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Harnessing Good Ideas

Harnessing Good Ideas

Today' raw material of successful growth is good ideas, put to work as new services, products and business processes. But creating sustainable business growth is hard

Good ideas are a great driver of business success but can lose their momentum if not tied to a repeatable growth process

The search for growth, and finding better ways of doing things in general, is a fact of life for all successful businesses. After all, that's what their competition is up to. The alternative: staying the same and instead focusing on cost cutting and efficiency, may help during a downturn but in the end will lead to trouble.

Today' raw material of successful growth is good ideas, put to work as new services, products and business processes. But creating sustainable business growth is hard. Staying ahead of the competition even more difficult still. Once an idea is proven, easy access to market information means that competitors can copy that idea quickly - wherever they are.

Create superior value. Growth comes from offering something that customers want at a price more and more of them are willing to pay. In other words, putting yourself in a position where your products and services offer superior value to those on offer from your competitors.

There are two components that need to be in place before you can think abut offering superior customer value. First, some degree of focus is essential. An enterprise needs some sort of overarching strategy to set the direction for its development and to establish which markets are to be considered and how they are to be tackled.

Yet focus isn't enough. The challenge with all growth strategies is that there are a lot of unknowns once they start to be implemented. So the second piece of the superior customer value puzzle is the need to test and develop a growth strategy that's low in risk and cost. Enterprises must foster an approach that supports a series of strategic experiments within the strategic direction laid down, learning as it goes.

Experiment your way to growth. As naturalist Charles Darwin pointed out, fitting in with your environment is key to survival. And one way of ensuring that you fit is to change as your business conditions change - or better yet, to change yourself and so change the business environment for your competitors, who are then forced to respond to catch up.

The way to make these changes is through a series of iterative experiments: short-term, time bound projects with a clear set of success criteria and a process that prevents them from becoming runaways.

These iterative experiments act as an engine of growth in four ways. They allow business and IS managers to work closely together. They enable ideas to be gathered from a wide range of sources. They balance growth strategies. For example, a portfolio of different types of growth-oriented strategic experiments is needed to spread risk. And they bring in innovative ideas from outside the enterprise.

Gather ideas from a wide range of sources. Most managers often have ideas for growth strategies. The problem is that there's no process to gather these ideas. This can be fixed in two ways: informally through face-to-face discussion or suggestion boxes, or formally through structured events such as brainstorming sessions. A mix of the two is best to get a wider range of suggestions.

Involve customers: They can be a good source of new ideas. Suppliers can be useful, too, not only for their insights but also for their potential as partners. Learn where the enterprise stands relative to its competitors, and try to gain insights from people outside the industry to see what new ideas are shaking up other companies.

To create a culture of growth, people bringing ideas forward need to be recognized and rewarded.

Balance growth strategies. Gathering a wide range of ideas is vital, but they need to be balanced. That's where having a portfolio of growth strategies becomes important. The portfolio should have a number of strategic experiments, spread across the different types of growth strategies.

A portfolio of strategic experiments is also needed if the enterprise has more ambitious growth targets. Because growth is additive, by using several strategic experiments with smaller growth objectives there's the potential for bigger growth. Strategic experiments are low cost and low risk to the enterprise, so a number of them can be run in a relatively inexpensive portfolio.

This also lowers the risk of not delivering any growth, and it makes selecting and managing strategic experiments easier. The ability to create and run strategic experiments is a core competency of business growth.

Structure strategic experiments. Many managers assume that the problem is a lack of ideas. The reality is that companies have plenty of ideas in the minds of their employees, but employees lack the mechanisms to act on them. For a company to grow, a repeatable growth process is needed.

The process aims to provide a disciplined approach to business growth. Everyone in the enterprise should be aware of the process, how it works and how he or she can be involved.

Learning is at the heart of the process. And it should be clear that the main aim of the process is to allow the enterprise to quickly learn and adapt.

Screen experiments against business growth ­strategies. With luck, your enterprise will generate dozens of growth ideas. Clearly, the next step is to identify those worth pursuing. They will fall into one of three categories. The first consists of definite winners that demand immediate investment. The second comprises those ideas that can be eliminated quickly. However, it's the third category, the "maybes", that are the most important.

At this stage the growth idea will be only loosely defined. During screening the assessment is based on a loose business case, focusing on trends and non-quantitative measures. A simple checklist can help, but there are two main factors that decide whether a strategic experiment should be run on an idea: a clear link with the business strategy and a business sponsor.

It's the job of the steering group to make the choice. That group often comprises the CFO, a small number of senior business executives and the CIO.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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