Using Innovation to Grow - Within and Beyond - Your Core

 

Rich Kohler

While it is well known that innovation is critical to all companies’ growth, research shows that the most successful organizations use it to:

Not only expand their lead within their industries,

But also disrupt new ones, even in uncertain times.

In last week's article, Pathway to Sustainable Growth, I stated that the biggest key to future growth, many experts believe, will come from innovation: operational improvements that make products faster, better, or cheaper, or new devices that save consumers time and money.

And that innovation could also come from investing in talent. 

Innovation and Growth are Inherently Linked

Companies that build new businesses and develop new offerings, processes, or business models are better able to capture growth opportunities - as well as and hedge against market and technology disruption in a highly uncertain business environment.

In McKinsey's recent survey of over 1,000 global companies, the largest share (39%) of respondents identified the ability to innovate as the most important strategic factor for generating growth over the coming 12 months.

The next 4 include: Relationships with Customers (38%), Relationships with Business Partners (30%), Talent (28%), Operational /Manufacturing Excellence (27%).

The biggest sources of competitive advantage vary by industry, but innovation is consistently in the top three.

In sectors undergoing significant disruption - energy, for example, where supply disruptions and large investments in sustainability require companies to evolve their businesses - innovation is particularly important. 

But even in industries where the evolution of business models is a less urgent need, such as retail, nearly a third of the respondents identified innovation as a top three source of competitive advantage.

What distinguishes top economic performers3 from the broader group, however, is their comprehensive approach to innovation and growth. This applies both within and outside their current industries or geographies.

In McKinsey's survey, top performers cited innovating new offerings as their number one investment priority for accelerating growth over the next 12 months. 

They were also more than

• 63 percent more likely to innovate at scale - by building or acquiring new businesses outside their current industries and

• 50 percent more likely to expand geographically compared with their lower-performing peers.

Innovation Spurs Growth Within - and Beyond - the Core

On average, 80 percent of corporate growth comes from within a company’s core industry, and innovation is critical to that growth. 

While overall industry momentum and commercial levers such as pricing and marketing are critical and cited by 42% of respondents, the next two largest factors, noted by 38 and 34 percent of survey respondents, respectively, are innovation of new offerings within the core business and expanding into new regions.

According to McKinsey, Innovation not only gives companies new revenue streams within their core businesses - but also potentially steepens the entire sector’s growth trajectory. 

For example, Taiwan Semiconductor Manufacturing Company’s:

• Disruption of the integrated semiconductor industry by supplying manufacturing services to other players,

• Combined with its innovations that increase chip computing density,

both raised its revenues by 17 percent annually between 1995 and 2025 and contributed to boosting the sector’s growth. 

Similarly, Apple famously helped redefine the music industry by introducing the iPod and its associated apps and created entirely new platforms with the iPad and Apple Watch, all of which bolstered its ascent to the number-two spot among the world’s most profitable companies.

Top-performing companies put as much effort as other firms do into growing the core. 

What differentiates them from their peers is their use of innovation to venture beyond their industries. 

As technology continues to break down traditional industry barriers, the need to innovate outside the core deepens. 

For example, in McKinsey's research, top performers were:

• 78 percent more likely than their peers to build new businesses in different industries 

• and 68 percent more likely to acquire one in another sector.

This pattern holds true when one narrows the lens to the top 20 global companies by average five-year economic profit. 

Fourteen of them accelerated growth through:

• Significant innovation investments within their core businesses or by

• Creating entirely new markets outside their core

• Sometimes both - underscoring the importance of innovation-led growth.

These moves often occurred over numerous years, even entire economic cycles.

Consider:

• What is your approach to Innovation?

• How are you using it to accelerate your growth?

• And how might it compare with top industry performers?

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RoundMap® : Framework 12 Principles

 

Unveiling the Twelve Cornerstones of RoundMap: Pioneering Principles for Transformative Business Success

 

Welcome to our guide on the Core Principles of RoundMap®—your compass to conquering business complexities and propelling sustainable growth. RoundMap®, not just a framework but a holistic ecosystem, fortifies modern organizations with crucial insights and strategies sculpted around its foundational principles.

At the heart of RoundMap® lie twelve robust principles (in alphabetical order):

1.                All-Encompassing Integration – Merges various business facets into a unified, holistic framework, ensuring a seamless interplay between different operational areas.

2.              Applied Systems Thinking – A holistic approach that views an organization as interconnected, emphasizing understanding complex interdependencies and long-term impacts.

3.              Augmented Execution – Harnesses the power of technology and advanced intelligence to enhance strategic planning and execution, pushing the boundaries of traditional business practices.

4.             Consentric Alignment – Facilitates consent-driven decision-making, distributed from the center to the constellation of teams, thereby enhancing resilience, adaptability, and accountability.

5.             Cyclical Evolution – Advocates for continuous improvement through cyclical processes, fostering an environment of perpetual growth and adaptation.

6.             Empowered Action – Promotes a leadership style that is collaborative and empowering, distributing responsibilities across the organization to encourage innovation and engagement at all levels.

7.              Integrative Diversity – Balances specialized expertise with a broad, holistic understanding, embracing diverse perspectives for comprehensive problem-solving and innovation.

8.             Impact-Focused Approach – Prioritizes actions and strategies that yield sustainable and positive impacts within the organization and the wider community.

9.             Human-Centric Orientation – Puts people at the forefront, focusing on human needs and experiences to drive organizational success and employee satisfaction.

10.           Skillful Mastery – Highlights the importance of skill development and effective utilization, ensuring team members are equipped to contribute their best.

11.             Story-Driven Communication – Utilizes the power of storytelling to convey the organization’s values, vision, and mission, creating a compelling and relatable narrative.

12.           Whole System Engagement – Concentrates on nurturing the overall health and dynamism of businesses, engaging every aspect of the organization in the journey toward excellence.

Our guide will delve into understanding each of these principles, exploring how they drive the effectiveness of RoundMap® across diverse business contexts. Beyond theoretical knowledge, you’ll gain invaluable insights into implementing these principles, propelling your organization toward sustainable prosperity.

Whether you’re a seasoned leader, a start-up entrepreneur, or an aspiring business professional, gaining insights into these principles will empower you to navigate the intricate corridors of the business landscape confidently. Prepare to embark on a profound learning journey that fundamentally redefines how you perceive and act within the business world.

Unravel the RoundMap® framework, derived from its eight core principles, to illuminate your pathway toward sustained relevance and prosperity. Dig in, and let your journey toward business excellence commence.

Navigating the Twelve Principles of RoundMap

 

 

1. All-encompassing Integration

RoundMap® is an all-encompassing framework meticulously designed to integrate every facet of organizational dynamics. Whether addressing strategy, operations, marketing, or stakeholder engagement, RoundMap® offers a holistic view, ensuring that no element is viewed in isolation. It recognizes the interconnectedness of all organizational components and promotes a cohesive approach to decision-making and value delivery.

By providing a comprehensive roadmap transcending departmental silos and industry-specific challenges, RoundMap® empowers organizations to achieve optimal coherence, drive alignment, and ensure that every action contributes harmoniously to the overarching objectives.

2. Applied Systems Thinking

Systems Thinking, as a principle within the RoundMap framework, is an approach that views an organization not just as a collection of independent components but as a cohesive, interconnected whole. This perspective emphasizes understanding how different parts of the organization interact and influence one another, creating a network of relationships that defines the overall system. In Systems Thinking, the focus shifts from isolated issues or challenges to the broader patterns and structures that drive behaviors and outcomes. This holistic view encourages looking beyond immediate causes and effects, considering the longer-term implications and the dynamic interplay of various elements within the system.

Applied Systems Thinking in an organizational context involves recognizing the complex and often subtle interdependencies within and beyond the organization’s boundaries. It prompts leaders and team members to consider how decisions and actions in one area can ripple through the entire system, impacting other areas in ways that may not be immediately obvious. This approach fosters a deeper understanding of the organization’s functioning, enabling more strategic and effective decision-making. By adopting Systems Thinking, organizations can anticipate unintended consequences, identify leverage points for change, and develop solutions that address root causes rather than symptoms, leading to more sustainable and resilient outcomes.

3. Augmented Execution

RoundMap’s augmentative ability is a testament to the integration of expansive thought and cutting-edge technology in business intelligence. Its 48 Thinking Caps gives executives a comprehensive panoptic view of business operations. This multi-faceted perspective allows decision-makers to dive deep into every nook and cranny of their organization, from its strategies and structures to its underlying culture and purpose. 

Furthermore, leveraging the power of augmented intelligence with an interactive chat agent, RoundMap® systematically maps out the current business dynamics—highlighting strengths, pinpointing opportunities, identifying challenges, and laying out visions, missions, plans, and more. In an era where business complexities continue escalating, making it increasingly challenging to account for every variable, RoundMap® is an invaluable compass, guiding executives to make informed and strategically sound decisions for their journey.

4. Consentric Alignment

Consentric Alignment, as envisioned in the Consentricity™ model, marks a significant departure from the traditional top-down command-and-control structures still prevalent in many organizations. This innovative approach to organizational design is inspired by the concept of concentric circles, where each circle represents different roles and functions, yet all are interconnected and harmoniously aligned. At its core lies the Circle of Confluence, a pivotal forum where collaborative governance and equitable decision-making occur. Embodying the organization’s highest values, this central circle sets the tone for decision-making, ethical conduct, and cultural resonance, ensuring that these core principles permeate every layer of the organization.

Around the central Circle of Confluence are various concentric circles – including Councilors, Catalysts, Coordinators, and the Constellation of Teams – each with distinct roles but working in an integrated fashion. This structure fosters a consent-based decision-making process, where decisions are not imposed from the top but are reached through collective agreement, respecting and valuing the input of each circle. Such an arrangement promotes inclusivity and ensures that every decision aligns with the organization’s core values and objectives. The Consentricity™ model, therefore, creates a cohesive and harmonious system where the traditional hierarchies are replaced with a more fluid, dynamic, and inclusive form of governance, reflecting a deep commitment to collective success and ethical standards

5. Cyclical Evolution

At its essence, a market participant is driven by the ethos of efficient value creation and optimization, always aiming for the cost of value production to be lower than the value retrieved upon its delivery to the market. However, in the VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) world, organizations might confront scenarios where the expense of realizing value temporarily surpasses its creation. This deviation doesn’t detract from the ultimate goal of profitability but underscores the imperative of adaptability and building resilience for the future. 

Herein lies the significance of cyclical leadership—a leadership style that recognizes the inherent ebb and flow of business cycles, adapting strategies and tactics in response to the changing rhythms of the market. Rather than being linear and fixed in approach, cyclical leaders iterate, pivot, and evolve, ensuring their organization’s long-term viability and competitiveness in perpetually evolving market terrains. This agility and cyclical perspective position organizations to weather challenges and capitalize on emerging opportunities.

6. Empowered Action

RoundMap champions Empowered Action and Distributed Leadership, moving away from traditional leadership models where authority is concentrated at the top. This paradigm shift recognizes that every team member, with their unique blend of skills, knowledge, and experience, plays a vital role in guiding the organization. By empowering individuals at all levels, this approach fosters a culture where responsibility, engagement, and ownership are not just top-down mandates but are ingrained in every aspect of the organization.

Empowered Action offers numerous advantages. It significantly bolsters employee engagement and commitment by giving all members a direct role in decision-making and leadership. This empowerment leads to a surge in innovation as diverse perspectives contribute to creative problem-solving and strategic thinking. Team morale and motivation also soar, driven by collective responsibility and shared achievement. This approach adeptly spreads decision-making and leadership tasks in an era of organizational complexity, ensuring agility and adaptability. Moreover, dispersing authority provides a robust foundation for resilience during change, maintaining continuity and stability. This focus on Empowered Action is not just about distributing tasks; it’s about instilling a sense of leadership at every level, turning the entire organization into a dynamic, responsive, and cohesive entity.

7. Integrative Diversity

Balancing individuals with deep expertise and polymaths – deep and broad knowledge – is crucial for fostering creativity, innovation, complex problem-solving, and synthesis in organizations. Specialists bring focused, in-depth insights, while polymaths contribute wide-ranging perspectives that can bridge diverse areas of knowledge. 

This blend enhances the organization’s ability to generate novel ideas, tackle complex issues, and integrate different viewpoints for more comprehensive solutions. It creates a dynamic environment where diverse skills and perspectives coalesce, driving forward-thinking and innovative outcomes.

8. Impact-Focused Approach

The impact-driven core principle of RoundMap® emphasizes driving meaningful change within and beyond an organization. It involves a comprehensive approach to analyzing, formulating, implementing, and evaluating operations based on their impact. 

This four-step recursive process integrates impact assessment into the strategic framework, ensuring business objectives align with positive outcomes. An impact-driven organization continuously refines its approach, like maintaining a well-oiled machine, striving to create beneficial changes, differentiate itself, and improve long-term performance while contributing positively to the global landscape.

9. Human-Centric Orientation

Human-centric organizing, anchored in virtuous cycle leadership, revolutionizes organizational culture by emphasizing human value. It fosters environments of psychological safety, enabling open communication and innovation. This approach cultivates resilience and adaptability, enhancing stakeholder satisfaction and aligning internal and external success. 

The virtuous cycle principle underlines the reciprocal benefits of caring for employees and customers, reinforcing that valuing individuals drives transformative growth. Integrating this theory encourages organizations to focus on their people, creating a thriving internal ecosystem that promotes sustained growth and shared prosperity.

10. Skillful Mastery

Skills-First, a pioneering principle in modern talent acquisition, revolutionizes traditional hiring paradigms by prioritizing the development of essential competencies over static qualifications. This strategic approach recognizes that an individual’s skill set, practical abilities, and aptitudes indicate their potential success in a role more than conventional markers such as degrees or certifications. It represents a departure from the one-size-fits-all mentality, fostering an environment where diverse skills contribute to a dynamic and enriched workplace. Embracing Skills-First ensures real-world relevance, promotes diversity and inclusion, and positions organizations to adapt swiftly to evolving industry landscapes.

This transformative philosophy enhances recruitment strategies and unlocks the full potential of individuals within an organization. By valuing and cultivating diverse skills, Skills-First allows for tailored development paths, fostering a meritocratic environment where advancement is based on demonstrated abilities. This approach enhances employee engagement and satisfaction and acts as a proactive strategy for future-proofing talent, ensuring organizations are equipped with the capabilities needed to stay competitive in an ever-evolving business landscape.

11. Story-Driven Communication

Storytelling, an age-old art, plays an invaluable role in the intricate dance of value signaling. Whether illuminating a compelling need or showcasing an abundant surplus, a well-crafted story built upon a riveting plot can evoke emotions, drive action, and foster connections. Enter the realm of StoryCasting™, a dynamic fusion of storytelling and casting a line, much like an angler aiming to attract fish. Storycasting is a strategic lure in business, drawing customers into a brand’s narrative. 

At its heart, every potent story pivots on its plot—a series of interconnected events or moments that lay the foundation for the narrative. Through this plotted journey, brands can effectively communicate their value propositions, resonating with the desires and aspirations of their audience. As such, a masterfully told story informs and beckons, guiding listeners toward the intended value, be it a call to action or an invitation to partake in a surplus offering.

12. Whole System Engagement

Whole System Engagement, as a key principle of RoundMap®, is a transformative approach that integrates the entire human system of an organization into the process of change and development. Rooted in the principles of Appreciative Inquiry, this method centers on discovering and amplifying the existing strengths of an organization – its team, management, systems, and processes. Rather than focusing solely on fixing problems, it encourages exploring and building upon what already works well. This positive focus creates a fertile ground for innovation and growth.

In this approach, every individual in the organization is invited to participate in shaping its future. This inclusive, collaborative process not only ensures a deeper understanding and alignment with the organization’s mission but also fosters a sense of ownership and commitment among all stakeholders. By empowering individuals to contribute their insights and ideas, Whole System Engagement leads to more robust, sustainable changes. It’s a shift from traditional top-down decision-making to a more democratic, bottom-up approach, where change is co-created, reflecting the collective aspirations and strengths of the entire organization.

RoundMap® : Framework 2 Vectors

 

Foundations for Ethical Prosperity: Harmonizing Equitable Profit Distribution with Responsible Growth

Within the RoundMap framework, Equitable Profit Distribution and Responsible Growth are pivotal vectors guiding businesses toward ethical prosperity. While profit is necessary, equitable profit distribution is crucial for long-term success. Meanwhile, growth is envisioned as a process of purposeful distinction, where we actively amplify positive and mitigate negative impacts. 

This approach to growth, aligning purposeful distinction with market demands and prioritizing quality over quantity, underpins our commitment to ethical, equitable, and sustainable business practices

Fostering Equitable Profit Distribution

Equitable Distribution of Profit is a core principle that guides the fair and balanced allocation of financial gains, extending beyond shareholder returns to benefit a more comprehensive array of stakeholders, including employees, customers, and the community. This approach underscores a commitment to collaborative empowerment and sustainable growth. 

By sharing profits equitably, businesses aim to reinforce the interconnected success of their ecosystem, aligning financial practices with their values of innovation, systems thinking, and sustainability. This strategy is not just a financial choice but a reflection of their ethos, ensuring that as the business prospers, so does the broader community and environment.

Responsible Growth Rooted In Purposeful Distinction

Purposeful Distinction in Growth represents a commitment to creating profound, significant, and uniquely outstanding change. It’s about achieving results that stand apart in effectiveness, sustainability, and positive influence. This approach goes beyond conventional metrics of success, focusing instead on the depth, quality, and uniqueness of the impact we create. 

Purposeful Distinction is characterized by innovative solutions, transformative outcomes, and a legacy of positive change that resonates within the community and industry. It embodies our dedication to making a difference and doing so exceptionally and unmistakably aligned with our core values of systems thinking, collaborative empowerment, and holistic transformation. 

In pursuing Purposeful Distinction, we aim to set new standards in how we contribute to society, demonstrating that success is not just about what we achieve but how distinctively and meaningfully we achieve it.

Equitable Profit Distribution

As a critical component of the RoundMap framework, the Business Model Matrix provides a nuanced approach to understanding and developing effective business models. This matrix is crucial in mastering the Profit-vector, which focuses on how a business can profitably create, deliver, and capture value.

Let’s delve into the essentials of the Business Model Matrix to explain the concept of the Profit-vector:

• Four Value Orchestration Direction:
  
  • Product Centricity: Focuses on superior product development and innovation.
  • Customer Centricity: Centers around creating exceptional and personalized customer experiences.
  • Resource Centricity: Focuses on offering resources as a service while maximizing their utilization.
  • Platform Centricity: Builds on creating platforms that facilitate user interactions and transactions.
• Four Value Positions:
  
  • Operational Excellence: Emphasizes efficiency, streamlined operations, and cost leadership.
  • Product Leadership: Prioritizes product innovation and is a market leader in product development.
  • Customer Intimacy: Focuses on bonding intimately with customers and understanding their needs.
  • Network Orchestration: Building and enhancing value through interactive stakeholder networks.
• Interplay of Strategies and Disciplines:
  
  • The Business Model Matrix suggests that any of these four value disciplines can be effectively integrated into the four business strategies. This interplay offers diverse strategic combinations, allowing businesses to tailor their approach to their strengths, market position, and objectives.
• Strategic Alignment for the Profit-Vector:
  
  • By aligning these value disciplines with the chosen business strategy, organizations can effectively navigate the Profit-vector. This alignment is critical to creating, delivering, and capturing value to maximize profitability and competitive advantage.

By considering these aspects, businesses can develop a comprehensive approach that balances innovation, customer needs, resource utilization, and platform dynamics to create profitable and sustainable business models. This alignment is crucial for navigating today’s complex business environments and achieving long-term success.

Responsible Growth

Growth is more than just numbers; it’s about excellence, resilience, planetary boundaries, adaptability, and the foresight to meet future demands. This is where the Business Vitality Matrix comes into play. It challenges us to be ready for change, resilient in the face of adversity, and continuously evolve to fulfill today’s needs and tomorrow’s aspirations. This matrix is the blueprint of our readiness to adapt, survive, and flourish – no matter what the future holds.

It’s crucial to understand that growth is not just about expansion; it’s about making deliberate, strategic choices based on the current maturity and market dynamics of your business:

• Strategic Expansion: This choice is about scaling up. But it’s not just about growing bigger; it’s about growing smarter. It involves enhancing your operational excellence and product-market fit or tapping into new markets and opportunities.
• Strategic Recalibration: Sometimes, the key to growth is realignment. This involves revisiting and adjusting your business model to meet evolving market demands and customer needs. It’s about staying relevant and resilient in a changing landscape.
• Strategic Agility: In a fast-paced world, being agile is crucial. This choice focuses on your business’s ability to adapt to market changes and innovate quickly. It’s about being flexible and responsive, ready to pivot when necessary.
• Strategic Optimization: When growth seems to plateau, it’s time to optimize. This involves refining and improving your current operations and offerings, focusing on quality over quantity. It’s about doing better things, not just doing things better.

Aligning Strengths: The Path to Collective Success

The journey to success is a confluence of aligning our strengths across both matrices. By mastering our business model for profitability and nurturing our ability to grow and adapt, we set ourselves on a path that’s not just about surviving but thriving. In this alignment, business vitality keeps us on track, focused, and perpetually moving forward. 

Incorporating Positive Inquiry further enhances this path, enabling us to uncover and leverage our collective strengths, imagine new growth opportunities, and co-create a profitable but also vibrant and sustainable future.

Embrace the Journey

As we chart our course through these positive, equitable, and sustainable twin vectors of business, let’s commit to aligning our strengths, refining our models, and seizing growth opportunities. This path isn’t just about survival. It is about crafting a legacy of innovation, resilience, and collective success. Let’s uncover and harness our full potential, envisioning new horizons of prosperity and impact. Join us on this transformative journey to redefine success and thrive together in a rapidly evolving business landscape.

We are drowning in information while starving for wisdom. The world henceforth will be run by synthesizers, people able to put together the right information at the right time, think critically about it, and make important choices wisely.

Edward O. Wilson

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