paperJam Workshop on Strategic Innovation

The Who, What, How of Strategic Innovation

$ 1.600.000,-

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Strategic Innovation

AGENDAWhat are we going

to do today?

Why does Strategic Innovation matter?

What is Strategic Innovation?

How to get started?

The Process

AGENDA

Why Strategic Innovation?

Content• Too much focus on best practices, operational effectiveness and incremental improvements in cost

and quality• Too much imitation of competitors‘ moves• Too much holding on to one strategic position• Operational effectiveness is NOT strategy• „Herding“, clustering of companys around the most successful oneProcess• Strategy as incremental adaptation of last year‘s plan (no search for new opportunities,

differentiation, and new growth.• Planning being too formal and analytical• No creativity• The assumption of linearity of the processTools• Tools being too analytical• Focus on control• Tools were developed for a different purpose (analysis, planning and control)• Conventional tools provide a snapshot of conventional wisdom• „No battle plan survives contact with the enemy.“ General Collin Powell

It all started with criticism of strategic management.

“Business model innovation matters and it is a top priority of CEOs.”

„Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“

Business Week, November 16, 2009

AGENDA

• What is „strategic innovation“ to you?

• How do you define „business model innovation“?

• What about things like „Blue Ocean Strategy“, „disruptive innovation“,...?

Please discuss with your neighbours (groups of 3)

10 minutes

AGENDA

4 Types of Innovation

Internal

External

DiscontinuousContinuous

Management Innovation

Operational Innovation

Product & Service Innovation

Strategic Innovation is about growth

Growth

Organic growth

Within the boundaries of the current business

Same or increased market share in

growing markets

Increased market share in mature

markets

Mergers & Acquisitions

„There„s no good just being better,

...you got to be different.“

Charles Handy

“Hey! They‟re lighting their arrows!Can they do that?”

New Markets New Value New Business Models

Whois your customer? Which

customer segments do you serve?

Whatdo you offer your customers?Products, services, solutions,

experiences.What problem do you solve for

Howdo you create your value proposition? How do you

reach the customer? How do you make money?

Market Innovation Value Innovation Business Model Innovation

Achieving growth and/or differentiation through...

Superior Financial Performance

It„s all about...

Inventing a New Business

Reinventing Your Business

Changing The Game

New Growth

Differentiation

Superior Financial

Performance

Who is your

customer?

Which customer segments do you serve?

What is your value

proposition?

Value proposition from the customer‘s point of view.What problem do you solve for the customer?What is the job you help the customer getting done?

How are you

creating and delivering your offer?

How are you delivering your value to the customer? Which channels do you use? Fullfillment and support. Customer relationships.

How do you create your value proposition? What are your strategic assets, core competencies, key activities and processes? Who are your main suppliers, partners, alliances?

Please describe your business by answering these 3 questions.

10 minutes

ContextConditions Surrounding Strategic Innovation Activities

The Dimensions

Organizational PurposeInput to Strategic

Innovation Activities

ContentResult ofStrategic

Innovation Activities

ProcessFlow of Strategic Innovation Activities

Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning

Walking Gallery

Until 11:00

„…the real barrier to strategic innovation is more than denial – it„s a matrix of deeply held beliefs about inherent superiority of a business model; beliefs that have been valitated by millions of customers; beliefs that have been enshrined in physical infrastructure and operating handbooks; beliefs that have hardened into religious convictions; beliefs that are held so strongly, that nonconforming ideas seldom get considered, and when they do, rarely get more than grudging support.“

Gary Hamel, The Future of Management

„The organizational designs that support innovation are very different from those that support delivery of current performance.“

John Roberts, Professor

Stanford Graduate School of Business

ContextCharacteristics of

Strategic Innovators

Leadership

Structure

Culture

Systems

People

Processes

• Questioning attitude

• Rewards success and failure, punishes inaction

• Tolerates mistakes

• Slack is welcomed

• Supports risk taking and change

• Supports teamwork and collaboration

• Set the context

• Guide the process in a participative and fair way

• Clearly communicate reasons, and expectations

• Educate employees

• Shield creative teams from distractions and pressure

• Appreciate distinctiveness in people and their thinking

• Welcome change

• Ask itself what it does to promote or inhibit innovation and how to get rid of these obstacles.

• Fast and flat

• Small units

• Encourages collaboration

• Autonomous teams at the front line

• Fast and unbureaucratic

• Decentralized decision making

• Support idea generation, experimentation and execution

• Variety (internal and external)

• Collaboration

• Educated in regard to the strategy and skills needed

• Support the process of strategic innovation

• Enable collaboration

• Enable the use and creation of knowledge

• Reward risk taking and action

• Used to create relationships with customers

• Metrics & rewards support innovation

AssetsCapabilities

Needs Existing

Suppliers

Customers1st Tier

Within the industry

Trends

Competitors

StrategicGroups

Non-Customers2nd Tier

Outside Industry Boundaries

OtherCountries

OtherIndustries

Non-Customers3rd Tier

OtherRegions

Trends

OtherTypes ofOrganizations

Value Innovation

Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005

The Six Stages of the Buyer Experience Cycle

Purchase Delivery Use Supplements Maintenance Disposal

Customer Productivity: In which stage are the biggest blocks to customer productivity?

Simplicity: In which stage are the biggest blocks to simplicity?

Convenience: In which stage are the biggest blocks to convenience?

Risk: In which stage are the biggest blocks reducing risk?

Fun and image: In which stage are the biggest blocks fun and image?

Environmental friendliness:In which stage are the biggest blocks to environmental friendliness?

The Strategic Innovation Profile

5Assets

Customers

Profitability

Satisfaction

Segmentation

Circumstances

Total SolutionAppeal

Function

Features

Customer Interface

Revenue Streams

Activity System

Company 1 Company 2 Company 3 Company 4

existing noncustomers (2nd and 3rd tier)

most profitable less profitable

most satisfied less satisfied (1st tier)

specific buyer chain of buyers

focus on differences focus on commonalities

focus on finer segmentation focus on de-segmentation

focus on attributes(of customers and products)

focus on circumstances(needs and the job done)

Market Innovation

conventional customer interface (co-creating) experienceseasy to do business with

conventional pricing(either to cover cost or benchmarked against

competitors)

strategic pricing of the masses(benchmarked against substitutes and alternative industries)

cost-plus thinking price-minus thinking; target costs

integrate activities network (with customers, suppliers, partners, alliances)

low fit of activities(internally and externally)

high fit of activities(internally and externally)

Business Model Innovation

focus on existing assets start anew, or use existing assets in a new way

single product or service total solution, bundling

functional appeal emotional appeal and experiences

focus on product focus on function fulfilled and the job-to-be-done

build new features raise, reduced, create, eliminate selectively

Value Innovation

The Empathy Map

What does heSEE?

EnvironmentOthers

What does the market offer?

What does heDO?

BehaviorsAttitudes

Appearance...

What does heHEAR?

What others sayInfluencersCompanies

What does heTHINK and FEEL?

Fears, worries, aspirations, wants,

needs, frustrations,....

The Strategy Canvas

Price Meals Lounges Seating Class Choice

Hub Connectivity Friendly Service Frequent Point to Point Departures

Low Cost Airline Average Airline Car Transport

Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005

#1 Challenge industry assumptions

VALUE INNOVATION#2 Offer complementary products and services

#3 Offer solutions and experiences

#4 Offer bundles

#5 Switch your appeal: functional versus emotional

#6 Focus on the job to be done

#7 Selectively eliminate, reduce, raise and create

#8 Look at subsitutes

#9 Expand the use of your assets and capabilities

#10 Look at the customer experience

BUSINESS MODEL INNOVATION#18 Reinvent the customer interface (channels)

#19 Reinvent your customer relationships

#20 Invent new revenue streams

#21 Price differently

#22 Reinvent you cost base

#23 Re-assess your key activities

#24 Collaborate with suppliers, partners, the network and ecosystem

#25 Look at completely different industries

MARKET INNOVATION#11 Target non-customers

#12 Target less profitable customers

#13 Target the least satisfied customers

#14 Target the chain of buyers

#15 Segment according to commonalities

#16 Segment according to circumstances

#17 Desegment the customer based

A Discovery-Driven Approach

Setting the Stage

• Bringing successful ideas to market

• Financial impact

• Incubation

• Acceleration

• Transition

• Define the purpose, scope and focus of innovation activities

• Mobilize the organization

• Align business and innovation strategies

• Build leadership alignment & commitment

• Build a common language and understanding

• Innovation audit – Assessing need and capabilities

• Definition of goverance structures and processes

• Definition of metrics

• Develop and select ideas

• Develop an idea portfolio

• Idea Generation (In-house, cross-units, external)

• Idea Evaluation

• Idea Selection

• Strategic decision making

• Turn ideas into market ready concepts

• Road-test the idea portfolio with key stakeholders, consumers, internal and external

• Prototyping, Technical feasibility

• Experimentation & learning

• Customer & stakeholder feedback

• Business planning, venturing, secure founding

• Decide of organizational and governance structures

• Evolution & optimization

• Identifying internal and external opportunities

• Sensing, seeking and shaping opportunitiesDescribe the current business model

• Explore and understand consumer and customer needs, motivations, behaviors

• Understand emerging markets, industry and socio-ecological trends

Formal

Informal

RevolutionaryEvolutionary

Inside

Outside

CoreCo

Focused

Holistic

Closed

The Innovation Wheel

Innovation tensions

• Download the poster for free at http://www.businessmodelalchemist.com/tools

Who is your

customer?

What is your value

proposition?

How are you

creating and delivering your offer?

Any new ideas?

• What was new to me?

• What I found most interesting / irritating?

• How could I get started in my organisation?

Please discuss in small groups of 4-5 people

20 minutes

Any Questions?

Meet with your (management) team

• Goal = Setting the stage

• Answer these questions:

- Does your organization understand the need for innovation/change/transformation/renewal?

- Is your organization committed to innovation/change/transformation/renewal?

- Does it have the right capabilities for innovation/change/transformation/renewal?

• Agree on a common view

• Map out the current business model & value proposition

- Downloads: „Reinventing your Business Discussion Guide“ and „Business Model Handbook“.

• Define the purpose of your innovation activities, align business and innovation strategies

• Agree on how to proceed

- Define governance structures, processes and metrics

A leadership agenda

www.nin.com

Want more?

www.doujak.eu

www.sniukas.com

• Dynamic Capabilities (i.e. activities, processes and routines) leading to Business Model Innovation.

• Managerial capabilities for creating, developing and leading these capabilities.

Would you like to participate?

Contact Details

Marc Sniukas

Doujak Corporate DevelopmentLainzer Strasse 80

A-1130 Vienna

Mobile: +43 699 122 333marc.sniukas@doujak.eu

“The difficulty lies not in the new ideas,...

…but in escaping from the old ones.”

John Maynard Keynes

• 20.05.2010 Strategy ImplementationHow to engage the Organization.

• 06.07.2010 The Living OrganizationSystems Thinking and Management.

Looking forward to seeing you again...

• Download: Reshaping Strategyhttp://www.sniukas.com/2009/11/reshaping-strategy/

• Download: Discussion Guidehttp://www.sniukas.com/2010/03/discussion-guide-challenging-your-strategy/

• A list with books on amazon.dehttp://www.amazon.de/Innovation-for-paperJam/lm/R3R3Z352PL1O8A/

• Videos on New World of Work, Motivation and Creativityhttp://video.ted.com/talks/podcast/DanielPink_2009G.mp4http://www.ted.com/talks/lang/eng/ken_robinson_says_schools_kill_creativity.html

Further references

Looking forward to seeing you again...

Lainzer Strasse 80A-1130 Vienna

Austria

Tel: +43.1.306 33 66Fax: +43.1.306 33 66 9

office@doujak.euwww.doujak.eu

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