Phase I: Picture of the Future & Strategy
The first phase of the end-to-end innovation process sets the context for all innovation activities. We create a Picture of the Future and derive the strategy to get there. Let's dive in and see what strategic guidance you need to succeed with innovation.
Bernhard Doll
Business Design Maverick
1. Purpose
Innovation work needs clear, tangible strategic direction. This is especially true when developing new products and Business Models meant to depart from today's core business — it's essential to understand which ideas fit from a strategic perspective and which don't. Many companies have a vision, a strategy and at least some financial goals, haven’t they? The initial reaction of some managers to the question of whether they have a clear vision for the organisation they are accountable for is:
Sure! We want to become the Nr. 1 in our industry XYZ and increase our gross margin by 3%.
Well, this is neither a Picture of the Future nor a strategy. It is a goal. And by the way, terms such as "purpose", "vision", "mission", "strategy", "goals", "KPIs" etc. are often mixed up and create more confusion than clear guidance. Also buzzwords such as "digitalisation", "sustainability"1, "customer centricity" are a good starting point but not precise enough that they provide any guidance for innovation activities and management decisions around these activities. And this misconception is prevalent in many companies.
In Business Design, we address this by developing a Picture of the Future, which is then completed with a Measurement of Success & Progress and an innovation strategy. The first phase of the End-to-End Innovation Process is dedicated exactly to this task. Dream Big, Act Small is our motto. What matters most is that the outcome of this phase helps everyone involved evaluate and prioritise new ideas of varying ambition levels from a strategic standpoint. Room for individual interpretation should be minimised as much as possible, so that all of a company's innovation activities and investment decisions can be aligned around a shared vision.
Without a Picture of the Future, for instance, you will have challenges to derive your "playgrounds" and eventually an idea portfolio. You will also get vague decisions at the end of a Phase IV: Validation & Refinement and never 100% commitment for new ideas. You won’t get the best people for a Project Team. Managers will always rely on numbers and business cases to make decisions in the context of innovation. It will be difficult to kill a bad project, because nobody knows what "bad" really means. Nothing is really good, nothing is really bad. And it is even worse for us: You need to have very sharp senses to realise that the missing vision is the reason for all that. Because everyone tells you the opposite ("sure, we have a strategy!").
We don’t need a "perfect" map of the future. The details of the picture will be wrong anyway. But what is the point then? The goal of this exercise is not to precisely predict the future, but to support everyone in an organisation to make big and small decisions today in an aligned manner. This may impact your hiring process. This may impact which ideas will be prioritised. This may impact how Project Sponsors of Business Design sprints guide new innovation projects.
Hence, a Picture of the Future is a very essential leadership tool for modern managers across industries.
2. Duration
Optional: Step 2: Inspire: 4 weeks
Step 3: Imagine: 2 weeks
Step 4: Visualise: 2 weeks
3. Key Activities
These are the core activities of this phase:
Step 1: Setup: We get a clear picture of the appetite for change, try to get internal sponsorship and setup a Project Team for the inspirational research as well as the upcoming Vision Workshop.
Step 2: Inspire: Before we answer any strategic question, we start with a preparation phase we call inspirational research. A small team of curious people explores the future today: they talk to (lead) customers and users who do things beyond the mainstream, they interact with trend researchers. They analyse the capabilities of new technologies and try to figure out what future use cases might be conceivable. The goal is to gather inspirational content that helps you design a picture that embraces the future instead of repeating the status quo. This step is optional.
Step 3: Imagine: In this step, a small team of C-level and innovation managers meets in a series of workshops. They digest the inspirational content from the previous step and work through a set of strategic questions covering the future "life" of customers, the future of the organisation itself, Measurement of Success & Progress and finally a corresponding innovation strategy. The answers become the brief for a designer, who turns them into a visual Picture of the Future.
Step 4: Visualise: This is usually an iterative feedback process: workshop participants review the Picture of the Future and refine it through several versions. They also craft a compelling story for audiences inside and outside the company. The last step is documenting both the picture and the story in a format like PowerPoint or Innovation Monitor. Done.
A Picture of the Future is barely driven by pains and challenges your customers experience today. Your vision should be driven by an entrepreneurial idea what kind of future YOU want to build with your company. Sounds scary? It shouldn’t and, by the way, your Picture of the Future can be revisited and revised over the years. Be brave!