Factor 4: Planning Emphasis

This Factor measures the degree to which planning emphasizes rationing resources versus identifying opportunities.

Factor extremes as measured in survey:

Planning focuses on rationing resources

versus

Planning focuses on identifying opportunties

Overview to restructuring initiatives

Planning within the financial constraints of current cash flow and borrowing capacity of the corporation often leads to rationing of resources. On the opposite end of this Factor, it may be that there is a lack of new ideas forthcoming from various levels of the organization or, it could be, that the historic reaction to new ideas has dulled the necessary enthusiasm for new thinking to the point of total frustration and a resulting in a dull innovative culture. In any case the solution begins with a thorough assessment of the process in place for generating and evaluating new opportunities. Rationing resources, the other extreme measured in the survey, is often easier to accomplish than identifying opportunities!

Examples of good management practice and communication

Factor #4 is one of the 8 most important building blocs to support corporate innovation.

Deere & Company; Chairman and Chief Executive Officer, Robert W. Lane, from an address he gave on May 7, 2007, addresses how Deere is ‘Driving Growth through Innovation’. Emphasis is placed on ‘investing in R&D for the long run, in good times and bad’, and one of the pillars of Deere’s program is entitled ‘a sustained investment’. Deere has an initiative called ‘The Accelerated Innovation Process’ which is aimed at conceiving, evaluating and proposing ideas more quickly. One of the phases of this initiative is called ‘opportunity identification’; an ongoing process of working with Deere’s strategic partners to come up with both ‘sustaining’ and ‘breakthrough’ innovation.

Possible Initiatives to Modify and Improve the Culture for Innovation

Generate, on an organized basis, a list of opportunities

There are several approaches to coming up with a list of opportunities but most approaches follow a common pattern.

  • Conduct a user survey to identify user’s unmet needs. In other words get a handle on the current and potential customers unmet needs.
  • Thoroughly analyze the competition to identify any business lines, models, or products that could be adopted and improved upon within the corporation, but do not fixate on the competition. Don’t look around, look ahead!
  • Dissect the technologies inherent in the corporation and assess ongoing trends and/or emerging technologies that could lead to new opportunities.
  • Complete the ‘strategic opportunity profile’ with a profit sensitivity analyses on existing and potential new process and product opportunities.

By undertaking all of the above steps, possibly augmenting this effort with brainstorming sessions and focus groups, the result should be that the corporation will have too many opportunities and not too few as was the prior case.

Develop a ‘Strategic Opportunities Profile’

The ‘Strategic Opportunities Profile’ is the process used to evaluate and rank each of the identified opportunities. A complete profile would include an examination of seven basic elements:

  • social, economic and political trends,
  • profit sensitivity analyses,
  • technology assessment,
  • competitive dissection,
  • user survey results,
  • bases of competition, and
  • identifying blue-sky opportunities.

In the concluding stages of this process, opportunities are weighted and ranked according to criteria agreed upon by senior and middle management.

Factors