How to formulate your strategy through co-creation?

Strategy work is often done by senior executives based on their point-of-view. While their view is often correct, it does not involve all perspectives from not just the internal stakeholders. Especially external stakeholders are left out. We think of them and their needs, but they are seldom involved. How can we then know that their needs are met?
Especially true is this about our friends in the value-chain. Based on Porter's Five Forces we try to create a strategy that gives us the largest bargaining power enabling us to carve out the largest share of profits.
What if you involved inside and outside perspectives in you strategy creation? How would such a process be like? Who would it involve? What results could come out from it? Which tools to use?
Based on a recent article in HBR October 2010 I will try to add something on tools to use. For further background, please read the article.
Challenges with traditional strategy processes are:

• Focused on economics of the firm and its industry
• Internally focused on the firm and an inside-out perspective on the industry. 
• It fails to allow for the possibility of co-creating an ecosystem whose members all win
• Growing the pie before the fight for shares begin
• Assumes that a strategy can be defined on the outset, though uncertainties often make that impossible
• Incremental approach that allows for learning and engaging outside and inside stakeholders

While thinking on how to co-create a strategy, I started to think on which tools are available to counter the issues listed above. Here are some of the tools you would need:

• Appreciate Inquiry
• Appreciative Inquiry focuses on the affirmative topic chosen. The set of questions defining the topic will enable everyone to focus their energies and ideas towards this topic. Involving many people will get them to work towards this topic and thus not go in all possible directions. Based on the topic the co-creation process is led towards a solution to that topic in an affirmative way. 
• Collaborative IT platforms
• Involving many stakeholders from throughout the organization and from external organizations requires each individual to collaborate and interact individually. A comprehensible IT platform enabling groups of people to collaborate together will drive results between opportunities of face-to-face meetings. The collaborative IT platform need to answer questions like: How spread out are your people? Which bandwidths do they have access to? What type of problems are we working with, numbers, visual, text, etc.
• Goal-hierarchy
• A Goal-hierarchy is a  very powerful way of illustrating where we should end-up. The top goal is related to the set of affirmative questions identified through Appreciative Inquiry. A goal-hierarchy answers questions like: Which goals reside in each organization or group? Which activities lead to that goal? Who are doing the activity?
• Experimentation
• The results from Appreciative Inquiry are based on co-creation involving internal and external stakeholder. They are still not validated in reality and for that you need to start small through experimentation. Which are the minimal features you need to test before you can say whether this will work or not? What result is the most critical? Create and execute experiments for these parameters to validate their legibility. Then grow the size of roll-out, risk and commitment to the new strategy. 

Which other tools are useful co-creating a strategy?

More to read:
HBR Octorber 2010: Building the Co-Creative Enterprise

Experiment driven innovation - How to use data creating novel business models

Organizations will in the future be far more responsive, far more innovative, far more analytics-minded. Experiments drive the data collection necessary to create and develop new novel business models based on customer behavior.
Which practices and methods do you use to collect real world data when creating, developing and refining you business models? The basic foundation is that in order to develop new and more valuable business models we need to collect better data. And data that are based on real behavior, not just surveys. The problem is usually where to find that data, how to analyse it and based on that knowledge draw conclusions. Here are some thoughts on how to use experiments to collect more and better data that drives innovation and novel business models.

• Go to the source. Don't let the IT department alone decide on which data and where to collect it. It is usually at the point of sophistication within the organization where the need is defined. The IT department can provide technical knowledge and tools. However, it's important that those tools are flexible and open enough to allow a wide variety of business needs to utilize them in many different settings.
• Experiment on experiments. Don't plan your experiments, rather experiment on which experiments to run. Be agile and have an environment of short turn around times. How fast can I define an experiment, execute it and collect the data? Even more important - how fast can I make changes to running experiments to counteract abnormalities. Be open, and re-evaluate your experiments often making sure you get the quality and data sets needed to see your customers need and develop business models fulfilling some of it.
• Visualize data. Make data available to everyone. It has been invested quite some money into your experiments. Others may see value in the data that you don't need. When visualizing the data new patterns and conclusions might be apparent. 
• Culture of experiments. Will your corporate culture allow experiments or will it preserve current processes? It is crucial when succeeding with experiments that there is a wide-spread support within the organization for experimentation - and for failure. In some cases failure is the best outcome since a lot of effort into otherwise doomed ideas are saved.

New business models in the future are based on thorough data collected through frequent experimentation. Organizations will no longer be able to just "think" new business models - they need to collect the data necessary to draw those conclusions. Which tools do your organization provide to do frequent experimentation?

More to read:

• MIT Sloan Management Review Fall 2010: 10 Data Points
• Dan Ariely in HBR April 2010: Why Business Don't Experiment

Crowdsourced innovation strategy through collaborative IT tools

Crowdsourcing your innovation strategy within the organization sounds like the perfect idea generation mechanism. When Whirlpool started to use IT collaboration tools in the mid-2000's to collect, share and collaborate on innovation projects it not only increased the likelihood of serendipity. A side effect was that you could track which ideas were hot - aka which topics people across the global organization were working on. Was it design, pricing or sustainability? By counting the number of projects and ideas within each domain and topic a bottom-up innovation strategy was built. Those hot topics set the innovation agenda. Crowdsourcing the innovation strategy has several novel advantages:

• Don't bother spending time and energy on what to focus on - let your people across the globe decide implicitly through how they spend their time 
• Don't think on how to engage employees and changing the innovation agenda - it's changed by engaged employees in real time responding to changes in requirements and the context where you do business
• Don't have special activities to connect people and organizations - they will find and connect with themselves were it makes sense 

Serendipity and prioritizations happens by themselves through bringing smart people together sharing ideas. Using a structured IT tool fostering collaboration will not just connect people from far away. Such an IT tool will also enable progress tracking, KPI collection and idea repository. Choosing the right IT based collaboration tool requires you evaluate and decide on:

• Who will use it? Will it be a smaller or larger set of people inside the organization? How will you engage external parties such as universities and startups?
• How will you track progress? How long will you track the progress of an idea? Will you use it as a repository to store ideas or will it be more of a project management tool as well?
• What external material will be available through the site? Who will manage it and update it? Should it be only links or will you store it locally as well?

The answer to these questions sets the foundation on what kind of IT collaboration tool you should use when enabling your employees to define the innovation strategy from the bottom and up.