Category / Strategy

by Roger Dennis

Strategy article on megatrends and opportunity

 

This is a five minute read which is well worth the time.  It outlines some collisions between megatrends that are already in plain sight and makes the point that:

If you are a leader in government or a company, you still have time to build the necessary strategies and capabilities for a robust and effective response.

The challenge with this is always how to focus a board or executive team on the long term, and in my experience this is challenging at the best of times.  For further context about this, I recommend reading about the three-box model in an HBR article from 2011.

Essentially this points out that most leaders focus on operational efficiency today, when they should actually be thinking about creating more value by inventing the future.  From left to right, Box One is operational, Box Two is Change and Box Three is the future.  Most value comes from Box Three, but nearly all leaders focus on Box One.  In a world of accelerating change, this is not the value to endure organisational longevity.

For the megatrend piece, go here: How to Seize the Opportunities When Megatrends Collide.

by Roger Dennis

(article) Where do breakthrough strategies come from?

From the excellent strategy & business publication (formerly booz) comes this short article about where the good stuff comes from.  The paragraph below sums it up:

“…breakthrough strategies rarely come from the typical strategic planning effort. Nor do they typically result from the common practice of generating and evaluating strategic options. And they certainly aren’t inspired in a traditional board offsite, executive retreat, or brainstorming session. Instead, they start with individuals working on big, specific challenges who find novel ideas in unexpected places, creatively combine them into innovative strategies, and personally take those strategies to fruition—against all odds.”

via The Truth about Breakthrough Strategies.

by Roger Dennis

Key insights from Singapore Foresight Week 2013

In 2011 the Prime Ministers office in Singapore sponsored a week of foresight conversations.  This year saw the next iteration and I was invited back to the conversation.  Once again there were about twenty of us from around the world that were invited, and the diversity of the conversation was only trumped by the quality.  My notes are in mind-map form, and therefore I’m going to post some images from the event along with some insights and summation.

Firstly – the pictures:

Future of Growth

Graphical recording from the fourth day of the week on the future of growth.

Future of Governance

Graphical recording from the fourth day of the week on the future of governance.

Dave Snowden presenting his framework for foresight and complexity.

Dave Snowden presenting his framework for foresight and complexity.

Insights (in no order)

  • It’s strategically important to have a good imagination and an adaptable mind.
  • Most decision makers want simple answers, and ask the wrong questions.  They want an answer, but in complex environments there may not be a simple answer.
  • there is book called “Future Babble” that looked at previous predictions of the future, and found that the most inaccurate predictions were the ones that were most convinced of their accuracy.
  • the real lack of skills in the world is the lack of generalists
  • The waiting time to purchase a new industrial robot is 4-6 months.
  • People are hard wired to take more notice of failure than success – from an evolutionary point of view it’s more important
  • More insights are on my Twitter feed

Summary

To try to summarise the week is to fall into the trap of thinking conversation is a linear process.  The discussions were so varied it’s almost impossible to bring it together, however the most important points for me related to foresight, policy and governance:

The world is becoming increasingly complex, and as a result leaders need to be adept at understanding that decision making can not always be causal.  In order to make good decisions you need firstly to understand the environment you’re working in and Dave Snowden provides guidance here with his framework:

Dave Snowdens Cynefin (kin-are-fin) Framework

If you find yourself on the left hand side of the framework then you need to understand complexity theory, and acknowledge that there may be no right answer.  That’s not easy for decision makers raised to believe that they need to make fast decisions based on minimal information.

I’ll close with a wonderful analogy that was provided in a conversation about the work of Karl Popper: you can begin to understand complexity through the lens of clouds vs clocks.  You can take apart a clock to understand it, but to understand clouds you need to look at many different variables. Clouds cannot be taken apart.

by Roger Dennis

McKinsey Quarterly – developing strategy en masse

Over at McKinsey there is a fascinating article about engaging an entire workforce in the development of organisational strategy:

…executives at organizations that are experimenting with more participatory modes of strategy development cite two major benefits. One is improving the quality of strategy by pulling in diverse and detailed frontline perspectives that are typically overlooked but can make the resulting plans more insightful and actionable. The second is building enthusiasm and alignment behind a company’s strategic direction—a critical component of long-term organizational health, effective execution, and strong financial performance that is all too rare, according to research we and our colleagues in McKinsey’s organization practice have conducted.

This is similar to some very successful work I’ve done with one client over the last five years. Initially we involved eighty thought leaders and influencers (along with a handful of hierarchical leaders) in a process to develop a vision.  Later in the process we spread that out to thousands of people using word of mouth.  It was extremely powerful, but you need to take great care to ensure the process does not go astray, and the McKinsey article touches on this.

via The social side of strategy – McKinsey Quarterly – Strategy – Strategy in Practice.

by Roger Dennis

Culture and innovation – alignment is essential

Booz and Co published a study back in October that’s been on my reading list for a while. It’s had an interesting but not surprising conclusion -spending more on R&D won’t drive results. The most crucial factors are strategic alignment and a culture that supports innovation.

To quote the study:

36 percent of all respondents to our survey admitted that their innovation strategy is not well aligned to their company’s overall strategy, and 47 percent said their company’s culture does not support their innovation strategy. Not surprisingly, companies saddled with both poor alignment and poor cultural support perform at a much lower level than well-aligned companies. In fact, companies with both highly aligned cultures and highly aligned innovation strategies have 30 percent higher enterprise value growth and 17 percent higher profit growth than companies with low degrees of alignment.

via The Global Innovation 1000: Why Culture Is Key.

by Roger Dennis

Article link: So you think you have a strategy

Just quickly, there’s a great short read on strategy at the London Business School Business Strategy Review.  It’s titled “So, you think you have a strategy” and here’s the highlights:

I often wonder why such bright CEOs and their deputies miss the most basic necessities of cogent and executable strategy. They fail because they:

  • Are not really making choices
  • Are stuck in the status quo
  • Have no relationship to value creation
  • Are mistaking objectives for strategy
  • Keep it a secret

The full article is here.

by Roger Dennis

Foresight/innovation at scale – Magnetic South

Over the weekend I was interviewed on Radio New Zealand about a initiative to forecast the future of Christchurch (my home town that has been devastated by a series of earthquakes since Sept 2010). It was called Magnetic South and was a version of the Foresight Engine developed by the Institute for the Future in Palo Alto.

It’s a way of scaling public engagement so that ideas can not only be submitted, but can also be built upon in a transparent manner.  The software also adds a game layer which turns the initiative from something potentially dry, into something that becomes compelling and addictive.

Magnetic South went extremely well, with over 8000 ideas submitted, built upon and improved by collaboration from the time the game commenced.

You can see the threads of the game here, where some very sharp visualisation enables the tracking of individual ideas as the are commented on and built upon.

Although I was the one that was interviewed, kudos needs to go to Richard Gordon, CEO of Landcare Research who backed the game, Bob Frame who drove it (and who took some conversations we had a couple of years ago to places that I didn’t expect) and Stephanie Pride who got very little sleep for the 5 weeks prior to the game, and during the game itself.

(However my interview did cause a hiccup in the process, when Radio NZ listeners took the chance to logon in such numbers that the server in Silicon Vally crashed the game prematurely.)

You can hear the full interview here.

by Roger Dennis

The link from foresight to strategy (McKinsey Quarterly article)

I’m of the opinion that there is a continuum between foresight, strategy, innovation and design (in that order).  A recent article on strategy in the McKinsey Quarterly elaborates on this further:

Strategists must take trend analysis seriously. Always look to the edges. How are early adopters and that small cadre of consumers who seem to be ahead of the curve acting? What are small, innovative entrants doing? What technologies under development could change the game? To see which trends really matter, assess their potential impact on the financial position of your company and articulate the decisions you would make differently if that outcome were certain. For example, don’t just stop at an aging population as a trend—work it through to its conclusion. Which consumer behaviors would change? Which particular product lines would be affected? What would be the precise effect on the P&L? And how does that picture line up with today’s investment priorities?

via Have you tested your strategy lately? – McKinsey Quarterly – Strategy – Strategic Thinking. (free registration required)

by Roger Dennis

Corning is the new 3M of innovation

More from my very backdated pile of Fast Company magazines:

Seventy percent of Corning’s revenue today comes from products that did not exist five years ago.

Corning must have a very robust innovation process in place for making this happen. What’s the advantage of such a process?

By bringing out new products constantly, and killing off older ones, your margins remain high. By the time a competing product makes it onto the market (usually at a lower price) you’ve got a whole new set of high margin products coming out.