How should senior leadership be involved in innovation projects? How should you handle integrating new initiatives into your core business?
In Lead From the Future, business strategists Mark W. Johnson and Josh Suskewicz explore the steps of future-back thinking (visionary planning). They show how you can adopt the process to improve outcomes for your business.
Keep reading for Johnson and Suskewicz’s advice on how to implement a business strategy with an eye always on the future.
How to Implement a Business Strategy
Once you’ve formed a vision and developed a new growth strategy in service of your vision, it’s time to focus on how to implement a business strategy to realize your visionary plan. You must structure your teams to embody your strategy and then execute it.
Step 1: Structure Your Organization to Carry Out Your Strategy
The authors advise that you structure your organization in a way that allows your teams to effectively execute your strategy. To do so, you must involve your senior leadership, position your breakthrough innovation teams for success, and establish a discovery cycle process to oversee new projects.
The senior leadership team’s responsibilities. Senior leadership must be involved in all major decisions about innovation projects. They should oversee projects by balancing efficiency and quality, and protect breakthrough innovation teams from conflicting interests of the business’s core (like funding).
(Shortform note: Business innovation experts agree that senior leadership should protect the interests of breakthrough innovation teams. One way of doing so is to establish a dedicated pool of resources to promote growth initiatives and take strong measures to safeguard it—for example, by creating separate teams or units to work on innovation projects. Additionally, while they agree that leadership should oversee innovation projects, they acknowledge that senior management cannot be intimately engaged in every detail of those projects. Therefore, they should position themselves to make sure new projects are going well and then work with the team to solve any issues that may come up.)
Position breakthrough innovation teams for success. When it comes to building and organizing innovation teams, it’s important to start small and bring together employees from different departments or functions who can work together on a specific project. Look for people with an entrepreneurial mindset who are willing to take risks and have a passion for the project’s vision.
To foster innovation, teams should be organized like startup incubators, competing for funding from the company as they develop their ideas. It’s important to support them with the necessary resources and infrastructure but also to allow them to work independently and take risks. By creating an environment that supports innovation, companies can attract and retain top talent and drive long-term growth.
|The Two Innovation Teams Your Company Needs|
Johnson and Suskewicz’s recommendations imply that you should have multiple teams working on different aspects of innovation, but they don’t go into much detail about what these teams should look like and do. Some business experts agree that innovation should not be done by a single organizational unit and that your company should build two cross-functional innovation teams that include members with diverse skills and expertise: a distributed innovation group (DIG) and an enterprise integration group (EIG).
The DIG looks for new ideas and helps people develop them by offering tools and resources. The EIG helps ensure that different parts of the company work well together by managing how they do things and helping them find better ways to work together. Both teams should be staffed by knowledgeable, experienced IT professionals who can use technology to help people work together and develop new ideas.
Step 2: Execute Your Strategy
The execution stage of your visionary plan has three phases—gestation, expedition, and evolution.
In the gestation phase, you test the important assumptions you’ve made about the future landscape. Early on, it’s crucial to create some momentum by validating some of these key assumptions and meeting some early-stage goals. Additionally, the authors recommend you prepare to scale up your initiatives by making changes to your core business that will generate the necessary cash flow. Gestation typically lasts two to three years.
In the expedition phase, your focus shifts away from testing your assumptions and toward standardizing processes, establishing rules, and defining metrics to measure your efficiency and profitability. Expedition typically lasts two to four years.
In the evolution phase, you must decide whether to integrate your new growth initiatives into the core business or keep them separate. If you integrate new growth initiatives, their profits should be similar to the margins of the core business and enhance the core brand. If you don’t integrate them, the new business outgrowths must have their own brand and different rules, metrics, and norms. Evolution typically lasts one to three years.
|A Closer Look at the Three Phases of Execution|
In his other book, Reinventing Your Business Model, Mark Johnson discusses in more detail the three phases that organizations pass through as they mature or shift strategy.
He explains that the gestation phase is a period of exploration and experimentation where new ideas are developed and tested. During this stage, you should focus on researching and developing new products and services. It’s a time when innovation is encouraged and failure is tolerated.
During the expedition phase, the process, rules, and metrics your company establishes are aimed at growth, expansion, and scaling up. He adds you should also focus on marketing and customer acquisition to drive revenue growth during this phase.
Johnson provides a broader view of the evolution phase, explaining that it’s a critical period when companies must adapt to changing market conditions or face a decline. During this phase, your company may encounter increased competition, changing customer needs, and disruptive technologies. You must decide whether to stay with your approach to core and new business outgrowths or make major changes to your approach to meet evolving landscapes and new challenges.
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Here's what you'll find in our full Lead from the Future summary:
- Why it's important to anticipate future change rather than reacting to it
- A three-stage framework for staying ahead of the competition
- How to understand and adopt the visionary planning process