Tuesday, October 19, 2010

Transforming the "So What" Opposites in to a “So That” Strategy called Purpose Innovation

The last few posts on the topic of “balancing opposites” have definitely made our blog readers to pay a closer attention to the ideas we have been promoting in the fast few weeks. Coincidentally enough, on the other day, one of our readers came up with a “So What?” question– which, in our opinion is a great sign – as, it is just a matter of time that they will transition from the “so what” camp in to the “so that” camp, as alluded in one of our earlier posts (http://strategywithapurpose.blogspot.com/2010/09/transforming-what-aboutso-what.html). With that said, we are going to dedicate this post to answer that specific question- i.e. how do we transform these “so what” questions in to a “so that” strategy called “purpose innovation” within the context of balancing opposites?

First things first... what is this purpose innovation? As depicted in the graphics on the top of the page– when core and edge (or, in general, when opposites) are balanced , the “forces of attraction” from the core and edge participants of various related and unrelated industry verticals come together to unleash their synergistic purpose value in the form of a powerful innovation called - purpose innovation - with its three sub components -
  • Boundryless purpose models - A stirred up view of edge opportunities, in the form of a “pull value chain” disrupting the traditional boundaries of related and unrelated industry verticals (CPG, Retail, Telecom/Hi-Tech, health care, Pharma, Insurance, Banking etc.) – who are knitted together with a “forces of attraction” from the “purpose value opposite pairs” such as Health &Wellness/Taste & Beauty, Sustainability/Maintainability, Mass Market/Personalized, Shareholder value/Community value and Externality/Internality - to name just a few.

  • Boundryless Purpose bundles - A “causal chain” based dynamic bundle of products and services with a set of positive value incentives that are shared among all the players of the pull value chain (consumers and participants alike) who helped to create them- as incentives help catalyze collaborative action.

  • Boundryless Purpose platforms* - A flexible foundational platform design that help to change the characteristics of the underlying product and services without changing the platform design significantly using the emerging technology and manufacturing/supply chain best practices - a huge capital cost saver.

I hear someone asking - how is this purpose innovation different from open or institutional innovation? In our opinion, purpose innovation is much broader. While open innovation focuses on leveraging third party resources to support organizations’ product and/or business model innovations, institutional innovation, in some cases, also expands the scope to include the core operating processes of partner’s value chain – but, still within a single or related industry verticals. On the other hand, purpose innovation goes few steps further – by creating a “pull value chain” across both related and unrelated industry vertical boundaries in the form of purpose models, purpose bundles and purpose platforms – that are knitted together with a powerful “forces of attraction” from the consumer consumption driven, causal chain based, “purpose value opposite pairs” as listed earlier.

Pull Value Chain - Explained

This "pull value chain", unlike the push model encourages decentralized, yet loosely coupled interactions among its players from both related and unrelated industry verticals facilitating much broader type of collaborative innovation, using the “forces of attraction” from the purpose value opposite pairs. This attraction in turn inherently makes the participants to come together with a causal chain relationship, thus making them highly scalable with diverse, yet complimentary set of talented resources. This type of unprecedented scalability is being achieved because of the “distributed talented workforce"- regardless of their location or country where the pull value chain’s operations are predominantly executed.

Granted – in some situations, we will need the push management techniques for better control - however, they are used only on a case by case basis, and not as a norm. Hence, the push model organizations –typically go through a mindset shift to effectively harness the potential of pull value chain –which brings up another point - that the purpose innovations, in some cases also might override local product and/or business model innovations within the context of creating big picture value for all the participants - instead of creating the value for just one participant.

Pull value chain, in addition also pulls consumers with the same forces of attraction by providing valuable incentives in the form of purpose bundles. In other words, pull value chain makes consumers as passive virtual business partners within the value chain, thus making consumers as their lifelong partners creating a different kind of consumer loyalty -called “composite brand loyalty”.

The 3P’s (Purpose Models, Purpose bundles and Purpose platforms) Explained

Purpose models are the revolutionary game changing business models that not only just reinvent the firm from product/business model innovation standpoint, but also, mutate the DNA of the brand at the nucleus level and make them to be a part of a “pull value chain” composite brand. In other words, business models usually shuffle the value chain activities of the firm within the four walls of the firm (or at the maximum within the industry or related industry verticals) whereas, purpose models go few more steps further - shuffle the value chain activities of both related and unrelated vertical boundaries– and, then re-purposes the vision/mission of those brands (as both standalone and composite brands), with a causal chain based purpose bundles- that are knitted together by the “forces of attraction” resulting from balancing the “purpose value opposites” (i.e. the example value pairs as identified earlier).

Similarly, Purpose bundles are the causal chain based “consumer consumption” driven “day in the life” type dynamic bundles of products and services from variety of related and unrelated industry vertical providers that are bundled together by the “forces of attraction” from the “value opposites” – thus, providing a better value for the purpose minded consumers who are committed to a leading a purpose life style. For example, under this model, a Health and Wellness/Green minded consumer (who is also a passive partner of the pull value chain), will get a better value when they purchase a dynamic purpose bundle of “health insurance along with a variety of H&W based durables and non durable P&S and workout services” in a price that is in proportion to their purpose scores. The causal chain relationship rationale here is that- those consumers, who eat healthy organic food, apply natural beauty treatments to their bodies and exercise well will have a healthy life - and hence they deserve a better health insurance premium and so on and so forth. Extending the context of the this causal chain rationale, one can also say- that the more products and services consumers add to their causal chain - the more their purpose scores - and hence, better the value.

Likewise, Purpose Platforms are the foundational infrastructure enablers of the purpose models (and purpose bundles) providing the flexible platform design (with principles like JIT, lean manufacturing, tapered integration etc.) to help change the “relevance, access and value” characteristics of the underlying products and services - without significantly changing the platform design. This is a great value-add feature – that these purpose platforms are designed with a flexible design using emerging cloud based miniaturized manufacturing technologies (& nano- technologies) - as they help to change the characteristics of product and services without changing the underlying platform design – which is huge capital cost saver for the "pull value chain" participants.

Bottom line: History is filled with many examples of business concepts becoming successful – only when they “go along with the gradient” in alignment with the nature’s principles. And so, if history repeats itself (as it has done in the past), our purpose innovation has a great potential to be the next wave of disruptive innovation -as it, not only just disrupts the current “push value chain model”, but also, goes along with the gradient (in alignment with the “forces of attraction” principle from balancing the “purpose value opposites”) – as outlined in our blogs -and summarized in the poem below.

Opposites attract opposites for creation to procreate,
Positives exert negatives for the creature to illuminate,
Profits revert purposes for corporations to innovate,
Yet, likes retract likes for them to continue to be unlit,
Like the unlit* Almighty- as He has no opposites!

* That’s why Solomon among other wise men/yogis of yester-years, depict the Almighty to be residing in the inner most court in utter darkness- in alignment with nature’s “forces of attraction” principle -as evidenced in the scriptures of both west and east alike!

1 comment:

  1. Hello Charles, Thank you indeed for writing such an illuminating post. It is deep, and more importantly opens new directions for thinking. As I am currently in Sudan for few more days I find it difficult to find the time to write a response that matches the quality of this post. So, I shall be commenting again early next week.

    A great post, indeed