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Designing Your Company’s Future with the Strategic Innovation Canvas

The Gist of It for Busy Execs:

  • The Strategic Innovation Canvas is a simple, easy-to-use tool to collaborate on, communicate and develop future-oriented strategy.
  • The Strategic Innovation Canvas is built upon the theories of Clayton Christensen (three types of innovation) and Rita McGrath (discovery-driven growth and short-term competitive advantages).
  • Companies that use the canvas like Statoil, Reckitt Benckiser, and Biotage find that it allows them to shape a very different future for their organization.

Christian Rangen — co-founder of Strategy Tools

 

It’s now been 5 years since the early development of the Strategic Innovation Canvas. The strategy tool has since been put to use in hundreds of companies.

We decided to take a look back at history and sat down with the original strategy tool designer Christian Rangen with a few questions.

1. What can the Strategic Innovation Canvas do for my company?

 

The single biggest impact the Strategic Innovation Canvas has is helping management teams and strategists to create a more future-oriented strategy.

Most companies are incredibly focused on operations and the status quo. As the pace of innovation and disruption is picking up worldwide, we believe companies need better tools for their future.

This has been the driving idea behind Strategy Tools since our early research days back in 2011. We simply must build better strategy tools and the Strategic Innovation Canvas is but one small contribution to this global challenge.

The Strategic Innovation Canvas gives you a strategic framework for developing an options-driven innovation portfolio. This builds heavily on one of our advisory board members Rita McGrath’s long-time work on discovery-driven growth and short-term competitive advantages.

Companies that use the tool like Statoil, Reckitt Benckiser, and Biotage, realize that they’re able to shape a very different future for their company simply by using a different strategy tool.  

 

The Strategic Innovation Canvas – a great tool to engage everyone in shaping strategy | Reckitt Benckiser workshop, Italy

 

2. Where did the canvas originate from?

 

Early during our research, we found a repetitive pattern of thinking in threes.

Again and again we saw this becoming very apparent in the field of strategy.

One example is the old McKinsey research — The Three Horizons of Growth, where companies need to think about the short term, medium term and the long term at the same time.

Equally Clayton Christensen talks about three in terms of sustaining innovation, improving innovation, and market-creating innovations. But we realized that we didn’t really have any good future-oriented tools that brought this level of “three” into practical use.

Working with a number of companies including our good friends at Statoil, we started sketching out and prototyping the first designs of the Strategic Innovation Canvas. Using highly innovative companies like Amazon as case studies, we were able to communicate and articulate what this meant in practice.

Our goal in the early days was really to build a simple, easy-to-use visual tool that came out of fairly advanced research and understanding of how to shape strategy for the future. And i hope we have achieved that fairly well.

 

With the Strategic Innovation Canvas, it’s easy to collaborate on shaping the strategy of your company | RB using the SIC in a workshop

 

3. How was the early development work?

 

The early development work built on a lot of design workshops with the executives from many industries.

The tool was largely built through workshops and testing with executives responsible for designing and shaping strategy across many different industries.

This has not been a primarily academic research, but really a genuine co-creation with executives around the world.

Following the very early design phase, we quickly took our work on the road and presented the early designs at various innovation conferences, including Copenhagen, Cannes, and Vienna. Again the feedback that we got from the larger innovation community helped confirm our earlier experiences and helped shape this tool further.

 

The Strategic Innovation Canvas works seamlessly with other visual strategy tools | Tenaga Nasional workshop, Malaysia

 

4. What’s been your biggest learning?

 

One of the effects of working with the tool is that management teams, strategy teams quickly realize that most of their energy and intellect goes into core business and operational issues.

Simply working with the tool forces you and enables you to design a different strategy for the future.

Again and again we see management teams surprise themselves when they realized how operationally focused they have become, and they simply do not have a proper strategy and innovation portfolio in place.

My biggest learning has been that simply by visualizing on this and starting work on it, companies quickly adapt and start developing better strategic thinking for themselves.

 

With the right facilitation, 300 people can work on shaping company strategy at the same time. | Biotage workshop, Spain.


5. How do you see companies using the tool? What is the best practice when using the Strategic Innovation Canvas?

 

Best practice is really when the tool becomes internalized by leaders and strategists at all levels.

This might take time, this might require some training sessions, but once leadership starts using the tool for their own progress, once the strategy team starts using the tool in internal sessions, once mid-level managers pull it out to start to discussing a more ambitious strategy, that’s when the tool really comes to effect.

The Strategic Innovation Canvas is not meant for a one-time, one-session use, but really it is a deep strategic tool that should be embedded into the organizational DNA.

 

[Case Study: How Statoil used the Strategic Innovation Canvas to get from idea to prototype in only weeks]

One of the teams from Biotage working on the Strategic Innovation Canvas

 

6. What do you see next for the Strategic Innovation Canvas?

 

Moving forward, we see three things.

One, we see an increasing number of companies putting it to use.

Two, we see more and more strategy and innovation teams internalizing it and using it in their everyday work.

Three, we’re looking at ways to bring this into a software solution.

We are working on our book and our writing in general, to publish more content, insights, and case studies on how our strategy tools are being put to use. This has been work in progress since 2012, and we’re still trying to find time to make more of that happen.

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Get your own copy of the Strategic Innovation Canvas, free.

 

Grow your company beyond your core business. Book your own in-house workshop now. 

 

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A Collaboration for Growth: Sri Lanka and Norway

Sri Lanka is a nation in transformation. Emerging from a 30-year civil war from 2009, the country has been playing catch-up on business development and innovation. It’s been 7 years, and Sri Lanka is running to make up for lost time and reach its full potential.

The result? An impressive 6.4% economic growth in recent years.

With its goal to move from a lower middle income country to a high income country in the next two decades, Sri Lanka’s government has implemented multiple reforms and set in place many business-friendly policies to improve the business environment. The economy is on the rebound, slowly but steadily.

 

Strategic Innovation for Sri Lankan Firms

The government is now looking to build a knowledge-based economy to lay the groundwork for the future of the country.

Their biggest challenge at the moment, according to PwC’s Academy manager Nuwan Dishan, is to ignite the entrepreneurial spirit in both big businesses and small.

“Companies aren’t really sure how to implement an innovation department and go beyond R&D. How do you come up with new business models, new strategies, new products and services to revolutionize the industry?” he said in a recent interview with us.

Companies in Sri Lanka, like many others across the globe, struggle with managing innovation and transformation.

“We have many good ideas from individuals, entrepreneurs and startups. In fact, some of our local companies have made it to the global level. As an economy we need more of these companies dominating local, regional and ultimately global markets with strong brands.” Dishan revealed.

The biggest challenge most Sri Lankan entrepreneurs face is nurturing the good ideas into reality, into a commercially viable product or service through new business models that disrupt the market.

“In order to do that I think insights are critical not only at a local level but also at global level. Rome was not built in one day, similarly this would take time. Collaborations such as Engage // Innovate and PwC’s Academy will help companies get new insights to think in different angles.” he explained.

 

Last year, PwC’s Academy reached out to Engage//Innovate to run a Strategy Tools for Business Model Innovation workshop for some of the top business leaders in Sri Lanka.

Engage//Innovate founder Christian Rangen flew over from cold and gloomy Norway into the pulsating heat of Sri Lanka, and facilitated two intense days of learning in Colombo.

Participants deep dived into the current innovation best practices and strategies. They looked at updated, real world case studies and got hands-on with the strategy tools that’ll help frame their innovation strategy.

 

Christian Rangen’s Strategy Tools for Business Model Innovation Workshop in Sri Lanka with PwC

 

In just two days, they have laid the foundation for strategy and transformation within their companies.

Many of the participants found the strategy workshop so enlightening and inspiring that Engage//Innovate has once again been invited to run a new workshop, happening from Mar 8-9, 2017. 

 

“This programme has been quite fantastic. We thank PwC’s Academy because Christian has made us think in new dimensions in terms of innovating our strategy for the progress of our company. Our thinking has been changed after attending this programme.”
— Thilanka De Zoysa, Managing Director, Convenience Foods Lanka PLC.

 

Creating the future for Sri Lanka | Engage // Innovate Workshop with PwC’s Academy in 2016

 

Improving the Sri Lankan Economy through Innovation

With Sri Lanka’s goal to join the ranks of the high income countries — you need significant innovation.

Development of technology is an important measure for innovation, and as of 2015, Sri Lanka’s tech exports stood at just 1%.

In the Global Innovation Index, Sri Lanka ranked 91 out of 128 countries. It isn’t bad for a country that had battled 30 years of civil unrest, but it reflects the amount of work Sri Lanka has to do in order to secure their place in the future.

Engage//Innovate and PWC’s Academy play just a tiny role in the grand scale of things, but the abounding interest in the innovation programs is a reflection of the country’s voracity in striving towards change.

 

Connecting New Growth Opportunities between Norway and Sri Lanka

Sri Lanka is a potentially huge growth market for Norway in terms of renewable energy, wind, and fish-farming. There can be a lot to gain for businesses of both countries to work together, both in knowledge and resources.

“Norway is one of the world leaders in terms of energy and innovation. It is one of the innovation hubs in Europe. Norway has a lot to share with Sri Lanka,” said Dishan.

Engage//Innovate’s work in Sri Lanka is just beginning. We are looking forward to deeper, more impactful collaboration in the near future.

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If you’re in Sri Lanka and want to cement your place in the future, register for the March 2017 workshop by clicking the button below. 

 

We travel worldwide to run workshops and consult with companies. Interested in getting a conversation started? 

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31 Questions that Lead to Innovation

Our resident innovation guru Christian Rangen is always going on about how important it is to ask the right questions.

His favorite thing to do whenever we sit down for a meeting, is to ask provocative questions.

While they weren’t the easiest questions to answer, they helped re-frame the way we thought and pushed us to see things from a different perspective.

Questions are incredibly powerful.

Think about it, asking questions led to the world’s greatest discoveries and inventions:

“Why did the apple fall from the tree?”
– Isaac Newton

“What would the world look like if I rode on a beam of light?”
– Albert Einstein

Opportunities to innovate are around us every minute of the day. The first important question is — are we even looking out for them?

Here are 30 questions to uncover the innovation opportunities you might not have seen before:

 

Capitalizing on Problems

  • What other problems do our customers face that aren’t getting solved right now?
  • Can we solve these problems for them?
  • What problems do we currently have that we could turn into an opportunity?
  • Why are our current unhappy customers unhappy?

Outperforming the Competition

  • Where is the market leader weakest?
  • What can we do to be better than that?
  • If there were a new competitor in our industry, what would they do to be different?
  • Who are our unlikely competitors in the future?

Perfecting the Processes

  • Which parts of our process flow would we like to eliminate?
  • Why are we doing this process in the first place?
  • What if we did this backwards?
  • Can we remove the constraints when managing our workforce?
  • If we had a magic wand, what would we change about our product / service / process?
  • What can we do an hour a day to make our business better in 5 years?

Prepping for Unexpected Surprises

  • What would happen if someone started giving our service / product for free?
  • How can we start giving our product for free and still make money?
  • What new legislation could put our business in danger?
  • What new technology could make our product obsolete?
  • What kind of business model could kill our business?

Thinking Beyond Today

  • What other markets could we sell our products / services in?
  • How should we go about selling our products / services in other markets?
  • How can we tweak our current product / service to appeal to a new market?
  • How can we make $xxx,xxx (insert ambitious sum) an hour?
  • Could we turn our services into products / products into services?
  • Could we start selling our internal resources as a service or product?
  • How can we seize the white space of unexplored markets and customers?
  • How can we innovate our management and increase the effect of our leaders?
  • Can we change our cost structure?
  • How can we double our revenue streams without adding cost?
  • Are we looking far enough ahead to redesign the competitive field?
  • Are there new ways to use the technology and capabilities that we currently have?
  • What would Elon Musk, Mark Zuckerberg, Jeff Bezos or a visionary leader we look up to do?

We could come up with 100 more questions, but we’d like to hear yours! Leave them in the comments section below.

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3 Costliest Mistakes in the History of Business

The best thing to do in business is to learn from the mistakes of others. Here are three major lessons learned from some of the biggest business blunders to ever occur:

Mistake #1: Ignoring their own innovations

We all know Xerox, they’re world famous for their document solutions and services. Your company is probably using several of their machines. What you might not know is that they could’ve owned the entire computer industry if they had the foresight to.

Back in the day, in 1970 to be exact, Xerox set up the Palo Alto Research Center (PARC) to invent the technology of the future. They pumped it with funding and made sure the genius scientists working there had everything they needed to make magic.

And magic they made.

PARC invented what is widely argued to be the world’s first Personal Computer in 1973.

The Xerox Alto was awesome — it had an operating system, the world’s first Graphical User Interface (GUI — which enabled the then primitive computer screens to display information beyond just numbers and letters), and even a mouse to point towards stuff on the screen. To top it all off, this computer was linked to other PCs by a system they created called the ethernet.

No other machine had this magical combo at the time.

Remember, this was before Apple, Microsoft and the likes even came up with anything close to what Xerox had invented.

And what did Xerox do with this amazing breakthrough technology?

Nothing (much).

The higher ups didn’t quite get the revolutionary technology they had in their hands. They were more focused on their photocopiers that were the existing cash cow of the company.

According to former PARC researcher Larry Tessler,

“the company management at the East Coast of the USA did not (care a straw for) the PARC’s research results unless they were directly involved with photocopiers.”

Someone else was there to capitalize from this technology though.

Steve Jobs was invited to take a tour of the PARC facility in 1979. And during this tour they were introduced to the Xerox Alto and all its (at the time) jaw-dropping tech.

As Larry Tesler demonstrated how their “mouse” moves the cursor on the screen and clicked on icons, opened and closed “windows”, wrote emails to other people in PARC, Steve Jobs gradually got more and more excited.

In Steve Jobs’ own words:

“Why aren’t you doing anything with this? This is the greatest thing. This is revolutionary!”

He took this inspiration back to Apple and the rest, as you know, was history.

 

Mistake #2: Not looking beyond their existing business models

Image source: gizmodo.com

In the early 2000s, Blockbuster was the kingpin of the video rental industry in the United States. At its prime in 2004, it had about 60,000 employees and over 2,000 stores in 25 countries.

Just a short 6 years later, Blockbuster filed for bankruptcy.

Why?

Here’s a fun little story about Blockbuster and Netflix you may have heard.

Back in 2000, Reed Hastings, founder of the then tiny, but thriving company called Netflix, met up with Blockbuster CEO John Antioco and his team.

Hastings suggested they join forces and work together. The deal was that Netflix would help run Blockbuster’s online service while Blockbuster helps run Netflix’s offline component (DVD rental through their large network of stores).

Netflix was laughed out of the room.

We don’t know what would’ve happened if they ended up partnering with Netflix. Would Netflix have grown into what they are today — a 61 billion dollar company? Not too sure.

What we do know is that Blockbuster had the funds, the expertise and the resources to launch their own subscription-based streaming service, but they didn’t.

They even got an offer to purchase Netflix for $50 million, but they didn’t.

Instead, they continued focusing on their existing business model — physical stores that rent out videos.

Because they ran such a large network of stores and employed so many people — they needed DVD rental prices that could sustain this. A significant chunk of their profit also came from late fees, something which doesn’t even exist on mail-order video rental services like Netflix.

It was OK when they were the main player, but when given a better alternative and better customer experience?

Netflix knew what the customer wanted — variety and convenience at a low price. They also accurately predicted the customer’s shifting priorities when online streaming became more accessible.

Because they saw that, they pivoted quickly from their mail-order business into an intuitive online platform for movie-watching.

At a time when similar sites were struggling to even display their content in a clean, functional manner, Netflix was sleek, sexy and even had a first-of-its-kind system which accurately recommended movies based on what your personal preferences and movie-consumption history.

Blockbuster’s CEO Antioco realized Netflix (and other services like it) was becoming a threat. And in 2004, he started taking action — he discontinued the late fees and pumped money into a digital platform which he hoped would pave the way to Blockbuster’s bright future.

The board of directors were not happy about the $400 million these moves would cost the company. They did not believe that growing an online business and finding new ways to satisfy customers were the right strategy to take.

In 2007, they fired Antioco and reinstated the late fees. They raised prices on Blockbuster’s digital platform and cut marketing on it despite its fast growth rate. Instead of innovating their business model, they chose to focus on their brick-and-mortar business.

Wrong move.

Today, the Blockbuster brand has mostly vanished from society, with a few straggling stores scattered in certain markets. Netflix, on the other hand, has become a household name.

In his reflections on this, Antioco wrote in the Harvard Business Review that he “firmly believed that if our online strategy had not been essentially abandoned, Blockbuster Online would have 10 million subscribers today, and we’d be rivaling Netflix for the leadership position in the internet downloading business.”

Quite possible, indeed.

 

Mistake #3: Not changing fast enough

Image source: REUTERS/Kacper Pempel

Just over a decade ago, Nokia defined the mobile phone industry. With a history that began in 1979, it innovated its way into making the most sought-after mobile phones in the market. It was the world’s no. 1 phone company and sold its billionth phone in 2005.

Shortly after, iPhones and Android came into the market. Suddenly, consumers weren’t looking at Nokia anymore for the latest and greatest in mobile tech.

When Android 1.0 was launched in 2008, Nokia’s Q3 profits plummeted by 30%. It went downhill from there.

Nokia realized a bit too late in the game that they needed something that could compete with the smartphones being produced by Apple, Blackberry and Samsung and the likes.

While Nokia continued releasing solid phones with top-notch build quality, the Symbian software that they used in their touch-enabled phones were sub-par compared to Apple and Android phones. Nokia was making great quality phones with amazing cameras, but lagged behind in user experience.

People found other mobile phone operating systems easier to use and so sales continued to dip.

In a last-ditch attempt to win the smartphone battle, Nokia partnered with Microsoft to produce phone that will run on a Windows OS.

The move sold quite a few phones, but it came too slow, and the end product was not good enough to compete with the likes of Apple and Android phones which still delivered a far superior user experience.

Nokia’s market share continued to decline and in 2014, Microsoft acquired Nokia’s mobile business for $7.2 billion.

Just for a bit of perspective, at the height of its times in 2000, Nokia’s market cap was hovering around $245 billion.

However, this is fortunately not the end of the story.

There’s talk of a comeback for Nokia in the first half of 2017, and this time finally, the phones will run on Android. Knowing Nokia’s hardware capabilities, I’m definitely looking forward to see what they come up with.

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What are the biggest mistakes you’ve made in business and what has that cost you? Share your lessons in the comments section below.