Thinking Strategically: Designing for Shared Value

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Today I had an epiphany.  At the heart of our greatest companies is innovative design.  Great companies create shared value with society.  Great design leads to shared value.

To explain you’ll need to understand the concept of shared value.  As Michael Porter explains it, shared value is developing products and services that not only benefit the company’s financial stakeholders, but that literally add value to society in some way.  They solve real problems and are not just repackaging solutions or solving contrived needs.  Think: energy management solutions and smart electric grid technology.  The video clip below explains.

Now, what is design thinking.  From the experts at IDEO:

“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” —Tim Brown, president and CEO

The needs of people.  These people are your customers, clients, and users.  They are also members of society.  Their needs transcend the stated purpose of the product or service.  Great design serves these unstated needs, the ones we didn’t know we had; the needs that impact our world and society.  Great design creates shared value for the company and society.  That’s what capitalism can be.  How you run your company will determine if capitalism makes good on this promise.


Prof. Michael Porter about Creating Shared Value by borisloukanov

From the documentary Objectified, by Gary Hustwit.

Your Most Valuable Employee

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If you had to pick, who would be your most valuable employee (MVE)?  Here’s a hint, you don’t need to tell them if something is their responsibility, they just do it.  The most valuable employee is the one who doesn’t care about job descriptions but takes the initiative, thinks ahead, and sees his or her job as doing whatever it takes to achieve the team’s success.  Your most valuable employee leverages all his or her talents, connections, and resources to bring about results.  These people are always thinking ahead, never take anything for granted, and are action oriented.  In short, they are a force for moving projects forward, helping to set the pace for others.  They are leaders.

I was recently at a biotech networking event and met a number of scientists looking to move from academia into the biotech industry.  I also met scientists from industry looking for new biotech jobs since their company was recently bought out.  The question came to my mind, with so many PhDs  looking for jobs, how can anyone stand out?  My suggestion is to think and act like the MVE.  Interview from that perspective, and be willing to jump in and learn and do work you are likely not qualified for because it needs to be done.  Moreover, do it with excellence.  People like this are rare, which is why it is a very good quality to have.  The trick is to work for a company where this type of action is appreciated and rewarded.  One of the best books on this topic is Linchpin, by Seth Godin.

Use Analysis to Drive New Growth

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Thank you to all the attendees at today’s ACS 2012 panel on marketing and technical sales for start-up and growing businesses.  Below is the presentation I gave at today’s talk.    See the list of resources linked below for references.  Next week we’ll be releasing a white paper to compliment this talk.  Please sign up for our newsletter on the homepage to get notification and the link.  It requires flash to view.  If it does not load immediately, hit reload on your browser.

1. “Hidden flaws in strategy: Can insights from behavioral economics explain why good executives back bad strategies?” by Charles Roxburgh McKinsey Quarterly May 2003  http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Hidden_flaws_in_strategy_1288

2. Harvard Business Review: “The End of Solution Sales” by Adamson, Dixon, and Toman HBR, July – August 2012, pgs 61-68

 

 

 

 

 

Strategy and Culture

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Setting a strategy in motion is not easy.  Often, managers bemoan the company culture as the cause of their failure.  A recent article in HBR discusses the impact of ignoring culture when implementing a new strategy.  Clearly, to accomplish big things you need a good strategy.  But how you communicate it to your team and how you sell it to them is critical.  Yes, you do need to sell it.  Every person has to recognize why the new strategy is good for them and the company.  And every employee must choose to implement the company strategy.

Your best bet at a change in your employees is to help them uncover for themselves why the change is important to them.  Not tell and sell, but rather get people to ask themselves why the change is good for themselves and their company.  One way to help this process is to involve employees in discussions that feed into the strategy creation process.  When people are treated like stakeholders, they begin thinking more like stakeholders.  They’ll be more likely to consider the importance of the strategy and what their role will be in making it successful.

 

Buck the Status Quo

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What’s keeping you from taking action?  Maybe things in your business aren’t great, but they might not be too bad either.  Perhaps sales are flat or growth has just leveled off.  You’d like things to be better, but for some reason you haven’t done anything substantial about it.  Welcome to the status quo, a land where mediocrity rules and where once great businesses go to die.  Okay, maybe I’m being a bit dramatic, but the status quo is a powerful anchor in the human mind.  It keeps us from making decisions when we perceive risks in taking action.  The problem is, inaction has risks too.

An article in McKinsey Quarterly entitled: Hidden Flaws in Strategy1, by Charles Roxburgh discusses 8 common flaws managers make with respect to strategy.  In the article, Roxburgh discusses how the status quo affects decision-making, and the resulting impact on strategy.  I’ve found that one of the most insidious affects of this bias, is that it keeps organizations (and communities) from adapting to a changing world.  When your environment changes you must adapt to compete and thrive.  So how do we break ourselves out of the status quo?

Tim Riesterer wrote a blog post on HBR.org called Stimulate Your Customer’s Lizard Brain to Make a Sale2, that may offer some insight.  Maybe we need to stimulate our own lizard brain, the part of our brain that senses danger.  There is certainly danger in doing nothing to adapt to competition.  The problem is, that danger may not feel real yet.  How do we tap into this instinct to drive action within ourselves?   Humans respond to urgency, its our nature.  To take advantage of this fact, we need to increase the urgency of the needed change to enhance our ability to take action now.

Here’s the trick, once we’ve created urgency for seeking a change we must build our motivation by asking what positive outcomes will come from taking action and why those outcomes are important to us.3  Only by building the whys can we convince ourselves of the positive reasons for change.  The contrast of this positive future versus the urgency and danger of the status quo is what can produce the activation energy needed to break our inertia.

References:

1. Charles Roxburgh, “Hidden Flaws in Strategy: Can insights from behavioral economics explain why good executives back bad strategies?” McKinsey Quarterly, (May 2003), https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Hidden_flaws_in_strategy_1288, accessed August 2012.

2. Tim Riesterer, “Stimulate Your Customer’s Lizard Brain to Make a Sale,” HBR Blog Network (blog),July 31, 2012,  http://blogs.hbr.org/cs/2012/07/stimulate_your_customers_lizar.html, accessed August 2012.

3. Michael V. Pantalon, Instant Influence: How to Get Anyone to Do Anything – FAST (New York, NY: Little, Brown and Company, 2011).

Is Strategy Last on Your List?

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It shouldn’t be, but in most small and mid-sized businesses, strategy is last on the list of things to do for business managers.  Why is this?  First, strategy is hard work.  Most managers choose the urgent over the important.  Strategy requires creativity and dealing head on with more questions than you have answers for.  So, it becomes easier to be a doer of tasks than a navigator in uncharted territory.

Second, I think that if you run a business that is surviving (as opposed to thriving), you may become complacent.  Seth Godin had a great blog post on this topic today.  The web has changed the face of competition and lowered barriers to entry that once protected these companies.  If you wait until you start losing business, you’ve already lost the game.

To learn about three reasons why a good strategy is imperative to your business, see the presentation of a talk I gave recently at the Frederick Innovative Technology Center.

Needed: U.S. Leaders + Strategy

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Where did all of our leaders go?  It seems that everywhere you look, from our businesses to our government there is a dearth of true leadership.  If you need help remembering what a real leader looks like, I suggest reading The 21 Irrefutable Laws of Leadership, by John Maxwell.  Harvard Business School recently completed a large survey and study of U.S. Competitiveness.  The findings point to fundamental weaknesses in our approach and actions toward restoring our competitive advantage as a country.  However, what I also took away from the findings was that a combination of educated leadership and cohesive strategy were absolutely required to dig our nation out of its current predicament.

Going beyond ideology and making decisions based on evidence is the mark of a functioning government.  Researchers from Harvard and other top universities who worked on the U.S. Competitiveness study proposed paths forward.  It will take great leadership that is willing to go beyond ideology, and forge a cohesive strategy that cuts across party lines to move our country forward.

How can we all do our part?  Demand more of yourself.  Read the studies and educate yourself from these and other solid research sources.  Reevaluate your ideology in light of these findings and consider this as you elect your leaders.  Demand more of our leaders.  We must hold our leaders accountable for working together to move us forward rather than sitting idle under the cloak of their ideology.

Leverage Analytics in the Frederick News Post

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Last week I gave a talk at the Frederick Innovative Technology Center on the importance of having a good strategy and why strategy is important to business leaders and stakeholders.  The Frederick News Post did piece on the talk: Speaker’s message: Strategy key to success in business.  The turnout was great and the audience was engaged in the topic.  I’ve posted the prezi below and on the strategy page of this website.

Starting and running a small business can be overwhelming, but it is important to be able engage in strategic thinking regularly.  I hope the talk gave attendees an opportunity to think about their business outside of the hustle and bustle of daily activities.  The objective of these talks is to give business leaders a chance to assess why and how they do what they do and create breakthroughs in their thinking.

The Modern (Dis)organization

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Why are so many employees today disengaged from their work?  I believe the modern organization, with its focus on bureaucracy rather than substance is a primary reason.  Sense of purpose is a key driver of successful organizations and for people.  Moreover, a clear purpose (as defined by a competitive strategy) is a critical element to defining work that matters to the organization and the employee.  This is one reason why more adventurous people like to work for small entrepreneurial companies.  While the risks are higher, their is more perceived opportunity to do work that matters.  In most young small businesses, there tends to be little structure and few bureaucratic institutions, so action is easier to initiate.

The problem is, with little structure things can quickly degrade into chaos.  So, rules are put into place, people break them, so more rules and punishments are put into place, etc.  Before you know it, things aren’t so fun anymore.

Try this instead:

  1. Hire great people who care deeply about bringing excellence to your organization.
  2. Set the bar high, accept no slackers!
  3. Design and communicate a great strategy that everyone can understand.
  4. Make the intent of your initiatives clear so that employees are free to use their creativity to devise more effective ways to accomplish your objectives.
  5. Trust your people.

Dan Pink has a great book called Drive: The Surprising Truth About What Motivates Us, that clearly explains how to create motivation in your team.  See also, The Progress Principle, by Teresa Amabile and Steven Kramer about how companies successfully create engagement and creativity in their teams.