Virtual Ocean Strategy – the way to reset strategies with a purpose driven “industry structure is irrelevant” mindset?

With our Virtual Ocean Strategy (VOS) receiving some great press within the blogosphere, some of our fellow strategy practitioners, have challenged us with a set of follow-up questions - the most notable one being - "how is it different from the popular approaches like Red Ocean and Blue Ocean Strategies?". Instead of answering them all individually, we decided to synthesize them in the form of three questions, to make it relevant for our larger audience -

1. Why another approach now?


2. How does it stack up against the other popular frameworks like Red Ocean (ROS) and Blue Ocean strategy (BOS) frameworks?


3. In spite of having these great strategy frameworks, quite a few strategy efforts, still do not produce its intended outcome - Why?
   

1.Why another approach now?

While the popular Red Ocean Strategy (ROS) and the Blue Ocean Strategies (BOS) have widely been successful in the last decade+ years, we believe that they may not be well equipped, to handle the ever-changing business needs of the 21st century! This does not mean that these two approaches have not lost their former glory; rather, the best way to comprehend our hypothesis is that some of the foundational principles of ROS and BOS, may not be well equipped to handle the seismic shift happening within the social media/digital technology driven, global business environments of the 21st century.

In other words, the right way to frame this “Why another approach question” within the context of this seismic shift being – “what elements of ROS and BOS can be blended together, to form a hybrid approach (with some value-adds), that can, not only help companies to reset their strategies, but also, help them to stay relevant in the 21st century?”

First things first - let us start with some basics. Porter’s ROS is built with the mantra of beating the competition with a unique winning path, whereas, BOS is built with a mantra of entering the deep blue ocean markets, with a “competition is irrelevant” mindset. While there is time and place for each of these worldviews, we believe that none of these approaches, in its current form, are designed to handle the emerging "boundaryless industry structure" mindset of the 21st century. In other words, in the last 5-10 years, the traditional boundaries existing among industrial structures, have started to blur, as evident from some of the recent industry convergence moves by Fortune 500 companies (e.g. Starbucks entering CPG type Juice industry, Google entering travel/media/mobile handset industry, Apple/Intel entering media/paid TV industry etc). What do these strategic moves tell us? Companies have started to look beyond their traditional industry structures for growth opportunities with an “industry structure is irrelevant” mindset, and so, the need of the hour is an approach that helps companies to accomplish that mindset, in a comprehensive way, as outlined in the picture on the top of the page!

While VOS is designed with an "industry structure is irrelevant” mindset, in its essence and spirit, VOS is all about executing those strategies with a collaborative heartbeat. In other words, while competition within a boundaryless industry structure, might be irrelevant during the beginning days (i.e. especially when companies enter the virtual oceans with a first mover advantage), it will catch up sooner than later, as digital and social media technologies have started to shrink the world much smaller, by tearing down the artificial walls, existing among the industry structures, and so, “collaborative execution” is the name of the game in the 21st century!

The implication is that the trade boundaries across industry structures are all being redrawn, thus validating the need for a “strategy reset journey” with an “industry structure is irrelevant” mindset! VOS starts that reset journey, not only, by resetting the purpose statement (with its five parts of vision, mission, values, codes and BHAG with priorities), but also, by balancing them with a multi dimensional balancing process, in value, cost, velocity, growth and purpose dimensions, as opposed to the two dimensional value-cost trade-off in ROS and value-cost balancing in BOS. VOS is the only approach in the market place that is sourced from an “inside-out” energy source called PURPOSE SEED that is manifested in three forms simultaneously -

• Purpose Driven Leadership framework using the “inside-out” emotional energies of faith, hope and love.


• Purpose Driven Strategy framework using the “inside-out” scientific energies of seedal energy, seasonal force and sequel power.


• Purpose Driven Innovation framework using the three value energies (shareholder, societal and emotional/cultural) that are manifested as purpose bundles, purpose models and purpose platforms.
  

Simply put, VOS and its three frameworks are being sourced from the common PURPOSE seed, very much like, how GOD-HEAD in most faiths happen to manifest himself in three forms depending upon the dispensational context, and yet operate as one person. In other words, VOS, although manifests itself in three forms (leadership, strategy and innovation) within the various cultural contexts, it still operate as one integrated approach, when it comes to decision making- which is what makes VOS, a sustainable approach for the long haul.

2. How does it stack up against the popular ROS and BOS?

3. In spite of having great strategy frameworks, still some strategy efforts do not produce its intended outcome - Why?

The essence of strategy, according to Michael Porter, is choosing what not to do, and so, we have developed 5 “WHAT NOT TO DO’s” to answer this question. One might ask - why the “negative” approach? Well, most research suggests that unlearning is the foundational prerequisite of learning, and so, we have identified these 5 “what not’s”- to unlearn some of these decade old mindsets, before learning to use VOS, with an integrated/systemic mindset and to stay relevant in the 21st century!

• What Not #1 -> Do not reset with a single dimensional strategy mindset, as opposed to an integrated systemic approach, in the three dimensions of leadership, strategy and innovation, as addressed by our TPF framework within VOS.



• What Not #2-> Do not reset strategy without resetting the purpose seed, as addressed by our Purpose driven seedal chain/scientific energy management principle driven Portfolio Thread view based strategic planning framework within VOS.



• What Not #3-> Do not go after an existing market, as opposed to going after the virtual ocean market and/or experience pools, which do not exist today with a motivational momentum themes creating experience moments or movements-> as addressed by our Experience Pool Portfolio (EPP) framework and our Purpose Innovation framework within VOS.



• What Not To Do #4->Do not mix up SCA vs. competency vs. capability within organic and inorganic growth strategies, but follow a portfolio approach, in avoiding this “capabilities mix-up trap” – as addressed by our Capability Pool Portfolio (CPP) Framework within VOS.
  o To put things within its context - SCA vs. Competency vs. capability is equivalent to Grandma’s hand trick of sautéing for the right duration with right temperature vs. Recipe vs. Ingredient.



• What Not To Do #5-> Do not execute without a real time performance visibility -> partly addressed by our big data driven real time valuation/Corporate performance management framework within VOS.

Conclusion:

Implementing a strategic plan, in itself is a big challenge for most organizations, leave alone resetting them all the way from the Purpose Seed, as strategy resets, invariably end up introducing lot more structural changes to the organizations, than we think. To manage those changes and to mitigate those execution risks that come along with it, we suggest companies to take a phased approach, and apply our VOS principles and frameworks with an integrated systemic mindset – as guided by our big data driven analytics/synthesis balanced, Corporate Performance Management (CPM) frameworks!

Please feel free to check out our Slide share version of our article for a better visual display as well.

A Purpose Leader’s Declaration of Independence - Strategize from the Core & Innovate with the Edge!

With this weekend happen to be the July 4th weekend – we didn’t feel like writing a blog with a serious strategic content - and so, started searching for a topic – that, not only would lighten up the moment, but also, would re-kindle the independence spirit within all of us. It so happened that the topic of “declaration of independence” came to our mind - and to our utter amazement, we quickly learned that the dilemma that drove the founding fathers to come up with their five part manifesto – seem to be very similar to the “core vs. edge dilemma" that is being faced by most corporations today – and rightfully so, it ebbed up our curiosity, and so, we decided to learn more!

As it turns out, the 5C’s our Purpose Driven Leadership (PDL©) framework (as listed below), in conjunction with our strategic planning framework called Portfolio-Thread View (PTV©), seem to have a perfect answer for this core vs. edge dilemma, and so, we decided to summarize our answer, in the same format of the declaration of independence, - with the same language tone of the founding fathers, yet augmented by the tenor of our own PDL©/PTV© frameworks! We hope it lightens up your spirit– as we celebrate Independence Day this weekend!

1. The INTRODUCTION – Setting the new vision with the right tone of "CONFIDENCE”

When the course of “business as usual” is no longer an accepted norm, it becomes imperative for the stakeholders to redefine (reset?) the meaning of their core businesses (and its associated value), which have connected them with one another for so long, so that, they can embrace the truth behind their edge vision (e.g. Purpose Innovation driven VizPlanet©), the separate and yet almost equal planet station, to which the nature’s principles and God’s principles entitle them, driven by the tenets of the free market capitalism, that compels them, not only to “strategize from the core”, by declaring the causes behind their purpose value chain, but also, impels them to “innovate with the edge” with an edge platform like VizPlanet©, as depicted in the picture above!

2. The PREAMBLE – Renewing the “COMMITMENT” for the new vision

We hold these truths to be self-evident, that all stakeholders (i.e. core and edge) are created equal, that they are endowed by their Creator with certain unalienable rights that among these are life, liberty and the pursuit of purpose and profit. Those to secure these rights are called upon to rise among the stakeholders, as purpose innovators, deriving their inspiration from their creator and founding fathers!

3. The INDICTMENT – Establishing the “CONTEXT” for the new vision by identifying risks and returns

That whenever, any form of this edge vision, start cannibalizing their core, it is the right of the leaders to seize the moment, and mitigate those risks by exploring alternative paths of returns (or execution), including, but not limited to the option of spinning off a new start-up entity called “Edge Inc”, by laying its foundation on such principles and organizing its powers in such a form, as to them shall seem most likely to derive their collective purpose and profitability from their parent core.

4. The DENUNCIATION – Building the case for forming a new entity, with the right CALIBER of purpose leaders!

While self cannibalization of the core in some cases is a real thing, it is definitely not a compelling reason to quench the edge endeavor (as the saying goes, if we don’t eat our own lunch, someone else will!) – and so, edge, would like to peacefully work things out, as edge and core at the end of the day are still conjoined cousins (as they need each other), and so, hereby, the edge constituents, affirm and appeal to the open minded among the core, to accommodate edge’s aspirations and agree to co-exist as sister concerns, under the larger purpose holding umbrella!

5. The CONCLUSION– Closing the deal with the CALL-TO-ACTION

That, these united edge colonies, also envision the need to change the strategy and structure of the holding corporation, so that they can officially declare the existence of “Edge Inc” and of their right ought to be free and Independent operating entity; that they are absolved from the day to day oppression of the core, yet operating as conjoined cousins, to win the competition collectively and decisively, united by the larger purpose, that comes from their creator and founding fathers!


Editor/author’s closing comments:

While "Strategize From the Core and Innovate with the Edge" being the key strategic principle promoted within our blog today, by no means, we are suggesting that forming “edge Inc” is the only option to implement that principle , rather we suggest that, it is one of the most viable options available to large corporations - as history has proven again and again that “moving the needle” with the edge vision, especially within a large established core business, is not an easy thing.

On a side note - one of our business partners – after reading the draft version of the article – was quiet impressed with our timely “declaration of independence metaphor” and jokingly summarized the article with the following mapping. Although we did not mean it that way, it turned out to be that way, and so, we let you be the judge!

• 17-20th century British Empire –> depicting the Core or “business as usual”


• All former British Commonwealth colonies led by USA –> depicting the Edge type disruptive innovation businesses (e.g. our purpose innovation enabled VizPlanet© platform)


• Founding Fathers –> depicting the Overarching Board and Senior Leaders


• Declaration of Independence –> depicting the Edge manifesto with a proposal to form Edge Inc.


• Creator –> depicting the Common Purpose or a holding company uniting both core and edge under a common umbrella!

With all due respect, most former British colonies including USA, are still thankful to the British Empire –as they all have derived some of their foundational strengths from Great Britain, in spite of the shortcomings, that came along with the colonization. In other words, a former colony like USA cannot be the super power today, had it not derived some of its core strengths from the British Empire. Similarly, some of the emerging economic powers of today, were also, once colonies of British Empire- and in a way - they also have derived some of their foundational strengths from the British Empire, in spite of the shortcomings of colonization. The most notable one being the English language– which has become the link language for the whole world! In closing – no matter how we slice it, whether it is core or edge, we all need each other – as world is becoming smaller and smaller every day!

Wish you all a happy July 4th!

Purpose Landing on the VizPlanet© - Our Generation’s Sputnik Moment?

Courtesy: Google images customized within our prototype implementation

With our VizPlanet© article, that is being posted within the Management Innovation Exchange (MIX) site, generating some interesting follow-up questions within the MIX community, one of our readers, suggested that we cross-post it, within our blog to keep that momentum going. As it turns out, some of those questions, in fact, strengthen the case of our article, and so, we decided to incorporate them within our blog today. The most notable question being – is there a burning platform to call this revolutionary VizPlanet© idea, as our Generation’s Sputnik Moment?

The Answer is …..

The short answer is YES! Having said that, as we started thinking about the best way to present the compelling case for this burning platform – a key insight came to our mind – i.e. an insight from an article by Jared Diamond, assessing the impact of the increased rate of consumption happening among world’s population- as summarized in the picture below.


What does this insight tell us? The middle class boom of the developing world (more specifically the BRIC countries), that is being used by the western multi nationals, as the burning platform for their emerging market growth strategy, eventually might come back, and start even impacting their capital raising ability in the long run– especially, when those middle class populations, start competing for the limited set of natural resources, that are currently being consumed by their western counter parts, with a GH emission inequality ratio of 32:1. What do we mean by that? As it turns out, the emerging market growth strategies of most western multinationals, in a way, are a paradox because - on one hand, these corporations are counting on capitalizing the middle class boom happening within the developing world, to sustain and justify their double digit growth for the next 10 years or so - and, on the other hand, the same boom, eventually will end up increasing the competition for the limited natural resources (or cost of capital in financial terms)- and might even start reducing (or hurting) the quality of life, that is being enjoyed by all of us, perhaps not today, but definitely 10-25 years from now. In other words, no matter how we slice it, our planet’s current resource consumption pattern or lifestyle, is not at all sustainable and so, it is a no-win value proposition, for both the developed and developing world, in the long run.

As we present this argument, I hear someone pointing us to the progress we have made so far on developing those innovative sustainability solutions/strategies to reduce the carbon footprint (& hence reducing the resource uses) along with those efficient global capital/capability management strategies that have been instituted by most multinational corporations. While we don’t disagree with the intent and merits of any those strategies - most of those sustainability solutions/strategies, however, are still being centered around –just changing our personal choices, to reduce the carbon footprint, as opposed to changing our lifestyles in en-masse , before changing those personal choices. In other words, if we may use Prof. Clayton Christensen’s style of writing – most of our current sustainability solutions are stuck at the wrong side of the fork!

The root cause being …..

While we agree, that it is the right thing to do, to develop these innovative sustainability solutions (e.g. energy star programs etc.) to help reduce the carbon footprint at the personal/household/business levels, in our humble opinion, these solutions, do not fix the root cause of the issue i.e. -

• "With urbanization happening at a faster rate than ever across the globe, especially, in the last decade or so - more and more percentage of consumers (& corporations) are continuing to consume and compete for the limited set of natural resources to sustain their current life style (& profit margins) within the natural realm, in spite of a compelling alternative purpose/virtual lifestyle, available for them within the virtual realm, in a fraction of cost, providing almost the same “look and feel” type of experience, emitting just a fractional percentage of the greenhouse gases.”

One might wonder why we have not been able to fix this root cause, in its totality so far! The reason, in our humble opinion, is the lack of a compelling motivation (or incentive mechanism) on the part of both consumers and corporations, to embrace the alternative purpose/virtual lifestyle - and rightfully so, we propose a “lifestyle-changing”, root cause fixing, systemic approach, that MOTIVATES both consumers and corporations alike, to come together under a Virtual Community Environment(VCE, henceforth pronounced as Viz), that is bounded together by a powerful “Purpose Score driven, Virtual Reality/Avatar/3D/Interactive Gaming technologies/Tele-Metry based VizPlanet© Platform”, as outlined in the picture above, (that was put together as part of our recent prototype implementation), that inherently compels all parties (specifically corporations) to stretch their value chain into the VizPlanet© realm, thus making it possible for them to provide value-add purpose bundles of products and services with relatively less number of resources. Not only that - this type of a stretched value chain, apart from increasing corporations’ economies of scale & scope benefits, also, helps us to preserve God given, limited natural resources for the benefit of the future generation. In other words – it is all about us, changing our life style and making a conscious mindset shift, where possible, to consume certain services within the virtual realm (thus reducing the carbon footprint in larger percentages), as opposed to continuing our current lifestyle within the natural realm.

Resource Pool Portfolio (RPP) Framework – to help prioritize the VizPlanet© Services

To facilitate such a large scale sustainability driven purpose movement, we have developed a Resource Pool Portfolio (RPP) framework by grouping the high value resource consumption assets of our planet into 25 resource consumption buckets, and let the framework itself, to identify the top 5 high potential candidate buckets of services (as numbered in the picture below) that can be slowly moved from natural realm into the virtual realm, as promoted by our earlier purpose innovation platform concept.

Simply put, those purpose consumers (with a history of consuming/applying H&W P&S’s, consuming/reducing green energies, thus leading a purpose lifestyle, in body-soul-spirit dimensions with a higher purpose scores), who choose to consume all of their commerce and content services, using our VizPlanet© Platform, not only get a better value for themselves, but also, facilitate the noble cause of reducing the natural resource consumption rate by a substantial percentage. In other words, VizPlanet© platform, over a period of time, reduces the carbon footprint, by a substantial percentage (& hence operating cost as well) as captured in the three KPI’s of the RPP framework, thus increasing the profit margins of corporations as well.
Solution Options within the VizPlanet© Platform
With that said, the sustainable long term question that needs to be solved within the purpose reform context is – How do we change our lifestyle by resetting planet’s end-to-end resource consumption pattern and by moving some or all of the resource intensive commerce/content services from natural realm into the virtual realm – using one of the five options identified below

1. Brick and mortar platform along with a purpose score enabled vanilla online channel (current model with just addition of purpose scores based content and commerce services bundles).


2. Brick and mortar platform with a purpose score enabled vanilla online channel along with a third option of Purpose Score based VizPlanet© Platform in asynchronous mode i.e. near real time synchronization of SKU’s and content.


3. Brick and mortar platform with a purpose score enabled vanilla online channel along with a third option of Purpose Score based VizPlanet© Platform in synchronous mode i.e. real time synchronization of SKU’s & content - and so potentially replacing the newly constructed brick and mortar platforms


4. Brick and mortar platform with a purpose score enabled vanilla online channel along with a third option of Purpose Score based VizPlanet© Platform in synchronous mode i.e. real time synchronization of SKU’s & content with lot more value-add services like personalization and so eliminating the need for the new brick and mortar platforms, especially in the developing world


5. 100% “one-stop-shop” VizPlanet© Platform in synchronous real time mode eliminating all commercial real estate platforms(remediate the brick and mortar real estate for other services where virtual services are not possible to provide)

Having said that, by no means, we are suggesting that any of these options, will replace the current solution(s) in totality – rather, we suggest that these solution options, among many of the other experimentation solution options, has a great potential to compliment the current solution options. In other words, our solution is an experimentation option – with a potential to become the stepping stone, for the long ranging solution(s) within the 5-10 year purpose reform road map.

Conclusion
In closing, our hope is that sustainability experts, will pay a closer attention to our experimentation based solution options, given the fact, our VizPlanet© approach (including its ancillary platforms like VizMall©, VizTV©, VizDiner©, VizBev© etc), not necessarily, just solves those sustainability challenges, but also, it provides a better value (price) proposition for all parties, with an "almost similar look and feel type shopping/consumption experience" of their brick and mortar platform counterpart, thus motivating corporations and consumers to consume more and more purpose bundles, with an intention to increase their purpose scores -resulting in a win:win value proposition for all parties, in the long run!

Healthcare Reform – the Purpose Innovation© Way.....

With our Purpose Innovation idea, that is being posted, within the Management Innovation Exchange MIX site, seem to be getting some good visibility, some of our readers, informally suggested that we expound upon our earlier hypothesis – “Purpose Innovation, being a systemic approach, has a great opportunity to revolutionize health care reform”. Before we get into the nuances of our solution – in our humble opinion, there exist three foundational issues, in the way health care reform, in its current form, has been scoped –

• First and foremost, the health care reform problem space has not been framed up correctly. In other words, it has been wrongly framed, predominantly as a choice between public vs. private option (as pointed out by Prof. Clayton Christensen), as opposed to, being framed up as a choice between distributed, integrated or virtually integrated solution options.



• With the fact it has been framed incorrectly in the first place, it has also been approached with a “problem solving mindset of finding an immediate answer to fix the symptoms”, as opposed to being approached as a “systemic mindset of finding a long ranging solution, fixing its root causes”. In other words, it all comes down to “problem solving mindset of fixing the symptoms vs. solution providing mindset of fixing the root causes”.



• Finally, the health care reform has also been solved with a mindset of fixing the symptoms, with a 5-10 year planning mindset, as opposed to being solved with a series of experimentation based chunks of solutions, fixing the root causes, constituting 5-10 year road maps with an experimentation mindset. In other words, it all comes down to “symptoms fixing mode, with a vanilla planning mindset vs. “root causes fixing mode, with an experimentation based planning mindset”.

Systemic root causes of the Health Care reform

With that said, we propose a systemic approach, where we step back and re frame the health care reform, as an “opportunity for solution with an experimentation based chunks of solutions, fixing the root causes, leading up to the 5-10 year road map. As part of that attempt, we have also identified the top three systemic causes for the health care challenge (especially within the US context), before arriving at the solution part.

• Lack of a compelling mechanism motivating consumers to reduce their health risk profile, so that insurers can accept them readily without charging a high premium.
  


• Existence of Conflict of Interest (or lack of motivation) between providers and insurers - e.g. providers trying to extend hospitalization services whereas insurers trying to reduce the coverage of the services, thus resulting in a tension.



• Motivation of the providers to exploit the loop holes (e.g. performing mundane health care services as part of an in-patient care instead of out-patient care etc), resulting in malpractices and hence higher cost.

If we had to further summarize these three causes - it all comes down to the “lack of a compelling motivation (or incentives) on the part of providers, insurers and consumers” to come together and find a systemic solution, fixing the root causes. In other words, the primary root cause for the health care reform is - the lack of a compelling motivation among the three parties (providers, insurers and consumers) to form a joint alliance, so that collaboratively, they can create a win: win value proposition for all the parties involved.

Potential Solution Options

With that said, the sustainable long term question that needs to be solved within the health care reform context (especially when we add those 32 million uninsured people) is – which solution option? – distributed, integrated or virtually integrated solution options.

As part of this right framing, we have also identified the key pros and cons of these three solutions options, and let the "pros and cons", themselves decide the right solution option.

1. Under the distributed model (by and large the current model in US and most developed countries), hospitals are motivated to keep patients for longer - whereas the insurers are motivated to minimize reimbursement; thus creating conflict of interests – which means, any process improvement solution done on one end (provider side or insurer side) is not sustainable as it lacks a systemic view. In some cases, process optimizations, done in one side of the health care value chain, to save money or improve performance, invariably might have a detrimental impact on another side of the value chain, because the system lacks an end-to-end systemic perspective. The classic example, is privately managed private hospital providers, like hotels are motivated to fill their beds (or increase their room occupancy) whereas independent insurers are motivated to minimize reimbursement charges; thus creating the conflict of interest.



2. Under the Integrated model, (as proposed by Prof. Christensen), providers and insurers will come under one roof (perhaps as one firm) and so, provider’s action to reduce costs will also help the insurer side, as the conflict of interest, no longer exists as they are all part of the same organization. Increased room occupancy, a primary motivation for increasing the revenue in the distributed model, may not be a revenue opportunity under this model, and hence, conflict of interest, is greatly reduced, resulting in a better solution. On the flip side - while it provides a superior strategic/systemic solution, it might also introduce some structural challenges, in terms of making the health care value chain much more complex and bigger, potentially leading up to a monopolistic market model, as opposed to the free market driving the long term solution. In other words, a superior strategic solution, without a solid free market structure, sometimes, may not get the support from the business world!



3. As a middle ground solution, we propose the Purpose Innovation enabled virtual model, wherein, providers, insurers and consumers alike, are motivated to come together under a virtual roof, that is bounded together by a powerful “Purpose score based, virtual PurposeCare© platform”, that inherently motivates the parties to reduce the cost (with incentives to reduce their conflict of interest & malpractices), resulting in a “collaborative health care value chain” providing win: win value proposition for all, as promoted by our larger Purpose Innovation Idea. In other words - stronger their purpose causal chain (e.g. H&W consumers with a history of consuming/applying H&W P&S’s, leading a healthy lifestyle in body-soul-spirit dimensions), higher will be their purpose scores (and lesser their risk profile), and hence, resulting in increased number of uninsured being accepted by the insurers with lower premiums, facilitating a quick treatment turnaround time(as healthy consumers, in general, respond to treatments faster, with less expensive medicines & do-it-yourself and commoditized/shop floor type procedures), thus increasing the profit margins of all parties involved. It is also important to highlight yet another point here - that the spiritual dimension of "body-soul-spirit" has been consciously incorporated into the purpose causal chain, as health & wellness, in our opinion, also has a spiritual component, as history has proven again and again, that spiritual minded people (regardless of their religious denomination background), lead a healthy life style and have a better resilient power to recover quickly from health issues. On the down side - although, this solution is a sound systemic solution like option #2, (yet does not have as much of structural challenges like option #2), it still needs, some revamp of the health care value chain, as it needs lot more collaboration mindset among all parties (without much of direct control) - potentially resulting in a model, where we might need regulators policing the governance and purpose scores.
   

By looking at the "pros and cons" of these three options - options #2 and #3, in our opinion, deserve some additional exploration. Having said that, by no means, we are suggesting that any of these options, will totally replace the current solution(s) in totality – rather, we suggest that our solution, among many of the other experimentation solution options, has a great potential to compliment the current solution options, that are being considered by the experts from Washington. In other words, our solution is an experimentation option – with a potential to become the stepping stone, for the long ranging solution(s) within the 5-10 year health care reform road map.

Conclusion

In closing, our hope is, that experts from Washington will pay a closer attention to our experimentation based, Purpose Innovation option - given the fact, our solution (including its foundational purpose platform), not necessarily, just solves the health care reform, but also, has a potential to become the solution for other purpose reforms – i.e. motivating corporations and consumers to embrace green brands, green energy and also thereby solving externality other corporate social responsibility issues, given the fact, our solution is built on a purpose platform, that is bound together by a powerful purpose score based, purpose causal value chain.

Portfolio-Thread View (PTV©) , the armor of strategy warfare - Dealing with both expected and unexpected events?

With the fact that the word strategy has been defined in a variety of different ways, we traced back to its original definition, with a curiosity to understand, what our forefathers really meant, when they coined the word strategy. Interestingly enough, the word “strategy” is being derived from the Greek word stratçgos; which again comes from two other words -

• "stratos" – meaning army.


• "ago" –meaning leading/guiding/moving.

In that respect, the term “strategy” just means the General’s plan to win the war – as reiterated by Sun Tzu, in his Chinese military treatise called the art of war. In other words, the original intent of strategy was to deal with the competitive environment that is filled with both expected and unexpected events. On the surface, it might sound, as if strategy is all about, just defeating the competitors, as we go beneath it, one can clearly recognize the fact that it is, more about the way of dealing with the “expected and unexpected events” - and less, about defeating the competitors (although that is part of it)!

Strategy, as practiced today is mostly dealing with the expected events only!

With that insight, we fast forwarded ourselves into the 21st century and did a quick scan of the strategy landscape, to see whether strategy’s original intent is still being practiced within the real world strategic planning engagements. To our credit – we found quite a few strategic planning views available within the market place, emphasizing one or more dimensions of strategy (i.e. strategic positioning, capabilities/resources, execution, design etc) - however, most views seem to be using only the historical data (with the traditional segmentation techniques) as their premise, for solving their impending strategic problems. Put another way, over the years, most strategy practitioners, seem to have slowly moved away from our forefather’s original intent - and settled themselves into the comfortable zone of dealing with just the expected (or easily predictable) events. In other words, in most companies today, strategy has become a ceremonial exercise of planning for an environment that is filled with, just the “expected events” - as opposed to planning for an environment that is filled with both “expected and unexpected events”.

With that said, one of the key business questions facing the senior leaders today, in our opinion is - do we want our strategies to deal with just expected events or unexpected events or both? - which compelled us to step back and introspect our own PTV, in terms of, how it stacks up against other popular views, within the context of this key question.

Strategic planning is a warfare?

If the original intent of the word strategy is all about dealing with both expected and unexpected events – then, is it not fair to say that strategic planning is a warfare? If the answer is yes, then, it is time that we reframe the key strategic planning question of -“How do we win?” - as - “How do we win within this warfare? – which brings up yet another encouraging insight that “we might lose few battles along the way, but the war isn’t over till it is over -and so, it is critical that we equip themselves with a warfare type armor (& marathon mindset), and not just a battle type armor (or sprint mindset), as strategy is more about dealing with the expected and unexpected events- and less about defeating the competitors”!

Put another way – to prepare for this type of warfare, it is important that we put the whole armor (e.g. PTV©’s 10 box model and its EPP©, CPP© & PIP© frameworks) with a warfare mindset, as the strategic planning under PTV, is not just a onetime effort of dealing with the expected events anymore, rather, it is about dealing with multiple unexpected events from multiple competitors, regulators, and above all, dealing with the powers of the emerging economies within the global realms.

PTV as the armor of strategy warfare with its 10 box SWOTC model

Rightfully so, we have developed our 10 box SWOTC model with a warfare mindset, as outlined in the picture on the top of the page. To comprehend our model to its fullest sense, it is important that we go back in history with an empathetic mindset, and put ourselves into the shoes of an ancient soldier who is decorated with his whole armors (i.e. the sword, shield, darts, breast plate etc) – given the fact, the word strategy was coined during an era, when those armors were widely used for warfare.

For example, the sword and dart were the primary offensive armors used in that era, and rightfully so, our model proposes two offensive strategies (DIFFERENTIATION and EXPLOITATION) symbolizing both sword and dart respectively, to help position ourselves effectively within the battle field. Similarly shield and breastplate were the primary defensive armors used in that era, and accordingly, our model, also proposes two defensive strategies (PREVENTION and MITIGATION) to protect our positions in the battle field – as further echoed by our fellow strategists Gerald Nanninga in his position-protect paradigm article and Ali Anani in his forming a team article - both stressing the need for the balanced combination of offensive and defensive strategies.

• Differentiation strategies are the offensive “edgy” disruptive innovation growth strategies leveraging company’s strengths, as symbolized by the sword.


• Exploitation strategies are the offensive growth strategies to exploit competitor’s weaknesses/constraints, as symbolized by the darts.


• Prevention strategies are the defensive/preventive strategies to overcome company’s weaknesses/constraints, as symbolized by the shield.


• Mitigation strategies are the defensive/risk mitigation strategies to reduce company’s vulnerability from competitor’s threats, as symbolized by the breastplate.

The unspoken power of defensive strategies

As it turns out, this type of all-inclusive well guarded game plan - not only, helps us to guard our strongholds, but also, helps us to go on the offensive, by hiding behind our strongholds (a popular warfare time tactics, practiced in the ancient world)! The insight here is that, just because a firm is operating in a high growth industry with a well differentiated strategy, it does not mean, that it is guaranteed to succeed. To succeed, rather, it must also establish the strongholds (i.e. defensive strategies in the right order) - thus creating a barrier, so that competitors cannot enter into their spaces that easily, and steal their profits.

PTV’s portfolio mindset and its alignment with Warren Buffett’s tactics and McKinsey’s findings!

In other words, on some occasions, we might be better of executing a sound defensive strategy (e.g. prevention) as the winning growth path, as opposed to a half-baked offensive (e.g. differentiation) strategy. The classic example is the M&A tactics practiced by Warren Buffett – as he often selects his acquisition targets (e.g. recent Lubrizol acquisition) in an industry (or a category) where there is a high barrier for entry (i.e. a defensive/prevention strategy) – and pays a high premium for it, and thereby, locks the growth path for his portfolio for many more years to come- which by the way, also brings up, yet another important point of taking a portfolio mindset in our strategic planning efforts. In other words, the right combination of offensive and defensive strategies, within a portfolio mindset, that is appropriate for the moment, is the one that is going to give us the winning growth path - as further reiterated by one of the recent McKinsey articles.

More specifically, in that article, McKinsey had disaggregated the growth paths of over 700 Fortune 500 firms into three drivers: portfolio momentum or the market growth of the segments in a company’s portfolio; M&A; and market share gains –and interestingly enough, if we look at these three drivers holistically - the portfolio mindset, seem to be the common thread across all of them. Rightfully so, the foundational design construct of our PTV is a portfolio mindset – as it naturally lends itself, to dissect these growth drivers into multiple dimensions, with various “what-if analysis” planning scenarios, using its 10+ interlinked portfolio constructs (i.e. schema and/or sheet tabs in excel terminology) that is part of its foundational analysis/synthesis layer.

Strategy warfare and Spiritual warfare

On a side note – interestingly enough, these portfolio enabled warfare inspirations seem to be one of the foundational fabrics of most scriptures of both east and the west alike. Few notable ones being – Bible & Torah expounds the walk with God as a spiritual warfare- and encourages the believers to “put on the whole (or portfolio) armor of God, to stand against the wiles of the evil”. Similarly, if we look at the true meaning of Diwali within Ramayana, it is a celebration commemorating the portfolio of battles within a larger warfare, where the good triumphing over the evil. Along the similar lines, Qur'an, also has a similar warfare theme – “And we did raise among every people a Messenger, preaching; `Worship Him and shun the Evil one”.

Competition vs. collaboration dilemma

With that said - it brings up an interesting dilemma – does that mean that we must try to shun our competitors by all means? Definitely not – the answer lies in the balanced middle ground - where we can both “compete and collaborate” with a “DOING BOTH” mindset, as business is not always a zero sum game –and so, one can always come up with creative ways, and make it as a win-win value proposition - as promoted by our trademarked purpose innovation concept. Having said that, we would like to reiterate yet another important point to our readers here as well– that the emphasis we have given to the warfare metaphor, within this article must be interpreted accordingly within its context – as the intent of warfare metaphor, is not to crush the competitors, rather, it is meant to help us understand the unique set of “expected and unexpected events” that are commonly present within a warfare environment!

Conclusion

In closing, we are reminded of an interesting question that was asked by Rick Warren, to the then presidential candidates – Barack Obama and John McCain, during one of the 2008 presidential debates. “Does evil exist?” – Rick Warren asked. The answer perhaps was, one of the few things, both the candidates agreed on the whole debate, and we are paraphrasing here – “Yes, evil exist in the world and so, we must learn to deal with it (overcome with goodness?)”. The key take away for us from that answer was – goodness (or for that matter evil) is neither a republican thing nor a democrat thing, rather it is a universal thing – which brings up to our closing point - whether we like it or not, competition is a real thing in the business world, and so, taking a balanced/neutral stand with a goodness mindset (i.e. competitive mindset augmented by collaboration) is critical for us to create the win: win value propositions – in perfect alignment with the original intent of our forefathers, when they coined the word strategy!

PTV© on the Serendipity Road, Exploring the Unexpected?

Courtesy:Google's images further customized to suit our article

With us, already have covered the Power through Collaboration (PtC©) driven Portfolio-Thread View (PTV© with its EPP©, CPP© & PIP© frameworks) in detail - within the last few weeks, we conducted an informal survey among few strategy practitioners, with a simple question – “What is the single most important criterion they use to select the strategic view to solve their strategic problems?” While we received variety of answers – the single most common and consistent thread, we found across all the answers was – “the ability to come up with a proprietary and profitable insight, much ahead of the competitors”. Although this answer might sound like a no-brainer on the surface, beneath it, it is a three part answer -

• The structure part of the view (with its set of frameworks, tools, techniques and templates) -must be flexible enough to be customized, depending upon the business situation.

• The strategic insight development process part of the view- must yield proprietary insights, quickly much ahead of the competitors.

• The strategic execution/measurement part of the view -must be able to monetize those proprietary insights within a time period.

It all comes down to CONNECTING THE DOTS!

As we further analyzed these three answers – we recognized a rhyming pattern emerging with the following key words – flexible, customizable, proprietary, quickly and monetizable. As we further synthesized the “spirit and essence” of these five words in one phrase – it all came down to “CONNECTING THE DOTS”. Simply put, “the view that helps strategists TO CONNECT THE DOTS is the winning view.

While this “connecting the dots” process might sound like a simple slogan on the surface, in reality – it is one of the most challenging tasks to do – and so, we as strategists, not only need to be equipped with a flexible view (i.e. structure part with its frameworks/tools/templates/techniques), but also, need to be talented enough to facilitate that “connecting the dots” process – for us to reap its benefit 100%. Put another way, the structure and strategy part of the view must work harmoniously together with a “doing both” mindset, for strategists to excel at this “CONNECTING THE DOTS” process!

PTV© on the Serendipity Road!

The next pragmatic question is - what does it really mean to “connect the dots” within a strategic planning scenario? As I was thinking about the best way to answer this question – “SERENDIPITY”, one of the most popular words in the English language, coined by the Linguistics scholar Horace Walpole (based on an Arabian poetry) popped up in my head - and so, we started our inquisitive literary journey in to the Middle Eastern poetry world, to learn more about this word!

The word Serendipity, although has been voted as one of the most popular words in the English language, linguistics scholars, until today, cannot absolutely define what this word really means!Part of the reason being is that, this word apparently depicts the intuitive process of “exploring and/or discovering orderly things from unexpected places (which is filled with disorderly things), especially when one is in not in serious quest of". As I started thinking more about this definition, I was struck with a light bulb moment- PTV©, like Serendipity, is also the process of discovering ORDERLY things from DISORDERLY - by just connecting the dots (or glues) existing within the business realities.

In other words, it is like a sculptor making an art out of the rock – and, all that the sculptor is doing is - just chiseling away the unwanted edges of the rock to give life to an “already existing art” that just happen to be buried inside the rock. Put another way, different variations of the orderly strategy are already buried inside the disorderly rock called the organization, and all that the sculptor is doing is just chiseling away the unwanted edges to give life to the already existing strategic path. Simply put, depending upon what edges the strategist chisels away, the rock turns in to that appropriate strategic path - that is already buried inside the large rock that is filled with disorderly paths – which by the way, was the primary driver, that made us to come up with PTV© - to help strategists to intuitively identify those winning paths!

Three Princess Story comes to life on the Serendipity Road!

As it turns out, the story behind this word has been told in the form of a poetry by Firdausi's Shahnameh in the year 1010, as part of his fairy tale The Three Princes of Serendipity – which is based upon the life of Persian King Bahram V, who ruled the Sassanid Empire. The poetic story goes like this (below) and as pictorially represented in the picture on the top of the page.

One fine day, three princes from a region called Serendip (Scholars believe it is a region from ancient Asia between India, China and Sri Lanka) were sent by their father on a prolonged journey to acquire practical wisdom as part of their training. They wandered through the Arabian deserts and apparently lost all of their fortunes including their ability to get back home. While trying to find their way back home, they ended up meeting a camel driver. The camel driver apparently was searching for his lost camel and inquired about the camel to the three princes. Though the three princes never saw the camel, they tried to accurately describe it to him using their newly acquired wisdom - to get his favor (or resources to get back home).

They start narrating the characteristics of the camel –“It was blind in one eye, and did not have tooth, and was lame as well”. Now the camel driver’s interest level started rising – and the princes continued – “the camel was also carrying butter on one side and honey on the other, and was carrying a pregnant woman”. Being so impressed by their description (as it so accurately described his lost camel), the camel driver unfortunately started ACCUSING the princes of having stolen his camel, and took them to King Behram V. The king in his wisdom recognized the fact that the three princes merely assembled (or connected the dots) various insights based on their observations of events and evidences they saw, as they were walking in the serendipity road!

Here is the factual account of their creative wisdom or insight of connecting the dots and king’s ability to discern the facts –

They thought that the camel was blind in the right eye because the grass had been cropped only on the left side of the road. They also concluded that it was missing a tooth from the bits of chewed grass scattered across the desert side. In addition, its footprints seemed to indicate that the camel was lame as they saw only three foot prints and a dragging footprint. Also, ants were one side of the road and flies on the other – which made them to infer that the camel was carrying butter on the ant's side, and honey on other. Finally, the hand imprints on the ground (in one of the resting areas) made them to conclude that the camel must have been carrying the pregnant women as it was the practice in those days.

Interestingly by God’s providence, as these princes were being inquired by the King, another person ended up bringing the camel to king’s court with the same description, and so finally, King Bahram V, in his wisdom discerned the fact that the princes were innocent and granted them FAVOR- and honored their wisdom of CONNECTING THE DOTS!

So much impressed by this story, Horace Walpole wanted one word to describe this “CONNECTING THE DOTS” type of wisdom exhibited by the three princes - and ended up choosing the word, SERENDIPITY, based on the place where they hailed from – Serendip. What a great poetic insight!

Their edgy helping gesture- is nothing but, Purpose Innovation!

As we take a deeper look at this story – it is interesting to recognize the fact that these three princes indeed were charting multiple core paths (road ride, camel ride and/or chariot ride) including the edge option of helping the camel driver (to find his lost camel), as part of their “GET BACK HOME” goal. Out of those paths, the edge option of helping the driver, on the outset, although, looked like a distraction from their traditional core paths (i.e. finding their way back to go home to Serendip), later turned out to be the winning path. In other words, the edgy path of “HELPING THE CAMEL DRIVER” – although, got them in to trouble in the beginning (i.e. false accusation part), later turned out to be the path that won them the favor – which eventually helped them to perform many more adventures in the future as well!

As it turns out, the three princesses put one of their precious “cultural capital asset” called “collaboration and/or helping each other” skill to work and created their “out of the box” path, in collaboration with this camel driver who, by the way, happen to be from a place, totally outside of their network. Although it sounded like a risky path in the beginning, later turned out to be the most profitable path! The insight here is, while companies are well justified to chart their winning paths within the constraints of their four walls (or within their industry vertical boundaries), in some situations, they must also, go out of their industry networks and start collaborating with partners from those other industry networks to win in this 21st century– as we learn from this story - and as promoted by our Purpose innovation concept within our PTV.

Their edgy helping gesture and Ed Schein’s “helping culture” mindset!

Interestingly enough this “inter network collaboration” or the so called “cultural capital behavior” driver called “HELPING EACH OTHER” has been getting lot more press lately – as it seems to be the one of the important, emerging cultural capital assets, that is going to revolutionize the organizations of next decade – in the words of Ed Schein. Ed calls this as "the humble inquiry that equilibrates the relationship between the vulnerable person asking for help and the powerful helper" – which is further, amplified within one of my comments in the HBR Executive Education group discussion groups recently.

A newer internetwork collaboration driven insight - NESIGHT!

As I was further meditating this poetic story – we saw few other insights emerging, one after the other, in the form of a composite insight– and so, we thought of renaming this “uncommon wisdom/insight generating” process (or story) with a new terminology called NESIGHT – to refer to the intentional practice of creating composite insights, using “internetwork industry vertical cultural capital asset” or resource called “collaboration/helping each other”. How is it different from the regular insight generation process? Nesight generation process, apart from the typical self seeking insight development process, also, lets the “inter cultural industry vertical network” resources to germinate their insight generation part, before synthesizing them as a holistic nesight, just as in our lives, we sometimes, need to look beyond our close friends, colleagues, and relationships to the lesser rigid connections (or weaker ties) – as they might be the ones who bring the light in to our lives- as it happened in the life of these three princesses.

The Jewish version of the same story and Joseph, the first purpose innovator!

On a side note – there is also a Jewish version of the same story in the name of Rabbi Yochanan—the only difference being is that instead of three princesses the story revolves around two Jewish slaves and a master – but the rest of the story, by and large remains the same.Yet another resembling story in the biblical days is the story of Joseph – as he was also falsely accused in the beginning – and then later, not only, was vindicated of his false accusations, but also, was elevated because of his Nesight producing talent.

In our opinion, Joseph was one of the pioneers who put the “inter industry network collaboration” to work (perhaps in a rudimentary form) in biblical days –as he was the first one to come up with the “Harvest-Tax-Store-Consume” business model, much ahead of the famine (i.e. recession in today’s terminology) as opposed to the prevailing business model of that era (Harvest and Consume). The reason we call it as purpose model is that “tax and store” was the function of treasury department, that was managed by different organization of the kingdom, whereas harvest was managed by a different organization –and, this is where Joseph applied his nesight and combined/interweaved both of their functions in the form of a “inter organization business model”, thus, BREAKING AWAY the traditional organizational boundaries of those days for a noble social cause of “HELPING THE NEEDY”. The impact was that his business model (or PURPOSE MODEL in the words of PTV) saved all countries of the known world from starvation (i.e. recovery in today’s terminology) during the big famine.

Arjuna, the Archer - yet another CONNECTING THE DOTS story!

Yet another story from the epic of Mahabharata might be appropriate here as well – expounding, how an inquisitive, connecting the dots mindset, helps us to appreciate the key principle - “justice always prevails at the end”- very similar to how it happened in the life of these three princes and Joseph!

Arjuna, being the most favorite mentee of Guru Dronacharya, is being promised that his Guru would make him the best archer in the world. But then Ekalvaya, an equally skilled archer (but not fortunate enough to have a Guru like Drona) starts learning archery intuitively, by keeping a statue of Drona as his Guru. Over a period of time, Ekalavya starts performing better than Arjuna - and now Drona is faced with a dilemma – whether to keep his promise to Arjuna, or go by his consciousness and make Ekalavya to win. Drona, in the beginning chose to honor his promise and try to trick Ekalavya – asking his Thump as the Guru Daksha (offering or tuition fee), thus stopping him to perform archery forever.

At this point, the story gets interesting – although, it would appear as if Drona’s scheme would harm Ekalavya (for no fault of his own) – as the story unfolds, Drona, also asks Arjuna to defeat Drupad to pay for his Dakshina (perhaps to show fairness on his part). Now the defeated Drupad’s son who finally eliminates Drona, while Drona himself was also forced to kill Arjun's son, in the war – proving the point that the connection of seemingly unrelated dots within different parts of the story, at the end proves the point that JUSTICE ALWAYS PREVAILS at the end – as it happened in the life of three princes and Joseph.

Conclusion - PTV is all about CONNECTING THE DOTS!

Finally, in closing, if we could further synthesize the nesights from these three stories in one sentence - PTV© like Serendipity, also is the process of discovering ORDERLY things from DISORDERLY - just by connecting the dots (or glues) existing within the business realities – very much like, how the three princesses connected the dots within the Serendipity road, where the camel was lost. Yet another nesight, we garner from these stories is that we don’t reach Serendip, by plotting just one path - rather, we have to set out multiple paths in good faith and lose our bearings serendipitously- as echoed in the words of Warren Buffett –“We're prepared. Our elephant gun has been loaded, and my trigger finger is itchy" – and rightfully so, feel the same, based on the lessons learned from these stories and the words of Warren Buffett!

PTV© in Action - Tapping those untapped growth opportunities using an Experience Pool Portfolio (EPP) Framework

Our last week’s article definitely has created some buzz within the blogosphere– as we received quite a few follow-up questions (both by formal and informal means) from our readers – especially asking us to propose additional measures (on top of the CET index), to effectively gauge this customer centric vs. vision centric innovation dilemma. While we agree that the optimal number of additional measures would definitely help us in solving this dilemma effectively, it is important to highlight the fact, that too many measures, at times, could also lead us to faulty, out-of-context conclusions. With that said- if at all, we need to add any more measures, it would be in the area of measuring the nebulous emotional/ emerging experience expectations of the consumers - as this is one area, the traditional quantitative analytics fall short – partly because of the fact this space is filled with too many opposites.

Having said that, we quickly realized the fact that this dilemma, in a way, is also interconnected to another macro level dilemma within our Portfolio-Thread View (PTV©) called “Pull vs. Push value chain” as well. As it turns out, customer centric innovations, by and large are driven by the push (supply) value chain models, whereas, the vision centric innovations (or the glorified customer centric innovations) are driven by the pull (demand) value chain models – which made us to step back and solve these two macro level dilemmas together (i.e., CE vs. VE & Pull vs. Push) in a holistic manner within the larger PTV© context (with its six macro level dilemmas that were identified within our earlier PTV© blog). This holistic mindset, along with our “causal chain based opposing forces analysis” not only helped us to create few more additional measures (as identified in the picture at the top of the page), but also, resulted in the following value-add INSIGHT –

• While the push (or supply) side of the value chain has been continuously optimized by corporations for over 10+ years, the pull (or demand) side has been often overlooked– and so, bulk of the untapped (or hidden) growth opportunities are being buried deep within the pull side of the value chain only.

What do we mean by that? To better understand and comprehend this insight, let us step back and understand the foundational underpinnings of our “value conservation principle based PTV© view” using an inspirational analogy (if you allow me, let me, take a digression for a minute - and I promise you, that I will come back quickly to the key point of our article…)

• Imagine for a moment … A Poet was about to step out of his home for his inspirational walk in to the nature’s trail -like most poets of yester years like Wordsworth's of the world, did! As the Poet started opening the door, the whistling/whispering sound of the wind started welcoming him with its wonderful rhythm – which made him compelled to start a friendly conversation with the wind - “What’s your name?” The Poet asked. The Wind apparently started talking back “My name is love, peace, joy, patience, kindness, etc (all the emotional fruits/energy types!).” – the Poet was so captivated by the answer, and so, started asking his next question– “Where were you then yesterday this time?”. The intelligent wind quipped – “I was in your nostrils my friend, didn’t you notice me?”- Hearing this punch line back, the Poet’s interest level started going up again -and asked another follow-up question- “Where were you then, the day before?” The wind started imagining one step ahead of the Poet, and gently whispered back – “I was in between the zigzag lines of those Pampoo trees in your backyard producing those wonderful lullabies, my dear Poet”. Now the poet’s interest level started reaching newer heights and asked –“how about the day before that?” The wind apparently started answering back with a musical twist –“Guess what, my friend… I can run over 100 miles an hour, and so, with me being everywhere, anytime, believe it or not, I was flowing through those wonderful Krishna style flutes – that were being played within London’s symphonic orchestra!” Now the Poet started recognizing the fact that the wind was trying to act smart, and so, thought of asking a non-answerable question, thinking that it would end the conversation – “how about zillion years ago?. The wind quietly said – “don’t you know my friend – I was the one who was breathed by your creator in to your fore father’s (Adam’s) nostril to give him (and you) the life you are all treasuring now”. After hearing this insightful answer, the Poet got so humbled and started thanking God for His wonderful creation of nature and the wonderful inspirations that come along with it!”

Granted, it is an imaginative story – but the added inspiration within our context here is – like the wind energy, business value also revolves around our PTV© conservation cycle (within the four walls of the BSC perspectives along with its six dilemmas) as I had alluded in the picture of one of our earlier blogs (http://strategywithapurpose.blogspot.com/2011/01/portfolio-thread-view-ptv-in-action.html), and to be little more precise,

• As we can visually see in the PTV© cyclical picture, the intangible human intellectual capital energy (like the wind energy, in the form of capabilities) within the “Growth/Learning” perspective, first transforms itself in to a tangible asset value (in the form of P&S’s) within the “Value Chain” perspective – and then, those tangible assets gets interchanged with the “need state based experience pools” within the “Customer” perspective (creating the incremental value or cash-flow from outside growth opportunity sources) – which finally transforms itself in to the shareholder value in the “Financial” perspective – which again gets re-invested in the form of human intellectual capital energy (or capital/capabilities) – and the PTV© value conservation cycle keeps moving.

The key message here is that VALUE gets either increased (using value accelerators in the form of positive cash flow generating growth opportunities from an external source) or decreased (using value deaccelerators in the form of negative cash flows or bad business decisions) within the PTV© conservation cycle – very much like how PHYSICAL ENERGY gets accelerated/deaccelerated (from external energy sources) as part of the energy (or wind energy) transformation process. In other words, if we had to summarize - the single most important challenge facing corporations today, in our opinion is -

• IDENTIFYING, GUARDING and RESURRECTING (The IGR Challenge) those hidden value accelerators that are being buried deep within the pull side of the value chain in the form of a positive cash flow (i.e. value) generating growth opportunities.

This IGR challenge not only made us to start our gold rush journey of searching for those hidden treasures (sounds like the gold rush of the 19th century?) – but also, resulted in the following hypothesis -

• These “right to win” type hidden growth opportunities, happen to exist more on the pull side of the value chain – because, bulk of the unmet emotional/emerging consumer experiences are buried within the hearts and minds of the high-spend creative customers/consumers.

This does not mean that we need to ignore the push side altogether (which is more of functional or baseline experience focused) - rather, we need to balance both (i.e. pull and push value chains) to bring this “right to win” hypothesis to life. With that said, the key question that needs to be solved within this hypothesis is -

• What are those untapped, unmet, need state, based experience moments of your most profitable customers/consumers -and how fast you can, not only tap them, but also can fill those experience gaps with your P&S’s (or business models)much before your competitors could?

As we started answering this question– we quickly realized that we need to first re frame this untapped growth opportunity space using a “pull value chain” based market segmentation approach – given the fact traditional “push value chain” based demographic and/or behavior based market segmentation approaches, that worked well to quantify the traditional consumer segments, do not seem to work very well, to quantify the “pull value chain” based emotional/emerging experience moments. Part of the reason being is that –the traditional demographic/behavior based segmentation approaches are based on the rear-view mirror type historical data and so, it does not work very well in quantifying these futuristic emotional/emerging experience moments. Granted, the historical data, definitely is useful in identifying the unmet functional (or already fulfilled) experiences – however, in our opinion, it does not work well for quantifying the emotional/emerging experiences - and so it is time to try a different approach – called the “Pull-Push balanced Experience Pool Portfolio (hence forth called as EPP Framework)”.

Under this EPP framework, the traditional products and services (P&S’s) are redefined as Experience Enhancers - to better identify these untapped emotional/ emerging expectations in the form of experience pools (EP) and the corresponding unmet need-states (NS). Experience Pools are the groups of consumers that are grouped based on the futuristic emerging/emotional experience expectations of their needs (i.e. what part), including the rationale behind the decisions they make to meet those needs (i.e. why part), and the potential growth opportunities ( i.e. how part of discerning the growth rate variations within those groups). For those of us who have come from the data intensive analytics background – I perhaps could provide an OOS analogy to explain the differences between the traditional Market Segments and Experience Pools – it is the same difference between “Entities/ Tables” within Relational Schema vs. “Objects” within Object Oriented Schema(OOS). Along the similar lines, Need-States are the distinct set of “usage occasions” depicting how the choices made by the Experience Pools change depending upon the situation or usage occasions.

Once the experience pools and need-states are mapped as a matrix (5x5 matrix as identified in the picture at the top of the page), it helps us to perform the experience gap analysis to accurately size these “experience gap opportunities” in terms of dollars and volumes. Granted that these experience pools and the unmet need states vary from category to category – however, our analysis has shown that most of these macro experience pools and need states identified in our 5x5 matrix are common across most consumer focused P&S categories (whether it be consumer electronics experiences, content/video experiences, F&B experiences or non-durable experiences), as there is a need to solve/gauge these emerging unmet experience needs of the creative/high-spend consumers within all of these sectors, regardless of a specific category. However, please note that these experience pools and need states may have to be refined, should we get an opportunity work on an engagement for a client firm to identify the experience pools for a specific category. For the purposes of this blog, we strongly believe that our EPP framework (along with its 10 component level analysis sub-frameworks) - definitely help us to answer our hypothesis question with clarity, certainty and speed as identified in the picture at the top of the page

1. Experience pool (EP) analysis - arriving at the Experience Pools addressing the nebulous emotional/merging experience expectations as identified in the 5x5 matrix at the top of the page.

2. Need state (NS) analysis - arriving at the occasion based need states driving those experience pools as identified in the 5x5 matrix at the top of the page.

3. EPNS Gap Analysis – econometric analysis to identify the experience gaps between current experiences offered by the current P&S’s within a category vs. the ideals expected up those creative high-spend consumers for each EPNS Pool. EPNS pool is the intersection bucket of EP and NS within the 5x5 matrix.

• Context sensitive EG metrics in % at Experience-Pool-Need-State (EPNS) pool level e.g. SURVEYED EXPERIENCE GAPS (SEG %)and DERIVED EXPERIENCE GAPS (DEG%) in the EG areas of – enjoyment, mood-fill, award-status, access, relevance, convenience, personalization, uniqueness, deal, good enough mindset, recreation, nutrition, flavor, texture, energy, trendiness, style etc or some combination of above as outlined in the picture at the top of the page.
• Context sensitive EG relative priority rankings at Experience-Pool-Need-State (EPNS) pool level e.g. SURVEYED EXPERIENCE GAPS (SEG #) and DERIVED EXPERIENCE GAPS (DEG #) of the above EG’s.
• Context sensitive weight factor for each EG metrics (%) and rankings (#) at Experience-Pool-Need-State (EPNS) pool level e.g. SURVEYED EXPERIENCE GAPS (SEG #) and DERIVED EXPERIENCE GAPS (DEG #) of the above EG’s.

4. EPC Gap Analysis – econometric analysis to identify the experience gaps between current experiences offered by the current P&S’s within a category vs. the ideals expected up those creative high-spend consumers for each EPC Pool level. EPC pool is the intersection bucket of EP and Channels within the 5x5 matrix, very similar to the above matrix, with the only difference of need-state being replaced by channels(Groceries, Drugs, Mass, online, mobile etc.)

• Context sensitive EG metrics in % at Experience Pool-Channel (EPC) levels e.g. SURVEYED EXPERIENCE GAPS (SEG %)and DERIVED EXPERIENCE GAPS (DEG%) in the areas of - physical/virtual feeling, ease of experience from home vs. making a trip , on my side, better deals, service on a touch of a dial/screen, same day vs. next day delivery, flavor, texture, energy, trendiness etc.
• Context sensitive EG relative priority rankings at Experience Pool-Channel (EPC) levels e.g. SURVEYED EXPERIENCE GAPS (SEG #) and DERIVED EXPERIENCE GAPS (DEG #) of the above EG’s.
• Context sensitive weight factor for EG metrics(%) and rankings(#) at Experience-Pool Channel (EPC) levels e.g. SURVEYED EXPERIENCE GAPS (SEG #) and DERIVED EXPERIENCE GAPS (DEG #) of the above EG’s.

5. EPNS and EPC pool based new opportunity analysis - mapping the ENS and EPC gap experiences to future P&S’s (in the form of line extensions and/or new product/business model innovations) in few more variations (i.e. permutations and combinations).

• EPNS/EPC with Decision Makers (Moms, Dads, Grand Parents)
• EPNS/EPC with Life stage (Family, Single, Senior Citizen Boomers etc)
• EPNS/EPC with Family Type (Small, Medium, Large)

6. EPNS & EPC pools mapping to tiered brand strategy (dual or triple brand positioning) based on these emerging/emotional gap opportunities.

7. EPNS & EPC pools mapping to tiered pricing strategy/framework based on the gap opportunities.

8. EPNS & EPC pools mapping to differentiation tier strategy based on these emerging/emotional gap opportunities.

9. EPNS and EPC based Profit Pool Analysis - Experience Fulfillment (EF) map wherein ENS and EC pools are mapped to current and gap opportunities in the form of revenue, volume and profits.

10. Final recommendation with an action plan/execution focused roadmap.

As it turns out, solving these macro dilemmas within the larger context of our PTV© view, in our opinion, has definitely paid off, in the form of two synthesis based “doing both” solution frameworks called Experience Pool Portfolio (EPP) and Purpose innovation Portfolio (PIP) – respectively addressing the challenges posed by these macro level dilemmas. At the same, we would like to highlight the fact that, in the real world within large corporations, there exists always a tension between the opposite ends of these dilemmas – and so– as leaders, we have a greater responsibility of resolving these tensions, on a proactive, timely manner using emerging collaboration techniques like Power Through Collaboration (PtC©) framework promoted by experts like Dr. Steve Willis. At the end of the day, executing these collaboration driven strategic actions on a timely manner, much before the competitors, is what going to create the incremental value for shareholders.

In a way, we can also call our PTV© as a Reset Enabling View (REV©) as it revisits/resets some of the foundational assumptions of the other dominant strategic views of recent years (and derives its best features from them as well) and help organizations to go back to their drawing board with a reset/refresh mindset – and so, in our opinion, PTV© is one of the best views to develop both near and longer term reset/refresh strategies (e.g. Annual Plan and 2020 strategic plan), especially for corporations within those industries (Consumer Goods, Consumer Electronics/Media/Telecom and Retail industries to be specific) that are trying to reset their businesses to better align with the challenges and opportunities of the next decade, as identified in one of the recent McKinsey’s surveys.

Is Strategy the Salt of the Business?

With our “so that” strategy - called purpose innovation- receiving some positive reviews in the last few days, one of our fellow bloggers came up with a yet another “so what” question – i.e. “What if, our competitors also come up with a similar “so that” strategy? We agree that it is valid question - as most corporations these days invariably try to emulate the successful strategies of competitors, with a hope to reap the benefits of the second mover advantage. The question however, is how do we devise a holistic, yet well guarded strategy framework - that makes it difficult, or at a minimum prevents them from encroaching in to our first mover advantage. While no one can guarantee a 100% bullet proof strategy framework- ours, perhaps comes close to it, given the fact, it is being derived, not only from our unique purpose driven strengths/core competencies, but also, from our weaknesses - that are then balanced using nature’s principle of “balancing opposites”.

As it turns out – our strategy framework is built using our earlier “so that” strategy (i.e. purpose innovation) as the cornerstone – that is further augmented by three of its sister strategies - knitted together by PURPOSE in the middle balancing them using the “forces of attraction” -as outlined in the picture on the top of the page. Sounds too abstract, isn’t’ it? Well… as usual, we searched scriptures and few other sites for an appropriate metaphor to explain it – and the SALT metaphor fitted the bill this time, and so, salt is the emcee today for our additional inspiration.

Rightfully so, James Beard proclaimed - Where would we be without salt? - And, I couldn’t agree more. Without salt, our taste buds indeed will become senseless – and equally so, the seasoning of the food, as such, will also become meaningless! With that said, it is also fair to ask ourselves - while we all enjoy the seasoning flavor of salt in our foods- not sure, how many of us have paid a closer attention to some of its other remarkable usages!

With “Saltiness” as its core feature, salt exhibits itself in four different usage dimensions depending upon the way it is being used. First and foremost - salt is the primary ingredient of food seasoning as echoed by James Beard. In addition, as a preservative, salt prevents the decay & degradation of food –and as a disinfectant, it prevents the body parts from becoming septic (and even heals some ailments)-and, finally, it also acts as a thawing agent melting the ice on the roads, thus helping us in our busy morning commutes. I am sure- if we inventory some more, there will be few more ancillary usages as well.

Interestingly enough - our 10-box strategy model (http://strategywithapurpose.blogspot.com/2010/07/where-eagles-dare-strategies-dare.html)
aligns perfectly with this salt metaphor - and rightfully so, our strategy framework is a logical extension of the 10 box strategy model – that is further enhanced by “PURPOSE” in the middle balancing the four profit strategy dimensions – using nature’s “forces of attraction” principle -as listed below (and on the picture on the top of the page).

• Differentiation strategies (e.g. our “so that” strategy called purpose innovation) to help us to stand apart in the market place leveraging our strengths and core competencies - equivalent to the seasoning dimension of salt (Offensive growth strategy).

• Prevention strategies to overcome/hide weaknesses with one’s strengths (and thereby preventing the onslaught from competitors) – which is equivalent to disinfectant dimension of salt (Defensive strategy).

• Exploitation strategies to exploit competitor’s weaknesses – equivalent to the “Thawing Agent” dimension of salt (Offensive growth strategy).

• Mitigation strategies (i.e. risk mitigation strategies) to reduce one’s vulnerability our weaknesses – equivalent to the preservative dimension of salt (Defensive strategy).

This all-inclusive, well guarded strategy framework - not only helps us to go on the offensive, but also helps us to defend ourselves from the offensive onslaught of the competitors. Yet another insightful part of this framework is the way, PURPOSE manifests itself in four profit strategy dimensions within the context of its seasons - very similar to- how salt, with its core feature of SALTINESS (symbolizing purpose) manifests itself in four different usage dimensions within the context of its seasons. As it turns out, salt with its core feature of saltiness - manifests in four usage dimensions simultaneously, within the context of its seasons-symbolizing the need for us also to “execute both” offensive (differentiation and exploitation) and defensive (prevention and mitigation) strategies simultaneously, as advised by Inder Sidhu and Roger Martin.

At the same time, it is equally important to highlight couple of seasonality insights we had covered in one of our earlier posts – a) balancing opposites does not necessarily mean assigning equal weight and b) seasonality also has other dimensions(place, money, markets etc.),apart from the primary dimension of time (http://strategywithapurpose.blogspot.com/2010/10/within-eagles-fine-nest-strategy-is-at.html). With that said, it is important to highlight yet another important seasonality insight – that, even a simple misstep of executing a wrong strategy within a wrong season at times could also cost us fortunes – given the fact profits do not flow equally to all players in all seasons. This is one of the reasons, that we might be better of assigning more weight factor for defensive strategies (than offensive strategies) especially in those markets where our competitors are very strong (which perhaps is their forte). In other words, choosing the right strategy mix (with the right weight factor for the four strategy buckets within the context of its seasons) is both an art and science, as there is no silver bullet for thriving in this highly competitive, yet ever changing business environment of 21st century.

As we further observe the characteristics of our strategy framework within the context of this salt metaphor – salt with its saltiness, not only, just seasons the food, but also, serves other needs( disinfectant, preservative and a thawing agent) by renewing/maintaining (i.e. “not losing” to be precise) its SALTINESS. Speaking of salt "not losing" its saltiness – let us not forget the fact that – if salt loses its saltiness, it cannot be made salty again. In other words, saltiness is what makes salt to perform all of its usage functions, and so, if it loses its saltiness- it is worth nothing. Similarly, if our strategy, for some reason loses its purpose, it is very difficult to regain the confidence in the minds of our stakeholders , and so, it is important, that corporations pay a closer attention to the process of continuously renewing (or maintaining) our purpose – to keep the four dimensional holistic profit strategy cycle moving – very much like how saltiness is constantly renewed (maintained) to continue its four dimensional salt usage cycle moving- as summarized in the poem below.

Oh, Salt of the Earth… Aren’t you the Strategy of the business also? With your,
Seasoning strength, you source the sustaining secret -for differentiation,
Thawing tactics, you tweet the tooling technique -for exploitation,
Disinfecting defense, you draft the deviation detour- for prevention,
Preserving power, you plant the precautionary prescription -for mitigation, yet, by
Renewing your “saltiness (purpose)”, you improvise our innovative iteration,
Oh, Salt of the business…Without you where will we be?