The Importance of Strategic Compass in Demand Flow & Innovation

A Note to Our Readers: In this installment, my Quantum Leaders colleague, Gregg Gallagher, contributes another post from our Quantum Thinking blog which continues our "Strategic Planning is Dead" dialogue. Gregg talks more about the importance of alignment between a firm's Strategic Compass an the dynamics of the marketplace.

My last article discussed the importance of speed of execution in the RTE Wave as it relates to competitive advantage, and in Norman Wolfe's earlier post "Strategic Planning is Dead ... ", he elaborated on the Strategic Compass™ and the role it's three elements (Soulful Purpose, Values and Vision of Desired Future) play in aligning the energies of The Living Organization™

Alignment with the Strategic Compass™ - which identifies both the company's internal dynamics and the external dynamics & expectations of the marketplace - plays a critical role in innovation and the creation of demand for a company's products and services.

It is key that the products and services the company provides (or is planning to develop) are created in a manner that is in alignment with the Strategic Compass™ of the organization. Equally important is that both the company's employees and it's customers perceive it as such. When internal alignment is not there, there will likely be a great deal of dissonance, confusion and resistance in developing the product and launching it into the marketplace.

For example, in development environments that utilize the Scrum form of Agile methodology, non-alignment with the Strategic Compass™ can result in continuous frictions and "resets" during sprint iteration. This results in delayed time to market and products that meet neither the expressed needs of the marketplace ("Voice of the Customer"), nor their unmet, unexpressed needs ("Heart of the Customer").

A company's products and services must also be aligned with the energies of the marketplace - the marketplace's expectations of what products & services the company should be providing in service to its customers. History is replete with examples of failures when such misalignments exist:

- Xerox Star: One of the first computers to instantiate a graphical user interface - but who would expect a breakthrough computing product from a photocopier company? Several of Xerox's ideas were latest realized in the form of Apple's Macintosh - a firm the market accepted as an innovator in the personal computer space.

- "New Coke" - forget what your market research and taste tests may have told you, how dare you change and take away the core product we have come to love & expect from your company?

- Microsoft Zune - the product specs and overall service offering compares favorably with those of market leader Apple - but is "fun & entertainment" really in Microsoft's genetics? (i.e., Is the dominant enterprise technology company really able to meet my personal needs for entertainment?)

The Gallup Organization has been conducting research into the correlation between high levels of employee and customer engagement, and the success of the company in the marketplace. [REF: "Human Sigma"} A particularly compelling finding is that firms which are above the median in both customer & employee engagement experience revenue growth at a ~4x greater rate than firms that are below the median in both engagement dimensions.

How does this correlate to product and services?

Simply put, the product creation process should flow naturally from the core of the company. It must be an extension of its' Soulful Purpose(tm): why the company exists and whom it serves.

The role of leadership (at all levels of the organization) is to understand & embrace this Soulful Purpose, but more importantly to promulgate an understanding throughout the firm, such that all employees are making product design & development decisions in a semi-autonomic manner, in alignment with the Strategic Compass(tm).

When it does so, it creates innovative products in an almost "effortless" manner - it just seems to flow naturally....

Is that how your firm is currently operating?

More to come ... .

To learn more about the Real-Time Execution Wave, part of The Living Organization business model, and the role of Innovation, download our white papers.