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What is Strategic Innovation?

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What is Strategic Innovation?

  1. „There‘s no good just being better,<br /> got to be different.“<br />Charles Handy<br />
  2. The Quest for New Growth<br />A Framework for Strategic Innovation<br />28 March 2008<br />2<br />© Marc Sniukas<br />
  3. The Agenda<br />Why do we need a new approach?<br />What‘s Strategic Innovation?<br />The Content<br />The Process<br />The Context<br />Enabling Strategic Innovation: First Steps<br />Current projects<br />28 March 2008<br />© Marc Sniukas<br />3<br />
  4. Why do we need a new approach?<br />28 March 2008<br />© Marc Sniukas<br />4<br />
  5. What‘s wrong with strategy today?<br />Content<br />Too much focus on best practices, operational effectiveness and incremental improvements in cost and quality<br />Too much imitation of competitors‘ moves<br />Too much holding on to one strategic position<br />Operational effectiveness is NOT strategy<br /> „Herding“, clustering of companys around the most successful one<br />Process<br />Strategy as incremental adaptation of last year‘s plan (no search for new opportunities, differentiation, and new growth.<br />Planning being too formal and analytical<br />No creativity<br />The assumption of linearity of the process<br />Tools<br />Tools being too analytical<br />Focus on control<br />Tools were developed for a different purpose (analysis, planning and control)<br />Conventional tools provide a snapshot of conventional wisdom<br />„No battle plan survives contact with the enemy.“ General Collin Powell<br />28 March 2008<br />© Marc Sniukas<br />5<br />
  6. The solution...?<br />28 March 2008<br />© Marc Sniukas<br />6<br />
  7. Strategic Innovation<br />28 March 2008<br />© Marc Sniukas<br />7<br />
  8. What is<br />Strategic Innovation?<br />28 March 2008<br />© Marc Sniukas<br />8<br />New<br />Mind Set<br />Different<br />Focus<br />New<br />Tools<br />
  9. The outcome<br />28 March 2008<br />© Marc Sniukas<br />9<br />New<br />Markets<br />New<br />Business<br />Models<br />Increased<br />Value<br />Differentiation<br />New Growth<br />
  10. The dimensions<br />28 March 2008<br />© Marc Sniukas<br />10<br />
  11. How to enable Strategic Innovation?<br />28 March 2008<br />© Marc Sniukas<br />11<br />
  12. Continously ask questions...<br />28 March 2008<br />© Marc Sniukas<br />12<br />
  13. Which questions?<br />28 March 2008<br />© Marc Sniukas<br />13<br />
  14. 28 March 2008<br />© Marc Sniukas<br />14<br />The Content of<br />Strategic Innovation<br />
  15. „Starbucks is not in the coffee business.“<br />Howard Schultz, Chairman Starbucks Inc.<br />
  16. Redefining the Business<br />28 March 2008<br />© Marc Sniukas<br />16<br />
  17. The Business Definition<br />Defines customers, competitors, success factors, processes, products,...<br />28 March 2008<br />© Marc Sniukas<br />17<br />The way things<br />get done<br />„around here“.<br />An organization&apos;s biggest <br />mental model.<br />
  18. Redefining the Business<br />28 March 2008<br />© Marc Sniukas<br />18<br /><ul><li> From beating competition to being different
  19. Create awareness in the organization
  20. Look across substitute industries
  21. Look across strategic groups
  22. Look at completely different industries, countries,...
  23. Blur industry boundaries
  24. Use what you have or start anew?
  25. Mobilize hidden assets.</li></ul>Switch the<br />Strategic Goal<br />Challenge Industry Assumptions<br />Challenge Assets & Capabilities<br />
  26. Redefining the BusinessChallenging your mental models & conventional wisdom<br />What are the main industry assumptions, when it comes to pricing, costumers, products and services offered, delivery, etc.?<br />Does the industry have a product-centric, customer-centric, or rather competency-centric approach? What would a change in approach entail?<br />Do you let yourself be constrained by the assets and capabilities you possess?<br />Are you trying to use the assets you have and simply leverage them, or are you continuously striving to build new assets?<br />How many of your competitors do already posses the same or similar assets?<br />Which of your assets are truly unique and cannot be imitated or substituted easily by others?<br />Do companies without these assets face a cost disadvantage in obtaining them?<br />Which of your assets and capabilities are obsolete?<br />Which assets would you build if you started anew?<br />28 March 2008<br />© Marc Sniukas<br />19<br />
  27. „Put simply, the right way to define a good customer is to pick a definition that suits you better than it does your competitors.“<br />Costas Markides, Professor London Business School.<br />
  28. Redefining theMarket<br />28 March 2008<br />21<br />© Marc Sniukas<br />
  29. Which customers to target?<br />28 March 2008<br />© Marc Sniukas<br />22<br />
  30. Redefining the MarketChallenging your mental models & conventional wisdom<br />Who are currently your costumers?<br />What are their needs?<br />Why are they buying your product? What jobs are customers trying to get done?<br />Which customer needs is your product actually fulfilling?<br />Are there customers you are not serving now who have similar needs?<br />Which customer needs and functions can be satisfied best with the company’s unique competencies?<br />Which customers value most what the company does best?<br />Are there any existing customer segments being neglected by the industry now? Why are they not being served?<br />Which consumers or customer groups share the most commonalities?<br />Are competitors serving segments your company is not? Why?<br />Is your company serving markets that competitors are not serving? Why?<br />Who is the real final customer?<br />How can existing assets and capabilities be leveraged?<br />28 March 2008<br />© Marc Sniukas<br />23<br />
  31. „...ferret out what customers really want (instead of what they say they want).“<br />Andrall E. Pearson<br />
  32. Redefining theProduct<br />28 March 2008<br />© Marc Sniukas<br />25<br />
  33. How to redefine the product?<br />28 March 2008<br />© Marc Sniukas<br />26<br />
  34. What factors should be...?<br />reduced<br /> raised<br /> created<br /> eliminated <br />28 March 2008<br />© Marc Sniukas<br />27<br />Changing key elements of product, service, anddelivery<br />
  35. Looking for inspiration?<br />28 March 2008<br />© Marc Sniukas<br />28<br />
  36. Redefining the product<br />Which of your assets, capabilities, and core competencies are truly unique?<br />Which of those are valued by the customer?<br />What are the customers’ needs and wants? What is the job they are trying to get done? What is the problem they are trying to solve?<br />What job can customers not get done?<br />How could you build on your core competencies to fulfill these needs better or fulfill different needs with new products?<br />Why are noncustomers not using your offering?<br />Which elements of your offerings could be reduced, raised, created, or eliminated so as to fulfill noncustomers’ needs?<br />What could a total solution, making the customers’ total experience more worthwhile, look like?<br />Could the customers design the products or parts of it themselves?<br />Instead of traditional market research: have you observed the customer, talked to them directly, and tried the product yourself? <br />What trends can be observed?<br />How will they change customers’ priorities?<br />What offerings do alternative industries have?<br />What offerings do other strategic groups have?<br />28 March 2008<br />© Marc Sniukas<br />29<br />
  37. Redefining the product<br />What do companies in similar or even completely different industries or countries offer?<br />What would less profitable customers want? How could their needs be fulfilled in a profitable way? Thus, how could they become an attractive market for your company?<br />Is consumption constrained by any factors, which might be reduced?<br />What do customers before, during, and after having bought your product?<br />Is there anything more you could offer to make the whole experience more satisfying?<br />Which emotions does your product or service evoke?<br />“Which alternative technologies might meet the customers’ requirements? Which rivals are pursuing which approach?<br />What are the two or three key parameters that influence the customers’ decision to buy? How do these relate to the technical performance factors or design parameters of each alternative technology?<br />How far is my company from the limits of each alternative technology? Are there ways to circumvent these limits?<br />How much would the customer value the remaining technical potential? How much would it cost to realize this potential?” (Coyne, Buaron et al. 2000 40)<br />Seek feedback and advice from external experts, suppliers, customers, and distributors.<br />28 March 2008<br />© Marc Sniukas<br />30<br />
  38. Where do you create value...?<br />28 March 2008<br />© Marc Sniukas<br />31<br />FollowingKim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005<br />
  39. “Business model innovation matters and it is a top priority of CEOs.”<br />Expanding the Innovation Horizon The Global CEO StudyIBM Global Business Services 2006<br />
  40. Redefining theBusiness Model<br />28 March 2008<br />© Marc Sniukas<br />33<br />
  41. What‘s your business model like?<br />28 March 2008<br />© Marc Sniukas<br />34<br />
  42. Redefining the business model<br />How do you reach your customers?<br />How easy or difficult is it for the customer to find and buy the product?<br />How easy is it to do business and interact with your company?<br />How aligned are our channels and processes with the needs of the customers?<br />How could you achieve a higher degree of interaction with your customers?<br />What would be more fun for you and your customers?<br />How could you improve the customer’s total buying cycle experience?<br />How could you reach noncustomers?<br />How could create new distribution channels and innovative points of presence?<br />How transparent is the information you have available to the customers? Do they have access to vital information, which could enhance their experience?<br />28 March 2008<br />© Marc Sniukas<br />35<br />
  43. Redefining the business model<br />Is your price affordable by the mass of buyers?<br />How creatively do you work with suppliers, partners, alliances? How could you work with them in such a way that it creates a competitive advantage? Are they an integrated part of your business model?<br />How well do your activities fit internally and externally?<br />How well do the activities reinforce each other?<br />Could you redesign core processes differently to improve efficiency and effectiveness?<br />What is the most expensive part of your existing business? How could decrease this cost?<br />How can you either perform additional or eliminate unnecessary steps in the value chain?<br />Could you eliminate certain steps in your value chain altogether? Or maybe outsource them? Could you outsource them to your customers? (Think IKEA)<br />What is the best organizational structure for implementing this strategy?<br />28 March 2008<br />© Marc Sniukas<br />36<br />
  44. The Strategic Innovation Profile<br />28 March 2008<br />© Marc Sniukas<br />37<br />
  45. ...and think through the issues in a creative way.<br />28 March 2008<br />© Marc Sniukas<br />38<br />
  46. How?<br />28 March 2008<br />© Marc Sniukas<br />39<br />
  47. 1<br />2<br />3<br />4<br />Generating ideas<br />Visualizing strategy<br /><ul><li>strategy canvas
  48. strategic innovation profile
  49. describe the strategy
  50. build a common picture and language
  51. discuss the strategy
  52. identify possible areas for innovation
  53. generate as many ideas as possible
  54. using external & internal sources
  55. involving a variety of people and views</li></ul>The Process ofStrategic Innovation<br />1<br />2<br />3<br />4<br />Evaluating ideas<br />Implementing ideas<br /><ul><li> using a structured approach
  56. strategic experimentation
  57. address the barriers
  58. demonstrate the need for change
  59. involvement
  60. communication
  61. learning and forgetting
  62. sense of urgency</li></ul>28 March 2008<br />40<br />© Marc Sniukas<br />
  63. „First we shape our environments, then our environments shape us.“<br />Winston Churchill<br />
  64. Is there a context that favors strategic innovation?<br />28 March 2008<br />© Marc Sniukas<br />42<br />
  65. The Organizational Context of Strategic Innovation<br />28 March 2008<br />© Marc Sniukas<br />43<br />Research has shown that strategically innovative companies are characterized by a distinctive organizational context enabling strategic innovation.<br />
  66. Characteristics of Strategically Innovative Companies<br />28 March 2008<br />© Marc Sniukas<br />44<br />
  67. What can be done?<br />28 March 2008<br />© Marc Sniukas<br />45<br />
  68. Making Innovation everybody‘s everday job<br />Make innovation a central topic in leadership development programs<br />Set aside capital spending for truely innovative projects<br />Train innovation mentors charged with supporting innovation throughout the company<br />Enroll every employee in courses on business innovation<br />Install a „Innovation Lab“ (room) in the company‘s business units / HQs<br />Innovation as a large component of top management‘s bonus plan<br />Set aside them in business review meetings ofr in-depth discussion of each business unit‘s innovation performance<br />Create an „Innovation Board“ to review and fast track the most promising ideas<br />Build an innovation portal to give people access to a innovation tool, data, and input their ideas<br />Develop a set of metrics to track innovation inputs, throughputs, and outputs<br />28 March 2008<br />© Marc Sniukas<br />46<br />Adapted from Gary Hamel “The Future of Management” Harvard Business School Press, 2007<br />
  69. Enabling Strategic Innovation: First Steps<br />Take and allow time for creativity and slack.<br />Encourage and motivate people to pursue ideas.<br />Resources should be used to start small scale experiments „Just do it.“<br />Create and use diversity in knowledge, people and sources. Encourage generalism.<br />Celebrate and allow mistakes and set-backs. Punish inaction.<br />Provide freedom and space for ideas, experimentation, and unconventional thinking.<br />Encourage risk taking.<br />Challenge old habits and ways of doing things.<br />28 March 2008<br />© Marc Sniukas<br />47<br />
  70. Questions for discussion<br />Can you think of any companies that routinely experiment with strategic innovation?<br />What distinguishes them?<br />How are they creating competitive advantage?<br />28 March 2008<br />© Marc Sniukas<br />48<br />
  71. Want more…?<br />Visit for more information and download the complete guide to the theory and practice of strategic innovation, reinventing your business and creating new growth businesses.<br />28 March 2008<br />© Marc Sniukas<br />49<br />
  72. Thanks for your attention! Comments welcome!<br />Marc Sniukas<br />Webgasse 29/8<br />A- 1060 Vienna, Austria<br />Mobile +43 – 699 188 388 00<br /><br /><br /><br />28 March 2008<br />50<br />© Marc Sniukas<br />
  73. Marc niukas<br />28 March 2008<br />51<br />© Marc Sniukas<br />

Notas del editor

  • New Mind Set: Challenging convential logic and outdated mental modelsDifferent view: focus on differentiation, not beating the competition by being better, cheaper, etc.
  • New business models New value chain architecture The creation of New markets Reshaping existing markets Increased value Redrawing market boundaries
  • What product / service can also be „What need“ What problem is being solved? For which customer? How is this done?
  • Challenging Industry AssumptionsSwitch strategic goal from beating competition to achieving differentiationLook across substitute industries, what makes customers trade between these? (Alternatives vs Substitutes)Look across strategic groupsLook at completely different industries, segments, countries, ...Blur industry boundariesChallenging Assets & CapabilitiesUse what you have or start anew? Mobilize hidden assets.