HIGH POINT — In 1968, a young athlete named Dick Fosbury revolutionized the high-jumping event when he literally turned his back on convention.
Until then, every contestant had tried to clear the bar face first, but with his eponymous “Fosbury Flop,” Fosbury leapt backwards on his way to a gold medal in the Mexico City Olympics that year. Within a few years, practically all jumpers had adopted the move.
The “Flop” is an example of what transformation and innovation consultant Kaihan Krippendorff called “the 4th option” in his keynote address to the Furniture Today Leadership Conference. The “4th option” concept, he says, is about outthinking vs. outplaying the competition.
Krippendorff began his career with McKinsey & Co. before founding his own consulting firm. He concentrates on how to thrive through disruption and technological change through imaginative transformation. His growth strategies and innovations have generated more than $2.5 billion in revenue for companies including BNY Mellon, Citibank, L’Oréal, Microsoft and Viacom.
“With the ‘4th option,’ you look at where your competitors … start repeating themselves,” he said, noting that Fosbury’s move wasn’t dependent on “technology” related to the sport, and there’s a lesson in business. “It’s not about the technology; it’s not understanding the technology. What it is about is adapting a new concept around the technology, and the concept needs to be inconsistent with existing concepts.”
All great innovators, he said, “talk about outthinking, not outmuscling, outspending or out-executing their competitors.
“You’re going to target a segment of the market they don’t view as valuable, offering a product they might view as inferior, so they let you have it,” Krippendorff continued. “You take that segment of the market, that becomes your beachhead, and then you start pursuing and attracting more valuable segments with a higher quality product.”
5 steps to implementation
Krippendorff identified five steps for implementing “4th option” strategies.
Imagine “what will the future look like and what will be your goals in that future,” he said. “Right now, with the level of uncertainty we’re experiencing … we need to plan for multiple futures and create different scenarios.”
Step two, dissection, involves identifying leverage points — i.e., positioning, product, pricing, placement, promotion, processes, physical experience, people — that can be used to achieve strategic goals.
“Identify those points you need to re-think, and innovate across all those leverage points,” he said.
Step three is to expand by generating new ideas for those leverage points chosen.
“As we’re identifying new strategies, we want to look for patterns,” Krippendorff said, along the lines of a chess grand master analyzing multiple games at once. “Look at companies in the same industry, the same size. Which strategies does the winning company use?”
One key here is identifying the business you’re really in.
“Successful companies today don’t define themselves by the industry they’re in,” Krippendorf said, offering a quote from Starbucks CEO Howard Behar: “We realized we are not in the coffee business serving people, we were in the people business serving coffee.”
The next step is to analyze the options and ideas generated so far. “What do we do with 200 strategic options?” Krippendorf said.
He suggests plotting each idea on two axes: high and low impact, and difficult or easy to achieve. High-impact, difficult to achieve might comprise your “crazy ideas,” while high-impact, easy to achieve would be “winning moves.”
“Get rid of ‘difficult-low impact’ ideas, and maybe sit with that ‘crazy idea’ and work on it a while,” he said. “Then you’re in a position to pick your ‘4th option’ strategies.”
Finally, sell the strategy. “You build buy-in and support from your board, your investors, your employees,” Krippendorff said.
And remember to give those crazy ideas some real thought. Krippendorff quoted Albert Einstein in that regard: “It’s not that I’m so smart, it’s just that I stay with problems longer.”