Your ability to innovate depends on your ability to conceive of new strategic options, which in turn is a function of the number and variety of stories you recognize. When you face a challenge and ask, “What does Porter’s Five Forces tell me to do?” or “What does Clayton Christensen’s Disruptive Innovation model dictate?” you end up defaulting to what others – your competitors, your peers – would do as well. Instead, use our IDEAS framework – specifically the “Expand” step – as the key to getting out of that rut.
As fall descends upon us and we plan our winter ski holiday, I remember the house we rented a few years ago on the edge of a frozen lake, nestled in pine trees, 10 minutes from ski slopes. Now, I not only remember the imagery but actually the security code of the property.
I remember it now because at the time over many weekends I struggled to do so. Then, one Saturday morning, while stepping into our cars on our way to the slopes, I reminded a friend visiting us of the house’s garage door code: “Twelve thirty-four.”
He looked at me oddly, paused, and said, “You mean 1-2-3-4?”
It hit me then. I had been trying to remember “twelve thirty-four,” not realizing that the code was as simple as “1-2-3-4.”
Finding the strategic narrative
At the choice between these two ways of remembering lies the key to how great strategists see disruptive options. Do you think “twelve thirty-four” or, like master chess players and other great strategists, “1-2-3-4”?
You see, the strategic choices we make every day are determined by the “strategic narratives” we tell ourselves. We face a challenge and we don’t ask, “What does Porter’s Five Forces tell me to think about?” or “What does Clayton Christensen’s Disruptive Innovation model tell me to do?” No, we ask ourselves, “What does this remind me of?”
The challenge you face today may remind you of a problem you faced in the past, and if what you did in the past worked, you will simply want to try the same strategy again.
EXPAND to discover a breakthrough idea
In our IDEAS process, the third step, E (for Expand), applies this insight to help you develop a greater number of more diverse strategic options.
For my most recent book, Outthink the Competition, I got a chance to interview Alexandra Kosteniuk, a Russian chess grandmaster and Women’s World Chess Champion, and get some insight into how she can see the winning strategic move in a chess game when her opponent cannot. What she describes fits perfectly with the research into how great chess players win.
She looks at the board, and while I am thinking in terms of “things” – pawns and knights – she is thinking in terms of “sequences.” She sees the board and actually recognizes the game – she has played this game before, and so she knows the winning move.
In other words, I try to juggle multiple things in my head – “twelve” and “thirty-four” – while she just recognizes one story – “1-2-3-4” – and so is able to see with ease that the next move is “5.”
Picking the right patterns
Your ability to see new strategic options is a function of the number and variety of stories you recognize. Indeed, it has been shown that grandmaster chess players recognize 10 times as many stories (games) as experts.
What strategic narratives are you and your team using to see new options that will surprise your competition and lead you to breakthrough solutions?
We believe there are 36 fundamental strategic patterns, which we will explain in detail in an upcoming article. The key to finding effective strategies depends on your ability to pick the right patterns for your situation.
Now, increasingly we are coming across companies stuck in commoditized situations looking to increase margins. You know the situation: your core service or product has been around a while. The competition has copied your brilliance. You are starting to look like everyone else. So what should you do?
Three narratives reveal new solutions
Our research into companies that have broken out of the commoditization trap reveals three patterns that are particularly helpful.
Try these on for yourself as well. Write them down on a card, and every time you are about to make a decision today, pull out the card and see what new solutions these narratives reveal:
- What “brick” can you give away? The story goes like this: You give up something of relatively little value to you and exchange it with your partner/customer for loyalty. This is like HP selling printers for low profit in order to make money selling ink cartridges.
- Who else benefits if you win? The story goes like this: You face a tough situation but you find an unexpected ally who benefits by you winning. You partner with that person and they help you succeed. This is like Aflac becoming one of the leading insurance firms in Japan by partnering with the government, decades ago, to provide cancer insurance at the height of what many feared was a cancer epidemic.
- To where can you move the action? The story goes like this: You are in one business but competition enters, so you create a new related business and move your profits into this new business. This is like TUI (formerly Thomson Travel) in the U.K., which people know as a travel retail business, but that actually pools its profit through a charter airline business.
Let me know how these three narratives work for you. I’m sure they will reveal a trove of new ideas and will also expand your possibilities.
If you like what you read here, take a look at our Master Business Course, called “Outthink Your Competition With a 5-Step Process”.
It’s a self-paced online experience that walks students, step-by-step, through the entire IDEAS framework, Including EXPAND, which I just discussed above. The course is a perfect way to introduce new people to Outthinker or provide a review for those who are already familiar with the process and its benefits.
Because this is a new course, we are giving my community an exclusive special offer: 10% off your second registration and up to 30% off for additional colleagues who register for the course. This is perfect for small teams who want to achieve hyper growth as you begin to plan for 2019. Click here to find out more about the course and to enroll.
As always, I love to hear from you. If you have any questions or comments, feel reach out via email.
Best Regards,
Kaihan
