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Do you have a strategy for your company?

4 x 4 questions about the status of your corporate strategy

Our strategy is 10% growth with 10% profit! That’s the answer I got from a CEO of a big Swiss company to the question of strategy.

When I went on to find out how this so-called strategy is anchored in the company, it turned out that most employees were unfamiliar with it. But it also lacked the essential building blocks that form the framework of a strategy and with which a strategy can be implemented and continuously developed and adapted.

Such building blocks include:

We have put together a small checklist of 4 x 4 questions for you to give you a first impression of the status your company’s strategy:

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White Paper Innovation Management with the «Extended Business Model Canvas» (eBMC)

From the BMC to the eBMC

If you compare the Business Model Canvas with the navigation system of Aloys Gälweiler, you will see that the innovation is positioned there on the top level, with the two components «solution-independent customer problem» and «solution technology». We then put these two building blocks on the Business Model Canvas, making this extended Business Model Canvas (eBMC) a great tool for innovation management.

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The book «Business Model Generation», published by Alexander Osterwalder, has hit the world of consulting and entrepreneurs like a bomb. The book is practical, very nicely done and above all very different from anything else in the field. And success proves the author right.

When a colleague told me about this model for the first time, something irritated me from the beginning – something was missing. It’s not like the BMC reinvented the world. Much can be found in it from known approaches and methods – or not.

What was lacking for me from the beginning is the building block «customer problem», namely the «solution-independent customer problem», as we used to call it. Based on the St. Gallen approach, we have always clearly separated the customer problem from the product or service itself.

The «Solution-Independent Customer Problem»

A watch is a product for the purpose of indicating the time. The customer problem, namely the time to know, however, is independent of the clock and can be solved differently. This applies even more clearly when the watch is offered as a luxury or status object. Then the customer problem is to make a difference, and that can be solved with completely different offerings or value propositions.

In the BMC, the customer problem is presented together with the building block product and then called «value offer» in New German. Later, a separate canvas was developed for the building block customer problem and with the help of the so-called empathy card (by Xplane).

I did not let this thought go, and I studied how the canvas model can be complemented with the customer problem without destroying the model’s logical unity and symmetry. And as is sometimes the case, the best thoughts come when you are alone: During a long run through the forest, I had the following idea: Let’s take the top level of the navigation system of Aloys Gaelweiler with the two components «solution-independent customer problem» and «solution technology,» and put them on the business model canvas. This makes this enhanced Business Model Canvas (eBMC) a great tool for innovation management.

This results in the following chain: customer – customer problem – technology – product or if you prefer: product – technology – customer problem – customer. The interesting thing is that the model remains nicely symmetrical and fits together logically.

Innovation Management with the eBMC

Supplemented with the two building blocks from Gälweiler’s navigation system, we use the canvas model mainly in the search for new businesses. This makes it an excellent instrument for innovation management. Because innovation can be driven forward from two sides: the market and the technology. Good practical instructions have been provided by Prof. Hugo Tschirky, who teaches at ETH Zurich, with his approach to innovation management. We find it in the book « Wunderwaffe Innovation «by Beat Birkenmeier and Harald Brodbeck. In the following, we will explain the two components «customer problem» and «solution technologies» in more detail so that you, too, can supplement the Business Model Canvas accordingly and use it as an innovation tool

Figure 1: The extended Business Model Canvas by Furger und Partner AG with the blocks «Solution Technologies» and «Customer Problem»

The module «customer problem»

This component stands for the customer problem that a company wants to solve – and that is about the «solution-independent customer problem». This means that this customer problem is often latent and is only solved differently and better by new products or services.

Here is an interim remark: We use the terms «customer problem» – «customer need» and «customer request» as synonyms. You are free to use your appropriate term here.

Solving a customer problem brings benefits to the customer, and it is for this benefit that the customer is ready to pay. So the product «car» is not primarily a beautifully designed machine on four wheels, but creates the ability to move from A to B at any time. It is often useful to abstract a business idea to this «problem» in order to come up with new solution techniques. Innovation, which is based on the market, is mainly concerned with it and can only work if you know the original customer problem exactly.

These may be a original problem as such like eating and drinking or secondary, derived problems such as luxury goods, holidays or other amenities that go beyond a basic elementary need.

The most important questions about this module:

Instrument Customer Value Analysis (Value Proposition)

The customer value analysis is probably the didactically best instrument to focus the company in its activities on the customer benefit. The instrument can be set up directly on the building block customer problem. This creates the logical and substantial connection between customer benefit – products – customer groups.

On the basis of purchase criteria, a strategic Value Map is created that shows which competitors bring benefits to the customer with their products. For a detailed description, the tool itself, and the tutorial, see the white paper Customer Benefits on our BLOG

The module «Solution Technologies»

This component represents the technical solutions behind a product or service. Technologies usually have a specific lifecycle and, after a certain period of time, are replaced by new technologies that solve a customer problem better and more favorably. Thus, a substitution process begins, which leads to the replacement of existing products in the market. This process normally follows the pattern of an S-curve.

An example of this is the substitution of horse-drawn carriages by automobiles. Innovation always takes place in the interplay between the knowledge of the original customer problem and new solution technologies. The timeframe of substitution varies and can go on for years. The first presentation of a new solution concept is called invention, while innovation only exists when the product prevails in the market. Solution technologies can be incremental improvements or implement completely new concepts like the laser printer or the fax technology that has substituted the telex. Such completely new approaches often turn the existing business model upside down, which is described by the term «disruption».

The most important questions about this module:

Instrument substitution analysis (S-Curve)

With the substitution analysis, the replacement of existing products or technologies by new offers can be shown.

This instrument helps on three levels:

eBMC in the STRATEGY.APP

For each business area, we create the eBMC with the current key elements. Each module is filled accordingly and can be adapted, printed or otherwise communicated at any time:

The individual blocks and elements are entered in the usual editing window:

In the design phase, we can now add additional key elements; here e.g. as a new technology, the «nanotechnology» applied to the coating of the glass; or a new sales channel with which customers will be served in the future:

The new elements appear in red for identification. This provides us with a basis for deriving new strategic options and developing strategic directions and measures.

These are then listed in parallel with the options derived from the SWOT.

Here, too, options can be added, added, stopped or deleted at any time.

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White Paper Competition Analysis

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Download the Competitive Analysis (pptx) tool

Competitive analysis shows our relative advantages over the competition. We compare the strengths of the competitor with our weaknesses and their weaknesses with our strengths. Every employee must be able to recite these benefits by heart at any time!

In the process described here, we first summarize the essential characteristics of a competitor into a profile. Then we create a profile of the strengths and weaknesses that every salesperson and every employee who deals with customers has to memorize.

Additional knowledge of competitors will provide additional tools such as the value proposition.

Note : I like to use the term competition – because competition comes from the Latin «concurrere» – to run together; and that’s about it.

Procedure

1. List of current and future main competitors

List all competitors that are strategically relevant to your business. We distinguish four groups:

The competitors from other industries are the most dangerous. For example, the «Enzyclopedia Britannica» by PC with the Encarta displaced – and that was very fast and none of the former typewriter manufacturer has considered the entry of PCs. The most dangerous competitors today for the automotive industry are not the other manufacturers, but new providers we Google, Apple or Uber.

2.     Overview

For each competitor, create an overview on a sheet by template (this is to be memorized):

3. Key data

The key data is used to record the essential characteristics of the competitor. Do not write novels, but not just embroidery, but try to make one or two clear statements. Above all: do not just copy the details from the website of the competitor! First, these are mostly inaccurate and not very specific, and secondly, any learning effect is lost – and that’s a pity about your time.

We’ve listed a list of topics below so you can customize the template as needed.

4. Strategic Comparison

The strategic comparison presents the 3 main strengths and main weaknesses of the competitor against the 3 main weaknesses and main strengths of your company. Enter a maximum of 3 topics here and formulate them in such a way that they can be memorized by your employees. Ask them in between or distribute them on colored cards, which have space in the wallet.

5. The analysis topics

We have listed some topics for you in the template. You can supplement, adapt or replace these. The following list should give you some ideas or hints:

Ownership Structure

Financials

Strategic key figures

Basic strategy

Customers

Sales and marketing concept

Product and service portfolio

Core competencies

Production and production concept

Technologies and Innovation

Competitive Analysis in STRATEGY.APP

In the setup we enter all competitors that occur during the strategy development. The basic data usually relate to the same level as our own company; i.e. you describe an entire company or the division of a group.

Then we assign the competitors from the overall list to the individual BU. The question is, where does a competitor in the market compete with us? With a simple click, a record is created for the corresponding BU. Only the name of the competitor is taken over. All other and further data are dealt with in the BU-strategy. If a competitor assignment is deleted, the record from the BU-strategy is deleted again.

We can now analyze the competitors at the corporate level and / or at the business field level and derive SWOT elements for the SWOT. Here we show the procedure at the company level.

All competitors we’ve covered are listed at the company level. The description fields are taken from the configuration.

There are two dialog windows available:

For each competitor, the 3 strengths are contrasted with our weaknesses and the 3 weaknesses are our strengths

The same procedure can also be used for every business field.

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Download the Competitive Analysis (pptx) tool

Whitepaper The eBMC as an Implementation Tool for the Innovation Architecture

The innovation turbo

We started a trial once and filled the results from the innovation architecture into the eBMC. And lo and behold, now we had a stable basis on which to derive innovations, directions and measures; almost like in a real strategy.

That works as follows:

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The innovation architecture as a basis for the delimitation of strategic focus areas

The «innovation architecture» serves to increase innovation success while taking social trends and the use of new technologies into account, by enabling simultaneous consideration or coordination of market, product and technology aspects.

Figure 1: The innovation architecture

The various levels of architectural observation are logically linked from both the market and the technology point of view and are mutually dependent: On the one hand, trends affect the markets and the behavior of current and potential customers. In concrete terms, the influence of trends is expressed in specific customer tasks and needs. Satisfying these is the primary objective of shaping the market offering, i.e. products, services or business models. In order to provide this service, you need to click on of the other side requires competences or technologies. They fulfil – abstractly formulated – those functions which are necessary for the satisfaction of the customer needs are necessary.

For a Approach «from the market «, in marketing also known as «Market Pull«, we therefore try to optimize our own market offer as much as possible. to meet the needs of the markets. An essential feature of this The point of view is that the customers you want to serve are at least are known to the public to some extent. When looking at «from the technology or Competence her«, also known as «Technology Push«, this is not the case. must be the case. Rather, the question is in the foreground here which Needs in new markets on the basis of available competencies could be satisfied.

If one now fills the individual levels of the «innovation architecture» with concrete content, one obtains a suitable basis for deriving so-called «strategic focus fields» for innovation. In a somewhat abstract formulation, these are search fields for raising innovation potentials, which serve as a source for new market services or offers over a longer period of time. Within these fields, active search is now made for innovation opportunities and solutions are sought . Or something more concrete: Fields within which a company wants to innovate.

The limitation of a strategic focus field is not absolute, but it gives every company a framework to increase the chances for successful innovations and to minimize the risks.

What do we do with the result?

The identification of strategic focus areas forms the basis to fill the eBMC:

The procedure step by step

Step 1: Creating the innovation architecture

When creating the innovation architecture, the aim is to fill the above-mentioned levels with concrete content that is relevant for your own company. The following procedure has proven itself:

Before further work is started, the innovation architecture should be adopted by the management as a suitable basis for the next steps. This includes a check of the completeness and quality of the content as well as of the granularity. The following figure shows an approved innovation architecture of a manufacturer of chemical laboratory equipment:

Figure 2: Derivation of focus fields

Step 2: Identification of strategic focus areas

To identify and delineate a strategic focus, a single content, such as a trend, is selected from the innovation architecture, which, from the company’s point of view, opens up opportunities for differentiating innovations. This content then serves as a «driver» or «nucleus» for the strategic focus field. Each content can already be seen as a strategic focus field on its own or, if necessary, supplemented by further contents from other levels, which should sharpen the task in a suitable manner. Since the demarcation of strategic focus areas should be in line with the corporate strategy, appropriate content should already be incorporated here. This procedure is repeated until the most attractive strategic focus areas have been identified. A number of five to a maximum of ten strategic focus areas has proven to be appropriate. The most important facts about each focus field are summarized in a profile.

Figure 3: Profile focus field

Depending on the content of the focus fields, we then either enter the eBMC via the customer problem or the technology.

Step 3: Solution-independent customer problem and solution technologies

As part of a first «exploration» of the focus areas, it is about sounding out possible innovation potentials. This primarily includes the concretization of solution-independent customer problems in the sense of articulated or inarticulate customer needs. In doing so, it is possible to fall back on proven methods of innovation management in the early stages. Possible meaningful approaches include: lead user workshops with selected customers and sales partners, customer process analyzes, customer observations, in-depth interviews with customers, critical event method (CIT), frequency relevance analysis of events / problems and complaints, internal ideas competitions, open innovation Activities (eg public competitions), benchmarking days, business model confrontation or trend scouting. These are entered in the corresponding field of the eBMC. At the same time – as far as possible – ideas for solution technologies are developed and also recorded in the eBMC. Here, too, can be built on proven methods and concepts such as the S-curve, the Gartner hype cycle or technology radars.

Figure 4: Customer benefit analysis – result as a value map

Step 4: Customer Groups and Products

In the next step, the idea will be given further contours by, on the one hand, sharpening the profile of potential customers and, on the other hand, putting the offer together. Osterwalder’s «Value Proposition Design» approach provides valuable assistance in this regard. He assumes that the customer profile can be derived from the «jobs-to-be-done» of the customer as well as the pains and gains in the fulfillment of the tasks. From the considerations to possible «pain relievers», so solution elements for the reduction of the Pains and «Gain-Producers, so solution elements, which are able to donate a customer use, finally the product can be designed. By a product we mean everything that the company «produces» and donates to the customer for money. This includes haptic products, services, services and everything that is today called New German word creations such as «value proposition», «value proposition» and other terms

Complete the remaining fields for the eBMC

On the basis of technologies, customer benefit and offer, the other fields of the eBMC are filled up according to the already classic pattern.

Figure 5: The Enhanced Business Model Canvas (eBMC)

Step 5: Partners, Resources, Activities

No company is alone in the market. List the partners you work with here. This is best done along the value chain; So from the purchase of materials and services on the service to sales; Marketing and communication with the customers, also record the services provided by the partners.

The resources used to create the market offer the following categories: the physical resources (premises, production machines), the intellectual resources (knowledge, patents, partnerships, customer base), the human resources (employees) and the financial resources (available capital, securities).

The key activities describe the processes and competencies needed to ensure service delivery. Again, we cover the entire value chain, which we serve from – to marketing and sales.

Step 6: Customer Groups, Customer Relationship, Sales Channels

Customers can often be divided into groups or segments. In many cases, segmentation also serves for the division into business segments. We recommend equal quantification of these groups, i. with which groups which turnover or even better, which profit is achieved. A good instrument for this is the classic ABC analysis.

The customer relationship also determines the communication with the customer. Between intensive collaboration e.g. There is a whole range of possible relationships with joint developments and pure marketing of the products. Depending on the intensity of the marketing is adjusted accordingly

The sales channels determine how the products or offers come to the customer. Distribution, online channels and points of sale form the interfaces of a company to the target customers.

Step 7: Expenditure

The most important cost factors of a business model are summarized here.

Step 8: Revenue

Here, pricing models and pricing strategies (one-time payment, subscription) are described.

Step 9: Integrate the innovations into the corporate strategy

We can now directly derive the measures from the eBMC for the implementation. If we have highlighted the «new» elements in color, they can easily be formulated.

Alternatively, we can now embed the result in the corporate strategy and develop options, strategic directions with quantitative targets. These then lead to concrete measures and form part of the strategy that will be implemented and accompanied by strategic controlling.

eBMC in the STRATEGY.APP

For each business area, we create the eBMC with the current key elements. Each module is filled accordingly and can be adapted, printed or otherwise communicated at any time:

The individual blocks and elements are entered in the usual editing window:

In the design phase, we can now add additional key elements; here e.g. as a new technology, the «nanotechnology» applied to the coating of the glass; or a new sales channel with which customers will be served in the future:

The new elements appear in red for identification. This provides us with a basis for deriving new strategic options and developing strategic directions and measures.

These are then listed in parallel with the options derived from the SWOT.

Here, too, options can be added, added, stopped or deleted at any time.

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Literature: « Wunderwaffe Innovation «By Beat Birkenmeier and Harald Brodbeck

Learn more about « Innovation Architecture » at:

beat.birkenmeier@gronova.com +41 41 727 04 70

White Paper: Strategic Success Potentials in Times of Disruption

Part 1 of 2

Just as operational management has its controlling or core figures in annual or quarterly earnings figures, so too does its strategic management. The most important control variables here are the market position, the cost position and the customer benefit. Add to this the handling of new technologies and here come S-curves and disruption into the game. The interplay of these variables allows us to derive the success potential and thus the future viability of a company.

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Strategic success potentials

Success potentials are all the prerequisites and abilities of a company, with which the results of the enterprise are achieved. Gälweiler differentiates here by distinguishing between current and future potential for success.

Today’s potential for success

Today’s or existing potential for success forms the basis for the medium-term success of the company. The most important key figures for this are the market position and the cost position. However, these key figures are not sufficiently informative about the long-term success and survival of the company.

Future success potential

Future success potential ensures that a company can remain successful in the long term. The central control parameters for this are the «solution-independent customer problem» and «new technologies». The building up of future success potentials is attributed to the strategic management. Essentially, the development of future success potentials corresponds to innovation and thus to strategic innovation management.

«Strategic corporate governance as a precontrol task with regard to the subsequent realization of success therefore consists of the search, creation and maintenance of high and secure success potentials, which always includes the timely location of innovation potential.»

(A. Gälweiler, 1987)

Figure 1: Steps from the future potential for success to liquidity

The different crises of a company

According to this logic, corporate crises can be classified:

Figure 2: from the innovation crisis to the liquidity crisis and the eventual bankruptcy

Gälweiler on operational key performance indicators versus strategic success factors

Quotes from A. Gaelweiler: Strategic Management, 1987

The current success potentials and their control parameters

According to Gälweiler, today’s potential for success is derived from the control factors of the cost position and the market position. From our point of view, it is indispensable to include the area of employees as a further position for control variables. Our experience shows that this as a strategic success potential also plays a crucial role.

Market position

The control parameters of the market position include the following factors:

These figures show whether your own market position can be maintained and defended, or expanded.

Cost position

The control variables of the cost item are the various types of productivity. The continuous optimization of structures and processes comes into play here:

Know-how Position

The active involvement of employees in corporate development releases strong and often unimaginable energies and decisively supports the development of factors such as:

Future success potentials and their control variables

Gälweiler derives the future potential for success from the control parameters of customer benefits and technologies.

Figure 3: The elements of strategic management

Customer benefits

Customer value is the anchor for any corporate strategy; And this is about the original customer problem, detached from the product or offer. We also refer to this as a «solution-independent customer problem». Whether you prefer to call the customer problem a customer request or a customer need, leave it to them. We treat these three terms as synonyms.

Here are the questions:

A detailed description of this topic can be found in our whitepaper «Customer Benefits».

Technologies

All technologies have a limited lifetime because they are replaced by new and improved technologies. There are on the one hand gradual improvements and optimizations of existing technologies, on the other hand quantum leaps, with which a new technology replaces the existing solutions within a short time. Not only does it offer improved solutions, it also offers completely new applications that are better for the customer. These are e.g. the automobile with the internal combustion engine opposite the horse-drawn carriages or the email via the Internet opposite the letter post. As control parameters of the technologies the questions after the

Disruption and S-curve

Here we find the basis of what is being discussed and treated nationwide under the term «disruption»: the S-curve.

Figure 4: «Disruption» is the substitution of an old technology with a completely new base technology

The expiration of a technology while at the same time a new technology spreads, shows the emergence of future success potentials. Existing products are substituted by new offers according to the pattern of the S-curves.

In the next whitepaper, we will discuss it in detail and introduce the S-curve tool in more detail.

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Ignaz Furger

Furger and Partner Inc Strategy Development Hottingerstrasse 21 CH – 8032 Zurich +41 44 251 8070 furger@furger-partner.ch www.strategy.app

Strategy Development – The Book

Strategy Guide

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Strategy Guide- The Book

This strategy guide is a practical guide to developing business strategies. The concept is based on 20 years of experience that I have acquired in the accompaniment and management of strategic projects with mainly medium-sized companies in Germany and Switzerland. The guide clearly shows how a strategy project is set up and then guides you step by step through the process to the point of preparation for implementation. The book is intended to empower employees to independently develop and implement the strategy of their company.

Employees as strategists

Most corporate strategies emerge in the all circle in top management, often with the support of external Consultant.

Practice shows that a large part of these strategies does not work or only works poorly. They may be well thought out or even brilliant in content, but create massive implementation problems. The reason: they do not reach the heart or the head of the employees. They are therefore understood too little or not at all and thus not supported. The result is misunderstandings and resistance, which must be overcome with great effort to implement the goals. This effort is then debited under the Change Management account.

Line employees work on strategic projects

That can be avoided in our experience! By integrating employees into an integrated development approach, the strategy becomes the strategy of the employees, who are then more motivated to implement it – with the positive side effect that strategic competence is simultaneously built up in the company on a broad basis.

Sructure

 Basics

Chapters 1 to 3 present just a few theoretical foundations. After looking at different approaches to strategy development, we will discuss some key issues and economic laws. One focus is on professors Hans Ulrich and Aloys Gälweiler. Professor Ulrich, who may be described as the founder of the system-oriented approach, describes a company as an open, productive and social system. From this, the central objective of the strategic work is derived: to promote and ensure the long-term viability of the company.

Structure of the book Strategy Guide

Strategy process

Chapter 4 is dedicated to the strategy development process. As a basis, we present a model of the complementary process that will guide you through the guide as a whole. To this end, we also present possible variants of the overall process, which can be applied depending on the requirements of the company. In addition, it explains which roles are involved in a strategy process and how decisions are made. Hints and advice on organizing meetings and filing documentation complete the chapter.

Guide

Chapters 5 to 12 each represent a step or intermediate step in the strategy process. We describe the procedure and the contents

for the workshops, presenting templates for the agenda and screenplays, and listing each one’s homework. At the end of each chapter the necessary instruments are listed. All checklists, templates and tools can be downloaded from the book’s website. These serve as a template and can be adapted and supplemented as needed. In particular, three aspects are emphasized in this process: the decision-making process between actual project phases, detailed planning of the implementation and the implementation of strategic controlling as part of a separate strategic planning process.

Conclusion

Without going into the theoretical and well-known principles of communication, in chapter 13 we will give you some information about communication based on our practical experience. Our 10 theses titled «Employees are the best strategists» conclude the book with chapter 14.

Electronic Instrumentarium

900 pages of tools, checklists, instructions in Excel, Word and PPT for practical use

With this guide you will receive a comprehensive set of tools in electronic form that you can download from a book’s own website and use as a working framework for your strategic projects. In addition to well-known strategy tools such as the SWOT, this includes all the documents you need for a project: checklists for the project setup, agendas and scenarios for the workshops, forms and tables.

The instruments are explained in the book just below the immediate application without unnecessary theoretical ballast.

Understanding strategies

Business Process «Strategic Planning»

Last but not least, the concept of this guide is that we do not impose rigid instructions and guidelines. Rather, it allows the procedure to adapt both the process and the documents in each case with regard to the specific situation and the requirements of the company. The wide range of instruments and forms is by no means a corset intended to lead to a mechanical execution and filling of forms. The book is intended to teach one thing in particular through its approach: UNDERSTAND STRATEGY.

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Reviews – Excerpts:

Bernhard Kuntz, Office for Education & Communication

… A very clearly and systematically structured (work) book, which provides its readers with the necessary tools either to develop strategies for their own company or to design such processes. It is also helpful that the author has placed instructions, forms, etc. on a separate website for all instruments mentioned. From there, readers can download it, adapt it to their needs and use it for their projects. A recommended book!

Prof. Dr. Patrick Eichenberger, Zug / Berlin

… All in all, this strategy guide has produced a highly informative and instructive book on the subject of strategy development, where a proven practitioner and expert in this field not only writes in plain English but also makes convincing attention to numerous shortcomings in this sector. As a university professor in business administration, reading and studying this book has brought me many insights and complementary knowledge of a wide range of tools and brought my knowledge to the sensible and feasible on an updated state of this «strategy consultants guild». Particularly valuable should be the sometimes excellent documents in Power Point, Word or Excel form, which represent in fact a great and highly useful fund of tools. The Strategy Guide has clearly earned five stars in its entirety!

Dr. Pablo Hafner

… With «Strategy Guide» you have all the tools that a professional strategist uses in his daily work. If you own or run an SME, you have the opportunity to design your own business strategy at an affordable cost; a luxury that I at least could not enjoy so far.

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