Creating Operational Behavioral Differentiation: Setting a New Standard

2008-11-10

Operational BDs are those that have been codified and integrated into the standard operating procedures and policies affecting how employees normally interact with and serve customers. The word normal is important in this definition. If the company’s standard procedures result in behaviors that clearly and positively distinguish the company from the behaviors customers experience with the company’s competitors, then those standard procedures are differentiating and will help bias customers toward the company. Behavioral differentiators alone are insufficient, but if the company can offer competitive products or services at a price acceptable to its target customer segment, then positive BDs will create customer preference. Operational BDs are very tactical because they are deliberate choices you make about how to interact with customers and they can occur at most of your customer touch points. They reflect the moment-by-moment ways in which customers experience your company and its people. If they are consistent and sustained—if customers experience these behaviors with the majority of your employees the majority of the time—then they form the baseline of the customer’s experience of you.

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Organizational Hurdles in Executing Blue Ocean Strategy: Tipping Point Leadership in Action

Once a company has developed a blue ocean strategy with a profitable business model, it must execute it. The challenge of execution exists, of course, for any strategy. However, compared with red ocean strategy, blue ocean strategy represents a significant departure from the status quo. It hinges on a shift from convergence to divergence in value curves at lower costs. That raises the execution bar. Managers have assured that they face four hurdles: cognitive; limited resources; motivation and politics. Knowing how to triumph over them is key to attenuating organizational risk. This brings us to the fifth principle of blue ocean strategy: Overcome key organizational hurdles to make blue ocean strategy happen in action.To achieve this effectively, however, companies must abandon perceived wisdom on effecting change. Conventional wisdom asserts that the greater the change, the greater the resources and time you will need to bring about results. Instead, you need to flip conventional wisdom on its head using so-called tipping point leadership.

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Initiating the Discovery Process: Key Roles in the Discovery Process - The Discovery Team and Team Captain

Participation in the Discovery Process will vary for each corporation based primarily on its size and reporting structure. In the case of smaller companies, the Discovery team needs only to select a cross-functional team and appoint a team captain. In larger corporations with much more complex organization charts, the selection of the team and identification of roles requires more careful consideration. With more people who can have an important influence on the strategy, there needs to be a way to involve a larger group without making the team unwieldy. When planning a strategy innovation initiative, members of the discovery team and team captain are some roles that are crucial for success.

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MAIN framework as a tool for winning markets: Introduction

2008-11-09

Success stories illustrate important principles which, according to Daniel Spulber, author of The Market Makers : How Leading Companies Create and Win Markets, can be learned and applied by every company. The key is in devising a successful strategy not simply to maximize short-run profits, but to win markets. Daniel Spulber argued that winning markets is important enough to be the sole corporate objective. Firms compete to win. They must strive to be the best in their markets. Maximizing shareholder value in itself cannot be the corporation’s primary objective. If the firm is successful, the capital markets will take that success into account. Thus, winning markets maximizes the long-run value of the firm. To win markets, the firm devises the best bridges between its suppliers and its customers. Traditional analyses of strategy and organization stress the firm’s products and processes. But thinking of the firm as an intermediary makes it possible to identify a new set of important value-adding activities. This approach is particularly well suited to a growing but highly competitive market in which input and output prices are highly volatile. The firm must act swiftly to earn arbitrage rents.

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How to Deal with Heavy Investment in Wrong Problem and with Fading Problem

This post will provide suggestions to deal with (i) heavy investment in wrong problem and (ii) fading problem. For the first issue, you have two solutions. The first is to try to make your problem feel more important. For this solution, a great sales and marketing team is essential. The longer-term solution is to be willing to leave a problem behind. No matter how much you have invested in the problem, investing any more of your resources may be pouring good money after bad. For the second issue, One way to find out is to wait. Another is to return to what works, then go to your potential customers and ask them what keeps them up at night.

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Innovation as a Knowledge-based Process

Innovation is about knowledge – creating new possibilities through combining different knowledge sets. These can be in the form of knowledge about what is technically possible or what particular configuration of this would meet an articulated or latent need. Such knowledge may already exist in our experience, based on something we have seen or done before. Or it could result from a process of search – research into technologies, markets, competitor actions, etc. And it could be in explicit form, codified in such a way that others can access it, discuss it, transfer it, etc. – or it can be in tacit form, known about but not actually put into words or formulae. The process of weaving these different knowledge sets together into a successful innovation is one which takes place under highly uncertain conditions. We don’t know about what the final innovation configuration will look like (and we don’t know how we will get there). Managing innovation is about turning these uncertainties into knowledge – but we can do so only by committing resources to reduce the uncertainty – effectively a balancing act.

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Steps to Develop an Indirect Strategy: Define the Strategic Goals

There is a logical and systematic process you can use to develop an indirect strategy. The process consists of six steps: (i) Define your strategic goals; (ii) Determine the resources needed to achieve the strategic goals; (iii) Gather competitive intelligence; (iv) Establish security; (v) Implement the indirect strategy; (vi) Develop a poststrategy. This post will introduce the first step in this 6-step process: Define the Strategic Goals. Strategic aim, therefore, is the first step in developing an indirect strategy. The purpose, again, is to guide your activities with discipline, rather than wander off in several directions, expending resources without a defined purpose and a measurable end. There is a second but no less important purpose to the strategic aim: to coordinate with the overall corporate direction. This broader view provides credibility when seeking approval for a budget from senior management.

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