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This 10 part video series “How to Develop a Winning Strategy” was filmed at National Speakers Association Australia event in Adelaide. I will post the 10 video’ here each Friday.

You’ve got a burning passion and you want to share it with the world.
The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.
You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.
This seminar will show you tips, and tools so you can develop an effective strategy for your organisation.

Learn tools to help you learn:

  • How to identify your strengths
  • How to create a ‘Star’ business model
  • How to commercialise your skills
  • How to make your speaking career into a ‘machine’

Innovation is not invention.  Invention is a result of innovation, but innovation is continuous. It is also not discrete, but a combination of two or more entities.

Importance of Domain Knowledge

In order to innovate, a company must have ownership of its skills and knowledge, and businesses that outsource skills and knowledge are paying to reduce their innovative capability.  I just cannot understand why companies do that. It is essential for the long-term survival of a company to be able to innovate.

Take Apple:  they have brought in chip engineers to enable the company to develop its own chip technology for use with the iPhone.  They could easily have outsourced the chips, but this would have detracted from their innovative capability. 

By using sound strategic thinking and doing it this way Apple have ownership of their own knowledge and skills, and hence their own ability to innovate. 

Strategic thinking and innovation are partners, and strategies that reduce costs, or at least minimize them, and that focus on profitability, support innovation, as does the effective management of change.  A failure to meet change and use it to your advantage will lead to stagnation. 

Rocking the boat is preferable to maintaining the status quo.

Innovation resulting in the development of new products is a repeatable process that must be managed by the CEO.  In order to achieve that effectively, the talent and skills of employees have to be codified, and the whole process driven and managed by the CEO.

Innovation can be managed and is repeatable.

There two major forms of innovation: innovation of products and services that are marketed by the company, and innovation of processes and procedures that can improve productivity and the overall profitability of the company.

By the effective management of innovation, 3M succeed in creating 300 new products each year, and Merck developed 12 high-selling new pharmaceutical products in 10 years.

As stated at the beginning, innovation is a continuous process, and invention is a discrete outcome of it that occurs at a specific point in time.  In order for the volume of inventions that 3M and Merck come up with to be possible, a process of managed innovation has to be instituted. 

Innovation must be developed into a repeatable system, and that should be one of the main roles of a CEO:  to make innovation a systematic and deliberate process rather than relying on luck or serendipity.

 

dlc-image1
‘Helping Leaders build great organisations”
www.DanielLockConsulting.com
(C) Daniel Lock.

.

dlc-image1

‘Helping Leaders build great organisations”

www.DanielLockConsulting.com

(C) Daniel Lock.

This 10 part video series “How to Develop a Winning Strategy” was filmed at National Speakers Association Australia event in Adelaide. I will post the 10 video’ here each Friday.

You’ve got a burning passion and you want to share it with the world.
The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.
You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.
This seminar will show you tips, and tools so you can develop an effective strategy for your organisation.

Learn tools to help you learn:

  • How to identify your strengths
  • How to create a ‘Star’ business model
  • How to commercialise your skills
  • How to make your speaking career into a ‘machine’

The statistical link between corporate strategy and profitability was discovered by Richard Rumelt in 1972. He found out that the degree of diversification affected a company’s performance:   the less the diversification, the better the company did.

What explains business success?

This discovery still stands after over 30 years of research.  However, it was his 1991 paper “How Much Does Strategy Matter?” that controversially challenged the majority thinking.  Published in the Strategic Management Journal, this paper demonstrated that neither corporate ownership nor the industry involved could explain significant differences in performance between businesses.

Although the nature of the industry has an influence on profitability, of far greater significance is being the best in your field.  The way you do it is more important than what you do. Many companies have great strategies but end up in failure because they didn’t get it right.

Take the newspaper industry for instance, and their search for an online and offline model. This is a completely new business model, and how it will work out is equally unknown.  It is easy to take your eye off how to make money in this situation, and the Boston Globe is losing more than $100 million a year.

Uncertainty Vs ‘Me-too’

To reach a logical conclusion in such situation it is essential to use logical thought processes, and strategic thinking enables us to reach a conclusion. Opportunity and risk are two sides of the same coin:  you can choose to be a ‘me too’ but you don’t make money that way.  Uncertainty can reap high rewards.

Take Bill Gates.  In his book ‘Outliers’, Gladwell states that people like Gates saw an opportunity and grabbed it.  That is what strategy is all about:  getting it right first.  Being the first to get it right is much more important than getting first to market. However, before you can achieve that, you have to understand what drives your own strategy before you can recognize an opportunity when it arises.

When ex Apple co-founder Steve Jobs’ company NeXT was bought over, Apple returned as Apple CEO. He recognized that there would be an opportunity of blending the MP3 player with its contents so that both could be use together. His strategic thinking was driven by the combination of the entertainment industry and technology, and its result was the iPod.

Bottom line

It is simpler and safer to be a ‘me too’ – a follower, and letting opportunities go because they are risky. However, the qualities that make a business rise and stand with the giants are strategic thinking and innovation.

dlc-image1

‘Helping Leaders build great organisations”

www.DanielLockConsulting.com

(C) Daniel Lock.

dlc-image1
‘Helping Leaders build great organisations”
www.DanielLockConsulting.com
(C) Daniel Lock.

This 10 part video series “How to Develop a Winning Strategy” was filmed at National Speakers Association Australia event in Adelaide. I will post the 10 video’ here each Friday.

You’ve got a burning passion and you want to share it with the world.
The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.
You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.
This seminar will show you tips, and tools so you can develop an effective strategy for your organisation.

Learn tools to help you learn:

  • How to identify your strengths
  • How to create a ‘Star’ business model
  • How to commercialise your skills
  • How to make your speaking career into a ‘machine’

Innovation is carried out by many Australian businesses both big and small. The ABS in its summary of IT Use and Innovation in Australian Businesses for 2005-2006, reported that 38.9% of Australian businesses are implementing innovation.

According to the report, approximately 21% of businesses are introducing new operational processes. About the same proportion (19%) is introducing new goods and services, while new marketing methods are being introduced by 14% of businesses. However, most of these are large businesses: 74% of those that implemented innovation employed over 200 people, while only 49% of those with 5 – 19 employees did so.

In terms of broad industry categories, those implementing an innovation during the period were manufacturing (45%), services (38%) and mining (36%)

Facts and Statistics

Results of the ABS 2005-2006 Business Characteristics Survey (BCS) revealed some significant statistics. In this survey, the Health and Community Services and Personal and Other Services were included as additional sectors. It also expanded the survey population by including those with 0-4 employees.

This change in the survey population and the level of stratification made the current results different from those of previous years so data contained in the two years should not be compared.

Innovation can be classified into four. These are product innovation (goods and services), process innovation, marketing innovation and organizational innovation.

Summary of the 2005-06 Survey (Source: ABS, 8166.0)

Employment Size

Implemented

Innovation

(%)

Innovation still in development

(%)

Abandoned innovation

(%)

Any innovative activity

(%)

0-4

31.5

9.5

5.9

35.4

5-19

48.8

15.4

8.4

51.6

20-199

65.5

18.6

8

67.7

>200

74

28.6

9

76.5

Total Businesses

38.9

11.8

6.8

42.4

 

Industry

Innovation type

Goods/

services

(%)

Operational

process

(%)

Organizational/

managerial

(%)

Marketing

methods

(%)

Proportion of innovating businesses (%)

Mining

11.3

17.4

23.1

10.6

36.3

Manufacturing

19.3

31.5

21.5

16.3

44.6

Services*

19.4

19.9

20.6

14.2

38.4

Total Businesses

19.3

20.8

20.7

14.3

38.9

* Calculated as a weighted average of industries in ANZSIC93 Divisions D to L, O, P and Q.

The basis of these innovation surveys, and the ABS definition of  ‘innovation’, was the Oslo Manual (3rd edition, 2005, OECD/Eurostat).

“An innovation is the implementation of a new or significantly improved product (goods or services), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.” To be considered an innovation, the process or method must be new or a significant improvement of that already in place.

The Four Types of Innovation

  1. Product innovation refers to new or significantly improved goods and services as to their characteristics or intended uses. Examples are significant improvements in components, materials, technical specifications, ease of use, the software involved or any other functional characteristic.
  2. Process innovation refers to changes in production or delivery methods, including equipment and/or software and innovative techniques.
  3. Organizational innovation refers to new organizational methods that are implemented in workplace organization, business practices and external relations.
  4. Marketing innovation involves new marketing techniques that involve changes in product packaging or design, product placement, product pricing or promotion.

    In summary, then, a significant number of large Australian businesses are innovative in nature, while smaller companies tend to be less so. Innovation is a must for any business that wishes to retain their market share, or even improve it, in difficult financial times such as these.

    Innovation can save money and increase productivity, and there are few doubts that new product designs are attractive to the consumer.

     

    dlc-image1

    ‘Helping Leaders build great organisations”

    www.DanielLockConsulting.com

    (C) Daniel Lock.

     

     

    .
    dlc-image1
    ‘Helping Leaders build great organisations”
    www.DanielLockConsulting.com
    (C) Daniel Lock.

    This 10 part video series “How to Develop a Winning Strategy” was filmed at National Speakers Association Australia event in Adelaide. I will post the 10 video’ here each Friday.

    You’ve got a burning passion and you want to share it with the world.
    The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.
    You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.
    This seminar will show you tips, and tools so you can develop an effective strategy for your organisation.

    Learn tools to help you learn:

    • How to identify your strengths
    • How to create a ‘Star’ business model
    • How to commercialise your skills
    • How to make your speaking career into a ‘machine’

    A Powerful Tool

     Strategic thinking remains a powerful tool despite the present economic condition, and need be neither impractical nor ineffectual. 

    Many companies are reassessing their strategies at this time of year, but the current economic climate is not a normal one, and regular route maps will not help in showing a path to success.

    This is a good thing, because it promotes the original thought and critical thinking needed for companies to keep ahead of the game.  

    Bad times can frequently initiate the type of strategic planning necessary to enable businesses to come out of them stronger than most others. 

    Here are three tips on how to go about this.

    1. Your Operational Plan Must be Realistic

    There are more variables now than ever before that have to be taken into consideration in realistic strategic planning. 

    Industrial suppliers, for example, are exposed to factors such as interest rates, commercial and domestic real estate markets and recession stimulus spending by the government with all of the licensing requirements that government spending help demands.

    So be realistic, and get together all the information you need, and base your decisions on sound problem solving techniques and decision-making processes.

    2.  More Frequent Strategic Monitoring

    In economic situations such as this one, things move very rapidly, and an increasing number of CEOs are carrying out their strategic monitoring on a more frequent basis. What was annual, or maybe even half-yearly, is now quarterly.  In fact, many strategy meetings are held ad hoc in response to rapidly emerging opportunities.

    Staying with the real estate example, as the market moderates government led infrastructure will provide many business opportunities, and this requires many regulation needs to be met.

    Indicators such as these can enable businesses to become proactive and rapidly make the good decisions that are needed to make the best of these emerging opportunities.

    3.  Think Ahead

    Don’t be caught off guard during these times, because opportunities will occur. You have to plan to be ready for them, and be able to make quick and decisive decisions.

    However, don’t throw your long term strategy out of the window, because things are going to improve some day, and your forward strategic plan will once more be valid.

    McDonalds haven’t stopped upgrading their premises and developing more healthy choices for their customers.  Sure, kill off anything that seems no longer valid, but those strategies that make sense should be retained.

    The present challenges call on CEOs to gather together good relevant information on which to base their decision making,  to monitor as frequently as changing conditions demand, and to be aware of what the future demands from them.

    Rapid decisions, monitored frequently, but with the longer term always in mind. That’s what’s needed!

     

    dlc-image1

    ‘Helping Leaders build great organisations”

    www.DanielLockConsulting.com

    (C) Daniel Lock.

    dlc-image1
    ‘Helping Leaders build great organisations”
    www.DanielLockConsulting.com
    (C) Daniel Lock

    This 10 part video series “How to Develop a Winning Strategy” was filmed at National Speakers Association Australia event in Adelaide. I will post the 10 video’ here each Friday.

    You’ve got a burning passion and you want to share it with the world.
    The current economic conditions pose opportunities and threat. You need a strategy and you need it quick.
    You have no time for theory and jargon, and you don’t need to change the world, just pragmatic strategy that delivers bottom line results.
    This seminar will show you tips, and tools so you can develop an effective strategy for your organisation.

    Learn tools to help you learn:

    • How to identify your strengths
    • How to create a ‘Star’ business model
    • How to commercialise your skills
    • How to make your speaking career into a ‘machine’

    Strategic Innovation Newsletter

     

    Welcome to the May edition of Strategic Innovation newsletter, a free monthly newsletter on leadership, strategy and innovation. Delivered on the first Tuesday of each month.

    Back issues are archived for free downloading atwww.DanielLockConsulting.com.

     

    15 Tips For Leading In Freaked-Out Times.

     

    1. Leaders create order from chaos.

    If there is no chaos, then there is nothing to put into order and, therefore no energy and creativity.

    2. The leader is rarely — possibly never? — the best performer.

    Leaders are field marshals, organising resources and talent. They are rarely the best performer, always looking for smart people (smarter than them) and put them to work at what they are good at.

    3. Leaders make it happen.

    Like the pizza man, leaders deliver. In heady times, cool and flash count. Now it’s all about performance, improved behaviour and outcomes.

    4. Leaders design their own future.

    Design your next five years, decide to be a leader, or find a leader to work for, as only leaders survive.

    5. Leaders triumph through orchestration.

    Great quote from Tom Peters: “Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics…”

    6. Leaders thrive on ambiguity.

    What is going o happen I the next five years? Who knows? But we know this for sue. They will be a roller coaster ride; the recovery will be dramatic and swift. Too many people down prepare for success.

    Making fact based decisions will be important, but what about making them on less than complete and accurate data. Leaders wallow in ambiguity.

    7. Leaders improvise.

    Change is with us, it’s always been wit us. In the nineties it was the Internet. We learnt to deal with that. Now it’s social media. Leaders need to understand the fundamentals (there are no ‘new’ fundamentals) and integrate them with the new environment.

    Be ready to move and adapt. Re-structure, refine, adapt and change. 

    8. Leaders trust their instincts.

    Usually our intuition is actually more rational then we think. More often it is more accurate on the down side, and tend s to be overly optimistic on the upside.

    If you aren’t feeling a sense of inspiration, stop wait, and look for more information. Leaders act from inspiration.

    9. Leaders bring in different people.

    Leaders know they need the right person for the right job, this creates diversity. Leaders bring in new people just to refresh the gene pool, if you need new thinking, go and acquire some new thinking. The first step is to open you mind to accept you need new thinking.

    10. Leaders make mistakes — and make no bones about it.

    Winston Churchill said it best: “Success is the ability to go from failure to failure without losing your enthusiasm.”

    Most of us don’t get it right the first time, or the second, or third. That’s fine, at least you were trying and making a stand. As long as they were different mistakes.

    Recognise mistakes early, deal with them, and then forget about them and move on.

    11. Leaders don’t create followers, they create more leaders.

    Successful leaders build leaders, they create environments that allow people to take risks, make mistakes with out fear of retribution. Leaders measure their success by how many leaders they develop.

    12. Leaders wear their passion on their sleeve.

    Tom Peters again: “There’s absolutely no question in my mind: Leaders dream in Technicolor. They see the world in brighter colors, sharper images, and higher resolution. Leadership, in the end, is all about having energy, creating energy, showing energy, and spreading energy. Leaders emote, they erupt, they flame, and they have boundless (nutty) enthusiasm. And why shouldn’t they? The cold logic of it is unassailable: If you do not love what you’re doing, if you do not go totally bonkers for your project, your team, your customers, and your company, then why in the world are you doing what you’re doing? And why in the world would you expect anybody to follow you?”

    13. Leaders know: Energy creates momentum.

    Every successful business, and project, requires momentum to keep it moving. But creating momentum, getting the project off the ground requires an enormous amount of energy. This is the role of the leaders, once it is in motion; the leaders job is guide it in the right direction and make the necessary course correction. Don’t underestimate the amount of energy required to create momentum. Benjamin Zander said it best: The job of the leader is to be a ‘dispenser of enthusiasm.’”

    14. Leaders have courage.

    Courage is the trait the ancient Greeks held to be the foundation of all other virtues. What’s the difference between an average leader and a great leader?

    15. Leaders give respect.

    Leaders care! Because they actual give a damn about what they are doing.
     

    Technique of the month: The daily update

     

    Use this when running multiple projects, or with new team members.

    At the end of every work day, ask them to take 5-10min to do an update, any longer is too long and they are doing something wrong.

    Answer these questions:

    1. Jobs I did today and the results I got.
    2. Challenges & problems that came up.
    3. Questions I have for you.

    Within 30 days you will have a good understanding how this person is working out.

    Hire slow and fire fast. Take 60-90 days to get to know someone.

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