Another approach to strategic planning is to develop an Innovation Thesis. The process to do so consists of seven steps utilizing 10 to 12 top executives within the business for a two day workshop. This must include all the top decision-makers across operations, finance, marketing, heads of business units, and the CEO.
The first step in the process is a Pre-Workshop. In a half-day preview workshop the company’s main business model is mapped. If the company has more than one business model several models are mapped and then convergence is done on the main business model the company uses. The point of the workshop is not to map business models on a product-by-product basis but rather to map the general approach the company takes in doing business in its core markets. Osterwalder’s “Business Model Canvas” as shown in the figure is used.
The second step is to Conduct Research. At the end of the workshop the executives are given copies of the Business Environment Canvas as shown in the Figure. They are then given 2 to 3 weeks to work with their teams to do the research necessary to be able to complete the categories on the “Business Environment Canvas”, e.g. key trends. They are also encouraged to make a first pass a completing the environment canvas with their teams.
Step three is a Workshop. After the research period, the team reconvenes and the key trends, market forces, industry forces and macroeconomic forces impacting the Corporation’s business model are collaboratively mapped.
The fourth step is a Review. After mapping the business environment the executives review their initial business model in terms of how adaptive it is to the business environment they have mapped. The point of the task is to identify key gaps and potential problem areas. The identified gaps articulated and captured in a separate document.
The fifth step is Laying Out Options. After identifying gaps, the executives consider how these gaps may be dealt with. The goal of this exercise is to create innovation options. These can range from changes to their current business model, introducing new products into adjacent markets, and coming up with transformational ideas. The point is not for the executives to come up with specific product or service ideas. Instead their role is to identify the types of ideas, markets, industries and arenas in which they would like innovation to happen. In other words they will be defining how they expect innovation to help with the gaps and challenges identified in step four.
Step six is to Develop a Thesis. After deciding how to use innovation to help with closing the gaps in the Corporation’s portfolio, the group of executives works on their innovation thesis. First they complete the “Innovation Thesis Worksheet” as shown in the figure. After reviewing examples of investment theses from various venture capital firms, the executives work on their thesis making sure to provide a clear strategic narrative about how the world is changing, how they expect these innovation to benefit her take advantage of these changes, and specifics about the types of ideas and teams they will invest in. Also articulated is what the Corporation will not invest in. This Thesis Statement becomes the guiding document that the corporation’s technical and business development groups can use for guidance.
Step seven is to Iterate. After the team completes the first drafts of the innovation thesis, the executives then share the thesis with their teams, get feedback and iterate on the thesis. The final versions of the thesis are then shared with the rest of the company as a “Thesis Statement”. Product ideation then takes place in the arenas, ideas, technologies, markets, business models, and teams areas.
This is a much higher level plan than the previous strategic planning processes create. On the other hand its benefit is it builds an innovation ecosystem. This helps protect management from disruptive innovation emerging from the low-end or emerging markets. The company must resist at all costs it’s a natural reaction to walkway from apparent low profit margins and revenues. An established company should as much as possible try and disrupt itself.
When the projects are generated from the Thesis Statement, a good way to map them is shown in the “Company 10 Year Road Map” figure. In this particular Figure, Facebook started by building an ecosystem, that led to developing products, and finally into investing in technologies that it needed to support its growth. Other corporations start with technologies, then go into products and then finally build ecosystems. There is not one right way to evolve, but the pathway should be visible and understood by all so collaborative discussions and improvements to the plans can be made.