Analysis 3: February 2015

The company set new strategic objectives in February 2015. These strategic objectives were set only four months after the previous strategic objectives because the company changed its business strategy in that time. Due to the change in the business strategy, all previous alignment analysis and recommendations need to be reassessed in the context of the new business strategy. The following analysis was conducted on the company shortly after February 2015.

7.3.3.1 Step 1: Document the Current (February 2015) Business and Innovation Domains In step one, each of the three components in each of the four domains in iSAM are described for the company. This is achieved through analysis of strategic and operational documents and discussions

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with the company’s management (see Appendix H for list of strategic and operational documents analysed). Between analysis 2 (October 2014) and analysis 3 (February 2015), there was significant change to the company’s business strategy. The following list presents the key outputs for this step of the approach. A high level description of the change from analysis 2 (October 2014) to analysis 3 (February 2015) is also provided.

1. Main target market: Donor funded HSS projects for departments of health in developing countries & Analytics projects for Life Sciences companies, executive government structures and donors.

• Change: Starting to target executive governments, donors and life science companies with analytics offering.

2. Main products: HSS technical assistance, analytics TA and analytics products (IT system) • Change: Moved away from consulting services to life sciences companies and started

to focus on analytics technical assistance and IT platforms.

3. Key business principles: Social entrepreneurship, data driven, scalable and sustainable solutions, blend private and public sector approaches.

4. Distinctive competencies: Global network and reach along with local understanding of how government services are delivered on the ground, able to operate in both the public and private sectors, analytics and software development capability.

• Change: Increased analytics and software development capabilities.

5. Primary generic strategy: First to market generic strategy, attempting to be seen as leaders in their field by being the first to introduce a solution or to follow a novel approach.

6. Innovation scope: Type - Strong product, medium strategic, weak process. Level - Strong radical, medium incremental. Impact - Medium sustaining, strong disruptive.

• Change: Far stronger focus on disruptive, radical product innovation.

7. Innovation governance structures: No formal innovation governance forums or structures exist in the company.

• Change: Technical review committee (TRC) no longer in operation, prioritisation and innovation decision making happens in a dispersed and ad-hoc manner.

8. Innovation capability maturity level: Unaware of innovation. Although innovation is communicated as an important part of the competitive advantage and culture of the company, there is no formalisation of innovation to a point where the understanding of the term innovation is not always clear.

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10. Competency framework: A competency framework consisting of five dimensions and 40 relevant competencies is used in the company.

11. Innovation model: Visionary leadership is implicit dominant innovation model. • Change: Visionary leaders playing stronger role in all aspects of the company. 12. Innovation processes: No formal innovation processes exist in the company.

13. Innovation competencies: There are several innovation related competencies in the overall company competency framework.

14. Innovation roles: There are no innovation specific roles in the company.

15. Innovation competency improvement activities: There are no innovation specific innovation competency improvement activities.

7.3.3.2 Step 2: Assess Functional Integration

As in analysis 1 (December 2013) and analysis 2 (October 2014), the assessment of the functional integration in analysis 3 (February 2015) is based on the alignment of the competitiveness strategy and the innovation scope. The strategic alignment framework [167], presented in Table 13, is once again used to assess the functional strategic integration of the company. The company’s preferred generic competitiveness strategy or grand strategy remains the “first to market” strategy. For true alignment, the innovation scope should have a stronger focus on strategic, radical and disruptive innovation. As the company still does not have an explicit and formal innovation strategy, the past innovation focus or pattern of innovations assists in defining an implicit strategy [53]. Based on an analysis of the company’s current and planned projects, the company has a far stronger focus on product innovation (100% of innovation projects), which means 0% of current and planned projects are categorised as strategic innovations. This is misaligned with the “first to market” generic strategy. However, all the innovation projects were categorised as radical, disruptive innovation projects which is aligned with the “first to market” generic strategy. The number and percentage of innovation projects has increased since the previous analysis. In analysis 3 (February 2015) 22 (45.8%) of 48 projects are categorised as innovation projects. The results of the project analysis is presented in Table 21. From a functional infrastructure and process integration perspective, there continues to be few formal innovation infrastructure and processes in the company, and therefore once again it is difficult to determine the level of alignment.

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Table 21: Results of analysis of project innovation scope (analysis 3)

Analysis 3 (February 2015)

Total Number of Projects 48

Number of Innovation Projects 22

% Innovation Projects 45.8%

Innovation Type

Product 100.0%

Process 0.0%

Strategic 0.0%

Innovation Level Radical 86.4%

Incremental 13.6%

Innovation Impact Disruptive 86.4%

Sustaining 13.6%

7.3.3.3 Step 3: Assess Strategic Fit

As in analysis 1 (December 2013) and analysis 2 (October 2014), there is no strategic fit from an innovation perspective in the company. The company still does not have a formal innovation strategy, but even if the implicit innovation strategy is taken into consideration, there is no formal innovation infrastructure or process.

From a business perspective it is not possible in the context of this dissertation to analyse and assess the business strategic fit. The scope of the business strategic fit is significant and includes all of the company’s operational processes, equipment, personnel and skills.

7.3.3.4 Step 4a: Determine Appropriate Dominant Strategic Alignment Perspective

The business strategy has clearly changed between analysis 2 (October 2014) and analysis 3 (February 2015). This adjustment to the business strategy has focused the scope of the implicit innovation strategy so that there is far better functional strategic integration. However, due to the lack of progress in formalising an innovation strategy and innovation infrastructure and processes, there continues to be a level of misalignment in the company. Therefore as in analysis 1 (December 2013) and analysis 2 (October 2014), 4a in Figure 25 is the next step in analysis 3 (February 2015). For very much the same reasons given in analysis 1 (December 2013), the innovation transformation perspective would appear to be the most appropriate dominant perspective for the company in

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analysis 3 (February 2015). This decision is further supported by the recent change to the business strategy, which has kicked-off a series of other changes to the business as the management team try to align the operations and support functions with the new strategy. The dominant alignment perspective will guide the steps through the alignment pathway in step five of the approach.

7.3.3.5 Step 5b: Innovation Transformation Alignment Perspective

The pathway to alignment, based on the innovation transformation alignment perspective, is presented in Figure 26 and is the same as in analysis 1 (December 2013) and analysis 2 (October 2014). This alignment pathway involves 11 steps, in which the required changes to the four iSAM domains are identified and the current and planned projects are analysed to check their alignment with the four domains. For the company in the case study, 48 current and planned projects were identified and analysed shortly after February 2015. The alignment of the projects was analysed using the alignment questions, presented in Appendix B. The breakdown of the 48 projects by project category is presented in Table 22.

Table 22: Breakdown of 48 projects by project category

7.3.3.6 Results of Analysis 3

The company’s strategic objectives and the derived projects, analysed during analysis 3 (February 2015), are based on a changed business strategy. A key focus of the management team is now to determine how to align the company with this new business strategy. This should include aligning the innovation strategy and the innovation infrastructure and processes. The analysis of the 48 current and planned projects in analysis 3 (February 2015) reveals that there are a higher percentage of innovation projects in the project pipeline. In analysis 1 (December 2013) 29.7% of the projects were determined to be innovative, while in analysis 2 (October 2014) the percentage of innovative projects dropped to 9.5%. In analysis 3 (February 2015) this percentage increased to 45.8% (Table 21). The

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level and impact of these innovation projects are also closer aligned to the “first to market” generic business strategy, with 86.4% of the innovation projects being both radical and disruptive. However, all the innovation projects are categorised as product innovation, which still reveals some misalignment between the generic business strategy and the innovation scope. The “first to market” generic business strategy has not changed since the first analysis. The innovation projects have a stronger focus on radical, disruptive product innovation, which is key to a “first to market” generic business strategy. These projects are a direct response to the new business strategy of the company. So, although the company still does not have an explicit innovation strategy, the alignment between the new business strategy and the implicit innovation strategy has improved in analysis 3 (February 2015) compared with analyses 1 and analyses 2.

The area of poorest alignment in the company remains the innovation infrastructure and processes domain. No formal innovation infrastructure and processes exist and there are no current or planned projects aimed at rectifying the situation. The implication of this shortcoming are the same as in the analysis 1 (December 2013) and analysis 2 (October 2014) and will continue to limit the company’s ability to truly achieve a “first to market” grand strategy in a consistent way. The results of the innovation transformation perspective analysis along with recommendations are presented in Table 23.

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Table 23: Summary of analysis 3 (February 2015) results with recommendations