Authored by Subbu Iyer & Siddharth Patel
Businesses can spend a lot for a strategic action plan. Studies show, however, that even with a good plan, 60%-90% of all business strategies fail before they even launch writes Mollie Barnett, Former Forbes Councils Member in her article published in Forbes dated Jul 11, 2024. But is strategy merely a plan? It is a Transformational Blueprint for sustained success of an enterprise. It serves instead as a transformational blueprint for the sustained success of an organization. According to McKinsey’s research, only 56% of organizations meet most or all of their transformation goals, and a mere 12% manage to sustain these goals for over three years.
Strategy lies at the intersection of space (Value) and time (Economy). Here, space serves as the canvas for visualization, while time provides the context necessary for that visualization to be realized.
It is clear from Exhibit 1 that we are entering a New Era, and merely making incremental changes to past practices will not suffice for a sustainable future. There should be no doubt that the future must be shaped by our aspirations and intentions, rather than merely addressing the unfulfilled needs and desires of the past.
As shown in Exhibit 2, this is not just the vision of a select few; it represents a shared aspiration of an entire enterprise aimed at fostering growth and long-term success. Achieving this requires organizational discipline that is both collaborative and widely embraced. It is important to differentiate between Enterprise and Business: the former refers to a concept, while the latter pertains to operations. The smooth transition from Concept to Operation serves as the foundation for strategic success.
In today's context, an enterprise extends far beyond the traditional notion of a business. It encompasses the Universe of Customers who actively engage in proving concepts and driving growth. This Universe includes clients, employees, stakeholders, shareholders, business partners, technology, vendors, and society at large. The challenge of strategy is to bring a Unified Vision to play across this Customer Universe. Those who succeed will be the Industry Leaders who set the trend rather than try to catch up.
Change is one thing, progress is another – Bertrand Russell
Over the last 150 years of Industrialization spanning 4 distinctive waves, strategy has always been addressed in the context of competition. It is now time to pivot it to the context of innovation. There is a marked distinction between Competition and Innovation. Competition demands understanding the strength of others and adapting to them to succeed; whereas innovation demands playing to one’s own unique strengths. Only then does the Strategy become the engine of growth.
Today's strategy necessitates an emphasis on Value Creation that aligns with the paradigm of "New". This shift requires the development of new capabilities, moving away from the previous approaches of Value Extraction that focused solely on incremental Value Addition to Value Creation that capitalizes on the advancement of Digital Technologies.
This is where the dance of Strategy and design come into play involving the five elements of Data, Talent, Materials / Resources / Energy, Financial Capital and Intelligent Infrastructure fusing to Create sustainable new products and services involving more intrapreneurs and entrepreneurs who hitherto did not have the Access and / or the Voice. The term “Capabilities” is an encrypted one involving the Capacity to Transform and the Ability to Perform. Such ability being the fusion of all the five elements harmoniously organizing Work, Workforces and Workplace to Orchestrate Innovation and Operations continuously and mutually inclusively. These Capabilities must find unified buy - In and expression across the nine segments of the Customer Universe addressed earlier.
Design Playbook
A design playbook is a shared artifact that choreographs the priorities and guardrails of Visualizing and Realizing a Strategy across a Customer Universe facilitating an immersive participation and progression. Before we dive into detailing a Design Playbook, it is critical to understand that Design has evolved from Industrial to Personal to Intelligent Design.
The modern design needs to address both the engagement (process of creation) and the experience (intelligently on-demand). Being digital technology centric, every enterprise must find a way to transform their processes from a siloed information processing systems to real time digital computing across an ecosystem; shifting the Critical Success Factor (CSF) from building a Pipeline of Customers to a Pipeline of Intellectual Property (IP) that focuses on Value Creation. The following Exhibit 3 therefore illustrates the need to transform the enterprise technology environment from a DevOps to GrowthOps one, even before one can begin the journey of transformation.
Exhibit 3 illustrates this new organization of work, workforces and workplaces that renew strategies dynamically to the relevance of a digitally intelligent economy with a Design Playbook that serves the purpose of inclusive and sustainable growth. A critical shift in reshaping the transformation engines of the enterprise is the Data Science led Engineering approach for Creation leading to Contextualization and Commercialization.
An FT editorial on Aug 13, ‘24 headlined the anatomy of Corporate Turnaround showcasing the Rolls-Royce’s turnaround story with Tufan Erginbilgiç taking the helm in January 2023. What worked for Erginbilgiç is his tough approach — he called Rolls-Royce a “burning platform” soon after joining to instil urgency in his staff. Citigroup under Jane Fraser is another example of a turnaround under way. Their Transformation Engines are not cosmetic. They are deeply rooted to building a new future. Research reveals that only 12% of organizations sustain transformation goals for more than three years. The Design Playbook is an essential part to building sustaining transformation engines that addresses the Value of Solutions and the Cascading Applications.
“We’re just starting to feel the impact of how the multimodal vision and generation capabilities of AI will change product design and more.” Scott Likens; PwC US and Global Chief AI Engineering Officer
Investment or Expenditure
The establishment and evolution of a Design Playbook should be viewed as a deliberate investment rather than a mere expense. This perspective fosters a growth mindset, whereas the latter promotes a savings mentality. Remember, Transformation Engines cannot thrive under a savings mindset. PwC's "Innovation Benchmark 2023" found that companies that allocated more than 15% of their revenue to innovation initiatives saw a 38% higher return on investment compared to those that spent less than 5%.
Design Playbook is not just documentation but an actual environment that sustains the will to Create and Sustain with Aspiration, Agility, Anticipation, Authenticity and Ability. Options such as the C4 Platform from Giggr Technologies must be considered as a Risk Assured Choice learning from the failure of the failed $700 Million Project Everest Transformation initiative by EY. A survey by McKinsey found that 55% of CEOs struggle with aligning business strategies to achieve revenue growth. 74% of executives believe AI will significantly impact strategy development by 2025 according to a PWC research report.
Stop Thinking, Start Acting
The Pursuit of Excellence is Innovation. And all breakthrough innovations happen at the sweet spot intersecting Simplifying Processes across ecosystems, Modernizing Technology and Disrupting the ecosystem as illustrated in Exhibit 4.
The International Data Corporation (IDC) predicted digital transformation investments will reach $3.9 trillion by 2027, which shows how important it has become for companies globally. 89% of large companies globally have a digital and AI transformation journey underway, but they've captured only 31% of expected revenue lift and 25% of expected cost savings write McKinsey’s Kate Smaje and Rodney Zemmel. According to McKinsey's "State of Innovation 2023" report, 84% of executives identified innovation as extremely or very important to their companies' growth strategy, with successful innovators growing at 2.4x the rate of their peers from 2019-2023.
The Takeaway
A Design Playbook is not just a document. It is an effective manifestation of Strategy.
Strategy must be a generative process across an ecosystem. It is not an elite / discrete activity. A Digital Design Playbook is the first step in modernizing design to the relevance of the Future
A Transformation Engine is critical for Innovation that bridges Potential with Performance that is choreographed by the Design Playbook through the dance of Strategy and Design continuously.
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