Archive for July 2007

The Strategy Paradox

July 30, 2007

Read: The Strategy Paradox: Why committing to success leads to failure (and what to do about it)

Michael Raynor spoke at the business/innovation conference (aptly titled The Overlap) in June, and we received his book as a conference favor. If given a fair hearing, I expect Raynor’s book to force business practitioners to think more deeply about formulating strategy and structuring the organization for competitive advantage. Most treatments of strategy address competitive dynamics (in the line of Porter), likewise positioning, or competency leverage (Collins). Raynor leverages insights from his research and publishing in innovation (The Innovator’s Solution), Harvard doctoral research, and the practical understand that comes from actually consulting. In the case of strategy, the consulting experience lends valuable grounding – as opposed to theory-heavy work or easy-reading strategy-lite. This book could anchor a top-notch MBA course – but it could lead a good company’s board to make much better strategic decisions.

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I would not compare The Strategy Paradox with popular business books, such as The Long Tail or even Good to Great. This is a book about the perils and promises of strategy formulation, the management of strategy and commitment, and the design and execution of strategic options. Keep in mind that, regardless of what you think you know about strategy research, most of what’s published in journals and books is very loose, or even just junk research. Strategic management remains largely influenced, in the real world of corporate decision making, by Porter’s 5 Forces, SWOT, and resource allocation. Who should care? Just about every executive, business unit-level manager, and all professors or consultants focusing on business strategy and organizational dynamics. It is one of the few works on competitive strategy that guides organizational strategy as well – not directly through guidance on org design, but in terms of organizational function necessitated by requisite uncertainty. Raynor never mentions “strategic alignment,” a troublesome notion from consulting with no good research support. Rather, he demonstrates how the organizational focus implied by “alignment” results from appropriate structural intention generated by appropriate distribution of uncertainty and commitment in the hierarchy. In time for Alfred Chandler’s handoff to history with his passing in May, Raynor retrieves the effectiveness of hierarchical management, obviating the need for “alignment,” based on good theory and sound research.
For example – I know (well) of one firm that leads its market in products and share, and was able to maintain its position by good old-fashioned installed base lock-in and monopoly rents with long-term contracts. With the luxury of not having to follow their own strategies well, they jumped around from Good to Great, then acquisition mania, product integration and overhauls, a China program and off-shoring, process redesign. At the end of the day, they were just acquired – and their product line now internally competes with its new owner’s. Could the Paradox have saved this firm? If taken seriously, yes – they appear to have violated nearly everything Raynor suggests.

Raynor explains complex business scenarios with a brisk storyline. The footnotes are a fascinating secondary read – the points are backed up by his research, Harvard studies, and dozens of well-cited papers. While optional to the main points, the research is actually useful and interesting, and much of it new to business research (consider his retrieval and application of Elliott Jacques’ work on requisite organization in the principle of Requisite Uncertainty.)

A week after reading the book, in late June, I referred to Raynor’s concepts in a conference presentation about structured dialogue for decision making in the intelligent enterprise, (the book was a timely, disruptive influence). I found a significant symmetry between Requisite Uncertainty and the principles for dialogic design we have been developing. The strategic horizons for strategy vs. commitment map to our stages of strategic dialogue (where a group of stakeholders formulates strategy, scenarios, and action plans in a structured dialogue). Since I consider time horizon the most pivotal factor in group decision making, the relationship of temporal uncertainty to priority and opportunity now becomes a key organizing principle.

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Procedures Consult – Immersive experience in rich content

July 16, 2007

Nothing but medical procedures. No tagging, no RSS feeds, no social networking. (Not yet anyway.) The innovation was in discovering exactly what was required for the intensive education of doctors in residency programs, delivering these capabilities and minimizing all other distractions. Here the user experience is in the transparent immersion in the details of anatomy, positioning, approach and entry points, techniques, and simulations of all the internal parts you never could see even with live patients.
Elsevier released ProceduresConsult this month, to institutional subscribers. This e-learning service provides animated and acted video and text details for common internal medicine procedures, so you can learn to do arthrocentesis at home. (Hopefully, only if you are in a residency program). Medical residents in internal medicine (and soon Orthopedics and Anethseia will be able to locate detailed interactive procedures education with extraordinary video produced by Harvard’s Dr. Todd Thomsen.

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Both 320 (on-page) and 640 (video player) videos are provided for every procedure. Text is shown in two full-scrollable pages, Quick Review and Full Details. Navigation was based on how residents typically work with one procedure at a time – while you can search, browse and jump around, the nav model focuses attention within the procedure and limits the opportunity to link away from the page.

We started on this service from nearly scratch 10 months ago, and leveraged an existing platform (based on Elsevier’s Nursing Skills product) to deliver the testing and tracking capabilities rapidly. The interaction design was totally drawn from user research, from multiple interactions with physicians and residency program staff. The content design was generated in collaborative design with the product manager (the indefatigable Rolla Couchman), Dr. Thomsen, and the product and editorial team. We conducted multiple onsite user research sessions, evaluating the site structure and navigation, visual and interaction design, content layout, video interaction, and administrative tools in a series of iterations and increasingly-defined prototypes. Jez Alder of Elsevier produced the visual design, over multiple iterations. Look for navigation and content enhancements soon.

Semantics of Innovation

July 3, 2007

“That’s a great deal to make one word mean,” Alice said in a thoughtful tone. “When I make a word do a lot of work like that,” said Humpty Dumpty, “I always pay it extra.”

Lewis Carroll (1872) Through the Looking Glass

What twists and turns we put to the word “innovation .” We make it mean everything from original invention to “good design,” to creativity, to product development. We all think we know what it means, from our own experience. But we rarely do the rather churlish academic thing of stopping someone and requesting “What do you mean by innovation?”

I like primary research, so I tend to go with definitions that support Rogers’ (1962) Diffusion of Innovations. Innovation differs from invention in that adoption is implied. An intentional invention must end up somewhere useful to qualify, or at least be “overlooked” by the market of the time – the implication being that its adoption failed due to poor timing.

In 2002 I wrote in the DMI Review: When Successful Products Prevent Strategic Innovation

First, let’s define innovation, a misused concept assigned to a range of meanings from “creativity” to the vendors’ “making new versions of the same product.” I express innovation as significant invention with the capacity for transformation. Strategic innovation sustains business strategy through significant invention, designing new or breakthrough products to fulfill strategic intent. And not all innovations are successful. Market success also requires fulfilling user intent; innovations must map to known user needs or emerging user desires.

Another definition I like is clear and yes, academic: Garcia and Cantalone (2001). A critical look at technological innovation typology and innovativeness.

“Innovation’ is an iterative process initiated by the perception of a new market and/or new service opportunity for a technology-based invention which leads to development, production, and marketing tasks striving for the commercial success of the invention.”

So what seems to be happening today? First, business culture and then popular culture has held an extended love-in with the very idea of innovation. So back in 2001, when I was wondering whether we would see (e.g. early forecast) the Next Big Thing coming our way, I admit I did not think it would be the Same as the Last Big Thing. Where other late-90’s trends peaked and expired, Innovation came back to stay. (So maybe it made sense after all to study and get the doctorate in Design and Innovation Management in 2000.) After all, Knowledge Management didn’t survive the purge very well, and now isn’t Web 2.0 and user participation the height of innovation?

Maybe, maybe not. There’s a principle in socionomics (social macroeconomics) forecasting that suggests that when pop culture picks up a tech or business trend and exploits it to the extent that it appears on magazine covers, your 15 minutes may be up. Market timers use such indicators to call tops (and bottoms). Innovation may be due its morph into its next phase as soon as the business cycle changes (resulting in disappoint with the last cycle’s memes). And we’ll we looking for the NBT again. Hint: Look for those disappointments to reveal the next trend. Is the new Transparency already an early indicator of the disappointment with the technology-driven lifestyle? Or will it morph into more of the same?