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Innovation from Above the Clouds
on 30 Mar 2017 4:19 PM

Have you ever been on a plane flight where, as you take off everything you can see from the window, the weather is hazy and overcast, only to have your flight break through some time later and emerge above the clouds, where the sun suddenly shines bright and clear? If so, after a long period of uncertainty and doubt, you will know how this gives you a sense of clarity.

Businesses are very much like this We spend so much of our time and energy living "under the clouds" as business leaders ...Trying to lead our daily operations desperately day - in and day-out in a way that ensures that everything goes "according to the plan". Never in all this do we rise above the clouds to seek – and find – real clarity about our business' long-term future, not to mention the types of strategies that our business will need to thrive in the future and remain resilient to the many new challenges and changes that it will inevitably bring.

This is problematic, as we are now living in what was called the "earthquake age" ... A period of radical market shifts – metaphorically speaking, "earthquakes" and "tsunamis" – occur at an unprecedented, relentless, and accelerating pace in the history of businesses.

New Ways of Engaging Stakeholders

Faced with this, the business challenge is not simply to pursue more of the same thing ... more of what they have always done. Businesses cannot afford to simply add another motivational speech to the "noise," yet another business presentation, yet another board meeting, yet another how-to book, or yet another best-practice conference. All of these are almost for sure to be forgotten and dissipated just as quickly as one gets back into the workplace. Just more of this same noise won’t cut it. It ends up being meaningless... a chasing after the wind.

Instead, the real challenge for businesses is to constantly strive to find compelling new ways to engage their customers, markets, workers and investors – all of their stakeholders – and to lead them to new places where they can explore, adapt and reshape their collective understanding of how their mutual worlds should function together, including the vibrant new lifestyles and working styles this can afford, as well as the sometimes-radical new business models it will require in the exchange of value.

Why is this the overriding challenge of our day?

This is our challenge because in the traditional sense of the word, let alone a market follower, it is basically no longer enough to be just a "market leader."

Market leaders traditionally read the tea leaves so they could understand where their markets were heading and then try to remain at the forefront of that movement. But the approach was still passive and reactive ... A more and less relevant approach to where our world is today.

In this sense, instead of trying to be a "market leader," businesses now have to rise to become a market driver. Being a market driver means taking a much more proactive approach to one's strategies – instead of trying to discern the tea leaves for guidance, they try to become those who write the tea leaves ... those who define and shape where their markets – and, to some extent, the world – go.

This is the wisdom that comes from rising above the clouds.

Consider Amazon for example. This is precisely the approach that Amazon has taken in the world of retail. It's not just leading from where its markets go; it's defining where those markets are going through aggressive and proactive actions that are very much in line with what these markets are now valuing. As this clearly shows, such an approach dramatically speeds up the growth and leadership of these businesses, placing them clearly in the driver's seat to determine where their markets are going – with all the associated revenue and profit rewards that come with it, although each on a given maturation timeline (which requires a certain level of patience and perseverance).

So how does a business achieve this level of clarity and wisdom for its own sake?

The answer to this is to develop – and implement – a well-informed multi-tier strategy for innovation (Horizon 1, 2, & 3). This is a strategy for which specific actions are set out:

  • Horizon 1 – our current business:  life beneath the clouds… allowing us to capture and extract as much value as possible from that business.

  • Horizon 2 – adjacencies to our current business:  life at the level of the clouds... allowing us to extend our current value foundations further so that we can capture even greater value from them tomorrow.

  • Horizon 3 – completely new lines of business and/or business models:  life above the clouds… Enabling us to transform and redefine our businesses into new things that will reinvigorate our markets – and sometimes create completely new markets – so that we can stay well into the future.

At the same time, we need to design organizational operations and resources that are capable of implementing each of these strategies – independently of each other. This is where a properly designed program and structure for Corporate Innovation comes into play. And we must accept that a by-product of our pursuing lean, agile, capital-efficient experimentation like this in our work on Horizon 2 and 3 will be a certain amount of technical and organizational debt that we will have to work out later, just like any other new endeavor. This is simply a part of moving fast and shaping markets.

The unfortunate reality is that most organizations lack the ability to envision clear new strategies in this way, as well as the ability to operate in this way.

However, the fortunate news is that help is available to help organizations develop both this capacity for leadership and this capacity for organization. Your organization can become one above the clouds that sees and thinks ...One that drives its markets and shapes them ...One who writes leaves of his own tea, rather than one who constantly tries to react. This requires engagement and discipline, but organizations can become such a market driver with these. They can unlock, shape, and harness these capabilities with the right training, coaching, and assistance, and release this power in the business – and reap their rewards.