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How do these four differ?

January 31, 2013

Continium

What are the categories of differentiation? 

For example,

1) Delivery: what does the Inventor deliver that is different from the others.

2) Skills: what are the most important skills for each.

3. Experience,

4. Etc.

MY PERSPECTIVE WILL BE FORTHCOMING

 come  back for stimulating information and discussion

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Six Steps for Profitable Innovation

August 14, 2012

My approach to innovation is framed by two paramount topics which figuratively constitute the “book ends” of my thinking: “Value Creation and Value Appropriation”.  As an innovator, I foremost must always think about Creating Value, but even more important, Appropriating Value (i.e., getting a slice of the created value).   In addition to “Value Creation and Value Appropriation”, I focus on assuring “Scarcity” and “Sustainability”.   By assuring Scarcity, I (roughly) mean making sure the created value has certain degree of uniqueness (scarcity assures appropriation).  By Sustainability, I mean, assuring that the scarcity of the newly created value will persist for a period of time that is sufficiently long to attain an economic profit (i.e., attain a positive NPV).   These three guiding principles (Value Creation and Appropriation, Scarcity, and Sustainability) are organized in six logically connected sets of questions that guide me through a systematic evaluation of any business endeavor.  The six sets of questions are as follow: What value is created?  Is the solution for the created value competitive?  Is the operation (i.e., the delivery of the value) efficient? Can the solution be protected? Can scarcity be sustained long enough? Are the operational and asset inefficiencies in the previous five steps managed properly?

Here is a brief description of the six sets of questions:

1. The first set of questions (“Value Created”) guide me toward identifying the “Core Value”, i.e. the most important value associated with my Value Proposition of the innovation (or business endeavor).  This step recognizes that the value proposition of innovation could be composed of aggregation of multiple values; therefore it is important to prioritize and clarify.

2. In the second set of questions I assess the competitiveness of the solutions that deliver the Core Value.  Again, I seek to identify the most important technology or solution that is key in the delivery of the Core value; I call this solution the “Primitive Technology”.

3. In the third step I analyze all the relevant critical business processes that deliver the Primitive Technology (and hence the Core Value).  I make sure that the key steps are subservient and optimized for the delivery of the Core Value and the Primitive Technology. This is the ” Golden Thread”…

4. In the fourth set of questions I analyze the degree to which the key assets identified in the value chain are protected from imitation.

5. In the fifth step I analyze the organization’s ability and commitment to sustain and maintain competitive advantage associated in the Core Value, the Primitive Technology, and the Golden Thread. Typically, I look for evidence of “fastest rate of innovation” in these three areas.

6. In the sixth steps I deal with the countermeasures associated with the weaknesses identified in any of the five cases above and with them management process overseeing all the steps.

When I am done with the process, I would have clearly identified and quantified the value that is created, clearly identified and prioritized the technology that delivers it, clearly identified the processes that are key to its deliver, identified the areas that need to be protected, and identified how to assure a long term competitive advantage.  Furthermore, I would identify how to deal with partners and suppliers and assure my appropriation is protected and uncompromised.

The typical deliverables from the process are circumstantial,  but some of the more common outcomes are as follows:

Decision for innovation/investment  in a specific product or portfolio;

Identification of technology portfolios with greatest future profitability;

Clarification about when to invest internally vs. when to partner vs. when to source, and the conditions and countermeasures that govern the choices;

Identification of the client’s core competencies;

Identification of business areas for key focus (and hence KPIs), etc.

This is a brief description of my approach to innovation.  A systematic and careful progression through these questions will almost assure profitable innovation and growth.

My added value in this process is the ability to efficiently create profitable innovations; my scarcity is the proprietary methodology and personal know-how acquired through repeated use of the process.   I have  lectured and implemented this methodology in many organizations and, time permuting, I might be available to work on your project.

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My Top Five Strategy Fallacies

July 3, 2012

These five things come to the top of my mind as I reflect on thirty years experiences with corporate strategy. I would love to hear which of these resonate the most with you.

  1. Strategy is not like wine, rather it’s like vine.  Putting it away to age will get you nothing.   Strategy needs to be worked, you need to prune it like a vine in order to reap its fruits.   Don’t put your strategy on the shelf; put a plan behind it. I’ve seen too many cases where great effort was put into creating a strategy, only to be put on the shelf and revisit it a year later, at the time of the next strategy cycle.
  2. If your change your strategies every year, you have mislabeled them.  What you actually create are campaigns, not a strategy. A good strategy lasts at least few years, and is supported with annual plans and campaigns.
  3. If you create your strategy quickly, be sure you’ll change it quickly too. Many managers want templates that they can quickly fill-in and be done with the strategy cycle. These are the same managers who think the strategy is useless and put it away unused.  Consequently, they’ll have to recreate it in the next planning cycle, if not sooner.
  4. It takes some talent to recognize a good corporate strategy- it takes none to recognize a bad one.  Anyone can recognize a bad strategy when they see one, not the least reporters and disgruntled amateur investors.
  5. Company’s business performance could be viewed as a process with a given Process Capability Index (PCI).  Companies who continuously meet or exceed the expected performance goals have a high Cpk. Companies who fail to meet the goals have low Cpk.  One of the most important business processes is the Annual Strategy Process. It sets the performance limits and defines the key process variables that need to be managed to maintain the process under control, i.e., meet the company goals. If you create unrealistic goals, or the goals are not supported with solid initiatives, resources, etc., you have a process that is not in control- it will be incapable to meet the goals. PCI definition: http://en.wikipedia.org/wiki/Process_capability_index