ORIGIN - REASON FOR CHANGE
Never mistake motion with direction. Having the discipline to focus is one of the most challenging aspects in building and running a business. To succeed in the marketplace, companies must embrace a Business Value Strategy.
Authors Michael Treacy and Fred Wiersma describe three value disciplines : Operational Excellence, Customer Intimacy and Product Leadership. In today’s complex world of interacting organizations and individuals, we defined a fourth value discipline: Corporate Coherence [David J. Teece et al. – 1994]. The main premise is that companies must choose to excel in one of these disciplines, where it aims to be best-in-class, act upon it consistently and vigorously, and remain competent in the other three value disciplines. We also believe firms can do business in ways that both deliver long-term shareholder value and benefit society (shared values) [Michael E. Porter and Mark R. Kramer – 2011]. As such, making choices and finding the right ‘inside-out / outside-in’ balance is part of the Business Value Strategy.
ORGANIZATION - WIDTH OF CHANGE
Without understanding the challenges of your VUCA environment, different parts of an organization can easily wind up pursuing conflicting priorities, sub-optimization and poor implementation – even if there’s a clear Business Value Strategy.
Formulating an Innovation Strategy helps ambidexterity balancing short and long term priorities. It indicates whether transactional (redesign / restructure / redirect), transitional (redefine / revitalize / reorganize) or transformational (re-engineer / renew / re-invent) types of change is needed to successfully achieve the outcomes desired. Inspired by McKinsey’s Three Horizons model , we distinguish three horizons: Expansion (red), Exploitation (purple) and Exploration (blue). Each horizon is bounded by its market dynamics and organization’s capacity to innovate. It sets boundaries to your innovation performance expectations: The use of an ideas or creativity to improve, renew or innovate the products, processes, procedures, structures that increase the significance, usefulness and performance of the product offering and business practise. It helps to creating a high-level innovation portfolio plan for allocating resources and people to the different kinds of innovations and its magnitude.
OPERATIONS - DEPTH OF CHANGE
Depth refers to the complexity, novelty, technology and pace [Diamond Model – Shenhar & Dvir, 2007] of the change in question. As the notion of the known and unknowable arises impacts its approach.
A goal without a plan is just a wish. You need a sharply defined Business Development Strategy that defines where you want to take your business initiative (marketing plan) and the steps you need to complete to get there (business case and project plan). For example, if you know where you come from and you know exactly where you want to go, you can organize and manage complexity from a reductionist perspective as a SMART project (hiking – first order change/low impact), possibly beefed up with issue management (dropping) or even contingency planning (scouting – second order change/medium impact). But when neither starting point nor future are known, uncertainty is the only certainty, than you better organize and manage complexity from a Design Thinking perspective. As a Value-Based project in terms of shared values exploration, curiosity, questions and self-reflection (discovering – third order change/high impact). To be successful in today’s world, your Biz Dev Strategy should not only focus on internal operations but also on external levels of complexity. How you wish to work together with external parties? By co-operation or collaboration with customers and suppliers (value-adding partnerships)? Or perhaps with competitors and complementors (coopetition)?