The most desolate place I’ve ever visited was in London, halfway between Heathrow and the West End. I vividly remember standing on a random grassy mound, looking at acres of empty, abandoned, unwanted land. Today, it’s transformed. Chiswick Park is a bustling business park, designed by Richard Rogers, and it's worth almost £500 million. The transformation is a perfect example of being what Wolff Olins calls 'value-creative.'
How did it work? By breaking all the rules of business parks. By selling not on location or floor space or even the architecture - but on the experience it would offer the people who work there. By creating not a product but a service that enables people to enjoy their work.
Value-creativity like this is a very different kind of strategy. It’s a way of winning that puts creativity ahead of the traditional MBA tools of analysis and benchmarking. It depends on simply being creative about value.
• Facebook is unprecedentedly value-creative. First, by making something that enables people to do something they couldn’t do before – share their lives with the global village. And then, by realising the huge value for businesses to tap into that social graph. The market finds it hard to quantify, so the share price moves around dramatically, but it’s not a small number – around US$104 billion as I write.
• Lego is value-creative by finding new ways to make money from its core asset. Lego achieved a 13% profit growth in 2011, by adding a range of new offers from its Lego Ninjago range to business services like Lego Serious Play.
• Ryanair is value-creative by choosing to compete on different criteria from its traditional rivals – on price and punctuality, not on airport location or service.
• Cemex is value-creative by searching for ways to achieve social value as well as financial value. It developed salt-water-resistant concrete for Egypt, and then went on to productise it for the Philippines.
Behind all these businesses is a single attitude: let’s not do better, let’s do different. This attitude is explored in depth in a provocative new book, Uncommon Sense, Common Nonsense, by Jules Goddard and Tony Eccles. The book suggests that this way of winning requires a very different approach to strategy.
In one way this approach is scientific: “The true strategist resembles an experimental scientist rather than a clairvoyant planner.” Strategy is not so much a plan, more a hypothesis. But in another way, it’s an art, an act of creativity, requiring not the focused gaze of the analyst but the more relaxed and diffuse gaze of the poet or artist. “Artists and poets,” argue Goddard and Eccles, “have a lot to teach strategists.”
So if strategy becomes value-creativity, what follows?
Lots of chickens, lots of baskets
First, as with all creativity, there’s no right and wrong answer. So value-creative businesses often have multiple strategies in play. They have not just plan A, but plans B, C and many more. This is different from the traditional wisdom that emphasises focus above all else.
Learn by doing
Second, creative people don’t usually distinguish between thought and action. Their thought is revealed in action. They rarely waste time in analysis, preferring to just get on with it. This way of being is alien to most large organisations today – certainly to their strategy departments.
Third, as with all creativity, being value-creative demands bravery to the point of destruction. Sometimes you need to be brave enough to throw away what you currently value most highly. Kodak is now infamous for sticking with old film technology and paid the price. But that wasn’t for lack of inventiveness – don't forget that it was Kodak that made the first digital camera. It's failure was a lack of courage to abandon the analogue technology at its heart.
Like all creativity, then, value-creativity requires not reasonable people but unreasonable ones. People who trust their intuition beyond evidence. People who make things, not just think things. And sometimes destroy things. People who never accept a status quo.
This is a business world where change is unpredictable and incoherent, where it happens at different speeds in different places and contexts, where no-one knows anything (including the true value of Facebook).
In such a world the only sane strategy is creativity: don’t predict your future, invent it.
What this world needs is a creative director in place of a strategy director. "It is better to be first," Goddard and Eccles tell us,"than it is to be better.” Reflecting on what he had created, Chiswick Park developer Sir Stuart Lipton, said at the time: "This is on the edge... but I like to be on the edge."