Methodology

The process of developing creative strategies requires three important tasks- Investigation, Strategy, and Execution. The key catalyst for success of the entire process is the ability to find and recognize nuggets- in needs, trends, discontinuities, opportunities, threats- and to apply these insights to the firm's strategic focus, objectives, implementation plans, and organizations.

The Investigation phase focuses on three uncontrollable issues- customers, competition and business climate. It also includes evaluation of the firm that stays on course because of strong currents of objectivity that flow in this phase. However, during the strategic focus phase, there is always the inherent danger of institutionalized "bad habits" resurfacing to destroy, if not to hinder, development of a new strategic perspective. The process is internal to the firm at this stage and the role and participation of the CEO is critical in defining and supporting the process.

Opportunities are created by the interaction of four issues: Customers, Competition, (Business) Climate and Company- the four Cs of the market place. The first three Cs relate to external factors to the firm while the fourth C is Company- the client firm. Analysis and synthesis of information in these four arenas provide insights into the nature of markets and the firm's responses.

Customer analysis involves understanding the details of many factors- yielding customer segments, and each segment's drivers, motivations and needs. To gather insights about the nature of the customers requires, at the outset, asking seemingly generic questions such as:

• Who are the customers- both existing customers and prospects, internal and external to the firm?
• What do they buy?
• How do they buy?
• Why do they buy?
• Where do they buy?
• When do they buy?

Answers to each question typically reveals a first level of understanding of the nature of customers. However, delving deeper into the responses usually reveals the nuggets that are critical for insights into segmentation, market drivers, needs, trends and discontinuities. For example, a focus on "who, what, how, why, where, and when do prospects buy?" usually reveals perspectives that are not obvious when investigating existing customers.

Competitor analysis is the second phase of the investigation process. The first issue is defining competitors in the market space. Myopia can create shortsightedness in defining the competitive arena, to the detriment of the client, and must be overcome.

The "who, what, how, why, where, and when" competition sells, and their revenues, margins, and growth rates, are the next series that reveal some aspects of each competitor's market strategies, and the players' competitive positions.

However, that is not adequate. A competitor's organization, culture, assets, and skills in innovation, manufacturing, technology, finance (access to capital), information technology, management, marketing, and customer base (to name a few) are also important in determining apparent strategy and business design.

An additional step is to group competitive firms that pursue similar strategies, and have similar assets, skills and other characteristics.

Company analysis is similar to competitor analysis except that subjectivity creeps in. Competitive analysis is somewhat objective, done at a distance, but with limited information. Self-analysis tends to be subjective, with tendencies to use available information. This is most often unacceptable.

The challenge is to create an objective framework for self-evaluation. Typically, the analysis criteria developed by critically dissecting competition, easily transfers to the self-analysis phase. Additionally, the hypotheses created by the team are shared with a diagonal cross-section of the firm for verification, or modification.

Business Climate issues are those issues that are beyond the control of customers, competition, and the Client Company. Economic, Environmental, Regulatory, Cultural, Technological, Demographic, Political and other factors have far reaching consequences on the market place.

Therefore monitoring, detecting, and analyzing these issues are critical to identifying relevant trends and discontinuities that, in turn, could create opportunities or threats to the firm. Scenario and impact analyses of the most relevant business climate issues provide insights for developing resultant strategies.

Analysis and synthesis of the four Cs- into major issues, trends and discontinuities, and opportunities and threats- typically yield the market landscape for the firm to achieve its overarching corporate objectives. The firm then has to define its strategic focus to succeed in this newly defined terrain.

The strategic focus of the client firm varies depending on the nature of the business unit. The unit can be a strategic business unit (SBU) or a strategic product unit (SPU)- the unit that encounters direct product competition in the market. The SBU has several SPUs in its repertoire, each connected to the other by functional synergy of some nature.

The strategic focus of an SBU and SPU is constructed on the foundation of opportunities and threats revealed in the investigation phase. The strategic direction is then defined by the interaction of the attractiveness of specific markets and segments, and the relative competitive strength of the client firm in those markets.

These then get translated into specific business objectives for the SBU and SPUs of the firm. The SPU's business objectives become objectives to specific departments in the customer value delivery chain.

Execution: The most challenging phase for the organization is the implementation phase. The process now becomes internally focused, controlled by its organization. The inertia of the previous strategic direction and practices is significant- the more significant the departure from the existing strategic path, the greater the power of the "Not Invented Here" (NIH) and the "This is not the way we do things around here!" syndromes.

The biggest hindrance to accelerated growth is the inability organizations to quickly drop old habits and assume new ones. Also, it takes time to add new capabilities and practices to existing organizations. Therefore, a five-step approach is considered.

The first two steps initiate the implementation phase and the final three take the firm to their final goal.

Step 1. Establish a growth oriented leadership team with:

• Ambition to create a new company
  
• Willingness to bet their career on it
  
• Ability to implement the growth strategy
  
• Ability to develop capabilities required for growth
  
• Ability to meet both short-term and long-term goals
  

Step 2. Articulate Vision Quickly

• Create a leadership ambition for growth
  
• Establish rational, political, and emotional commitment to growth; set the basis to alter culture
  
• Build a thorough understanding of opportunities and capabilities
  
• Focused on implementation and execution
  

Each of the final three steps- has imbedded in it, an Ambition-Strategy-Capability cycle. Ambition is the essence of the step's objective, strategy defines the methods of achieving it, and capability is the firm's infrastructure to fulfill its ambition.

The transition and transformation to the final outcome is a three-step process of getting started, then getting better, and finally, becoming different. However, each of these steps, requires an intermediate goal, strategy, and development of company capabilities to meet the goals.

Step 3. Get Started

• Find and implement early wins
  
• Find and fix quick hits
  
• Involve the organization
  
• Train and educate the organization
  

Step 4. Get Better

• Create and encourage profitable market focus
  
• Create and encourage growth creating processes
  
• Reengineer processes
  
• Mobilize organization for growth
  

Step 5. Create Competitive Edge

• Create broader and deeper understanding of markets, customers, and their dynamics
  
• Alliances, Mergers, and Acquisitions
  
• Develop new capabilities
  
• Enter new markets
  

The ultimate goal is to be significantly different, in important ways, in the market space. The process recognizes that the path to this end is not instantaneous but a gradual one with intermediate victories, and building of capabilities. At the core is the growth team with its articulated vision.

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