Business disruption has changed our everyday lives dramatically: smartphones and AI, low-cost flights, electric vehicles, and car sharing. These are just a few of many examples of true progress that business has brought to consumers. But why are the lessons of business disruption relevant for think tanks?
First, being focused on the common good, think tanks can unlock value and lead to positive disruptions in policymaking. This is really needed given the level of challenge society is facing now.
Second, think tanks can become more competitive in an extremely changing world. Disruption is strongly required to avoid becoming obsolete, like in business. In the increasingly competitive market nowadays, especially in terms of fundraising, think tanks capable of providing innovative approaches possess a strategic advantage.
Many lessons on business disruption have been gained within the past decades. I would like to focus on five highly applicable to think tanks.
1. Blue Ocean Strategy
Blue Ocean Strategy, introduced by INSEAD professors Chan Kim and Renée Mauborgne in their bestselling book, became a sensation in the world of business. A practically developed idea of how to open up a new niche (“blue ocean”) and create new demand, instead of operating in an established market full of competition (“red ocean”) turned out to be a powerful tool for many enterprises. The cornerstone of this strategic approach is value innovation. It is when a product/service created is more valuable for a customer while also being cheaper. How is this achieved? Remove the factors the market competes on and add new ingredients never offered before, like Cirques de Soleil, which decided not to feature animals but to have more artistic focus, or Marvel and some other known global brands.
There are plenty of ways think tanks can achieve value innovation. Leveraging technological advancements like AI and social media to increase the industry’s outreach while optimising the costs of research has great potential. The World Economic Forum’s strategic intelligence can serve as an example.
2. Incubation and Acceleration
Several important differences exist in programme duration and type, maturity of product/business developed, and overall level of involvement. Both incubators and accelerators offer startups mentorship, strong networks, and skills/expertise needed for further growth. This set has proven to be truly helpful for startups. Based on recent research, startups that have been in accelerators raise substantially more from investors and have higher chances of succeeding. Uber, Airbnb and Instagram are some of the big names that have emerged from business incubators.
These lessons are valid for think tanks. While struggling to go further, they experience almost the same challenges as growing startups, including getting funding, developing the right model and product, getting necessary contacts and promoting their activities. NGO funders resemble venture capitalists or private equity funds trying to maximise their return on investments (in the case of business, in financial terms, for think tanks, in value created for society). OTT is pioneering this area with its consulting and education. And there is still an enormous potential in this field.
3. CustDev
CustDev or customer development is a critical part of the Lean Startup methodology, helping to test both a perspective product or service on potential customers and understand their true needs (“pains”). Having this practical knowledge, startups and established firms enjoy much higher chances to be in demand in the market. Dropbox is an example of a successful CustDev story. CustDev helped this firm to release customers from the “pain” that they hadn’t even realised.
The process is divided into four steps:
- To understand the customers’ needs (Customer discovery)
- To ensure the customers need your product (Customer validation)
- To convert potential customers into your actual customers (Customer creation)
- To scale up (Company building)
Think tanks are very good at research, often using similar (to CustDev) instruments like interviews, questionaries, focus groups, and getting feedback. But “research questions are not the same as policy questions”. To make a positive social change, a think tank needs to get buy-in from policymakers and affected groups/communities. It is usually much easier to address the real “pains” of the above-mentioned. So CustDev might be very helpful if it merges with the traditional skills of think tanks.
4. Agile
Agile has become a synonym for fast adaptation and leveraging the opportunities of a constantly changing world. But what is it in reality? The agile approach was initially created to optimise software development (formulated in the Agile Manifesto). The latter prioritised people over processes, working product over documentation, collaboration over contract negotiations, and responding to change over following a plan. These principles turned out to be a powerful instrument for maximising client value, satisfying their evolving needs, and, thus, keeping up with the market. Therefore, agile is now a widespread practice not only in IT. The central element remaining is “to tight feedback cycles and continuous improvement”. Agile can also be efficiently used in think tanks as it resonates with their strategic agenda (be relevant, maximise the value for society, focus on teamwork).
5. Culture and Leadership
Nokia, Motorola, and Kodak are several names from the list of global champions that have lost due to an inability to innovate. At some point, they underestimated how the market had changed and the need to keep up with it. To innovate means to stay alive. And not only in business but also for think tanks. With AI, other non-traditional sources of competition and decreasing funding, it is the only option for many. The key element of success is not the approaches (including those described above) but the culture of the institution. “Culture eats strategy for breakfast”. To efficiently innovate, a think tank needs two essential ingredients: (1) a culture of innovation and (2) the leadership committed to this culture.