- Saturday, 07 April 2012 22:24
Strategic innovation requires high level thinking at the level of corporate strategy. Developing a five-year strategy of innovation at the corporate level creates a roadmap for the future of the organization and focuses on culture, processes, performance metrics, people, and capturing the current and future voice of the market.
One of the necessary steps of building this innovation strategy is to design it based on the dynamics of the market, the megatrends facing the industry and the current competences of the firm. Conducting benchmarking of best-in-class companies can help to generate best practices and real case studies, but might reinforce mimic behaviors. I believe in being innovative and creative in designing an innovation strategy. That means developing a multi-stage horizon plan with increasing “risk-taking”, creativity-driven programs and mindful process orientation.
My goal is not to propose a lecture on what strategic innovation is. If you search on Amazon, you will find excellent books on the subject. I can share with you my experiences on what unique capabilities and processes are critical to the successful design and implementation of a robust innovation strategy:
- Ideation process: the front end of innovation is critical. I found that idea management software are quite useful. Using ethnographic and customer observation research methodologies is also a good way to uncover hidden needs.
- Integration of ideation process, Stage Gate process and R&D resources: This is where marketing, innovation and R&D have to be strongly aligned.
- Embracing and generating a culture of innovation and creativity: make creative leadership a critical leadership competence of your business; measure innovation culture using tested academic constructs and track over time; get top leaders on board from the get go.
- Speed to market and organizational agility: 80% complete is perfect especially during a time of crisis; introduce rapid Stage Gate to accelerate the introduction of level 2 or 3 innovations.
- Technology and innovation mapping: value maps, patent maps, technology maps and other strategic mapping tools can help manage technology and project portfolios.
- Develop the right innovation metrics: use an innovation cockpit; kill resource-draining and “pet” projects fast; set realistic targets; commit to innovation investments.
Value & Pricing Management
- Saturday, 07 April 2012 22:23
Once value is created and differentiation established, it needs to be measured, quantified and somehow modeled. The process starts with a clear definition of the overall value proposition and the listing of essential value drivers (tangible and intangible). The Economic Value Estimation® methodology created by Strategic Pricing Group (now Monitor) is the best one to systematically assess business and economic value. Recently LeveragePoint Innovation has introduced a value-based pricing SaaS software to integrate all elements of the EVE® in combination with value selling and value communication dimensions of the value-based pricing process. These are powerful tools that best-in-class companies use to assess and quantify value, to communicate that value, and to derive the best pricing level for their products and services.
Pricing is the most powerful P of the marketing mix. It is the only revenue-generating P as well and can lead to dramatic increase in profit levels when done right. Yet, only 5% of Fortune 500 companies have a dedicated pricing function and only 9% of business schools have a dedicated pricing class. There is a long way to go before pricing is widely adopted and finds its well-deserved place in top management discussions. This is what drove my desire to conduct academic research in the field of pricing and to pursue a Ph.D. in Management from Case Western Reserve University.
I have written lots of papers in the field of value and pricing management. I embrace and recommend the adoption of value-based pricing. As more and more companies jump on the band wagon, I encourage a revolution in our pricing orientation! Join the value-based pricing revolution!
Because the conceptualization of value and value management is different for everyone, a group of pricing and value experts got together to write and propose a common definition of what value management is. Words and definitions are important in the business world. This is a position paper from top practitioners and consultants from around the world who specialize in value-based pricing and value management strategies. This paper is free to download and we welcome its wide circulation to practitioners in the field of marketing, pricing and value management.
What Value Management Is – Click here to download
Please check the blog and publication sections of my site and read all pricing-related papers. Feel free to download them and to share them with your network.
Here is a list of preferred partners I have professionally worked with and am endorsing in the field of value and pricing management:
Business Model Differentiation
- Saturday, 07 April 2012 22:23
Firms invest millions in innovation processes that will be mostly product focused. Many of them forget about elevating the differentiation discussion at the business model level. Are you challenging the impact of your business model and the level of competitive advantage it has? Do you find yourself in stale business planning discussions that end up being a copy-and-paste exercise of previous year’s work? Are you asking yourself the right questions on customer experience, business attractiveness, competitive pressures, etc? I found that it takes a mindful approach to be able to sit down with the relevant managers and have a candid discussion on where our business model stands. I conduct these types of discussion on a monthly basis: are we doing the right things? Are we leveraging the right trends? Are we over-estimating our differentiation power? Why do customers continue to buy from us? Are we leveraging our hidden assets? These are great discussions that are opened, candid, constructive and safe.
I recommend some reading on the subject. I really enjoyed the book series from Chris Zook especially the Unstoppable book. I also highly recommend you start with the classic books including the Michael Porter’s ones on competitive strategies and competitive advantage. The subject of business model differentiation is under researched and somewhat neglected. It is the role of marketers to inject business model innovation and to create differentiation. It is also their role then to measure that differentiation via Economic Value Estimation® and to price business models right.
Any strategic presentation should start with a visual representation of the business model and should state why that business model is strong, unique and sustainable. These one or two slides should not be bullets points but a strategy statement representing the foundation of differentiation and competitive advantage. Try it. Be bold.
Creative & Breakthrough Thinking
- Saturday, 07 April 2012 22:22
Creative leadership is a required skill of the future. With growing complexity in the global business arena, leaders will be called to be more creative in design, problem solving, system thinking and proactive scanning. The 2010 IBM HR survey suggests that organizational creativity needs to be unleashed and cultivated. Another study from IBM conducted in 2012 with over 1,700 CEO’s addresses the growing complexity and the need for different leadership skills.
As a top executive in several organizations, I intentionally and proactively encouraged employees to be more creative and to disrupt their way of thinking. Proactive disruption is necessary to anticipate crisis and make changes before moments of discontinuity occur. Disruption means an interruption in the regular flow or sequence of something (Wikipedia 2012). Organizations and managers in general avoid uncertainty. To make sense of conflicting signals and irrational behavioral temptations, they impose rules, routines, standard operating procedures, industry traditions and practices, information handling rules, risk avoiding agreements in order to reduce uncertainty. These mechanisms have a tendency to put the business into automatic cruise control mode! An agent of disruption proactively and constructively disturbs, interrupts, and challenges these organizational mechanisms to integrate more creativity, mindfulness and awareness about the dynamic environment.
So what does that mean in practical terms. I am using disruption to inject fun, unconventional ways of thinking, new interpretation lenses, new approaches to business issues. That means experimenting with new techniques, diffusing novel knowledge, engaging employees with fun activities (casual days, theme days, creative brainstorming) and also changes to the traditional rules and regulations (a month without PowerPoint was very popular for example).