Creative Thinking in Strategy Development

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PowerPoint Diagram Pack
Creative Thinking in Idea
Idea Idea
Breakthrough
Solution

Strategy Development Idea

Idea Idea
Idea
Idea

Strategy Development is creative process. However, Productive thinking
Problem
creativity is not a natural process and, therefore, it Reproductive thinking

isn’t easy for an organization to incorporate creative Idea A Idea B Idea C

thinking into its Strategy Development process. This
document details various ways to foster creative Weak
Solution

thinking within Strategy Development.

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Contents

• Introduction 4
- Strategy Development
- Creativity
• Creative Thinking 10
- Obstructions to Creative Thinking
- Opportunities for Creative Thinking
• Opportunity 1: Conditions 13
• Opportunity 2: Pushing Conventional Thinking 20
• Opportunity 3: Collaborative Thinking 33
• Summary 39

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The diagrams in this pack are to be used by the original buyer only. 2

Strategy Development is a creative process

Insights generation Alternative options evaluation Response development

Attractiveness/Strength Shape/Adapt What/How

• Market • Cost • Degree
dynamics of status quo of change
• Relative • Level of • Timing
performance uncertainty
• Level of
• Core • Resource readiness
capabilities availability

• Making sense of incomplete • Identifying alternative options • Visioning compelling future
facts states
• Inventing new solutions
• Seeing beyond the facts, • Connecting un-connected
trends, etc. • Optimizing solutions dots
• Generating unconventional
THIS IS A PARTIAL PREVIEW •
Problem solving
insights
You can preview the full PowerPoint document and
download it at http://learnppt.com/powerpoint/
If a spreadsheet could do the trick, there would not be much opportunities for
differentiating and winning in the market place.


Creativity is about thinking productively—not reproductively

Idea Breakthrough
Solution
Idea
Idea
• Looking at a problem
from multiple angles.
Idea • Generating as many
alternative approaches
as one can.
Idea Idea • Exploring all approaches
Idea even after a solution
Idea
is found.

Productive thinking
Problem
Reproductive thinking

Idea A Idea B Idea C Productive thinking aims
THIS IS A PARTIAL PREVIEWat deviating from procedures.
experiences and
past

Weak
Solution

Source: Adapted from ‘Cracking Creativity’


Creative thinking is not a natural process

Each card has a letter on one side and a number on the other.
How would you verify the following rule: “if a card as a vowel on one side,
then it has an even number on the other side”.
You are allowed to turn over a maximum of two cards in order to determine
whether the rule is correct as stated.

E K 4 7
THIS IS A PARTIAL PREVIEW

Source: William Poundstone, ‘How would you move Mount Fuji’, Little Brown Ed.


There is no silver bullet for creativity, but at least three areas of
opportunities

Enabling Creative Thinking

Ensuring the right Pushing the limits of Leveraging the power
‘conditions’ are in place ‘conventional’ thinking of ‘collaborative thinking’
1 2 3


Timing is important—frequency, duration, and calendar all influence
the outcome of Strategy Development efforts

Constraints Implications

 Developing a new strategy every year is rather unproductive –
conduct a full ground-up strategy development every 3-5 years
Creative processes do not depending on environment volatility
FREQUENCY respond well to routine
(routine processes produce  Alternate with strategic conversations on specific themes or
routine results).
related to new events (including scenario planning) as part of
strategic review process

Strategy development is aided
by good conversations.  Ensure sufficient time allocated by senior executive team
throughout the process
TIME
ALLOCATION Quality of conversations
improve when people have  Spread senior executive level conversations out over
time to prepare in advance a period of months
and incubate afterwards.

Financial planning and
budgeting process tend to  Disconnect strategy development effort from financial planning
CALENDAR dominate conversations and and planning activities in general
increase focus on short term
priorities


A diverse team bringing complementary vantage points will deliver
better results
Key Roles within Innovation SWAT Team

Activity Profile Role
LEARNING Anthropologist Bring new learning and insights by observing human
behavior and developing a deep understanding of how
people interact physically and emotionally with
products, services, and spaces.
Experimenter Prototyping new ideas continuously, learning by a
process of trial and error.
Cross-pollinator Exploring other industries and cultures searching for
cues.
ORGANIZING Hurdler Overcoming and outsmarting roadblocks for • More is better.
innovation.
Collaborator Bringing eclectic groups together. • Diversity/mix
Director Gathering cast and crew to spark creative talent. quality.
BUILDING Experience Designing compelling experiences that go beyond
Architect mere functionality to connect to a deeper level with • Intimacy with
customer latent or expressed needs. issue at stake.
Set Designer Creating a stage on which innovation team can do their
best work.
Caregiver Building on metaphor of healthcare profession to give
customer care in manner that goes beyond mere
customer service.
Storyteller Building internal and external awareness through
compelling narratives that communicate human value
or reinforce specific cultural trait.
Each specific situation will require a different mix of skills.

Source: Thomas Kelley et al., ‘The Ten Faces of Innovation : IDEO's Strategies for Defeating the Devil's Advocate and Driving Creativity Throughout Your Organization’, Reed Business Information


Appropriately formulating problems can make or break opportunities
for creative thinking

If a comet was to hit and destroy Earth in the next hour, I would spend 55 min. formulating the problem
and the remaining 5 min. solving it.

– Albert Einstein

Reformulating Problems Productivity of sales force is not high enough

In what ways might we increase the Invitation
• Invitational stem (in what ways might productivity of the sales force? stem,
positive
we...?) statement
Why – to generate more new sales Making it
• Positive statement. more global
Why – to reduce cost of sales
Why – to grow the top line and improve profits
• Making it more global (e.g., 5 whys). Why – to increase share price
Sales rep. Customer Competitor Shifting
• Making it more specific (e.g., what, where, • Increase • Make the • Be the first perspectives
who, when, how, why). close rate decision in the door
• Increase win easier • Avoid
rate • Make the
whole
competitive
bid
• Separating the whole from the parts. • Reduce
corrupted process
sell time faster
• Shifting perspectives (e.g., 6 thinking • Improve
hats, customers, competitors). lead quality


Diversifying the mix of sources and analyses increases the odds for a
creative outcome

Sources/Analysis Mix

Understand where client is at prior to
designing analysis plan (e.g., Focus
Interviews identifying situation and
disconnects):
Expanding Generating • What has been proven/how
New brand new
horizons insights • What is assumed
• What is unknown

Openly question assumed and unknown
SOURCES OF areas:
INFORMATION • Potential implications on current strategy
if discovered/proven wrong

Diversify sources of information:
Area of low Casting • Alternate secondary sources
Existing creative
opportunity new light • Primary research (even qualitative, at
least at the beginning)
THIS IS A PARTIAL PREVIEW • Outside of the industry
• Internal perspectives
download it at http://learnppt.com/powerpoint/ mix.
Existing New Target a 25-25-25-25

ANALYSIS


Broadening the scope early, as well as after solutions start shaping
increase the odds of a creative outcome

Broadening the scope early on
Reopening it as solutions start shaping
• Challenging status quo/’given’
assumptions - pushing scope boundaries.
• Imposing design challenges (e.g., buy-
• Injecting new sources of insights. up, buy-down, status quo).
• Identifying areas of disconnect.
• Taking different vantage points (e.g.,
what would company A do if they were
facing this opportunity).

Creative Process

Issues Traditional Process Solution


Although a Reality, uncertainties are typically discounted—there are 3
“conventional” responses, which all discount critical uncertainties

14
13 Conventional Responses
18

High Critical
Key trends uncertainties ‘Gut feel’
2 ‘I know we cannot be sure
19
15
it is what to do but my
1 5 17
16
instinct tells me we should
do it’
DEGREE
OF IMPACT
‘Wait and see’
3 6
‘It is too unclear, let’s stick
10 to our knitting’
11

Low Minor trends Minor ‘Do as everybody’
uncertainties
‘Everybody is doing it, we
THIS IS A PARTIAL PREVIEW should do it too’
4
20 12
Low High
LEVEL OF
UNCERTAINTY


To drive shifts in mindset, we can use uncertainties to plan out various
scenarios …
Developing Scenarios

Each axes of uncertainties are expressed in terms of Scenarios are developed, combining various possible
its most extreme outcome. extreme outcomesa.

Potential Outcomes Scenarios
Base Global Gas US
Case Instabili Blood Growth
A (Favorable) B (Unfavorable) ty/Local Bath
Protect.

Good (>125% Limited (<100% US
US opportunity reserves reserves opportunity A B B A
potential replacement) replacement) potential

Producing Producing
country stability Stable Unstable country A B A B
stability
Global
economic Slow Moderate-high Global Eco. A A B A
growth growth

Openness Regulated Unregulated Openness B A B B
Political Political B B A B
Free market Interventionist
influence You can preview the full PowerPoint document and influence

Environmental download Strong Green
Weak Green it at http://learnppt.com/powerpoint/
Environ-
mental A B B A

aUsually starts by producing all possible scenarios and then select the 2-5 presenting the most: consistency (plausible), relevance (realistic), challenge (posing a challenge),
distinctiveness (presenting different enough configurations).


… and develop contingency plans, driving a more comprehensive
thought process
Leveraging Scenarios to Drive Mindset Shifts/Contingency Planning

Working the scenarios

• Engage into a disciplined
approach of the future.
Scenario 1 Scenario 2 Scenario 3 Scenario 4
• Align behind a common
understanding of the driving
forces shaping the future and
provide a common framework to
work on it moving forward.
Portfolio
shifts • Develop new and structured
insights about potential future
Capability outcomes.
building
• Identify possible required
Preemptive changes in capabilities and
competitive pressure test current
moves organization’s adaptiveness.

Sales and • Create a robust 'radar system'
marketing on the business environment
tactics tracking the relevant market
'signposts.
• At minimum, pressure test
current approach with
You canStrategic
Strategic preview the full PowerPoint document and
Strategic Strategic ‘contingency’ plan.
options options options options


Uncertainties can also be leveraged by evaluating the 4 levels of
certainty and …
Categorizing Uncertainty
Majority of strategic decision making options
falling in this range

Level 1 Level 2 Level 3 Level 4
Clear enough future Alternative futures Range of futures True ambiguity
Description Outcome predictable MECE set of possible Wide enough range of Limitless range of
enough to identify a outcomes, one of which possible outcomes. possible outcomes.
clear confident solution will occur

1

2 ?
3

Representative  Retailer store  Unpredictable move  Customer demand for  Major discontinuity.
example of footprint expansion. of competitor (e.g., completely new  Markets just
strategic  Marketing decision entering or not product or service. beginning to form.
decision on well established entering into market).  Relative preference  Extended timeframe
brands in stable  Regulatory change for new competitive required to evaluate
markets. THIS IS A PARTIAL PREVIEW
(e.g., happening or
not).
services. potential strategy.
 Acquisition of  Unstable macro-
competitor in stable,  Establishment of a economic conditions
mature market new industry impacting underlying
standard. demand.
Level of uncertainty reducing over time

Source: Adapted from Courtney, H. et al. (1997), Strategy Under Uncertainty


… invention new solutions to address each level
Pushing Options Depending on Each Situation (1 of 2)

Key Level of uncertainty/Possible actions
Questions
Level 1 Level 2 Level 3 Level 4

Adapting Can we optimize our Are we experimenting and readying ourselves for potential shifts?
company fit with Should we start replicating some of the innovations introduced by some of the
identified trends? industry shapers?
Can we radically Can we increase the flexibility of our organization?
improve our execution?

Shaping Can we introduce How could we influence the creation of a standard and shape future outcomes
discontinuity to our to our advantage?
advantage? Can we introduce innovation and take a lead in the market?
Can we restructure the industry?
Can we replicate existing business model into new markets?
How could we influence the conduct of our competitors to our best interest?

Commitment Are we delaying Are we delaying ‘no regrets’ investments unnecessarily?
commitment for no Are there growth, learning, or insurance real options available that would give us
reason? an edge once uncertainty clears up?
Focus Are we being too Can we hedge our bets Should we diversify our portfolio?
distracted when we with cost effective
should increase our solutions?
Can we take insurance against worst case
scenarios?
focus?
Should we take some
insurance to protect
ourselves against worst
case scenario?


Here is an example of using Decision Analysis to evaluate a level 2
uncertainty scenario
Assessing Options – Level 2 Uncertainty Example
MagicCo facing potential entry of competitor Globalco in home market which would introduce a new retail format
competing with MagicCo’s traditional format – assessing relative attractiveness of preemptive move through
launching full scale chain competing with GlobalCo’s position or hedging risks with launch of pilots.

Pay-off to MagicCo
Enter (p=90%)
($500M)
Do nothing
GlobalCo ($450M)
Inv=$0 Do not enter (p=10%)
$0

Enter (p=20%)
($275M)
Full scale launch
MagicCo Inv=$200M
GlobalCo ($355M)
Do not enter (p=80%)
($125M)

Go full scale
($300M)
Enter (p=30%)
MagicCo
THIS IS A PARTIAL PREVIEW Do not
($450M)
Pilots launch
GlobalCo ($155M)
You can preview the full PowerPoint documentscale
Inv=$65M Go full and
($150M)
Do not enter (p=70%)
MagicCo Do not
$0



END OF PARTIAL PREVIEW


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