Using Strategic Planning & Innovating with a Value Denial
We’re getting to the time of the year when businesses are starting to think about their business plans and budgets for next year. It’s a good time to establish the difference between ‘strategy’ and ‘next year’s budget’. Strategic thinking is all about how to change your business to take advantage of changes in the marketplace or to lead change. For instance, a business owner might spot an area where competitors are weak, a new market that needs a new product/service that’s close to something s/he’s already offering, or an imminent change in the industry. Another concept is ‘value denial.’ This is where there’s demand for a product/service but no one is offering a solution. In UCLA Professor Dick Rumelt’s interview with The McKinsey Quarterly, he says, “Value denials are simply products or services that are not offered but that readily could be, and for which clients would clearly pay.” He gives the example of “an airline ticket that guarantees your luggage won’t be lost. Not for sale. But some people would clearly pay for it.” Here’s another, “In the music industry, a clear value denial was the inability to buy the two or three good tracks on a 15-track CD. iTunes squared that circle.” Can you expand your strategic thinking by brainstorming some value denials that your business could take advantage of? Brainstorm with your customers. They’ll let you know what they want that you could arrange to offer.