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Unless the leaders' mental models are altered, plans for strategic innovation won't produce a sustainable advantage.
FIVE ASSUMPTIONS ABOUT strategy are commonly handed down in companies that have used them to succeed in stable times:
1) Strategy development is the sole responsibility of senior management; 2) decisions should be grounded in solid market research; 3) benchmark current per fance against the industry's established value criteria; 4) develop a plan that will deliver your objectives and allocate sufficient resources to insure immediate success; and 5) develop a strategy that closely aligns uith the past precedents that have caused previous success
At first glance, these assumptions seem reasonable. They may even match how your management team goes about its strategic deliberations. But the finished product will be a strategy filled with minor tweaks from past years' versions. Even if your team comes in fired up to develop a dramatically original strategy, by following these assumptions their good intentions will be thwarted.
Five Distinctions
Let's examine these assumptions and consider a different planning approachstrategic innovation-that focuses on how to produce a sustainable competitive advantage, solve customer's "latent needs" (what they might value but have never experienced or expressed), reveal new opportunities that come from reinventing the rules of competition or penetrating new minimally contested market segments, and be perceived by customers as "the only one to do what we do."
1. Diversify contributors to the strategic plan. Strategic innovation begins with rethinking the planning team's guest list. Most strategies arise out of conversations restricted to senior management. But consider: Who are the most likely people to carry strategic assumptions saturated with industry dogma; lose in power, share of budget, and value of stock options if untested changes are instituted and fail; react defensively; interpreting radical change as a reflection of something wrong with the old strategy; be impressed with their...