Strategic Agile Business Development

Agility in management, organizing and infrastructure

Management emphasizes immediate results especially during depression. Managers often claim to have their eyes fixed on the future, but the reality tells a different story – why is it that sales meetings always handle those deals that were never closed or the problems with clients, or the manager spends two hours presenting financial figures from the previous quarter.

An organization cannot be called very creative or future-oriented, if most of the time is spent reflecting on the past. Not enough time is spent on future deals or future events. Operationally, agility sets new standards for information systems, among other things. For example, inflexible ERP systems, lack of connections between different operations and specialized systems hinder agility.

A major organizing-related problem is that resources are easily tied down, which becomes evident as, for instance, the core business monopolizes all available resources or competent managers only orientate themselves towards the core business, consequently depriving new, promising business ideas of any resources and appropriately-skilled managers. Agile organizing aims at separating profit-making from the ownership of resources to allow free mobility of resources.

Individuals and Interactions – in agile development, self-organization and motivation are important, as are interactions between key stakeholders. Business in practice will be more useful and welcome than just presenting documents to clients in meetings. Requirements cannot be fully collected at the beginning of the business development cycle, therefore continuous customer or stakeholder involvement is very important. Responding to change is the key in the Agile Development, which is focused on quick responses to change and continuous development.

From agile software development to strategic agile business development

Agile software development is a group of software development methodologies based on iterative and incremental development, for example: “During each “sprint”, typically a two to four-week period (with the length being decided by the team), the team creates a potentially deliverable product increment (for example, working and tested software). The set of features that go into a sprint come from the product “backlog”, which is a prioritized set of high level requirements of work to be done.”

The agile business development can be seen similar way, but there is several issues that require more attention. The agile business development have:

• to focus the whole business, not just a single product
• to take account the whole product lines or family
• more people involved to development
• people from different functions e.g. sales, marketing, production, logistics
• all issues that are strongly linked to business model, strategy model and its guidelines
• more stakeholders such as customers (not just users, but also various decision makers), suppliers, partners, resellers, authorities, etc.

Accordingly, you need:

• Enhanced visual collaboration between people
• Element based business model (“what”) and strategy model (“how”)
• Longer development periods – sprints 8than in agile software development)
• Intensive and transparent top management involvement, because development based on strategy and business model
• Manageable amount of “projects” or tasks, which are all linked to strategy
• Keep deadlines (pedantic) and decrease “features”
• Find customers with urgency to purchase your product or service right now
• Focus on MVB – Minimum Viable Business (not just Minimum Viable Product)

The key issues of Strategic Agile Business Development:

1. A sprint is a basic unit of development in the Agile Business Development methodology. Sprints tend to last between one month and three months, and are a “time-boxed” (i.e. restricted to a specific duration) effort of a constant length.
2. Each sprint is preceded by a planning meeting, where the projects (or tasks) for the sprint are identified and an estimated commitment for the sprint goal is made, and followed by a review or retrospective meeting, where the progress is reviewed and lessons for the next sprint are identified.

• Program per new business is about 30-40 projects or tasks
• Reviews in sprint workshop
• Status reports 1 page every month per project or task
• Status meeting every week 30 minutes

Summary

Agile strategy is diversely present in the day-to-day operation of an organization and everyone experiences the challenges set by agility in different ways and at different intensity. A new era has begun.

Minimum Viable Business [MVB]?

You need to:

1. Business model with visual elements (1 picture)
2. Customer: there needs to be a sense of urgency to get the problem resolved right now. Not the largest potential market, but the easiest and the fastest one.
3.  A Minimum Viable Product has just those features that allow the product to be deployed, and no more
4. Pricing scheme simple as possible
5. Sell something or anything to target customer
6. No hiring: outsource everything; production, marketing, sales, logistics, delivery, etc.
7. Use only ready and cloud based tools and processes for ERP, CRM, SCM, etc.
8. Sell and deliver first via existing companies and found a company later on.
9. Iterate your business model elements

There is a real need for agile strategy development?

What shuld be included to MVB – Minimum Viable Business?

Best tweets of August 2011

Here is my selected top tweets of August 2011. I use mainly following hashtags: #innovation, #strategy, #businessmodel, #startup, #creativity and #leadership

Best of best

Explanation of Apple’s success: not innovation, but the ruthless execution of good strategy http://bloom.bg/pPtwE3 #strategy #innovation

#innovation & #strategy

Trial, error, variation and selection: Unilever created nozzle after 45 generations http://bit.ly/pco1R2 #innovation #agile #development

Is over-sharing killing your creativity? “small and exclusive” gatherings were far more productive http://ow.ly/5T2iy #innovation

The Art of Teaching Entrepreneurship and Innovation | Tina Seelig http://bit.ly/oiZU6r #innovation #startup #entrepreneurship

Not invention, but adjacent innovation: Why Next Big Thing Will Come From Small #innovation http://on.mash.to/ooTv8v

Top 10 Innovation Videos of 2011 http://bit.ly/nud2Vr #innovation

Explanation of Apple’s success: not innovation, but the ruthless execution of good strategy http://bloom.bg/pPtwE3 #strategy #innovation

#businessmodel & #startup

Twitter reveals business model: Purchase data at a price http://bit.ly/nxWVcp #bmgen #businessmodel #strategy

Why Google Bought Motorola Mobility: Business model of hardware-software synergy http://bit.ly/pI6IOn #bmgen #businessmodel

Amazon moves into publishing: http://nyti.ms/pNse6A RT @ggvogt via @bill_fischer @vpsingh #strategy #bmgen #businessmodel

6 Reasons to Keep Your Business Small: at earning $500,000 a year for 20 years = $100m http://bit.ly/o7YtuG #strategy #startup

More than 90% of startups fail, due primarily to self-destruction rather than competition http://bit.ly/oRikl8 #startup #leanstartup

#creativity & #servicedesign

Design Studio Methodology: collaborative design of complex systems | UX MAG http://bit.ly/nj7iI5 #innovation #servicedesign #creativity

Constrains? Being creative requires using the knowledge you already have http://bit.ly/nGp6JX #creativity

#leadership

Stories Are Powerful Leadership Tools, because our brains are literally programmed for stories | Kotter http://onforb.es/nYCcXA #leadership

Humor exerts its psychological effect by forcing a change of perspective http://bit.ly/pCfjly #leadership #storytelling #strategy

S. Jobs: 10 Commandments in managing the creative process http://www.thedailybeast.com/newsweek/2011/08/28/steve-jobs-his-10-commandments.html #creativity #leadership #management #innovation

Don’t Write a Mission Statement. Often not representative of true meaning of company http://bit.ly/mOreMp #leadership #management #strategy

Strategic agility – Agility must first be introduced to the way of thinking

We are often bound by our old habits, whereas an agile mind is able to find new perspectives. The desired state can be reached by answering the following questions: why do we exist and what will our market position be in the future.

Our strategic alertness may have been lowered if our desired state and our brands are set to fixed assets such as land, buildings and location. On one hand, they have been, and still are, means of differentiation, but on the other hand, they narrow down the strategic horizon. An open-ended business concept leaves room for new ideas.

Ambitious enough sets us free to look for new solutions

Another important provider of strategic freedom is the set goal. Too ”realistic” a goal narrows down our horizon, resulting in us mostly relying on the familiar ways of doing things and not daring to search for new solutions. A desired state that is ambitious enough sets us free to look for new solutions. This means that we can either limit or release our strategic thinking merely by the way we set goals.

A hands-on and shared feeling on business is crucial for innovation.

A third factor affecting strategic alertness is a shared goal. A common desired state helps look for and recognize new solutions. Finally, a wide network of contacts and close interaction with interest groups are important in defining your vision. Reading interest group analyzes cannot do this; it requires actually meeting a variety of people. A hands-on feeling on business is crucial.

Values form the basis for agility

Agility is created through open interaction that encourages involvement, and in which everyone aims for the same desired state. Agility incorporates discovering, recognizing, handling, deciding over and implementing new things. It has also to do with an organization’s capability to adjust to new situations.

Are the necessary decisions made solely among the management team, or are different units able to decide for themselves? Values that promote agility include

• free participation,
• openness,
• efficient interaction (internally and with interest groups),
• accountability,
• initiative and
• the courage to participate.

Low-cost Airline’s Strategy Model Analysis: Southwest Airlines

Case Southwest Airlines

About 40 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. Southwest Airlines founded in 1971 and it was a novel business model innovation that breaks all the rules.

They began with one simple notion:

If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.

A  low-cost airline is also known as a no-frills, discount or budget carrier or airline. It is an airline that generally has lower fares and limited services. The term originated within the airline industry referring to airlines with a lower operating cost structure than traditional airlines. Low-cost carriers should not be confused with regional airlines that operate short flights without service, or with full-service airlines offering some reduced fares, because they have different business model.

Low-cost airline’s the key strategy logics (per perspective) are:

• Very low ticket prices (customer)
• High utilization rate of fleet of aircraft (growth, routes)
• Simple structures (processes)
• Lean and productive personnel (resources)

Low-cost airline allow business travelers, who could not fly in First Class, to enjoy a premium service. Accordingly, elements of the customer perspective focusing on frequent point-to-point flyers, limited service and refundable ticketless flight. Frequent flyers are people, mostly business, who frequently travel between destinations that are 250-500 kilometers (150-300 miles) apart.

The growth perspective follow only the strategy logic of the high utilization of aircrafts, which is based on elements such as the efficiency in ground services (25 min gate turnaround), short-haul, frequent and point-to-point routes between mid-sized cities and secondary airports. These the key issues keep planes in the air the most of the time. The utilization rate with high volume is very crucial for the low-cost airline’s strategy model and every business issues must follow this logic.

The process perspective based on simplicity of operations. Just one type of aircraft (Boeing 737) keeps costs down related to pilots’ training, spare parts, maintenance, etc. The hardest part of the implementation of low-cost airline business model is personnel.

Create lean organization, flexible and productive personnel:

• Flexible contracts & multi-skilled personnel
• Create right company spirit
• Reward: High compensations of employees
• Be selective: Only hire persons fit in profile

The whole Strategy Model of Southwest Airlines (see picture blow).

Levels of analysis:

1. Root: mission statement
2. Orange elements: strategy logics per strategic perspective
3. Dark blue/violet elements: business issues
4. Blue elements: activity elements

See the above case study here: Southwest Airlines Strategy Model in Cone Made software [web link to service]

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Navigate to MODEL and use VIEW mode from top-right corner.

20 quotes about innovation, agile strategy and leadership

I selected 20 quotes about innovation, agile strategy and leadership for you.

My favorite is Edison’s quote  “Opportunity is missed by most people because it is dressed in overalls and looks like work.”

1. Success is not final, failure is not fatal: it is the courage to continue that counts | W. Churchill
2. It is always wise to look ahead, but difficult to look further than you can see | W. Churchill
3. Continuous effort – not strength or intelligence – is the key to unlocking our potential | W. Churchill
4. To improve is to change; to be perfect is to change often | W. Churchill
5. However beautiful the strategy, you should occasionally look at the results | W. Churchill
6. Courage is going from failure to failure without losing enthusiasm | W. Churchill
7. Simplicity is the ultimate sophistication | Da Vinci
8. If you can dream it, you can do it | Walt Disney
9. Whether you think that you can, or that you can’t, you are usually right | Henry Ford
10. A market is never saturated with a good product, but it is very quickly saturated with a bad one | Henry Ford
11. Failure is simply the opportunity to begin again, this time more intelligently | Henry Ford
12. Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time | Thomas Edison
13. Opportunity is missed by most people because it is dressed in overalls and looks like work | Thomas Edison
14. I never did anything by accident, nor did any of my inventions come by accident; they came by work | Thomas Edison
15. The value of an idea lies in the using of it | Thomas Edison
16. I have not failed. I’ve just found 10,000 ways that won’t work | Thomas Edison
17. Anyone who has never made a mistake has never tried anything new | Albert Einstein
18. People with goals succeed because they know where they’re going | E. Nightingale
19. As long as your going to be thinking anyway, think big | Donald Trump
20. Sometimes by losing a battle you find a new way to win the war | Donald Trump

Apple’s success seems like magic: The Business Innovation Funnel has 2nd side

Did Apple “any” innovations or just business innovations? In Bloomberg’s article Richard P. Rumelt offers another explanation:

“To many people, Apple’s success seems like magic. Others attribute it to cool products, good marketing, and Steve Jobs’s charisma or presentation skills. Critics credit the Apple co- founder’s ability to project a “reality distortion field.” In his new book “Good Strategy, Bad Strategy: The Difference and Why It Matters,” Richard P. Rumelt, a strategy professor at UCLA’s Anderson School of Management, offers another explanation: the ruthless execution of good strategy.”

“Traditional” Innovation Funnel

The traditional innovation funnel focusing on a new product, product line, service or similar objects. The product or service innovation funnel can be described simply as a funnel from idea to product and service.

The Business Innovation Funnel has 2nd side

The first funnel is from many ideas to a few “elements” of innovation. Basically, we select the key elements for innovation such as customer’s needs, product features, design, etc. In the end, we have something ready, but not yet properly in the market or we don’t have “the execution” ready for innovation. In the 2nd funnel of innovation, which is, based on my experience, the harder part of innovation. We have to consider strategic issues concerning e.g. marketing, sales, delivery, customer service and also leadership and management innovations.

The 2nd Funnel

We need to use tools, which are more linked to strategic management & leadership, for example:

• Business model (“what”)
• Strategy model (“how to implement”)
• Strategic Project Management, PMO (“managing investments”)
• Key Performance Indicators, KPI, scorecard (“managing activities”)
• Incentive, reward and compensation plans

The Business Innovation Funnel has Two Sides

Also Paul Hobcraft wrote in his blog about There are two distinct parts to any Innovation Funnel. This is the real innovation, when we combine product, service and business innovations together.

What you think? Is Apple’s success more about 2nd funnel – business innovation funnel or the 1st one?

See more about business innovations from slideshare presentation

Strategy as model and guiding business rules

The biggest challenge in strategy development is crystallizing the strategy and making it easily conceivable. This is achieved by applying a guiding rule or simple rule, which is a principle of concrete decision-making and unambiguous operation.

Rules can be made for different things, organization units and themes: rules for the management to help decide on acquisition criteria, rules on customer soliciting for the sales department, or rules for choosing a business location.

All of these details may be crucial to the strategy. Decision-making rules evidently guide the decision-making situation. Whether to choose x or y? Whether to close a deal or not? For example, a decision-making rule unambiguously defines whether a store is opened in a given location.

Operative rules are related to the timing and the ways of conducting business. An operative rule relates to the practical side of operation and its characteristics. In its simplest form, an operative model is just a set of a few rules according to which the business is lead and developed. Performance rules define concrete goals, for instance a specific figure or volume.

Rules of this kind include, for example, product development lead-time, the portion of new products of the sales return, customer profitability and the sales volume in a given period of time. A restrictive rule outlines, among other things, the area, the customer segment, magnitude and also what is not done. Guiding rules aim to achieve the following benefits:

•    simplifying the strategy and facilitating its adoption
•    developing operating culture (= a strategic competition advantage)
•    facilitating implementation

Modular modeling of strategy

and business activities

The modeling approach differs from the traditional document-based strategy description in that the content may be constantly realigned and iterated.

The information model of the strategy can be modified module by module, and the model allows a visual presentation of the occurred changes. Discerning change from a written document is much more difficult. Therefore, strategic modeling is practically organic to an agile strategy process. Strategy written out in a document is useless for constant iteration of strategy, in which it is necessary to quickly identify cause-effect relationships and entities.

Example: mindmap style Strategy Model

See the above case study here: Southwest Airlines Strategy Model in Cone Made software [web link to service]

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• Password: swa

Navigate to MODEL and use VIEW mode from top-right corner.