Pulse September 2015 - Page 58

ASK THE EXPERT KAIHAN KRIPPENDORFF CEO of Outthinker LLC, a business and capital advisory firm, Kaihan Krippendorff leverages the power of a compelling idea in order to help clients win by outthinking the competition. A consultant at Wharton Business School and regular blog contributor for fastcompany.com, he outlines strategies on ways to innovate and compete in his book, Outthink the Competition. PULSE: In this day and age, how critical is it for businesses to outthink the competition? Krippendorff: Winning against competition has always been critical. What has changed, and why outthinking the competition is now so essential, is the way in which successful businesses win. Over the past 50 years, competition has been based on what I call “beat the competition” strategies: locking up resources, locking in customers, and building economies of scale. But today, the most successful companies are using a different playbook. They are instead winning by outthinking the competition: doing things that competitors could compete with but decide not to. Why did Elon Musk beat car companies in the electric car race? He did it not by beating the competition, but by outthinking them. P: Sometimes, the challenge when strategic planning is in sorting through all the ideas. Can you share some practical exercises or steps that can help businesses assess ideas with true innovative potential for their businesses? K: The dilemma is that disruptive ideas must be inconsistent with some belief that your competitors hold. You need to, as Mahatma Gandhi said, let them “ignore you, then laugh at you” so that by the time they decide to fight you, it’s too late, 56 PULSE ■ September 2015 you’ve already won. Traditional strategy processes are designed to kill off such ideas, the “crazy” ideas, the ones that are inconsistent with prevailing logic and belief. But there is a way out. Here is what you do. Take your 50 or so ideas and ask two key questions for each of them: ● “Is this easy to execute?” ● “If we successfully executed it, what would be the impact?” You sort through all your ideas according to these two questions and then focus on the ideas that appear difficult to execute but would have a big impact if successfully executed. Your breakthrough idea probably lies among such “crazy” ideas. Most companies throw out such ideas because they seem impossible. But innovative companies work on them. P: How exactly do you do that? K: Take a seemingly crazy idea, list the three reasons why the idea seems crazy, then for each reason, brainstorm three ways you can remove that reason or barrier. For example, I was working today with a leading consumer electronics firm. They came up with an idea they thought would cost too much to develop. They then brainstorm how to remove the “costs too much to develop” barrier. They considered ways to reduce the investment cost, seeking outside investors, and creating a separate business that pursues the idea. Suddenly, the idea did not seem so “crazy” anymore.