Nov 8, 2017

Strategy + Innovation Yields "Transient Advantage"

Posted by Johanna Mickel | 0 Comments

Stability is no longer normal; change is normal.

According to keynote speaker Rita McGrath, competitive advantage is an elusive, ever-moving target, what she termed in her speech "Transient Advantage."

For organizational success, we need both strategy and innovation. In the past, the “Holy Grail” of strategy has been to create a sustainable competitive advantage. Often when companies reach the top, they tend to rest on their laurels. To demonstrate this, Rita showed a video interview of the CEO of Blackberry discussing how he wasn’t worried at all about the future – he thinks they have it covered.  We know how that turned out!

She used a quote from Amazon's Jeff Bezos: “it’s day one forever; day two is death.”  So, how do organizations create a "Day One" mindset? Here's her proposed new playbook for strategy:

  1. Stability is no longer normal; change is normal. Need to be adaptive and change (she referred to it as “continuous reconfiguration”)
  2. “Healthy disengagement.” Organizations need to pull resources from projects that aren’t working and repurpose them. This needs to be a formal process. She noted that something that succeeds in the market generally had roots in something that didn’t work in the past--which speaks to the need for good knowledge management/lessons learned infrastructure.
  3. Resource Management. She discussed separating the power structure from resource allocation. She commented that much effort is put into defending the existing project and resource allocation rather than put into growing innovation.
  4. Innovation. She said innovation can’t stop with innovation boot camps – typically, that's just the ideation. Organizations need to move into incubation (find the product, market or service fit) and go into acceleration (bringing it to market).  She humorously commented that many times the innovative entrepreneurs aren’t the best fit in corporate culture, with it's emphasis on compliance.
  5. New requirements for leaders: thy will need the courage to accept what's new and far more flexibility than is now the norm.
  6. Manage talent (people / careers). She made reference to career growth as being more “tour of duty” assignments for specific periods, and when done, moving to the next “tour of duty” assignment. (Sounds a lot like the idea projectized organization to me!) Top leaders are more likely to “zig-zag” (or horizontal moves) to the top, rather than linear progression of the old "career ladder.".

Rita spent time discussing the balance of operations and imagination in innovation and commented that being towards the middle is better (too much imagination is “fluff”) and too little is viewed as not having much growth. This translates into needing to invest in the portfolio in a range of types of intiatives, both "keep the lights on" and "blue horizon" work.

What do you think?

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