IA Collaborative Presents the Accelerated Futures That Will Impact Every Industry
Dan Kraemer, Co-Founder and Co-CEO at IA Collaborative, was a recent presenter at DTVX 2020, the Design Thinking Virtual Conference.
In his talk, “How to Protect Your Business and Accelerate Innovation in the New Normal,” he gave a preview of IA Collaborative’s new Accelerated Futures Model™ and 4 hyperaccelerated trends coming out of COVID-19 that will leave a lasting impact on every business.
Further, he explained the specific implications for each hyper-accelerated trend, and provided tools for prototyping new business offerings to capture new value while demand is rapidly shifting.
“Every design leader’s new charter is to anticipate accelerated change in their industry and determine what new business offerings to prototype as a result.”
How to Apply a Ventures Mindset for Sustainable Growth
By Dan Kraemer
Many companies have an innovation strategy; a “plan to win” that includes staying on top of macro and micro trends, identifying customer pain points and needs, and investing in new technologies. However, the ability to operationalize that strategy and consistently translate it into well-timed and profitable new offerings eludes even the most well-established market leaders.
At IA, we apply a ventures mindset to innovation strategy. We believe the organizations that apply this mindset are able to consistently enter the market with cohesive, vetted, well-timed new offerings.
The following article describes how organizations can benefit from applying a ventures mindset to their innovation strategy to place smart bets on their organization’s future.
The Winning Approach: Ventures Strategy for Growth
Applying a ventures mindset to innovation strategy means that organizations proactively and continuously explore key forces of change in the market, in the context of their current and future business, to identify multiple venture opportunities. Through testing, iteration, and prioritization, ideal options emerge and are quickly brought to market.
A ventures strategy creates a continuous portfolio of market opportunities to fuel business innovation.
With this approach, organizations have multiple opportunities at their disposal and develop criteria for advancement of the most promising and market-ready options. This application of a ventures mindset – in the context of innovation – creates early awareness of latent opportunities and enables swift stakeholder alignment.
Because several possible market opportunities are continuously identified, a business can consistently define and launch new ventures before others do – and create the conditions to win in a competitive marketplace.
Activating a Ventures Mindset
To apply a ventures mindset to their innovation strategy, leaders must continuously conduct research with their current and future users, assess technology shifts and other macro and market factors to identify signals of changing demand, and align these forces with corporate strategy.
To rapidly identify insights and hypothesize a range of likely future scenarios, three forces of change must be continuously monitored:
Macro changes: societal, economic, and technological trends
Demand-based changes: how users’ wants, needs, and behavior are evolving
Market shifts: emerging disruptors and changing customer loyalty
Technology – and how we use it – is an especially important indicator of change. Consider tech at both the high-end of the market – where the tech is interesting, but may currently be too expensive or advanced for today’s customers – and the low-end of the market – where the tech is affordable, but not robustly solving current customer needs. At either end, how users interact with the tech (or could interact with it) can clue organizations in on how customer needs and desires will evolve.
Changing technology is just one of many forces of change to consider, but all take part in shaping the future of business, users, and society.
Adaptive Corporate Strategy
By taking a ventures mindset, an organization translates key forces of change into user insights, and filters the insights through corporate strategy. For new venture options to surface, ask:
How does this insight align with our enduring mission and vision?
How does it fit within our strategic portfolio of core, adjacent and transformational ventures? Does it align with our innovation ambition and risk tolerance?
Do we have the capabilities to succeed? What resources or processes must be developed?
Do the economics align with current expectations? Will the opportunity’s size and profit margins justify allocating the needed resources to succeed?
If your insights are compelling and they imply a “fit” with the company’s mission and vision, but aren’t a fit with its current processes and economics, don’t necessarily say “no”. Consider standing up separate entitiesto incubate ideas. This approach can protect high-potential opportunities that are currently too small to justify needed resources within the parent organization.
By aggregating company mission and vision, ambition, and economic advantages in combination with user insights, key stakeholders can align on priorities and set innovation goals to ground new ideas.
Informed by powerful insights and aligned leadership, dedicated project teams are created; either within the parent company, or as part of a separate entity. Teams challenge assumptions, and envision concept systems that create, deliver and capture new value. Through the process, multiple business opportunities – or “options” – emerge. Teams quickly explore and construct arange of value propositions. Using “lo-fidelity” visualizations they quickly co-create value props with users and stakeholders before investing resources to build and test new products and services. The most promising opportunities are refined and prioritized for prototyping and piloting.
Business Prototypes and Pilots
The next step is to put “business prototypes” into the marketas fast as possible. Business prototyping strategies can include physical and digital experiments such as service simulations, pop-up locations and A/B tests. With these “realistic” prototypes, teams can quickly collect behavioral data that is both qualitative and quantitative. This enables teams to confidently prioritize features and iterate in real-time as data is gathered. Managers can identify which options should be pivoted, divested, or scaled for success.
Organizations can leverage the same data to make informed investment decisions. For example, by comparing a feature’s importance in delivering on the value proposition with its level of effort to deliver, managers can determine what components should be built from the ground up, acquired, or co-developed with a strategic partner.
Ventures Strategy in Action
IA Collaborative recently worked with a global pharmaceuticals company to influence the future of their industry. Our team uncovered rapid insights by analyzing broader macro-trends – from hyper-personalization to changing subscription service models. We then contextualized how these changes impact buyer behavior and produced a holistic view of competitor dynamics. By framing this data to the company’s mission, capabilities, and goals, the team aligned corporate strategy with user needs to create several market opportunities focused on the future of personalized medicine.
With actionable options at their disposal, the client is now confidently and proactively piloting opportunities that benefit their future users and their future business – before their competitors do.
We’re also working with one of the world’s largest investment companies to disrupt the market with future-forward products and offerings. In this instance, we developed rapid insights by focusing on a single key user and identifying several possible market opportunities based on macro trends, market research, and user research. By contextualizinginnovative ideas with corporate strategy, brand-aligned concepts emerged centered on the relationships between parents, children, and finances. We designed actionable options for collaborative money management and tested several low fidelity future products to gauge market feasibility, iterate on user feedback, and prioritize opportunities aligned with organizational goals.
By testing multiple options simultaneously, we are proactively identifying innovative solutions and piloting them in the market– minimizing risk of future investment for new innovations.
Applying a Ventures Mindset to your Innovation Strategy
Innovation strategy is not a “once a year” or an “ad hoc” activity. Organizations investing in proactive innovation initiatives should continually collect indications of the future, aggregate observations into patterns and guiding principles of need, and evolve criteria for advancement.
Organizations that apply a ventures mindset will be uniquely positioned to maintain market leadership, can more effectively prioritize innovation and corporate development resources, and make better strategic decisions.
Modern, product-obsessed, human-centered organizations understand the value of applying design as business strategy, identifying future demand and envisioning new offerings by asking what’s desirable, possible, and viable.
These companies are also creating significant
value by applying design broadly across their organizations: empowering
employees, aligning stakeholders, transforming businesses, and making
Below are six strategies in which modern
organizations are leveraging design to align, strengthen, and prepare teams for
growth and scale.
1. Embedding design principles in every function and BU to align organizational priorities and empower collaboration.
Modern organizations are developing sets of
design principles that align the company’s purpose, each business
unit’s/department’s growth opportunities, and their users’ emerging needs.
By creating this detailed level of aspiration,
and by making each area’s principles known throughout the organization,
cross-silo teams have a better idea what information, talent, and assets
could be shared and leveraged. Proactive communication and coordination
increase across the company. Continuous
learning becomes a mindset and processes continue to iterate and improve.
Additionally, strategic hiring, retention,
and development are enhanced. Return on invested capital goes up.
Marketing becomes more integrated and effective. Ultimately, teams
become empowered to explore myriad possibilities with confidence that
their solutions will align with company values and direction.
2. Championing user research and storytelling to connect user needs with business opportunities.
Companies that conduct continuous user
research to inform ongoing product development and innovation are far more
likely to stay ahead of changing customer needs and maintain market
To maximize research efforts, modern companies
are transforming insights into compelling communication that can be broadly
shared across the company. Video, print, and digital media can bring insights
to life though user stories embedded with insight. These narratives inspire
teams to create user-centered solutions that drive business strategy,
offerings, experiences, and
thoughtful design, unfamiliar concepts are easily digested and novel ideas are
brought to life, helping both the enlightened and novice business leader learn,
adopt, and grow.
3. Envisioning user-centered value propositions to evolve current and future offerings.
Led by user insight and fueled by cross-discipline collaboration, modern organizations continuously consider updates to their value propositions and customer targets; identifying opportunities for product extension and market expansion.
To ensure new directions are not only desirable to users, but also possible and viable for the company to deliver, teams visualize high-level user experiences while assessing new capability needs and investment requirements.
4. Seamlessly integrating new partners into the business ecosystem.
Most acquisitions fail to deliver value
greater than their cost of capital. When considering new potential acquisitions
or detailing the integration plan for already-acquired businesses, modern
companies take a user-first approach toward determining how newly combined
assets might be leveraged.
To create competitive advantage, teams
envision opportunities that could enhance current or enable entirely new
experiences, offerings, business models, and internal processes. All latent, underutilized
assets are uncovered through cross-functional cooperation and diligence.
Armed with design principles, teams define
which components and operating models should remain independent and which
should become integrated or divested. Internal user journeys can also be defined to inform operating
structures and decision-making processes.
Based on human-centered scenario planning, an
integration roadmap is established; maximizing value from the acquisitions
while avoiding cannibalization and cultural conflict.
Oftentimes, teams will initially isolate new
acquisitions to preserve value and assess opportunities. Next, teams
iteratively incubate aquirees’ ideas within the parent organization, followed
by strategic incorporation of key capabilities into their core business. After
successful piloting, the last stage is full integration of customer
experiences, operations, and cultures.
5. Enabling ideal customer experience through organizational transformation.
When seeking to change the way parts of their organization work, modern companies begin by identifying a bold user-centered vision though cross-functional collaboration.
Teams facilitate service blueprinting work sessions where user, customer, and partner needs are mapped to customer sales and service capabilities; tools, features, and programs; and operations, policies, and technologies. To activate the vision and blueprint, new collaboration models are often required, bridging organizational silos and establishing new incentive structures and shared goals.
6. Business prototyping to prioritize new online and offline experiences.
Even for digital-first companies, much of a customer’s experience occurs offline. By incorporating lean methodologies with design thinking, modern companies simulate and iterate evolutions — and entirely new versions — of offerings, operations, and profit models.
Through low-fidelity prototypes, teams make experiences feel 100 percent real to customers (before incurring the expense of new operations or assets) and gain data from “in real life” interactions among customers, employees, and partners. Operating models can also be feasibly tested, where teams are built, trained, and expanded quickly.
With this iterative approach, leadership gains valuable real-user data, otherwise unavailable without business prototyping. Prototype data indicates which projects have the most merit, and what makes the most sense to fund and scale.
In summary, by incorporating human-centered design principles within each functional discipline and business unit, companies are signaling priorities and facilitating collaboration across the company. By evangelizing user research and storytelling across the organization, everyone becomes empowered by customer insight to guide their work. By infusing human-centered and systemic thinking within offering, integration, and transformation strategies, teams are envisioning and capturing new and unexpected value. By businessprototyping online and offline experiences, leadership is making better-informed product and service investments.
By infusing a design process and mindset throughout their organizations, modern companies are creating a human-centered, systemic culture; and aligning teams to lead change.
Dan leads the convergence of design and business strategy at IA Collaborative, where he works with teams to identify unseen human needs, frame breakthrough opportunities, and drive systemic solutions to commercialization.