The model of Stephen P. Anderson presents the two extremes of a business strategy. At the base are the companies focused on tasks, with strong appeal to products (materiality), which prioritize functionality and usefulness (work as planned). Next, organizations direct their efforts to making the product reliable, available and consistent. Third, they focus on making their products easy to use, mainly through usability studies, yet this doesn’t mean they succeed. Fourth, companies reach the layer of convenience. This stage determines the conversion of a task-driven-business to a user-experience-driven business. This is because convenience is fluid, with no friction. On the fifth point of the pyramid, companies focus on making pleasant user experiences that are worth sharing. Finally the company’s goal is to build meaningful experiences, those that have a personalized meaning to consumers.
How and if the user perceives added value in a moment is a challenge. We need adaptive solutions and multiple options that create a higher probability of an emotional or logical response.
With the plurality of interactions, technological solutions of access and focusing on the Moment Economy, we have to answer with new dosages.
I call this logic for the fluid reality “Value Capsules,” which are neither purely functional as products or services, nor only emotional/cognitive as experiences.
The Value Capsule embodies a mixture of four key elements: The Origin, The Access, Experiences and Value Exchange—logics that integrate such organizational activities as branding/marketing, products/services, experiences, and economic sustainability.
We need to design options, not a single solution. It’s not an object, service, or interaction that is important, but adding value to the user and the organization. People have to live the moment differently, with a positive value added, and so does the organization. The “why” defines the moment.
In a nutshell, the Value Proposition describes the Value Exchange (why, what) that occurs at a specific stage (where, when, how) and generates additional value for the Value Generator and Value Perceiver.
Value Perception—eality is always in the eye of the beholder.
Value Exchange—expresses the flow of value between Perceiver and Generator.
Value Generation—describes products, services, brands or experiences.
Mobilizing internal employees to achieve a desired outcome is important, but it’s not enough to satisfy the increasing proliferation of expectations of internal and external stakeholders. In a society where change is imminent, a general guidance for decision making is critical; an orientation we can turn to in times of turmoil, and to inspire innovation.
Taking this integration of the desired, the possible, sense-making and purpose, we get The Vision Diamond, an approach that guides us in the definition of a Vision and expands upon the “possible that makes sense” for the organization and society.
In the Vision Diamond concept, the Desired Future builds on the organizational purpose and the preferred future. The Sense-Making represents the Value Perception of people, the “Why we matter.” Finally, the Strategic Capabilities describe the possible in the present and future.
After exploring the first set of changes, using PESTLE or a similar classification, the next step is to dig deeper—map why the changes occur. This means the synthesis of “hidden” or “underlying assumptions.”Those variables are only visible to us on a second, third or fourth glance, and we uncover them through exploring, questioning and assuming new perspectives, breaking down the obvious.
For organizations, Hidden Assumptions fortify the creation of new value opportunities and market differentiation. When the project team identifies relevant changes, the next step is to name what drives them. Similarly, when we classify and map changes using PESTLE, we use four dimensions to investigate the underlying variables of a change. Those are: Individual, Society, Technological and “Earth.”
Innovation, foresight and strategy have to be about sense-making. No longer should they stand alone, but generate benefits through integration. Finding synergies is the key to creating an agile organization that balances the present with the future, and external changes with the internal value offering.
With constant change, we must react swiftly, be prepared, and have access to alternatives—options that allow us to manage crises in the present, explore new opportunities, and implement the changes necessary in our Strategic Capabilities to generate future value. We need an integration of innovation, foresight and strategy.
We’ve explored, researched questions, and searched for new connections. Now we have to organize the data.
A common, but certainly not the only, tool to facilitate this analysis is the classification model known as the PEST/PESTLE. This stands for (P)olitical, (E)conomic, (S)ocial, (T)echnological, (L)egal and (E)nvironmental. It is commonly applied in innovation and strategic projects, but there are alternatives, such as STEEPLED, TEEPSE, Trend Atlas and Salvador Raza.
Each logic helps you to classify what you already have, and fill in the blanks. Which tool you should use, however, depends on the Focal Question and the setting.
Even though interesting and as easy to use as a radar chart or Excel spreadsheet, we have to use classification in the early phase of exploration very cautiously. Categorization produces a reduction of complexity.
People perceive changes or possibilities as much further in the future than they really are. Often solutions already exist, resulting from technology tested in laboratories, startups experimenting with business logics, prototypes developed, or patents registered. The future is closer than we imagine. To compensate for this “time fallacy,” we should not focus on a certain year in the future for our research, but on how changes spread and unfold with time—beyond our point of reference, which is represented in the concept of Time Ecology.
To investigate changes more holistically, we need to focus on a timeline, not a snapshot in time. The concept increases awareness of what change is when in transformation. Plotting out the shifts and researching their change in direction over time provide organizations with the ability to make better and more risk-aware decisions.
Dr. Norman Henchey, a professor at McGill University's Faculty of Education, was the first to categorize the Possible, the Plausible and the Probable Future, and later added by fellow futurists, the “Preferable Future.” The tricky part is that any type is created using our present knowledge, imagination and logic.
Possible Futures describe future realities we can imagine today.
Plausible Futures are those that logically make sense.
Probable Futures are those that are highly likely to happen.
Preferred Futures describe our “desired outcome,” which exist for any organization and individual.
Unknown Unimaginables represent the elements that we couldn't possibly even know that we don’t know.
Foresight is about leading with a variety of information and uncertainty, and we need to work with different types of information and forms of gathering it, such as interviewing experts, crowdsourcing challenges, social fiction, and collaborative workshops.
The more we explore, the more we gain new insights and find similarities, reduce our biases, and identify patterns.
For that reason, we cannot apply just one form of reasoning, but need to see things differently; have a perception of the change and reality that combined faith and imagination, which can sometimes defy present logic itself.
Our society is defined by many elements of change. Let us now explore the key Types of Change.
The Future Value Framework supports creating a new Value Strategy. Yet before we start, we need to understand what the organization desires, the urgency, and its capacity for change.To guide you during the process of Diagnosing, each basic Building Block has “Guiding Questions,” which are key deliverables.
Diagnosing supports the understanding of the organizational soft and hard facts, and we need both the pragmatism to accept the starting point, and the creativity to expand the existing worldviews.
Answering the questions might sometimes be challenging, as we don’t always have all the information we need. In all honesty, few organizations have all of the necessary information updated or available. Diagnosing isn’t about perfection, but about mapping the initial state in the best way possible.
When an uncertain situation occurs or crisis strikes, the organization has to react quickly, with the main goal being to find a viable solution. In such circumstances, executives are under enormous pressure, dealing with resource limitations, and the window for reacting effectively is closing fast.
It is reasonable and human that in this high-pressure situation, short-term urgency prevails without considering the implications for the long-term value. However, as we explored throughout the book, we need to consider both the present and future value.
This pattern—Stay On Track—illustrates a risk-weighted, tactical process of execution. In such an urgent situation, it helps to keep the present value generation on track.
The work of the future is uncertain and non-linear. Strategic implementation demands a process that can adjust to volatility and uncertainty.
The challenge of such a process lies in continuous validation and this pattern keeps the strategy updated, the Policies valid, and resource allocation focused. A short-cycled loop focuses on the overall performance of execution, aligned with eventual new changes in the Portfolio of Change.
Applied once a year in line with the strategic formulation process, this pattern checks the overall logical integrity of the researched Future Position. As mentioned in the Vision section, the statement should not be static, but dynamic, incorporating possible changes.
This doesn’t mean you should change it every year, but use it to validate if sense-making and the development of Strategic Capabilities are on track. For the same reason, we also explore possible deviations in the Futures Context and our potential to generate value in the probable reality in formation.
Today, executives ask for a “toolbox” to manage the shorter cycle of stability and keep generating new value for their clients. They request a logic that increases their agility in decision making, while at the same time embraces innovation, delivering new value. Finally, there are difficulties in arguing the introduction of new methods, methodologies and tools that requires retraining the whole organization, instead of building on what already exists.
The Future Value Generation concept is the response to this request. The connection between the processes makes the organization more agile, allowing it to counter faster against crises in the present and proactively create future opportunities.
For whom and when do we generate value? What value flows?
The Present Value Proposition describes which value is exchanged. The flow must be sustainable for all parts involved. It is where the Value Generator (organization) and the Value Perceiver (people) meet. This connection defined the “why” of existence and how the organization adds extra value for clients.
What are the relevant Attractors and Drivers? Do we prioritize opportunities or risks?
The Portfolio is a choice of Driving Forces (faster changes) and Attractors (slower accumulating changes) relevant to the organizational context. It establishes a strategic focus for practical implementation. Integrated with the other Building Blocks, it increases awareness of shifts and facilitates agile decision making. The Portfolio improves strategic alignment between the present and the future.
What drives future societies? What do people value?
The Futures Context describes techno-human future logic. “People of the Future” play a central part in this setting. Their preferences define how the organization can offer and be relevant in the new context. The interplay of the individual, society and technology allows the identification of new opportunities and risks.
What is the reason we will exist? What is our purpose?
Vision is an energetic commitment, balanced with what is possible for the organization. It integrates the desires, purpose, the present/future Strategic Capability and sense-making to internal and external stakeholders. The vision mobilizes and sets a workable strategic north.
Why will people choose us in the future? What value will we add?
The Future Value Proposition describes what value the organization adds to people, and the possible exchange of value. We identify new opportunities, and determine what business logics and Strategic Capabilities are necessary to generate future value.
What new Strategic Capabilities do we need to generate future value? What is our strategy of change?
Value Policies lay a course of action and define an approach for agile decision making. Policies define the change necessary to create new value. They connect the future with the present, and external changes with the internal organizational context. Each Value Policy allows a controlled implementation of short-term tactics aligned to the set strategic north, adjusting the Strategic Capabilities.
What options do we have/need to implement the change? How can we generate new options?
The Options Portfolio is a combination of alternatives aligned to the organizational boundaries. Pre-validated against the Value Policies, it offers a buffer of choices to be accessed when needed. The Portfolio facilitates decision making when a fast response is necessary, and increases alignment with the Vision and Future Value Proposition. It integrates a process of innovation aligned with strategy.