Have you ever wondered how some companies are able to pivot, transform and pursue new growth ideas?
Kaihan Krippendorff, business strategy speaker and author, says their secret is a repeatable process and a common language that can be learned and taught.
Krippendorff will be covering this topic during the opening general session at LANDSCAPES 2021 at 8:30 a.m. ET on Wednesday, Oct. 20. In this session, he will share a set of proven business strategy tools he has used with hundreds of clients in almost every industry to create innovative strategies and growth ideas that have generated more than $2.5 billion in revenue.
“95 percent of people who walk through what I will cover report conceiving of a potentially transformative strategic idea in the session,” he says. “Companies that apply the simple thinking tools I will provide increase their growth rates by 50 percent on average. It’s not magic. It’s simply a method I have refined over the last two decades that works. It guides you through a series of quick inquiries that help you generate ideas your competitors will not conceive of and that your competitors may risk trying to copy for many years.”
Krippendorff has been studying the strategies and strategic thinking habits of high-growth, high-profit businesses for the past ten years and he will share four key lessons that he’s gathered. These lessons are:
1. Great businesses outthink the competition by executing strategies that competitors cannot, or will not, copy quickly.
“As Ray Kroc, founder of McDonald’s put it, ‘Competition can try to copy my style, but they can’t read my mind so I’ll leave them a mile and half behind,’” Krippendorff says.
2. Great businesses make creative strategic choices that are beyond the choices that their industry peers have accepted as the norm.
“I call these kinds of choices ‘4th Options,’” Krippendorff says. “For example, when retailers were focused on placing stores in city centers and it was commonly believed that to be the winning strategy, Wal-Mart placed their stores in rural areas. Dell was the first to sell computers directly to consumers. Southwest returned to the point-to-point model when nearly all major airlines had moved to a hub and spoke model.”
3. Successful businesses apply the ‘4th Option’ mindset across many dimensions of the company. Look for areas to innovate in that your competitors are overlooking.
4. Coming up with disruptive strategic ideas is easy when you understand how people conceive of innovative ideas.
Having a systematic process for creating new strategies is critical because the pace of change is accelerating.
“This means that successful companies don’t just have strong strategies, they have the ability to continually generate new strategies,” Krippendorff says. “Think of Tesla, or any of Elon Musk’s businesses. It seems that nearly every quarter they announce a new approach that catches the competition by surprise. We can all innovate our strategies with similar speed if we systemize the strategic thinking in our companies.”
As for the common language these successful businesses use, Krippendorff says we all use common language with our teams that help build our businesses. Like “clustering” customers to minimize travel or “vision” that helps you align your team and make consistent decisions. In the session, Krippendorff will introduce a few new concepts to your vocabulary. The ‘4th Option’ is one example of this common language.
“When you and your team start talking about ‘4th Options’ in your meetings, you will find your behavior starts changing,” he says. “In fact, I was just today at a board meeting of a client who had started adopting the ‘4th Option’ language. During that meeting, I saw the entire discussion evolve. When someone proposed an idea for, say, better managing their fleet of machinery or offering additional services to customers, people would say “is that a 4th Option?” This question led them to immediately brainstorm more ideas.”
When it comes down to how owners can actually outthink their competition Krippendorff breaks it down into steps that spell “IDEAS.”
- Imagine what you want your business to be or deliver in the future.
- Dissect your business and decide which areas is most valuable to focus on (services, people, marketing, etc).
- Expand your option set by coming up with more potential strategies than your competition does.
- Analyze those ideas and distill them down to the very best ideas you can execute.
- Sell those ideas to your partners, investors, employees so they support the resulting strategy.
In the Expand phase, Krippendorff says while your competition may stop at three or four ideas, you need to come up with forty. He says it’s not uncommon for business owners to come up with over 100 potential ideas.
“You can do this over a multi-day off-site or during a one-hour meeting,” Krippendorff says. “If you keep working through IDEAS and make it a habit, you will be continually outthinking the competition.”
There are three things that make a growth idea actionable. First, it has to be something that if you acted on it, it would move the needle on what you want out of your business. Second, it needs to be something you have the capabilities and passion to see through. Third, you want to make sure that by taking on the idea, you do not exceed your resources and management bandwidth. You have two choices if this occurs.
“The most commonly taken choice is to shelve it on the back burner…until later you find out your competitors executed it and enjoyed its benefits,” Krippendorff says. “But a more intriguing choice is to look back at the things you are currently executing and kill it, stop doing it, in order to funnel your time and resources into the new idea. Too often we get stuck executing the same old ideas, even though we have better ones because we are not willing to abandon them.”
Want more information on how to outthink your competition? Register for LANDSCAPES 2021 and we’ll see you in Louisville!