We talk a lot about using innovation to create exciting and funky products, and to deliver a competitive advantage. But what happens when we extend our thinking and look at the way we deliver change outcomes?
Value chain thinking gives us a powerful toolkit to help pinpoint innovation opportunities within our project delivery practice. Exploiting these opportunities gives us a leg-up to deliver innovative business outcomes to the market, faster and cheaper than our competitors.
Identifying Innovation Opportunities Across the Value Chain
When Harry Gordon Selfridge said that “the customer is always right” in 1908, he knew that the customer had the ultimate choice – to stay or leave. In a digital marketplace, this is more true that ever.
The global marketplace is shifted – digital transformation has created a fluid, dynamic landscape crowded with global suppliers and clients, plugged into a data driven network that has changed the way we interact with each other.
When customers connect with our business, we need to provide the right solution immediately – if we take too long or can’t meet their needs, they will simply plug in elsewhere and not return. This is the new business norm – shorter time to market, smaller windows of opportunity and a crowded global marketplace.
Companies respond to these changes by looking for competitive advantages – finding ways to build superior products, operate more efficiently and deliver better customer outcomes than their competitors. But in an increasingly crowded marketplace, it can be hard to find that competitive edge.
In response, executives are looking inwards, using a value chain approach to break their businesses down and find innovation opportunities within the organisation.
In his 1998 book Competitive Advantage: Creating and Sustaining Superior Performance, Michael Porter’s value chain provides the foundation approach to breaking a company down into a series of critical and interrelated activities, allowing us to examine each in turn and pinpoint the most valuable innovation opportunities. Porter’s key message was that we need to understand all the component parts of the organisation and how they interact, before we can pin down the opportunities for improvement.
Competitive advantage cannot be understood by looking at a firm as a whole…it stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation – Michael PorterMichael Porter, “Competitive Advantage: Creating and Sustaining Superior Performance (1998)
In their 2017 study An exploratory study of food waste management practices in the UK grocery retail sector, Filimonau and Gherbin propose that before we can improve our delivery approach or propose any innovations, we first need to understand the company’s current approach and identify different points at which inefficiencies can arise. Using supermarket food waste as an example, the authors highlight several reasons why innovation in UK supermarkets has not taken hold.
These reasons extend beyond food handling processes and encompass wider issues of consumer awareness, poor regulation, inflexible policies and limited supplier management. Collectively, they remind us that we need to look for innovation opportunities across the entire change delivery approach.
Applying Value Chain Thinking to Project Management
But here’s the thing.
We can use this approach and look beyond the company’s processes, products and services – we can use value chain thinking to drill down into the way we deliver change outcomes.
Let’s treat the company’s project management framework as a value chain and see how we can deconstruct it and pinpoint innovation opportunities. To do so, we’ll start with a critical question – how can we use value chain thinking to identify and exploit innovation opportunities across our project management practice?
Doblin’s Ten Types of Innovation ® framework provides a really useful tool for deconstructing our project management practice. It does this by using a “grouped process” approach to deconstruct a business into three thematic groupings – Configuration, Offering and Experience.
- Configuration – innovation opportunities that are focused on the organisation’s structure and system
- Offering – innovation opportunities that are focused on the organisation’s core processes, products and services
- Experience – innovation opportunities that are focused on how the organisation engages with its customers and partners
We can apply the same “grouped process” approach and map the Project Management Institute’s PMBOK ® key knowledge areas to the themes; this allows us to understand how each knowledge area interacts with other thematically related areas.
|Thematic Area||PMI ® Knowledge Area|
|Experience|| Stakeholder Management|
By applying Filimonau and Gherbin’s thinking that innovation doesn’t come from implementing changes in one area alone, but rather in understanding how different areas interact with each other, we can use a Doblin-style framework to focus questions and activities towards exploring the way that the practice and thematic areas interact with each other.
Using the grouped process approach, we won’t look at say…Risk Management…in isolation but rather, we’ll explore how it interacts with Integration, Resource and Procurement management. How do these areas intersect with each other? Where are the overlaps? How can we improve or respond to these?
Taking it a step further, we can think about how the three thematic areas intersect with each other at a higher level – how do changes in our core processes (Offering) impact the way that we share information and engage our stakeholders (Experience)?
Turning our focus then to teach knowledge area, we can look at our specific processes and practices and think about how they interact with each other and within their thematic area.
The Doblin framework then applies a series of coordinated activities and questions to explore these relationships – to help us understand where the relationships are breaking down and where we can drive improvements.
Bringing it All Back Home
Companies are looking for competitive advantages in the marketplace – finding ways to do things better than their competitors.
Value chain thinking is a terrific way to look at our business, understand how all the moving parts interact with each other and work out where we need to do better. It gives us a framework to pinpoint innovation opportunities that can help drive competitive advantage.
But we don’t need to limit our thinking to the core processes, product and services. We can apply the same value chain approach to our project management practice – using a grouped process approach to understand how our delivery processes hang together.
By looking at the relationship between the parts, we can hone in on our processes and understand how they interact with each other and within the thematic groupings.
This gives us a toolkit to apply across our project management practice, and identify opportunities for innovation that can in turn, help the business create a competitive advantage.