Introduction

Companies are increasingly finding themselves operating across multiple sectors, and, accordingly, the complexity of the challenges they experience often surpasses the capabilities of traditional problem-solving methodologies and industry best practices. Thus was the inception of the Sector Convergence model, designed to effectively tackle intricate business challenges that transcend functional boundaries and sector divisions. The model was specifically designed to provide business leaders with a strategic approach to address these complex, multifaceted challenges, allowing them to leverage insights from various industries. It proves most beneficial when confronted with intricate and extensive problems that cannot be adequately resolved using standard industry practices. The model facilitates the integration of skills, knowledge, and resources from traditionally independent sectors, fostering a unified and interconnected strategy that capitalizes on the strengths of each sector.

Definitions

Background

The Sector Convergence model stands out by offering a holistic approach to problem-solving for overarching issues while maintaining a structured framework for investigating specific challenges. Bryce Porter developed the Sector Convergence model during a consultation with Trilogy Software, an enterprise software company aiming to reduce operating costs, enhance product quality, and elevate the customer experience across a diverse portfolio of over 60 products spanning multiple sectors. This consultation exemplified a quintessential business objective: improving quality while concurrently reducing expenses, aligning with the company’s mission of achieving factory-style efficiency. The complexity of the consultation arose from the need to address a spectrum of intricate issues across products and implement standardized solutions universally, adding an extra layer of complexity to the overarching goal. Traditional problem-solving methods were observed to encounter challenges, falling into either the realm of being too general, such as SWOT Analysis or Gap Analysis, or excessively specific, exemplified by methods like Why-Why analyses or Gemba Walks.

Methodology

The Sector Convergence model can be broken down into six general steps:

1. Identification of Key Deliverables or Objectives;

2. Investigation into the Most Important Problems (MIPs);

3. Sector Selection;

4. Identification of Applicable Cross-Sector Solutions;

5. Integration of Cross-Sector Solutions; and

6. Iterative Analysis.

It is crucial to emphasize that achieving success in the implementation of the Sector Convergence model does not necessitate the immediate creation of a flawless solution to a business problem. Rather, the strategic approach involves reaching approximately 85% completeness in the initial action and subsequently iterating on the design. This iterative process—informed by real-time data obtained post-implementation—allows for continuous refinement and optimization, contributing to the overall success of the model.

Step One: Identification of Key Deliverables

The initial stage in addressing any issue involves the identification of targeted outcomes. Before delving into the solution, it is imperative to meticulously document the desired outcome. The Key Deliverable should be succinctly expressed in a single sentence, presenting a well-defined objective encompassing a measurable element, the desired timeframe, and a specific target for improvement. While the inclusion of Alignment Metrics is optimal for providing indicators of success, it may not be a mandatory component of the Key Deliverable.

Step Two: Most Important Problems (MIPs)

In the application of the Sector Convergence method, the second procedural step involves identifying the primary two or three reasons why the Key Deliverable, established in the initial step, has not been achieved. Various approaches can be employed for this purpose, with the recommended technique being the Why-Why analysis. This analytical method aims to uncover a singular root cause, hindering the accomplishment of the Key Deliverable. The initiation of the Why-Why analysis should center around the deficiency observed concerning the intended target. For instance, if a customer service team records a 70% Customer Satisfaction (CSAT) compared to their 90% target, the Why-Why analysis should commence with the question, “Why is CSAT 20% lower than the targeted value?” Upon completion of the Why-Why analysis, the derived outcome serves as the Most Important Problem (MIP), intricately connecting all components of the resolution process.

Step Three: Sector Selection

At the core of the Sector Convergence model, lies the principle that harnessing knowledge from diverse sectors enables companies to efficiently and swiftly tackle intricate business challenges. This model is based on the idea that insights gained from various unrelated sectors contribute to enhanced problem-solving capabilities when applied to a new sector. A pivotal stage in the Sector Convergence model is sector selection. During this phase, one must identify a minimum of two entirely distinct sectors from which to draw experiential knowledge. It is crucial to emphasize that ‘unrelated’ must be interpreted as genuinely diverse sectors. For instance, in the context of working within FinTech and employing the Sector Convergence Model, opting for GovTech and EdTech as distinct sectors would be insufficient. A more optimal sector selection might involve choosing hospitality and education, as the model capitalizes on the divergences between these sectors to deliver top-tier solutions. It is noteworthy that the effectiveness of the solution is not solely contingent on the number of sectors selected; rather, the key lies in the diversity of the chosen sectors.

Step Four: Finding Cross-Sector Solutions

Effectively leveraging the Sector Convergence model necessitates the capability to gather insights from the identified distinct sectors. While this task traditionally entails a considerable investment of time and resources, the Most Important Problem (MIP) identified in step two streamlines the process by making consultations with external experts notably efficient. For instance, employing the Customer Satisfaction (CSAT) example from step 2, a targeted inquiry might be formulated, such as, “What strategies would you recommend for enhancing customer CSAT scores within the hospitality sector?” The precision of the posed question becomes pivotal in ensuring that consultations with industry experts remain focused, yielding actionable and tangible feedback.

Step Five: Integration of Cross-Sector Solutions

The integration phase poses significant challenges, intertwining technical complexities with the imperative of overcoming institutional inertia and, at times, industry inertia. Optimal implementation of the Sector Convergence model enables companies to leverage insights from other industries comprehensively, avoiding the pitfalls of reinventing established processes or adapting novel ideas to fit existing operations. The model’s core objective is to innovate problem-solving approaches, acknowledging that some discomfort during implementation is inherent. Another layer of complexity arises from the task of transitioning existing operations to a new system aligned with the chosen sector approach.

Effectively executing this change involves the meticulous creation of processes, playbooks, operations manuals, technical documents, and requisite documentation, along with the introduction of systems, new technologies, and training materials. This comprehensive groundwork precedes the broader implementation within the organization, culminating in a decisive shift known as the “cut-off moment.” This approach to overarching structural change is more effectively navigated by making an instantaneous switch, allowing the organization to collectively address and resolve challenges in unison rather than adopting a gradual approach. Successful implementation hinges on disrupting the organization’s standard operating model and mitigating the inertia often encountered during such transformative shifts.

In the execution stage, it can be advantageous to retain industry consultants from step four to serve as implementation consultants. Despite potential unfamiliarity with the specific product or business model, these industry consultants can offer valuable insights into preemptively addressing challenges based on their industry experience.

Step Six: Iterative Analysis

Following the deployment of cross-sector solutions, a phase of iterative analysis begins. This analytical process entails a comprehensive review of the Most Important Problem (MIP) itself, along with the Alignment Metrics outlined in sections one and two. In order to capture the highest volume of relevant data points, it’s advisable to collect data in the shortest period possible and begin immediately following the transition’s completion. In the context of the CSAT example from step two, a daily data collection frequency with weekly reporting to accommodate normal metric variation is recommended. An effective implementation of cross-sector solutions typically results in an absence of immediate metric declines, in contrast to the impact observed with many conventional problem-solving methods. Subsequently, a positive trend in metric results is anticipated. Assuming the Alignment Metrics selected in step one offer a comprehensive perspective of the business problem, further iterations can be conducted within a few weeks of data gathering. This involves refining the solution based on the specific metrics showing improvement.

Implementation

A. Practical application of the problem-solving method

1. Case studies or examples

2. Real-world scenarios where the method can be effective

B. Considerations for implementation

1. Resource requirements

2. Potential challenges and how to overcome them

Optimal Conditions for Sector Convergence Model Application

The Sector Convergence model is an application-first approach to problem solving. This model can lend itself to great analysis post-implementation; however, taking on such an analysis prior to implementation is nearly impossible due to the incredible complexity of such a project. Remember, the purpose of this model is to address challenges that cannot be solved through industry best practices, traditional problem-solving techniques, or when attempting to achieve innovation-driven, industry-leading results. When considering whether to apply the Sector Convergence model, consider the following:

1. Is the problem being experienced unusually complex or hard to solve?

2. Has the problem attempted to be solved by using more traditional, lower-level approaches?

3. Does the problem qualify as one of the most important problems being experienced?

Alternatively to these three questions, consider the timeline for making changes. Even if the problem does not call for the Sector Convergence model to be used due to the complexity of the changes, if the timeframe for change requires radical action, it may still be the right time to apply the Sector Convergence model. If the problem being experienced does not need to be solved quickly and these three questions cannot be answered affirmatively, there are likely better solutions than the Sector Convergence model. 

Resource Requirements

Although the Sector Convergence model is excellent at achieving results in short time frames, there are some additional resource requirements that should be considered prior to implementing this model.

Consultants: Although an obvious expense, this model requires drawing on expertise from a variety of sectors. For each sector, there is a requirement for real expertise, and thus, the cost of hiring a consultant from that industry needs to be considered. Although, when implemented well, the model naturally streamlines the consultation process pre-implementation.

Project Management: Setting up a transition like this is complex and requires a project manager of great skill to accomplish it on time and within budget. Although some companies may already have project managers available to work on a transition like this, there has to be a dedication of time and finances to a change like this. While it is true that whole organizations can be redeveloped in only a few months, this requires great skill and knowledge of organizational change management. This type of transition may warrant hiring a specific project manager with knowledge of organizational change management or experience in the application of the Sector Convergence model in particular.

Transition Costs: Less tangible but no less worth considering are the costs of undergoing a major transition. It is critical to properly consider the questions posed in the previous section in order to understand if the sector convergence model suits the situation being considered. Transitioning requires resources; personnel hours will be dedicated to the transition, retraining of related staff will cost time, and during the transition, it is common to have personnel costs increase significantly for a brief period of time to cover the inefficiency of retraining staff.

HR Resources: The draw on an organization’s HR and people management resources can be great during a transition period. People are naturally resistant to change and generally shy away from discomfort, so large-scale changes that impact their jobs directly can be challenging for people to accept. Consistent and clear communication about the transition, including expectations for the organization and staff roles, can help overcome this challenge. The key here is to eliminate ambiguity and uncertainty, not justify the changes.

Implications and Impact

Significance of the Sector Convergence Method

The Sector Convergence model emerges as a transformative approach designed to tackle intricate and multifaceted business challenges that transcend functional and sectoral boundaries. In today’s business landscape, companies operate across diverse functions and indirectly influence multiple industries through their customer interactions. Conventional problem-solving methodologies and industry best practices often fall short in addressing the complexity of challenges faced by companies operating in this interconnected manner. The Sector Convergence model was specifically crafted to provide business leaders with a method that leverages insights from different sectors, fostering collaboration to solve critical problems. This approach stands as a paradigm shift in problem-solving, offering a structured, adaptable, and collaborative approach to address challenges that transcend conventional boundaries, ensuring companies navigate complexity with agility and innovation.

Broader Applications

Beyond its application in business change management, the Sector Convergence model exhibits significant potential for diverse and impactful implementations. It presents intriguing opportunities for the rapid and efficient execution of government policy changes, the advancement of the education sector, and the optimization of new systems and redundancies within the healthcare domain. These prospective applications warrant thorough exploration and scrutiny through substantive discussions with industry experts. Such in-depth engagements hold the promise of unearthing nuanced insights that could pave the way for tangible transformations in sectors susceptible to stagnation and inefficiency. By leveraging the Sector Convergence model, these sectors stand poised to effect substantial and meaningful changes, aligning with the model’s core principles of collaboration, adaptability, and innovative problem-solving.

Real-world Impact

Kawartha Music Foundation

The organizational transformation, facilitated by the implementation of the Sector Convergence model and the incorporation of strategies from the finance, technology, and real estate sectors, achieved substantial success. The transition effectively addressed the three most critical challenges faced by the nonprofit industry: enhancing donor engagement and business development, ensuring corporate sustainability, and optimizing resource management. Noteworthy outcomes of the transition encompassed a significant reduction in organizational risk, operational and administrative costs, and internal conflicts. Concurrent to this, there was a notable improvement in governmental compliance, job satisfaction among personnel, and overall operational efficiency. Key performance metrics highlighting the impact of the transition include:

– An average 47% reduction in program delivery costs, with a range between 15% and 79%.

– A 40% increase in programming hours.

– A 38% rise in youth participation within KMF programs, maintaining an 82% year-over-year retention rate.

– A 92% staff retention rate, massively surpassing the national average of 47% for Arts and Culture non-profit organizations.

– A 16% reduction in administrative and operational costs.

– A 6.25% decrease in overall budget expenditure, despite budget reductions not being an intended target.

– An 8% increase in program attendee Net Promoter Scores (NPS), indicative of enhanced program quality despite substantial fiscal and programmatic savings.

For a comprehensive understanding of the Kawartha Music Foundation’s transition and the application of the Sector Convergence model, refer to the publication “From Discord to Harmony: Bryce Porter’s Leadership in the Kawartha Music Foundation’s Restructuring.”

Summary

The Sector Convergence Model—brainchild of Bryce Porter—was developed during a consultation with Trilogy Software and presents a compelling and sophisticated solution to intricate business challenges spanning diverse functions and sectors. This innovative approach is specifically designed to tackle problems that elude resolution through conventional methodologies and established industry best practices. Porter’s model places a strong emphasis on the synergistic integration of skills, knowledge, and resources from seemingly unrelated sectors, crafting a cohesive strategy that leverages the unique strengths of each sector involved. The six-step methodology encompasses the identification of Key Deliverables, exploration of Most Important Problems (MIPs) using techniques like the Why-Why analysis, sector selection, identification of cross-sector solutions, integration into existing processes, and a thorough iterative analysis marked by ongoing adjustments based on real-time data.

The initiation involves defining Key Deliverables and pinpointing MIPs, a process guided by meticulous analysis such as the Why-Why technique. Subsequent steps necessitate the careful selection of unrelated sectors, expert consultation for cross-sector solutions, and the meticulous integration of these solutions. A pivotal moment, known as the “Cut-off Moment,” signifies the transition from existing processes to the innovative system. The model’s iterative analysis phase ensures continuous refinement based on real-time data and feedback, underscoring its commitment to optimal outcomes.

Successfully implementing the Sector Convergence Model demands adept project management, dedicated allocation of resources, and a strategic approach to overcome institutional inertia. Demonstrating its efficacy in initial applications across diverse sectors like hospitality, technology, and nonprofits, the model champions an application-first approach to problem-solving, proving its value in post-implementation analysis. While acknowledging resource requirements such as consultants, project management, and HR resources, the transformative impact of the model on organizations justifies these investments. Evaluations should incorporate quantitative data and qualitative feedback, facilitating a comprehensive comparison of actual outcomes with anticipated results.

Beyond its application in business change management, the Sector Convergence Model exhibits promise in diverse areas such as government policy implementation, education enhancements, and healthcare system improvements. It stands as a paradigm shift, fostering collaboration, adaptability, and innovation in problem-solving across various industries, thereby making a significant and lasting impact.