Linking Innovation With Strategy

Good Reading

Dan Ariely: Predictably Irrational: The Hidden Forces That Shape Our Decisions
Want to make better choices in 2011? Learn to overcome the negative and emphasize the positive effects of this inevitable aspect of human nature. Get started by checking out these chapter excerpts and videos.
John P. Kotter: Leading Change
A timeless classic, recommended to CUES School of Sales & Service participants by Mike Neill
Daniel H. Pink: Drive: The Surprising Truth About What Motivates Us
Pink shows that people are motivated by more than money or the carrot and the stick. Once their basic survival needs are met, employees respond to intrinsic motivation, like growth and development and the possibility of reaching their full potential. Read more in this post.
Bob Spitz: The Beatles: The Biography
Reading like a novel (except for some detailed sections on the band's merchandising deals), this hefty volume tracks each Beatle, beginning with his family's Liverpool origins, to show how the group is shaping pop culture to this day. There is virtually no one who has not been touched by their influence--culturally, musically, even historically--which is why, though not a business book per se, this Beatles biography makes a good read.
Seth Godin: Meatball Sundae: Is Your Marketing out of Sync?
What do you get when you combine a boring brand (meatballs) with fresh, shiny New Marketing (candy bits, whip cream and sprinkles)? In this engrossing and fast read, Godin teaches marketers how to avoid the meatball sundae. He characterizes the differences between Old Marketing and New Marketing while identifying the 14 trends that are redefining what it means to be a marketer today.
Roger L. Martin: The Opposable Mind: How Successful Leaders Win Through Integrative Thinking
Instead of looking for best practices to adapt for your CU, what if you could learn to think like the leaders of firms like eBay and Procter & Gamble? In this book, Martin shows how simultaneously holding two or more diametrically opposed ideas can produce a synthesis that is superior to either of the original ideas.
Chris Resto: Recruit or Die: How any Business Can Beat the Big Guys in the War for Young Talent
Today’s young professionals want it all and they want it now. They want a career, glamour, gossip and work/life balance (people first, organization second). They are willing to work hard but are not willing to sacrifice the rest of their life like their parents did.
Charles Fishman: The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy
Wal-Mart virtually invented big-box retail, and did nothing short of change the world. In an “unputdownable” read, Charles Fishman provides an inside glimpse of the tactics and strategies Wal-Mart employed to establish its utter dominance. Any business person can benefit from an understanding of Wal-Mart's encroachment.
Howard Moskowitz: Selling Blue Elephants: How to make great products that people want BEFORE they even know they want them
Learn a process of designing, testing, and modifying alternative ideas, packages, products, or services to discover what appeals to consumers, even when they can't articulate their own needs. Best practice examples include MasterCard and HP. Download a chapter, free with registration from the very-worthwhile Wharton@Work site.
Jeanne Bliss: Chief Customer Officer: Getting Past Lip Service to Passionate Action
Bliss draws on her experiences as "customer crusader" for the likes of Lands' End and Coldwell Bankers in this practical tool kit.
Seth Godin: Small Is the New Big: and 183 Other Riffs, Rants, and Remarkable Business Ideas
Remember when big was better? According to Godin, "Small is the new big [but] only when the person running the small thinks big." Sounds like the perfect job for a credit union CEO.
Ben McConnell & Jackie Huba: Citizen Marketers: When People Are the Message
More about word of mouth and how social media are impacting marketing. Get an excerpt, interview with the authors and more via this blog posting. Learn about using social media in your CU's marketing at CUES Nexus
Robert Scoble: Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers
According to the author, every business can benefit from smart "naked" blogging in which posts are not filtered through a PR department. Here are links to the examples used in the book.
Spannerworks: What is Social Media?
Find everything you need to know about wikis, blogs, podcasts, social media and content communities in this free, easy-to-download e-book.
William C. Taylor: Mavericks at Work: Why the Most Original Minds in Business Win
Glean ideas from Internet banks, funky sandwich shops and break-the-mold business units inside IBM and Procter & Gamble. Read an interview with co-author Polly LaBarre.
Jim Collins: Good to Great and the Social Sectors: Why Business Thinking Is Not the Answer
A companion to the best-selling Good to Great, this article applies Collins' concepts to the non-profit world. Read excerpts here.

By Barb Kachelski, CAE

Introducing a successful new product or service requires both innovation and strategy. Bruno Cassiman explained how the two can be connected by taking my DLI II class through a case study of Cirque du Soleil, an entertainment empire derived by turning the ages-old concept of a circus on its head.

Cassiman, an associate professor of economics and strategy at DLI II host IESE Business School at the University of Navarra in Barcelona, Spain, noted that the entertainment giant started small and consciously decided what to keep, add and subtract. Cirque du Soleil leaders, he said, focused on a two-part strategy of "differential value creation" and cost reduction.

To differentiate itself and create value for customers, the company did four main things:

Traditional circuses target children, while Cirque du Soleil focuses on adults, competing against theater and opera rather than children's venues. This new, more profitable pool of customers allows for higher ticket prices.
Cirque du Soleil has no head-to-head competition, providing differentiation and, again, allowing it to charge a higher price
One traditional circus looks much like others, and they do not change the look of their shows significantly. Cirque due Soleil features multiple productions, resulting in more visits per customer to bring higher volumes.
Overall, the leap in value pulls new customers to Cirque du Soleil performances. Customers who have never been to theater or opera are attracted to see a "cirque" show.

To cut costs, the company did these three things:

Traditional circuses feature star performers and high-cost animal acts. Cirque du Soleil eliminated these high costs. (Elimination of the animal acts also appealed to attendees who found them cruel or dirty.)
Cirque releases roughly one new show per year, while continuing to run older shows. This yearly production schedule allows faster coverage of cirque's high fixed costs.
Cirque du Soleil consciously leveraged untapped value by replacing star performers with a lower cost talent pool, gymnasts and performers from Russia, China, and Latin America.

To bring this model back to credit unions, DLI II participants mapped their institutions' value curves, answering four questions to aid them in strategic positioning and innovation:

What dimensions do you compete on?
What do customers value?
What do customers not value?
What do/could credit unions keep, eliminate, create?

Cassiman encouraged attendees to graph the value curve of their credit union relative to its competitors or alternatives. The graph is created by listing value factors on the Y axis (such as convenience, auto loans, best price) and listing a low to high value level of the credit union relative to its competitors or alternatives on the X axis. The curve can be used in positioning, identifying what type of members credit union leaders should target based on their CU's particular value proposition.

Barb Kachelski, CAE, is SVP/chief information officer for CUES and a former newspaper reporter.

Read more insights from DLI II in this Skybox post and this article.

CUES Sybox

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Linking Innovation With Strategy

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