Quick takes

Citation

Gorrell, C. (2008), "Quick takes", Strategy & Leadership, Vol. 36 No. 5. https://doi.org/10.1108/sl.2008.26136eae.002

Quick takes

Article Type: Quick takes From: Strategy & Leadership, Volume 36, Issue 5

These brief summaries highlight the key points and action steps in the feature articles in this issue of Strategy & Leadership.

Interview: in the crucible: Robert J. Thomas explains how leaders learnRobert J. Allio

Because organizations need to plan for future leadership, most companies have instituted leadership development programs. But the truth is that most of them do a dreadful job, often resulting in the need to hire top leadership from outside the company. This suggests the premise that leadership can be learned – but not taught. So what’s an organization to do? Findings by leadership researcher Robert J. Thomas suggests that a wise first step is to reconsider what we know about how successful leaders actually learn. Key points presented in an interview of Thomas by Robert J. Allio include:

1. 1.

   Leaders benefit from difficult experiences that transform their attitudes or behavior. Are these tests – crucible experiences – necessary to transform managers into leaders?Response: Crucibles are neither necessary nor sufficient to transform managers into leaders. However, crucibles can and often do provide rich opportunities to learn leadership lessons and learning perspectives that last a lifetime. Any experience that challenges your self-concept (or your understanding of who you can be) has the potential to shape you – whether as a leader, a citizen, a parent or as a human being.

2. 2.

   For leadership development, what must be learned?Response: Two types of things mainly. One set is the technical aspects of leadership, such as how to set direction, craft a shared vision, resolve conflicts, make decisions effectively, provide feedback and coaching, and think systemically. The other set is the learning aspects of leadership, like how to how to reflect on action, learn from experience, become self-aware in the midst of leading, and adapt to change.

3. 3.

   What is the role of HR?Response: Toyota and Boeing (with its Waypoint program) are two corporate exemplars of experience-based leader development. These programs prepare people to extract learning from experience. They understand that people have to be supported while they’re engaged and then re-integrated into organization.

Bottom-line for aspiring leaders: they must learn from experience, develop and apply a personal learning strategy, and practice their craft as they perform it! The five criteria for experience-based leadership development are presented.

Co-creating value through customers’ experiences: the Nike case Venkat Ramaswamy

Leading firms are learning how to sustain competitive advantage by co-creating experiences of value with customers.

Customers are now informed, connected, networked, and empowered on a scale as never before, thanks to search engines and engagement platforms like Google, the growth of Internet-based interest groups, and widespread high-bandwidth communication and social interaction technologies. Customers have learned how to use these new tools to make their opinions and ideas heard. A few leading companies are involving customers in the value creation process by offering Internet sites where they can share their interactions and experiences. These range from customers’ ideas about how to improve or customize products to their feelings when they use products.

The shoe company Nike provides a glimpse of the next “best practices” of value co-creation with customers. By engaging with informed, connected, and networked customers around the globe, Nike has found a new source of value, customer experiences. Whether as “single individuals,” or as members of the global thematic communities Nike has developed around soccer and running, customers or other stakeholders now can and want to be involved with Nike.

The strategic opportunity for Nike is to build and promote the use of Internet engagement platforms through which the firm can build customer relationships on a scale and scope as never before. Effectively managing these new initiatives initially posed a new challenge for Nike, a traditionally product-centric organization. Now their viewpoint is reversed. “In the past the product was the end point of the consumer experience. Now it is the starting point.”

To manage the co-creation of value process Nike uses guidelines based on the DART Model – dialogue, access, risk-return and transparency –to establish best practices. At Nike, these guidelines set the stage for high quality co-creative interactions between individuals (runners); groups (teams of runners, running clubs); and organizations (Nike and Apple). For Nike, the learning from these interactions creates new strategic capital. The company can now learn directly from the behavior of its customers, both from mining the data and from customers’ direct input on their preferences. Nike can build relationships and trust with the Nike+ community and experiment with new offerings, all the while enhancing its brand.

Case: a non-profit theater’s strategy focuses on experiencesJohn Sterling

This case study addresses how one organization, the Timeline Theatre, implemented both an experience-driven strategy (the conscious choice) and an ongoing commitment to co-creation of unique value through experiences (the values-based approach). By adopting both, TimeLine has achieved significant artistic and organizational growth.

Experiences

TimeLine’s strategy and core values are both important factors underpinning its run of success. The first insight for its strategy was from the several publications by B. Joseph Pine and James Gilmore on the idea of experience as a basis for differentiation. TimeLine has embraced the experience strategy as part of:

• •

  Its operating strategy for performers technicians and volunteers who are creating the work on stage. The central idea behind this goal is that working at TimeLine in any capacity should be a uniquely valuable experience, one that entices talented artists, technicians and volunteers to return. Its implementation has established “The TimeLine Environment,” as a milieu in which artists, technicians, theater professionals, and volunteers want to work. This operational branding is crucial to TimeLine’s strategy of being able to compete with other theaters for access to great talent.

• •

  Its offering strategy for involving the audience. Creating an “experience” for the audience focuses on continually enhancing the total experience audiences get from TimeLine: it goes beyond the moment of the live performance to draw the audience into the essentials of the work (play) and immerse the theatergoers in the topic of the play.

Co-creation

The second innovative idea for strategy was derived from the co-creation process described by C.K. Prahalad and Venkat Ramaswamy in their book The Future of Competition. To go beyond the moment of the live performance, Timeline Theatre creates the opportunity for audience and performers to converse. These conversations are the starting point of co-creating unique value. And, because of the ease of sharing information and dialogs (integrating web and in-person delivery), the organization has found new sources of value (enhance experience) and gained competitive advantage by engaging with customers to co-create unique products, services and experiences responsive to individual needs and desires.

The synthesis: co-creation of value through experiences

These two ideas are mutually reinforcing and become more powerful taken in combination. In settings where experience-based offerings involve the customer directly, opportunities for co-creation become abundant. Further, application of the co-creation model can lead directly to “new engagement experiences of value to the customer.”

Innovation: scenarios of alternative futures can discover new opportunities for creativityGill Ringland

What tools are available for an organization to promote creativity to underpin the search for breakthrough innovation to capture a future market? In particular, what tool will allow the team to step into a “stretch zone” with activities and environments that are unfamiliar, and where (per research) innovation takes place?

The answer: scenarios

Scenarios of the future offer “stretch zones” for the imagination. Scenarios provide several alternative model future worlds for consideration and exploration. Investigating the constraints and possibilities of these future worlds increases the range of “what we have experienced” and “what is relevant to our future.” A scenario is “an internally consistent view of what one future might be … not a forecast, but one possible future outcome.”

Two case examples are presented in this article. The steps involved, lessons learned, and the outcomes are presented.

For many types of innovation, particularly related to delivery of an offering, the inside-out process brings more buy-in and quicker implementation since it taps into the knowledge of people in the organization. In the first case, Electrolux, the scenario process was essential in developing a picture of what was happening in the broader market and business environment that affected the product groups. While the process and the results were intended to broaden management thinking in general, the key objective was to integrate the concern and awareness of environmental issues with the business strategy and to set up action plans. Of their experience using scenarios as a “stretch zone” executives said:

• •

  “Having an already articulated view of a possible future provided a fear-free environment to think about new products in a way that we have not done before.”

• •

  “I found it very challenging to think my way into our scenario, but once we had accepted it as a future, we were able to come at the questions from a different angle and set of (borrowed) assumptions.”

Conclusion

The case studies illustrate that because scenarios offer a glimpse of what “different” futures are like, an organization’s innovators can more readily imaginatively experience buying and selling products, living, commuting, under the particular constraints and opportunities of a number of possible future conditions. The result being the new perspectives and insights for innovative ideas.

How CEOs can promote a strong market cultureLinden Brown, Sean M. Gallagher, Christopher Brown

Corporate culture, if correctly aligned with the external environment, is the key to long-term organizational success. This is the goal. But how can today’s CEOs take an abstract concept like culture, visualize it, and take steps to harness its power to create enduring competitive advantage in the marketplace?

The focus here in on “market culture.” It is defined by:

• •

  How the overarching culture of a business focuses attention on markets.

• •

  The skills a business uses to create value for customers.

• •

  The level of belief that the ultimate purpose of the business is to create superior customer value, profitably.

The first step is to recognize that a strong market culture exhibits high ratings on six dimensions of corporate beliefs and behaviors related to: customer insight, competitor awareness, collaborative approach, criteria for decisions, CEO leadership, and a deep organizational commitment and contribution of all functions to creation of superior value for customers, profitably. These dimensions are called the “6 Cs.” The 6Cs Model is an actionable framework for building a strong market culture. Significant steps can be taken in each of the Cs to strengthen a company’s market culture.

The 6Cs Market Culture Model

Each of the six dimensions is discussed, concluding with specific steps for leaders to foster the attributes of the dimension. The case study of Telstra is presented to illustrate points.

1. 1.

   Creation of superior customer value, profitably. The customer is at the center of the model. This indicates that the primary objective is the creation and delivery of superior customer value at a profit. The model is circular because, as the market changes, a firm’s value proposition must be improved.

2. 2.

   Customer insight. This involves developing a thorough understanding of the firm’s target customers in order to create consistently superior value.

3. 3.

   Competitor awareness. Essential is a company-wide understanding of the short-term strengths and weaknesses and long-term capabilities and strategies of both current and potential competitors.

4. 4.

   Collaborative approach. Part 1 is the cross-functional team approach, with Part 2 being the collaborative value networks.

5. 5.

   Criteria for decision-making. Companies with a strong market culture have a longer-term perspective on profitability goals and business decisions.

6. 6.

   CEO leadership. This plays the all-important role of developing shared vision and shaping culture from subsequent decisions, actions and behaviors.

There is an adage at Toyota that says “First the customer, then the dealer, then Toyota.” This is a perfect alignment with a strong market culture model.

Internet tools enable organizational transformation from the inside out: the Nokia Siemens Networks caseAnne Deering, Andy Cook, Gillis Jonk and Anne van Hall

At some point, every large enterprise will likely face the need to transform itself (or a segment) as the result of a merger, business model change, strategic market repositioning, or other major change. When this happens, there are two classic approaches: top down or bottom-up. Now there is a third: inside out. The case presented of Nokia Siemens Networks demonstrates how it tapped into the collective wisdom of its employees to define, develop, and deploy its new culture, post-merger.

The approach offered is called Transformation 2.0 by the authors. It is modeled after the way smaller, highly entrepreneurial companies readily connect people and the leadership. There are two components:

1. 1.

   Leadership establishes the context and overarching goals of change, and then creates opportunities for employees to turn these goals into action. In essence, the leadership task is to translate the company’s vision–that is, its transformation objectives–into simple, contextual goals. These goals provide the frame within which the company’s people can take ownership of the actual transformation of processes, ways of working, and even the creation of new processes and activities.

2. 2.

   The transformation is accelerated by using an array of new Internet tools to allow more interactivity, thereby drawing on the collective strength and wisdom of a large portion of the organization in significantly less time. Interactivity also allows the company to rapidly build momentum behind a change process in ways that energize and give voice to virtually every person in a large organization.

Useful Internet tools include multiple new platforms such as IBM’s proprietary Jam collaboration tool, Google-hosted web discussion forums, wikis, blogs, and other similar collaborative solutions. And for proprietary collaboration, the authors suggest applications such as Microsoft SharePoint, a web-based collaboration and document management application.

Bottom line

As the case indicates, “inside-out” transformation works. Internet tools enable the full power of the organization in the search for practical ways to translate transformation goals into real-life business outcomes – adapting the high-level direction of the transformation to the immediate concerns of individual managers: “It’s Monday morning. What does this mean for me, here and now? What should I be doing differently, and how will I know I have been successful?”

Catherine GorrellPresident of Formac, Inc., a Dallas-based strategy consulting organization (mcgorrell@sbcglobal.net), and a Contributing Editor of Strategy & Leadership.