Category / Strategy

by Roger Dennis

Breaking groupthink helps decision making

From a recent McKinsey Quarterly comes this interesting tidbit:

A recent survey by McKinsey asked about decision-making practices and compared them with decision outcomes. Decisions that were made after a company’s executives sought out contradictory evidence and opinion were more likely to turn out well.

By getting away from the groupthink that pervades many decision making processes – and seeking out opinions from a diverse range of people – you get better outcomes. The takeway from this?  Broaden your thinking, embrace different mindsets and seek out fresh trains of thought.

by Roger Dennis

GE and “white spaces”

Over the holiday break I caught up on some very long overdue reading.  Quite a bit of it in fact.

One issue of FastCompany magazine had a fascinating article about GE and how the company uncovers new opportunities. It appears to be very much in the vein of the work that we do at Innovaro:

Immelt and other top GE strategists love to talk about the opportunities presented by “white spaces” and “adjacencies” — corporate-speak for untapped markets that the company wants to develop, and for expansion opportunities that one GE business unit can pass along to another.

Given the article was written in the middle of 2008, in the current economic climate it would be very revealing to see if this type of strategic foresight is still going ahead at GE, or if it has been cut back.

by Roger Dennis

Make Strategy Inspiring (quote)

Before I head off for a well earned – and overdue break – here’s a great quote that relates to the last few weeks of work that I’ve been focusing on:

“Strategy can be awfully boring. The consultants can be straighter than we academics, not to mention the planners. Everybody is so serious. If that gets us better strategies, fine. But it often gets us worse ones – standard, generic, uninspiring. Strategy doesn’t only have to position, it also has to inspire. So an uninspiring strategy is really no strategy at all.”

Henry Mintzberg, Bruce Ahlstrand & Joseph Lampel. “Strategy Bites Back” 2005

Ponder on that over the new year…

by Roger Dennis

McKinsey on strategy in uncertain times

The recent issue of the McKinsey update had a couple of articles that weighed in on strategic planning in uncertain times.  A couple of these were worth sharing:

Remember that the most important decisions for most companies will truly be […the ones where there is little level of certainty.]  Our standard strategic-planning tool kits—the ones that we are most comfortable with and that we learn in MBA programs—don’t do a really good job for that.

So we ought to pay attention to this wake-up call. Embrace uncertainty. Get to know it. In uncertainty lies great opportunity. If you don’t try to understand what’s separating the known from the unknown from the unknowable, you’re really missing out.

(from an interview with Hugh Courtney, author of 20/20 Foresight: Crafting Strategy in an Uncertain World)

The second article starts with this:

There is nothing like a crisis to clarify the mind. In suddenly volatile and different times, you must have a strategy. I don’t mean most of the things people call strategy—mission statements, audacious goals, three- to five-year budget plans. I mean a real strategy.

For many managers, the word has become a verbal tic. Business lingo has transformed marketing into marketing strategy, data processing into IT strategy, acquisitions into growth strategy. Cut prices and you have a low-price strategy. Equating strategy with success, audacity, or ambition creates still more confusion. A lot of people label anything that bears the CEO’s signature as strategic—a definition based on the decider’s pay grade, not the decision.

By strategy, I mean a cohesive response to a challenge. A real strategy is neither a document nor a forecast but rather an overall approach based on a diagnosis of a challenge. The most important element of a strategy is a coherent viewpoint about the forces at work, not a plan.

(From the article “Strategy in a Structural Break“)

Both extracts provide good food for thought with regards to the strategy process – whether in a crisis or not.

(Note – just finished an intensive three day workshop that involved weeks of planning, so apologies for the break regular transmission.  Service will now return to normal…)

by Roger Dennis

Guest Entry: Patrick Harris on brand and strategy

When is the last time you looked at a company strategy and felt excited?

I suspect that most people might say ‘never’. I wouldn’t mind, except isn’t strategy meant to do something like this? Isn’t it meant to be more than a document that emerges from some dry strategic process, only to gather dust on the bookshelves of senior managers? Surely a good strategy is one that creates a call to action, provides a clear direction and helps to build momentum.  But if these are the characteristics of a good strategy, then how do you create such a beast?

I think that building good strategy involves a keen focus on the inside of an organisation. Good strategy ignites employees to act. It also gives them the means to act in the best individual way that they can, while still serving the best interests of the company.  I’ll just say that again for emphasis. Good strategy lets people act in an individual manner while serving a common aim.

The key is to forget the mantra of buy-in and to focus instead on the concept of momentum.  Buy-in is only a dream because it suggests that the strategy is 100% right, it is communicated with 100% effectiveness and that it can be carried out with 100% efficiency. This, of course, is nonsense. Momentum, on the other hand, just asks for you to communicate the gist of the strategy, provide a handful of guiding principles and then let the folks get on with their jobs.

Principles are statements that describe how things should get done. They are underpinning behaviour necessary to bring about the strategy. They aren’t rules. Rules tell you what you can and cannot do. They aren’t objectives either, as objectives follow that prescriptive SMART format. No, principles are memorable statements that employees can easily ingest and then interpret for their own situation and skill set.

Here is an example from a task I tackled with a European CEO of a major brand. In trying to refocus his customer service arm we developed the strategy and got some key messages out. For Finance, we laid out some cost of calls guidelines. For Engineering we spelled out service level agreements. But for the folks in the customer service teams, we supplied just one guiding principle – “Our service is like oxygen and a customer dies after three minutes without it”.

Now just pause for a moment. That one sentence is a strategy. And as a strategy it IS pretty exciting…right? It is also memorable and easy to apply. But most importantly that one phrase could be internalised by each of the staff. They could interpret its meaning to their particular situation and they could respond in the best way they knew how. They could all behave as individuals, but know that they were serving the strategy together. They had momentum.

Just one more thing.

Strategy these days is hardly worth the paper it is written on unless it is strongly tied to your brand. After all, a brand is only as good as the next experience a customer has with your company. If that next experience reinforces some of the things your company stands for and strikes a chord of belief with the customer, you will live to sell another day. But woe betide you if his experience is anything less than what the customer expects. Strategy or not, a bad brand experience can be a bitter pill indeed – for the customer and your company.

But the good news is that if you build your strategy by creating and applying principles, you also positively affect the behaviour of your company at the same time. Your employees not only get the strategy done, they do it in a preferred way, in line with the principles. What really happens – and what I should have said right at the start – is that strategic principles do two things for you.

They allow your staff to Be the strategy and Live the brand.

There is still room for dusty strategy documents, anodyne planning processes and hard and fast objectives, don’t get me wrong. These things give the detail of what the strategy will achieve. But when it comes to getting things done, in a way that makes everyone happy – you, customers and employees – you need strategic momentum. And if it is momentum that you seek, principles should not be far behind.


Patrick Harris is formerly Director of Creaticity at Orange and an Executive Director of France Telecom UK R&D. Now he operates his consultancy, thoughtengine, operating in the areas of Brand, Strategy, Creativity and Futures. Patrick is also a current Director in Medinge, a branding think tank that celebrates humanity in brands and the organisations that they represent.

Patrick’s recent article in the Journal of Brand Management, ‘We the People’ can be accessed from the thoughtengine site.

by Roger Dennis

Innovation vs Design

There’s been a lot of coverage over the last couple of years around the word “design.”  Some people now regularly interchange the terms “design” and “innovation” as if they mean the same thing.

They don’t.

Innovation should be an inherent part of your strategy.  A strategy without explicit acknowledgment of the need for an innovation component is a strategy that will not bring any benefit to the organisation.

If a business is not looking to develop new offerings that can bring high margins, then the business will not grow. Innovation is the key to this.

Design is different.

Design is a vital part of the process in developing new offerings – but does not need to be part of the strategy.  You can only bring design into the process once you have identified product opportunities – or better still entirely new markets – and analysed the proposition.

It’s absolutely vital to have the design process inherent in the development of new offerings.  Design brings customer insights, ergonomics and a whole raft of necessary thinking to the development of new offerings.  There is also a strong element of innovation in the design process.

It would be pointless investing in the identification of new opportunity spaces, only to go to market with a product that is badly designed and does not meet the customer need.

The summary:

  • innovation is a vital part of strategy
  • a strategy that lacks an innovation component is not a good strategy
  • design is essential when a market opportunity has been identified
  • the best innovation processes in the world cannot compensate if you fail to leverage design

Now can someone please tell BusinessWeek to stop interchanging the words design and innovation?

by Roger Dennis

The role of the corporate innovation team

Over at BankerVision, James Gardner weighs in on the importance of strategic innovation for financial institutions.  Having worked for egg (a London based online bank), and seen some of the thinking first hand, I agree entirely with his point:

Try this experiment. Dream up some bank-important scenario. Create two stories, one in which the bank makes a decision, and the other in which it doesn’t. Present both. Watch the mind set of leadership change as they begin to rehearse the implications through for themselves. I have to tell you, having now spoken to a very large number of innovation teams for Innovation and the Future-proof Bank, that few organisations do this kind of work in a very structured way.

James is right. Very few organisations – let alone just in banking – carry out this process in any structured manner.

Bear with me while I dive into some detail and pick up on his ideas around “what if” future scenarios.

I’d suggest that the way in which you present the scenarios is critical to this process.  Don’t rely on black and white A4 documents.  Don’t rely on documents at all.  Develop your picture of the future by using images, sounds, actors – whatever you need to bring the scenario to life.

If the scenarios challenge a critical strategy, then the way in which you present the information is critical too.  Take your CEO on a journey – and make sure it’s not one that involves narcolepsy –  by not just telling a story, but involving him in it.

But let’s not stop there.  If we’re looking at the role of the ideal innovation team, let’s keep pushing the boundaries to see what else they could be doing.

The role of an innovation team should not  be limited to future thinking and proposing ways to add value (although finding a team that does these things alone is a rarity in any organisation).

The ideal innovation team should also perform the role of the Court Jester.  Consider the following extract from Wikipedia:

In societies where the Freedom of Speech was not recognized as a right, the court jester – precisely because anything he said was by definition “a jest” and “the uttering of a fool” – could speak frankly on controversial issues in a way in which anyone else would have been severely punished for, and monarchs understood the usefulness of having such a person at their side.  Still, even the jester was not entirely immune from punishment, and he needed to walk a thin line and exercise careful judgment in how far he might go – which required him to be far from a “fool” in the modern sense.

When you consider some of the group think that pervades senior management structures, the role of the Court Jester becomes an important one.  Who better to perform the role than the team that regularly examines the futures, deals in complexity and thrives on creativity?

This point is reinforced in a Harvard Business School publication called “Seven Ways to Fail Big.”  For a summary, view the video summary, and take note of the last point.  The authors talk about empowering internal devils advocates to ask the tough questions.

Sounds like a Court Jester to me.

To summarise here’s what your corporate innovation team should be doing:

  1. Empowering change in the organisation (a colleague of mine at AMP in Sydney has the wonderful title “Catalyst for Change”).
  2. Communicating a view of the future in such a way to identify risks to the organisation or spot opportunities.
  3. Acting as court jesters.
by Roger Dennis

Bringing the future to life

An Australian television network has produced a TV movie set in 2012 that examines what happens to Sydney when it is faced with a combination of bush fires and water shortages.

The movie – called Scorched – depicts a Sydney that has not received rain for 240 days.  To make the movie scenario really compelling, in the true vein of all good disaster movies the problem is compounded when the city then gets surrounded by bushfires.

It’s enough to make you want to call everyones outback hero, Skippy the Kangaroo, but I digress.

The smart move the producers made was to go beyond a simple TV series, to develop an entire backstory online with fake company websites and video blogs from the characters.

This is a fascinating take on creating a future vision, and will get far more attention than any public consulting exercise or newspaper article. Why?  Because it brings the future to life.

Never mind that some of the ‘facts’ in the series are a little far from the truth, as pointed out in this article:


…the producers of the program didn’t bother to speak to Sydney Water or the Sydney Catchment Authority before going to air. They would have discovered that even in the worst-case scenario, Sydney already has enough water in its huge network of catchments to meet demand until 2014. The city’s new desalination plant will come on line by 2010 and will be able to supply 15 per cent of Sydney’s demand, but has been designed to quickly double its capacity to a half-billion litres of water a day.

The interesting thing is that by tapping into the visual medium, but not in a “lecture me like Al Gore” fashion, the story will gain traction.  So much so that public authorities were concerned about the impact of the movie:

Water Services Association chief executive Ross Young says he is concerned the show might spark a wave of panicked callers to water authorities on Monday morning.

Compelling and a good pointer to how to engage people in future focused conversations.

(Thanks to Bob Frame for the pointer)

by Roger Dennis

Bringing Strategy to Life

Strategy.

The word means so many thing to so many people, but I prefer a simple definition provided by my friend and colleague Patrick Harris of thoughtengine. He crystalised the meaning of the word as “the plan that gets you from where you are now to where you want to be in the future.”

It’s simple but not simplistic.

I use this definition to guide my work in the area of strategic innovation.  Often though there’s a need to make your strategy more than just a pile of black and white A4 documents.  And, before you make the obvious retort, I’m also talking  about those strategy documents that use colour.  And, what’s more, those that use  – gasp – graphs.

The challenge is to make a strategy come to life so that people can not just understand it, but experience it.  At the end of last week I ran a process to do just that – bring the Board of a NZ$1.3billion organisation up to date on the strategy.

Working with my colleagues we developed a concept where we mocked up an example of what the current service was like.  We had real people talking to small groups from the Board about how things were done today and what the problems were with the service.

We then walked them through the strategy, but bought it to life.  We mapped out the next twelve years from a customer point of view, and from an employee point of view.  We used three points along the way (the years 2011, 2014 and 2017)  to show how things could change and why they needed to change.  By interacting with two scenarios, the Board were able to see what would happen if the organisation continued on it’s present path, and what would happen if the organisation was transformed.

At the end of the walk though we then had a mockup of what the service might look like in the year 2020, and why the mockup was a better outcome for the organisation, for the employees and for the customer.

The result was exactly what we had hoped for: a Board that was galvanised by the challenges that it faced.  The Board not only understood the issues, but also had an excellent grasp of the complexities that were inherent in the strategy.

Now that’s something that you can’t do with paper.

by Roger Dennis

The importance of strategy in downturns

A quick post to point to a thought provoking article on the Booz site. The summary excerpt is as follows:


All industrial corporations face downturns and periods of retrenchment. Successful strategists promote upturn thinking even during the deepest downturns. Techniques such as crafting an upturn SWAT team, implementing long-term strategic planning, and requiring upturn thinking during restructuring help companies develop their own Marshall Plan to stay one step ahead of competitors when better times return.