Innovation Tools That Can Help You Right Now
The world looks a lot different than it did at the start of 2020. The roadmaps we introduced at the start of the year have changed, with some organizations completely pivoting their organizational strategies. While there is no doubt that a crisis causes many challenges, it also creates new opportunities. How can organizations at a time when business is changing rapidly, use their resources and bandwidth to find opportunity, and take the business to wherever its future lies?
Professor Rita Gunther McGrath, best-selling author, sought-after speaker, and longtime professor at Columbia Business School, answered this question in our recent webinar event. Rita is one of the world’s top experts on innovation and growth, and below you will find the 5-step process that she walked through to show how organizations can set themselves up for success as we move through this inflection point – the moment when everything changes.
“In a moment of high uncertainty, you are worried a lot less about the rate of failure, than you are the cost of failure.”
– Rita McGrath
5 steps that you need to think through as you rightsize your business:
1. Do a portfolio inventory
Organizations can accumulate a lot of stuff over time. The first step is to conduct an inventory of what your organization is currently working on. Your goal here is to gain a better understanding of the projects, programs, or initiatives that are no longer relevant and not in line with the strategy. Remember to keep in mind the parts of your business that you thought were predictable as this may not be the case anymore. This analysis should be quick and not too detail-oriented.
Answer the following questions:
- What are people working on?
- What is the spend of these things?
- What is the status?
- Are these things high, medium, or low on uncertainty?
As you make this list, remember that it is not one individual making a central decision of what is in and what is out.
2. Revisit your strategy
A strategy is critical in a crisis. You need a good strategy statement as it will be needed to support trade-off decisions later on.
3. Develop your screening statements
Now that you have a clear strategy, you can create your set of screening statements – the specific attributes that would make projects, programs, or initiatives more or less attractive. If an attribute is desirable, it gets a high score. If it is undesirable, it gets a 1 or negative score.
Take your inventory list from step one and score everything in your inventory using these screening statements. This analysis does not need to be perfect, but will help give you more direction and help you find new opportunities.
Once the major initiatives from your list are now scored, you can rank them. Top-ranked will be your Tier 1, aka your highest priority. The second group can be maintained if you have the resources and bandwidth, and you will disengage from lower priorities.
Healthy disengagement is possible. This is when you come to the conclusion that it is sensible to stop doing something, and you take the time to factor in all the key stakeholders who will be affected by doing this. Don’t forget that even if you are disengaging something, there could be parts of it that you save and bring back later on. You can learn more about the disengagement process in chapter 3 of Rita’s book, The End of Competitive Advantage.
4. Explore new opportunities
Look for new areas that your capabilities may allow you to enter, even if this is not in the markets you currently serve. Ask yourself: Where do I want to place my future bets? Think about all the companies today that we see pivoting quickly and entering spaces they had not considered beforehand. For example, Nortech, the contract manufacturer, is producing circuit boards and other ventilator parts based on the design specifications of Medtronic.
5. Use discovery driven practices for rapid learning
Document your assumptions and look for ways you can convert them to knowledge through market tests, experimentation, and other efforts. You have to test new things, but you need to be willing to stop testing something. At each checkpoint, the point where the period of learn-and-test ends, ask yourself the question that Alex van Putten and Ron Pierantozzi call “RACE.”
- Should we redirect?
- Should we accelerate?
- Should we simply continue?
- Or should we exit?
The goal here is to accelerate the conversion of assumptions to facts as rapidly as you can, knowing that in a time of great uncertainty, new information will emerge as time goes on.
Learn more practical ideas from Rita in her free newsletter or in one of her upcoming Friday fireside chats that she hosts with other thought leaders. You can also experience her teachings in ExecOnline’s Leading Strategic Growth course. We will continue to update the ExecOnline® resource center with new, relevant content, and events based on your evolving needs. Here you will find upcoming live webinars, webinars available on-demand, blogs, and much more!
– Today and Beyond
Get the latest resources to help support your leaders and maintain business continuity for your organization during the pandemic and beyond.