Creating the Future

CREATING THE FUTURE Innovation and Performance Driven Strategic Process A step by step guide to creating your company's next growth curve. Table of contents Preface – Why this Book? 1. Strategic Planning Creates the Future 1.1 The Challenge of the Second Curve 1.2 The Future is Open 1.3 The Value Created by Strategic Planning 1.4 Pitfalls to Avoid in the Planning Process 1.5 Management: the Good, the Bad and the Ugly 2. Each Situation is Unique 2.1 Situation Analysis: the "Where are we?" Question 2.2 Creating a Fact Base 2.3 A Model of the Future-Creating Enterprise 2.4 The High Performance Assessment™ 2.5 Validation 3. The Genius is Inside 3.1 A Design Template for the Requisite Organization 3.2 Lean, Aligned and Learning Structures 3.3 Four-Wheel Drive Business Processes 3.4 Culture: The Best Idea Wins 3.5 Creating a Virtuous Circle 3.6 The Nucor Example 4. Alignment 4.1 A Client Example: Crossing the Desert 4.2 The Problem of "Maturity" 4.3 A Differentiated Competitive Advantage 4.4 Competitive Spirit 4.5 A Process for Strategy Formulation 4.6 The Mind of the Strategist 4.7 The Emerson Electric Example 5. Incremental Innovation 5.1 Chance Comes to those who are Prepared 5.2 Idea Creation, Customer Involvement 5.3 Screening and Testing: Speed to Failure 5.4 Organizing and Managing Incremental Innovation 5.5 The P & G Example 6. Radical Innovation 6.1 Creative Destruction 6.2 To Make a Significant Difference 6.3 Growth Platforms 6.4 New Market Space 6.5 High Performance Work Models 6.6 Jump-Start the Process: the Innovation Lab™ 6.7 The Entrepreneur 6.8 The IBM Example 7. Making it Happen 7.1 So… Do We Have a Strategic Plan? 7.2 Managing Change 7.3 Without Follow-up, Nothing Happens 7.4 Strategic Initiatives: The President's Agenda 7.5 Disciplined Follow-up: the Management Forum 7.6 A-B-C Management Inventory 7.7 Beware! 7.8 A Journey to Mastery Preface Why this book? Why write another book on strategy, business processes and change management? Because, as far as we know, there are very few books available to business leaders which provide a full, practical and clear process to create and then maintain a company that produces superior performance and value in our very turbulent environment. Companies have to deal with quantum change, that is 100% change, sometimes over cycles of months, but certainly over cycles of a few years. It stands to reason that quantum change requires quantum management. Incremental improvements are fine, but not sufficient to provide the quantum gains in performance and value creation required to stay ahead of the curve. A global survey by IBM of more than 1,000 CEO's found that eight of ten CEO's see significant change ahead. Yet the gap between expected change and the ability to manage it has almost tripled since their last global CEO study in 2006. Even more telling for the themes developed in this book, the IBM study found that financial outperformers are making bolder plays. These companies anticipate more change, and manage it better. They are also more global in their business designs, partner more extensively and choose more disruptive forms of business model innovation. In North America, this problem is compounded by the current management orthodoxy. Henry Mintzberg recently argued that shareholder value as a holy grail has focused senior management attention on productivity gains. The strategy has been to downsize, cut costs. The consequent thinning out of middle management has resulted in loss of knowledge, creativity, community, trust and commitment. Having let go of their knowledge, companies must resort to superstar CEO's with supersize compensation to "shake things up". This only compounds the vicious circle of increased cynicism, loss of trust and collaboration. Yet, in order to survive and thrive, stakeholders and boards at top performing companies must set goals that define superior competitive business enterprises: sustainable, increasing and predictable results. This is a tough job! There is immense pressure to maximize short term gains and as a consequence minimize future potential. This book provides a process and a template or model for business leaders and their associates to achieve their requisite goals of high performance today and the creation of a winning future. Most of the previously written material is aimed at a broad audience which includes business leaders, but also leaders of public sector organizations or institutions. As the audience gets broader and more diverse, the discussion loses precision. There are indeed many audiences, each with their own specific needs and conditions. In each of these domains, there are models of excellence. This book focuses on competitive business enterprise; whether they be large, medium or small, they have to compete. This creates a unique and different universe with its own dynamics. In terms of the subject matter, however, most current books take a specialized, or narrow approach: they propose a new or better way to do something or think about something. Our aim here is to propose a complete enterprise system for competitive business enterprise. Finally, this book aims to provide a template for high performance business firms that are world class or are aiming to be the best in the world. If they are asked, everyone will say they want to do that. But of course, few actually walk the talk. So our goal is to provide an effective process and a complete enterprise model for an excellence driven business audience. Given that the author's work experience has been mostly in North America, the ideas and the examples in the book are anchored in that culture. And even in North America, it is a minority of companies that operate and provide the models that are used in this book. But they exist and we sorely need more of them. The application of these models in cultures other than North America would require integration with these cultures, one by one, respecting the specificity of each. The book will follow the logic of the consulting approach we propose for companies to formulate the strategy that will create their future. First, agree on your current state, then design your target state. Getting from here to there typically involves three types of strategies: alignment, incremental innovation and radical innovation. Each of these three strategies has its specific logic and methodologies. Ideally, they are pursued one after the other to avoid overloading the process and not succeeding at any. More specifically, the chapters of the book deal with the following materials: • Chapter 1 starts with the mission of the strategic planning process: to Create the Future. The planning process should provide the point of view and the tools that can help to do the rest. • The first foundation is to recognize that each situation is unique, therefore that no two strategies are alike. The process starts with a full and candid assessment of the current position and prospects. The aim is to produce an agreed definition of the current model. This is Chapter 2. • The second foundation is the target model. Structures and cultures can be designed to support the innovative creativity and the performance discipline to create the future. The right organization and the right players have the best chance of getting to the right strategy. This is Chapter 3. • The first level of strategy is alignment in and around the current business model. Viewed through the lenses of high performance management, and when combined with incremental innovation there is almost no limit to the growth and performance potential of the current business model. This is Chapter 4. • Incremental innovation applies to the current business model. In this sense, Chapter 5 is a continuation of Chapter 4. But innovation requires its own specific process and this is the object of Chapter 5. •