Sept. 2, 2017 "Design thinking on it's own won't save your company": Today I found this article by Brian Moelich in the Globe and Mail:
Founder and chief executive of Arrisio, an innovation strategy and implementation firm based in Kitchener-Waterloo, Ont.
Adopting a design-thinking approach within an organization to reconsider old processes and develop new customer-centric products and services is not a new concept. What is new is that organizations pursuing this path are creating an even more daunting problem than the ones they were hoping to solve.
Organizations are becoming idea generators and not idea executors.
Design thinking is like mayonnaise. It goes well with almost everything, but it alone can’t be the star. You need to make your ideas compelling enough to be put on the road to execution.
From my experience helping organizations build innovation capabilities, I’ve found that these are the practices you’ll need – on top of design thinking – to become an idea executor.
From my experience helping organizations build innovation capabilities, I’ve found that these are the practices you’ll need – on top of design thinking – to become an idea executor.
Learn about your organization’s needs and problems, just as you would your customer’s
Design thinking is grounded in the principle of knowing your customers’ needs and problems and then generating solutions to deliver on them.
The sad truth is that creating ideas based on your customers alone is just recreating the problem of developing ideas in a vacuum that you wanted to get away from in the first place.
Your ideas will only be executed if they solve organizational challenges and align to your company’s strategic vision.
The sad truth is that creating ideas based on your customers alone is just recreating the problem of developing ideas in a vacuum that you wanted to get away from in the first place.
Your ideas will only be executed if they solve organizational challenges and align to your company’s strategic vision.
As you learn about your customers, you need to explore in tandem what I call “stakeholder discovery.” Figure out what lines of business could potentially benefit from your idea and interview the business unit leaders the same way you would a customer.
What challenges are they working on and, most importantly, what are their strategic priorities, what does the future hold for their business and how will they get there?
What challenges are they working on and, most importantly, what are their strategic priorities, what does the future hold for their business and how will they get there?
When you get into idea generation and prototyping, consider how the idea aligns to strategy and whether it tackles problems of interest to stakeholders. Doing so gives your idea buy-in at the onset, which in turn makes it relevant to the organization.
Give your organization the data it’s looking for
Organizations root out anything that looks, sounds or smells like risk and have built processes and layers of decision-making to remove uncertainty. Unfortunately, your ideas are risky, because the outcome is uncertain.
Consider how you would regularly present a business case. There are typically some data to argue that your case is worth the organization’s time, an explanation of the end goal and a road map of how you will get there. Your organization expects to see these things, so give them what they’re looking for.
Show the rigour behind your ideas by outlining the steps and activities within those steps. Determine what success looks like at each step, define metrics to measure progress and track them meticulously. Explain the customer and market data that you gather for validation and how those data are used for decision-making to evolve the idea.
Being transparent about your process and showing data to back up the relevance of your concept shows the organization that you’ve mitigated risk involved in what might seem like an out-there idea.
Think about your idea as a business
The biggest failure of design thinking is the focus on getting to ideas and not how those ideas turn into businesses. As you progress through your design-thinking process and prototype the idea, prototype the business as well and test it alongside the idea with customers and stakeholders.
Start with the aspects of the business that the customer sees.
Specifically, where and how will they buy your idea and what are they willing to pay for?
Will you sell online or through a brick-sand-mortar store?
Ask yourself what value your idea provides that the customer would pay for?
From there, is it a one-time sale, a continuing subscription or another revenue model?
Specifically, where and how will they buy your idea and what are they willing to pay for?
Will you sell online or through a brick-sand-mortar store?
Ask yourself what value your idea provides that the customer would pay for?
From there, is it a one-time sale, a continuing subscription or another revenue model?
When you share your idea with the customer, test the business by presenting the idea as it would live in the real world. Use an online store mock-up or run a retail pop-up to test how your customers want to acquire the idea and set a price to test willingness-to-pay. As you iterate the idea based on feedback, do the same with the business.
Now, take it a step further and determine what capabilities you need to deliver your idea.
For example, if your organization typically sells through bricks-and-mortar retail but your customers are drawn to online shopping experiences, you will need the resources to develop a digital store.
For example, if your organization typically sells through bricks-and-mortar retail but your customers are drawn to online shopping experiences, you will need the resources to develop a digital store.
Look to your organization’s existing capabilities for what you can leverage and identify gaps in what needs to be built. When you identify a capability gap, test whether it is better to build a solution or to partner with a third party that has the skills you need.
This will uncover potential costs or challenges in developing that organizational capability.
This will uncover potential costs or challenges in developing that organizational capability.
Integrating these practices will give the mayonnaise of design thinking the added ingredients it needs to move beyond idea generation and into idea execution.
Sept. 13, 2017 "A simple way to close the door on uncertain strategy": Today I found this article by Harvey Schachter in the Globe and Mail:
What is your definition of strategy?
That's a deceptive question. Also a provocative one. And when Vancouver-based consultant Tim Lewko uses it with top executives to kick off a strategy session, a dismaying question, since they quickly find they all have quite different understandings.
"Everybody wants to talk about strategy and competitive advantage, but nobody wants to admit they don't know what it is," he says in an interview.
Chief executive officers, who are supposed to be strategy experts, can be the worst. They have climbed the corporate ladder as fantastic operational executives. But when the door shuts on the top office, they don't often know what to do in the new role. Mr. Lewko believes they need some simple tools to guide them.
He starts by advising that strategic decision making is a process, not an event. Too often, companies choose an event: The strategy retreat. Sure, go ahead and have one and make some decisions. But he warns you to remember that you lack certainty. That means your decisions will have to be revised, again and again. It's a process.
As for consultants, be wary. He says more than 80 per cent of the gaps and barriers holding back your business are already known by the people in your firm, who are closest to the issues and most knowledgeable.
Don't pay for consultants to talk to you and create a PowerPoint deck that just feeds back what you told them. Create a strategy with your own executives and people.
Don't pay for consultants to talk to you and create a PowerPoint deck that just feeds back what you told them. Create a strategy with your own executives and people.
In doing that, here's a hint of what strategy is, from his book Making Big Decisions Better:
A framework of choices that defines the purpose and path of the organization. Strategic choices always come down to three things – products, markets and capabilities.
Through the interplay of those elements, it's also about profits. The fact your company doesn't have a vice-president of profitability is a signal that organizations lack holistic focus on profitability. Sure, somebody oversees sales and another oversees operations, and the issue of profit comes up. But each department focuses on their own interests. It all needs to be tied together.
A framework of choices that defines the purpose and path of the organization. Strategic choices always come down to three things – products, markets and capabilities.
Through the interplay of those elements, it's also about profits. The fact your company doesn't have a vice-president of profitability is a signal that organizations lack holistic focus on profitability. Sure, somebody oversees sales and another oversees operations, and the issue of profit comes up. But each department focuses on their own interests. It all needs to be tied together.
He urges CEOs to make sure this equation is well understood by all:
Revenue – Costs = Profit.
Everybody serves revenue or costs, or both.
Revenue – Costs = Profit.
Everybody serves revenue or costs, or both.
Lack of understanding can also create frustration between the board and CEO. The senior executives might seek an acquisition, but the board insists it has always intended growth to be organic, from within. "Why didn't you tell me?," the CEO will moan.
Mr. Lewko recommends "strategic latitude guidelines," a one-page document that makes clear the parameters for executives. For example, growth has to be more than 10 per cent a year, what kind of acquisitions are permitted, what geographic areas can be considered.
He finds both boards and CEOs appreciate the clarity when they develop such a document.
He finds both boards and CEOs appreciate the clarity when they develop such a document.
The three main tools he recommends are not quite as concrete as a hammer, screwdriver or nails. But they will help you build strategy:
- Strategy assumptions: You need to connect outside trends to the inside profit and loss statement, figuring out the implications of those trends and what is likely to happen.
- “You can’t make decisions without assumptions. You need to think which critical ones will affect the business,” Mr. Lewko said in the interview. Unfortunately, most companies don’t define the assumptions they are working with, and can’t adjust them if they prove unreliable. As well, companies can operate in a vacuum. Thinking about assumptions – what’s happening externally – focuses you beyond your own doors.
- Product market capability engine: This is a one-page statement that outlines what your plan is for the three elements at the heart of strategy – products, markets and capabilities.
- How will you combine them to be an effective engine for your company? It should explain the big decisions you are making with respect to each, show the relative priorities of all your products and markets, highlight where you make money and don’t, and clarify if your competitive advantage is real. “It’s simple, but powerful,” he says.
- Goal and gaps: Figure out three key goals – no more – that force you to focus, enable accountability, and help you to find and fix performance gaps. Strategic goals, he stresses, don’t have to be long term – they just need to be strategic. Avoid ambiguity, such as “be the leader in customer service” or “gain market share.” Then keep track of how you fare against those goals with some (but not too many) metrics.
"Strategy doesn't need to be complex. This provides a simple way – products, markets, and capabilities," he sums up.
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