Beyond Business - Today's news, tomorrow's business strategies

Which is better – sense and adjust or optimize and innovate?

I believe it’s the latter.

I wasn't sure whether I should post this entry here, or under my "inspire" blog which explores the use of Business Analytics. It fits equally at home on both. To encourage you to visit that blog, I decided to cross post.

If you'd like to understand why I think it is better to optimize and innovate, click here to read the full story, and while you are there, check out other posts from myself and others talking about Business Analytics.

“However beautiful the strategy, you should occasionally look at the results.” Winston Churchill.

As I highlighted in my last post, strategy begins as a hypothesis. It may sound very eloquent and logical, but you need to prove it works. But there’s more …

Dr’s Kaplan and Norton (of Balanced Scorecard fame) led attendees at Palladium’s EMEA summit through their “XPP - Execution Premium Process” – 6 stages of executing strategy. The work is based on research carried out at hundreds of organizations across the world, in all sectors. In this blog …

• I’ll introduce you to the 6 steps
• Share key insights
• Give you a discount code for subscribing to summit presentations captured on video

Two stories caught my attention this morning – one from Reuters on a new web site designed to bring crowd sourcing to fashion, and the other from booz&co’s strategy+business magazine – an interview with Henry Mintzberg "Management by reflection”.

Both were radical and inspiring. Both turn general business assumptions on their head – a key for innovation.

• For the fashion world it was that you don’t need to rely on retailers to fund up and coming designers
• With Mintzberg, it was the value of MBA’s, and in particular, the way we learn

“Management by reflection” was a great title. It gets straight to the heart of the problem – not just the solution.

Think about your business. Why do you do things the way you do? Because they have always been done that way? Or because it’s simply the best, most efficient way of doing it? If the latter, when did you come to that conclusion – last week, or years ago? More importantly, what evidence or proof was used?

It’s as easy as one, two three right? … maybe.

Earlier this week I attended the first in a three part series hosted by The Economist – The Ideas Economy. The session was focused on “Innovation – fresh thinking for the ideas economy” held at the Haas School of Business, Berkeley, CA.

The conference was a mix of innovative ideas and best practices for innovation. Very inspiring and a credit to Vijay Vaitheeswaran the conference chair and global correspondent for The Economist.

Here are my top 3 observations:

1. Ideas are cheap

The real challenge is how to nurture an idea and bring it to life. There were many examples of how teams got into trouble, failed, lost respect and funding. The biggest risk in this scenario is the negative impact on the flow of good ideas and more importantly, the number of people prepared to run with an idea.

Without innovation, we become a “me too” and face competitive threats, so you need to keep that conveyor belt of ideas flowing – particularly when ideas are cheap and the economy is about to surge.

On July 6th 2009 Dave Carroll posted a video to YouTube – United Breaks Guitars. Within a week it had been viewed 3 million times. When I met Dave last week, the figure had reached over 7.8m. His budget was a mere $150.

According to the Times of London, it was the tipping point that caused United’s share price to plunge 10% costing shareholders $180m.

Dave is a singer. He didn’t set out to destroy value. He’d reached the end of the line and got no satisfaction. He’s not a tech savvy marketer - he did what he does best – he wrote a great song, one that resonated with a lot of people. It had rhythm and a catchy message. The web made it easy to communicate – it’s cheap, instant and provides great reach. Serendipity took over – others spread the word and it went viral fast- very fast.

Dave has received over 15,000 emails from people with similar stories – examples of bad service from other organizations. People want to talk – but the web not only makes it easy, their comments and impressions can last forever - for all to view.

Wednesday 11 November was an enlightening day. I learned how DOW chemical transformed a $1bn investment into $5bn, and I came to understand why 88 percent of people would switch brands to a company with a cause.

The common denominator was a focus on sustainable growth – increasing shareholder value while decreasing an organizations environmental footprint.

The insights came from AMRs Sustainability Exchange in Boston. There were over 150 attendees - people tasked with executing environmental initiatives within their organizations.

Dawn Vance of Nike talked about how they used a focus on the environment to innovate, integrate and mobilize efficiencies throughout their organization.

John Phillips of Pepsico talked about the need to change the physics of how you do business. As he put it, incremental change doesn’t help – you have to radically rethink how you do business. When you do that, as DOW chemical learned, you can make significant cost savings.

Think about it. We do many things purely because they have always been done that way. They’ve been handed down from one generation to the next. But who questions whether a process is still the most efficient? Who questions whether it still adds value?

Let’s take an example from Pepsico – rinsing bottles before filling them with Pepsi - a process that can use thousands of gallons a day. As many of you know, water is a scarce resource. Rather than work out how they could reduce water (incrementally), Pepsico decided to eliminate it completely. Such a radical challenge required a radical solution. And they got one – highly compressed, sterilized air. Now the bottles aren’t just clean, they are clinically clean - and not a single drop of water gets used.

This “radical” message was echoed at the World Resources Institute (WRI), Courage to Lead dinner held in New York that same night. I was lucky to be one of the 350 guests that came to honor Dan Doctoroff, President of Bloomberg and Chad Holliday, Chairman of DuPont.

Unable to attend the World Business Forum this week I read through stories posted on their Bloggers Hub.

Four speakers (via the bloggers writings) caught my attention: Gary Hamel, Bill George, Jeffrey Sachs and Bill Clinton. Each brings an interesting perspective on what it will take to move beyond business as we know it today.

I believe they are connected - each builds or contributes to the other. What I have done here is pick through the information shared and extracted ideas that may have been lost when presented by a single speaker.