Nonlinear Thinking

The Value Proposition Canvas

As someone who has spent much of the past 20 years defining, developing, and articulating value propositions to address all types of customer pains, I think this extension to Alexander Osterwalder's Business Model Canvas touches much of what I have come to think of as the formula for developing value propositions.

 

Alexander has a new book that details the process and journey to creating value propostions that match/address the pains your cusotmer is experiencing.

 

Recognizing Strategic Dissonance

Operating in a world where the competitive landscape is ever more ephemeral, challenges to the status quo ever more profound, and the life of a successful business model ever shorter, aligning a corporation’s strategic intent and strategic action becomes ever more critical.  The more dynamic the industry, the shorter the duration such alignment is likely to be.  As intent and action become misaligned, that divergence creates what Andy Grove termed “strategic dissonance” in a California Management Review article he co-authored as well as his 1996 book Only the Paranoid Survive.

Arriving at a point of strategic dissonance suggests that the incumbent strategy no longer works as the underlying market and competitive dynamics have shifted enough to require a new strategy.  Grove termed these “strategic inflection points” to describe the giving way of one type of industry dynamics for another.  Strategic inflection points signal fundamental change in a business and require a new strategy, a modified business model, and a change in the way business is conducted.  The driver might be new technology, new regulations, emergent competition, or any structural dynamic that obviates the current environment.

The challenge for anyone, management or otherwise, is to recognize the strategic dissonance and, more importantly, to perceive the opportunity being created by the strategic inflection point and requisite new strategy.

 

Recognition that the changing nature of the enterprise’s operating environment is a true strategic inflection point occurs in stages:

• Initially, identifying and articulating the existence of strategic dissonance – the growing divergence between what the company views as its strategy and the actual actions of its management team.
• Then, confirming and accepting that the new set of circumstances is indeed a strategic inflection point that will require changes to the old way of business.
• Finally, understanding the new strategic priorities, creating a framework for overcoming the strategic dissonance, and formulating a new strategic intent.

To manage through the envelope of strategic dissonance that is driven by the emergence of a true strategic inflection point requires the management insight and discipline to see that during this period of transformation, both the old and new basis of competition, distinctive competencies, strategies, and strategic actions will need to coexist.

That is a distinctive competency in and of itself.

Chaos, Boundaries and Innovation

As I am a visual thinker, I do love a good graphic.  Jeremy Gutsche, Chief Trend Hunter at TrendHunter.com, included some nice ones in his book, Exploiting Chaos last year.  At the core of his thesis, that in times of chaos, companies must learn not to create structure and stability, but rather, to adapt quickly, is this evocation of a process that is aligned with much of my thinking.  While I have nits to pick with some of his conclusions in the book, I appreciate the codification of the thinking around chaos and the opportunities that learning to manage chaos to the enterprises' (and individual's) benefit serves in creating elements of competitive advantage.

The key elements of what Gutsche refers to as the Exploiting Chaos Framework are outlined below:

Culture of Revolution

Culture is more important than strategy. Culture underlies your organization’s ability to adapt, and times of dramatic change magnify this importance. Most likely, your organization perceives the need to adapt, but uncertainty and resistance are paralyzing innovation. By creating an organizational culture of revolution, you can spark a new paradigm for creative change.

Trend Hunting

Innovation and strategic advantage hinge on your ability to anticipate trends and identify the next big thing. By using the cutting-edge framework in this book, you can filter through chaos and identify clusters of opportunity to focus your innovation.

Adaptive Innovation

Engineers, designers, and scientists have invested billions of dollars to perfect human creativity. By applying the best of their proven practices to your own field, you can think big while acting small. You can rapidly identify and evaluate new opportunities.

Infectious Messaging

The Internet has created a world cluttered with chaos, but it has also created the world’s first viral platform for ideas. Well-packaged stories travel faster than ever before. Unfortunately, most marketers are stuck in a world dominated by traditional advertising and cliché. By cultivating infection, your ideas will resonate, helping you to leapfrog ahead of the competition.

 

An expanded view of the Framework adds some color to the canvas.

The first chapter of the eBook is available for free download here and the book can also be purchased at the same location.

Books We Like!

It Starts with One: Changing Individuals Changes Organizations by J. Stewart Black and Hal B. Gregersen

From the perspective of the outsider, change management often seems to be equal parts art and science and, as a process, challenging when it comes to defining success and failure.  Recent surveys suggest that up to 80% of organizational change initiatives fail.  Presumably, these assessment are made by the organizations themselves based on the goals/objectives outlined during the planning for the initiatives.  While that figure seems almost incredible — if the process is failing that badly, why hasn’t it been abandoned or in some way reinvented — in my experience, that number pretty much rings true.

Traditional change management is a “top down” process that usually focuses on an organization’s structure and/or reward system. J. Stewart Black and Hal B. Gregersen of INSEAD may have identified the core issue that has driven so much failure in the change management world.  In their new book, It Starts with One: Changing Individuals Changes Organizations, the authors suggest that the traditional process must be turned on it’s head, with the focus shifting to a “bottom up” view to effect real, lasting change.  In Black and Gregersen’s view, the key is to change the behaviors of individuals first and the organization will follow.

With more than a hundred books on leading strategic change to choose from, why read this one? The answer is simple. Most other books on change have it backwards. They take an "organization in" approach; in other words, they outline all the organizational levers you should pull to change the company based on the premise that if you change the organization, individual change will follow. Our experience and research commands the opposite conclusion. Lasting success lies in changing individuals first; then the organization follows. This is because an organization changes only as far or as fast as its collective individuals change. Without individual change, there is no organizational change. Consequently, instead of an "organization in" approach, we take an "individual out" approach. To repeat—to change your organization, you must first change individuals, and sometimes (maybe even often) this means changing yourself as well.

The authors spend a significant amount of time exploring the reasons change initiatives fail and discuss the three barriers to achieving the change agenda: the failure to see that change is necessary, the failure to embrace the pathway towards a more successful environment, and the failure to finish as people tire during the process of transformation.

The book concludes with what I consider both the most obvious and most profound insight regarding change management.  Beyond overcoming the three barriers, successful change requires an understanding and appreciation of three fundamental types of change — anticipatory, reactive, and crisis.  I would guess that the catalyst for the vast majority of change initiatives are reactions to external stimuli that threaten the status quo or dealing with significant crises that arise either internally or externally.  Anticipatory change is the proactive, visionary approach to organizational change and the pathway towards sustainable competitive advantage.

Read this book and you will be much better equipped to effect successful change in your organization.

Books We Like!

Innovation in Global Industries: U.S. Firms Competing in a New World (Collected Studies) by Jeffrey T. Macher and David C. Mowery

The debate over offshoring of production, transfer of technological capabilities, and potential loss of U.S. competitiveness is a long-running one. Prevailing thinking is that the world is flat that is, innovative capacity is spreading uniformly; as new centers of manufacturing emerge, research and development and new product development follow.

Innovation in Global Industries challenges this thinking. The book, a collection of individually authored studies, examines in detail structural changes in the innovation process in 10 service as well as manufacturing industries: personal computers; semiconductors; flat-panel displays; software; lighting; biotechnology; pharmaceuticals; financial services; logistics; and venture capital. There is no doubt that overall there has been an acceleration in global sourcing of innovation and an emergence of new locations of research capacity and advanced technical skills, but the patterns are highly variable. Many industries and some firms in nearly all industries retain leading-edge capacity in the United States. However, the book concludes that is no reason for complacency about the future outlook. Innovation deserves more emphasis in firm performance measures and more sustained support in public policy.

Though written from the perspective of the U.S., and driven by concerns about the continuing erosion of U.S. competitiveness in innovation, the book is a tremendous source of information and analysis on the ten key industries featured.

You can review the book online here.

Books We Like!

The Option of Urbanism: Investing in a New American Dream by Christopher Leinberger

Americans are voting with their feet to abandon strip malls and suburban sprawl, embracing instead a new type of community where they can live, work, shop, and play within easy walking distance. In The Option of Urbanism visionary developer and strategist Christopher B. Leinberger explains why government policies have tilted the playing field toward one form of development over the last sixty years: the drivable suburb. Rooted in the driving forces of the economy—car manufacturing and the oil industry—this type of growth has fostered the decline of community, contributed to urban decay, increased greenhouse gas emissions, and contributed to the rise in obesity and asthma.

Highlighting both the challenges and the opportunities for this type of development, The Option of Urbanism shows how the American Dream is shifting to include cities as well as suburbs and how the financial and real estate communities need to respond to build communities that are more environmentally, socially, and financially sustainable.

One interesting data point: if the whole country lived in a walkable urban place, comparable to the people in Manhattan, we would cut our CO2 emissions by 50%.

Leinberger includes a new list of 30 metropolitan areas ranked by the number of walkable places per capita throughout the areas – not just in the downtown cores. The Washington, D.C., metro area ranked first; the Tampa-Clearwater-St. Petersburg (Fla.) area ranked last.