Management and strategy by prototype – 2: developing a conceptual model
This is my second posting in a short series in which I propose applying a software development methodology to a business analysis and process context (see Management and Strategy by Prototype – 1: starting a new series.)
In part one, I introduced the concept of prototyping as a means for rapidly and at low cost exploring a wider range of options and opportunities. The idea there is that throwing a more effective, wider net increases your chances of identifying and capturing new market opportunities and even emergent blue ocean marketplace capabilities. In that context I cited that your products and services are not the only areas where you can strive to create a market capturing unique value proposition. This is always a possibility for any process or function that directly or significantly impacts on the market and on potential customers, in which you can offer significant and even unique value – unique to that specific market.
Prototyping as I present it here would be used for developing and vetting business-side sources of unique value going beyond the scope of simply looking at your products or services per se. But this approach can only offer value if it is done in such a way as to maintain a focus on core business capabilities and on larger strategic goals, priorities and plans. Otherwise you run the risk of ineffectively diffusing your efforts and your resources and you may even risk depleting your business liquidity in the process. So doing this right means at least potentially facing and reconciling two opposing visions and operational requirements: one wide ranging and open and one tightly focused. And better understanding and reconciling these approaches, or at least provoking some thought on them is the goal of this posting.
Consider delivery pizza as a working example, and I select this precisely because pizza per se is unlikely to be your product category of choice for creating a truly unique value proposition if you only consider the finished product itself. True, there are brick oven roasted, thick crust and Sicilian, thin crust and other basic types of pizza. There are a tremendous range of toppings that can be added. But simply coming up with yet one more possible topping or a novel twist on making the crust is probably not going to create whole new markets for you. The closest I know of for that might be Pizza Hut’s cheese-stuffed crust, but that does not seem to have taken off as the pizza delivery game changer either. When you are looking for ways to create a truly innovative new value proposition in a mature and settled marketplace like this you have to look beyond your end-point products and services themselves to ways you can improve the customer experience through business processes.
Consider delivery. Are there ways to prepare customer orders and deliver them faster and hotter? Are there ways to make the experience of getting and eating that pizza to more closely match a best in-restaurant experience that your customers might experience if they were to go to you? Looking for possibilities to prototype in this case means having an operational and marketplace goal and a distinctly customer-centric goal, as suggested by way of my pizza delivery example here. Then prototyped changes would be results-evaluated, testing out operational and business practice alternatives to see if you can more cost effectively, consistently improve on product as delivered and on performance in doing so.
In practice, business process prototyping would most likely offer greatest value precisely where marketplaces are settled and competition is fiercest – and where a small and incremental improvement could translate into increased market share as it would make you stand out from the more homogeneous crowd.
And with this I turn to marketing your newly improved production and delivery practices. If you look to production and delivery per se as avenues to creating a unique value proposition, and through prototype testing to reach greater effectiveness, you also need to find better ways to share word of what you offer through marketing.
Online and social media market your pizza through the channels your customers like, use and trust, enlisting their voices through cultivation of viral marketing outreach. Elicit feedback and refine both what you share as to your story and where you share it. Prototype, prototype, prototype! And keep it all in focus and directed towards creating sustaining value for your business and for your business model.
And with that I bring up a second key point.
• Look for ways to break out of the standard and routine in what you do, as discussed above.
• But go beyond that and look for areas and aspects of your business and its operations where you can do this that are unexpected and generally taken for granted too.
So in my pizza example, don’t just look at the pizza ovens, delivery processes and containers the pizzas are transported in. Look to your process for taking delivery orders and for managing their flow to the kitchen. And look for unexpected processes and areas in your business where you may be able to create a more competitive edge. Look for unexpected and novel places in your business where you can develop unexpected and novel sources of value.