Creative Strategy: Using our minds hearts and guts to drive strategic innovation for a complex world
Strategy has always been the preferred playground for the brightest minds. In the last half century, millions of the best business school graduates all over the world were working their ranks up in the top strategy consultancies to apply the analytical frameworks from Porter’s five forces or value chain concept to BCG’s or McKinsey’s numerous 2×2 or 9-field matrix. Although it requires a lot of hard work and sound market knowledge to do this effectively, the process itself has not changed so much over time and is still quite straight forward: diagnosis of the strategic or operational problem to solve, identification and analysis of a couple of solution scenarios, and recommendations of which one to choose, including a detailed proposal to support its execution plan. Almost all large companies relied heavily on high premium consultancies who had developed the skills and methodologies to either save them from crisis or help them grow their organizations to the next level.
There is nothing wrong with this approach which has proved to be very efficient in times of relatively stable conditions, despite regular economic crises and fallbacks. However, with the emergence of global digital business opportunities and the inherent capacity of organizations to instantly measure customer feedback and reactions to changes in their offerings, a new class of leaders such as the founders of AirbnB Brian Chesky and Joe Gebbia and their homologues from Uber or Netflix to name but a few have changed the strategy paradigm of their companies fundamentally. Their strategy was basically not to have any, and instead try a multitude of new features and offerings, test them in the global digital market and analyze the feedback from these experiments with advanced data analytics. Obviously, customers weren’t telling them upfront what they wanted, but their capacity to interpret market feedback gave them the relevant insights to build great and desirable products.
This approach was broadly spread by global (digital) design agencies like IDEO, Frog and other Silicon Valley innovation practitioners. Their mantra was to create empathy with potential customers, understand unmet needs and pain points, develop rapid prototypes of new solutions to address them, test these solutions in the real market and interpret the reactions. If the feedback is positive, i.e. if people are actually buying the product or service and if growth rates are exponential at least in the early stages, then the solution will be rolled out. If not, they iterate and come up with an improved or entirely new version of the solution. This cycle is repeated as often as necessary, depending how deep the pockets are and how much time there is left. All this led to the rise of a whole set of new user-centric innovation approaches such as design thinking, lean start up, agile project management etc. all based on the famous principles of fail fast to fail better next time to succeed ultimately.
This new innovation paradigm brought us a long list of new services such as Uber, Netflix, Facebook or Amazon. But some innovation experts now believe that we approach the end of a cycle and that companies and organizations now face a new type of challenges that require new and more systemic approaches to drive sustainable innovation.
From a user-centric to a stakeholder-centric innovation approach
First of all, user-centric innovation is still a pretty much linear process, especially if applied by the same consultants having discovered design thinking to complement their increasingly outdated strategy frameworks with a new 5-step approach. If executed well and involving at least a couple of real designers in the process, this actually works quite well, especially in relation to basic incremental innovation challenges. But it is much more difficult when addressing the new breed of interconnected, multidimensional and complex challenges that many organizations are facing today. The vice-chair of the think tank on design innovation at Davos, Jens Martin Skibsted brings it to the point when he states that “as studies of successful innovations and creativity show, creating something new in our complex world is a chaotic, unpredictable, frustrating, and very, very hard process … most of the time, when it happens it’s the result of extraordinary efforts and visions of extremely open-minded and complementary profiles that know how to bring in their perspectives and are humble enough to work together efficiently.”
This implies that there is more to strategic innovation than focusing only on the users and their pain points. We need to go beyond what is visible and observable, we need to understand the cultural, economic and political contexts in which organizations, markets and clients are evolving as new opportunities emerge at the intersection of macro and micro trends. Focus on the user alone makes companies miss out on disruptive innovation opportunities because these often come from a profound understanding of the interconnections between a number of seemingly unlinked problems and stakeholders. For innovation to be truly disruptive, innovators are required to understand the interactions in a system view and need to generate benefits for many or all related stakeholders, not only the company and their customers. Google, for example, is a disruptive answer to two non-related problems: how to provide easy access to all information in the world? and how to efficiently advertise? The iPhone and Apple Store are a disruptive answer to two other problems: how to access to unlimited digital services everywhere? and how to leverage the power of the entire community of app developers to continually provide new services?
Focusing solely on the user means paying too much attention to the present instead of the future
Consider designing a food delivery system to address the need of employees in large corporations seeking an alternative to their company restaurant, but you totally miss out on the trend that more than 50% of the workforce will be freelancers in the US by 2025. How will the food delivery system need to be designed to factor in this macro trend? What new opportunities emerge in relation to the high rate of fluctuation of freelancers between organizations? How will this trend put the food delivery system at risk? Or consider designing a great new app for finding new clothes by identifying brands and products via a new recognition technology directly from your friends’ pictures on Instagram and forgetting that most of our digital interactions tomorrow might rely on vocal assistants rather than screens. How will this potential shift in technology use affect your business opportunity?
Those examples illustrate what is probably the main pitfall of typical user innovation approaches: they heavily rely on our current perception of the world and provide companies with a snapshot of user behaviors instead of the whole movie of how they evolve over time and in a given context. But by spending time focusing on what customer expectations are today, we miss out on grasping the dynamics behind them and how they will evolve over time, even in the near future.
Creative strategizing, a new approach to drive positive system innovation
There is no reason why we should oppose the ‘technology push’ paradigm materialized through Henry Ford’s famous quote of “if I had asked the customer, he would have wanted faster horses” and the user-centered ‘market pull’ paradigm represented by the wide-spread global innovation culture around the globe. There is no barrier to having the vision and leadership of creating new great products and services while at the same time trying to figure out if these will be adopted by the users living in their specific contexts and driven by their beliefs, cultures and responding to global trends and transformations.
We call the approach we have developed to help innovators do exactly that ‘Creative Strategy’. It is a rigorous and collaborative process that combines the analytical layers of the mind, the heart and the gut. It is as much about analyzing and understanding global trends as it is about diving into social and human science-based frameworks of imaginaries and future stories. It is about empathizing with our users by taking deep dives into their lives and going beyond what they declare to understand what they actually do and why. And it is about reflecting the learnings from different sources of knowledge and anticipation with a broad group of complementary profiles within and beyond the organization to create a better and shared understanding of the complex situations and new emerging opportunities.
By mixing rigorous analysis with the intuitions and experience of informed strategy and innovation practitioners we can enhance our analytical frameworks and create a new quality of strategic thinking. Making sense of the change that surrounds us cannot be done in isolation, we need to create space for better strategic conversations across the organization and accept spending much more time analyzing and discussing, to understand what makes sense to customers, to frame and reframe problems, develop and test solutions to address them, change our minds if necessary and keep iterating.
The secret lies in the mix of approaches of ‘upframing’ and ‘downframing’, i.e. zooming out to understand the macro trends driving our societies, communities and economies, and zooming in to understand what happens in your customers’ hands, heads and hearts. In our approach, we may spend some time interviewing customers and analyzing megatrends, but we will also spend a significant amount of time exchanging and discussing what we have collectively learned with your team, trying to interpret signals and create new insights by understanding the users’ deeper motivations and link them with what happens at a macro level and how it will evolve given our vision of the future.
One of the sense making mechanisms we use are scenarios which help us to create different plausible stories of the future and how these futures might come about. It helps us keep an open and agile mindset about what might happen and identify new innovation playgrounds.
A well-defined problem is more than halfway through the solution. This is why we are comfortable spending quite some time spotting the right problems to solve or opportunity areas to address and reframing them until we find a promising new angle to it. But once we have them, we must be very fast in prototyping and testing a number of different solutions to address them.
Strategy is finding the right innovation playground, while design is developing the perfect round-about which the kids will love. Strategy is a messy process involving analysis, empathy, intuition of multidisciplinary teams (foresight practitioners, human scientists, tech evangelists, analytics…) and design is a race to imagine as many concrete solutions as possible and test them with customers to keep only the best ones.
A case study in a French insurance company
The following case example focuses on a French insurance company that has gone through a process of creative strategizing as described in this article.
Our client asked us to help a cross-cutting team of board members and selected mid-level executives to identify new business opportunities on the basis of a multi-methods creative strategy process.
In this 4-month project the group was taken provided with 4 sources of diverse and complementary analytical and prospective input materials, both thought provoking and rich in novel insights about the business context the company was evolving in.
The exploratory studies involved the following methodological approaches:
- An ethnological approach to risk: 15 interviews were conducted to observe the behavior and understand the practices of users’ subject to risks
- A semiotic study exploring contemporary imaginaries related to risk: a study to understand risk attitudes through examples of popular and media culture
- A technology trends analysis with a focus on how these technologies could change the way products and services including insurance could be handled in the future: via specific inputs provided by a leading global observatory that monitors the new global digital uses
- A study exploring the topic of social innovation, entrepreneurship and new ways of working and how these trends might affect insurance companies: a panorama of social innovations and a meeting with 4 innovative social enterprises.
The inputs of each input stream were explored with the expert content providers through carefully designed learning and co-creation workshops with the project team. Each of these sessions was focused on co-learning, generating new insights, testing existing and developing new options and aligning around new emerging opportunity areas.
As a result of this 4-month creative strategy process, the group has developed 9 new potential value propositions covering a total of 31 high-potential business opportunities and a portfolio of 120 concrete ideas that will feed into the company’s current strategic plan and its 5-year long-term innovation efforts.