Editor's letter

Citation

Randall, R.M. (2007), "Editor's letter", Strategy & Leadership, Vol. 35 No. 4. https://doi.org/10.1108/sl.2007.26135daa.001

Editor's letter

In every issue of Strategy & Leadership we try to steer you to the most useful and intriguing insights offered by the authors. We flag the ideas on the cover, we herald them in the table of contents and Catherine Gorrell shrewdly summarizes them in her “Quick takes” section. As a fourth way to beat the drum for the ideas in this issue’s special section on innovation I’m simply going to quote from the articles and let the authors deliver their message in their own words. To set the stage, please keep in mind that over the past several years S&L has published enough articles on innovation to fill several books. We have addressed how to be more creative, how to innovate new business models, and how leaders can foster a culture of innovation. So now we arrive at a needful and challenging discussion – how to address innovation and risk: managing a portfolio of business models. Here are some thoughts on best practice as proposed by the authorities in this issue:

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  James P. Andrew and Harold L. Sirkin, senior partners and managing directors with The Boston Consulting Group assert that “Most attempts at innovation fail to … generate enough payback. Payback has one basic metric, cash that is realized within the planned timeframe.” To track it, they introduce the cash curve, a tool that “requires managers to bring together all of their different perspectives on an idea, with the goal of creating a plan that everyone can understand, support, and work to achieve.” – “Using the cash curve to discuss and discipline innovation investments.”

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  Michael E. Raynor, the Distinguished Research Fellow with Deloitte Consulting LLP: “Requisite uncertainty is a new organizational design principle that separates the process of making strategic commitments from managing the risk created by those commitments. In a diversified company, for example, operating division managers must make commitments if high achievement is to be even a possibility. But it must then fall to corporate management, the next layer up in the hierarchy, and so responsible for a still longer time horizon, to create strategic options.” – “Solving the strategy paradox: reaching for the fruit without going out on a limb.”

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  Brian Leavy, AIB Professor of Strategic Management at Dublin City University Business School: “The options-based approach to managing uncertainty can be a very difficult one to explain to shareholders, not least the value of potentially investing in options that might later have to be abandoned. It is not surprising then that many of the companies most effective in using this approach so far have, like Microsoft, been led by visionary leaders with deep appreciation of the dynamics of their industries … ” – “Managing the risks that go with high-impact strategies in uncertain markets.”

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  Deloitte strategy and innovation consultants Ken Hutt, Ruben Gavieres and Betosini Chakraborty: “The reality, however, is that most budding business opportunities won’t grow into billion-dollar business units, and therefore few have true potential to drive big-company growth. So how can managers distinguish between limited-potential niche and crucial market foothold opportunities? The distinction is crucial in order to make the case for funding and supporting for the small, but potentially important, foothold business areas.” – “Limited-potential niche or prospective market foothold? Five tests.”

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  IBM Global Business Services consultants Saul J. Berman, Steven Abraham, Bill Battino, Louisa Shipnuck and Andreas Neus: “New kinds of media experiences necessitate new business models, as well as a revived spirit of invention and faster way to test emerging ideas. As companies enter emerging channels, they must be willing to cannibalize a bit of their current business to grow a new one … Media incumbents must aggressively experiment with the revenue model, the industry value chain and the enterprise model, including the use of partnerships and acquisitions.” – “New business models for the new media world.”

Good reading.

Robert M. Randall Editor