The Strategy Group

The Strategy Group delivers real value in the areas of business and organisational strategy development and implementation, innovation acceleration, business model collaboration and globalisation. We provide business impact to you and to all our clients. The Strategy Group team has years of business experience in hands-on commercial roles, and as such will deliver exceptional value and outcomes.

Clients of The Strategy Group include many brand names in the private and public sector, including Cisco Systems, PepsiCo, Kraft, Unilever, the Australian Government, the ACT Government,  Amadeus, the Frame Group and Telstra.

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Open Innovation in France

According to data gathered by Bluenove in 2011, major industrial players in France have taken the steps to integrate Open innovation concepts, that are today understood and being applied in all industrial sectors. This is a major evolution in corporate behavior and has had a positive effect on their operating modes (54%). On the other hand, behind the scenes, these same companies are continuing to question themselves on the concrete impact of Open Innovation. 55.7% of these companies do not expect to gain any short term benefit from an Open Innovation strategy and do not expect this to have an impact before a number of years. In this way they are addressing Open Innovation as a long term stake in the deep and sustainable transformation of French industrial culture.

In parallel to this, surprisingly these same companies show confidence in their Open Innovation programs. They know the risks involved in intellectual property rights, the eventual loss of control over innovation processes and the difficulties associated with integration and collaboration. With these risks now identified, measured and accepted, these major industrial players consider that they possess the means and the corporate culture necessary to overcome them and successfully embark on an Open Innovation program.

Today the actions applied by major French companies are primarily focused on the initial stages of open innovation with 41.2% stating that they are still in the very first stages of this strategy. This contrasts with an American study conducted in 2009, where 49% of the major American companies interviewed had already moved into development stages of applying open innovation practices and 40% were actually in the process of optimizing it. Whereas in France, only 21.9% of equivalent firms claim to be in this process of optimization.

The report can be read here.

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PwC Innovation Survey in Global CEO Report

Excellent survey of global CEOs by PwC. Not only does the survey focus on emerging markets, but it contains a significant section on the importance that CEOs attribute to innovation as a key driver of their growth strategy.

The 1,201 chief executives in 69 countries polled were nearly as confident in their outlook for revenue growth over the coming 12 months as in the boom years before the global financial crisis

Innovation is very high on the agenda for CEOs globally. 78% expect that their development efforts to generate significant new revenue opportunities over the next three years. The report shows that CEOs are “putting the customer first”, reinforcing the view that the best ideas come from customers, partners and suppliers. Further, CEOs are really trying to co-create products and services with their customers.

The full report can be found here and is available for download.

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Cultivating Organizational Creativity in an Age of Complexity – IBM Report

“Why are some organizations consistently good at innovating and adapting while others seem to be blindsided by change? Is it because of their disciplined innovation process or the knowledge and skills of their people? Or is it their determination to build a culture where challenging assumptions is not only encouraged, but expected? The IBM Creative Leadership Study found that leaders who embrace the dynamic tension between creative disruption and operational efficiency can create new models of extraordinary value.”

To gather the data for the IBM Creative Leadership Study, IBM conducted open-ended interviews with 40 leaders from around the world. Five of the participants are acknowledged experts in the area of creativity and innovation, five are senior HR officers from companies of various sizes, and the remaining 30 are creative leaders as defined by their peers.

Individuals in this last group represented a range of business and creative disciplines and were selected without regard to their formal leadership role in the organization. The interviews sought to answer three basic questions:

• What are the key capabilities of a creative organization?

• What are the catalysts of these capabilities in leaders?

• How can these capabilities be scaled across the organization?

To download and read the full report click here

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China and Innovation – Now Overtaking Japan

It’s not that long ago that a colleague told me that innovation would come out of China two generations hence. I did not believe him after seeing a little of what China was doing first hand.

Interesting to read this article today in the Start Advertiser:

As a result, China is expected to overtake Japan soon as the world’s second-largest R&D investor, although it still remains far behind the U.S. China’s domestic doctorate awards in science and engineering have also increased more than tenfold since the early 1990s, and its share of the global pool of researchers has grown from less than 14 percent in 2002 to more than 20 percent today. 

Only a few years ago, China’s approach to innovation hardly played a role in international economic diplomacy. Today, it is a hot topic in U.S.-China economic relations, adding further to contentious disputes about exchange rates, trade and foreign direct investment.

The article continues:

Rather than fearing China, we need to focus our research and policy debates constructively on how this relationship can be improved.

I could not agree more. The entire article can be found here.

And now this in the Harvard Business Review Blog on August 4 for another perspective.

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We Gotta Share!

A bit of fun….

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P&G – Extraordinary Results from Innovation Acceleration

Many of you will know that Procter & Gamble is one of my favourite companies when discussing innovation acceleration. The latest Harvard Business Review (June 2011) contains an extremely important article on the impact that innovation has had on P&G recently. We all know of the Connect and Develop program that was kicked off some years ago, but where is P&G now, and where are their innovation efforts? To be honest, I was unbelievably excited when I read this article, and I think you will be as well.

Here are some of the facts reported by HBR that really impressed me:

From 2004 to now, P&G looked to carry out the following:

a) Teach senior management and project members the mind-sets and behaviours that foster disruptive growth

b) Form a group of new-growth-business guides to help teams working on disruptive projects

c) Develop organisational structures to drive new growth

d) Produce a process manual – a step-by-step guide to creating new-growth businesses.

e) Run demonstration projects to showcase the emerging factory’s work.

The challenge that they found in 2008 was that they were burdened by a number of smaller projects that were not necessarily disruptive. This scenario is very common – the organisation establishes an Innovation program and soon people ask – “So where are the Big Ideas?”. So Bob McDonald (then the COO) and Bruce Brown (then CTO and coauthor of the article in HBR) drove three critical improvements:

a) Increase emphasis on an intermediate category, transformational-sustaining innovations, which would deliver major new benefits in existing product categories

b) Strengthen organisational support for the formation of transformational sustaining and disruptive businesses. P&G created several new business-creation groups whose resources and management are kept separate from the core business – dedicated teams with a separate General Manager. What is really interesting is that there is one group, FutureWorks, solely dedicated to enabling different business models. This to me is tremendous and a lesson for other companies – while “tiger teams” might be formed to boost sales and win deals, it is rare that they are formed specifically for new business models.

c) Revamp its strategy development and review process. Innovation and strategy assessments had historically been handled separately. Now the CEO, CTO, and CFO explicitly link company, business, and innovation strategies. What a great lesson!

Lessons learned include:

  1. Closely coordinate the factory and the core business
  2. Promote a portfolio mindset
  3. Start small and grow carefully
  4. Create new tools for gauging new businesses
  5. Make sure you have the right people doing the right work
  6. Encourage intersections – successful innovation requires rich cross pollination both inside and outside the organisation.

There are other significant lessons learned from the above cited in the article. And many more initiatives that you should read for yourself that are truly remarkable. Here, though, are some of the business impact metrics cited:

  • In 2000 only 15% of its innovation efforts met profit and revenue targets. Today the figure is 50%. The past fiscal year was one of the most productive innovation years in the companyʼs history, and the companyʼs three- and five-year innovation portfolios are sufficient to deliver against their growth objectives. Projections suggest that the typical initiative in 2014 and 2015 will have nearly twice the revenue of todayʼs initiatives. Thatʼs a sixfold increase in output without any significant increase in inputs.
  • In 2009 P&G introduced the wrinkle-reducing cream Olay Pro-X. Launching a $40-a-bottle product in the depths of a recession might seem a questionable strategy. But P&G went ahead because it considered the product a transformational sustaining innovation. The cream and related products generated first-year sales of $50 million in U.S. food retailers and drugstores alone.
  • In 2010 P&G refreshed its C+D goals. It aims to become the partner of choice for innovation collaboration, and to triple C+Dʼs contribution to P&Gʼs innovation development (which would mean deriving $3 billion of the companyʼs annual sales growth from outside innovators). It has expanded the program to forge additional connections with government labs, universities, small and medium-sized entrepreneurs, consortia, and venture capital firms.
The HBR article can be found here. I seriously urge you to read it, digest it, look at what your organisation is NOT doing, and gather senior leaders of your organisation together in a war room to form an action plan to close the gap. NOW!.

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Reigniting Innovation in the United States

Interesting article by McKinsey on how the US is slipping further and further behind in innovation. McKinsey conducted a series of interviews with CEOs of advanced industrial companies, and as they say there is “real cause for alarm. Seems the issues are:

Cutting-edge technology: the United States is competing against or even catching up with foreign companies and engineers
Demand: more than 50 per cent of the global middle class lives outside of North America
Talent: Significant scientific talent is building outside of the United State
Entrepreneurship: There is an increase of risk aversion towards new ventures in the United States, with large US corporations being most affected

McKinsey goes on to provide a set of remedies:

1. Clear the way for the cutting edge industrial technologies of the future
2. Rebuild infrastructure
3. Attract and retain talent
4. Reenergise the entrepreneurial spirit in the large US companies

The article can be found here

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