Rohit Talwar 21st Century Tour Guide CEO

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Developing the Culture and Capacity to Support
Innovation, Accelerated Change and Continuous
Renewal
Rohit Talwar - 21st Century Tour Guide / CEO
Fast Future Ventures Mob 44 (0)973 405 145
Tel [phone] Fax [phone]
3568 www.fastfuture.com rohit_at_fastfuture.com
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Key Themes

• Using participatory approaches to explore future
  scenarios and strategic options
• Applying scenario planning, creativity, visual
  facilitation and process design in the
  transformation process
• Capturing and transforming ideas into valuable
  products and services
• Developing models to compete in a wired world
• Hothousing and Fast Forwarding key innovation
  projects

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Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

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Exercise - Objective Setting

• Working in syndicates, explain the following
• The key change management challenges facing your
  organisation
• What you hope to have learnt / gained by the end
  of this workshop

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Adaptive Cultures - Key Principles

• Consider alternative futures
• Continuous learning
• Tolerance of uncertainty
• Willingness to experiment
• Recognition that participation accelerates change
  delivery
• Execution orientation
• Underlying vision
• Passion

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The Challenge - Developing Strategies in an
Uncertain E-enabled World
How do we cope with risk and uncertainty? How do
we select the right indicators to track? How do
we identify key trends and developments? How do
we spot new opportunities, white spaces and the
potential for major discontinuities? How will
technologies and science change the way we work,
live and learn? How do we plan, operate and
survive in a turbulent and fast-changing
world? How do we handle those not playing by
our rules'?
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We Must Focus on 6 Key Areas
Strategy Stakeholder Relations
Resources Core Skills
People Values Culture
Knowledge Management
Operational Processes Structures
Financial and Social Performance
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Shaping Strategy in the Face of Uncertainty
Demography
Environment
The Economy
Commercial Developments
Global Developments
Infrastructure
Media
Education
Lifestyles
Crime
Natural World
Climate
Providers of Finance
Technology
Government Policy
Suppliers
Workers
Electronic Markets
Alternative Providers
Public Expectations Values
Interest Groups
Substitutes
Regulation
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Visualizing Success

• Step into the future
• Imagine the innovation has been implemented
• Create a video in your mind of what the impact
  has been
• What are the key stakeholders saying, thinking,
  doing as a result
• What can you now do that couldnt be done before
• What other benefits have been created
• What were the critical tasks in achieving the
  result

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Causes of Past Change Failure
Key Causes of Failure
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Underlying Transformation Model Scenario
Techniques Can Be Used at Multiple Stages in the
Process
Communications and Stakeholder Management
Continuous Change Management
Stage 2 Rethinking Reframing the Organisation
Stage 3 Developing the Implementation Plan
Stage 4 Iterative Implementation of Change
Stage 1 Building the Case for Change
Definition of Intellectual Underpinning - New
Business Paradigm
Pathfinder Projects - Early Insights into the
Future
Programme, Project and Task Management
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Construction Industry Supplier - Transformation
Programme
Development of Intellectual Underpinning - What
is the Basis of Our Market Strategy
Building the Case for Change
Rethinking and Reframing
Implementation Planning
Iterative Implementation
PILOTS
Project 1 - Telesales Management
Project 2 - Sales Process Redesign
Project 3 - Management Development Coaching
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Participative ApproachesChanging the Way we
Change Organisations
Need for Speed
Post Delivery Issues
Change Fatigue
Drivers
Whole System in the Room
Participative Design
Democratic Process
Mechanisms
Early Issue Identification
Faster Delivery
Greater Ownership
Outcomes
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Why Adopt A Participative Approach?

• Participation is not a universal panacea
• The attraction of participation is that it can
  deliver comprehensive solutions quickly - cutting
  traditional change cycles by 50-80
• The drawback is that it requires key people to
  come together and resolve issues together within
  a compressed timescale - the resistance to
  participation generally diminishes rapidly once
  the first such event takes place and the results
  become visible
• It is generally adopted by organisations who are
  feeling a sense of frustration with traditional
  approaches that deliver great ideas but little
  practical change
• It also requires a willingness and/or need to
  speed up the change process
• Participative approaches start with the premise
  that however compelling the case for change,
  however radical and potentially beneficial the
  proposed solutions, the actual implementation of
  change rarely succeeds unless it is owned and
  delivered by the front line managers staff
• People generally feel ownership for that which
  they create, hence if we want front line staff to
  understand and own the design for change they
  must be involved in the design process
• The more we engage the front line in the design
  process, the more likely we are to identify and
  address the real issues that traditional
  analytical approaches may not surface or
  challenge
• Once we have understanding, ownership and
  participation we have the conditions in which
  trust is created and empowerment can succeed
• Bringing different parts of the organisation
  together to view issues from multiple
  -perspectives and experiment with new ideas and
  approaches helps to unleash and harness the
  latent intellectual, physical, emotional and
  spiritual energy that lies unused in many
  organisations

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Participation in Practice

• Participation seeks to bring together focused
  groups of 5 - 5000 using a range of intensive,
  fixed timescale activities to address specific
  organisational challenges from defining a new
  vision to redesigning the order fulfillment
  process
• A key to the success of these sessions is to
  ensure that the whole system is in the room -
  i.e. all - or as many as possible - of those who
  have an interest or influence on the outcome are
  bought together to resolve the issue at one time
• Participative approaches acknowledge that today's
  problems are frequently yesterdays solutions,
  and that we need a broad range of stakeholder
  perspectives if we are to understand the causes
  of failure and fully appreciate future
  requirements. Hence during participative sessions
  all voices are considered equal and participants
  work together to review the past, understand the
  present and define and design the future
• We have undertaken a range of such events with
  group sizes ranging from 5-60 and addressing
  issues as diverse as sales order processing in
  telecommunications, reinventing a healthcare
  trust, process redesign in an international
  drinks manufacturer and conflict resolution in a
  major advertising agency
• Because of the clear focus on outcomes, shared
  learning, speed and co-operation, participative
  events provide very real, hands on experience of
  the culture and working disciplines many
  organisations are keen to develop throughout
  their organisations
• Finally, by using the participants as the main
  medium of communication throughout, participation
  ensures that real issues and concerns are
  addressed early in the change process
• In our view, participative approaches can be used
  at any and every stage of the transformation
  process

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Setting the Business Context
Company Business / Products Customers Value
Drivers Business Model
ARM HOLDINGS Semiconductor Design Semiconductors
/ Electronics Global Brands Leading
Edge Volatile Markets Speed of Response Customer
Understanding Innovative Design Reliability
Capture Mindshare Deep Customer
Relationships Involved in Customer
Strategy Invest in Innovation Process
Exceptional People
DIXONS Electrical Retailer Mass Market Brand
Led Price Conscious Limited Loyalty Price Choic
e Availability Repair Service Capture Market
Share Limited Customer Relationships Aggressive
Supplier Management Tight Cost Control Average
People
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Setting the Business Context
Company Business/Pdcts Customers Value
Drivers Business Model
YELLOW PAGES Directories / Business
Info. Predominantly SMEs (350,000) Often
Service Co.s (Taxis) Reliant on YP for
Business Price Conscious No. Of Leads Quality of
Leads Accuracy of Advert Price Capture Market
Share Close Customer Relationships Focus Quality
/ Error Reduction Multi-Product /
Multi-Channel Driven by Publishing Cycle
FAST FUTURE Accelerated Innovation Major
Corporations Entrepreneurial Start Ups Innovative
SMEs Investors Execution Skills Quality of
Thinking Effectiveness of Processes Consultants
Ability Capture Mindshare Deep Customer
Relationships Clear Participative Processes Focus
on Value Creation Equity Participation
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Exercise - Defining Business Context

• Using the Model shown on the previous pages,
  develop a business context model for your
  organisation
• Add any additional information that you feel will
  help us understand the organisation and its
  current situation

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Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

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Scenario Planning may be Valuable but...

• We dont have enough time
• We havent got the budget
• Were not convinced
• Our people are very cynical
• We have a long term plan
• We are too busy with current projects
• We are a numbers organisation

So is there a way we can prove the value quickly?
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How Can Accelerated Scenarios Help?

• To introduce and sell scenario planning to the
  organisation
• To help shape and drive fundamental change
• To open the door and let the future in - and
  thus help overcome resistance to change
• To help focus teams at the start of key projects
• To surface and sense check assumptions

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Applying Accelerated Scenario Techniques

• BellSouth - Understand impact of the New
  Economy
• Thames Water Utilities - Introducing and
  Assessing the Concept
• Environment Agency - Management Team Development
• Yellow Pages - Development of Business
  Blueprint
• Capture Thinking on Fast Forward
  programme
• Chloride - Senior Management Development
• Short Sharp Shock to Drive Growth
• East of Scotland Water - Initiation of Business
  Review
• Orange - Knowledge Sharing and Innovation
  Programme Launch

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The Stakes are Getting Higher
Where does the Internet rank in my business
priorities? its number 1, 2, 3 and 4. Jack
Welch, Chairman and CEO, General Electric
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And The Scenario Planning Horizons are Changing
In five years time, all companies will be
internet companies ...or they wont be
companies. Larry Ellison, CEO of Oracle
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Global Trends

• Technology is Shrinking Time and Space
• Technologies are Converging
• Choice is Now a Global Reality
• Free Agent Society
• Rising Service Expectations
• Globalization
• Emergence of Powerful Virtual Communities
• Emergence of a New Economics
• Quest for Customers - Internet Land Grab
• Emergence of New Business Models
• Businesses with no Product Emotions

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10 Driving Principles of the New Economy
1. Matter. It Matters Less. The processing of
information is more powerful and cost effective
than moving physical products. 2. Space. Distance
has vanished. The world is your customer - and
your competitor. 3. Time - It's collapsing.
Instant Interactivity is critical and is breeding
accelerated change. 4. People. They're the crown
jewels and they know it. 5. Growth. It's
accelerated by the network. 6. Value. It rises
exponentially with market share. 7. Efficiency.
The middleman lives. "Infomediaries" replace
intermediaries. 8. Markets. Buyers are gaining
dramatic new power - and sellers new
opportunities. 9. Transactions. It's a one-to-one
game. 10. Impulse. Every product is available
everywhere. The gap between desire and purchase
has closed.
Source Business 2.0 Magazine
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Winner Takes All - But Not for Long

• The opportunities are not lost on key players -
  both large and small
• Being the first mover creates immense publicity
  and short-term advantage
• The winners will be those who innovate
  continuously on behalf of their customers in
  order to recruit the best partners, generate the
  best deals and attract the highest value
  customers
• Unless you continue to innovate and reinvent
  yourself, however strong the brand, the service
  proposition and customer loyalty - someone else
  can and will change the rules and outsmart you

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The Benefits are Attractive
boosted competitiveness
fewer operational errors
Elimination of non-value-adding overheads
increased awareness of customers
revenue enhancing potential
more competitive pricing
enhanced customer service
faster and smarter RD
outsourcing
flow through supply chain logistics
smarter supply chain management
wider geographic reach
round the clock trading
speedy global collaboration
reduced printing costs
reduced product development cycles
reduced time to market
improved asset utilisation
lower cost product procurement
reduced customer acquisition costs
cost savings
information integration between businesses
productivity explosion
Source Ecom Asset Management
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Whats Changed

• Service obsession
• Digital communications - Information transparency
• Lower transaction costs
• Quest for customer intimacy engagement
• Adaptation / Customisation - its a 1-to-1 world
• Stickiness- Customers in control - so you arent
• Accelerated Competition - Pressure to add value
• Community building
• Convergence
• Imagination

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The E-Hierarchy
Scale of Change
Level of Commitment
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Theres Lots of Data Available

• 760 U.S. households join the Internet every hour
• 7.3 billions commercial e-mail messages are sent
  each day in the U.S
• The number 1 category of items shopped for online
  is cars and car parts, with 18.2 million shoppers
  
• Estimated number of Internet users in China
  1,750,000
• Estimated number of users who downloaded the
  Starr Report from CNN Interactive in the first
  two days it was available 1,700,000
• Fee to be charged by Delta Airlines for tickets
  not purchased on the Internet, in dollars 2
• Percentage of Delta Airlines tickets sold via the
  Internet in 1998 less than 3
• Volume of Internet initial public offerings
  underwritten by Goldman Sachs in 1998, in
  millions of dollars 435.6
• Estimated percentage of retail stock trades now
  taking place on the Internet 25
• Number of e-mail messages received by the U.S.
  SEC about potential Internet-related stock fraud,
  at August, 1998 120
• Percentage of print journalists connected to the
  Internet 87
• Number of outlet stores being closed by Lands'
  End, partly because of using the Internet 3
• Bank's cost to process an in-person transaction,
  in dollars 1.07
• Bank's cost to process an Internet transaction,
  in dollars 0.01
• Number of E-Zines (online magazines) listed in
  John Labovitz's e-zine list, as of January, 1999
  3022
• Through mid-April, amount of money raised by Bill
  Bradley's campaign web site, in dollars 30,000
• Amount spent by Dan Quayle's campaign to start a
  web site, in dollars 26,000
• Number of venture capital deals for
  Internet-related companies, in the first quarter
  of 1999 208
• Average financing in those deals, in millions of
  dollars 10

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and there are Loads of Forecasts Like This...
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and This...
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and This...
Source Computer Industry Almanac
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and This
Source Forrester Research
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But What Help are they to You?
"Everything on the net is moving at a frenetic
pace. In a fast moving market, statistics are to
a large degree an autopsy. You are looking at a
corpse. What is needed is an anticipation of a
birth."In a very serious sense, if there is a
statistic available to prove there is a demand
for a product you are probably already too late
to bring something to market to address that
need. You need to anticipate a requirement when
there is in fact no demand for it. Then you need
to build a solution that has no problem. Then you
launch your solution and build it slowly to
converge with the eventual demand created by the
eventual change of perception and consequent
recognition of the problem. It is a bit risky
and you can get it wrong, but in a fast moving
market, it is the only way to get to market
first. And first-comers on the web have a very
great market advantage."Leo Sheiner
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What are the Strategy Choices?

• Take your existing model online
• Innovate within the existing model
• Transform the model / market

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What Should E-Scenarios focus on?

• Technology?
• No! quantum computing, nanotechnology, genetic
  computing will all make impacts in the next five
  years
• Bandwidth?
• No! Assume it will be there
• Convenience?
• No! Mobile access will explode and mobile
  /portable web access devices will exceed static
  ones eventually
• Access Costs?
• No! Assume they will drop

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What Should our Strategies focus on?

• Who owns mindshare?
• Whos becoming web-centric?
• Powerful and disruptive business models
• Supply side opportunities
• Risk orientation of key stakeholders
• Pain-pleasure principles
• Social attitudes
• Rule breaking not rule taking
• Unmet need / Untamed greed
• Possibility
• Defining strategy as simple rules

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From Re-engineering to E-engineering
OLD LOGIC
NEW LOGIC

• Develop Business Scenarios (3 Months)
• Define Strategies
• Identify Key Processes
• Analyse customer requirements and process
  capability
• Define redesign goals
• Generate innovative concepts
• Redesign processes
• Implement, embed and measure

• Accelerated Scenario Planning (2 Days)
• Identify and select opportunity space / ideas
• Design Living scenarios
• Set design principles
• Design customer experience
• Define process boundaries
• Establish desired capabilities
• Prototype the scenarios
• Implement, learn and destroy

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The Accelerated Scenario Process
09.00 Introduction 09.30 Brainstorm driving
forces - political, economic, social
demographic, technological scientific,
environmental and commercial 09.45 Define
outcomes for each driving force 10.15 Pick one
outcome from each driving force and group them
into potential scenarios 10.45 Develop the
scenarios (12.45 Lunch) 13.30 Review the
scenarios and assess if any are similar enough to
combine 14.00 Assess the industry impact of
remaining scenarios 15.00 Examine the
organisational implications opportunities 17.15
Determine next steps and focus of day
2 17.30 Close
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Day 2 - Accelerated Solution Design

• 09.00 Introduction
• 09.30 Evaluate each opportunity
• Potential markets / customers / window of
  opportunity
• Potential market size
• Customer value drivers
• Possible Structures - in-house, spin-out, JV,
  etc.
• Critical success factors
• 11.00 Define core customer journey for each
  opportunity - how will they buy?
• Identify additional functional requirements /
  abilities to
• (12.45 Lunch)
• 13.15 Define core solution components - skills,
  processes, systems, infrastructure
• 14.30 Evaluate opportunities against criteria and
  select best fit options
• 15.00 Identify key stakeholder issues and
  management strategies
• 16.00 Develop high level 30 / 60 / 90 / 120 /
  180 day implementation plans
• 17.00 Agree next steps plan
• 17.30 Close

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Alternative Futures Approaches

• Stories about the future
• Strategies, goals, intentions, objectives, plans
  and tactics
• Possibilities, options and opportunities
• Off the wall ideas - blue skies thinking
• Hunches, predictions, guesses and estimates
• Trends, extrapolations and movements
• Projections, assumptions, simulations, models and
  forecasts
• Alternative arguments, cases, rationales and
  causes
• Models of stakeholder behaviour
• Follow the Leader / Regulator / Market
  influencers
• Anticipation and prediction of events or
  sequences of events
• All of these might be considered Scenario
  Planning techniques

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Scenarios - A Definition
The precise definition of scenario is a tool
for ordering ones perceptions about alternative
future environments in which ones decisions
might be played out. Alternatively a set of
organised ways for us to dream effectively about
our own future.
Peter Schwartz, The Art of The Long View
(Doubleday Currency, 1992) p4
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An Effective Scenario

• Tells a story about possible future changes in a
  particular system, domain, environment,
  society, etc.
• Engages the imagination
• Is written in the past or present tense - as if
  the forecasted trends and events had already
  happened
• Helps clarify the causes and consequences of key
  developments
• Challenges our current thought processes and
  assumptions about the future
• Enables us to define and assess a range of
  alternative policies, strategies and actions
• Is seen as relevant and an important element of
  the strategic process

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Scenarios Provide Fast Insights into Future
Experiences

• Engaging the Future - using scenarios is
  rehearsing the future. You run through the
  simulated events as if you were already living
  them. You train yourself to recognize which drama
  is unfolding. That helps you avoid unpleasant
  surprises and you know how to act. (p.200)
• Role Playing - by the end of the session,
  managers (at Shell) understood the implications
  of each possible future, because they had
  literally rehearsed them (p.205)
• Challenging Beliefs - that was the reason for
  creating the scenarios in the first place
  (p.202)
• Changing Behaviour - the test is not whether you
  got future right... The real test is whether
  anyone changed his behaviour because he saw the
  future differently. And did he change his
  behaviuor in the right direction?(p.214)

Peter Schwartz, The Art of The Long View
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Typical Approaches to Scenario Development
Discussion and debate - with or without source
data
System Change - evaluation of every parameter
under different conditions (treasury model)
Driving Force - identification and assessment of
the fundamental influencing factors
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Developing Scenarios Using Driving Forces
Gather Data
Commercial Business
Identify Driving Forces
Build Scenarios
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The Basic Scenario Process
1. Assess the Current Situation
8. Implement and Monitor
2. Gather the Data
7. Define Strategy and Plans
3. Identify the Driving Forces
4. Generate Alternative Scenarios
6. Assess the Implications for your Organisation
5. Assess the Implications for your Environment
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Example Driving Forces

• Political
• DF1 - Britains Attitude to the EU
• Total harmonisation
• Gradual alignment
• Growing divergence
• Fortress Britain
• DF2 - Political Stability of Europe

• Economic
• DF1 - Level of Growth
• Wireds Long Boom
• Consistent increases
• Zero growth
• Unshakable recession
• DF2 - Economic Health of Japan
• etc

• Social and Demographic
• DF1 - Work - Life Balance
• 24/7 Society
• 60 hour working norm
• Resurgence of 9 to 5
• 3 Day working week
• DF2 - Population Growth
• etc

• Commercial Business
• DF1 - Prevailing Business Philosophy
• Short term shareholder returns
• Long term value creation
• Socially responsible business
• Family friendly businesses
• DF2 - Impact of Globalisation

• Environmental
• DF1 - Impact of Environmental Legislation
• Encourages shift to paperless business
• Drives up costs
• Eliminates business sectors
• Negligible effect on most businesses
• DF2 - Pollution Levels

• Technological and Scientific
• DF1 - Impact of Wireless Technology
• Remote control for life
• Gradual take up of 3G/4G services
• Technology slow to deliver
• Health concerns restrict usage
• DF2 - Genetic Medicine

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Defining Driving Forces

• Working in syndicates, you will be allocated a
  heading (e.g. Political)
• Define two driving forces within that heading
  which you think will have a major impact on the
  business environment over the next 3-5 years
  (e.g. extent of regulatory control, political
  stability)
• For each driving force define at least four
  different possible outcomes
• Write the name of each driving force and the
  outcome on a separate sheet (you should have at
  least four sheets per driving force)

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Defining Scenarios

• Working in syndicates, select one of the outcomes
  from each of the driving forces defined earlier -
  the outcomes chosen do not have to fit together
  logically
• Using the set of outcomes as a start point,
  develop a plausible scenario of what a state of
  the world report would look like on January 1st
  2005
• You can present your scenario back in whatever
  way you think most appropriate - picture, one act
  play, news report, day in the life, etc.

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An Example Scenario - Britain 2005
Britain today is a thriving economy that has
recovered well from the recession of 2001.
Although its continual reluctance to be a full
participant in EMU remains a source of tension
with its European partners, Britain remains a
major influence in the 40 member EU. The
economy has experienced continuous growth over
the the last three years and a significant
transformation in employment patterns. London in
particular has responded well to the continued
migration of financial services operations to
Frankfurt, Yorkshire and the Internet. The
capital is now the centre of Europes multimedia
industry - with over 2 million of its working
population now involved in Internet / multimedia
related businesses. The general level of
Internet usage in Britain has risen dramatically
over the last three years as a result of the
joint venture between BTT, Microsoft and
Amazon.Com to provide free PCs to every home and
office. Take up has been particularly strong
amongst the wave of new businesses created on the
back of the re-elected Labour governments
innovative million five programme to create a
million new businesses in the five year period
2002 - 2007. Of the 600,000 new businesses
created so far, many have been in the fields of
new media, professional services, construction
related trades and the booming fields of personal
development, coaching and therapy. The need to
create these new businesses was driven by the
continual trend towards Globalisation and the
shift of production and service jobs to lower
cost countries in Eastern Europe and Asia.
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Data Gathering

• External
• Commentators / Think tanks / Institutes /
  Analysts / Economists
• Stakeholder groups
• Internet / Desk research / Secondary data
• Popular culture
• Government / Agency reports
• General press / Trade press / Generic business
  press
• Books
• Conferences / Seminars / Forums
• Internal
• Management information / Research
• Regulator / Trade monitoring
• Benchmarking

55
Sorting the Data

• MAJOR factors - impact through sheer size /
  volume e.g. demographics
• PIVOTAL factors - apply pressure in key /
  vulnerable areas e.g. regulatory behaviour
• GERMINAL indicators - early signs of possible
  trends e.g. Internet Commerce
• TERMINAL indicators - revealing movement away
  from current situation e.g. Government as
  providers

56
Typical Strategy Options

• Select most probable
• Hope for the most attractive
• Parallel strategies - e.g. Tesco
• Risk Aversion / Hedging
• Wait for indicators of developments on key
  drivers
• Seek to influence - choose your own destiny
• Ignore
• Hope is not a strategy

57
Health Warning

• Bias is unavoidable - make it explicit
• Synthesise perspectives - avoid building
  scenarios based on the perspectives of lone
  individuals - however insightful and well
  informed - group views - properly constructed -
  will invariably be more valuable
• Creativity counts - without creativity the
  process becomes stale very rapidly - the
  challenge is to bring the scenarios to life
• Use soft evaluation criteria - in analysing
  scenarios you cannot undertake hard evaluations
  of the future - there can only be opinions and
  judgements
• Anticipate cynicism and hostility - planning and
  thinking about the future is considered by many
  as a luxury or pointless navel gazing -
  particularly in reactive cultures
• Accept and publicisie the limitations - All
  forecasts and stories about the future will be
  imperfect, inaccurate and incomplete
• Expect conflict - a good scenario process will
  start to question the unquestionables and voice
  the unspeakable - the absence of conflict in the
  creation process may suggest that real issues are
  being avoided
• Openness is key - if strategic choices and
  operational decisions are based on the scenarios
  all involved need to know the underlying thinking
  - the more this case for change is known the
  less painful the resulting changes will be

58
Some Thoughts

• Scenario planning can help develop our
  anticipative skills
• No future can be guaranteed - which means the
  future can be influenced
• The strategic challenge is to identify and pursue
  the preferred future for the organisation
• The operational challenge is to ensure that real
  actions are taken in critical areas
• The intellectual and emotional challenge is to
  convince people that we can exert influence on
  our destiny
• The personal challenge is to learn and have fun!

59
Facilitating Scenario Building - Conclusions
Fun Delivers
No Right Way
Use Stakeholder Perspectives
Commitment Builds with Insight
Real Insights Occur at the Edge of Comfort Zones
60
Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

61
Assessing Customer Implications

• Underneath the business context flipchart for
  each of your organisations, place three
  flipcharts, with the following headings
• What are the implications for how our current and
  potential customers will run their businesses?
• What key products and services might they require
  from us?
• What kind of relationship will they want with us
  - what will the value drivers be for them?
• Staying in your syndicate group but working
  individually, go to each flipchart in turn and
  add your thoughts

62
Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

63
Innovation in Action at Yellow Pages - A Case
Study
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Yellow Pages Group - Key Facts

• Division of BT
• Provides a range of classified business
  information
• Ten main locations in the UK employing over 3,000
  people
• UK sales in excess of 500million p.a.
• Purchased Yellow Book in USA for 600m during
  1999
• Winner of EFQM European Quality Award in October
  1999
• Continued exploitation of global opportunities
• Flotation / Sale / Divestment planned in 2001

65
The Business Challenge
Achievement Culture
Global Brand / Household Name
Current Success
Excellent Financial Performance
High Customer Satisfaction and Retention
66
Service 2000 - Transformation Framework
67
Drivers For Transformation
68
Service 2000 Key Objectives

• To develop sales and service processes which
  support the growth objectives of the YP Group
• To facilitate rapid and effective launch of new
  products and services
• To accelerate its transformation into an
  e-business
• Stage 1 - Management Visioning Workshops
• Stage 2 - Fast Forward Prototype
• Stage 3 - Hothouse Business Deign Project

69
Service 2000 - Defining the Vision
Management workshops Dec 98 - April 99 to
establish
Desired Outcomes - How will success feel?
Sales and Service Strategy What do we sell? Who
to?
Approach - Use of Prototyping
Customer Journey What should the customer
experience be?
70
Fast Forward Strategic Objectives

• Build a throwaway prototype of tomorrows sales
  and service experience to bring to life
  strategic options
• Help the business make more informed choices
  about the strategic options available
• Engage the organisations imagination - capture
  knowledge and ideas from everyone who wants to
  participate
• Accelerate strategy implementation by providing a
  tangible and clear vision of the desired outcomes
  and customer experience
• Share what we are learning and creating on the
  journey - not just the outcomes
• Introduce new tools and techniques that can help
  speed up the innovation process

71
Fast Forward Approach
Team of 12 No Hierarchy
Cross- Functional
16 Week project
Thinking Like Customers Competitors
Benchmarking, Reading Training
Individual Learning Diaries
Continuous Sharing of Knowledge
72
Prototype Principles Pre-Requisites

• Clear remit - communicated across the business
• Dedicated team - intensive process
• Separate location - arms length relationship with
  day-to-day business
• Encourage innovation - clear mandate to act /
  think out of the box
• Flexible approach - no sacred cows
• Customer centric - focus on What the customer
  will see
• Act fast - deliver 80 solutions, live with
  loose ends- dont worry about low level details
  of how the processes and systems will work
• Preparation - well planned induction / education
  process for the team - the Detox
• External benchmarking
• Allocated funds
• Communications - focus on listening not telling
• Ownership leadership - Clear programme owners
  and dedicated steering group
• Engage encourage - find ways of sharing
  knowledge with the organisation and preparing
  people for change from the start

73
Fast Forward Outcomes

74
NEW BUSINESS PROPOSITION
75
Business Transformation - Goals

Empowered and Service Led Tolerance of Change and
Uncertainty Recognising and Valuing Individual
Strengths
Business Culture
Positive Encouragement and Support for
Leadership, Coaching Innovation vs. Management
Control Primary Focus - Maximising People and
Performance
Develop In-Depth Understanding of Customers Build
Value Adding Relationships Multi-Channel,
Multi-Product Sales Approach
Market Approach
Clarity and Simplicity Customer Focussed - Choice
Flexibility
Organisation Structure, Measures and Rewards
Designed to Encourage Customer Focussed Behaviours
76
What Needs to Change?
From
To
Customer Experience Customer Journey Business
Processes Sales and Service Proposition Product
Portfolio Channels to Market Sales Approach What
We Do How We Do It Who Does It Where Its
Done Market Position Business Drivers
Value Adding Relationship Seamless - Customer
Driven Simple End-to-End Design Delivering
Business Solutions Fast-Changing / Multi-Vendor /
Digital Multiple High Touch / Low Touch Territory
Based - Whatever it Takes Accept 80
Solutions Speed is Key Whoever Needs to Close to
the Customer New Kid on the Block Market Share
Customer Acquisition
Predefined Process Disjointed - Multiple Contact
Points Complex - Departmental Silos Selling
Advertising Space Stable / Own Brand / Paper
Based Field / Tele Canvass Based - 2 Call
System Strive for Perfection As Long As it
Takes Clear Policies and Procedures Determined by
Structure Mature Market Leader Customer
Acquisition, Turnover Profit
77
Exercise

• Develop a mapping of what needs to change in your
  organisation - use different / additional
  headings if you need to

78
Key Elements of the Service 2000 Programme
79
Stimulating Innovation

• 3 week Detox programme for Fast Forward
• Shopped, opened accounts and requested services
  from other organisations to experience their
  customer journey
• Looked at good design in other contexts -
  visited Design Museum and ICA
• Visited Cisco, Virgin, Dell, TNT, Wesleyan
  Assurance, WPA AND Easy Jet
• Training in creativity, visual facilitation,
  scenarios and process design
• Focus on continuous learning - books, journals,
  seminars and peer education
• Immersed ourselves in the web to understand the
  medium and the opportunities
• Used highly visual process
• Iterative approach for prototype screen design -
  web developers worked closely with the team
• Advisory Group, Steering Group and others
  provided constant challenge and input
• Emphasis on simple language
• Electronic facilitation tools used for formal
  evaluation and feedback on prototype

80
Mobilising the Organisation
Presentations / Workshops for Training, Change
Management Group, IS, Regional Sales Managers and
Area Sales Managers
Communicated Through Business Objectives
Reinforced at Local Performance Reviews
Presented to Top 200 Managers
30 Advisory Group 50 visitors 70 Invited to
Review Outputs
National Prototype Review Workshops
Electronic Suggestions Database
60 National Design Workshops - Personal
Invitations
81
Preparing People for Radical Change
and creating a culture to support continuous
innovation
82
Conclusions

• Transformation is a contact sport
• Innovation is an outcome and an input
• Context is key - start from what they need not
  what you know

83
Exercise - Brain Writing

• Alternative approach to brainstorming
• Can be used in small or large groups
• Can be used with single or multiple issues
• Each person (or syndicate) writes their thoughts
  on an issue for a few minutes
• Sheets then passed on to next person who builds
  on the existing points and adds new ones - pass
  round the group until complete

84
Morphological Analysis

• List the attributes of the product, service or
  situation across the top of a grid (max 4-6
  attributes)
• Identify under each attribute, brainstorm all the
  different possible variations
• Take one idea from each column and see what new
  ideas can be generated
• E.g. developing a new toy

Age Group
Type
Material
Theme
Baby Toddler Kindergarten Teenager
Fashion Educational Role Play Collectible
Plastic Steel Wood Cotton
Doll Car Construction Costume
Possible Outcome - Babys Educational Cotton Doll
85
Assessing Business Implications

• Working in your syndicate group, select one of
  the businesses and develop for it a new business
  proposition
• Consider what new products/ services / channels /
  applications / business models e-thinking makes
  possible
• What opportunities are there for process
  innovation
• Define the new business context statement
• Company
• Business / Products
• Customers
• Value Drivers
• Business Model
• Critical success factors for implementing the
  changes

86
Surfacing Assumptions - Example
The framework below may help surface the
assumptions made in the current business from
both the customer and firms perspective
Customer Producer
Who What How Why When Where
Are the main customers? Should perform the
task? Do they want? Are the critical
tasks? Do they want the outputs Do we perform
the tasks? delivered? Do they need the
outputs? Do we do it this way? Do they need
the outputs? Do we perform the tasks
required? Do they want to do business? Do we
have to perform the task?
87
Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

88
Fast Forwarding Innovation - CSFs

• Focus on the Customer Experience and Customer
  Engagement
• Speed
• Insight and Imagination
• Tolerance of Risk and Uncertainty
• Distance from Business As-Is

89
Participative Process Redesign - An Example
Who / How Much
Where When
Why
What
How
Develop Process Vision 2 Days
Produce Detailed Process Design 2/3 Days
Develop Delivery Plan 2 Days
Scoping Session .5 Day
Bus. Goals

• High Level Design
• Scope
• Look and Feel
• Customer Interface
• Key Steps
• Roles
• Use of IT
• Inputs
• Outputs
• Rationale

• Detailed Description
• Steps
• Tasks
• Decisions
• Interactions
• Information Rqts
• Participants
• Skills
• Controls
• Inputs
• Outputs
• Measures
• IT Requirements

• Delivery Plan
• Gap Analysis
• Process Changes
• Rollout of Current IS Projects
• New Developments
• People Development

• Issue / Question to be Addressed
• Agreed Scope
• Boundaries/ Assumptions
• Specific Goals
• Participants
• Timescales
• Preparation/ Inputs

90
Suggested Agenda for Scoping Workshop

• Project purpose and objectives
• Scope of activity to be considered
• Project timescales
• Objectives for next workshop(s)
• Target attendees for first workshop
• Structure of first workshop
• Communications and follow up activities
• Workshop preparation - support team
• Workshop preparation - participants
• Roles and Responsibilities

91
Key Elements of the Scoping Workshop - 1

• Project purpose and objectives - the clearer you
  can become about why you are doing the project
  and what you are aiming to achieve, the easier it
  will be for others to make a contribution and
  raise issues relevant to the project
• Scope of activity to be considered - you need to
  agree where you are drawing the boundaries for
  the process(es) or issues to be considered and
  identify any givens or constraints that need to
  be taken into consideration
• Project timescales - in order to maintain focus
  you need agreement on the project end date you
  also need to ensure that all involved understand
  the timescales for specifying, selecting,
  procuring, developing and implementing any
  information systems components or other elements
  of physical infrastructure that will be required
  for the project and hence when key decisions will
  need to be made
• Objectives for next workshop(s) - clear and
  commonly held agreement is required on where you
  hope to be by the end of the workshop(s) and the
  likely level of detail that is required for both
  the ideas that will emerge and the
  implementation plan that is produced

92
Key Elements of the Scoping Workshop - 2

• Target attendees for first workshop(s) - once
  you know what you want to achieve it is then
  easier to identify those whose presence will be
  critical to achieving the desired outcomes
• Structure of first workshop - the workshop design
  needs to ensure that current assumptions are
  challenged and that the ideas and design
  proposals that emerge as a result are well
  understood by all participants the number and
  duration of the workshops required will be
  dependent on the amount of detail you need to
  cover and the complexity of the processes
  involved
• Communications and follow up activities - you
  need to think about subsequent communications at
  the design stage so that the issue of
  documentation can be considered at the point of
  designing workshop activities think about how
  you will communicate the feel as well the
  content and outcomes of the workshop how will
  you involve the participants after the workshop?
  who else will need to see the outputs and sign
  them off? what decision making steps will there
  be before the design can be approved and
  implemented?

93
Key Elements of the Scoping Workshop- 3

• Workshop preparation - support team - the data,
  process maps, details on related projects and
  other relevant information that will be required
  in order to ensure that - as far as possible -you
  have all the information you need at hand during
  the workshop
• Workshop preparation - participants - the
  pre-reading, analysis and thinking you would like
  the participants to do beforehand in order for
  them to make a full and effective contribution to
  the workshop(s)
• Roles and Responsibilities - clarity on the
  contributions expected from each of the
  participants both in the project as a whole and
  in the redesign workshop(s) in particular

94
Agenda

• Context
• Exploring Future Scenarios
• Assessing Implications and Opportunities
• Developing New Models and Solutions
• Participation Model
• Creativity Tools and Techniques
• Conclusions

95
The Innovation Challenge
Research Intelligence
Creative Ideas
Scenarios Options
Accelerated Strategic Innovation
Internal Innovation
Corporate Venturing
Spin-Outs Incubation
Speed Flexibility Efficiency Service
Secure Future Value Streams
Maximise Value of Current Opportunities
96
The Innovation Process
97
Opportunity Definition - Example
Opportunity/ Problem
Potential Gain/ Impact
Current Situation
Business Requirements
Provision of Personalised Information Services
Create 10-30 additional revenue for 50 of
customers
Trial service launched in Brussels 5 take-up
Increase range of services Accelerate customer
sign-up
Delays in new product development
Loss of customers / revenues Loss of market share
Key faults detected in System testing Launch
delayed by 40 weeks
Identify offer / incentive to keep
customers Speed up development process
98
Brainstorming

• Brainstorming is a simple technique for
  generating ideas and encouraging creative
  thought, it can be used for
• Listing problems
• Identifying potential causes of problems
• Establishing objectives for a solution, project
  or activity
• Identifying solutions to problems
• Building action plans
• The objective is to generate as many ideas as
  possible without evaluation or criticism and with
  everyone having an equal voice
• Structured brainstorming involves clustering the
  ideas into related groups and then determining
  the relationships between the clusters
• Brainstorming can be combined with other problem
  solving tools Like Why-Why Diagrams

99
Brainstorming Guidelines

• Multiple perspectives - choose a mixed team that
  includes people who can take a totally detached
  perspective on the problem
• Clear purpose - ensure everyone understands the
  issue to be addressed and the rules of
  brainstorming
• Allow time for thought - introduce reflection
  breaks if required
• Ensure everyone participates
• Variety - using post-it notes allows people to
  generate ideas in parallel
• Quantity counts - generate as many ideas as
  possible - record them all
• Be daring - encourage radical and off the wall
  suggestions
• Dont rush to judgement - dont discuss, evaluate
  or criticise the ideas as they go up
• Keep the atmosphere relaxed
• Process control - agree who is leading /
  facilitating the session

100
Six Core Questions

• Who?
• What?
• How?
• Why?
• When?
• Where?

101
Defining Assumptions Constraints

• In every organisation there will be a range of
  business rules, assumptions and constraints that
  must be taken into account when developing new
  ideas e.g.
• Business rules
• Signing / authorisation levels
• Rules on recording customer interactions
• Rules on maintenance of records
• Product testing procedures
• Assumptions and Constraints
• Departmental structures which cannot be changed
• The extent to which computer systems can be
  changed
• Product characteristics which cannot be changed
• Willingness of other Departments to accept the
  impact of changes

102
Surfacing Assumptions - Example
The framework below may help surface the
assumptions made in the current situation from
both the customer and supplier perspective
Customer Supplier
Who What How Why When Where
Are the main customers? Should perform the
task? Do they want? Are the critical
tasks? Do they want the outputs? Do we perform
the tasks? Do they need the outputs? Do we do
it this way? Do they need the outputs? Do we
perform the tasks required? Do they want to do
business? Do we have to perform the task?
103
Assumption Surfacing Techniques
Detailed Review of Situation, Processes and
Performance Measures
Brainstorming
Independent Non-Aligned Perspectives
104
Defining Improvement Objectives

• The clearer we can be about the improvement
  objectives, the easier it will be to assess
  whether the new design will meet its
  requirements. Typical objectives might include
• Adding Value
• Create new customer offerings or product features
• Improve customer service, added value and
  responsiveness
• Provide better, more timely performance
  information
• Increasing Efficiency
• Faster product launch
• Reduce time spent on routine tasks
• Reduce paperwork / Minimise processing errors
• Cut transaction costs / Simplify and streamline
  processing steps
• Consolidation and elimination of roles,
  procedures and tasks
• Improving Effectiveness
• Clarify roles and responsibilities
• Increased empowerment / Devolution of
  responsibility
• Standardise processes and procedures performed in
  multiple locations
• Make more effective use of technology
• Improve speed, flexibility and productivity

105
Assessing Critical Success Factors

• The grid on the following page provides a simple
  format for
• assessing the critical success factors for
  delivering innovation or change in an
  organisation
• identifying supporting actions to achieve the
  desired results
• In column one list all of the current and
  potential critical success factors
• In column two you can assess the importance
  (imp.) of each success factor (1-minor relevance,
  10-critical)
• Column three allows you to assess the
  organisations current capability to address the
  success factor (1-implying that this is an area
  of major weakness, 10-suggesting that you are
  operating at the standards of best practice in
  this area)
• Column four provides a space to record ideas for
  supporting actions
• The associated positioning matrix may help in
  presenting your assessment of the situation to
  others

106
Critical Success Factors
Example
Success Factor Imp. Cap. Supporting
Actions
Business-wide clarity on customer needs concerns
10 3
Customer Focus Groups 0800 complaint line System
of Listening Posts
Effective internal communications
10 7
Team Listening structure Intranet Web-sites for
all projects 48 hour responses to all project
queries
Involvement and Participation (IP) at all levels
8 2
Management workshop on IP ideas Pilot
participative event Staff design of business
forums
Demonstrable support for new culture / ethos
9 6
Regular business forums Team charters at all
levels Open access to performance data
Formal ownership guidelines Regular process
owners forums Central process design repository
Process Ownership Infrastructure
7 9
Imp. - Importance 1- Minor Relevance 10 -
Critical Cap. - Current Capability 1 - Major
Weakness 10 - Best Practice
107
Critical Success Factors
Example
Clarity on customer needs concerns
Critical
Effective internal communications
Involvement and Participation (IP) at all levels
Demonstrable support for new culture / ethos
Process Ownership Infrastructure
Performance Measurement Framework
Formal skill development programmes
Importance
Stakeholder Communications
Strong Supplier Partnerships
Continuous Benchmarking
Minor Relevance
Current Capability
Major Weakness
Best Practice
108
Creative Idea Generation Techniques

• Benchmarking
• Reversing Assumptions - What if?
• Daydreaming - see Visualizing Success
• Random Word Techniques
• Morphological Analysis
• Stakeholder Perspectives
• Extreme Positions - e.g. cheapest, fastest, zero
  errors
• Brainstorming / Brainwriting
• How-How Diagrams - Reversal of Why-Why
• De Bonos Six Thinking Hats

109
What is Benchmarking?
An ongoing process of measuring our products,
services and practices against our toughest
competitors or those companies renowned as
leaders in their fields
David T Kearns President Xerox Corporation
110
Why Benchmark?

• Compare performance levels
• Create discomfort with current performance levels
• Identify alternative ways of meeting customer
  expectations, organising work, delivering
  outputs, achieving targets and managing change
• Stimulate new thinking on the art of the
  possible
• Accelerate change
• Learn from the Best of Breed
• Create stretch goals to raise performance
• Solve specific problems

111
The Benchmarking Process
Planning, Communication and Enrolment
Collect, Analyse and Interpret Benchmark Data
Define and Implement Changes
Monitor and Improve
Plan and Organise
Understand Current Processes

• Clarify purpose and objectives
• Decide what to benchmark
• Sign up the stakeholders
• Appoint and train benchmarking team / agree
  objectives, roles and responsibilities
• Define plan and milestones
• Think about target organisations

• Create process review team
• Map the process
• Identify inputs, outputs and measures
• Assess current process capability
• Determine underlying business logic
• Define potential areas for improvement
• Initiate immediate improvement actions
• Communicate findings

• Agree focus for benchmarking
• Select and approach target organisations
• Conduct pilot visit
• Agree participants
• Define specific questions
• Conduct visits and collect data
• Analyse and interpret findings
• Identify reasons for gaps and differences
• Communicate findings

• Determine scale of change required - set targets
• Identify and prioritise specific changes
• Develop detailed action plans
• Implement changes - people, process, systems and
  measures
• Monitor and communicate results

• Monitor changes
• Identify areas for further