How to grow using the ‘art of strategic imagination’

Companies have built rigid structures in a world which has become more fluid. They need to change. Stephen Conmy talks to Bernard Flynn, chairman of Katawave, who says businesses are suffering from “insights fatigue”, and are in danger. 

First, let’s go back to where you started in business. Lean optimisation – what did you aim for when you worked for companies? What do you look to remove? What do you keep? How does it work?

Ultimately, we looked to reduce manufacturing costs. Lean optimisation is the identification and elimination of waste.

We either reduced waste to allow for more capacity in a factory, (so there was an opportunity to create more product) or reduced CapEx by avoiding buying new equipment or not having to buy new stuff so often.

We pioneered lean and lean thinking in service-based operations. This approach (which was new at the time) included financial services. The step we took was from optimising companies to optimising industries and sectors. We eliminated 100s of millions of euros out of fat systems.

Now let’s jump to where you are now, what you are seeing, what you are solving with your new business?

The world of lean led me to a fundamental question. The challenge we identified is that you can optimise a bad business or a dying business, but it will still be optimised on the way down or worse, on the way out.

I asked: “Is it better to be a smart business over being an optimised one?” I explored the world of innovation. There was lots of tools and techniques and a whole lot of opinion. I could not find a repeatable process and methodology that could allow innovation.

This fruitless journey ultimately brought me to discover the need for what we term “Business Imagination” or “Strategic Imagination.” It was at this time Katawave was born.

Katawave is a strategic imagination consultancy, which works with our clients in co-creating new strategies, propositions, and experiences for a world of disruption. We harness the concept of “flow”- i.e., we apply the deep patterns of how people and things evolve and interact to help our client partners find new ways to win in the marketplace and the workplace.

We are strategic architects; the team ensures that a strategy looks through the many lenses of disruption. In doing this, the strategy does not overlook important patterns, which a company may feel are irrelevant to them. Many companies practice strategic planning, but very few take a step back and architect a strategy based on the current and future business landscape.

In your opinion, what are businesses ‘suffering’ from, in this age?

Companies have built rigid structures in a world which has become more fluid.

Companies optimise their operations but are not looking to what will make them survive far into the future. Businesses are suffering from “insights fatigue”, where they are basing their future on the wrong insights. By having the wrong insights, they are asking the wrong questions and are going in the wrong direction.

We give leaders new tools with which to operate in a business world of disruption. By using the art of strategic imagination we bring leaders on a journey and inform them of real patterns, then they can ask the right questions.

We are now in the age of IoT, AR, MR, VR, cryptocurrencies, Blockchain and the increasing power of the crowd. What would you say to corporations who view these as ‘trends’ rather than real business opportunities or threats?

Manufacturing 4.0, Industrial Revolution 4.0, the sharing economy, the circular economy, the gig economy, the power of the crowd and crowd-based capitalism. All of these shifts are happening, and businesses and industries are changing and changing radically.

Let’s take the lens of the sharing economy. With the majority of people now living in urban areas, we are seeing people share car rides, share accommodation and even share lawnmowers. All this gives rise to new business models. For traditional companies to fully understand this and the impact, it will have on their business they must realise that these patterns can be mapped. Once they see through a new lens, they can see their business in a new light, built on science and not speculation.

You have said: “The world of business needs to embrace the global trend away from a world of capitalism and the collaborative aspects of today’s society.” Are you saying capitalism has reached its limits? What do you mean by collaboration?

The role of a trusted intermediary will have to evolve. We will see a rise in decentralisation, digital currencies, Blockchain and smart contracts. With that, we are seeing threats to trusted intermediaries. Ultimately, I believe banks will embrace Blockchain and use it to optimise their processes.

When you step back and look through the lenses of such disruption, there are monumental shifts at play. However, many businesses do not understand how they need to evolve amidst such changes. Sadly, some don’t even realise that they need to evolve.

When you circle back to where I began, many are still looking to optimisation for the answers. Optimisation is great when your process is in existence, but the process itself needs to evolve.

Taking my career evolution from lean to innovation, let’s look at the car industry. If you are to look at car usage through a “lean lens.” You will recognise that in any 24 hours we barely use our car. Breaking that down further, consider how many seats we utilise in a car and you will find even more inefficiencies. Then when you add in tax, maintenance, and insurance costs, you see that it is a very inefficient use of investment. In fact, we will find car utilisation hovers around a mere 3%. Add this to the rise in the sharing economy, the experience economy, and now you are building an accurate picture. Hence, the increase in car services, car sharing services, etc.

One of my previous businesses was to explore how the world of startups can help large corporates to innovate. With this, I set up Red Planet ventures, which we subsequently sold to Deloitte after twelve months. Red Planet was an accelerator which worked with startups to solve a corporate contradiction, such as “How does a company act big and small?” or “How do we work on a new business model while maintaining the old one.”
Most corporates are not set up to do this themselves; they need a new operating system.

The next accelerator must go beyond this and explore a plethora of disruptive technologies such as cryptocurrencies, the Blockchain, MR/VR/AR, Ai, IoT and IoP (Internet of People).

To businesses, I say, we are in the fourth industrial revolution, and there is so much changing. We are witnessing the convergence of sectors and the creation of new ones. Underpinned by a shift in power, we are in a world of meaning rather than status and that changes human behaviour, which in turn changes the playing field.

Businesses are crying out for true meaning.

Industries thrive on disruption. Once you no longer feel the breeze at your heels, you may have already lost. You need to be one step ahead of that. There are new rules and an ever-changing playing field.
There is going to be a lot of businesses, and indeed industries disrupted. Disruption is where I am focused now. I work on what we term “White Space” projects.

What three businesses do you admire?

Disney
Disney was born out of the imagination of the great Walt Disney. Disney used the concept of three rooms, the dreamer room, the realist room and the critic room. What Disney did – and what we advocate – is to start with dreaming. In the dreamer room, everything is possible, and executives can dare to dream, there are no limitations. In the critic room, those same executives take out the red pen and discuss what is not possible. Finally, in the realist room, it is a mix of both, but by starting with dreaming, you always go one step further than you would have if you did not.

Airbnb
Although the future of Airbnb is questionable and this is due to the shifting forces we mentioned, it recognised the sharing economy and overcame a plethora of challenges.

Wikipedia
For its use of the crowd, for its authenticity and for its use of the web as it was meant, as an open system for sharing.