Tuesday, August 01, 2017

Why organisations need to move from strategic planning to innovation planning ?

We are living in a world full of disruptions and uncertainties. It is difficult in the present world to plan strategically for a unchanging future. All planning needs to factor in the element of variability, uncertainty and disruption.

I was reading this Greg Satel article on how businesses will get disrupted in the future.. This article has some of his points while others have been added, especially the reference to Tata Sons. 

1. Having a very clear mission - Google's mission is to organise all the world's information. It could not be anymore clearer than that. Walmart's mission is to offer goods at the lowest price everyday. Similarly South West Airline believes in offering the lowest priced flights for the people of US. Getting great clarity in one's mission helps one to achieve the results much faster and effectively. Clear mission helps get stability in the business and prevents it from overspinning out of control. Tata Sons in India believes in serving the society ethically as much as in making profits as their mission. Click here for their core values and the philosophy of giving back to society .... How many of the global corporates we come across believe in giving back to society ?

2. Leveraging on the core competencies - SouthWest Airlines remained true to its mission by having only limited variety in its fleet. Sam Walton concentrated on organising the best logistics and supply chain operations to deliver items at the lowest cost to customers. Tata Sons ensures they have the right people and the rights sets of values imbibed in them to help reach their goal of being fair to its customers, society and other stake holders in the business. By ensuring they have the right team of suppliers and efficient supply chains, Tata Sons are able to serve the customers well.

3. Driving profitability - Once you have a clear mission and core competencies in place, getting one's products through to the customers at the lowest cost ensures profitability. Satisfied customers talk to other customers and help more products to be sold, driving profitability. Tata Sons has great core competencies that support their mission. Unless it succeeds in converting this core competency into profits, Tata Sons will find it difficult to survive in the long run. High customer value ensures customer loyalty, repeat purchases, and this brings in the needed profits in the long run. It is in this area that Tata Sons needs to concentrate to ensure it is able to survive in a cut-throat market focusing only at short term gains than long term goals.

4. Shift focus from strategic planning to Innovative planning - Walmart's planning is focused on the uncertainty and changes that can affects its operations on a daily basis. Tata Sons in its planning does focus on certainties as much as it does on innovative disruptions. By keeping its employees properly motivated and energised, it ensures that its employees are able to sense changes happening in the ecosystem and adapt to the new environment as fast as possible. 

5. Leadership : Any implementation of progressive thoughts and ideas need to be fully supported by the top management. The top down culture of promoting an environment of thinking innovatively needs to come from the leader.  Were it not for the great leadership by Sam Walton or Steve Jobs or Jamshedji Tata of Tata Sons pursuing excellence, innovation and a value based leadership, some of these great organisations on planet earth would not have existed.

6. Promoting a culture of innovation - understanding that the future is very dynamic, if an organisation needs to be in the forefront in any industry globally, it has to continually innovate, evolve and adapt to the changing technology, customer needs and dynamic economic, business, social, cultural and political environment across the world.

The best way to foster innovation is not to focus on ideas or solutions, but on problems. According to me, problems drive innovative thinking, innovative thinking drives changes in mindset, changes in mindset drive changes in the ecosystem and changes in ecosystem drive value, changes in value drive benefits. Tata  Sons tries its level best to be as close to the customer as possible. In addition to be innovative it should also understand that the problems of the present day Indian society is fast urban development, generation of waste and alarming rate of consumption of water and lowering of the water table across the country. Let these be the new problems that are going to drive the next set of innovations in India. 

No business model is fixed. In this fast changing world, the models are very dynamic. Innovative planning and innovative thinking are the drivers for organisations to turn out successful and profitable in the long run. Tata Sons founded by a group of Parsis who landed on the Gujarat coast from Northern Iran around the beginning of the nineteenth century, over one hundred and eighty years back around 1830s have over this time built a global organisation known for its values and customer loyalty.  Planning for innovation aimed at better serving the society has helped Tata Sons to establish itself in the growing markets of India and Europe.


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