The Organizational Strategist

March 31, 2010

Assessing Nintendo’s Strategic Move into Schools

Filed under: Strategy, Technology — Tags: , , , — Whit @ 10:29 pm

-Introduction-

Recently in one of the news feeds that I monitor, I saw that Nintendo plans on expanding its offerings to include educational materials. CBS News has the article here. You may be thinking, “That seems odd. Nintendo makes video games with plumbers getting super-sized from touching magic mushrooms.” The strategy Nintendo is taking does seem like a huge departure, at first. However, the move into the educational realm looks to be a new strong offering in Nintendo’s market portfolio.

 

-Nintendo Strategy Analysis-

Strategy is the alignment of resources and capabilities to win in the market. Strategy can be done at an entire organizational level or to less encompassing levels like on a product or service level. Nintendo has the brain power, technical prowess, brand recognition, and more which makes it a competitive and profitable player in the video game industry. A vital question when evaluating entering into a new market space is if the new market is a logical fit with the organization’s current resources and capabilities. If there are gaps or risks, then steps should be taken to supplement or cultivate the new resources or capabilities needed to then win in the new market. An organization that is considering entering into an entirely new market space is akin to an idea coming out of the Futurist Horizon from the 3 Horizon’s of Growth.

Since I am an outside reviewer of this strategic approach, my knowledge is limited to what I know of the company and its recent progress. The employee level knowledge of the underpinnings of execution, internal alignment, and leadership vision are unknown. What can be addressed are the logical needs of the educational market space and comparing that to what is known of Nintendo.

Nintendo is planning on using its DS platform to bring forth educational games. That answers one of my initial questions of what would be the method that Nintendo will use to deliver the educational games. Thus Nintendo already has the technical prowess, supply chain, and other elements in place to deliver those systems to both the video game market and the educational market.

Another avenue of interest would be to know if Nintendo is capable of creating the right kind of software content in its games to be appealing to the users and actually provide educational value. Reaching and bringing in different demographics of users (different genders, younger to older) has been a strength of Nintendo. I remember hearing about the Nintendo Dogs game, a virtual pet game, and how that was not appealing to me. However, I kept hearing about its success with women, people my parent’s age, and players who like the animal games. A Forbes article highlights how Nintendo has had great success with its 2006 Brain Age game and how there was a study done by the government of Scotland  that indicated math scores did, in fact, increase after using the game over time. In a Nintendo World Report article, a reputable game design company, Intelligent Systems, the creator of acclaimed Fire Emblem game, has plans to make vocabulary enhancing offerings in mid-March this year. Also, another Nintendo World Report article reports that McDonald’s restaurants in Japan will be using the DS system to train employees. These findings show that Nintendo has the potential for creating games that fit the needs of many different kinds of users and has the means to deliver the material effectively.

Taking into account these glimpses into Nintendo’s offerings and activity, the strategy to expand into the educational space seems to fit. There are documented results indicating success, positive movement with initial products like Brain Age, which may have been a pilot to test the market, and a reach through the DS system to users of many ages.

-Considerations for Implementation-

In pondering Nintendo’s strategy and how to help make it effective as Nintendo’s offerings grow in this space, I came up with the following ideas:

  • Partner with teachers, administrators, parents and other important stakholders: These groups are gatekeepers into spending for educational efforts in class and at home. By actively engaging these stakeholder groups to find out what learning goals or curriculum aids are most needed, Nintendo’s games can be made to best fit those needs. At a larger scale, partnership with politicians, government agencies and more would be of immense benefit.
  • Start with the low hanging fruit: Japan is a good market to start in due to the high saturation of Nintendo products. When expanding into other geographies, find out the areas that are already familiar with the Nintendo brand and utilize a lot of technology in daily life. This will help make the new technological use in educational systems easily accepted. Building on success creates momentum and makes it easier to progress.
  • Continue to track and measure success: Academic circles are heavily influenced by metrics and continual learning. The case study done by Scotland’s government is a good start to this effort.
  • Expand in areas that can augment and complement the DS offerings: The Wii system, as an example, allows for at-home, multiplayer engagement and easy downloads. Making educational family games would be a good way to keep the learning happening and bring the whole family in to help the students.

 

-Conclusion-

Nintendo may be new to the educational space, but has been making solid steps to build its own resources and capabilities. Early indicators of success make this strategic plan appear feasible. It will be interesting to see if characters like the famous plumbers will become an every-day classroom appearance or not.

-Links-

Nintendo to put consoles in schools: http://www.cbsnews.com/stories/2010/03/19/ap/business/main6314135.shtml

3 Horizons of Growth: http://blog.seattlepi.com/organizationalstrategist/archives/199445.asp

Forbes article on Nintendo’s Brainy Strategy: http://www.forbes.com/2008/10/08/games-smart-brain-tech-personal-cx_mji_1008games.html

Fire Emblem company makes vocabulary games: http://www.nintendoworldreport.com/newsArt.cfm?artid=22769

March 23, 2010

Know Where and How to Play: Assessing an Industry through Porter’s 5 Forces

Filed under: Strategy — Tags: , , , , , , , — Whit @ 11:10 am

-Introduction-

Business strategy is often a loosely defined term in an organization. There can be market strategy, product strategy, business unit strategy, web strategy, gaming strategy and so much more. Because of the various approaches, meanings and applications of different forms of strategy, it can be a challenging topic to cover. The strategy that I feel is the most important is enduring strategy, as I’ve defined it here. To be clear for this blog, I will always aim to use the word strategy with the same meaning as I classified enduring strategy or be straightforward when I am not speaking of enduring strategy.

One way to have all strategic design participants to understand the same language, approach, and influences is to start the dialogues on strategy at a broad, foundational level. This can be done with an assessment of the relevant industry where the organization will strive to win. Since an industry evaluation is so broad and encompassing, the many different angles that participants come from should be included. This kind of exercise creates the underpinning for common understanding and more thorough planning.

-Discussing the 5 Forces-

Michael Porter, a famous business and organizational strategist, has a handful of strategic tools and approaches. One he is well known for is his Five Forces Analysis. The 5 Forces looks into the five different influences on an industry. Each force has a short series of investigation points to be evaluated. From those points the overall influence of the force on an industry can be determined.  The 5 Forces, listed with a sampling of investigation points, are as follows:

Threat of substitute products or services

  • Likelihood of buyers to switch products/services
  • Ease and ability of buyers to swap products/services

Threat of new entrants

  • Capital requirements
  • Importance of brand recognition/reputation
  • Legal or regulatory barriers to starting up
  • Resource availability

Intensity of competition

  • Number, size, and concentration of competitors
  • Degree of differentiation
  • Amount of industry growth

Bargaining power of customers

  • Customer industry concentration in comparison to supplier industry concentration
  • Distribution access (geography, gateways, number of suppliers)
  • Price sensitivity

Bargaining power of suppliers

  • Supplier ability to influence ease of forward integration
  • Supplier industry concentration in comparison to customer industry concentration

Going through a 5 Forces analysis will give an overall understanding of the ease or difficulty to get involved in a particular industry. The tougher the industry is to enter, the easier it is to defend. The less substitute products or services that are available, the easier it is for industry participants to set prices as they see fit. The higher the number of competitors in an industry, the need for differentiation is also increased. With low bargaining power of customers and suppliers, industry participants can exert more control and direction with their products and services. The influence of these points and many more can be discovered from doing a 5 Forces analysis. Once the overall picture of the industry is available, an organization can compare what resources and capabilities it has available to what kind of effort it would take to be become involved in the industry.

-Conclusion-

This analysis can be helpful as a baseline for a strategy or to assess how appealing an industry would be for an organization to move into. In this capacity it is good for both existing strategies and for creating new ones. I suggest this approach as a means of understanding the bird’s eye perspective of an industry. Even though each strategic dialogue participant may be a different bird, searching for their own opportunities, knowing the lay of the land will provide valuable insight into where and how to approach the targeted opportunities.

-Links-

Organizational Strategist Enduring Strategy: http://blog.seattlepi.com/organizationalstrategist/archives/198201.asp

Wikipedia entry on 5 Forces: http://en.wikipedia.org/wiki/Porter_five_forces_analysis

March 17, 2010

The 3 Horizons of Growth: A Consultative Approach


-Introduction-

In an earlier article of the Organizational Strategist, I wrote about the 3 Horizons of Growth strategic model (link here). This model segments an organization’s innovation pipeline into three parts (Operational, Entrepreneurial, and Futurist).  It’s based on the Alchemy of Growth book, by authors Mehrdad Baghai, Stephen Coley, and David White, which can be used for both creating an organization’s innovation pipeline strategy and assessing its health. This article will be delving into how to assess the measure of health in each horizon.

-Assessing the 3 Horizons of Growth-

These questions are built upon the foundational questions in the Alchemy of Growth. I customized them to fit my style preferences and organizational focus.

Operational Horizon Questions

  • Is the organization generating enough earnings & cash to invest in growth?
  • Has market share been stable or growing?
  • Has operating performance been stable?
  • Is there a strong performance orientation to drive profit in the next few years?
  • Is the organization’s cost structure competitive with the industry?
  • Is the organization reasonably safe from new competition, technology, or regulations that could change the industry?

Entrepreneurial Horizon Questions

  • Are there any new products or services capable of creating as much economic value as the Operational horizon’s product and service mix?
  • Is the organization comfortable making a substantial investment to speed new growth?
  • Is there mounting investor and stakeholder confidence in the new opportunities?
  • Are the new opportunities attracting entrepreneurial talent into the organization?
  • Are the new products and services gaining momentum in the market?

Futurist Horizon Questions

  • Does the leadership team dedicate enough time to think about growth opportunities and industry evolution?
  • Has the organization developed a rich portfolio of prospects for reinventing existing and/or creating new opportunities?
  • Is the organization developing attractive ways to turn the opportunities into new revenue streams or funding mechanisms?
  • Have these ideas been made into concrete, measurable steps?
  • Are or will these new ideas markedly different from those on last year’s list? Three years ago? Five years ago?

Determine the health of each Horizon by getting one or more knowledgeable organization employees to answer the questions candidly and completely. For a horizon to be healthy, the majority of the questions in that horizon should be responded to with favorable remarks. I’ve ordered the questions by importance. The initial questions influence whether or not the horizon is considered healthy more so than the following questions. The Operational horizon is the most needed area for the short term efforts of the organization. The Entrepreneurial horizon is the most necessary area for upcoming developments and to maintain the Operational core of the organization over time and as the industry evolves. The Futurist horizon is the vital element for the organization to harness distant possibilities and adapt to market volatility. Ideally all will be very healthy. If none are healthy, the organization is likely to die.

The different blends of some horizons being healthy while others are unhealthy each have challenges and opportunities. There’s too much to go into in this short article, but suffice it to say that the Alchemy of Growth book explores all of the assessment outcomes with helpful descriptions of what is at risk, what can be harnessed, and the direction the organization should take to improve.

-Summary-

Strategic models are tools. They can be used to create and to deconstruct. A hammer can pound in nails to build a structure or pry up nails to reassess and realign. The 3 Horizons of Growth framework is straightforward and powerful. It is easy to use for clear communication, yet can lead to very in-depth and valuable dialogue. Additionally, as noted in this article, it can be used to assess the thoroughness and completeness of an organization’s innovation pipeline. Through these uses the 3 Horizons of Growth is well suited for inclusion in an organizational strategist’s cache.

March 10, 2010

Finding, living and thriving in your Personal Strategy


-Introduction-

Recently I was in downtown Seattle after a couple of business meetings. I stopped at one of my favorite restaurants, Jimmy Johns, to enjoy a delicious sub-sandwich. One of the fun aspects of Jimmy Johns is the humorous signs that decorate the walls and windows. I saw three signs that were stacked next to each other saying the following:

WORK LIKE

You don’t need the money

LOVE LIKE

You’ve never been hurt

DANCE LIKE

Nobody’s watching

Those signs made me think about what I feel one’s own personal strategy should be like. Please indulge me as I impart some thoughts from my personal experience and what, hopefully, could be wisdom.

-Personal Strategy-

I’ve heard the saying that “if you love what you do, you’ll never work another day in your life”. Everyone’s ideal career or jobs would be to do what they love and satisfy whatever their professional goals may be. Understanding your strengths, organizational fit, dreams or goals and more is a long path of self discovery and learning about the business environments that we can immerse ourselves in. Finding what you love to do can be a short path or a long winding road to walk, but it is a journey that you should endeavor to take. It starts within you to learn what you do and do not like, love, and appreciate. From that, your journey goes into various specialties, environments, organizational dynamics and more as you test what is available and possible for you. Once you understand how you, in your own way, can win in your individual market of opportunities through aligning your individual resources and capabilities, you have your strategy. That strategy can make it so you can “work like you don’t need the money.”

In personal and professional relationships, I feel everyone should be open, trusting, candid and respectful. The reason for that is that you can be yourself more easily around others and that the time it can take to form meaningful relationships is decreased. If there are barriers to creating good relationships then it will naturally be harder to form those good relationships. I do not mean that you should be naïve, ignorant of danger signs or not protective of what is most important to you. People tend to set up defensive barriers because of past difficulties, environments, or circumstances. Learning from your experiences is vital to survival. However, I say you should strive to find a balance and make it so that you can create the best relationships with others as fast as you can. You do not want needless barriers to happiness or potential in your life. Life, in many ways, is short and I say let’s all try to make the most of it. That is a path to “love like you’ve never been hurt.”

At the same time with finding your calling, purpose, ideal job or whatever shapes that takes, it is important to know that there are many sides to a person. Your work self may be very different than your at home self. Each of your own roles or selves, as I’ve been calling them, has their own needs. In the business world, there are many causes and organizations that pursue sustainability and to do that effectively and efficiently they need to think through all of their various interactions, relationships, suppliers, distributors, customers, employees, and environment. Making an organization sustainable is no small feat and those causes and organizations that assist with sustainable initiatives know that. Similarly, sustaining your different selves can take a lot of time, effort, and planning. “Work hard and play hard” is another saying that I enjoy using and practicing. You need to find people, resources, and activities that will help sustain you in the good times and the hard times. In those efforts that renew you, live it up. The more you can renew yourself and sustain yourself at your best, the better your life will be. Make the most of your opportunities to truly be yourself and enjoy the time you have. If you can do that then you should “dance like nobody’s watching.”

-Conclusion-

Strategy can take many forms and levels. Most of the articles in this blog have related to large scale organizations and strategic elements. However, an individual’s strategy can mimic the decision making, in-depth planning, adaptability and alignment that larger scale strategy. For your personal strategy, I strongly encourage you to find what you love and pursue it; to trust, welcome, and strengthen your relationships; and to sustain yourself and live your adventures to their fullest.

March 3, 2010

3 Horizons of Growth: Paving your Innovation Pipeline

Filed under: Strategy — Tags: , , , , , , — Whit @ 11:58 am

-A Note about Strategic Models-

When formulating a strategy, it can help to use a model or framework. I’ll use the terms models and frameworks interchangeably. Models provide a setting and guide for an organizations fit of capabilities and resources to win in their market(s). They are tools to use for helping set the strategy of an organization. Like all tools, there are some good fits for uses and many that do not fit. No one tool fits all organizational situations. The 3 Horizons of Growth framework is the first of several different strategic frameworks I plan on writing about.

-Introducing the 3 Horizons of Growth-

The 3 Horizons of Growth provides an excellent mold to formulate an organization’s product and service portfolio strategy. The framework allows for evaluating the health of a product/service strategy pipeline and for setting up the alignment of short, medium, and long term plans of an organization. This can be a helpful diagnostic tool as well as an outline for a strategic plan. The model is described in detail as well as its various diagnostic evaluations in the book Alchemy of Growth by authors Mehrdad Baghai, Stephen Coley, and David White. The Organizational Strategist blog will feature a short series of articles on the 3 Horizons framework. This article will introduce the model and describe how it can be used as an outline for the strategic plan of a product/service pipeline.

Every organization should have an ongoing pipeline of product/service ideas that are generated, vetted, and sold to customers. Without a healthy pipeline of innovation, the organization becomes at risk for obsolescence. Beyond that, I feel that organizations should always aim to do the best they can with their own unique combination of resources and capabilities. The 3 Horizons of Growth model shows how the pipeline or, more accurately, the funnel of innovation should be set up within an organization.

-Outlining the 3 Horizons of Growth-

The 3 Horizons are broken into different areas. They each have different needs, thought involvement and action for an innovation pipeline. I have put my own names and description, instead of the book’s manner of simply labeling them 1, 2 and 3, to the three horizons below.

  • Futurist: This horizon is high up hierarchically to help plan and create the product/service ideas which often includes research, thought leadership, and seeing well beyond the current needs and wants of consumers. This is an area where all things are possible and little to no solid detail is set. The largest number of product/service ideas should be here because the horizons act as a funnel to narrow down ideas that become feasible to implement and bring to the market.
  • Entrepreneurial: This horizon deals with experimenting with the products/services dreamed up by the visionaries who contributed ideas in the Futurist horizon. This includes prototyping, testing, and discovering where and how to bring these ideas to market (market intelligence, customer segmentation, marketing/advertising, focus groups, etc). This is an unstructured realm that allows for quick decisions, directions, and declarations.
  • Operational: This is the area that formalizes and matures the product/service that comes from the entrepreneurial horizon. These ideas create the foundational products and services core of the organization’s profit and loss. This should be the stable area that produces the revenue streams the other two areas rely on.

  

This forms a big funnel of product/service ideas that the 3 Horizons of Growth outlines. The number of potential ideas lessens as the ideas travel from futurist to entrepreneurial to operational. This is due to the ideas being prioritized, understood, tested, and vetted by impact, profitability, feasibility and any other relevant decision factors, which narrow down the best ideas to implement.

That is not to say that some ideas cannot spur on others and that extensions, duplication, and spin offs do not happen. On the contrary, if there are innovative people involved in each of the different horizons, then branches that amplify the original product or service idea can happen. For example, take an international law consulting firm that gives advice as a service to Midwest-US companies on how best to sell products to the eastern coast of China. The advising consulting service at this firm is well defined, understood and staffed, which puts it in the operational horizon. An entrepreneurial horizon idea would be to add a different layer to the consulting services the firm offers by giving advice to coastal Chinese companies on how to export into the Midwest-US companies. This idea would not fit into the operational horizon because there may be many different adaptations of the service like different cultural, domestic export law, labor and other elements. An extension of the same operational service (Midwest USA to coastal China) might be to offer the same services only to the Great Plains, Pacific Northwest, or other geographic areas still going to the same area in China. This new extension of the original idea would still be in the operational horizon because so much of the same kind of resources and capabilities would be needed. The only additions needed would potentially be an increase in manpower and an understanding of the new state laws in the region that will be covered by the extension of consulting service.

On the whole, the pace of change in an industry will indicate how fast the ideas travel from futurist to operational. Generally speaking it helps to have a product or service development cycle faster than the industry average. Within a specific organization, the more levels there are to a hierarchy, the longer ideas take to come to fruition and go to market. Smaller organizations are usually able to adapt quickly and take ideas to market much faster than larger organizations. The higher the complexity, regulations, safety concerns, and other qualifications that a product/service needs to include, the longer the idea will take to come be realized and the harder it is to bring to market.

-Conclusion-

The take away from this is that any organization should have a healthy flow of ideas being dreamed up by those who inhabit the futurist horizon, vetted by those in the entrepreneurial horizon, and brought to market by those in the operational horizon. Without providing continual growth and improvement, obsolescence becomes an increasingly overshadowing threat to an organization. Beyond that, organizations must evolve to stay competitive. Channeling an organization to have a strong, steady flow of ideas will greatly help as a core element of an organization’s strategy. The 3 Horizons of Growth provides a good vehicle to model aspects of an organization’s product/service innovation pipeline and strategy. In a later Organizational Strategist article, I plan to introduce consulting/facilitating questions, built upon the questions provided in the Alchemy of Growth book, which I have created to help ascertain the health of the different horizons in a particular organization.

Create a free website or blog at WordPress.com.