Purpose Innovation driven “purpose bundles”, are products and services from variety of related and unrelated industry providers that are bundled together by a powerful "purpose causal chain (PCC)", for a value (price), in proportion to consumers’ PURPOSE SCORES. An example of PCC being – H&W/Green consumers, getting a better value when they purchase a PCC bundle of “health insurance with a set of H&W based durable and non durable P&S’s along with a workout service” in a price that is in proportion to their purpose scores. The rationale here is that- those consumers, who eat healthy, apply natural body treatments and exercise well, in general, will also lead a healthy life - and hence deserve a better insurance premium and so on and so forth.
Similarly, one can, also come up with lot more combinations of such PCC bundles (spanning across H&W, energy, micro financing, insurance, commodity/option/derivative trading etc) – to motivate both consumers and providers, to come together to create a powerful "purpose value chain driven, collaborative, purpose market place", for the larger benefit of the society, as explained later within the solution section. The fact that purpose bundles are tied together by this powerful “purpose causal chain based purpose scores”, it will motivate both consumers and providers alike, to actively promote this type of a market place with a vested interest of increasing their purpose scores and market shares respectively– thus, creating a win: win value proposition for all parties involved.
To cap it all, Purpose Innovation has a huge opportunity to revolutionize healthcare reform as well, especially within US and other developed economies, given the fact systemic problems like healthcare reform, in our humble opinion, need a systemic solution like Purpose Innovation.
Although there is so much talk on the topic of purpose, including the green and social responsibility agendas, still they have not become RELEVANT and PRACTICAL for large corporations (and consumers), especially when it comes to their day to day business and life. In other words, purpose agendas, are still being treated as a decorated corporate PR activity for large corporations, and so, the need of the hour, is a compelling innovative approach, to motivate both corporations and consumers alike, to implement purpose principles, in their day to day life and make purpose, an everyday activity like consuming air and water!
One such compelling innovative approach, we are proposing is Purpose Innovation (with Purpose models, Purpose bundles and Purpose platforms), to motivate corporations and consumers alike, to be part of a purpose value chain, so that they can experience better value in their day to day purchase/consumption life cycle of H&W/Green products and services, in proportion to their PURPOSE SCORES.
- Boundryless purpose models - A stirred up view of edge opportunities, in the form of a “pull value chain” disrupting the traditional boundaries of related and unrelated industry verticals (CPG, Retail, Telecom/Hi-Tech, health care, Pharma, Insurance, Banking etc.) – who are knitted together by a causal purpose value chain such as Health &Wellness/Taste & Beauty, Sustainability/Maintainability, Mass Market/Personalized, Shareholder value/Community value and Externality/Internality - to name just a few.
- Boundryless Purpose bundles - A “causal chain” based dynamic bundle of products and services with a set of positive value incentives that are shared among all the players of the purpose value chain (consumers and participants alike) who helped to create them- as incentives help catalyze collaborative action.
- Boundryless Purpose platforms* - A flexible foundational platform design that help to change the characteristics of the underlying product and services without changing the platform design significantly using the emerging technology and manufacturing/supply chain best practices - a huge capital cost saver.
While open innovation focuses on leveraging third party resources to support organizations’ product and/or business model innovations, institutional innovation, in some cases, also expands the scope to include the core operating processes of partner’s value chain – but, still within a single or related industry verticals. On the other hand, purpose innovation goes few steps further – by creating a “pull value chain” across both related and unrelated industry vertical boundaries in the form of purpose models, purpose bundles and purpose platforms – that are knitted together with a powerful “purpose causal chains driven purpose scores”.
Pull driven Purpose Value Chain Market Places
This "pull driven purpose value chain market places", unlike the push model encourages decentralized, yet loosely coupled interactions among its players from both related and unrelated industry verticals facilitating much broader type of collaborative innovation, in proportion to their purpose scores. This purpose score based model in turn inherently makes the participants to come together with a purpose causal chain relationship, thus making them highly scalable with diverse, yet complimentary set of players.
Pull driven Purpose value chain, in addition also pulls consumers in to the purpose value chain by providing valuable incentives in the form of purpose bundles. In other words, pull value chain makes consumers as passive virtual business partners within the purpose value chain market place, thus making consumers as their lifelong partners creating a different kind of consumer loyalty -called “composite brand loyalty”.
The 3P’s (Purpose Models, Purpose bundles and Purpose platforms) Explained
Purpose models are the revolutionary game changing business models that not only just reinvent the firm from product/business model innovation standpoint, but also, mutate the DNA of the brand at the nucleus level and make them to be a part of a “pull value chain” composite brand. In other words, business models usually shuffle the value chain activities of the firm within the four walls of the firm (or at the maximum within the industry or related industry verticals) whereas, purpose models go few more steps further - shuffle the value chain activities of both related and unrelated vertical boundaries– and, then re-purposes the vision/mission of those brands (as both standalone and composite brands), with a causal chain based purpose bundles- that are knitted together by the “forces of attraction” resulting from balancing the “purpose value opposites”.
Similarly, Purpose bundles are the causal chain based “consumer consumption” driven “day in the life” type dynamic bundles of products and services from variety of related and unrelated industry vertical providers that are bundled together by the “forces of attraction” from the “value opposites” – thus, providing a better value for the purpose minded consumers who are committed to a leading a purpose life style. For example, under this model, a Health and Wellness/Green minded consumer (who is also a passive partner of the pull value chain), will get a better value when they purchase a dynamic purpose bundle of “health insurance along with a variety of H&W based durables and non durable P&S and workout services” in a price that is in proportion to their purpose scores. The causal chain relationship rationale here is that- those consumers, who eat healthy organic food, apply natural beauty treatments to their bodies and exercise well will have a healthy life - and hence they deserve a better health insurance premium and so on and so forth. Extending the context of the this causal chain rationale, one can also say- that the more products and services consumers add to their causal chain - the more their purpose scores - and hence, better the value.
Likewise, Purpose Platforms are the foundational infrastructure enablers of the purpose models (and purpose bundles) providing the flexible platform design (with principles like JIT, lean manufacturing, tapered integration etc.) to help change the “relevance, access and value” characteristics of the underlying products and services - without significantly changing the platform design. This is a great value-add feature – that these purpose platforms are designed with a flexible design using emerging cloud based miniaturized manufacturing technologies (& nano- technologies) - as they help to change the characteristics of product and services without changing the underlying platform design – which is huge capital cost saver for the "pull value chain" participants.
- Purpose agenda gets blended in to the day to day business of corporations and consumers, given the fact, consumers are motivated to purchase H&W/Green P&S’s in proportion to their purpose scores – because higher their purpose scores, better the value from variety of products and services from multiple providers.
- Purpose innovation has a huge opportunity to revolutionize healthcare reform, especially within US and other developed economies.
- Purpose agenda moves from a decorated PR activity into the day to day business activity and gets blended into the part and parcel of corporation’s business model.
- With more people consuming H&W/Green brands, it is good for the environment.
- More money gets allocated for Green research and clean energy.
- Externality gets incorporated as part of P&S price.
- Brings down the cost of H&W/Green brands and so bottom of the pyramid can also afford them, thus improving the social responsibility agenda.
- Take baby steps and try to create purpose bundles that are made up of P&S from single firm (or four walls) in proportion to company managed purpose scores.
- Extend that bundle with close business partners within related vertical providers.
- Slowly build the momentum for boundaryless purpose causal chain based bundles.
- Influence Washington and see if the concept can help revolutionize healthcare reform.
- Take the concept global.
Hello Ali,
Just noticed that one of your comments perhaps was meant for my other strategic planning post, somehow, ended up posted here! Not a big deal! Nevertheless, you make an important point and I quote “this proposed approach offers the opportunity to learn by error as well” – which in my mind aligns perfectly with one of the key objectives of the MIX site i.e. ”learning by experimentation based trial and error solutions”.
Yet another reason your point caught my attention being - lots of times, we end up solving a problem with a quick fix solution, with a symptom fixing and planning mindset, as opposed to solving the issue with a series of experimentation based chunks of solutions, fixing the root causes, constituting 5-10 year road maps with an experimentation mindset. In other words, it all comes down to “symptoms fixing mode, with a vanilla planning mindset vs. “root causes fixing mode, with an experimentation based planning mindset” as further explained in one of my other Healthcare reform hack. In other words, next wave of disruption in management innovation is “learning by experimentation based trial and error solutions” and so your point is well noted!
Regards,
Charles
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Hello Willy, You have summarized it very well that our “purpose driven Portfolio-Thread (PTV) view” is a combination view, deriving its best features from other popular strategic views (SPV,RBV,SEV,DTV), but with some value-add features – with a novel goal of reducing complexity!
Over the years we have learned a key principle “There is no such thing called originality” as – “we humans, in general by and large come up with a new idea or new way of thinking leveraging an existing thinking and/or phenomena, but with some value-add”. In other words, the value-add piece is the one that makes the new thinking relevant or impactful for the current 21st century business context and it by no means, overrides or eclipses the original thinking. In other words, most of the new thinking in strategy is like “the harmonic convergence of original thinking from the experts of yester years” in the words of Walter Kiechel.
With that said, I quickly looked at your articles - and first of all, I must admit that they are very insightful and in a way your approach is similar to our approach, in many ways, given the primary driver for our work is still the same – i.e. “the need of the hour is the integrated systemic approach integrating traditional policies, models and methods under one panoramic view” and within that driver, you have done a wonderful job of focusing on the organizational/structural challenges of 21st century needing a new approach - by integrating the four dimensions of organizations (top down, bottom up, inside out and outside-in) with those two rings, whereas we, in a way, have started our work by addressing the macro challenges form strategy dimension with those 6 macro dilemmas (i.e. Purpose vs. Profit, Customer Centric vs. Vision Centric Innovation, Pull vs. Push value chain, Operation Excellence vs. Innovation Excellence, long term vs. Q-To-Q results and Market based vs. Resource based ) within the radial orbit framework using PTV’s 5 perspectives (4 Kaplan/Norton’s perspectives + our central purpose perspective).
In other words, our Systemic approach approach has started our integration journey from strategy dimension whereas you seem to have started your integration journey from structure dimension ((top down, bottom up, inside out and outside-in). Having said that, as you know better than I do, that structure must follow strategy, as concluded by chandler, for the “big picture” strategy to become holistic – and so, both of our approaches must converge at some point, to make it holistic.
Just to show you another differentiating aspect of our PTV view - while most popular views provide the frameworks, models, tools and templates for strategy and structure dimensions, we consciously wanted to keep innovation as a separate dimension (although one can argue it is part of strategy and structure as per most other views) . In other words, as part of developing our purpose driven strategic planning view called Portfolio-Thread View (PTV© with EPP©, CPP© & PIP©) we added three components
• Strategy Part – Experience Pool Portfolio - EPP)
• Structure Part (Capability Pool Portfolio - CPP)
• Innovation Part (Purpose Innovation Portfolio – PIP)
Although one can argue that Innovation is part of both strategy and structure dimensions, in our experience, what we have found is that one of the big picture dilemmas faced by senior management is which one comes first – strategy, structure or Innovation. While Chandler conclusion of “structure must follow strategy” is still valid – in our opinion, we need to constantly go back and forth between strategy, structure and Innovation components with an iterative approach (with an experimentation mindset) and balance all of them, to get the optimal result.
While this balancing business might sound easy to do in paper, however, in reality, as you know better than I do, is one of the most challenging things to do, especially when there are not many common denominator type sub components across them – and hence, the answer is adding at least one common denominator type sub component, across threes three components (strategy, structure and innovation) – so that it will help us to balance them little more easier.
Once such common sub component, we have found to be always fitting the bill is PURPOSE. In other words our mantra being - formulate purpose driven strategies (i.e. strategy part), with a diversified/talented purpose driven team (i.e. structure part) with a purpose innovation mindset (i.e. innovation part), so that no external/internal forces can derail the strategy and push the company off the purpose track, as the three dimensions are bound by that common purpose. This is one reason we consciously added Purpose in all three of our “strategy, structure and Innovation” dimensions and frameworks.
On the whole, I appreciate your insightful comment as it made us to do some home work - and compare and contrast your superior work within the context of our work as well.
Regards,
Charles
PS: In a way, your comment perhaps is more applicable to my strategic planning post (http://www.managementexchange.com/story/strategic-planning-purpose-drive...) than purpose innovation post – and so please feel free to post the comment in the other post as well. Also, I will add a summary version of this comment in your TQM vs. TIM post!
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First of all, many thanks for your interesting contribution. Strategy is obviously a complex matter and - as you point out - there are many approaches. The systemic approach that you also advocate, would favor a combination of the strategic positioning view, the resource centric view, the strategic execution view, and the design thinking view. While they all have their merits, unless there is an efficient execution, the best of strategies will remain a lettera morta.
Let me refer you to my contribution of 06/08 under the title "From Total Quality Management to Total Innovation Management" and more specifically, to the section 5/b. You will find an outline of my Model of the Two Rings. This model expands on Hoshin Kanri, a Japanese model for strategic deployment. Let me sketch how it addresses your SPV, RBV, and SEV.
SPV: senior management defines in the Planning Step the strategic positioning in the prioritized domaines, and it lays out the strategic projects. TIM and TQM support management project-by-project.
BRV: senior and operations management get together in the Planning Step (1) to come to an agrement on prioritizing the projects and to bring out opinions and reticences (2) to agree on the distribution on the 5 which include the resources and the return on the invested resources. in the following Step, the Process of Strategic and Organizational Deployment, the distribution on the 5 is done at each of the 2-4 levels of the strategic and organizational deployment.
SEV: in order to get an effective strategy and an effective execution thereof, we need commitment, cooperation, and collective creativity. This I propose to achieve, among other, by creating trasparency and connectivity over the whole process of management with the combination the 5 of the business policy, the model of the two rings, and the alertness and innovation commission.
However, for more the broader picture may I refer you to my last book "Innovate out of Crisis - Second Edition". Kind regards, Willy A. Sussland
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I liked most the statement and I quote " addressing/balancing the purpose driven “competitive advantage/aspiration” mix question effectively". Truly, we need an integrated approach to a complex behavior. Cause and effect might not be linear in a complex organization, but the propopsed approach offers the opportunity to learn by error as well.
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This Hack provides a very-well thought and an integrated approach to the purpose-driven organizations and why organizations exist.
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