EMBRACING CHANGE, PART 2 Last week, you examined the concept of change, including your relationship to it and how it impacts an organization. Change is one of the most common and inevi
EMBRACING CHANGE, PART 2
Last week, you examined the concept of change, including your relationship to it and how it impacts an organization. Change is one of the most common and inevitable challenges that organizations—and people—will face. A practical way to embrace change is to formulate and apply innovative strategies to approach it. By improving how you react to change, you can increase the amount of opportunities you will have for positive outcomes. By implementing an innovation strategy, organizations can do the same.
In this Discussion, you will revisit the topics from last week and continue to explore your relationship with change, including how the resources from this Module impacted your thinking.
To prepare for this Discussion:
- Consider how the Learning Resources in this module have had an impact on how you approach change and might inform future practice.
- Refer to last week’s Discussion where you analyzed an organizational change that occurred in the past. For the purpose of this week’s Discussion, imagine yourself in the position of the manager or other decision maker(s) who led that change. If you were part of the decision process on that change, then you can draw from and reflect on your own experience.
BY DAY 3
Post a synthesis of creative approaches to change management based on the organizational change scenario you described in the Week 7 Discussion. Be sure to address the following:
- Generate two or more recommendations for creative approaches you might have used to manage the organizational change (from the Week 7 Discussion) differently. (Note: This applies whether you originally managed the change or were on the receiving end of it, as well as whether the change went well or poorly.)
- Provide a rationale for each of your proposed approaches, including potential impacts on individuals and on the organization as a whole.
Refer to the Week 8 Discussion Rubric for specific grading elements and criteria. Your Instructor will use this grading rubric to assess your work.
Read some of your colleagues’ postings.
RESOURCES
Discussion
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In my experience, change is a constant in personal and professional life spheres. I personally go about change with a combination of anxiety and anticipation. It is normal to feel uncomfortable about what one doesn’t know but I also see change as a chance for learning and development. Responding to change professionally is more strategic, it involves understanding the reasons behind the change and how it might affect the organization.
An illustration from my experience in the workplace was when the company I served decided to launch a new project management software program. This change was made in an effort to enhance cooperation and efficiency in various departments of the corporation. This exercise commenced with a number of briefing meetings during which the management provided reasons for change, the advantages of the proposed system, and the timeframe for its introduction. Follow-up communication addressed questions and concerns that were raised by employees.
Stakeholder involvement in particular was crucial. The departmental heads were trained first, and they trained their staff. The cascading method ensured that the information catered for the unique requirements of each department. Nevertheless, the change was not easy. There was a short period of low productivity due to some employees who were used to the traditional system and initially resistant to change.
As I see it, this change had several implications. I improved my adaptability skills and also broadened my technical knowledge on a personal level. At first, my colleagues had a mixed reaction towards the software, but as time passed, everyone became more comfortable with it, which resulted in improved collaboration and efficiency. After the initial barriers, the new system enabled the organization to carry out streamlined processes, improved project tracking, and ultimately a conducive working environment.
This encounter emphasized the need for good communication, the involvement of stakeholders, and training in managing change in an organization (Tidd & Bessant, 2020). It also emphasized on the fact that although change may be hard, it has the potential to lead to major long term benefits both for people and organizations in the end.
References
Tidd, J., & Bessant, J. R. (2020). Managing innovation: integrating technological, market and organizational change. John Wiley & Sons.
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REPRINT R1902C PUBLISHED IN HBR MARCH–APRIL 2019
ARTICLE STRATEGY Strategy Needs Creativity An analytic framework alone won’t reinvent your business. by Adam Brandenburger
This document is authorized for use only by Yaina Delgado in Foster a Culture of Innovation-Fall 2023 at Walden University (Canvas), 2023.
This document is authorized for use only by Yaina Delgado in Foster a Culture of Innovation-Fall 2023 at Walden University (Canvas), 2023.
An analytic framework alone won’t
reinvent your business.
Illustrations by EDDIE GUY
Strategy Needs
Creativity
Adam Brandenburger
Professor, NYU Stern School STRATEGY
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analogies to come up with new business models. Charles Duhigg talks in his book Smarter Faster Better about intro ducing carefully chosen creative “disturbances” into work processes to spur new thinking. Youngme Moon, in “Break Free from the Product Life Cycle” (HBR, May 2005), sug gests redefining products by boldly limiting—rather than augmenting—the features offered.
What these approaches have in common is the goal of moving strategy past the insights delivered by analytic tools (which are close at hand) and into territory that’s further afield, or—to use a bit of academic jargon—cognitively dis- tant. They take their inspiration more from how our thought processes work than from how industries or business models are structured. For that reason they can help strategists make the creative leap beyond what already exists to invent a genuinely new way of doing business. Simply waiting for inspiration to strike is not the answer.
In this article I explore four approaches to building a breakthrough strategy: 1/Contrast. The strategist should identify—and challenge—the assumptions undergirding the company’s or the industry’s status quo. This is the most direct and often the most powerful way to reinvent a business. 2/Combination. Steve Jobs famously said that creativity is “just connecting things”; many smart business moves come from linking products or services that seem independent from or even in tension with one another. 3/Constraint. A good strategist looks at an organization’s limitations and considers how they might actually become strengths. 4/Context. If you reflect on how a problem similar to yours was solved in an entirely different context, surprising insights may emerge. (I wrote about these ideas more academically in “Where Do Great Strategies Really Come From?” Strategy Science, December 2017.) These approaches aren’t exhaustive—or even entirely distinct from one another—but I’ve found that they help people explore a wide range of possibilities.
Contrast What pieces of conventional wisdom are ripe for contradiction?
T O C R E AT E A strategy built on contrast, first identify the assumptions implicit in existing strategies. Elon Musk seems to have a knack for this approach. He and the other creators of PayPal took a widely held but untested assumption about
’ve noticed that business school students often feel frustrated when they’re taught strategy. There’s a gap between what they learn and what they’d like to learn. Strategy profes sors (including me) typically teach students to think about strategy prob lems by introducing them to rigorous analytical tools—assessing the five forces, drawing a value net, plotting
competitive positions. The students know that the tools are essential, and they dutifully learn how to use them. But they also realize that the tools are better suited to understanding an existing business context than to dreaming up ways to reshape it. Gamechanging strategies, they know, are born of creative thinking: a spark of intuition, a connection between different ways of thinking, a leap into the unexpected.
They’re right to feel this way—which is not to say that we should abandon the many powerful analytical tools we’ve developed over the years. We’ll always need them to under stand competitive landscapes and to assess how companies can best deploy their resources and competencies there. But we who devote our professional lives to thinking about strategy need to acknowledge that just giving people those tools will not help them break with conventional ways of thinking. If we want to teach students—and executives—how to generate groundbreaking strategies, we must give them tools explicitly designed to foster creativity.
A number of such tools already exist, often in practi tionerfriendly forms. In “How Strategists Really Think: Tapping the Power of Analogy” (HBR, April 2005), Giovanni Gavetti and Jan W. Rivkin write compellingly about using
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Elon Musk seems to have a knack for strategy built on contrast. With SpaceX he is attempting to overturn major assumptions about space travel: that it must occur on a fixed schedule, be paid for by the public, and use onetime rockets.
Idea in Brief
THE PROBLEM The field of strategy over focuses on analytic rigor and underfocuses on creativity.
WHY IT MATTERS Analytic tools are good at helping strategists develop business ideas that are close at hand—but less good at discovering transformative strategies.
IN PRACTICE The wise strategist can work with four creativityenhancing tools: contrast, combination, constraint, and context.
banking—that transferring money online was feasible and safe between institutions but not between individuals—and disproved it. With SpaceX he is attempting to overturn major assumptions about space travel: that it must occur on a fixed schedule, be paid for by the public, and use onetime rockets. He may be on track toward a privately funded, ondemand business that reuses rockets.
It’s best to be precise—even literal—when naming such assumptions. Consider the video rental industry in 2000. Blockbuster ruled the industry, and the assumptions beneath its model seemed selfevident: People pick up videos at a retail location close to home. Inventory must be limited because new videos are expensive. Since the demand for them is high, customers must be charged for late returns. (It was basically a publiclibrary model.) But Netflix put those assumptions under a microscope. Why is a physical location necessary? Mailing out videos would be cheaper and more convenient. Is there a way around the high fees for new releases? If the studios were open to a revenuesharing agreement, both parties could benefit. Those two changes allowed Netflix to carry lots more movies, offer long rental periods, do away with late fees—and remake an industry.
Most of the time, strategy from contrast may look less revolutionary than Netflix (which remade itself again by streaming videos and becoming a content creator) or SpaceX (should it succeed). Any organization can ask whether it might usefully flip the order in which it performs activities, for example. The traditional model in retail is to start with a flagship store (usually in a city center) and add satellites (in suburban locations). Now consider popup stores: In some cases they conform to the old model—they are like mini satellites; but in others the popup comes first, and if that’s successful, a larger footprint is added. The Soho area of New York City has become a testing ground for this strategy.
Another approach is to consider shaking up the value chain, which in any industry is conventionally oriented in
a particular way, with some players acting as suppliers and others as customers. Inverting the value chain may yield new business models. In the charitable sector, for example, donors have been seen as suppliers of financial resources. DonorsChoose.org is a model that treats them more like cus tomers. The organization puts up a “storefront” of requests posted by schoolteachers around the United States who are looking for materials for their (often underresourced) classrooms. Donors can choose which requests to respond to and receive photos of the schoolwork that their money has supported. In effect, they are buying the satisfaction of seeing a particular classroom before and after.
In some industries the status quo has dictated highly bundled, expensive products or services. Unbundling them is another way to build a contrast strategy. Various segments of the market may prefer to get differing subsets of the bundle at better prices. Challengers’ unbundling of the status quo has been facilitated by the internet in one industry after another: Music, TV, and education are leading examples. Incumbents have to make major internal changes to compete with unbundlers, rendering this approach especially effective.
HOW TO BEGIN 1/ Precisely identify the assumptions that underlie conventional thinking in your company or industry. 2/ Think about what might be gained by proving one or more of them false. 3/ Deliberately disturb an aspect of your normal work pattern to break up ingrained assumptions.
WHAT TO WATCH OUT FOR Because the assumptions underlying your business model are embedded in all your processes—and because stable businesses need predictability—it won’t be easy to change course. Organizations are very good at resisting change.
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Combination How can you connect products or services that have traditionally been separate?
C O M B I N AT I O N I S A canonical creative approach in both the arts and the sciences. As Anthony Brandt and David Eagleman note in The Runaway Species, it was by combining two very different ideas—a ride in an elevator and a journey into space—that Albert Einstein found his way to the theory of general relativity. In business, too, creative and successful moves can result from combining things that have been separate. Often these opportunities arise with complemen tary products and services. Products and payment systems, for example, have traditionally been separate nodes in value chains. But the Chinese social media platform WeChat (owned by Tencent) now includes an integrated mobile payment platform called WeChat Pay that enables users to buy and sell products within their social networks. Expand ing beyond the Chinese ecosystem, Tencent and Alibaba are coordinating with overseas payment firms to enable retailers in other countries to accept their mobile payment services.
Sometimes competitors can benefit from joining forces to grow the pie. (Barry Nalebuff and I explored this idea in our 1996 book Co-opetition.) For example, BMW and Daimler have announced plans to combine their mobility services— car sharing, ride hailing, car parking, electric vehicle charging, and tickets for public transport. Presumably, the two automakers hope that this move will be an effective counterattack against Uber and other players that are encroaching on the traditional car industry.
In other instances, companies from wholly separate industries have created new value for customers by combin ing offerings. Apple and Nike have done so since the 2006 introduction of the Nike+ iPod Sport Kit, which enabled Nike shoes to communicate with an iPod for tracking steps. More recently, versions of the Apple Watch have come with the Nike+ Run Club app fully integrated. Nest Labs and Amazon also complement each other: Nest’s intelligent home
thermostat becomes even more valuable when it can deploy voice control via Amazon’s virtual assistant, Alexa.
New technologies are a rich source of combinatorial possi bilities. AI and blockchain come together naturally to protect the privacy of the large amounts of personal data needed to train algorithms in health care and other sensitive areas. Block chain and the internet of things come together in the form of sensors and secure data in decentralized applications such as food supply chains, transportation systems, and smart homes, with automated insurance included in smart contracts.
Perhaps the biggest combination today is the one emerging between humans and machines. Some commentators see the future of that relationship as more competitive than cooper ative, with humans losing out in many areas of economic life. Others predict a more positive picture, in which machines take on lowerlevel cognition, freeing humans to be more creative. Martin Reeves and Daichi Ueda have written about algorithms that allow companies to make frequent, calibrated adjustments to their business models, enabling humans to work on high level objectives and think beyond the present. (See “Designing the Machines That Will Design Strategy,” HBR.org, April 2016.)
Strategy from combination involves looking for connec tions across traditional boundaries, whether by linking a product and a service, two technologies, the upstream and the downstream, or other ingredients. Here, too, the creative strategist must challenge the status quo—this time by thinking not just outside the box but across two or more boxes.
HOW TO BEGIN 1/ Form groups with diverse expertise and experience; brainstorm new combinations of products and services. 2/ Look for ways to coordinate with providers of complemen tary products (who may even be competitors).
WHAT TO WATCH OUT FOR Businesses often manage for and measure profits at the individual product or activity level. But combinations require systemlevel thinking and measurements.
Constraint How can you turn limitations or liabilities into opportunities?
T H E WO R L D ’S F I RS T science fiction story, Frankenstein, was written when its author, Mary Wollstonecraft Shelley,
STRATEGY
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was staying near Lake Geneva during an unusually cold and stormy summer and found herself trapped indoors with nothing to do but exercise her imagination. Artists know a lot about constraints—from profound ones, such as serious setbacks in their lives, to structural ones, such as writing a 14line poem with a specified rhyming structure. In business, too, creative thinking turns limitations into opportunities.
That constraints can spark creative strategies may seem paradoxical. Lift a constraint, and any action that was previously possible is surely still possible; most likely, more is now possible. But that misses the point that one can think multiple ways in a given situation—and a constraint may prompt a whole new line of thinking. Of course, the Goldilocks principle applies: Too many constraints will choke off all possibilities, and a complete absence of con straints is a problem too.
Tesla hasn’t lacked financial resources in entering the car industry, but it doesn’t have a traditional dealership network
(considered a key part of automakers’ business models) through which to sell. Rather than get into the business of building one, Tesla has chosen to sell cars online and to build Applelike stores staffed with salespeople on salary. This actually positions the company well relative to competitors, whose dealers may be conflicted about promoting electric vehicles over internalcombustion ones. In addition, Tesla controls its pricing directly, whereas consumers who buy electric vehicles from traditional dealers may encounter significant variations in price.
I should note that this attitude toward constraints is very different from that suggested by the classic SWOT analysis. Strategists are supposed to identify the strengths, weak nesses, opportunities, and threats impinging on an orga nization and then figure out ways to exploit strengths and opportunities and mitigate weaknesses and threats.
In stark contrast, a constraintbased search would look at how those weaknesses could be turned to the company’s
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advantage. Constraint plus imagination may yield an opportunity.
This approach to strategy turns the SWOT tool upside down in another way as well. Just as an apparent weak ness can be turned into a strength, an apparent strength can prove to be a weakness. The likelihood of this often increases over time, as the assets that originally enabled a business to succeed become liabilities when the environ ment changes. For example, big retailers have historically considered “success” to be moving product out the door; to that end, they needed large physical footprints with onsite inventory. Among the many changes they face today is the rise of “guideshops”—a term used by the menswear retailer Bonobos—where shoppers try on items, which they can have shipped to them or later order online. In the new environment, traditional retail footprints become more of a liability than an asset.
Another way to approach strategy from constraint is to ask whether you might benefit from selfimposed constraints. (Artists do something similar when they choose to work only within a particular medium.) The famous Copenhagen restaurant Noma adheres to the New Nordic Food manifesto (emphasizing purity, simplicity, beauty, seasonality, local tradition, and innovation). A similar strategy of working only with local suppliers has been adopted by thousands of restaurants around the world. A commitment to high environmental standards, fair labor practices, and ethical supplychain management can be powerful for organizations looking to lead change in their industries or sectors.
Selfimposed constraints can also spur innovation. Adam Morgan and Mark Barden, in their book A Beautiful Constraint, describe the efforts of the Audi racing team in the early 2000s to win Le Mans under the assumption that its cars couldn’t go faster than the competition’s. Audi developed dieselpowered racers, which required fewer fuel stops than gasolinepowered cars, and won Le Mans three years in succession (2004–2006). In 2017 Audi set itself a new constraint—and a new ambition: to build winning allelectric racers for the new Formula E championship.
HOW TO BEGIN 1/ List the “incompetencies” (rather than the competencies) of your organization—and test whether they can in fact be turned into strengths. 2/ Consider deliberately imposing some constraints to encourage people to find new ways of thinking and acting.
WHAT TO WATCH OUT FOR Successful businesses face few obvious constraints; people may feel no need to explore how new ones might create new opportunities.
Context How can farflung industries, ideas, or disciplines shed light on your most pressing problems?
A N E N T I R E F I E L D, biomimetics, is devoted to finding solu tions in nature to problems that arise in engineering, materi als science, medicine, and elsewhere. For example, the burrs from the burdock plant, which propagate by attaching to the fur of animals via tiny hooks, inspired George de Mestral in the 1940s to create a clothing fastener that does not jam (as zippers are prone to do). Thus the invention of Velcro. This is a classic problemsolving technique. Start with a problem in one context, find another context in which an analogous problem has already been solved, and import the solution.
Intel did that when it came up with its famous Intel Inside logo, in the early 1990s. The goal was to turn Intel micro processors into a branded product to speed up consumers’ adoption of nextgeneration chips and, more broadly, to improve the company’s ability to drive the PC industry forward. Branded ingredients were well established in certain consumer product sectors—examples include Teflon and NutraSweet—but hadn’t been tried in the world of technology. Intel imported the approach to high tech with a novel advertising campaign, successfully branding what had previously been an invisible computer component.
Context switching can be done across industries, as in Intel’s case, or even across time. The development of the graphical user interface (GUI) for computers was in a sense the result of a step backward: The developers moved from immersion in the textbased context in which programming had grown up to thinking about the highly visual handeye environment in which young children operate. Similarly, some AI researchers are currently looking at how children learn in order to inform processes for machine learning.
Companies are always eager to see into the future, of course, and techniques for trying to do so are well established. That is the purpose of leaduser and extremeuser innovation strategies, which ask companies to shift their attention from
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FURTHER READING
STRATEGY FROM CONTRAST Originals: How Non-Conformists Move the World Adam Grant Viking, 2016
Quirky: The Remarkable Story of the Traits, Foibles, and Genius of Breakthrough Innovators Who Changed the World Melissa A. Schilling PublicAffairs, 2018
Smarter Faster Better: The Secrets of Being Productive in Life and Business (Chapter 7) Charles Duhigg Random House, 2016
mainstream customers to people who are designing their own versions or using products in unexpected ways in especially demanding environments. Information about where the edges of the market are today can signal where the mainstream will be tomorrow. Extreme sports, such as mountain biking, skateboarding, snowboarding, and windsurfing, are good examples. In an MIT Sloan School working paper, Sonali Shah relates that aficionados led many of the innovations in those areas, starting in the 1950s, and big manufacturers added cost efficiencies and marketing to take them mainstream.
When companies locate R&D functions far from head quarters, they’re acknowledging the importance of jumping into someone else’s context. This is not just a strategy for large companies that move people to Silicon Valley for tech or the Boston area for biotech. Startups, too, should put themselves in the best context for learning and growth. The hardware accelerator HAX, located in Shenzhen, hosts hard ware startup teams from numerous countries and enables them to tap into the highspeed ecosystem of the “hardware capital of the world,” quadrupling the rate at which they cycle through iterations of their prototypes.
Strategy focused on context may involve transferring a solution from one setting to another more or less as is. It may mean uncovering entirely new thinking about problems (or opportunities) by finding pioneers who are ahead of the game. At bottom, it’s about not being trapped in a single narrative.
HOW TO BEGIN 1/ Explain your business to an outsider in another industry. Fresh eyes from a different context can help uncover new answers and opportunities. 2/ Engage with lead users, extreme users, and innovation hotspots.
WHAT TO WATCH OUT FOR Businesses need to focus on internal processes to deliver on their current value propositions—but the pressure to focus internally can get in the way of learning from the different contexts in which other players operate.
I N T H E WO R L D of management consulting, aspects of “strategy” and “innovation” have started to converge. IDEO, the design and innovation powerhouse, has moved into
strategy consulting, for example—while McKinsey has added designthinking methods to its strategy consulting. This convergence raises an obvious question: If the distinction between strategy and innovation is less clear than it once was, do we really need to think carefully about the role of creativity in the strategymaking process?
I believe strongly that the answer is yes. At its core, strategy is still about finding ways to create and claim value through differentiation. That’s a complicated, difficult job. To be sure, it requires tools that can help identify surpris ing, creative breaks from conventional thinking. But it also requires tools for analyzing the competitive
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