Technique 2.83 Growth Staircases

Introduction

Exploring the steps that allow organisations to move into new businesses in uncertain environments with emphasis on learning, options and building capabilities.

Study how other organisations have built valuable new businesses in recent times, ie
"...- working backwards from the planned outcome, thinking through the capabilities, assets, and business learning required to be successful
    - taking a step-by-step approach to strategic moves, allied to the uncertainty level, expanding commitment as uncertainty is reduced
   - framing in time the staircase steps, knowledge captured and capabilities that are built..."
Charles Conn et al 2018

Usually start with a series of initial small steps. If successful, it is followed by larger and more expensive moves.

Staircase Architecture (3 elements)

1. Stretch (includes understanding
- the degree of difference from established ways of doing things
- complexities of new capabilities required
- degree of integration with current businesses.
"...Whether the stretch is too great is a balance between the ability to absorb new skills and the competitive demand for speed to establish market presence..."
Charles Conn et al 2018)

2. Momentum (shown by the positive effect of early success, usually based on small moves, on the learning and confidence of the organisation.
"...Momentum becomes a critical factor in markets that feature increasing returns to scale, involved defacto standard-setting, where winners take all..."
Charles Conn et al 2018)

3. Flexibility (this includes picking options like contracting and outsourcing that generate the greatest chance of follow-on initiatives)
This involves trade-off between small versus large steps, option-laden moves versus focused commitments and speed of move to create momentum, etc. This includes ways of blocking competition.

Extremes of this include at one end of the spectrum, organisations like Google investing in hundreds of new ventures, eg placing investments in interesting spaces including in the same industry. The other end of the spectrum, a start-up may have only one route to market.

"...staircases can be used by start-ups to map the business goals and to show the desired strategic path to get their learning steps and capability building. The value of working backward and forward is to gain agreement what capabilities need to be built, and in what order......the aim is to agree in detail on the staircase steps for  the next 12 to 18 months, take stock, and then plan the next 12 to 18 months as new information on the market and the capability project trajectory come to hand. The end goal or its timing is then altered to reflect the market and competitive realities. Agile development, fail fast, and sprints are the hallmarks of this approach of strategic problem-solving..."
Charles Conn et al 2018

(source: Charles Conn et al 2018)