On Being Radical Innovators: Radical Innovations Are Not Demand-Driven

2008-11-09

Perhaps not surprisingly, radical innovations that give rise to entirely new markets are rarely driven by demand or customer needs. Demand-driven innovations can, at best, only account for incremental innovations that develop and extend existing markets. Such innovations usually come in the form of either product extensions or process innovations; valuable as they are, they cannot help us understand where new radical markets come from. This statement may surprise readers, especially those with a marketing background. How could an innovation succeed if it is not based on some unmet customer demand? The answer is that for any innovation to succeed it must, indeed, meet a customer need in an economical way. However, the fact that a new product or service must meet some demand to be successful does not mean that it is demand that necessarily stimulated the development of that innovation!

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Elements of Shaping Strategy: A Shaping Platform

Shaping strategies, which mobilize global ecosystems and transform industries and markets - often dramatically, is no less than an effort to broadly redefine the terms of competition for a market sector through a positive, galvanizing message that promises benefits to all who adopt the new terms. According to John Hagel III; John Seely Brown and Lang Davison, changing the risk/reward calculus as you shape strategy in a time of rapid change involves three interrelated elements: a shaping view, which helps focus participants; a shaping platform, which provides leverage to reduce the investment and effort participants need to make; and specific shaping acts and assets, which persuade participants that the shaper is serious and can pull off the shaping initiatives. This post will look at the second elements: a shaping platform, a set of clearly defined standards and practices that helps organize and support the activities of many participants.

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Outcome-Driven Segmentation: How Does It Address Development and Marketing Challenges?

2008-11-08

Innovation, development, and marketing functions encounter six common challenges which can only be addressed through an effective segmentation methodology. Strategyn’s outcome-driven segment methodology addresses each of these challenges (i) Identifying unique opportunities in mature markets; (ii) Identifying demanding customer segments that may be willing to pay more for more elaborate solutions; (iii) Identifying customer segments that are unattractive and should not be targeted; (iv) Discovering overserved market segments that make attractive entry points for disruptive innovation; (v) Determining the best way to enter an existing market as a new entrant; and (vi) Discovering segments of high potential growth.

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William G. Pietersen on The Killer Competencies

William G. Pietersen has identified the five killer competencies in his book Reinventing Strategy: Using Strategic Learning to Create and Sustain Breakthrough Performance.These competencies are (i) Insight: Your company will need a superior ability to make sense of the changing environment; (ii) Focus: You’ll need the ability to translate your insights in order to make the most intelligent strategic choices about where and how to deploy your scarce resources in support of your plan for winning; (iii) Alignment: You’ll need the ability to align every element of your entire organization behind your strategic focus; (iv) Execution: You’ll need the ability to implement your strategy— fast; and (v) Renewal: You’ll need the ability to do these things over and over again, without ever stopping.

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Principles of Breakthrough Strategy: Appropriate Organizational Support

Any strategy, however brilliant, needs to be well implemented if it is to deliver the desired results. However, implementation does not take place in a vacuum. It occurs within an “organizational environment” which managers create. Therefore, to secure the desired strategic behavior by employees, the firm must first create the appropriate environment that is, one that promotes and supports its chosen strategy. Often, the behavior of individuals within organizations is less than optimal. The natural response is to criticize them and encourage them to do better. If that fails (which is usually the case) we fire them for not being good enough. This misses the underlying problem: behavior in organizations is conditioned by its underlying context or environment - if we want our people to be more innovative, we need to first create an environment that promotes innovation.

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On the Strategic Thinking

The word strategy has come to mean different things to different people. According to Michel Robert, as long as browsing more books on strategy, one can found that: (i) every author who used the word strategy used it with a different meaning; (ii) all those books back had all been written by business school professors who had spent “7½ years in the business school library.” It was then that Decision Processes International decides to “do things a little bit differently” by going out and talking to real people who run real organizations, and then asking them what the word strategy means to them and let’s sit in on their meetings to see how they go about doing it. Decision Processes International started by interviewing CEOs in companies of various sizes, small, medium, and large; in a variety of different industries; in dozens of countries. Gradually, they started participating in these firms’ strategy meetings. Therefore, what you will learn in this post and coming posts (extracted from Strategy Pure & Simple II: How Winning Companies Dominate Their Competitors, By Michel Robert) is not a miracle recipe pulled out of the blue, but rather concepts and a process extracted out of the heads of real people who run real organizations.

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Do Customers Matter? The Case of OurBeginning.com

Three previous posts have presented three examples of companies whose successes were based in large part on getting it right in micro-market terms – the stories of iMode, Miller Lite and Nike - this post examines the case of a company that got it wrong. It’s the story of a company that failed to focus its efforts on a clearly identified market segment. The story was not uncommon in the dot.com era, when many companies spent inordinate amounts of investors’ money on poorly targeted marketing campaigns. The results of such campaigns were typically mediocre results and a waste of crucial cash. In this post, ourbeginning.com’s offering, its target market, its decision to advertise during the Super Bowl, which enjoys the single largest television audience each year in the USA, its results will be identified, examined and discussed.

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