Finding your next big growth idea

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This was a 45 minute webinar in which we broke down why only 25% of attempts to build new businesses out of your core business (adjacent businesses) succeed and how you can increase your chances of success to 80%. You must draw on core theories of growth and the resources based view (or RBV).

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  • The RBV sees companies as very different collections of physical and intangible assets and capabilities. No two companies are alike because no two companies have had the same set of experiences, acquired the same assets and skills, or built the same organizational cultures. These assets and capabilities determine how efficiently and effectively a company performs its functional activities. Following this logic, a company will be positioned to succeed if it has the best and most appropriate stocks of resources for its business and strategy.
    Valuable resources can take a variety of forms, including some overlooked by the narrower conceptions of core competence and capabilities. They can be physical, like the wire into your house. Potentially, both the telephone and cable companies are in a very strong position to succeed in the brave new world of interactive multimedia because they own the on-ramp to the information superhighway. Or valuable resources may be intangible, such as brand names or technological know-how. The Walt Disney Company, for example, holds a unique consumer franchise that makes Disney a success in a slew of businesses, from soft toys to theme parks to videos. Similarly, Sharp’s knowledge of flat-panel display technology has enabled it to dominate the $7 billion worldwide liquid crystal display (LCD) business. Or the valuable resource may be an organizational capability embedded in a company’s routines, processes, and culture. Take, for example, the skills of the Japanese automobile companies—first in low-cost, lean manufacturing; next in high-quality production; and then in fast product development. These capabilities, built up over time, transform otherwise pedestrian or commodity inputs into superior products and make the companies that have developed them successful in the global market.
     
  • The RBV sees companies as very different collections of physical and intangible assets and capabilities. No two companies are alike because no two companies have had the same set of experiences, acquired the same assets and skills, or built the same organizational cultures. These assets and capabilities determine how efficiently and effectively a company performs its functional activities. Following this logic, a company will be positioned to succeed if it has the best and most appropriate stocks of resources for its business and strategy.
    Valuable resources can take a variety of forms, including some overlooked by the narrower conceptions of core competence and capabilities. They can be physical, like the wire into your house. Potentially, both the telephone and cable companies are in a very strong position to succeed in the brave new world of interactive multimedia because they own the on-ramp to the information superhighway. Or valuable resources may be intangible, such as brand names or technological know-how. The Walt Disney Company, for example, holds a unique consumer franchise that makes Disney a success in a slew of businesses, from soft toys to theme parks to videos. Similarly, Sharp’s knowledge of flat-panel display technology has enabled it to dominate the $7 billion worldwide liquid crystal display (LCD) business. Or the valuable resource may be an organizational capability embedded in a company’s routines, processes, and culture. Take, for example, the skills of the Japanese automobile companies—first in low-cost, lean manufacturing; next in high-quality production; and then in fast product development. These capabilities, built up over time, transform otherwise pedestrian or commodity inputs into superior products and make the companies that have developed them successful in the global market.
     
  • The RBV sees companies as very different collections of physical and intangible assets and capabilities. No two companies are alike because no two companies have had the same set of experiences, acquired the same assets and skills, or built the same organizational cultures. These assets and capabilities determine how efficiently and effectively a company performs its functional activities. Following this logic, a company will be positioned to succeed if it has the best and most appropriate stocks of resources for its business and strategy.
    Valuable resources can take a variety of forms, including some overlooked by the narrower conceptions of core competence and capabilities. They can be physical, like the wire into your house. Potentially, both the telephone and cable companies are in a very strong position to succeed in the brave new world of interactive multimedia because they own the on-ramp to the information superhighway. Or valuable resources may be intangible, such as brand names or technological know-how. The Walt Disney Company, for example, holds a unique consumer franchise that makes Disney a success in a slew of businesses, from soft toys to theme parks to videos. Similarly, Sharp’s knowledge of flat-panel display technology has enabled it to dominate the $7 billion worldwide liquid crystal display (LCD) business. Or the valuable resource may be an organizational capability embedded in a company’s routines, processes, and culture. Take, for example, the skills of the Japanese automobile companies—first in low-cost, lean manufacturing; next in high-quality production; and then in fast product development. These capabilities, built up over time, transform otherwise pedestrian or commodity inputs into superior products and make the companies that have developed them successful in the global market.
     
  • The RBV sees companies as very different collections of physical and intangible assets and capabilities. No two companies are alike because no two companies have had the same set of experiences, acquired the same assets and skills, or built the same organizational cultures. These assets and capabilities determine how efficiently and effectively a company performs its functional activities. Following this logic, a company will be positioned to succeed if it has the best and most appropriate stocks of resources for its business and strategy.
    Valuable resources can take a variety of forms, including some overlooked by the narrower conceptions of core competence and capabilities. They can be physical, like the wire into your house. Potentially, both the telephone and cable companies are in a very strong position to succeed in the brave new world of interactive multimedia because they own the on-ramp to the information superhighway. Or valuable resources may be intangible, such as brand names or technological know-how. The Walt Disney Company, for example, holds a unique consumer franchise that makes Disney a success in a slew of businesses, from soft toys to theme parks to videos. Similarly, Sharp’s knowledge of flat-panel display technology has enabled it to dominate the $7 billion worldwide liquid crystal display (LCD) business. Or the valuable resource may be an organizational capability embedded in a company’s routines, processes, and culture. Take, for example, the skills of the Japanese automobile companies—first in low-cost, lean manufacturing; next in high-quality production; and then in fast product development. These capabilities, built up over time, transform otherwise pedestrian or commodity inputs into superior products and make the companies that have developed them successful in the global market.
     
  • Finding your next big growth idea

    1. 1.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Featuring: Kaihan Krippendorff Brought to you by Finding Your Next Big Growth Idea Photo: flickr user Francesca Guadagnini
    2. 2.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Kaihan Krippendorff www.outthinker.com
    3. 3.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Webinar objectives Learn what the “Resource Based View” (RBV) tells us about generating business growth. Know the three places to look for adjacent growth opportunities. Know the four factors that will determine if you idea will really provide a sustainable competitive advantage.
    4. 4.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. You Move Me
    5. 5.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. You Move Me • 25 franchisees day 1 • $17M in first calendar year
    6. 6.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Growth horizons Core business: grow value, revenue, and margin Adjacent: build and grow adjacent businesses Options: create growth options Visions: to guide the search for growth Exits: business to close or sell
    7. 7.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Growth horizons Core business: grow value, revenue, and margin Adjacent: build and grow adjacent businesses Options: create growth options Today’s Focus
    8. 8.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. “The average company succeeds only 25% of the time in launching new initiatives.” - “Growth Outside the Core” HBR, Chris Zook and James Allen
    9. 9.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved.
    10. 10.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. “Growth Outside the Core” HBR, Chris Zook and James Allen “Companies that have hit upon a repeatable formula have success rates of twice that, and some drive their rates up to 80% or higher.” -
    11. 11.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Resource Based View (RBV)
    12. 12.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. RBV
    13. 13.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Lock up resources
    14. 14.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Lock up resources
    15. 15.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Apple uses RBV
    16. 16.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Where to look Tangible Intangible Capabilities  Key components  Raw materials  Technology  Equipment  …  Brand reputation  Employee engagement  Customer loyalty  IP  …  Supply chain  Management skill  Specialty knowledge  Production  …
    17. 17.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Where to look Tangible Intangible Capabilities  Key components  Raw materials  Technology  Equipment  …  Brand reputation  Employee engagement  Customer loyalty  IP  …  Supply chain  Management skill  Specialty knowledge  Production  … Inimitable Valuable Rare To identify a valuable resource: Non- substitutable Source: Barney, 1991a, 1994, 2002
    18. 18.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. Breaking down You Move Me Tangible Intangible Capabilities  Key components  Raw materials  Technology  Equipment  …  Brand reputation  Employee engagement  Customer loyalty  IP  …  Supply chain  Management skill  Specialty knowledge  Production  … Inimitable Valuable Rare To identify a valuable resource: Non- substitutable Source: Barney, 1991a, 1994, 2002
    19. 19.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. What to do now 1. Inventory your unique resources • Tangible • Intangible • Capabilities 2. Assess which are truly defensible • Rare • Inimitable 3. Brainstorm ideas from those that are defensible • Valuable 4. Conduct a fact-based analysis to assess your potential competitive advantage • Rare • Inimitable • Non-substitutable • Valuable 5. Build a business case, test, launch, monitor, adjust
    20. 20.  Shannon Wallis & Kaihan Krippendorff All Rights Reserved. kaihan@outthinker.com www.outthinker.com @kaihan • Contact us to get presentation • Sign up for newsletter • Access tools and videos • Contact us for more support

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