Посты с тэгом: big picture

The Remaking of Netflix

Published date: November 28, 2011 в 3:00 am

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Netflix needs urgent change to stop the bleeding and rebuild its business model. It is running out of cash and losing support from customers and shareholders.  Management must re-establish its credibility with bold moves.  Here is a series of steps and techniques to do that.

1.  Reframing:  Use the Subtraction Tool to reframe and see new possibilities.  Make a list of the major components of the company (patents, products, brand, employees, customers, network, etc.).  Now imagine Netflix will merge with a company from another industry.  Create a phrase something like this: “Netflix cannot stream movies to customers, but it has all the other components.  What company has the ideal set of products that would best fit the remaining resources of Netflix?”   For example, would a company in the retail sector have products that would find new growth within the Netflix enterprise? Companies like Path Intelligence might be a good candidate.  Perhaps Netflix could merge with a brick and mortar movie theater company like AMC Entertainment and leverage the strengths of each.  Perhaps Netflix links up with Research in Motion to leverage its proprietary Blackberry network for streaming data.  Use this same approach for all the components, one at a time, to envision new possibilities.

2.  Reverse Assumption:  This technique helps “break fixedness” about assumptions.  List the key business assumptions about Netflix and its industry.  For example:

  • Netflix streams content to customers
  • Consumers want more options
  • Netflix sends DVDs to customers

Reverse the assumptions one by one.  “Customers stream content to Netflix.”  Perhaps the new business model is to offer a service allowing customers to stream information to Netflix which is then re-streamed to others.  Perhaps Netflix uses its streaming skills to enter the business-to-business market, servicing banks or other companies that need to move digital content in a unique way.  Perhaps customers send DVDs to other customers instead of sending it back to Netflix, saving time and money.

Green Field Innovation

Published date: August 9, 2010 в 3:00 am

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How should firms identify innovation opportunities and predict market potential at very early stages and in new areas (“green fields”) and ambiguous environments?  Here are three approaches:

1.  Find Innovation Adjacencies:

Adjacent markets are an attractive way to grow.  Adjacent markets are not too far away from your core business in terms of channels, technology, price point, brand, etc..  To find them, I recommend The Big Picture framework developed by Professor Christie Nordhielm at The University of Michigan.  The Big Picture outlines four quadrants that completely define any market category. To find “green fields”, consider each quadrant one at a time and imagine extending beyond the bounds of the category in some close by, adjacent way.  The key is to stretch, not leap beyond your inherent business model.  Ask yourself these questions:

  • Quadrant 1 Adjacencies:  What substitute products are non-category consumers using to fulfill the need.  Where are they buying it?  What complementary products go along with these substitutes?
  • Quadrant 2 Adjacencies:  What other products do your loyal customers buy, perhaps at the same price point or to fulfill the same or similar brand promise?
  • Quadrant 3 Adjacencies:  Why do multi-brand customers use several brands?  Is it time-dependent?  Situation-dependent?  Why does it vary?  What other products are used when the competitive brands are consumed?
  • Quadrant 4 Adjacencies:  What other category of products does your competitor sell?  How do those fit into their product line?  How could they fit into yours?

Once you identify potential adjacencies, apply an innovation method to create new-to-the-world concepts.

Value_net model 2.  Cooperate with the Competition:

Co-opetition is an idea described by Barry Nalebuff  and Adam Brandenburger in their book, “Co-opetition.”  It means cooperative competition – when industry participants behave in a way that benefits all.  They coopetate rather than compete.  The trick is to apply innovation templates to the Value Net model of co-opetition.  Here’s how.  List the activities of each Value Net participant (Company, Supplier, Customer, Complementors, Competitor).  Rotate each specific company in the Value Net model so that each takes a new role (competitors become suppliers, suppliers become complementors, etc).  Use each template on the new list of activities, starting with Task Unification.  Using Function Follows Form, envision how the new role creates a “green field” market.

3.  Listen to the “Voices”:

Here are three less obvious sources of “green field” opportunity.

  • Voice of the Product:  Products have enormous amounts of information coded into them through years of design improvement.  A corporate innovation method such as S.I.T. lets you “interrogate” the product to find new, undiscovered market benefits.
  • Voice of the Brand:  Brands also have information coded into them.  The key is to extract the information and data that contributes to the brand promise to see hidden assets and market potential.  For this I recommend the semantic search engine, Goldfire.
  • Voice of Serendipity:  Many products are invented accidentally.  Serendipity led to the microwave oven, corn flakes, Teflon®, penicillin, fireworks, Viagra®, chocolate chip cookies, and the most famous of all accidents…the Post-it® note.  While serendipity is unpredictable, there is value if you can unlock its hidden secrets.

Linking Innovation with Strategy

Published date: January 11, 2010 в 2:00 am

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Innovation that is linked to strategy is seen as more realistic and supportable.  Innovating is efficient because you avoid creating ideas that are out of scope.  Firms struggle with this as Idris Mootee observed in his blog, Innovation Playground:

“The most amazing thing with strategic experience innovation is that it
takes one kind of company and leadership to create the idea and another
kind of company to scale it up and drive industry transformation and we
see it in markets after market.”

Andrew Hinton offered this insight on his blog, Inkblurt:

“We hear the words Strategy and Innovation thrown around a lot, and often we hear them said together. “We need an innovation strategy.” Or perhaps “We need a more innovative strategy” which, of course, is a different animal. But I don’t hear people questioning much exactly what we mean when we say these things. It’s as if we all agree already on what we mean by strategy and innovation, and that they just fit together automatically.”

There are two approaches to linking innovation and strategy:  Strategy-Informs-Innovation and Innovation-Informs-Strategy.  Here is how:

Corporate Innovation Strategy Template

Published date: September 14, 2009 в 10:21 pm

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I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

Rudyard Kipling (1902)

Here is a simple template to create your company’s innovation strategy:

  • WHAT:
    • Determine what business lines are to be innovated.
    • Determine what products or services within those business lines need innovation.
    • Establish a portfolio model that compares innovation output from one business line to another.
    • Rank order business lines based on the strength of their innovation portfolio pipelines.
  • WHY:
    • Determine how much innovation is needed.  Use a tool like Map-the-Gap.
    • Tie innovation to a strategy framework such as The Big Picture.
    • Focus innovation exercises to link directly to the strategy framework.
    • Use the framework to identify market adjacencies.
  • WHEN:
    • Schedule innovation workshops at the front end of the business cycle to help determine what projects will get funding in the next budget cycle.
    • Schedule innovation workshops after the planning cycle to jump-start new initiatives for the upcoming year.
  • HOW:
    • Choose specific methods of innovation to be used based on efficacy and results.
    • Combine different methods to leverage the strengths of each.
    • Integrate the methods by using the output of one as inputs for the others.
  • WHERE:
    • Set aside space with the specific purpose of conducting innovation workshops.
  • WHO:
    • Form innovation “dream teams” to maximize the success of innovation efforts.
    • Schedule training on how to use innovation methods.
    • Examine the company’s innovation culture to diagnose where it is weak.
    • Establish an innovation competency model.
    • Designate and empower commercial leaders to drive innovation efforts.

Innovation Adjacencies

Published date: March 18, 2009 в 1:39 pm

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Finding adjacent market spaces is an attractive way to grow.  Adjacent markets are not too far away from your core business in terms of channels, technology, price point, brand, etc.  Adjacent means: lying near, neighboring, having a common border, touchable.  Although chasing adjacencies can be distracting, it is a much easier to sell internally.  Adjacencies seem more achievable than far out, ethereal white space opportunities.

Adjacent markets are even more appealing when you apply a systematic innovation method to it.  Giving yourself the gift of novelty in a new market space right next to your own seems like the best of both worlds.  The trick is finding the right adjacencies.

The starting point for thinking about adjacencies is to ask yourself, “Adjacent to what?”  It is much harder to find adjacent spaces when you don’t have a clear understanding of your existing spaces.  For this, I recommend a framework called The Big Picture developed by Professor Christie Nordhielm at The University of Michigan.  The Big Picture outlines four quadrants that, when properly constructed, completely define any market category.  Here is a visual of those quadrants.

Innovation Behavior

Published date: April 20, 2008 в 1:05 pm

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Innovation is a skill, not a gift.  Top organizations drive growth by nurturing and investing in innovation as a competency.  One way organizations make it real is by including innovation within formal competency models.
Professor Rodney Rogers of Portland State University defines a competency as a persistent pattern of behavior resulting from a cluster of knowledge, skills, abilities, and motivations.  It is the persistence of those behaviors that matter most and help your organization succeed.
Competency models are a useful way to formalize that behavior and make it persistent.  They help describe the ideal patterns needed for exceptional performance.  They are a blueprint for the type of person needed for a specific job. And they help diagnose and evaluate employee performance.  It takes a lot of work to develop one, but it’s worth it.
My approach is to see innovation competencies at two distinct levels: The Innovator, and The Innovation Leader. Here is how to think about it.
The Innovator Competencies:

  • Generating Innovative Solutions – Systematically innovates using a model with proven efficacy; routinely innovates products, services, processes, and strategies; values and harnesses team diversity; reframes problems in a different light to find fresh approaches; entertains wide-ranging possibilities others may miss; takes advantage of difficult or unusual situations to develop unique approaches and useful solutions.
  • Seeing the Big Picture – Has broad knowledge and perspective; pieces together seemingly unrelated data to identify patterns and trends and to see a bigger picture; understands the pieces of a system as a whole and appreciates the consequences of actions on other parts of the system; possesses a big-picture view of the situation.

The Innovation Leader competencies are different.  It is not necessarily the innovation leader who must generate new ideas; rather, they must understand how to instill innovation according to Penn State researcher, Dr. David G. Gliddon.  “Commitment to innovation as a culture is prevalent in organizations as it is commonly woven directly into mission statements. However, leaders still lack the ability to plan, measure and implement innovative programs, products and services.  These challenges are enhanced by the pressure to juggle several different and often conflicting roles.” said Gliddon.  In a three-year study, Gliddon identified the competencies that underpinned these roles and developed a competency model of innovation leaders.  The competency model can be tailored to any organization as part of a competency-based human resource development initiative.
An innovation leader collaboratively interacts with their employees and supports high levels of teamwork, providing opportunities to share innovations.  Once an innovation has been shared, employees should be empowered to then adopt the innovation if it is useful.  Employees can then support the innovation leader by initially adopting the innovation, and encourage the diffusion of the innovation throughout organization’s social system, Gliddon says.  Innovation leaders must also take personal responsibility for and be dedicated to projects that require innovations.  Therefore, innovation leaders must establish a trust culture and maintain relationships based on trust.  They must display initiative, set challenging project goals, and link those goals to the needs of the customer, department, and enterprise, according to his study.
Persistent innovation behavior by the leader and innovator is a recipe for growth.

Innovation Follows Strategy

Published date: February 10, 2008 в 11:45 am

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Innovation that is done in the context of business strategy tends to be more focused, efficient, and business-model relevant.  Innovation should not be viewed as a way to take the organization off its strategic track and in new directions.  Rather, innovation should be applied in a way that makes the current strategic track more successful and profitable…true growth.
Yet the tendency is to view this approach as incrementalism and not disruptive enough in the Christensen sense.  Some would say that starting with your current situation is not bold and is risk adverse.  “We’re not thinking outside the box” is the usual incantation at this point.  Instead, there is a preference to chasing “white space” and “open source” innovation as a source of growth.  Some executives prefer the lure of white space and opportunity spotting, and they readily acknowledge that it is “low yield by design.”  The Scarcity Principle tends to make these opportunities seem more valuable than they really are.  White space chasers position themselves as fighting the heroic fight.  Resources come pouring in.
The best Fortune 100 companies pursue high yield, organic innovation efforts… not “low-yield-by-design” efforts.  High yield innovation comes from tying innovation directly to the strategic marketing context of the firm.  Ideas generated this way help the organization stretch its model in a way that is achievable and internally-sellable.
How do you tie innovation to strategy?  Professor Christie Nordhielm from the University of Michigan has developed what I consider the best single contribution to marketing thought since the 4P’s.  Her Big Picture framework of the marketing management process provides the context for innovating across the entire business model.  Applying systematic innovation tools to each aspect of her Big Picture model can yield amazing insights at both the strategic and tactical levels of the business.  It is the intersection of these two ideas…Big Picture Strategy and Systematic Inventive Thinking…that will yield consistent, profitable results.  Innovation follows strategy…not the other way around.

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