I clipped this back on 2017/12/07. I didn't save the attribution.
How to change?
Often the status quo is not an acceptable course of action. The environment is
changing around us and we need to make not just incremental improvements
over what we are doing, but rather to rethink, reinvent, and reengineer what our
strategies should be. The conventional frameworks start the process of reflection
on our past, and that is often the wrong way to make you think of change. We
want to create discontinuities not to reaffirm what we have done. By providing
too much emphasis on competitor’s behavior, the conventional frameworks tend
to anchor us in the existing industry practices.
We have found that the obvious answer to initiate a process of change is to
start with the customer. What can we do to help the customer improve its business?
How can we look into its full life cycle and detect novel ways of providing
something that is truly unique? By focusing on the customer, we find it is much
easier to detect opportunities to be truly unique and promote change.
How to pursue profitable growth?
Profits are revenues minus expenses. It does not require much creativity to reduce
costs; there are always ways to curtail our expenditures. What is more demanding
is to find ways of increasing our revenues profitably. Are there a lot of potential
revenues and economic growth which are left under the table because of our
inability to detect those opportunities? How could we assess the potential for
growth?
One practice that is commonly used is sales forecast. I find that completely
unacceptable – first, because sales should not be a subject of forecast. We forecast
events over which we have no control, such as the weather. On the contrary,
sales are something that we truly can and should influence. Second, sales forecast
means an exercise of extrapolation of the past into the future. Again, this
is unacceptable if we want to challenge our previous performance and if we
want to engage in new forms of management that, hopefully, can make our past
irrelevant – for the better.
Where is the answer? Again this resides on the customer. If we were to look at
each customer individually, we will detect what potential exists by treating them
differently, meaning offering more creative value propositions. This will allow
us to examine “white spaces” – untapped opportunities – from the bottom up to
come up with a much more effective growth strategy than the one resulting from
competitive analysis.
How to spark creativity?
What we are saying, in various ways, is that we need to find mechanisms that
allow us to be more creative, the so-called thinking out of the box. When I was
using the conventional frameworks, I rarely found them to be the source of inspiration
conducive to creating an innovative strategic environment. It might be my
limitation while using those frameworks, but I doubt it. The emphasis on creating
“competitive advantage” was focusing on the competitors. That is not the
best way to do it. Instead, attempting to understand the granular needs of the
customer and to seek the best ways to satisfy them provides the answer.