New Radical Growth Options                                                   by Signals Solution                          ...
Within a week participants produced 823 different observations or comments on the business environment. Everyrespondent al...
The Second Phase: The Analysis of the ResultsIdentification of the alternative growth options was defined to be the brief ...
Conclusions and Corrective ActionsThe major drivers for growth:           • strong pioneer attitude and self-confidence co...
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New Radical Growth Options by Signals Solution: A Case Study.

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The case company is a very successful oil company, currently more profitable than ever.The recently appointed CEO recognized that the situation is probably not sustainable, as there are some changing trends in the market place that may be a threat to the current favorable position. He had another concern, too; the company was one of the most advanced in technology in its field in the world.The CEO soon realized that the company – because of its favorable market situation – was not cultivating this asset efficiently enough. He noticed that the growth rate was not satisfactory.The CEO made a decision to scan for new growth opportunities and apply the Signals toolset, because it minimized the time and resources needed.

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New Radical Growth Options by Signals Solution: A Case Study.

  1. 1. New Radical Growth Options by Signals Solution A Case StudyThe case company is a very successful oil company, currently more profitable than ever. The recentlyappointed CEO recognized that the situation is probably not sustainable, as there are some changingtrends in the market place that may be a threat to the current favorable position. He had anotherconcern, too; the company was one of the most advanced in technology in its field in the world. TheCEO soon realized that the company – because of its favorable market situation – was not cultivatingthis asset efficiently enough. He noticed that the growth rate was not satisfactory. The CEO madea decision to scan for new growth opportunities and apply the Signals toolset, because it minimizedthe time and resources needed.The Project/AssignmentThe briefing meeting was held with CEO, VP, Corporate Planning and Fountain Park consultants. It was agreed thatthe enquiry would involve all middle management and leading experts in all four divisions.The size of the respondentgroup was 170 participants. It was recognized that the organization, because of its long success track record wasvery internally oriented. In order to enhance external orientation, the research question was defined to be veryopen; We have to identify radically new sources for growth. What kinds of new, big or small, opportunities for ourcompany do you detect in the business environment? The CEO signed the invitation to participate which was sentby e-mail on the following Tuesday. E-mail message includes a link to the Second, every respondent assess 40 random comments Signals toolset. At first respondenst were produced by his/her fellow respondents. asked to give their observations and comments. 1
  2. 2. Within a week participants produced 823 different observations or comments on the business environment. Everyrespondent also assessed 40 random observations against the target: the growth of the company on the cognitivemap. Respondent feedback was positive. This was the first time that all of middle management was able to maketheir contribution to strategic planning. This traditionally has been the task of the top team and corporate planningpeople/professionals. The other reason for the positive feedback was the method; it was new and exciting for ex-plicating and evaluating a complex issue – and fast to execute. It took only app. 20 minutes per respondent to runthe survey.The First Phase ResultsThe enquiry was completed on Wednesday the following week and the primary results were reported to topmanagement on Friday morning. The classified/categorization of top 100 signals showed that the mental model ofthe organization was • strongly internally oriented; even if the brief was to comment on the business environment, more than half of the results concerned internal issues as management processes • for the big surprise of top management, customer orientation was totally missing; even if app. 20% of observa- tions concerned market and demand on the macro level, less than 3% of the material even mentioned the word “customer” • When the results were compared with the average perception profile of the chemical industry it was evident that the other major missing element was the change in industrial structure. As an average, 10-15% of comments concerned the restructuring of the value chain, in this data these issues were not commented on at all.The CEO commented that the major hindrances of growth were identified, but solutions were missing. 2
  3. 3. The Second Phase: The Analysis of the ResultsIdentification of the alternative growth options was defined to be the brief for the next phase: processing the resultsboth virtually and in a workshop.All the 170 participants were invited to join the processing phase.The processing was based on the automatic reportof the Signals toolset that indicated both strong signals (relevance agreed widely by participants) and weak signals(only a few respondents considered these observations to be of high importance).Those who were too busy to participate in three workshops gave their contribution virtually. Virtual processing wastwo-fold. One group created scenarios based on the three most unpredictable weak signals and the other one as-sessed the predictability and impact of the top10 weak signals.The workshops focused on alternative realities. The basic brief was to give an alternative market description whereeverything was as far as possible from the current perception of the business (story based on strong signals). Thefirst groups created stories, then assessed the predictability and impact of them and finally the most predictablestories with the highest impact were analyzed. The analysis included the description of the market, customer andprimary customer needs, the offering, the key success factors, the current assets valuable in the market describedand the implications for current development and investments. Knowldege intensive New raw business materials Flexibility Growth for the for the Future future Current roles in New roles in Current Global value chain value chain market operator Mental Mental Model Model Production and Current raw product driven materials businessThe consultant team analyzed the results and drew conclusions: • The alternative market descriptions revealed primary dimensions of the company’s mental model: current raw materials - new raw materials, current market – global market, current position in the value chain – new position in the value chain, production-based business – knowledge-based business • The dominating mental model was very production oriented and the main focus of the opportunity search was focusing on the current market area only. • The most interesting element that has a major implication on the current development was found from most of the descriptions: networking. Instead of the traditional model of investing in own R&D and production capacity, the company should develop a network of R&D partners and/or production capacity providers. 3
  4. 4. Conclusions and Corrective ActionsThe major drivers for growth: • strong pioneer attitude and self-confidence combined with advanced production technology • built-in positive attitude towards networking as a develop- ment or even operating model.The major obstacles of growth were • the lack of customer orientation and strong internal focus (analysis based on strong signals) • the narrow, production base definition of the business scope combined with market perception that is limited to the current customer segments.Corrective actions applied were: 1. in order to open the business scope thinking the manage- ment decided to apply scenario techniques as a central element for business planning 2. immediately started a wide analysis of the current cus- tomer perception.Other Signals Applications:Performance Signals for getting new insight on drivers &obstacles and new means for performance improvement.Risk Signals for identifying un-communicated, early or systemsbased risks. Complementary to the FMDA.Market Signals for scanning the early, still unstructured changesin customer needs.Integration Signals for predicting the post merger challengesand opportunities. 4

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