An important contribution of the Delta Model addresses the issues of experimentation and feedback, key adaptive mechanisms in the pursuit of successful corporate and business strategy development.
Structured experimentation is the key to effectively implementing a major business transformation. This is particularly critical when you want to move from one strategic option to another (say from Best Product to Total Customer Solution), where the number of unknowns is high and the optimal implementation path is unclear. The way to address this challenge is to design a careful set of experiments aimed at building a more thorough, fact-based knowledge of the issues and potential solutions prior to committing to a full-scale organizational effort.
As an example, for a client moving to a Total Customer Solution strategy, we enlisted three critical customers to participate in a joint research activity, and whose business profiles would allow us to draw valid learning that we could apply across the broader customer community. For each customer we identified five high priority needs in terms of product and service requirements. We thoroughly analyzed each customer’s economics and the competitor’s offerings. The “test” market allowed us to develop a unique value proposition for each customer and to quantify the level of economic benefit. We then rolled-out the successful approach to the remaining customer base.
Once you have chosen a strategic direction, identified the relative metrics, and conducted the appropriate experiments to “fine-tune” your adaptive processes, you are ready to move forward with implementation. However, after you have done all of that, you will still likely need to modify the selected course of action to allow for unexpected changes in your basic hypotheses. Thus you will need feedback. You will need to constantly monitor and measure performance, identify changes versus the original plan, and determine corrective and adaptive actions. You will also need to build enough flexibility into your management system, organizational structure, and resources to allow for proper changes to be made.