In: Root » Business » Business development
The purpose of a strategy innovation initiative that is right for your company will typically depend on the following factors:
Size of Company In general, larger companies have more resources available for strategy innovation than smaller companies. Yet the process of identifying new business opportunities is equally important, if not more important, for smaller companies to consider. We recommend that all companies carry out all five phases, regardless of how much time and money is spent on each phase. However, larger companies with their greater resources can afford to do more, on a larger scale, than the smaller companies can. Larger companies, for example, can usually identify up to a dozen people across all their functional areas that can be assigned to participate on the Discovery team. It is not unusual for each team member to be able to dedicate up to 20 to 25 percent of their time over a six-to-eight-months period for this initiative. In the Exploring Phase, larger-company budgets will allow for team travel across the country or across the world to participate in professionally organized meetings and customer visits. Depending on the scope, these global initiatives can last a year or more. Smaller companies would experience this process very differently. With fewer people available, they might select three company executives and a college-age intern to participate in their Discovery Process. To take advantage of the availability of the intern, they may want to complete the entire initiative over the course of a summer, which is quite possible on a focused initiative. Instead of elaborate meetings at customer sites around the country or abroad, teams from smaller companies might concentrate their exploration efforts more on local visits with some customers, telephone interviews with others, and literature searches on marketplace trends via the Internet. The implementation of the Discovery Process for strategy innovation is extremely flexible and can accommodate the different resources available in different size companies. Size of Industry Similar to company size, the size of the industry will also play a role in the scope of the Discovery Process. By size, we mean both the revenues generated and the number of industry ‘‘participants.’’ As you might imagine, being a strategic innovator in the multibillion- dollar automobile industry will require a more significant Discovery Process than being an innovator in the unicycle market. The automobile industry is very complex, with many stakeholders (customers, suppliers, dealers, manufacturers, after-market suppliers, etc.) and market segments to explore. The Exploring Phase in the automobile industry would likely be quite extensive and take a great deal of time to implement. The unicycle market, on the other hand, probably consists of only a handful of manufacturers, a relatively limited number of distributors, and a small core of user/enthusiasts. Insight gathering in the Exploring Phase would be much simpler for the smaller, simpler unicycle market, requiring a Discovery Process that is much more limited in its scope and scale. At the same time, making a significant impact on the automobile market through strategy innovation could result in significantly more revenue growth than making a significant impact on the unicycle market. The potentially higher return in automobiles would justify a greater investment in the Discovery Process in that industry than might be justified in unicycles. Type of Industry In addition to size of industry, the type of industry will also help dictate the scope of the Discovery Process. Industries undergoing a greater degree of change or transformation will usually require a more extensive Discovery Process than more stable markets. The reason is that it is more difficult to gain an understanding of a market’s future if changes are taking place more rapidly. Very dynamic markets such as the telecommunications industry will have very complex forces at work—new products, new companies, new regulations, new technologies, and what some believe is an inevitable merging with the computer industry. Each market expert in the telecommunications industry may well describe a different emerging market scenario, making it difficult for your Discovery team to agree on what the future holds for the company. In these more dynamic markets, it may take multiple exploration efforts and a longer period of time before the future becomes visible and new business opportunities can be identified. More stable markets are much simpler to explore because there are fewer future-changing forces to consider. A Discovery Process in the insurance industry, for example, would be a smaller scale effort than one in the telecommunications world. Strategic Frontier The selection of one or more strategic frontiers to be explored in the Discovery Process will have a critical impact on the size, scope, and timing of the initiative. A strategic frontier is a market, product, technology, or business process that lies beyond a company’s current corporate strategy and business model. The identification of a single frontier allows the Discovery team to focus their efforts and activities in the Exploring Phase, interacting with one set of customers, projecting the future of one market, and seeking insights on a minimum number of business models. The selection of multiple frontiers will result in multiple explorations in these areas in order to best understand the opportunities available. Besides the number of strategic frontiers being explored, the type of frontier will often dictate the activities necessary. Insights on value in the frontier can be found along three different exploration vectors: customer value, market dynamics, and business model innovation. Some frontiers, such as repositioning the brand name or product to a different target audience, might require exploration in only one vector: the customer value vector. The insights from the new target audience would be most critical for the creation of a new business opportunity. On the other hand, leveraging an emerging technology may require exploration in all three vectors. Getting customer insights on the technology (customer value vector), a picture of how the future market might emerge (market dynamics vector), and an understanding of how to best organize for the new venture (business model innovation vector) will make that Discovery Process more complex. Degree of Innovation Required We saved the most important consideration for last. The scope and complexity of the Discovery Process is directly related to the degree of strategy innovation desired. Companies looking to identify new business opportunities that will create new-to-the-world markets and provide them with a unique, sustainable advantage over competition will need to plan on a robust, larger-scale Discovery Process commitment. These more visionary market opportunities will not emerge from merely holding a brainstorming session or two. It may require a longer-term effort for a team, or the company may decide to form two or three Discovery teams to pursue this level of strategy innovation simultaneously. On the other hand, companies that have a new business opportunity already in mind and are searching only for a unique, strategic twist that will give it a proprietary advantage in the market will often find it after a brief, more concise Discovery Process. The degree of innovation being sought is usually one of the first questions to be considered because it has a direct bearing on not only the scope of the Discovery Process, but the selection of the activities in that process.
|
|||||||||||||
Disclaimer
1) E-articles is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringement, please read the terms of service and contact us or use the "Report this article" button on this page to investigate the problem.
2) E-articles is not responsible for inaccuracies, falsehoods, or any other types of misinformation this article may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. |
|||||||||||||
