2010 ECONOMIC EMPOWERMENT SERIES

MOVING BEYOND THE START UP: TAKING BUSINESS TO THE NEXT LEVEL

Part 1: Clear Strategies for Success

Saturday, April 24, 2010

2010 ECONOMIC EMPOWERMENT SERIESMOVING BEYOND THE START UP: TAKING BUSINESS TO THE NEXT LEVEL

Part 1: Clear Strategies for Success

Dwight CalbertPresident

Aphelion Consulting LLC

2010 ECONOMIC EMPOWERMENT SERIESMOVING BEYOND THE START UP: TAKING BUSINESS TO THE NEXT LEVEL

Part 1: Clear Strategies for Success

Workshop 1:Strategic Aspirations

Product/Market Life-Cycle

Launch Growth Maturity Saturation Decline

Time

Sal

es

1) Challenges of Growth

75% of growth initiatives fail

Less than 12% of publicly traded companies achievedouble-digit growth over a 10 year period

29% of managers in major corporation feel confident that they can reach their organic growth target

90% of executives rate innovation as a strategic priority in relation to growth;

over half are dissatisfied with their ROI on innovation

The Relative

ValueGrowth

OrganicGrowth

vs.

Margin Improvements

Exploration

Exploitationvs.

CreativeDestruction

Cannibalism

Dilute the Brand

Inconsistent Strategic Intent

Proactive Exit StrategiesReinvigorates Growth

The #1 Strategic Problem for Companies

GROWTHGROWTHGROWTHGROWTH

2) DefineStrategy

How do you strategically think about growth?

Strategy is:

1) an overarching plan that defines how you will attain & evolve a unique, differentiated

competitive position that provides a clear advantage

2) a guideline for the focused use of resources to exploit opportunity and profit

Strategy Defined

Differentiated

Advantage

Sustainable

Greatness

Components of Strategic Aspiration

from Blue Ocean Strategy

“These ideas are not for those whose ambition in life

is to get by or merely to survive”

PhilosophicalTenet

“An organization can outperform rivals only if it can establish a difference that

it can preserve”

Successful Strategy requiresVision, Commitment, Focus, Bold Leadership

& Decisive Action

“Strategy is a Paradox”Commitment to an Unknown Future

3) Strategic Thinking Tenets

Foundations of Strategic Thinking

Nothing is True -Everything is Permitted

ChallengeConventional Wisdom

Framing Science

BIG PICTURE

Long-Term Perspective

High Altitude Holistic View

Signaling

The strategic use of misdirection toconfuse the competition

Carefully manage signalingeffort because it gives notice

of innovation growth initiatives

4) ExampleGrowth Strategy

Innovation SpurredPath to Growth Model

Adapted from “Incubating Innovation”Journal of Business Strategy

by Hickman & Raia (200)Strategic Scope

Degree of Change & Innovation

Limited

Deg

ree

of C

han

ge &

Innova

tion

Unlimited

OrganizationalCapabilities

Existing

New

Develop NewCapabilities

CreateRevolutionary

Change

Improve CoreBusinesses

ExploitStrategic

Advantages

S3 4

1 2

Exploration

Exploitation

Illustrative Growth Strategy

1Increased Capacity for Reinvestment

Capacity & Willingness to Change

2Identify & Shape New Markets

Innovation

3Reduce Missed Opportunity Cost

De-Risking Opportunities

Product/Market Life-Cycle

Launch Growth Maturity Saturation Decline

Time

Sal

es

1Increased Capacity for Reinvestment

Capacity & Willingness to Change

Growth Strategy

COMPETE on Your Ability to Generate

Excess Cash

Innovation is a core strain in theDNA of Growth

AssumptionsKnowledge

Cost

Cost

1) Change the ratio to optimize cost savings & productivity gains

2) Create organizational knowledge & capabilities that are valuable intangible assets

10% Savings = $1 Million in Growth

A Key Source of Differentiation:

What are the capabilities that drive competitive advantage given our strategic focus?

Within those capabilities what are the positions that really make a difference?

Who are the people in those positions & what are their skill-sets?

Are the best people & skills in the most important strategic roles?

Growth Strategy

Building the Organizational CapabilityCapacity & Willingness to Change

1a

Compete onSpeed &Agility &

Time

Time

Org

aniz

atio

n Si

ze

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6

Creativity Direction Delegation Co-ordination Collaboration Alliance

LeadershipCrisis

AutonomyCrisis

ControlCrisis

Red TapeCrisis

GrowthCrisis

Organizational Growth Phase Model

UPS Marketing Tag-line

“Moving @ the Speed of Business”

UPS Marketing Tag-line

“Moving @ the Speed of Business”

DecisionMaking Window

Risk

Short Long

Low

High

FundamentalMarketChanges

DecisionMaking Window

Risk

Short Long

Low

High

Past Competitive Environment

Today’s Competitive Environment

Product/Market Life-Cycle

Launch Growth Maturity Saturation Decline

Time

Sal

es

2Identify & Shape New Markets

Innovation

Growth Strategy

COMPETE on Vision

“People who get on in this world get up and look for circumstances they want;

if they don’t find them, they create them”

~ George Bernard Shaw

Low Hanging Fruit

Low Hanging Fruit

Adjacencies

Franchising

Channel Expansion

Geographic Expansion

Growth with Partnerships & Alliances

Growth through Mergers & Acquisitions

Money In

Money Out

Growth RequiresInvestment

Converting Ideas

Innovation Portfolio

Innovation PortfolioPortfolio Dimensions

Timeframe

Exploration vs. Exploitation

Evolutionary vs. Revolutionary

External & Globally Sourced

Concept Diversification

Strategic Diversification

Master the Art of Creative Destruction

Unorthodox Experiments

Growth Strategy

Building the Organizational CapabilityInnovation

2a

COMPETE on Ideas

“from possibility to profit”

Innovation Defined

the art of converting new ideas, discoveries or a vision into societal progress or commercial success

faster and more effectively than competitors who have equal access to

knowledge and technology

PhilosophicalTenet

“Technological breakthroughs and new products are not enough to generate

growth from innovation”

Areas of Innovation

Creativity

~ how to discover more and better ideas that lead

to innovation

~ creativity & innovation in organizational teams

Creation Engines

StrategicValue

CreatingPotential

{

Challenge

Objective

Opportunity

Product Development

~ how to create an open-sourced, collaborative system of development

~ creating & coordinating synergies across the

global community

Innovation Integrators

Process / Capability

~ how to create the core capability of innovation in

all company activities

~ performance metrics, processes, systems &

human capabilities

Innovation Infrastructure

Strategic

~ how to create strategic innovations that drives adaptive competitive

advantage

~ exploiting environmental change to shape and create new markets

Strategic Renewal

3Reduce Missed Opportunity Cost

De-Risking Opportunities

Growth Strategy

Always Compete for New Opportunities

Growth Strategy

Building the Organizational CapabilityDe-Risking Opportunities

3a

Compete on ourDecision Making Ability

Risk is an Inherent Part of Innovation

& Growth

Remove the perception of risk (career risk) from the innovation process

Different is not Deficient

2010 ECONOMIC EMPOWERMENT SERIESMOVING BEYOND THE START UP: TAKING BUSINESS TO THE NEXT LEVEL

Part 1: Clear Strategies for Success

Thank You

Dwight CalbertPresident

Aphelion Consulting LLC

Infinitely Innovative

(650) 641-2095 Office(866) 202-1086 Toll-Free

(312) 498-7741 Cell

www.Aphelion-Consulting.com