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Opportunity – A Mix of Strategy and Innovation
Opportunities are generated from strategy and innovation, driven by curiosity and entrepreneurship. The plans that support these opportunities are the product of strategy, not the driver.
The McKinsey Quarterly recently published an interview with Richard Rumelt, professor at the Anderson School of Management, UCLA. His refreshingly blunt observations included:
Most corporate strategic plans have little to do with strategy. They are simple three-year or five-year rolling resource budgets and some sort of market share projection. Calling this strategic planning creates false expectations that the exercise will somehow produce a coherent strategy.
What top management really seeks, he elaborated, is substantially higher performance. There are two ways to achieve that. Invent your way to success, or exploit change in your environment.
Either requires strategic thinking.
Strategic thinking reveals alternative paths to differentiation. Strategic thinkers explore commonly available information, but reach innovative conclusions. These are possibilities, not certainties. If you require certainty, wait until someone else succeeds. Then analyze the opportunity you have missed.
Possibilities are the bargaining chips for your future. They identify your options. Without them, your organization is handcuffed by the past and vulnerable to the possibilities defined by competitors.
Rumelt said, “almost all innovation flows from the unexpected combination of two or more things, so companies need access to and, in some cases, control over the right knowledge and skill pools.” What he is describing are intersectional thinkers, non-linear combinations of personalities, experiences and perspectives who generate ideas.
In an increasingly dynamic environment, almost anything can happen anytime. Markets shift. Trends reverse. Resources fluctuate. To hinge any plan on static strategies is short sighted, concealing a resulting downward spiral.
Creating a unique share of an emerging environment is a strategic maneuver. Visualizing innovative scenarios is one way to create and own opportunities. Your view of the future will define more clearly and accurately the best allocation of resources today to assure ongoing differentiation tomorrow.
Chas Martin
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Reader Comments (2)
Chas: Thanks for covering this (there are so many things that cross my desk that I want to cover -- let alone I'd read the teaser to this piece, but hadn't read the whole thing).
[Did I miss the explanation of the elements of the equation? In the meantime I made up my own equivalents: Strategy, Innovation, Context, Economics.]
There was a term that I think even Rumelt glossed over. It is a term that to me is the crux of accellerating the potential that goes with opportunity: Insights.
In moving from manufacturing to service industries we lost the critical nature of Research and Development. In the service industry and based on the opportunities to optimize experiences (the transactions of relationships), R&D now needs to stand for Research & Design. Insights come from continuous research. All design (read: all funded projects) should be informed by insights from research.
Paula: The explanation of my equation was vaguely defined in my first sentence. Opportunity equals Innovation plus strategy multiplied by curiosity plus entrepreneurship. I should confess that subjects which required equations were never my strong suit. But, I appreciate your interpretation and conclusion. Insights, I believe, are the recognition of opportunities.
For additional perspectives on insights and how they can be cultivated, see: The Value of what you don't know.
I am interested in other suggestions you can reference, including your own writtings.