Stephen Shapiro explains the final 'D' — "disseminated" — in his five Ds of differentiation. He categorizes organizational activities into three types: support (necessary but not customer-valued), core (table stakes that customers expect), and differentiating (activities that set a company apart and deserve innovation focus). He advises focusing innovation on differentiating activities while applying best practices or partnerships for core functions.
Chapters
In the previous videos I talked about why you need to innovate, where you differentiate and introduce the five Ds differentiation. And today I want to talk about the last one which is disseminated. This is going to take a little longer than a minute, so bear with me. When we look at an organization's innovation portfolio and where they spend their money and the activities that people do, they fall into three categories. There are activities that people do that would be what I would call support. These are activities that are important to the business, but they're probably not important to your customers. Your customers don't value it, they wouldn't pay for it. Think about payroll. You don't have to have the best payroll system in the world. That's not the goal. So you don't want to innovate around things that are support. The second level are things that are core in nature. If it is core, your customers value it, they want it. If you don't deliver this, they will leave you. How? However, they're table stakes. It is the expectation to play the game. All your competition is doing this well. So even for things that are core, you don't want to be the best, you just want to be as good as everyone else. So your strategies for things that are core is not innovation, but it might be best practices. Even though I have a book called Best Practices are Stupid, they're actually very useful. For things that are core, you might want to partner strategically with others who have as their differentiator the thing which is core to you. So you want to look at ways of turning your core into a well oiled machine. And at the highest level are those activities that are differentiating and that truly set you apart from the competition. In the next video, we're going to dig a little deeper into this framework because I think this is important for people to be grounded in and understand how it works.
