New growth initiatives can get killed by top management before given the chance to live. To add to all these challenges, there is a growing unease about the viability of long-term planning. Frustrated executives complain that the rapid pace of change renders even three-year plans obsolete before they have time to gain traction. Indeed, companies do need to be agile and responsive to rapid competitive and market shifts.
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But to give up on long-term strategy would be a grave mistake. Without a vision of where markets and customers are heading, and without a map for anticipating disruptions that lie ahead, senior leaders are essentially flying blind in the most turbulent conditions imaginable.
Managing the Present, Imagining the Future
This enables you to open the way forward—to imagine new businesses and business models for the future that can be prototyped and tested today. You start with destination in mind and then work backwards to determine the right highways, roads, and signposts.
Organizations that have already deployed the future-back system of strategy formulation—diverse enterprises across defense, consumer products, healthcare, and financial services—have managed to overcome the strategic planning traps and tie their growth strategy directly to breakthrough innovation efforts. Instead of starting from the present and looking forward, they have envisioned a future environment and a future enterprise business portfolio based around changing customer needs.
Yet the vision of the future only serves as the starting point—for the process then moves backwards in time to develop a set of strategic innovation initiatives for the present. Taken together, the three steps enable organizations to develop a well-articulated master plan—a prioritized set of strategic initiatives, balanced between the short term and the long term. The three steps are:. To create a vision of the future of your industry and company, start with a truly long-term horizon, one that is typically 5 to 10 years out. The key to painting a picture that far off is to focus on understanding the customers of that future and their anticipated range of needs, or jobs-to-be-done.
One more step
The customer analysis is done in the context of key global and industry trends and scenarios that point to how value will be created in the new world. At a division of a major healthcare company, leaders looked out to to envision new ways to grow within and beyond its core business of selling diabetes monitors. In a series of strategic dialogues, senior executives raised big questions that went beyond the scope of its current lineup of blood glucose monitoring products, which faced pricing pressure from disruptive new entrants:.
These questions led to a debate around the issue whether the company should shift what it does, from simply monitoring diabetes to preventing diabetes from happening or minimizing its onset. Once leaders began asking this new set of questions, they realized that their target customer also needed to shift: instead of serving doctors who prescribe its products, the company also needed to cater to risk-based payers, such as Medicare and private insurance companies that are looking to achieve better results at a lower cost across a broad population.
To determine which customer value pools you should move towards, you first need to estimate your growth gap, your projected financial shortfall for a given year in the future. This is done by estimating how much revenue your current business could yield in a disrupted world and comparing that figure to your financial aspirations.
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You can start by asking questions such as: Given the customer-focused viewpoint, what would the portfolio of businesses and products look like in the future without fundamental changes? If this step is taken honestly and openly among the senior team, the growth gap can galvanize the need for change. Once you know how much revenue you need to generate, you can begin defining a portfolio of new growth initiatives to fill that gap.
The narrowed down set becomes what we call your strategic opportunity areas SOAs. Out of ten value pools, you might select just three or four SOAs. This blueprint is much more tangible than a vision statement or a set of scenarios. Using these tools, DefenseCo saw that its revenue mix would need to change dramatically in order to overcome its year growth gap. The leadership team began by examining the new realities of its biggest customer—the U.
Department of Defense— but also the key jobs-to- be-done of key U. To do so, the team asked questions such as: What will this country need to do to stay secure, beyond defending itself? What does a country need to do to protect its interests, both abroad and at home? In some cases, those jobs included classic security needs such as border patrol.
By analyzing these kinds of needs, DefenseCo was able to identify major customer value pools of the future, including disruptive solutions that fill key jobs at dramatically lower cost than in the past. Once it narrowed down those value pools and selected the key SOAs of the future, the company was able to start creating new products with new business models to enter those markets.
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Instead of designing new products around the Pentagon procurement cycle, the idea would be to proactively change the competitive landscape before customers even knew to request those products. That could involve adapting military technologies to civil and commercial markets that the company had never before entered.
This step can be taken only after the portfolio of SOAs are in place. Only then does it become time to walk the vision back to nearer-term sets of milestones. Working backwards in time, you can set key milestones, typically in two to three-year increments. This continues until you merge the future with the present state. In a different case from a different industry, ConsumerCo needed a new strategy aimed at harnessing disruptive product concepts that could close its growth gap for When the future-back process started, the leadership team was misaligned, with widely divergent views on how to fill that gap.
Through a series of discussions, senior executives decided to envision their future state as a portfolio of business models. One key problem was that relationships with consumers tend to be transactional. By combining their studies with the MPA at SDA Bocconi, the dual degree students are exposed to international methods and innovative ideas through overseas experience and gain different perspectives on the same challenges and processes of public sector management faced in their home countries. This also allows them to network internationally and increase their employability opportunities internationally.
SDA Bocconi has been engaged in the promotion and organization of executive education since , with an International approach. Choosing SDA Bocconi and coming to Milano means choosing a vibrant environment, the entrepreneurial, financial and industrialized center of Italy, a doorway to Europe. In short, a wealth of international contacts and opportunities. With this sub-theme, we would like to tackle some of the key unanswered questions related to the organizational change and learning challenges that companies face as they identify, make sense and manage sustainability issues and rapidly evolving stakeholder expectations on corporate behaviour.
A normative model for assessing competitive strategy
We focus on the following research question: How do firms learn to integrate and manage sustainability by rethinking and reshaping their enterprise model? The concept of sustainability is generally referred to as the capacity of a system to develop in ways that do not undermine its own viability in the long term.
More precisely, sustainability has been defined as the ability "to specify actions that will not diminish the prospects of future persons to enjoy levels of consumption, wealth, utility, or welfare comparable to those enjoyed by present persons" Bromley, At the firm level, the notion of sustainability has taken meanings related to the capacity of the business organization to serve purposes that includes not only the maximization of shareholders' wealth, but also the minimization of negative environmental impacts and the contribution to improving the quality of life in communities in which the firm operates.
The appropriate boundaries of business firms' responsibilities, however, are still very much a question of debate. Even if the long-standing debate on the "business case" for sustainability is assumed to be settled, however, the characterization of the defining traits of a sustainable enterprise model within a given socio-economic system is still very much an open question. This distinction is important because it highlights the complexity of the challenge involved in integrating principles of sustainability in the "softer" elements of the enterprise model, in addition to the changes in their "harder" counterparts.
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