Oil reservoirs are available and merely waiting to be found by experts. Similarly, opportunities already exist for all organizations that want strategic outcomes. Here’s the key. Just as the oil industry needs an effective method to locate a reservoir, organizations need an effective method to find opportunities that have strategic potential.
How did Airbnb generate revenues of $2.8 billion in 2017? “Airbnb has been breathing down hotels’ necks for years,” says a Digital Trends article. Airbnb started off by providing an alternative to hotel rooms. They let you book someone else’s apartment or house for a few days. Then they introduced Airbnb Plus to offer specially curated “beautiful homes” and “exceptional hosts.” And then they acquired luxury retreats to introduce Beyond by Airbnb. Most surprisingly, the “don’t book hotel rooms” company now lets you book hotel rooms, too.
Airbnb grows by finding the numerous opportunities that are waiting to be found and by exploiting those opportunities.
Strategic opportunities can fit into five categories.
1. Strategic objectives
Whether your organization has unmet or newly defined strategic objectives, your search for opportunities begins here. There are many ideas that can be created or many issues that can be addressed – to generate strategic outcomes. To make that a reality, your teams need to work on the following four items.
2. Customer focus
What helps achieve customer needs and wants? Decades ago, we started by focusing on improving internal supporting processes. Improvements were often achieved by automating the processes. These improvements brought efficiencies and drove down costs.
We then began focusing on customers, but the focus has been mostly limited to improving the customer experience. Principles were borrowed from human-centric design, which is increasingly informed by sophisticated technologies involving big data and analytics. Don’t get me wrong. Good customer experience is extremely important for all organizations; in some cases, it can even turn a company around.
The problem is, while focusing on experience, we seem to be forgetting a potentially bigger opportunities that could come from reimagining the product or service itself. Reimagining of products and services will require research and innovation capabilities. It makes a lot of sense to begin these activities after you have defined value propositions. Thankfully, today we have many techniques to do these activities quickly and cost-effectively.
3. Broader horizon
Traditionally, the scope of a tech initiative has been defined by the boundaries of a proposed tech. We therefore leaped into developing that tech – accepting it without knowing whether or not it has strategic potential. Often, any business benefits from this approach are generic and normally expected from automation or from the functional category to which the tech belongs. These benefits may not be the strategic outcomes that the organization needs at the time. By leaping into development, we kick-start strategic outcomes uncertainty and thus take a huge business risk.
To tie tech initiatives to strategy, we should step outside the functional boundaries of tech and instead locate the coordinates of a “reservoir.” A reservoir is a broader set of processes and assets (including tech) having the potential to contribute to a part of the organization’s strategy – if reimagined in specific ways.
Today’s successful digital initiatives all have a broad scope. A broader scope, if identified using strategic objectives, presents more opportunities and has better chances of delivering strategic outcomes.
4. New technologies
Innovation is a constant in the tech space. In fact, the pace of innovation is probably accelerating. The good news is that new technologies offer numerous opportunities for organizations. While some technologies may be used for critical purposes, others such as the self-parking TV remote may be used for convenience purposes. Here’s something important: all technologies (both new and existing) need to be validated in the strategy context. Speaking of existing tech, consider that a significant percent of them are suboptimal and may be retooled for strategic contribution.
5. Blending of business innovation and tech
Blending is obviously possible only if you have defined a broader scope. A lot of organizations still have silo business units that should come together. Many have dozens of silo technologies that may need to be combined in a new way. Internal tech may have to work with external tech used by customer and vendors. Multichannel (digital and physical) experiences work best when they’re integrated. See the opportunities?
Airbnb, it appears, used all of the five categories of opportunities we just looked at. Finding the opportunity is an essential part of strategy translation. Thankfully, like oil, strategic opportunities are waiting to be found, too. In fact, a lot of organizations are right now sitting on a great “oil reserve,” if you will!