The lack of imagination in corporate strategy development is hurting many organizations. Many companies think by adding new product extension is the easiest way to jump on the innovation bandwagon. There's simply a lack of tools, processes and framework to incorporate "corporate imagination" into "corporate strategy". There are tons of books written on how to do strategy planning but almost all of them fail to do that. I think every company needs to revisit their planning approach.
There's lots of myth about corporate strategic planning. The challenge with writing about what works in business strategy and what doesn't is that the evidence is basically anecdotal. Business writers are impressed from time to time with particular companies / CEOs that have succeeded (usually on financial measures or market cap size) and with the theories drawn from their success. Often they have to backward engineer these theories of success. And then five years later, another writer will write about the fall of that once great organization. We should not discount the need to learn the underlying habits of success--the "good habits" of great companies as illustrated by Jim Collins . For very good reasons, they singled out certain companies as models of success--companies that, for very different reasons, have since fallen on hard times. I am more interested what practical approach for companies to sustain their leadership under disruptive competition. Let me throw a few questions out and try to ask yourself if you believe in the following:
- High performance companies often recruit people outside their industry rather than looking within their own?
- VCs are better at investing than any typical corporation when it comes to innovative products/services?
- No nonsense, plain-vanilla boring straight-shooting CEOs perform better than flashy charismatic CEOs?
- Companies that reply on acquisitions of innovation do better than those who focuses on their own R&D ideas?
- Companies that stick to the knitting (ie their 'core business') reward shareholders better than those which actively expanding into the adjacencies?
- The level and quality of skunks work correlates directly to the long term performance of an organization?
History tells us that setting up autonomous "skunk works" or similar "idea labs" doesn't not improve an organization's innovation capability. Think about those all those lab (including the high profile Xerox PARC) that failed to have many of their great ideas commercialized. I believe the challenge is not on the R&D front, it is the integration of ideas generation and activation. This is where we add most value to large organization... active integration of imagination with operations. Organizations struggle to manage imagination and in fact, three generations of MBAs were trained on command and control concepts.
Corporate imagination and creativity needs to be the core any corporate strategic planning exercise. Strategic planning should be about anticipating big disruptive challenges and spotting important trends. Often strategic planning exercises are turned into a days long power point karaoke or rigid, data-driven operations planning or financial forecasting. To improve the quality of any strategic planning process, you need to begin with deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance. The need to avoid the trap that they blind themselves to disruptive competition... and not becoming arrogant, complacent, and far too dependent on their traditional core competencies. The starting point should be around a cross-industry scan (comparable studies as we call it) and deep customer insights (ethnographic exploration). The idea to identify the nature and extend of the shift between your organization's assumption of customer needs and the emerging unarticulated customer needs. When we work with our clients, we document these findings and allow executives to use them in their planning process to drive meaningful discussion of any key strategic issues. This way we can ensure that management does not waste time and energy on less strategic topics during the planning sessions.
"Corporate Imagination" and "Corporate Strategy" are strange bedfellows, by bringing the two together an organization can truly build an innovation engine to survive and prosper the next disruptions. Neither discipline nor imagination alone, however, is as effective as both are together.
