strategic positioning of ideas and concepts - aalto filestrategic positioning of ideas and concepts...

29/04/2016 © IMI 1

Strategic Positioning of Ideas and Concepts

TU-E5050

Collaborative Innovation Management

COINNO

(5 cr)

28.4.2016

Pekka Berg

Hani Tarabichi

Innovation Management Institute

Aalto University

© IMI 2

9.00 Start of the Day

– Learnings from your Homework

– Lecture 1: Strategy

• Based on your pre-reading

– Break: Case Report Intro

• 19.5. Program

– Lecture 2: Portfolios

• Based on your pre-reading

– Lecture 3: Six Hats

– Lecture 4: Lego Serious Play Agents

12.00 Lunch

– Intro for the Homework

– Working for the COINNO corporate project dealing with the

topics today

15.30 Wrap-Up of the day

16.00 End of the Day

TOPICS OF THE DAY

Homework 3 for 28.4.2016:

Scenario Planning and Concept Shifting (see the next 2 slides)

1. Define the scope

2. Identify major stakeholders

3. Identify basic trends (within the limits of the scope)

4. Identify key uncertainties of your case itself or it´s business

environment.

5. Select the top two uncertainties and cross them in 2x2 matrix. (ref.

Schoemaker 1995)

6. Name all these 4 scenarios.

7. Prototype at least two scenarios by “paper-legos-modeling clay”

mockup prototypes.

– Utilise your first prototype today, if relevant.

– Think about which components to freeze and which to replace? (ref: Seidel

2007)

– Make memos…….Take photos and videos.

– Be ready to present the status of your work in the wrap-up of the day.

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Building blocks for scenarios

Schoemaker 1995

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Case Anglo-American Corporation –

Uncertainties Combined

Goods

Customer

Interaction

Service

New Business Concept

Innovation

ENABLERS

PROCESS

PHASE:

FOCUS ON:

Invention Planning

OfferingDevelopment Commercialization

Creativity DecisionMaking

Speed Costs

LA

UN

CH

Busin

ess

Pro

cess

Develo

pm

ent

Portfo

lio

Roadm

aps

Busin

ess

Inte

lligence

, Fore

sight

Strategy

Competence

Cross-functional

teams

+

I

M

P

A

C

T

SOFFERING BUSINESS MODEL

Innovation Management Big Picture

Goal today

• To understand the linkage between

different type of strategies.

• To understand how to linkage idea

creation and conceptualisation with

the strategy in order to get the

concepts implemented.

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© IMI 8

• Hamel, G., 1996. Strategy as revolution. Harvard Business

Review, 74(4), pp.69-71, 74-82.

• Loch, C., 2000. Tailoring product development to strategy:

case of a European technology manufacturer. European

Management Journal, 18(3), 246-258.

PreReadings

© IMI 9

• Porter, 2008, The Five Competitive Forces that Shape Strategy, pp. 23-41.,

HBR`s Must Reads on Strategy, 2008.

• Bowonder, & Al. 2010, Innovation Strategies For

Creating Competitive Advantage, Research Technology Management,

May-june 2010.

• Casadesus-Masanell, 2010, From Strategy to Business Models and onto

Tactics, Long range planning [0024-6301]v:2010 vol:43 iss:2/3 s:195 -215

• Constantinos D. Charitou and Constantinos C. Markides, 2003, Responses

to Disruptive Strategic Innovation, MIT Sloan management Review 2003.

Useful Readings

Contents

1. Strategy

2. Teamwork

3. Linking Ideas with the Strategy

4. Teamwork

5. Homework

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What is strategy ?

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What is strategy?

Strategy consists of those describeable

guidelines, events and decisions which

when implemented lead from the current

state of affairs to the desired future (vision).

Strategy aims for creating stabile

competitive advantage that provides

profitability.

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What kind of questions

does strategy answer?

Lecklin, 1997/:

• What is the core competence of the firm?

• Which products and services the firm offers?

• What are the critical success factors of the firm?

• On what fields the firm is or wants to be strong?

• What are the competitive advantages?

• How does it maintain and reinforce comp. advantages?

• What is the target market and in what kind of position the

firm wants to be on those markets?

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What kind of strategies do you have in your

case company?

Innovation strategy? Design strategy?

Linkage between innovation activity and

strategy?

Strategy in practice

15

COINNO

Strategy and Portfolio

Hani Tarabichi

“Would you tell me, please, which way I ought to go from here?” said Alice.

“That depends a good deal on where you want to get to,” said the Cheshire cat.

“I don’t much care where.…” said Alice.

‘Then it doesn’t matter which way you go,” said the cat.

Strategy is Revolution

Everything else is tactic

• Create Value

• Build New Business

• Improve and transforms organizations

• Innovative way of thinking

• Visionary – Game changer

• Challenge driven

Business….What is the SPIRIT for it!!??

What is going on??

• Deregulations

• Technological upheaval

• Globalization

• Social change

What do they have in common??

Something interesting is

Happening !!!

WHY revolution?

• Corporations are reaching the limits of incrementalism

• Rivals are reinventing the industry

• Which is better ?

– Working harder!!

– Working smarter!!

• What good will it do to work harder to follow rules when someone else is

rewriting them?!

Organizational ability to

generate radical

innovations INDEX

Max 50

Methods

Max 5

Organizing

Max 5

Strategic

commitment

Max 5

Components of BM according to Shafer et .al. 2004

Strategic

• Customer

• Value proposition

• Capabilities/competencies

• Revenue/Pricing

• Competitors

• Output (offering)

• Strategy

• Branding

• Differentiation

• Mission

Create Value

• Resource/Assets

• Processes/ Activities

Value Network

• Suppliers

• Customer information

• Customer relationship

• Information flows

• Product/Service flow

Capture Value

• Cost

• Financial aspects

• Profits

Adopted from: The power of business models, Scott M. Shafer, H. Jeff Smith, Jane C. Linder

Business Model .vs. Strategy!!

• A Business model is not a strategy

• Strategy can be viewed as a pattern of choices made over time!

• Strategy is a forward looking plan (Mintzberg), pattern, position, or

perspective.

• Strategy is a position (Porter), choices about which products or services are

offered in which markets based on differentiation features

• Strategy is a perspective (Drucker), choices about how business is

conceptualized

24

• Hamel, G., 1996. Strategy as Revolution. Harvard

Business Review, 74(4), pp.69-71, 74-82.

Pre-Reading

Contents

1. Strategy

2. Teamwork


4. Teamwork

5. Homework

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Hamel 1996

Discuss in your team about topic as follows of the paper:

1. Three kinds of companies?

2. Ten principles?

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Hamel 1996

Three kinds of companies?

1. Rule makers

2. Rule takers

3. Rule breakers

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Hamel 1996

Ten principles

1. Strategic planning is not strategic

2. Strategy making must be subversive

3. The bottleneck is at the top of the bottle

4. Revolutionaries exist in every company

5. Change is not a problem; engagement is

6. Strategy making must be democratic

7. Anyone can be a strategy activist

8. Perspective is worth 50 IQ points

9. Top-down and Bottom-up are not the alternatives

10. You can´t see the end from the beginning

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Rule Makers

– Build the industry

– Create and protect the general norms of an industry

Rule Takers

– They pay homage to the industrial lords

Rule Breakers

– Not conventional

– No respect to precedent

– Overturn the industry by revolution, radical thinking

33

Strategic Management Process

Step 1. Develop a vision and translate it into a

mission statement.

Step 2. Assess strengths and weaknesses.

Step 3. Scan environment for opportunities and

threats.

Step 4. Identify key success factors.

34

Strategic Management Process

Step 5. Analyze competition.

Step 6. Create goals and objectives.

Step 7. Formulate strategies.

Step 8. Translate plans into actions.

Step 9. Establish accurate controls.

(continued)

10 Principles to liberate revolutionary spirit1- Strategic planning isn’t strategic!!!

- Industry’s boundaries should NOT be taken as given

- The question is NOT how to better fit within these boundaries!!?

-The question is how to create or invent new uncontested competitive

space.

- Conventional strategic thinking is easy when the goal is far short than a

revolution.

- Real strategic thinking is about discovering NOT planning

2- Strategic making must be subversive/disruptive

-”I watch where the cosmetics industry is going and then

walk in the opposite direction” – Anita Roddick of Body

Shop

- Rule Makers and Rule Takers = Conventional industry

- Rule Breakers = Redefine the industry

- Invent the NEW by challenging the OLD

10 Principles to liberate revolutionary spirit

3- The bottleneck is at the top of the bottle!

- Experience is becoming irrelevant and even dangerous!!

- Is experience making executives MORE willing or LESS willing to

challenge industry’s conventions??


4- Revolutionaries exist in every company.

- What is the process to hear revolutionaries within the company?

- Revolutionaries abandon their employers to find more imaginative

sponsors

- If executives don’t let revolutionaries challenge them from within, they will

challenge them from without in the market place


5- Change is NOT the problem, engagement is

- Executives usually assume:

- “People” in the middle will resist change

- Only a hero leader can force an organization into the future

- Usually executives use the tactic of FEAR INDUCING CHANGE =>

Change is nasty

- The issue is NOT to get people support for change

- The issue is to give people responsibility for engendering change

- Engagement is a key


6- Strategy making must be democratic

- It is impossible to predict where a revolutionary idea is forming,

therefore:

- Young people <30 (young hearted) why only <30!!

- People at geographic periphery

- Newcomers

- It is not about the right to be heard

- It is about the opportunity to influence opinion and action

- It is about being impatient and impassioned, informed and involved


7- Anyone can be a strategy activist

- Makers of revolutions do not come from the top

- Strategy/Revolutionary/ Activist are not anarchists, they aim to reform

rather than tear down

- Is it safer to be silent??


8- Perspective is worth 50IQ points

- Without enlightenment, there can be no revolutions

- Tasks to be done:

- Identify unshakable beliefs that cut across the industry

- Search for discontinuities in technology that create opportunities to

rewrite rules

- Deep understanding in core competencies

- Use all knowledge to identify revolutionary ideas, unconventional

strategic options that could be put to work in the competitive domain


9- Top-down and bottom-up are not the alternatives

- Although revolution doesn't need to start at the top, it must ultimately be

understood and endorsed by the top

- Process need to achieve diversity of perspective and unity of purpose.

- Executives must engage in a learning process alongside those at the

vanguard of industry revolution


10- You can’t see the end from the beginning

- Once a company dives into discontinuities and competencies and

escape from industry’s conventions we reach surprising conclusions

- Executives role is to:

- Invite new voices

- Start new conversations that span organizational boundaries

- Help synthesize unconventional options into a point of view about

corporate direction


Thank you

Contents

1. Strategy

2. Teamwork


4. Teamwork

5. Homework

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Offering + Process + Enablers

Goods

Customer

Interaction

Service

New

Business

Concept

Innovation

ENABLERS

OFFERINGPROCESS

PHASE:

FOCUS ON:

Invention Planning Offering

DevelopmentCommercialization

Creativity Decision

MakingSpeed Costs

LA

UN

CH

Bu

sin

ess

Pro

ce

ss

De

ve

lop

me

nt

Po

rtfolio

Ro

ad

ma

ps

Bu

sin

ess

Inte

llige

nce

,

Fo

resig

ht

Strategy

Resources

Cross-

functional

teams

Ideaportfolio

Development strategy/allocation of resources

IDEA PORTFOLIO

CONCEPT PORTFOLIO

PROJECT PORTFOLIO

PRODUCT PORTFOLIO

© Innoman Oy

© IMI Jussi Pihlajamaa

Why Idea Management-

Process?

• Idea Management means practices

that enable systematic gathering,

sharing and processing of ideas in an

organization so that breakthrough

innovations and continuous

development of current products can

be achieved

Source:Imaginatik 1994-2006


Categorization of Ideas

• Can be based on strategy and portfolio that steers R&D of organization, where resource allocation for different types of development has been though out

• Categorization and placing ideas into different baskets creates the prequisites for evaluating ideas of similar nature thus facilitating the management of whole system

• This way incremental projects are compared to ideas targeting small improvements and radical/discontinuous/platform ideas compete among each other


Example of idea portfolio

70%

20%

10%

70% 20% 10%

49%

14%

7%

14% 7%

4%

2%

2%

1%

Justified idea

Good idea but needs justifications

Early idea

s

s

s

s

s

S = Service idea

Technology TechnologyTechnology

Business Business Business

Existing markets

Emerging markets

New markets

Existing products New products New platforms


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Real options portfolio

23

35

50

69

20 30 45 60

Positioning

options

Stepping

stones

Platform launches Scouting

options

Enhance-

ment

launches

MARKET UNCERTAINTY

TE

CH

NIC

AL

UN

CE

RT

AIN

TY

LOW

MEDIUM

HIGH

LOW MEDIUM HIGH

23

35

50

69

20 30 45 60

Positioning

options

Stepping

stones


options

Enhance-

ment

launches

MARKET UNCERTAINTY

TE

CH

NIC

AL

UN

CE

RT

AIN

TY

LOW

MEDIUM

HIGH

LOW MEDIUM HIGH

Source: McGrath

and MacMillan 2000

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• Positioning options:

– Development interventions based on alternative technologies

– Use when:

• There is high technological uncertainty

• There is some idea about market segments you want to go

• Scouting options:

– Development interventions with a purpose to find or create new markets based on existing competencies

– Use when:

• There is high market uncertainty

• You do not know e.g. what product features customers value

• Stepping stone options:

– Step by step development interventions with a purpose to develope new competencies

– Use when:

• There is high uncertainty regarding both technology and markets

• Markets are highly attractive


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Development portfolio

Research and

advanced

development

projects

Breakthrough

projects

Derivative

projects

Platform

projects

Product change

Pro

cess c

han

ge

More Less

Less

More New core

product

Next generation

product

Addition to

product family

Derivatives and

enhancements

New core

process

Next ge-

neration

process

Single de-

partment

upgrade

Incre-

mental

change

Source: Wheelwright and Clark 1992

• Loch, C., 2000. Tailoring product development to strategy: case

of a European technology manufacturer. European

Management Journal, 18(3), 246-258.

Pre-Reading

Loch 2000

Discuss in your team about topics as follows of the

paper:

1. The Strategic Project Positioning Clusters?

2. The New Product Development Process Clusters?

3. The Tailored System of Strategy and Processes?

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Loch 2000

The Tailored System of Strategy and Processes

1. For each business unit, assess it´s strategic position

2. Identify a portfolio

3. Identify and establish the processes

4. Provide linkages

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TU-22.1185 Collaborative Innovation Management CourseProject members: Oskari Lyytinen

Esko KauppinenMarkku Koskela

Konsta SirvioPatarawan Chaowasakoo

18.05.11

TOC-

(Thin

Organic

Coating)

applications

Framing and Positioning

Market Newness

Technology Newness

Unknown

New Region

Existing

Modification New Product breakthrough

Color Coated Replacing 2 layers

with 1 layer(4)[1]

Zinc + TOCNo White Rust

(4)[0]

Color coatedTOC + Effect Treatment

(5)[1]

TUBULAR Products Replacing Oil with

TOC (cheaper premium products)

(4)[0]

Construction Fire Protection with TOC

(3)[0]

Painting process For ready made

(4)[0]

Construction TOC Coating Service

(2)[2]

MET ENG CON

Portfolio 1- Idea portfolio frame tools

18.05.11

9

Idea(Points that Match to Strategy Focus Areas)[Points that Mismatch to Strategy Focus Areas]

Market ProfitabilityCompared to

current

Technology Newness

30%

20%

10%

Modification New Product breakthrough


with 1 layer(4)[1]


(4)[0]


(5)[1]



(4)[0]Simplified Painting

process For ready made part

(4)[0]


(2)[2]

MET ENG CON

Construction Fire Protection with

TOC(3)[0]

Portfolio 2

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10

Potential(Technical x Financial)

High

Low

Low High

Zinc + TOCNo White Rust(4)

[0]Color coatedTOC + Effect Treatment

(5)[1]



(4)[0]

Simplified Painting process For ready

made part (4)[0]


(2)[2]

MET ENG CON


TOC(3)[0]


with 1 layer(4)[1]

RiskTechnical x Financial

Portfolio 7

18.05.11

11

Strategic Fit


with 1 layer(4)[1]


(4)[0]


(5)[1]


TOC (4)[0]

Construction Fire Protection

with TOC(3)[0]


(4)[0]


(2)[2]

MET ENG CON

0

1

2

3

4

5

Will be re-evaluated after a “normal” TOC is developed

Concept should be defined more carefully

Neither strategic fit nor management support

Strategic Fit of Ideas/Concepts

18.05.11

17

LinkagesProvided (Loch 2000)

(Points that Match to Strategy Focus Areas)[Points that Mismatch to Strategy Focus Areas]

Homework 4. for 19.5.2016

Strategic Positioning of the Ideas and Concepts1. Portfolio frames

– Build up at least 3 2D-portfolio frames thinking about the relevant viewpoints f.ex. as follows:

1. Concept (customer outcome) - Resources/System – Process (customer process)

2. B-to-B - B-to-C

3. Current Business Model – New Business Model

4. Existing market – New market

5. Existing technology – New technology

6. Existing products – New products – New platforms

7. Technical uncertainty – Market uncertainty

8. Incremental – Line extensions – Radical

9. Component – System

– Create and update the tentative solutions of your case by using the Six Thinking Hats approach

1. Start with the Blue Hat.

2. Create at least 4 solutions: White, Yellow, Black and Green Thinking Hat solutions.

3. Analyse these 4 solutions with Red Hat.

– Put your ideas/concepts dealing with the solution of your case to the idea portfolios you have built up. USE

STICK NOTES!

2. Strategic Positioning

– What is the strategy of your case company? How revolutionary the strategy is?

– Cross-check the strategy of your case company and your idea portfolios - What is the strategic positioning of

your ideas?

– Do Strategic Fit – Linkages Provided - 2D-portfolio

3. Visualize at least 3 idea portfolios and 1 strategic fit portfolio.


– Be ready to present the status of your work in the wrap-up of the day.

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23

35

50

69

20 30 45 60

Positioning

options

Stepping

stones


options

Enhance-

ment

launches

MARKET UNCERTAINTY

TE

CH

NIC

AL

UN

CE

RT

AIN

TY

LOW

MEDIUM

HIGH

LOW MEDIUM HIGH

23

35

50

69

20 30 45 60

Positioning

options

Stepping

stones


options

Enhance-

ment

launches

MARKET UNCERTAINTY

TE

CH

NIC

AL

UN

CE

RT

AIN

TY

LOW

MEDIUM

HIGH

LOW MEDIUM HIGH

Source: McGrath

and MacMillan 2000


High

Low

Low High



(5)[1]



(4)[0]


made part (4)[0]


(2)[2]

MET ENG CON


TOC(3)[0]


with 1 layer(4)[1]


Portfolio 7

18.05.11

11

Strategic Fit


with 1 layer(4)[1]


(4)[0]


(5)[1]


TOC (4)[0]


with TOC(3)[0]


(4)[0]


(2)[2]

MET ENG CON

0

1

2

3

4

5





18.05.11

17







2. B-to-B - B-to-C













STICK NOTES!




your ideas?




– Include this work as part of your Case Report, See more from Case Report Instructions.

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High

Low

Low High



(5)[1]



(4)[0]


made part (4)[0]


(2)[2]

MET ENG CON


TOC(3)[0]


with 1 layer(4)[1]


Portfolio 7

18.05.11

11

Strategic Fit


with 1 layer(4)[1]


(4)[0]


(5)[1]


TOC (4)[0]


with TOC(3)[0]


(4)[0]


(2)[2]

MET ENG CON

0

1

2

3

4

5





18.05.11

17



If something unclear – don´t hesitate to ask.

Thank you !

[email protected]

040-5455560

www.imi.aalto.fi

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