As we discussed last week there is a difference between an
Incremental Strategy and Innovation Strategy.
All strategies are designed to improve performance, which
means you are going to do something different than what you are doing. Whenever
you establish a new strategy, you are establishing a desire to change
something. Whether it is
incremental or innovative, managing strategy execution is managing change.
As the diagram shows even incremental strategy has a slope
to it, meaning that some change management is going to be called for. To increase performance over time,
either path requires changes in how the organization operates. Yet clearly, the
change management process for an innovative strategy will be much more
significant than for an incremental strategy.
For many companies, strategic plans are incremental in
nature and very close to operating plans.
These are mostly plans to improve operating effectiveness and extend the
current business model. But when
you are setting a strategic direction that is innovative, trying to manage the
strategy execution the same way will be devastating and unlikely to succeed.
What determines an innovation strategy is the degree by
which you are making changes to the basic business model. This model is the norms, rules, metrics
and processes of how the organization produces its results. (For a more detailed description of
this refer to Harvard Business Review Article “Reinventing Your Business
Innovation strategy requires a different focus that
addresses the forces within your organization that are operating mostly under
the surface at the unconscious level.
Mostly we pay attention to what we do and how we do it, what we can
observe and measure. The
forces associated with the activity we perform.
And there are other forces operating within our organization
that we also need to pay attention to.
There are relationship patterns that are unconsciously affecting
results. For example somehow
everyone knows to go to Bob for any of the key issues around fulfillment. But there is no identified process that
says, “go to Bob”.
The same is true for other forces, forces that unconsciously
define how we interact with the customer, how we choose projects to bid on, how
we collectively respond when the boss is upset, and the many unstated yet felt
rules and values of the organization.
Nothing is specifically defined yet everyone behaves consistent with
these energy patterns.
The fact that much of our organization behavior has become
unconscious is mostly a good thing; it has been incorporated in the
semi-autonomic nervous system of the corporate body. It’s a lot like learning to ride a bike. Eventually we become proficient because
most of the rules for riding and balancing have become part of our unconscious,
part of our semi-autonomic nervous system. This is what allows an organization to operate with a high
degree of efficiency. It is also
what makes changing the basic rules for how we operate so difficult and why we
have to make those rules conscious once again.
What we call resistance to change is really nothing more
than energy that has formed very strong flow patterns. Our organization only appears to be
resistant to change because these energy patterns usually remain under the
surface of what we pay attention to.
To manage the execution of your innovation strategy, we must
first identify the existing patterns of energy flow. Like the processes of activity that we normally think of
changing, we can also change these energy flows. Often slight changes in the patterns of relationship energy
and context energy, the energy that defines our meaning and purpose, can create
significant changes in results.
is during the innovative shifts in strategy that the Context and Relationship
Fields have the most impact. If
you remain unconscious to them, they could very well work against you. However if you include specific
strategic initiatives to reframe them, they will carry you on a wave of
Have you had to
execute an innovation strategy where the business model was changed? Share with us what your experiences has
been. How did you address the
issue of context and relationships changes that the strategy required?