Quick takes

Citation

Gorrell, C. (2001), "Quick takes", Strategy & Leadership, Vol. 29 No. 1. https://doi.org/10.1108/sl.2001.26129aae.001

Quick takes

"Quick takes" presents the key points and action steps contained in each of the feature articles. Catherine Gorrell prepares these summaries.

Catherine Gorrell is president of Formac, Inc., a Dallas-based strategy consulting organization. She is a contributing editor of Strategy & Leadership.

Page 4Leading the revolution: an interview with Gary Hamel

In today's business environment, innovation is the real secret to wealth creation. A revolution in business thinking needs to occur so that innovation becomes a company capability. In many companies there is talk about the importance of innovation, but little time and attention are going into a disciplined approach to making it a capability. In fact, most business leaders don't really know how to tackle this issue.

First, leaders must focus on the capacity to continuously spawn and act on radical ideas. We are reaching a point of diminishing returns on most of the traditional improvement programs that companies have been pursuing. Companies need strategies that are revolutionary, and they need to develop them faster than ever before.

Second, companies need a manifesto for getting individuals committed and involved. All employees deserve the same opportunity to influence the destiny of the organization to which they are devoting their lives as the most senior people in that organization. In this interview, Hamel cites eight steps for starting a bottom-up revolution.

Third, innovation must be institutionalized as a capability. A company's leaders cannot rely on outsiders (i.e. consultants) to generate the fundamental perspective on what new strategies, growth trajectories, and experiments they should conduct. These ideas must come from the sweat, blood, and imagination of the people within the organization.

The essence of the post-industrial organization will be more like a market than a hierarchy, because:

• •

  Markets are better than hierarchies at dealing with complexity and environments.

• •

  Once these idea markets are created, it is easier to link individual contribution to firm performance and, therefore, to reward the people who are actually moving the organization forward.

• •

  A market mechanism is much more efficient at getting the right resources to the right places.

The innovative company requires distributed leadership. The goal is to create an organization in which an innovative reality is being built all the time – by everyone. The interview includes ten design rules gleaned from the experiences of those who have lived through several strategy "lifetimes," reinventing themselves and their industries more than once.

Page 11Innovation: the new core competencyRobert B. Tucker

As company leaders have in past decades adopted the disciplines of quality, planning, and management, they are now accepting enterprisewide innovation as a key operational discipline. Having tried an endless array of alternatives, they have recognized that the only things that separate them from their competitors are the skill, knowledge, commitment, and innovative abilities of the people in their organizations. As a result, innovation becomes everyone's responsibility as the organization works to "invent" its future.

In the new century, winning firms will embrace four essential principles of managing innovation:

1. 1.

   A company's approach to innovation must be comprehensive. It must be part of the company's DNA and, as such, promoted in every area of the company as a core competency. Innovation should reach beyond R&D and marketing, should be bottom-up as well as top-down, and should tap external resources such as suppliers and customers.

2. 2.

   Innovation must include an organized, systematic, and continual search for new opportunities. The pace of change requires broader participation to seek opportunities and spot discontinuities. Forming opportunity-spotting teams allows people from all functions to self-select for participation.

3. 3.

   Organizations must involve everyone in the innovation process. Surveys of managers show that their companies do not use even half of their brainpower. In innovative companies, this dormant creativity is being tapped. Unleashing people's ability to solve problems and create opportunities becomes paramount to survival.

4. 4.

   A company must work constantly on improving its climate for innovation. The organization with a favorable climate for innovation is one that provides the context for people to collaborate as groups, teams, departments, and divisions without boundaries or fear.

The new century promises to bring more change, more complexity, and more competition. The expectations of customers and investors will continue to rise. Companies that pay attention to strengthening innovation as a core competency have nothing to fear and everything to gain.

Page 15Meeting real needs with real productsChristopher W. Miller

Nothing is more fundamental to a company's well-being than a meaningfully differentiated product valued by a significant set of customers. There are several ways you and your organization can achieve this end in a sustainable way.

Process fundamentals. Begin by defining product as a customer need merging with organizational ability. When you add strategic intent, you have a business. All three factors must be addressed individually and then interlaced to produce a successful innovation.

Designing an innovation effort. An innovation cycle has four steps.

1. 1.

   Chartering is an agreement between a sponsor, who protects the strategic interest of the organization, and a team, whose members represent the issues of need and technology. The good charter starts as a discussion and ends as a process.

2. 2.

   Information gathering leads the team to search for opportunities. Sources of innovation include: discontinuities in system patterns (a traditional pattern is breaking up), disequilibrium or lack of balance in a system (one partner seems to be getting more than other members of the value chain), disintermediation opportunities (emerging because of the previous factors), and compensatory behavior (a system member is experimenting while waiting for a market innovation). Target to identify 10-12 technical nuggets and 10-12 market opportunities that you believe will take you into your future. The article describes a number of tools for use in this step.

3. 3.

   Ideation is the step of identifying actual product concepts. Participants for this stage should include a decision-maker (the one who has the ability to significantly impact funding sources), likely implementers, those with relevant expertise, the core team, and representatives from the probable value chain (suppliers, customers, and partners). A reasonable minimum would be 1,500-3,000 ideas and 100-150 product, service, technical, or marketing concepts.

4. 4.

   Portfolio development is the point at which a selection is made by screening against established criteria. The goal is to identify the real opportunities to solve real problems. Be cautious of over-clustering or numerical tyranny in your evaluations, as you may lose important ideas. Remember that some of the best results can emerge from disagreements.

Greatness comes to those who apply great effort in seeking to represent their technology honestly and bringing that capability into the service of customers.

Page 21Strategic innovation: leveraging creative action for more profitable growthJay L. Abraham and Daniel J. Knight

The explosion of growth in the new economy intensifies and exacerbates the need for performance management, yet many managers consistently fail to seriously support these efforts because they focus on stability and routine. Strategic innovation involves making knowledge creation and innovative action a way of life, seeking to create and expand markets rather than just reacting to customer demand, and redirecting resources from profitable but dwindling lines of business to support emerging lines that are potentially more profitable.

Understanding and applying the process of strategic innovation requires an understanding of the levels of change, which define the context for shaping innovative strategy; the S-curve model of business life cycles, which defines the role of transformative change in strategic success; and the strategic innovation spiral, which puts knowledge creation and innovative action into practice.

The strategic innovation cycle contains five phases:

1. 1.

   Generating: getting things started by sharing knowledge and experience.

2. 2.

   Conceptualizing: putting things together, going from tacit to explicit knowledge and experience to create concepts.

3. 3.

   Optimizing: comparing explicit concepts with explicit criteria, justifying a selection of solutions, finding the best answer.

4. 4.

   Implementing: getting things done, building and testing prototype solutions, and creating new knowledge and experience for performance improvement.

5. 5.

   Capturing: capturing, codifying, and sharing explicit knowledge, identifying tacit knowledge and experience as well as gaps in knowledge for future use.

Five leveraging conditions provide the essential foundation for strategic innovation: a concentration of aims, freedom of action, creative tension, spreading resources, and genetic diversity. A sidebar, "How Matsushita uses strategic innovation," demonstrates how these leveraging conditions merge with the steps of the strategic innovation cycle to create an ascending spiral of knowledge creation and innovative action that results in business success.

Page 27Creating strategic plans with the power to winDennis A. Black

Strategic planning in many companies has become an impotent process, largely devoid of imagination. These companies must revamp their thinking if they are to create truly innovative strategy embodied with the power to win. Four fundamental business laws form the foundation for achieving outstanding results.

1. 1.

   The law of thinking first and thinking different. The founders of winning firms share a passion for redefining the boundaries of what's possible, and their passion permeates the organization. They are people with intense curiosity and vision. They have the ability to articulate their vision clearly and in ways that motivate others to follow their lead. Their passion is so strong that it causes them to take actions that less passionate people would consider risky.

2. 2.

   The law of anticipatory thinking and disciplined execution. This law expresses a both/and relationship. It also shows that anticipatory thinking must take place before disciplined doing. The best laid plans will not win if they are poorly executed. Conversely, no enterprise can win by flawlessly executing a strategy that is based upon less than best-practice strategic thinking.

3. 3.

   The law of trusting in and respecting people. Winning enterprises recognize that the care and feeding of their people's minds is key to the flawless execution of their winning strategy. They devote whatever time and resources are required to ensure that employees know how to perform their tasks, are assigned doable tasks, and want to do their tasks to perfection. These very visible actions on the part of the leadership send a powerful message to employees that they are, in fact, very important to the overall success of the enterprise.

4. 4.

   The law of customer enthusiasm. Winning enterprises know precisely who their customers are, and they are not satisfied until their customers become enthusiastic advocates of the enterprise. Enthusiastic customers tell others by word-of-mouth advertising or, in today's Internet culture, by "word of mouse." Conversely, if their expectations have not been met, they will share their disappointment.

To begin the journey to create winning (i.e. innovative) strategy requires three immediate actions:

1. 1.

   Decide to correct your strategic deficiencies.

2. 2.

   Select a proven process for creating winning strategy.

3. 3.

   Make innovation the most important core competency for your enterprise.

Begin today to introduce proven, best-practice methods for creating innovative strategy in your organization. Your future depends upon it!