Responding to Market Disruptions? Get Ahead of the Next One!

by Adam Hartung | Jun 21, 2019 | Newsletter Post

The newsletters of Adam Hartung.

Keynote Speaker, Managing Partner, Author on Trends

Responding to Market Disruptions? Get Ahead of the Next One!

Market Threat Assessments

Recent studies of senior managers have shown that being blindsided by a disruption is the largest unresolved concern in strategy development today. That fear is too often real because disruption typically begins where it is least visible to management- on the fringes of the existing target markets. And, once the disruption “pirate ship” is sighted on the horizon, not only is it probably too late, but companies react poorly.

Threat Responses

Research of corporate responses to disruption has shown that most companies ignore the threat, fortify existing positions or attempt to buy innovation. The first choice is not an option for an ongoing business. Fortification through distribution changes, product model proliferation and discounting only buys some additional time while wasting resources. Once a disruption enters the market, there’s little time for organic innovation efforts or “random acts of innovation” (Forbes) so companies often make acquisitions attempting to buy innovation.

Sadly, given the risk profile and limited experience in innovation, these are often sustaining innovations which are swept aside by the wave of disruption.

A very large example is when Microsoft fell behind in the mobile market in 2014 and purchased Nokia, a weak player in mobile phones to get access to this market. The joint project, the Lumia phone, failed to catch on and Microsoft’s share fell by 50%- fail. Cisco tried to catch up with the photography trend by acquiring Pure Digital, the maker of low cost Flip cameras. Unfortunately, shortly after the acquisition, the high-resolution sensors included in smartphones took photography to a new level. Bye, Flip! Trend monitoring would have predicted this natural evolution as a high risk threat.

Anticipate Threats

Even in successful acquisitions, founders often leave the firm, losing the source of innovative ideas long term. (Time, Inc.)

To anticipate external changes, marketing departments have embraced big data as a powerful tool to help companies identify new markets and consumer preferences. These tools use the past to predict the short-term future which is reasonable in a steady market. The problem is that big data cannot accurately anticipate dynamic disruptions.

But, you and your staff can.

Uncovering market opportunities that can deliver improved returns at a manageable risk for the firm is the goal. New products will also generate an increasing percentage of revenue leading to continued growth. Companies that master this process have a long range radar to identify potential opportunities in a process called, “continuous innovation”.

What’s on your company’s radar today?

Spark Partners is here to help as your coach on trends and innovation. We bring years of experience studying trends, organizations, and how to implement. We bring nimbleness to your strategy, and help you maximize your ability to execute.

Let us do an opportunity assessment for your organization. For less than your annual gym cost, or auto insurance premium, we could likely identify some good opportunities your blinders are hiding. Read my Assessment Page to learn more.

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“Don’t plan for what you know. Plan for what you don’t know.”

Adam Hartung, Create Marketplace Disruption

How we can help

For more on how to include trends in your planning, I’ve created a “how-to” that you can adapt for your team. See my Status Quo Risk Management Playbook.

Give us a call today, or send an email, so we can talk about how you can be a leader, rather than follower. Or check out the rest of the website to read up on what we do so we can create the right level of engagement for you.

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Watch Your Markets to Innovate

by Adam Hartung | Nov 22, 2017 | Newsletter Post

The newsletters of Adam Hartung.

Keynote Speaker, Managing Partner, Author on Trends

← Four Stages of Innovation Management

Responding to Market Disruptions? Get Ahead of the Next One! →

Watch Your Markets to Innovate

Our 20 years of research has shown that consistent success at innovation is the result of carefully applying four factors. Firms can win sometimes with only 2 or 3, but that risks costly mistakes. Worse, they don’t know what went wrong.

The Four Stages of Good Innovation Management are:

Market Sensing- Gathering the right data
Data Collection- Gathering data the right way
Data Analysis- Hearing the market story
Response- Doing the right things

Market Sensing

This newsletter will focus on the first stage, which lays the foundation for the entire innovation process.

Market Sensing is often viewed as gathering traditional industry data such as existing customers, existing competitors and existing technology evolution. Unfortunately, that information is woefully incomplete. Case studies and product failure analyses are filled with stories of how an upstart company, on nobody’s radar, created a new product, category or even a new market obsoleting the existing industry and changing key metrics.

Companies try to overcome the myopia by holding brainstorming sessions. But….

“Ok, we’ve got 6 months to make the numbers,” exhorts the VP. “We’ll watch this video on brainstorming and then break into small groups. Each group will generate ideas on how we can improve. No idea is too crazy at this stage!” But the VP adds, “Oh, by the way, we can’t hire any new people, spend any more money or move our resources around, so let’s work within those guidelines. Off you go; present after lunch!”

The Right Way to Market Sense

There are three types of questions for brainstorming:
1. What is happening now? What is considered the status quo?
2. What could happen that would destroy our business?
3. What could happen that would allow us to destroy our competition?

Once you answer these questions, identify what trends are driving each scenario. What trend can be leveraged to really do something different? What trend, taken to a greater extent, could change the status quo? Disregard existing beliefs, accept that “maybe pigs could fly,” and figure out what trend could make that happen. Then identify the data you could track.

prototype delivery drone For example, no one was considering delivering packages via drones, until news reported drones hovering over prisons to drop items. Next, DHL and Amazon said they were testing the idea for packages, and suddenly the competition for home and medical delivery changed dramatically. But few affected companies looked hard at this trend and were tracking drone size payload capacity, operational distance, navigation technology, etc.

The Lesson

Once the opportunity for changing the status quo happens, it is incumbent on every competitor to brainstorm how to track that trend and incorporate this trend into innovation plan. It was about 100 years since the first air mail planes but it took less than 5 years from prototype to drone delivery.

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“In the field of observation chance favors only the prepared mind.”

Louis Pasteur

Actions you can take

Most companies simply continue planning as if the future will look like the past, without sensing potential market shifts. They are forced to react when trends change the basis of competition, often late and with no insight into the look of future markets and competition. Try Market Sensing to more out of ideation sessions on products and services.

Stay tuned to my next newsletter, when we delve into data collection.

If you can’t wait, give me a call or drop me an email so we can discuss your needs.

How we can help

Our two decades of helping organizations identify and implement innovations gives us keen insight into how sustaining, expanding and disruptive innovations can be identified, evaluated for risk and cost, and managed for successful market growth. Our experience and processes will help you grow via innovation with more confidence, less time investment, lower cost and faster, greater returns.

For more on how to include trends in your planning, I’ve created a “how-to” that you can adapt for your team. See my Status Quo Risk Management Playbook.

Give us a call today, or send an email, so we can talk about how you can be a leader, rather than follower, in 2017 and beyond. Or check out the rest of the website to read up on what we do so we can create the right level of engagement for you.

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Stop Throwing Your Company’s Resources Away

by Adam Hartung | Apr 24, 2017 | Newsletter Post

The newsletters of Adam Hartung.

Keynote Speaker, Managing Partner, Author on Trends

← Are You Lost in the Innovation Gap?

Getting More out of Less When Investing for Growth →

Stop Throwing Your Company’s Resources Away

Is your organization stuck in the Flats of the River Lifecycle while the Innovation Gap grows? Are you pouring your resources into doing more of what you’ve done, even though you aren’t achieving the results you want – and need? Are competitors outflanking you with innovations? Are your customers telling you everything is fine, then buying from competitors? OUCH!!!

You need to change how you use your resources. You need to figure out how to put more resources into new products and customers, and less into trying to defend & extend sales of current products to current customers.

You need to change how you use your resources. You need to figure out how to put more resources into new products and customers, and less into trying to defend &extend sales of current products to current customers.

For established companies, the investment mix often looks like this.

But for start-ups would you be surprised to know their resources are allocated more like this?

innovation investment comparison established versus start-up

Our experience taught us that when the Current/Current investment exceeds 40% the company is “Stuck in the Flats;” over-resourcing slow growth business while under-resourcing new opportunities. After the frenzied growth in the Rapids, it feels like a relief to reach the Flats – where leadership would love to cruise along on auto-pilot, fine-tuning a few things and watching costs. But, the drift into decline begins at that moment- because the focus shifts to internal process optimization at the expense of monitoring external market trends. (Click here for last month’s newsletter on the River.)

Remember, the Ansoff matrix doesn’t just apply to where you put the money. As the Bain alums wrote in “Time,Talent, Energy” (see my review here,) you can use the Ansoff matrix to manage your talented people. In the Flats, leadership puts the best people in the Existing/Existing corner – optimizing the OLD business. The unintended effect is to dry up the Wellspring of new ideas, and leave precious little talent available for focusing on new growth.

To remain on the growth curve, companies need to put their best people onto new efforts, including projects in the New/New corner! By moving more investment capital, and talent clusters, into other cells any company can keep the Wellspring flowing with ideas and find The Next Big thing.

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“Knowing your purpose helps you in using all available resources in achieving your goals.”

Sunday Adelaja

Pastor and Author

Actions you can take

Examine or audit your investment in innovation. Try to assess the investment in each cell of the Ansoff matrix. Be rigorous about your classification because your competitors may be innovating or “pivoting” just to survive. Look for an outside source to provide some objective feedback on investment of people, funds and assets. Don’t hesitate to ask for help in making your organization more adaptable, and your strategy embedded with options to pivot based on market shifts. You could start with an underperforming product or brand.

How we can help

We are your experts at identifying trends, creating scenarios and building monitoring systems. We’ve done this kind of work for over 20 years, and bring a wealth of experience, and tools, to the task. You don’t have to go into scenario planning alone; we can be your coach and mentor to speed learning, and success.

For more on how to include trends in your planning, I’ve created a “how-to” that you can adapt for your team. See my Status Quo Risk Management Playbook.

Forbes Posts- Hartung on Leadership, Investing, Trends

Take time to read, “Time Talent Energy” by Mankins and Garton

How HR Best Practices Kill Innovation

Dow and DuPont – Nobody wins when transactions replace leadership

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Are You Lost in the Innovation Gap?

by Adam Hartung | Mar 30, 2017 | Newsletter Post

The newsletters of Adam Hartung.

Keynote Speaker, Managing Partner, Author on Trends

← Product Lifecycle as River of Trends

Stop Throwing Your Company's Resources Away →

Are You Lost in the Innovation Gap?

In the Wellspring of the product lifecycle river, organizations are creating innovations (see last month’s newsletter on the Lifecycle River here.) In the Rapids it’s all about finding customers for those innovations.

As volume grows organizations start focusing on optimizing operations, thereby “locking in” the Success Formula. Unfortunately, this decision – which seems obvious – almost always leads to decline!

Optimization causes an organizational shift away from focusing on the marketplace, toward focusing internally. More controls are implemented to insure standardization – and “process management” affects all parts of the company. The byword is “focus” as parts of the business are jettisoned, product lines dropped, assets sold and headcount lowered. These actions move the company from the Rapids of growth to the Flats of business model optimization – which produces short-term profit improvements, but cuts ties to market inputs necessary for long-term growth.

Think About GE

As CEO from 1981 to 2001 Neutron Jack expanded GE into multiple businesses from media (NBC/Universal) to financial services (GE Capital.) In the growth Rapids GE’s value (adjusted for splits, etc.) rose from $1.30/share to $46.75 – 35x or 3,500%. As CEO Jeff Immelt has“refocused” GE on its “core,” selling multiple businesses as he moved to grow profitability. Since 2001 GE’s value has fallen to $29.05/share – a decline of 38% (meanwhile the DJIA has almost doubled in value.)

In the Flats investments for low risk projects improving the existing business are approved rather than grander investments in new innovations. Although profits improve,the further the company (or product line) travels from the Rapids of customer focus into the optimization Flats, the greater the chance it will miss the next cycle of innovation and slip into the Swamp of decline.

As other companies continue innovating, market growth continues (often with substitutes) but the former leader does not participate. “First Mover” advantage disappears because innovators leapfrog the creator. This gap between market growth and company growth is called the Innovation Gap. The longer the company focuses on optimization, and profit maximization, the larger the Innovation Gap becomes.

To avoid becoming stuck in the Flats it is crucial to maintain a growth focus and avoid a profit focus. Like Amazon.com, you must track trends and competition and never hesitate to keep innovating. Investments in Wellspring projects must be maintained, and the lure of constantly investing to improve the old must be held at bay.

Next month we’ll discuss how you can track your resources in order to keep investing in the Rapids.

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“You’ve got to keep reinventing. You’ll have new competitors. You’ll have new customers all around you.”

Ginni Rometty
Chairman, President and CEO of IBM

Actions you can take

Don’t hesitate to ask for help in making your organization more adaptable, and your strategy embedded with options based on market shifts. You could start with an underperforming product or brand. Audit your company’s market sensing process at least twice a year. Does the process look outside the customer base and known competitors? What technologies might put the product line at risk?

How we can help

For more on how to include trends in your planning, I’ve created a “how-to” that you can adapt for your team. See my Status Quo Risk Management Playbook.

Forbes Posts- Hartung on Leadership, Investing, Trends

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Holiday Newsletter 2016

by Adam Hartung | Dec 22, 2016 | Newsletter Post, Trends

The newsletters of Adam Hartung.

Keynote Speaker, Managing Partner, Author on Trends

← Bah Humbug Investors In Retail: As Goes Sears, So Will Go Most Traditional Retailers

This Christmas People Matter -- For Buying Ads As Well As Gifts →

Holiday Newsletter 2016

Happy Holidays and gifts for my loyal readers!

This is my last newsletter of 2016 and I have seen a strong growth in new subscribers to the email newsletter, follows on my Forbes blog and in visits to my website. Thank you!

We have covered many topics around my passion- business growth through innovation. In my presentations around the world this year, there has been one common challenge to growth- how to best target limited resources to maximize returns. The best answer to identifying opportunities for disruptive innovation has been to look beyond the past internal and even industry trends and watch the trends outside the company, its current competitors and even the industry.

Disruptive innovation is so named because it often exists quietly on the fringes of the market, deep inside customers or in another market until it is suddenly “discovered.” Mountain bikes, snowboarding, Walkman, etc. are examples of the technology curve meeting the market demand curve to produce an “overnight success”. In celebrity circles it’s a performer perfecting his or her craft for years until preparation meets opportunity and just the right role catapults them to fame.

Here are the gifts:

Take our Trend Poll to see what trends are popular.
Download the TrendIQ Self-Evaluation to help you think about the value of trends in your innovation efforts.

Start the new year with a better insight on your Trend IQ, and a good understanding on how prepared you are to grow in 2017.

Click this link taking you to my web site. Then take the Poll on what trends you are following, and how you obtain trend information. Next, download the TrendIQ Evaluation. Fill out the questions and use that as a mini audit on your use of trends in planning.

Happy Holidays to you and your families! And we wish you a Merry Christmas!

Adam Hartung

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“Ships go sailing far across the sea,
Trusting starlight to get where they need to be…
When it seems we have lost our way,
We find ourselves again on Christmas Day! Believe….”

“Believe”, Josh Groban, Polar Express

Actions you can take

Don’t hesitate to ask for help in making your organization more adaptable, and your strategy embedded with options to change based on market shifts. Forecasting those key trends will help tell you plan your innovation allocations for the next year.

How we can help

We are your experts at identifying trends, creating scenarios and building external, market monitoring systems. We’ve done this kind of work for over 20 years, and bring a wealth of experience, and tools, to the task. You don’t have to go into scenario planning alone; we can be your coach and mentor to speed learning, and success.

For more on how to include trends in your planning, I’ve created a “how-to” that you can adapt for your team. See my Status Quo Risk Management Playbook.