W. Chan Kim, Renée Mauborgne, David Teece, Dave Gray, Don Kohlberg, Jim Bagnell, and David Kelley, among others, and is informed by our professional work with companies around the globe. The concepts we outline in this book were cultivated over the last 20 years out of our own original academic research and our experience applying what we learned and developed to help organizations grow, innovate, and transform.
The Art of Opportunity
Reader's Journey
To help the reader better understand and, ultimately, craft new growth opportunities, The Art of Opportunity has been structured around the idea of a “Reader's Journey.” This journey introduces concepts, demonstrates principles, and presents activities in a way that allows the reader to both understand and practice the art of opportunity. While we recognize that there are virtually an unlimited number of routes to find new growth, we hope the lessons learned along the way will enable the reader to more successfully explore and create their own growth journey. The “Reader's Journey” includes:
1. Core concepts: with supporting illustrations and diagrams.
2. Inspirations: examples of how other organizations have put the concepts into practice to generate breakthrough growth.
3. Sparks: tactics that encourage the reader to reflect on the concepts in relation to their own growth journey.
4. Activities: “Learn-by-doing” workshop-based exercises designed to guide your team through the growth process.
5. Templates: simple visual formats (found at the end of each section) for assembling and presenting key findings generated during your growth journey.
Innovation Drives Us.
Part 1
Artful Innovation
we seize growth opportunities in a targeted way and benefit from the dynamic development of new business areas in the long term.
Chapter 1
When Thomas Ebeling became the new CEO of ProSiebenSat.1 Media AG (Pro7) in 2009, he faced a familiar problem: how to grow the business. Pro7 was the leading media company in the German TV advertising market with their core business of free TV – financed by advertising. Mr. Ebeling's challenge was how to grow the business and achieve over €1 billion in incremental revenues by 2018. Resorting to traditional strategic moves, expanding existing businesses and offerings, would certainly not do the trick.
Pro7 crafted a unique strategy for a new business area making TV advertising available to start-ups, and small and medium-sized companies, two customer segments that traditionally couldn't afford TV advertising and were seen as unprofitable by the industry. One year after the new business had been launched, it had already generated €20 million in profit. Five years later, Pro7 had achieved tremendous success with its new strategy. In fact, the strategy worked so well that in 2015, the €1 billion plus target was increased to €1.85 billion.
Business professionals and scholars admire achievements like these and wonder how Pro7 tapped into new markets and developed new business areas. Finding and seizing opportunities for new growth is, after all, the Holy Grail of business. And if Pro7 didn't use traditional growth methods, exactly how did they arrive at new offerings, complete with innovative business models and revenue models, to reach entirely new customer segments?
The Art of Opportunity is about how strategic innovation and business design thinking can grow existing businesses and create completely new ones by discovering opportunities for new growth and crafting strategies to seize these opportunities.
Strategy is essentially about making choices about where to play and how to win. Strategic management theories offer frameworks to guide our thinking, help develop answers to these questions, and make such choices. The approach and concepts of The Art of Opportunity provide fresh and modern ways to look at these questions, enabling you to come up with more innovative answers than yesterday's traditional strategic management approaches might offer.
Traditional Strategic Management
On a Business Level, traditional strategic management 2 is primarily concerned with where to play and how to win. Where to play is framed as a choice of industry and product/market combination. Simply speaking, you pick an industry, say air transportation, and a market, for example continental flights in the United States, and you define your offering within this market, for example low-cost direct city-to-city flights.
How to win is mostly defined as achieving competitive advantage. Michael Porter's classic generic choices 3 about how to achieve competitive advantage are to either (1) be a cost leader, (2) differentiate your offering, or (3) focus on a niche. Treacy and Wiersema4 offer three choices to win: (1) product leadership (offer the best product by focusing on product innovation); (2) operational excellence (be a price and convenience leader by focusing on low cost, lean and fast production, and speedy delivery); or (3) customer intimacy (win by creating loyal customers through tailored offerings and focusing on customer relationships).
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