Friday's Growth
Inspiration
The discussions about what innovation culture we want, often distinguish between a so-called culture of exploration, where discovery and testing of new ideas take place, pervasively across an organisation, and more traditional culture of, for a lack of a better word, exploitation. A culture that gave rise to scientific management principles, to continuous improvement, and, over many decades, fuelled the growth and proliferation of existing businesses. In almost every organisation, we see a mix of the two, and the ‘right mix’ is often debated.
However, what is far less spoken about is the area in which the two overlaps. That is a real issue, as exploration of new ideas and business ventures does not seamlessly translate into exploitation, and the costs of business ventures failing to successfully transfer from the Explore to the Exploit portfolio can be extraordinary.
A useful framework to understand this transition is provided by Alex Osterwalder and team at Strategyzer. Known for their work on the Business Model Canvas, the Business Model Portfolio provides another, rather useful visual canvas, to map this important transition and become familiar with its many perils.
Here are a few lessons we have learned in bringing Exploration and Exploitation closer together and successfully helping organisations navigate this transition from a validated business concept to a scalable opportunity:
- Cultivate new mindsets – the biggest challenge we find in building a balanced portfolio, where an organisation works simultaneously at exploiting and exploring opportunities, is not rooted in technology or even in making organisational changes – it falls squarely into leadership and the mindsets we are able to adopt, as we connect the data from validating the desirability, viability and feasibility of new opportunities, into full-scale commercialization.
No matter how compelling the data may be or how clear the stage-gates are defined, if we struggle to ‘see’ the opportunity, within the business portfolio, we will ask for more. Investing in leadership mindsets, our ability to adapt ‘how we see’ is key to making the clearest strategic choices which this transition requires
- Build portfolio management into a dynamic capability – this is one of the best investments we have seen innovative organisations make. They recognise that an integrated portfolio requires more than just one set of rules for emerging businesses and another for more mature ones. The weighing of new options, leveraging capabilities across opportunity areas and making investment decisions all span across the portfolio, and this is often where a good look into the current workings of portfolio management is needed.
- Watch for the health, not just the performance of the business portfolio – we often think of growing new business ventures as a one-directional journey. Yes, with phases, stage gates and hurdles to cross along the way. But the direction is clear… Onwards. However, the business portfolio often contains a mix of ‘health issues’, from current business lines under-estimating the risk of disruption to weakened partnerships or waning collaboration, all are tell-tell signs of a portfolio that would not be as welcoming of new stars, and which might present some real distractions that ‘fixing the current portfolio’ would have. All these limit our ability to grow a future-fit portfolio – at the very least, to slow us down, to be overtaken by more nimble players.
As we transition from early explorations of future-fit businesses to exploiting innovations for growth, the narrow definitions of Explore vs. Exploit are not very helpful.
We need to open up innovation definitions to larger thinking, simultaneously working on both exploiting and exploring opportunities, in the space where the two meet. We must challenge ingrained mindsets and the early signs of ill-health. This is where our adaptiveness as an organisation is tested, where the quality of our thinking is made visible, and where no formula can replace clear strategic thinking – on our way to a thriving, future-fit organisation.
Have a good weekend everyone!
Saar Ben-Attar (A Connector Beyond Limits)
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“Building the bank of the future is not only an exciting vision, but means our employees get to work with industry-leading technology and tools. We’re fortunate to be growing and this allows us to provide hope, inspiration and to attract talent that wants to shape the future”.
Gerrie Fourie
CEO of Capitec Bank
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