paperJam Workshop on Strategic Innovation

The Who, What, How of Strategic Innovation

$ 1.600.000,-


Free
Download

Strategic
Innovation

AGENDA
What 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?


It all started with criticism of strategic management.

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 one
Process
• 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 process
Tools
• 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


“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?


Please discuss with your neighbours (groups of 3)

• What is „strategic innovation“ to you?
• How do you define „business model innovation“?
• What about things like „Blue Ocean Strategy“,
„disruptive innovation“,...?

10 minutes


4 Types of Innovation

Internal

Operational Management
Innovation Innovation

Continuous Discontinuous

Product & Service Strategic
Innovation Innovation

External

Strategic Innovation is about growth

Growth

Organic growth Mergers &
Acquisitions

Within the Strategic
boundaries of the
current business Innovation

Same or increased Increased market
market share in share in mature
growing markets markets

© Doujak Corporate Development

„There„s no good
just being better,
...you got to be
different.“
Charles Handy

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

Achieving growth and/or differentiation through...

New Markets New Value New Business Models

Who What How
is your customer? Which do you offer your customers? do you create your value
customer segments do you Products, services, solutions, proposition? How do you
serve? experiences. reach the customer? How do
What problem do you solve for you make money?
them?

Market Innovation Value Innovation Business Model Innovation

Superior Financial Performance


It„s all about...

Inventing a
New Business New Growth Superior
Changing The
Financial
Reinventing Game Differentiation Performance
Your Business


Please describe your business by answering these 3 questions.

Who is your Which customer segments do you serve?
customer?

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

10 minutes
How are you How are you delivering your value to the customer? Which channels do you use?
Fullfillment and support. Customer relationships.
creating and
delivering your How do you create your value proposition? What are your strategic assets, core
offer? competencies, key activities and processes? Who are your main suppliers,
partners, alliances?


The Dimensions

Context
Conditions Surrounding Strategic Innovation Activities

Organizational Content
Purpose Result of
Input to Process Strategic
Strategic Flow of Strategic Innovation Activities Innovation
Innovation Activities
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

• Set the context
• Guide the process in a participative and fair way
• Clearly communicate reasons, and expectations
• Questioning attitude • Educate employees
• Rewards success and failure, punishes inaction • Variety (internal and external)
• Shield creative teams from distractions and pressure
• Tolerates mistakes • Collaboration
• Appreciate distinctiveness in people and their thinking
• Slack is welcomed • Educated in regard to the strategy and
• Welcome change
skills needed
• Supports risk taking and change • Ask itself what it does to promote or inhibit innovation
• Supports teamwork and collaboration and how to get rid of these obstacles.
People

Culture Leadership

Context
Characteristics of
Strategic Innovators
Systems Structure
• Support the process of strategic • Fast and flat
innovation Processes • Small units
• Enable collaboration • Encourages collaboration
• Enable the use and creation of • Fast and unbureaucratic • Autonomous teams at the
knowledge • Decentralized decision making front line
• Reward risk taking and action • Support idea generation,
• Used to create relationships with experimentation and execution
customers
• Metrics & rewards support
innovation

© Marc Sniukas

Outside Industry Boundaries

Within the industry Other
Trends Countries
Competitors
Suppliers

Other
Assets
Regions Needs Existing
Capabilities
Strategic
Trends Customers Groups
1st Tier
Other
Other Industries
Non-Customers
Types of
2nd Tier
Organizations

Non-Customers
3rd Tier

© Marc Sniukas

Value Innovation

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?
The Six Utility Levers

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?

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

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

© Marc Sniukas

The Strategic Innovation Profile

Assets
Activity System 5 Customers

Cost 4 Profitability
3
Revenue Streams Satisfaction
2

Customer 1
Segmentation
Interface

Features Buyer

Function Circumstances
Appeal Total Solution

Company 1 Company 2 Company 3 Company 4

© Marc Sniukas

Market Innovation

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 focus on circumstances

(of customers and products) (needs and the job done)

© Marc Sniukas

Business Model Innovation

(co-creating) experiences
conventional customer interface 
easy to do business with

conventional pricing strategic pricing of the masses
(either to cover cost or benchmarked against  (benchmarked against substitutes and alternative
competitors) industries)

cost-plus thinking  price-minus thinking; target costs

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

low fit of activities  high fit of activities
(internally and externally) (internally and externally)

© Marc Sniukas

Value Innovation

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

single product or service  total solution, bundling

functional appeal  emotional appeal and experiences

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

raise, reduced, create, eliminate
build new features 
selectively

© Marc Sniukas

The Empathy Map

What does he
THINK and FEEL?
Fears, worries,
aspirations, wants,
needs, frustrations,....

What does he What does he
HEAR? SEE?
What others say Environment
Influencers Others
Companies What does the
... market offer?
...

What does he
DO?
Behaviors
Attitudes
Appearance
...

© Alex Osterwalder

© Marc Sniukas

The Strategy Canvas
Low Cost Airline Average Airline Car Transport
high

low

Price Meals Lounges Seating Class Hub Connectivity Friendly Service Frequent Point to
Choice
Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
Point Departures

© Marc Sniukas

MARKET INNOVATION
#1 Challenge industry assumptions #11 Target non-customers
#12 Target less profitable customers
VALUE INNOVATION #13 Target the least satisfied customers
#2 Offer complementary products and services #14 Target the chain of buyers
#3 Offer solutions and experiences #15 Segment according to commonalities
#4 Offer bundles #16 Segment according to circumstances
#5 Switch your appeal: functional versus emotional #17 Desegment the customer based
#6 Focus on the job to be done
#7 Selectively eliminate, reduce, raise and create BUSINESS MODEL INNOVATION
#8 Look at subsitutes #18 Reinvent the customer interface (channels)
#9 Expand the use of your assets and capabilities #19 Reinvent your customer relationships
#10 Look at the customer experience #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

© Marc Sniukas

• 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

Setting the Stage • Identifying internal
and external
opportunities
• Bringing successful ideas to market • Sensing, seeking
• Financial impact and shaping
• Incubation opportunitiesDescr
• Acceleration ibe the current
business model
• Transition
• Explore and
understand

A Discovery-Driven Approach
consumer and
customer needs,
motivations,
behaviors
• Understand
emerging markets,
industry and socio-
ecological trends

• Turn ideas into market ready concepts
• Road-test the idea portfolio with key stakeholders, • Develop and select ideas
consumers, internal and external
• Develop an idea portfolio
• Prototyping, Technical feasibility
• Idea Generation (In-house, cross-units, external)
• Experimentation & learning
• Idea Evaluation
• Customer & stakeholder feedback
• Idea Selection
• Business planning, venturing, secure founding
• Strategic decision making
• Decide of organizational and governance structures
• Evolution & optimization
© Marc Sniukas

The Innovation Wheel
Formal

Focused Open

NewCo Inside

Innovation
Evolutionary tensions
Revolutionary

Outside CoreCo

Closed Holistic

Informal
© Marc Sniukas

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


Any new ideas?

Who is your
customer?

What is your value
proposition?

How are you
creating and
delivering your
offer?


Please discuss in small groups of 4-5 people

• What was new to me?
• What I found most interesting / irritating?
• How could I get started in my organisation?

20 minutes


A leadership agenda

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

www.nin.com


Want more?
www.doujak.eu
www.sniukas.com

Would you like to participate?

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

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


Contact Details

Marc Sniukas

Doujak Corporate Development
Lainzer Strasse 80
A-1130 Vienna

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


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

…but in escaping from
the old ones.”
John Maynard Keynes


Looking forward to seeing you again...

• 20.05.2010 Strategy Implementation
How to engage the Organization.

• 06.07.2010 The Living Organization
Systems Thinking and Management.


Further references

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

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

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

• Videos on New World of Work, Motivation and Creativity
http://video.ted.com/talks/podcast/DanielPink_2009G.mp4
http://www.ted.com/talks/lang/eng/ken_robinson_says_schools_kill_creativity.html


Looking forward to seeing you again...

Lainzer Strasse 80
A-1130 Vienna
Austria

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

office@doujak.eu
www.doujak.eu

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