Accelerate Strategic Thinking and Innovation: Focus Outside-In
It can be frustrating as a leader to be told that you need to think more strategically, set an inspiring vision, or create breakthrough innovation. These statements imply that there is something wrong with the way a leader thinks, creates, or communicates. That a leader either has this capability or not. Luckily, this is not the case!
Thinking strategically, innovating, and setting a vision are all skills leaders can develop and enhance. This starts by building the core capability of Shape External Focus and Alignment. This is a key driver of company growth, and is the start of the strategic, innovation and vision processes.
If your strategic planning process is coming up in your company, or if you need to refresh your team’s vision and strategy, start here!
Why It’s Important
Being externally or market focused is one of the key drivers of a company’s organic growth. Studies over the last twenty years show that focusing on customers leads to greater salesperson performance and better company-level customer satisfaction. Customer focus also drives product and service innovation and financial performance. Companies that are market-oriented (i.e., focused on competitors, market and industry trends) experience greater innovation, strategic thinking, learning orientation, entrepreneurism and growth.
As an example, consider how external orientation influenced the design of the iPhone. In 1993, IBM introduced the first smartphone, and in 1999, NTT Docomo launched the first mobile internet services platform. Consumers in Japan were using their phones for games and music as they commuted to work. Much later, Steve Jobs set out to recreate the mobile phone to be easier to use, with simpler buttons to push and with less likelihood of dropped calls. At that time, Apple engineers were exploring touch screen technology for use on tablets. Instead of focusing on Steve Job’s initial request, the design team used touch screen technology and their awareness of competitor trends to design the first iPhone, which was introduced in 2007. Instead of a redesigned phone, Apple introduced a mobile computing platform, which catapulted Apple’s growth.
What It Is
Shape External Focus and Alignment is a capability anyone can develop. Capabilities are a combination of a person’s preferred Style and their learned Strategies. A Style reflects natural preferences and traits and takes more time to develop. A Strategy reflects a person’s learned skills, practices and routines, and can be developed more quickly.
The Style for Shape External Focus and Alignment is Customer Centered. This reflects a person’s enjoyment of interacting with and serving customers. This is especially important in customer-facing jobs and in certain industries and functions (e.g., hospitality, call centers, customer service functions).
The complementary Strategy is Focus Externally, which reflects a person’s practices in how they engage their customers and the actions they take to monitor the external environment. This is about seeking information, learning, and sharing information internally about customers and industry trends.
These preferences and activities help individuals learn about the market, create new insights, and gather input from others on these insights. This stimulates their thinking so that they can create new ideas, identify new strategies, and set direction that responds to external demands.
What It Looks Like
Leaders, teams, and organizations can become more externally focused. For example, as part of a development program, a cross-functional team was recently required to create a new technology product strategy. The team was not familiar with the product area and initially was leaning towards pursuing a technology strongly suggested by internal experts. However, as part of their strategy process, they were required to gather information from customers and competitors.
Insights from their customer interviews and benchmark studies led them to suggest pursuing a different technology opportunity as part of their overall strategy. By focusing externally, they suggested an opportunity that had a large revenue upside, created a pipeline of innovations, and a product vision that excited senior management. This also allowed them to pursue longer-term opportunities while addressing more immediate needs in the marketplace.
Putting it Into Practice
How you focus externally varies based on your need. For example, thinking strategically includes four different elements. These don’t have to occur in order, but they combine to shape a person’s or team’s strategic thinking skills.
Start by scanning the external environment by networking and speaking to strategy or industry experts. Regular scans can provide ideas and insights that you can use with stakeholders and leaders internally. For strategy purposes, go beyond this by gathering structured information on the 3C’s: Consumers, Customers, and Competitors. Gather information to understand consumer/customer needs and how well you and your competitors are positioned to serve these needs.
While scanning the environment, identify insights and ask questions to identify why these insights and trends are important, how they impact stakeholders, and opportunities they might create. Involve others to gain diverse views and perspectives.
Then, use these insights to formulate strategic options and hypotheses that you can test with stakeholders and customers. Evaluate these options to decide on the strategic options to pursue.
Thinking strategically is not an internal process! Instead, think of it as an interpersonal process that leverages environmental scans to stimulate insights and conversations that result in strategic opportunities.
Get Started Today
Most leaders are too busy focused internally to spend time focusing externally. To overcome this, start by identifying why focusing externally is important to you. Link your efforts to work challenges that require you to be more strategic, innovative, or inspirational.
Then, identify practice gaps by using the Growth Leader Assessment:
Individuals can gain insight into how Customer Centered they are and the practices they use to Engage Customers and Monitor and Share information. This can focus effort and development.
Teams can identify and leverage individuals on the team that have strengths in External focus, Innovation, and Entrepreneurism. The Growth Leader Team Report helps teams identify and overcome gaps in these areas.
You also can get started by reflecting on the areas where you might get the most value:
Do I actively spend time with customers to understand their needs, issues, and challenges?
Do I have a good engagement model for interacting with my customers?
Do I speak to others internally that work with our customers to learn about the trends they are seeing?
Do I spend time each month learning about competitors or technology trends?
Do I actively network externally to learn about other industries and competitors?
If you want to know more capabilities for growth, sign up for one of our learning events here. If you want to know more about the Growth Leader Assessment, email us at mail@organisationsolutions.com.
© 2024 Organisation Solutions. All Rights Reserved.
Dr. James Eyring is CEO of Organisation Solutions and Lead Science Advisor for Produgie. James has over 30 years of experience assessing, coaching, and developing executives and their teams. With a PhD in Industrial / Organizational Psychology, James is actively involved in research on leadership, growth capabilities, and potential. He has taught Undergraduate and Graduate level courses and published in academic and practitioner publications. Most recently he authored book chapters on Strategic Workforce Planning and Innovations in Assessment in SIOP’s Professional Practice Series.
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