How Innovation can disrupt your Market and Competitors

At present, many organisations face uncertain and often turbulent conditions. Advantages of economies of scale has been overtaken by newer, faster, technologies; social networks have eroded the advantage of better market knowledge; and superior products have been copied through the ravages of hyper competition. In short, growth seems harder to achieve.

Achieving growth in today’s uncertain environment requires innovation. Innovation is a strong driver of disruptive strategy and competitive advantage. But for many, it seems harder than ever to achieve this competitive advantage, as a means to fuel growth.

A simple proposition on growth...

Competitive advantage is necessary to fuel growth. You need to provide your customers with a reason as to why they should buy from you rather than a competitor.

This competitive advantage needs to be predicated on difference - i.e. Your proposition to the market is different (and better) than that of a competitor or substitute. Such a disruptive approach to growth changes the rules of the game so that traditional market leaders lose their stranglehold. Soon, the attributes that you bring to the market become the standard and preferred offering.

So how do we achieve this difference and disruptive growth? Three simple rules.

Compete where no one else competes - This is a category creation strategy. It focuses on seeking out unserved market opportunities that can be served by an innovative combination of existing technologies. Best of all, it has the natural competitive advantage of no competition - at least in the beginning!
Identify a job to be done for the customer - The focus is on the areas where the customer has a problem, or cannot get a complete solution. It requires thorough research to truly determine the nature of solutions required.
Create new business models in well served markets - Such a disruptive approach focuses on providing a cheaper or more convenient means of serving the customer through a radical transformation of the business model. Technology has enabled many of these strategies, and they often centre around the simplification of the supply chain. Dell Computers and Amazon.com are such examples.

How do you unleash innovation that drives disruptive growth?

We can see that there are three ‘levels’ of thinking that organisations utilise.

Creative thinking - This involves harnessing creative ability across the whole organisation, and a relentless curiosity about organisational capabilities and the market.
Strategic thinking - This means recognising that the organisation faces many different futures, all depending on behaviour and decisions.
Transformational thinking - This includes your personal attitude, the design and culture of the organisation, and the processes put in place to facilitate innovation. It’s about engaging staff, bringing people in from outside the leadership to envisage change, and defining the market by understanding customers’ needs in terms of the problems they need solved (not the products they buy).

Leaders need to ensure innovation occurs on these three levels, in order to have a meaningful impact on the organisation.

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Part 3: Accelerate Performance With Strategic Alignment - Develop The Appropriate Culture

By Norman Chorn • March 27, 2023

In my previous article "Accelerate Performance with Strategic Alignment - Define the logic of your strategy", we demonstrated the alignment between the market and business strategy by matching the logic of the market with the logic of the strategy. The Explore logic emphasises a market where customers seek new solutions for emerging requirements. The strategy responds by exploring new opportunities and driving for growth. The Exploit logic occurs in a more stable market where customers seek lower costs and reliability of supply. The appropriate strategy focuses on operational efficiency and building close customer relationships. Culture is key to shaping the capabilities of the business to successfully implement strategy . It drives the way that people behave, decisions are made and actions are taken. It determines, therefore, the strategy that is actually realised in the market, as opposed to that which is merely intended. We make a key distinction between the desired culture and the appropriate culture. The desired culture is what people may choose because it sounds attractive and in vogue. However, the appropriate culture is the culture that is required to successfully implement the chosen strategy. Often, these can be different. For example, people might seek to develop a culture that is ‘innovative’, ‘flexible’ and ‘empowering’, but this may not be the appropriate culture needed to successfully implement the business strategy. DEVELOP THE APPROPRIATE CULTURE FOR YOUR STRATEGY Developing the appropriate culture requires a deliberate emphasis on certain cultural attributes and making trade-offs on others. As we will see, the attributes that are traded off are usually the opposites of those that are emphasised.

Part 2: Accelerate Performance with Strategic Alignment - Define the Logic of your Strategy

By Norman Chorn • March 27, 2023

In Part 1 "How to Accelerate Performance with Strategic Alignment - Understand the Logic of the Market" we outlined different market conditions and defined them in terms of two overarching logics — Exploring and Exploiting . To briefly recap, an Exploring logic is one where customers are seeking new solutions for emerging needs. It’s all about change and action. An Exploiting logic occurs in a more stable market in which the issues are about lowering costs and working collaboratively with customers. It’s a market that focuses on stability and cohesion. FORCES THAT SHAPE YOUR STRATEGY Clearly, it is one of these two logics — or a combination of both — that will shape your strategy as you operate in these markets. See figure 1 below that describes how these logics will form your business strategy: