Implications of a $300 House

How would the world change if you could build a house for $300? Who would benefit? What would it require? Could it affect your organization?

There is a movement afoot to “bring together people, institutions, and businesses in a ‘creation space’ to turn this idea into a reality and test it out in the field.” Before you dismiss it, check out the Web site devoted to the concept by clicking here.

A lot has been written lately about serving customers at the bottom of the pyramid. Grameen Bank has been doing this since 1976 when Muhammad Yunus pioneered the idea of microfinancing with the goal of helping to eradicate poverty. Today, the bank has more than 7.5 million customers.

That’s the promise of the bottom of the pyramid: millions to billions of potential customers. When you factor in the opportunity to do well by doing good, this market is appealing to many companies.

Whether or not it appeals to you, you will want to consider the impact it may have on your organization. To figure out a way to make low-cost, low-tech, green houses that homeowners can build themselves out of local materials, innovation must take place. Breakthrough processes must emerge. New ways of thinking must take root. How will they reshape the construction industry? What will they mean to the companies that supply that industry? How will they challenge governments and education?

A lot of companies are busy devising…

Sustainability Forces Wheel

In strategic planning, the quality of the plan depends on the quality of the information collected and analyzed to guide the plan. The Baldrige Criteria ask how you collect and analyze information about your strengths, weaknesses, opportunities, and threats; early indications of major shifts in technology, markets, products, customer preferences, competition, or the regulatory environment; long-term organizational sustainability; and your ability to execute your strategic plan.

The goal is to build a sustainable organization that can survive change in whatever form it takes. Andrew Winston has created a tool to help navigate the forces that may affect your organization’s survival. He calls it the Sustainability Forces Wheel.

In “A New Tool for Understanding Sustainability Drivers” (HBR, July 13, 2010), Winston describes the three rings that make up his wheel and his idea to “spin” the wheel to line up different forces on each ring, which could then spur discussion among leaders about what that combination might mean for their organization. For example, he looks at the issues that currently line up at 9:00: “Consumers increasingly want to know what’s in products and where they come from; technology is enabling more data on a product’s origins; and there’s no denying the rising concerns about chemicals and toxics in our bodies and our children’s bodies. If your company operates in the consumer products world, how are you handling this trifecta of concerns?”

From a Baldrige standpoint, your strategic planning process should…

Revolutionary Thinking

The ability to disrupt your industry is something you want to possess but fear someone else may already have. The Baldrige Criteria address disruptive change indirectly in several places by asking about any changes taking place that affect your competitive situation, what your key strategic challenges and advantages are, how you identify potential blind spots, and how your planning process detects early indications of major shifts in technology, markets, products, etc.

Having systematic processes in place to answer these questions may help you spot a disruptive change in time to counteract it but none of the questions really explores your processes for developing your own disruptive change. A recent post by Umair Haque on HBR provides an interesting perspective on this subject, using Apple as an example, by explaining “How to Challenge Your Industry Dogma”:

• Challenge products. Offer an alternative that gets people to rethink what such a product can be used for, as Apple has done with the iPad.
• Challenge strategy: Find an area that your competitors are ignoring and become the best at it, as Apple has done with the design of electronic gadgets.
• Challenge distribution. Look for innovative new ways to distribute your products or services, as Apple did with iTunes.
• Challenge business models. Companies protected how their products are used until Apple introduced a new business model: The App Store gives software developers a huge market for their new products, making Apple’s products more valuable as…

Be Prepared

I haven’t referred to a Rosabeth Moss Kanter blog for a couple of months so it’s time for a Kanter fix. She’s a professor at Harvard Business School and the author of several popular business books, which is an accomplishment in itself. This week she reflects on the volcano in Iceland in “Surprise! Four Strategies for Coping with Disruptions” (HBR, April 19, 2010).

Her four strategies are:

• Backup. Even in a recession, it’s a good idea to build some overlap and redundancy into your organization to make it easier to respond to disruptions. “Great companies stress efficiency but build in slack and cross-train their people,” she writes.

• Communication. If you’ve developed systems to spread information virally, such as through social networks, you can keep the communication lines open and fast when disruption occurs.

• Collaboration. “Human relationships, commitment, and resiliency help companies recover quickly,” writes Kanter. She points to the efforts of Continental Airlines employees during the power outage that closed airports in the Northeast in 2003 and the creative solutions they came up with to keep their planes flying while other airlines were grounded.

• Values and Principles. I’ve talked about this a lot on Baldrige.com because it’s a common characteristic of Baldrige organizations. Guided by a shared vision and clear values and standards, “people know the right thing to do without being told and without waiting for permission.” An empowered workforce can act much quicker during a disruption than employees who…