Strategy + Innovation - An Unrequited Love

by Norman Chorn

What’s love got to do with it?

Most of us have, at one point or another, sat through a strategic planning session that addressed our organisation’s position in the marketplace, our mission and objectives, our strengths, weaknesses, opportunities and threats. Most of this is based on the assumption that we are under some form of attack from competitors and that we have to win in order for the business to be successful.

This “military” model reflects much of the traditional thinking about strategy — and makes sense when we recognise that the word strategy comes from the Greek word “strategos”, the art of the general.

The military model places competitors at the centre of our focus.

But what if there was a different way of thinking about strategy? What if we thought about strategy as LOVE instead of continually thinking about strategy as WAR? What new insights would that afford us? What are the implications for organisations as they plan for their futures?

Putting customers at the centre

Instead of competitors being the centre of our focus, strategy as LOVE places the customer as the core focus. The customer now becomes the driving force. And we begin our strategy discussion by deeply understanding the customers’ requirements and focus on how we can add value to customers in the most effective way.

Instead of trying to beat or imitate our competitors, you begin by understanding the customer — and then building a value proposition that is unique, differentiated and adds significant value to the customer.

How does innovation fit into this strategy?

Innovation is a powerful process that opens up new opportunities for growth and success for the business — in many cases by rethinking the customer value proposition.

But what is the connection between innovation and strategy?

In essence, innovation is a process for breaking constraints that may limit the business.

Strategy is a process that identifies where the constraints are — ie: what constraints need to be broken.

So, how do we develop an innovative strategy that places the customer at the centre of focus?

Developing an innovative strategy

There are essentially three broad stages to developing an innovative strategy:

Stage 1: Develop a future strategy

The purpose is to develop a customer-centred strategy that articulates your future aspirations, customer value proposition, and the capabilities you would require to be successful in a competitive market.

Depending on the levels of uncertainty in the environment, you may choose to use a process such as scenario planning or a more conventional business planning process.

This strategy would also indicate the key constraints that prevent the business from successfully implementing the future strategy.

Stage 2: Overcome constraints and focus the innovation process

Since you now understand where the constraints exist, the innovation process can be used to address these constraints and identify new opportunities.

Innovation can be defined at 4 key levels — and the process can be focused at where the greatest opportunities and constraints exist.

Leadership innovation challenges the very concept of the organisation and its future in the market
Strategic innovation explores the business model and how the business interacts with customers via its value proposition
Product / service innovation tests the product and service offerings of the business
Operation innovation has a focus on improving the efficiencies and effectiveness of the operational activities in the business.

Stage 3: Implement an effective innovation process

An effective innovation process reduces the risks involved in making radical changes and improvements in the business.

In essence, it allows the business to move from leaps of faith (with high risk) to leaps of logic (1), with numerous incremental gains and continuous learning and adjustment.

Source: wave.design

Bringing it all together to develop an innovative strategy for the future

The three stages above will ensure that any innovation process not only takes place within the context of the overall business strategy — it also allows us to explore new opportunities and growth opportunities for the business in the future.

All with the customer at the centre.

References:

(1) *Dr Munib Karavdic, wave.design

About Dr Norman Chorn

Dr Norman Chorn is a highly experienced business strategist helping organisations and individuals be resilient and adaptive for an uncertain future. Well known to many as the ‘business doctor’!

By integrating the principles of neuroscience with strategy and economics Norman achieves innovative approaches to achieve peak performance within organisations. He specialises in creating strategy for the rapidly changing and uncertain future and can help you and your organisation.

Get In Touch With Norman Chorn

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Part 3: Accelerate Performance With Strategic Alignment - Develop The Appropriate Culture

By Norman Chorn • 27 Mar, 2023

In my previous article "Accelerate Performance with Strategic Alignment - Define the logic of your strategy", we demonstrated the alignment between the market and business strategy by matching the logic of the market with the logic of the strategy. The Explore logic emphasises a market where customers seek new solutions for emerging requirements. The strategy responds by exploring new opportunities and driving for growth. The Exploit logic occurs in a more stable market where customers seek lower costs and reliability of supply. The appropriate strategy focuses on operational efficiency and building close customer relationships. Culture is key to shaping the capabilities of the business to successfully implement strategy . It drives the way that people behave, decisions are made and actions are taken. It determines, therefore, the strategy that is actually realised in the market, as opposed to that which is merely intended. We make a key distinction between the desired culture and the appropriate culture. The desired culture is what people may choose because it sounds attractive and in vogue. However, the appropriate culture is the culture that is required to successfully implement the chosen strategy. Often, these can be different. For example, people might seek to develop a culture that is ‘innovative’, ‘flexible’ and ‘empowering’, but this may not be the appropriate culture needed to successfully implement the business strategy. DEVELOP THE APPROPRIATE CULTURE FOR YOUR STRATEGY Developing the appropriate culture requires a deliberate emphasis on certain cultural attributes and making trade-offs on others. As we will see, the attributes that are traded off are usually the opposites of those that are emphasised.

Part 2: Accelerate Performance with Strategic Alignment - Define the Logic of your Strategy

By Norman Chorn • 27 Mar, 2023

In Part 1 "How to Accelerate Performance with Strategic Alignment - Understand the Logic of the Market" we outlined different market conditions and defined them in terms of two overarching logics — Exploring and Exploiting . To briefly recap, an Exploring logic is one where customers are seeking new solutions for emerging needs. It’s all about change and action. An Exploiting logic occurs in a more stable market in which the issues are about lowering costs and working collaboratively with customers. It’s a market that focuses on stability and cohesion. FORCES THAT SHAPE YOUR STRATEGY Clearly, it is one of these two logics — or a combination of both — that will shape your strategy as you operate in these markets. See figure 1 below that describes how these logics will form your business strategy: