
Today, we’ve seen a dramatic re-centralization of strategy work
The Predatory Leap in Entrepreneurial Strategy
After his return to Apple, Steve Jobs described his strategy as: “I am going to wait for the next big thing.” His strategy involved waiting for the right moment to take a predatory leap through a small window of opportunity and staying focused on those opportunities rather than maintenance activities. This is what characterises a real entrepreneurial strategy.
An entrepreneurial strategy doesn’t include a leap of imagination into the far-distant future. Changes are happening constantly in front of our eyes. You need the right set of eyes to spot and validate them.
The Seven Key Touchpoints to an Agile Entrepreneurial Strategy
Reach Far: An entrepreneurial strategy is open-minded, not trapped within one's own industry fields of expertise. It quickly and skillfully combines pools of knowledge and resources.
Separate: Annual resource budgets should be separate from strategy work. Strategy work should be a separate, long-term opportunity-driven process that is resourced to act. This means investing in resources that will be made valuable by the changes happening.
Changes: Exploit change in your environment, technology, consumer tastes, laws, or competitive behaviour, and ride that change quickly and skillfully. This is the path that most successful companies take. Changes, however, don’t come along in nice annual packages; they don’t come as opportunities but as challenges.
Take Position Early: Real strategy starts with identifying changes early, taking a clear position and developing strategies to exploit them.
Speculative Judgment: Now, technology often overshoots consumer demand, and nobody can 100% predict which positions will pay off in the future. However, speculative judgments are the essence of strategic thinking and the starting point for taking a position.
It is the nature of strategic thinking that it is fundamentally an alternative to having clear connections between the positions we take and their economic outcomes. Strategic thinking helps to take positions in a confusing, uncertain and constantly changing world.
The opposite of strategic thinking is using spreadsheets as a foundation to determine the future sustainability of your organisation.
You can’t eliminate ambiguity and uncertainty—they are the flip side of opportunity. If you want certainty and clarity, wait for others to take a position and see how they do. Then you’ll know what works, but it will be too late to profit from the knowledge.
Skill Pools: A company's capabilities to take advantage of changes and ideas are based on entrepreneurial insight and creativity.
Creativity is the unexpected combination of two or more things that creates something new in a way that others cannot see.
There is no substitute. Companies must build or have access to the right skill pools to quickly and skillfully access resources and knowledge. A functioning skill pool needs to be multiskilled and cover areas of knowledge that aren’t typically combined or part of your core business. The broader the understanding of the human experience in these pools, the better entrepreneurial innovation we will have. Only a small group of smart individuals can analyse these kinds of things.
6. Dynamic: Strategy needs to be dynamic to ride those forces of change and trigger actions early.
One of the most important reasons that hinders executives from looking beyond the standard consensus view of what is happening is the endless list of biases that prevail undetected.
Value Denials: Another common cause is value denials. These denied business opportunities are desired and feasible but not supplied to the market. Every value denial is a business opportunity. It combines insights into demand and potential supply. Every change and innovation creates a new value denial.
Ask what value denials it will trigger: Dynamic strategy demands looking at every change from new, unusual and different perspectives and asking what value denials it will trigger; how can this be fixed and repeat this again and again.
Competency: How do you accomplish dynamic strategy in a rapidly changing world? Competencies are created through activity. Companies become proficient at something by practising it.
We develop our competencies by making bets on positions and allocating the right resources to nurture those competencies.
This will give businesses a sustainable advantage for a certain period – an advantage with a short shelf life.
Creativity comes when you break out of conceptual restrictions.
I help you turn new ideas into value in the form of new products, services, or ways of doing things.
A McKinsey excerpt. More here
Comments