The ability to quickly adapt and pivot to survive in uncertainty is a skill we all had to hone during the past eighteen months. Jerry Wind, the Lauder Professor Emeritus and Professor of Marketing at Wharton, shared his eight principles of innovative transformation with NetElixir during our Connecting the Dots virtual conference to help brands continue to thrive in the future.
Professor Wind taught us that there is no one driver of innovation; rather, innovation is a process each company has to learn about and experiment with to determine their own path forward. His eight principles of transformation guide our mindset and organizational structure so we can be prepared for whatever comes next. These principles are the foundation to help us cope with and survive current crises from the coronavirus pandemic to racial injustice, capture available opportunities, and be able to anticipate and navigate the next crisis.
Learn how Jerry Wind conceptualized his eight principles of transformation
Eight Principles of Transformation
1. Change Your Mental Model
In changing your mental model, you seek to adopt an insurgent mindset that challenges the reality we have accepted or become complacent to. Wind tells us that returning to a pre-coronavirus normal is the wrong mental model to have, as the world has drastically changed since March 2020. Between work-from-home, the e-commerce boom, zoom communications, e-learning, and the like, we would lose so much if we just went back to the way things were. We are facing a new reality and have to use our learnings to grow and expand.
Wind instructs us, “The most fundamental [task] that I’d like you to explore is what is your mental model? Is it still appropriate for today’s environment of the new reality and how can you change it? What will be the needed changes to the mental model, that how can you become not only a defensive player but actually a disrupter in your industry?”
2. Reimagine and Reinvent Your Approach to the Customer and Stakeholder
Customer needs and expectations are constantly evolving and successful brands evolve with their customers. Wind notes that current crises, as well as significant advances in technology from apps to AI, are really “enriching and allowing the consumer to be much more empowered in the balance of the relationship between the consumer and the retailer.”
Wind encourages brands to design customer-centric strategies that respond to and anticipate customers’ needs and expectations — ideally, brands should co-create with their customers by offering real-time customizable and personalized experiences. Society is shifting from the traditional shareholder approach to a stakeholder approach, where stakeholders are predominantly the customer, but also partners and employees. A purpose-led organization that has a positive social impact will resonate with customers, new talent, and more.
3. Speed Up Digital Transformation and Design for Personalization at Scale
A rapid, agile system that can quickly respond to changes in the environment will thrive in this rapidly evolving world. As we learned last year, we don’t always have the luxury of time and deep analysis to figure out the best solution. A robust digital infrastructure and omnichannel approach will give organizations the foundation to be able to respond quickly, fully engage their audiences, market globally, and provide updates as needed. A digital infrastructure will also help with personalization at scale, as we move away from a one-size-fits-all approach to a personalized approach that directly addresses consumer needs.
4. Reinvent Your Talent Strategy and Embrace Open Innovation and Open Talent
The idea of open innovation and an open talent strategy means we search for solutions outside our traditional domain and knowledge. Many challenges that organizations face have been solved somewhere else in the world, so we should be finding solutions that already exist and not wasting time reinventing the wheel. More and more people, especially under the flexibility of remote working, are preferring the gig economy style, which means companies might not be attracting all the talent they need. An open innovation network curates specific results to a problem, benefits from an interdisciplinary point of view, and is a source of collaboration and communication that can keep innovations cutting-edge and modern.
5. Seize the Need for Speed and Design for Agility, Adjacencies, and Adaptability
Agility is an important facet of innovation and success. To be adeptly speedy and agile, organizations need to look at the adjacencies in terms of similar products and services, available markets, and shared partners and networks where they can pivot, learn from, and expand. Looking at these adjacencies creates opportunities for improvement, a new perspective, and increased efficiency.
6. Innovate, Then Experiment, Experiment, Experiment
“The key to everything we are doing, especially in today’s environment, is the need to continuously innovate and then experiment, experiment, experiment!” Wind shares. Everything from customer behavior to technology to competition is changing, so organizations need to change, too. And we change through innovations, both big and small.
Customers don’t think in terms of verticals, but rather their experience is shaped across industries, which influences their expectations of everything else. Therefore, brands need to innovate every facet of their business, from their product offering to business model to their market approach. We accomplish continuous innovation by creating a culture of continuous experimentation that allows us to come up with new ideas pulled from various industries and domains and test them.
7. Redraw Your Timeline and Build a Portfolio of Initiatives Across All Innovation Horizons
There are three horizons of innovation: one is a brand’s current offerings of products and solutions; two is the markets a brand operates within; third is that which is new to the world. Wind offers Tesla’s series of innovations as an example of operating within all three horizons. In horizon one, Tesla is developing new electric models and creating a lower-priced version for greater accessibility; in horizon two, Tesla is creating autonomous cars; and in horizon three, Tesla is working towards Hyperloop, a tube that makes fast travel between cities like San Francisco and Los Angeles possible.
It’s best to have a varied portfolio of innovation initiatives, dedicating 80-90% of your time and resources to horizon one, and 10-20% to horizons two and three. Your portfolio should seek to address how to improve your current offerings, explore what others are doing in other industries and how you can reach new customer segments, and create new solutions for the world in terms of products, markets, and business models.
8. Deploy an Idealized Design and Recreate Your Organizational Architecture and Network Orchestration
To create an idealized design, start with a compelling vision for your organization of what you want to accomplish and what your legacy will be. Select a date deadline for your objective, select a prize you wish to win (like the most innovative retailer or the best place to work), and then write a story for why you receive that award. That story is the foundation of an idealized design planning process that has you work backward to achieve your goal.
Having your story and design in place, then you look to recreate your organizational architecture — which includes your corporate culture, processes, structure, internal and external competencies, technologies, performance, and incentives — that positions you to accomplish your goal. The trick is moving away from just enacting minor tweaks to leveraging experiments and consistent daily tactics that will get you closer to accomplishing your goal by your set timeline. Through this, you will succeed in capturing opportunities and thriving, not just surviving, crises.
Your Innovation Strategy
Professor Jerry Wind inspires us to think differently, to challenge ourselves to innovate, and to continually learn to create opportunities and transform in times of crisis.
While Wind inspires us to innovate, he shared a hefty challenge for marketers and businesses to find a place to start within their own organization. Learn where to start applying Wind’s eight principles below:
Learn how you can start innovating new opportunities for your business today.
Insights from the Experts
- Opportunities in Times of Crisis, a recap of Professor Wind’s previous discussion with NetElixir, from June 2020
- Connect the Dots with Natalie Zmuda, Head of Think With Google
- How Vigilant Organizations Gain an Edge
- Revisit the insights and perspectives shared during Connecting the Dots: Driving Change Through Innovation