This year, the biggest topic of discussion in the boardroom is growth, according to a recent survey. Forty-one percent of Board members cited growth compared to only 16% in previous years. Businesses are sitting on cash and are looking to expand.
The implications for leaders of strategic initiatives are clear: there will be more strategic initiatives focusing on revenue, market share, and profitability. We will see considerably more product and market development initiatives. CEOs view strategic initiatives as those endeavors that:
- Change market or competitive position, and
- Cut across functional or organizational boundaries
Too, we will see more strategy innovation that changes the business model. Consider this statement from Fortune Magazine (June 13, 2011)
“In the good old days, a strong business model lasted for decades. No more. CEOs in almost every industry will have to innovate at their business’s deepest level, as Sam Palmisano has done in moving IBM adeptly into software.”
In addition to strategy innovation, strategic initiative leaders need to recognize the presence of these other two kinds of innovation.
- Product innovation – development of new offerings to new or existing customers
- Process innovation – improvement or change to business processes that provide a core competency that can be exploited through lowered prices or capacity to bring new offerings to the market
Innovation occurs in levels. Incremental innovation involves feature enhancements. Platform innovation involves creation of new families of products and services. Radical innovations are “game changers” that can disrupt the competitive picture. Strategic initiative leaders will have have to recognize that often project management process and methodologies are suited (only) for incremental innovation and might erase value. This quote from Ronald Mascatelli expresses the tension,
“The challenge for managers is to inspire, guide, excite, encourage, and shape, without imposing arbitrary structure that might destroy the fragile essence that separates breakthrough innovation from uninspired incrementalism.”
The emerging discipline of open innovation popularized by firms such as Procter and Gamble will also contribute to growth-oriented strategic initiatives. Open innovation involves actively partnering with other organizations to quickly find new combinations of ideas that are commercializable.
Too, I should mention that people use the terms organic and inorganic growth. Organic growth refers to internal innovation efforts of using own resources. The GE Growth Playbook, is a set of questions designed to encourage organic growth. Inorganic growth refers to use mergers/acquisitions/alliances and occasionally open innovation is put into this category.
If you are leading a growth-style strategic initiative, you can review my earlier postings for program structuring suggestions:
- The four driving questions – These are four questions (Why, Who, What, When) that need to be asked in order
- The improvement map – This describes 9 elements that can help you understand the terrain for accomplishing your goals.
- Describe performance outcomes – This article emphasizes the point of building around one important metric, displayed as a trend line. Develop the inputs systematically
- Five things that SI leaders need to know about innovation. Innovation is a process where individuals make choices, and do so at different rates.
- Interpreting strategy documents – This article is the first in a series of articles on interpreting strategic intent.
What other concepts of growth strategic initiatives can you add?
- Strategic Initiatives Drive Growth and Innovation in the Travel Industry (leadingstrategicinitiatives.wordpress.com)
- Strategic Thinking (Part 2): Framing Decisions with the Four Types of Ambiguity to (leadingstrategicinitiatives.wordpress.com)