ASK THE EXPERT
CEO of Outthinker LLC, a business and capital
advisory firm, Kaihan Krippendorff leverages the
power of a compelling idea in order to help clients
win by outthinking the competition. A consultant at
Wharton Business School and regular blog contributor for fastcompany.com, he outlines strategies on
ways to innovate and compete in his book, Outthink
PULSE: In this day and age, how critical is it for businesses to outthink the competition?
Krippendorff: Winning against competition has always been
critical. What has changed, and why outthinking the competition is now so essential, is the way in which
successful businesses win. Over the past
50 years, competition has been based on
what I call “beat the competition” strategies: locking up resources, locking in
customers, and building economies of
scale. But today, the most successful
companies are using a different playbook. They are instead winning by
outthinking the competition: doing
things that competitors could compete
with but decide not to. Why did Elon
Musk beat car companies in the electric
car race? He did it not by beating the
competition, but by outthinking them.
P: Sometimes, the challenge when strategic planning is in
sorting through all the ideas. Can you share some practical exercises or steps that can help businesses assess
ideas with true innovative potential for their businesses?
K: The dilemma is that disruptive ideas must be inconsistent
with some belief that your competitors hold. You need to, as
Mahatma Gandhi said, let them “ignore you, then laugh at
you” so that by the time they decide to fight you, it’s too late,
you’ve already won. Traditional strategy processes are designed
to kill off such ideas, the “crazy” ideas, the ones that are inconsistent with prevailing logic and belief. But there is a way out.
Here is what you do.
Take your 50 or so ideas and ask two key questions for
each of them:
● “Is this easy to execute?”
● “If we successfully executed it, what
would be the impact?”
You sort through all your ideas according to
these two questions and then focus on the ideas
that appear difficult to execute but would have a big
impact if successfully executed. Your breakthrough
idea probably lies among such “crazy” ideas. Most
companies throw out such ideas because they seem
impossible. But innovative companies work on them.
P: How exactly do you do that?
K: Take a seemingly crazy idea, list the three reasons
why the idea seems crazy, then for each reason, brainstorm three ways you can remove that reason or barrier. For
example, I was working today with a leading consumer electronics firm. They came up with an idea they thought would
cost too much to develop. They then brainstorm how to
remove the “costs too much to develop” barrier. They considered ways to reduce the investment cost, seeking outside
investors, and creating a separate business that pursues the
idea. Suddenly, the idea did not seem so “crazy” anymore.