Translate strategy from concept to results

JWI 540, Strategy, Week9 Summary, 8/28/12

Strong managers constantly reconcile competing priorities in a dynamic manner by never losing sight of the firm's strategic vision, envisioning success, defining critical activities to get there, balancing the relative priorities of action items by using the balanced scorecard and strategy map and communicating effectively.

Leading managers understand the firm's strategic capabilities, identify target customers, size up competition and decide on a strategic option. Such managers recognize that their ultimate goal is to support the firm's leadership and translate corporate strategy from a high level concept into feet-on-the-ground activities and results. They approach strategy methodically with a six-step plan:

Step1 - Envision success and what it will take to get there
 what does success look and feel like?
 what are we doing or not doing to achieve strategic goals?
 what are competitors doing?

Step2 - Define critical activities
eg. identify store locations, create supplier networks, create a marketing campaign, define a staffing model

Step3 - Coordinate activities and resolve conflict - balance with a strategy map
Leverage the balanced score card technique and create a strategy map (Carpenter & Sanders, 2009) to balance and guide key activities including financial, external relations, internal business processes and learning and growth. Show how the various activities fit into the firm's overarching strategy using the strategy map. Align key elements of plan such as strategy, people, organizational structure, processes, metrics.

Step4 - Prioritize Action Items in the Plan - clarify barriers to success
Set plan priorities by framing the situation in the negative ie. by listing the barriers to success
eg. what aspects of the organization have high potential to derail the strategic initiatives ?; is there difficulty hiring people with right skills fast enough?; will it be difficult to identify an acquisition target that meets agreed-upon criteria ?

Make it clear what needs to happen first, where scarce resources should be allocated. Provide rationale for controversial moves and make difficult decisions easier to accept. Generate the Top5 priorities that must happen in order for strategy to succeed. Focus managerial attention on these significant priorities.

Step5 - Communicate
Be received: get people's attention, deliver the message using multiple channels in a provocative and surprising way.
Be understood: provide clarity with a picture or a story
Be credible:close the credibility gap and get people to make real commitment.
Be actionable:convey a step-by-step process for moving from concepts to activities to results. Identify success metrics and timelines.
Be timely: Tradeoff preparation and timely communication and deliver the message when it is fresh and new.

Step6 - Allocate resources and budget - with iterative feedback
Listen and get better proposals from managers, use iterative - Top Down, Bottom Up, Top down - communication flow, and play the budget game for effective resource allocation

Dr DP

Framework to Assess a Job Candidate

JWI 520, People Management, Week8 Summary, 8/26/12
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This week I have gained clarity about the most important factors to keep in mind when assessing a job candidate. I learned about the relative power and importance of core values, EI, IQ, past experience, future potential and key leadership attributes such as IIM, 4EP, ACSR, and other core competencies when making people decisions.

Takeaways are:

I. Bielaszka-DuVernay (2008), “Hiring for Emotional Intelligence”
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I learned the kind of questions to ask to test for aspects of emotional intelligence such as:
Self-regulation & Self-awareness - Tell me about a time when your mood affected the team's performance
Impact of one's behavior on a group - Tell me about a time when something you said had a negative effect on a team member and behavior changes you had to make.
Ability to learn from mistakes - Tell me about a time when you made a mistake and got on a wrong course. What did you learn from the experience ?

II. Jack and Suzy Welch, Podcast JWI 520, Week8, Executive Search Consultants
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Use the consultants but do not take them at face value - check their references

III. Jack Welch, Video, JWI 520, Week8, Hire for the 4 Es
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Hardest thing is hiring and promoting people to next level. Success rate in 40 years improved from 50% to 80% only.
Look for 4Es:
Energy - somebody who will go after stuff
Ability to Energize - excite people; get people to buy in to their things
Edge - People who can say yes or no and take decisions
Execute - get it done
Passion - wrap the 4Es in a Big P; really caring about people, the job, wanting to win, excited by it; always see glass half full;
never hire a dark cloud - a big wet blanket who always sees dark side of things; need people with lots of energy oozing out; excited about other people being successful

IV. Qualities to look for when hiring (JWI 540, Week8, Lecture1)

Integrity: tells the truth, takes responsibility for actions, follows the spirit and letter of the rules.
Professional experience: Years of Practice matters; more relevant the candidate's former experience to the job opening, the better
Intelligence: Sheer brain power
Emotional Intelligence: Self aware, resilient, maturity, empathy; essential elements to team work and leadership in any job
Good personality: Negativity, grumpiness are contagious. Never hire people who are hard to like.

Energy: Thrives on action and constant change
Energizing: Gets other people revved up
Edge: Has the courage to make tough yes or no decisions
Execute: gets the job done
Passion: deep and authentic excitement about work

V. Competency-based people decisions have reduced turnover, improved job performance.
Core competencies of managers (Kelner, Egon Zehnder International) are:

1. Results orientation
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Weak results orientation - simply do things well or better than present
Moderate results orientation - meet and exceed goals
Strong results orientation - interested in exceeding their goals, introducing improvements to the way things are done
Extremely strong results orientation - determined to transforming the business.

2. Team leadership
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Low level competency manager - focus on setting goals for their team
Moderate level manager - concentrates on building a productive team; good enough for building most companies
Successful managers - passionate about turning a group of individuals into a coordinated, cohesive fighting unit far better than sum of parts.

3. Ability to collaborate and influence
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Managers with strong competency - effective in working with peers, partners, others not in direct line of command,
in a way that positively affects business performance.

4. Strategic Orientation
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Leaders think beyond pressing issues of the day and even beyond their own areas of responsibility.
They stand back and look at the big picture, without ignoring the details.

5. Secondary competencies
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(a) Commercial orientation - a drive to make money
(b) Change leadership - ability to lead organizational transformation and realignment
(c) development of organizational capability - improve long term capacities of others
(d) customer awareness - relentlessly consider customer perspective
(e) market knowledge - deep understanding of industry dynamics

6. Assess current capabilities or potential
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Ambition - does the person want to grow and move ahead ?
Learn from experience - does candidate have ability and desire to seek opportunities to learn, take risks, seek and use feedbacks & remain open to criticism?
Competencies that predict high potential - strategic orientation, change leadership, results orientation

7. Pay attention to candidates values
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Never ever make concessions regarding ethical values for candidate.
Integrity is a fundamental value - do your best to ascertain before hiring someone (Welch, 2005).
Shared values are important in an organization ( Jim Collins)

Right people share the core values of an organization:
Find people who have a predisposition to the core values
Create a culture that rigorously reinforces those values

8. Are past successes a result of star's own capabilities ?
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Some stars are only stars because of complementary talents from their supporting players, organizational and human resources.
Performance in many jobs isn't only the result of individual skills but shared resources, capabilities, internal systems & processes, internal networks, training.

Dr DP

Framework for successful M&As, Partnerships

JWI 540 Strategy, 8/24/12, Week8 Summary

The merits and challenges of M&As  and partnerships between firms are reviewed. Levers to tilt the odds toward success are identified.

I. Why M&A
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 M&A is the fastest, most powerful tool a company can use to change its competitive game.
Adds real fire power to growth arsenal
M&A gives twice the talent to pick from. Ideally M&A results in 1+1 = 3

Potential Benefits of Acquisitions:
Allows a firm to obtain in a single transaction,
- capabilities or resources that would take years to develop.
- Reduce costs through consolidation and eliminatiion of redundant positions and activities.
- Increase a firm's market share, competitive advantage from greater size

A partnership allows you to capitalize on another firm's resources.
An acquisition makes resources one's own.

II. Problems with M&A
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Majority of M&As fail
Benefits of M&A are many times not realized
It feels like death to most people in the acquired organization, with lives turned upside down

III. How to avoid common traps in M&A and make a successful acquisition?
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1. Check if the same business result can be achieved at lower risk with a partnership or organic growth.
2. Does it make strategic sense and further the strategic objectives of the firm ?
    Is this acquisition aimed at getting quick results that organic growth cannot match ?
    Is this to Acquire a competitor?
    Is this to move quickly into an area where you don't currently compete?
3. If acquisition is justified, are clear criteria for selection of target company set ?
4. Does the acquisition create value?
5. Before starting the acquisition process, stay aware of the common traps in M&A (Welch, 2005)
Sin#1 - Beware of merger of equals. Anticipate people dueling over who is really in charge. Identify roles and responsibilities ahead of the acquisiton.
Sin#2 - Cultural fit based on values of the two companies is as important as strategic fit that is based on products, technologies and numbers. Some cultures don't combine, they combust. Cross-cultural differences in a merger are usually not addressed until it is too late.
Sin#3 - Reverse hostage situation
Due to deep concessions given, the acquired firm is in charge in the end. Don't pay too much for something you don't own.
Sin#4 - Being afraid rather than going boldly
Complete the integration process within 90 days of closing (eg. Lou Gerstner at IBM managed transitions successfully by drawing attention to the firm-wide priorities of the 90-days). Do not let uncertainty morph into inertia or fear.
Sin#5 - Conqueror syndrome
Don't march into new territory and install your people everywhere.
For new and expanded firm to survive, it needs the best team - you may need to let go of some of your own.
Sin#6 - Paying too much
Beware of deal Heat that comes from overheated desire.
Don't get caught in the negotiation frenzy fanned by competitive bidders and investment bankers.

6. Before the Acquisition, consider the risks you are about to take (JWI 540, Week8, Lecture1)
(i) The people in the acquired firm could prove difficult to manage
(ii) The people in the acquired firm may be used to different objectives

To counter the risks and ensure a successful acquisition
(i) Manage actively
(ii) Have clear and shared goals with well-defined targets
(iii) Have clearly defined and quantified benefits supported by strong business rationale
(iv) Monitor progress - Explicit metrics and detailed reporting must be used to ensure targets are met, problems are resolved quickly and effectively.
(v) Create and encourage formal and informal connections between the two firms
Provide multiple channels of communication about both opportunities and problems.
Ensure clear accountability so there is never any doubt about who is in charge and where decisions will be made.
(vi) Place qualified managers chosen from both firms - It is vital to Select, prepare, support, reward qualified managers.
Wisdom to know what not to do - and not doing it - is among the most valuable contributions of a strategic manager (JWI 540, Week8, Lecture1)
(vii) Manage expectations across both firms and encourage a learning mindset

7. During the acquisition process, keep the following four key factors in mind.

Pace:
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Some acquisition situations will reward the swift; but in some cases, rushing with deal heat can hurt. Consider your Assumptions and frame of mind - You are probably thinking that the deal must get done and quickly. You may even be afraid that rivals may swoop in and snatch away your target. You have a bias for action and measure your effectiveness by how fast you can get the deal done. However, moving forward too rapidly can result in a due diligence process that fails to produce information that would be helpful in deciding whether to go forward with an acquisition. Focus instead on the spirit of discovery-driven strategy: how quickly can you discover whether there is any future in this deal ?

If there is value in the acquisition, move the process forward. But, as a merger may represent a strategic shift for the organization, think carefully about fundamental changes needed to realize the full strategic potential of the acquisition. Then rush to integrate the firms within 0 to 90 days of closing, to capture advantages, reduce uncertainty, fear, low morale and inertia in minds of people.

On the other hand, if the value of acquisition is inadequate, move on and explore other opportunities.

Power:
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Get with the top leaders of the firm you are acquiring and read the power bases in your respective firms. Senior leaders from both sides should consider and discuss how conflicts will be resolved, how decisions will be made and how ideas will be assessed. Simply assigning job titles and agreeing on formal job definitions is not enough. Look beyond the organizational charts - many decisions about resources and agendas do not fall into one person's job domain.

In every firm, informal power network influences key decisions. Create a power map of the new organization - to evaluate options, explore opportunities, and investigate financing.

Formally or informally, where will key strategic decisions be made ?
Who will make staffing and investment decisions post-merger ?
Who will control scarce resources and key assets?

Do not end up arguing endlessly about whose systems and culture to use.
Make the leadership call early on, clarify who is in charge, take the pain, get the transition over with fast, and don't worry about stepping over toes of people. Err on side of speed rather than being too sensitive about stepping on toes (Welch, podcast, JWI 540, Week8)

Information:
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To reduce anxiety, avoid miscommunication and increase trust in the firm, provide information to the employees of the firms, before, during and after the acquisition. Messages are often complicated; information cannot always be shared openly. Different audiences need to get different information at different times and in different formats.

Common errors in this area are: Sharing too much too soon or too little too late.
Define an information sharing process that works for the firm. Develop good measures and feedback around the information sharing to ensure same problems do not recur in future acquisitions.

People:
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People are stretched thin before, during, after an acquisition. Demands of integration come on top of regular work. New processes need to be learned and new tasks mastered. Most people are on edge emotionally, struggling to adapt to changes, worried about losing their jobs. This is why the following people management challenges need to be handled with care:
- match right people in right jobs in the new organization to build the skills needed to exploit the strategic advantage an acquisition creates.
- Prepare to face resistance from many people unhappy with the changes.
- Face the unpleasant task of deciding whom to let go and also deal with emotions of those who go and those who stay.
- Balance the needs of the top 20% versus the middle 70%

IV. Partnerships (Week8, Lectur1)
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Sometimes A firm can't meet its strategic goals on its own
Lacks resources - people, money, skills, physical or intangible assets, energy - necessary to carry out its strategy.

Options:
Develop internally
Partner with a firm for a short term
Buy the assets, hire the people or the entire firm you need

Between building or developing what you need internally and buying it elsewhere lies partnering with another business.

Benefits of Partnering
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(a) Opportunity to learn fast and fail fast - walk away without trying to salvage a large investment.
(b) Enjoy a high potential upside for a relatively small investment while being protected from serious downside risk.
(c) Share different skill sets and financial risk
Beneficial in High-risk investments: share knowledge and financial exposure.
eg. Green energy industry has great deal of uncertainty around consumer preferences, dominant technologies, regulatory decisions, costs.
(d) Take small stakes in entrepreneurial firm in the form of Joint ventures or partnerships on selected projects.
eg. Rapidly changing high-tech sectors. Cisco & MSFT
Lower cost and higher flexibility than M&A

Different ways to partner
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(i) Informal relationship: Preferred supplier network; agree to give purchasing preference to certain suppliers in exchange for better terms.
(ii) Formal relationship: Contractual agreement; Joint venture in which two firms share ownership of a project or enterprise.
(iii) Strategic Alliance: Formal agreement but not shared ownership.
(iiia) Highly integrated alliance: Functions almost like a formal relationship
Different functions inside both firms are involved from R&D, marketing, customer service, manufacturing, distribution eg. Apple & Nike with ipod sensors
(iiib) Focused alliance: involves a limited part of each partner's business such as manufacturing.
eg.IKEA had long standing mfg arrangements with some supplires, got favorable rates
(iiic) Experimental alliances: shorter duration, project-specific. Temporarily use a partner's distribution network to get customer reaction to
your product in a foreign market.

Risks of Partnering
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(i) Difficult to manage
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Partners Not fully committed. Relationship can easily dissolve. Partner can suddenly pull out resulting in a rude suprise.
- Slow in decision making
- reluctant to commit resources
- unwilling to respond with sense or urgency when internal problems arise
(ii) Different objectives
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Partners kid themselves into thinking they will be able to reach their goals
but end up working at cross-purposes
(iii) Betrayal
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Malicious partner
Secretly allocates costs from other parts of its business to a Joint Venture, cheating the partner.
Loss of proprietary data, processes, product designs - clear guidelines and safeguards not in place.
Hollow out one partner - cheating partner grabs substantial knowlede, people, resources.
Mole - partner's real intent is to weaken the other firm.
Victim firm does not realize what is happening until it is deeply committed to the partnership and the damage is done.
(iv) Intangible and unquantifiable metrics for success
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(v) Constantly Nitpicking a Strong contract
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Insisting on following the letter of the contract
(vi) Too formal or Too informal relationships
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Too informal: No relationships at all
Too formal: Rigidly defined with specified points of communication


To ensure a successful partnership
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(i) Manage actively
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Increase managerial attention more than in-house action items as they focus on risky new activities
(ii) Have clear and shared goals with well-defined targets
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(iii) Have clearly defined and quantified benefits supported by strong business rationale
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eg. tangible increase in sales
Intangible benefits could result in less disciplined partnerships
eg. hoping both partners will learn about new markets
need to specify what they hope to learn over a certain time period, how knowledge will be measured, how it will be used.

(iv) Have a strongly worded contract - but never use it to nitpick
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Mistrust and failure can result from nitpick
Very existence of a contract can lead to success

(v) Monitor progress
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Vitally important to good alliances and partnerships.
Do not delegate duties to partner firm and hope for the best.
Explicit metrics and detailed reporting must be used to ensure targets are met, problems are resolved quickly and effectively.

(vi) Create formal and informal connections between partner firms
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Provide multiple channels of communication about both opportunities and problems.
Encourage informal contact between people from two firms.
Ensure clear accountability so there is never any doubt about who is in charge and where decisions will be made.

(vii) Place qualified management on both sides
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Vital to Select, prepare, support, reward qualified managers.
Partnerships complicated by Geos, culture eg. US-China joint venture
No single manager can master all necessary skills without support from home team

(viii) Manage expectations
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Learning mindset - manage expectations about how much can be accomplished
Removes stigma of failure when partnership or alliance dissolves.
Ending or restructuring an alliance is a powerful indicator of success.
Companies may now know enough to pursue similar opportunities on their own or acquire resources they need on a temporary basis.
Wisdom to know what not to do - and not doing it - is among the most valuable contributions of a strategic manager
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V. Have Exit Strategy clear
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Under what conditions would you walk away from an M&A or Partnership negotiation ?
Think about Risk/Reward and BATNA.

Dr DP

Win with PARTS strategy analysis framework

JWI 540, Strategy, Week7 Summary, 8/19/12
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This week I learned more about what strategy is, how the game is played and the strategic levers to pull to gain competitive advantage.

1. The end goal - Play to Win
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Know your competitors. Understand their styles. Know their plays. Anticipate their next moves. Operate proactively rather than reactively. Define your strategy to win.

2. What is strategy? (Jack Welch video, Week7)
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It is the big Aha that defines the core value proposition of the business, sets the business apart from competitors in the marketplace and makes customers love and choose it over other choices. It is a living, breathing game and an approximate course of action at a given time.

Every firm needs a clear cut definition of what the Aha is.
Michael Dell has an Aha at Dell - he delivers a Low cost, On time, Service oriented product. He and Wal-Mart are not afraid of commoditization. Commoditization for most of us is evil - we want to get rid of it, find innovative products, get away from commodities. They think different and relish commodities. They know how to take advantage of the situation - through great delivery, clear strategy, execution. They don't have a very sophisticated strategy. They don't make it very complex. Just Make it well, provide value, and deliver customer needs - when they want it, exactly how they want it.

The strategy must be defined by the leaders and cannot be delegated especially when a firm is in crisis. eg. Lou Gerstner took charge of strategy at IBM in 1990s and asked the rest of IBM to help with execution.

2. Role of the strategy team
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Those at the top who are leading the strategy definition for a firm must continually find new strategic options for the firm and come up with new ways of winning. Depending on the kind of game being played in the industry, anticipate the competitor's next moves, and adjust the company's strategies accordingly.

3. PARTS framework for analysis of strategy in any industry
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Helps define game-changing levers to manipulate as part of strategy (Brandenburger, Nalebuff, 1997).

(i) Players:
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Competitors, Suppliers, Customers, Complementors are all players in the game.
Who are the participants who take actions to create value ?  Who are the established and rising players ?
Ultimately who has a chance to be one of the game's big winners?
Do players team up ? Or is it every man to himself ?
Can the number of players change, by encouraging a firm to join or leave the game ?

(ii) Added Value
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Keep score in the industry.
How does a player add value- high performance, reliable, timely, cost-effective ?
Amazon: wider inventory, convenience of internet => shifted the game; all players had to adapt a new definition of added value.

(iii) Rules
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What can and cannot be done in a strategic game.

Legal rules: Regulators or legal entities set the rules.

Unwritten rules that are industry standard: Adapt to the existing rules of the game - note the unwritten rules between customers, employees, others.
To add higher value, can you find existing rules you might break ? and new rules you want to put in place ?
Think who makes the rules - what would it take for your firm to become the one who sets them ?
Then Generate new ways of thinking and playing in your industry.
Put rivals on the defensive with a full-court press.

(iv) Tactics
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Methods a firm uses to gain better position on the strategy game board - to score points with stakeholders, suppliers, customers.
Borders adopted strategic commitment to total customer experience - created generous loyalty program; opened in-store cafes; customers can relax & browse mags. Increase customer's perceived value of what Borders offers without increasing perceived cost of a book. Move below the value equivalence line - perceived cost is lower than its perceived value

(v) Scope
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Boundaries of the game in the industry.
Is this a stand-alone game ? or is it linked to other games ?
Could you gain an advantage if you provided the link ?
Game of location - gain prime retail locations in malls.
Game of merchandising - get strolling customers to make impulse purchases.
Amazon - single location, browse without wandering aisles !

It is all about finding a unique way for the firm and playing to win !
Dr DP

Hire, Ignite Passion with a purpose & Retain with Growth Opportunities

JWI 520, People Management, Week7 Summary, 8/19/12
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This week I learned about clarity of purpose, engaging employees, techniques to retain employees including creating opportunities for professional growth, reducing levels of hierarchy and eliminating non-value add activities.

I understand that as a leader, my job is to clarify purpose with a vivid picture of the future, engage the employees with a compelling vision and igniting a fire within them. I learned the key qualities to look for in hiring candidates and how to generate a list of highly qualified candidates from inside and outside the firm instead of settling for the first one that is available or comes along.

0. What to look for in Hiring (Welch, 2005)

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IIM 4EP ACSR

Integrity, Intelligence, Maturity - Acid Tests

Energy, Energize, Edge, Execution, Passion

Authenticity, foresight around Corners, Surround by smarter people, heavy duty resilience

1. Ignite Passion with a purpose (Welch, Business week, 2007)
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Paint a future in vivid colors; make purpose come alive.
A vision of the future with compelling upside - new opportunities for career growth, financial reward, fun at work.
Strike a match to light a fire of passion to win and turn cynicism into engagement.
Change cynicism to optimism with a turnaround story, productivity gains and attack of new markets.

Passion can be ignited. Help people draw on their own inner fire.
Give powerful answers to: Where are we going ? Why ? What's in it for me?
Transform cynicism to optimism with genuine engagement.

A few people are perpetually on fire - they pour their hearts and souls into life with unrelenting intensity.
Madly in love with their work, wild about their sport or home team, crazy over jazz or art.

Cynical, Numb cubicle dwellers and dreary collection of clock-watchers may be enduring managers who don't care or don't make sense. Give zealous attention to people, rigorous execution and fresh ideas.

Employees will learn the game and how to play it, if they know how they would benefit if the team won.
With purpose clarified, Bored people will get energized and burst into flames.
Managers need to strike the match. It all begins with clarity of purpose.

2. Retain the best people with retention tools
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Retention is about creating an environment where people dont want to leave.
Create an environment where people want to stay.

(i) Best retention tool is a Thriving company, highly profitable, growing, opportunity galore.
Profitability, Growth, Opportunity - this is why IBM 70s, Microsoft 80s, Google 2000s did not lose people.
Sense of excitement and possibility about the job - exciting growth opportunities.
Make it exciting, make it fun, that something is happening there - not same old same old.
(ii) money
(iii) let people know where they stand, let them know company is thinking about them, what the company growth plan is
(iv) 1 on 1 conversation as a leader - exactly how they are doing, what they can do to improve, what their trajectory of their career looks like in the company. So they never feel like a number, lost in the place. Feel like someone is looking out for them.
(v) Find enough great jobs, show the route to moving up fast - else people will leave
People who have put in their time on training programs are looking for a chance to reach their dreams.
That is what we as leaders have to give them. Pay attention to what kind of jobs the people get.
Do people who get real stretch assignments - do they stay or go ?

3. Key points from Domino's Work-Out
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Come up with every damn idea possible to increase horsepower, go after big opportunities and rise to greatness.
What is your competitive advantage ? Why should anyone buy from you ?
Revamp recruiting - expand the search to include places like West Point
Give incentives - million dollars in 10 years; Reward referrals.
Strategic positioning - lunch market

4. To develop leaders, let them lead something
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Best way to assess leadership potential is to scrutinize them closely as they carry out their duties.
Customer's premises - excellent environment to develop new skills.

GE's flatter restructuring + utilization of popcorn stands + use of wide variety of other programs like 1:1 performance feedback => ranked #1 in leadership development; #1 poaching ground for managerial talent

5. Give people the opportunity to Learn by Doing (Week7, Lecture1)
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Opportunity for professional growth and development of leadership skills are among the most important of all organizational rewards.

Most powerful professional and leadership development typically occurs through action learning, on-the-job learning, learning by doing - not through academic training or company-initiated professional development programs.

(a) Job Content Rewards
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- Recognition
- Responsibility
- Autonomy
- Performance feedback
- Opportunities to participate in decision-making
- Important, interesting, challenging work
- Opportunity to develop professional and leadership skills
- participating in new business initiatives
- move from line to staff role
- taking a position with P&L responsibilities (McCall, Lombardo & Morrison, 1988)

(b) Professional growth opportunity - Rich developmental opportunities
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Introduce a new product
Implement a new recruitment or performance program
Launch a new corporate initiative
Customer interaction "at the customer, for the customer" - 4-6 months stay with the customer; work on customer's problems & priorities

(c) Reduce Hierarchy - the number of Organizational levels
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Layers separate senior executives from customers => no more than 5 layers between CEO and junior workers (300K GE employees)
Flatten the organization => increases people's responsibility, challenge, autonomy, participation in decision-making
Less number of sign-offs needed before action can be taken

6. Insights from GE Managers Training
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(i) For every task that consumes time and energy, ask - Why am I doing this ? What value am I adding ?
(ii) Enable self-service rather than encouraging inefficient bureaucracy
(iii) Avoid repetitive tasks that add little value




7. Where and how to recruit new players (Week7, Lecture2)
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Put together a list of people to choose from
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Generate a list of highly qualified candidates instead of settling for one.
Always consider both internal and external candidates for a position (Center for Creative leadership, Sessa & taylor, 2000)

Internal sources
Draw from the Succession plan.
Leverage wisdom of peers inside the firm - use peer assessment with 360 degrees feedback.

External sources
- Online electronic recruiting eg. LinkedIn
- Sourcing: ask people about other people; suppliers, customers, agencies, trade association execs, trade journalists, consultants. Use creativity, good communication, relationship skills. Think not just about the candidates but the people who may know the candidates

Dr DP

Build Core Competencies & Create an Opportunity Portfolio

JWI 540 Strategy, Week6 Summary, 8/12/12

This week I learned how to identify core competencies, build a strategic opportunity portfolio by balancing risk and reward, and test the strategy using VRINE model.

Highlights I take away are shown below.

(1) Core competencies - Identify and build strategic capabilities of the firm
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 Competition is dynamic: firms need to improve the game continuously

(2) Test strategy with VRINE framework
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Test importance of specific resources and capabilities using VRINE framework for
- value, rarity, inimitability, non-substitutability, exploitability

(3a) Fundamental fact of business life is Uncertainty
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Changing markets, customer preferences, products, technology, skills needed to take advantage of opportunties
Bigger Risk, Bigger Payoff

Great strategists appreciate uncertainty and use it to their advantage.
Uncertainty provides opportunity to surprise the competition and delight customers in new ways.
It decreases the chances that all competitors will come to market with similar me-too offerings.

Uncertainty presents challenges
Lack of reliable information increases likelihood of introducing a product before people are ready to buy it or just as their preferences are changing.

Create a balanced portfolio of strategic opportunities with a mix of risk and reward.

(3b) Two types of uncertainty
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(i) Where to compete - which markets, customers, products?
(ii) How to compete -which technologies, skills ?

(4a) Manage an Opportunity Portfolio **********************************************************
Balance Market & organizational uncertainty vs Technical & execution uncertainty
(i) Low, Low = Core enhancement launches:low uncertainty about where and how to compete; skills already there
(ii) Medium, Medium = Platform launches: significant opportunity close to core business; build new skills
(iii) Low-Medium, High = Positioning options: Execution risk high; stretch to a new market, based on good information about consumer preferences; experiment cheaply to verify
(iv) High, Medium = Scouting options: High Market risk; experiment cheaply to check merit before investing heavily
(v) High, High = Stepping stones: where & how to compete is not clear; high uncertainty about market demand, competition, capabilities;
Reduce uncertainty with initial experiments; monitor signals

(4b) Type of manager who will excel in stepping stones situation: Big-picture thinker who is comfortable with ambiguity
- Launches small experiments and monitor tangible and intangible indicators of success
- sensitive to weak signals and qualitative indicators that precede customer adoption of new offerings

(5) Put together a winning Hand - Position the firm to succeed in any type of strategic opportunity in the portfolio
*************************************
(i) Capitalize on and expand on current capabilities
(ii) Assemble a portfolio of strategic opportunities
(iii) Balance Risk & Reward - risky vs certain bets
(iv) Create good match between the opportunities and the company's capabilities, current or potential
(v) Ramp up the firm's capabilities to meet needs of a desired strategic objective
(vi) Match new venture with the right person to run it & staff sensibly
 
(6a) Core competencies - What enables a company to do something real well
*****************************
- beyond plain hard work, timing, luck

At the core of every successful organization are a handful of capabilities that result in high performance.
Complementary value-creating skills or activities that other companies find difficult to imitate.
examples
- tehnical know-how
- reliable mfg process
- close relationships with customers or suppliers
- culture that fosters employee loyalty
- distinctive way a company exploits technology (not technology by itself)

Difficult to isolate and identify
Not appreciated until they have eroded or people responsible for creating them have left the company

Figure out the firm's core competencies - Maintain and strengthen them

(6b) Identify your core competencies
******************************************
(a) Does it truly create value from customer's view ?
(b) Is it difficult to imitate ?
Sustainable competitive advantage achievable when a competency relies on a complex combination of activities and knowledge.
(c) Does it further your strategy?
A core competency should be closely linked to the firm's strategic advantage.

(6c) Develop a Core Competency - Build or Buy it
********************************************************
Create something superior to the industry standard.
Quantify what will make the capability clearly superior.
Use current and relevant data.

Two basic ways to develop a competency in-house
***********************************************************
- Shift resources and decision making power to the competency you want to develop
- Skunkworks: free up and nurture a small group of stars to incubate the new idea

(6d) Acquire a core competency
*************************************
Gain the skills the firm seeks by buying another firm.
The skills needed may come with skills that are not needed.
Get rid of LOBs or Geos quickly so that resources can be redirected to core value-creating activities.

Competencies are embedded in a company's culture or rely on a complex set of activities or a team
Risk of acquiring a competency is the "embededness" can be disrupted
Understand the true sources of value - don't let the wrong people go

(6e) Maintain a core competency - Protect it
***************************************************
Create a core competency with numerous elements
requiring teams of employees
with special skills working together
Knocking off a product or imitating a service is easier
than creating same team skills and internal activities that resulted in that product or service

(6f) Continually invest in your competency
************************************************
Help employee upgrade skills
Hire more people
Add new machinery
shore up the firm's advantage - in ways that make the core competency difficult to replicate

(6g) Keep a close watch on rivals
***************************************
They may try to make the firm's competency irrelevant by investing heavily in their own

(6h) Resources should not be diluted in pursuit of too many paths to greatness
******************************************************************************************
If the right area is chosen, it will be the only one you need
*************************************************************
Only the best managers should be working in core areas.
- champion programs and follow through on them
- laser-sharp ability to keep priorities straight
- great communicator's about company's priorities
- see connections between their own area and other parts of business






These are powerful concepts to build and strengthen a firm
Dr DP

Motivate Employees with monetay & non-monetary incentives

JWI 520, People Management, Week6 Summary, 8/12/12

This was another excellent week of learning.
I learned how to motivate employees using monetary as well as non-monetary incentive systems.

I. Maslow's classic theory of human needs and motivation (1954)
*****************************************************************
Level1 Physiological needs: Food, water, shelter; obtaining them takes precedence over everything else
Level2: Safety needs: Security
Level3: Social needs: Friendship, Belonging, Acceptance, Giving and receiving love; "what do others think of me?"
Level4: Ego needs: Adequacy, Achievement, Strength, Freedom; "What do I think of me?"
Level5: Self-Actualization:Need to realize your full potential; strive to become everything you are capable of

Money makes physiological & security needs evaporate.
Money is not everything in society but does get cultural acceptance and entree.
Self-esteem grows with wealth and income.
Money ultimately becomes irrelevant.

II. Critical factors to get to employee happiness
******************************************************
- a meaningful job
- rich relationships
- adequate money

People need to enjoy their work (Fit, challenge, variety, a continuous quest to get better)
enjoy the co-workers they work with (work with great people)
respect the boss they work with (not a jerk boss)
they need to get paid enough to make it worth their efforts (decent money)
Lose one of those, and people will walk

What people look for in a job (Aaroz, 2007, 245)
*******************************************************
- a job where they can do their best
- with a challenge that matches their skill level
- in a place they can grow and develop
- in an organization they like
- with a good boss
- with a great group of peers

When hiring people, don't just focus on money but paint a picture
**************************************************************************
a well paid miserable existence is still a miserable existence
life is too short to stay in a job you don't like

III. Motivate employees to invest heart and soul in the jobs (Business Week 2006)
*****************************************************************
Basics: Motivate employees through money, interesting work, enjoyable co-workers
Tools: Recognition, Celebration, Great Mission, Balance Achievement & Challenge
Other levers: open appreciation, a sense of fun, an exciting shared goal, individual attention to the challenge of each job.

IV. To manage older employees (Welch & Welch, JWI 520, Week6 Video)
***********************************
Pay respect, give voice and dignity - the two most important things you can give
Build an organization organization where Quality of ideas counts more than age, experience or anything else

V. Give Incentives - Financial & Non-financial - to impact employee performance (Week6, Lecture1)
***********************************************
Reward, Recognition & Performance Feedback
*******************************************************
Most HR manager's think in terms of Reward and Recognition
Reward = financial compensation
Recognition = plaques, awards, less important touchy-feely stuff warm and fuzzy inside

But performance feedback is also a great reward  - helps people behave more productively in the future.

VI. Problems with Financial Rewards
********************************************
(i) Unavailable
(ii) Can be matched
(iii) Difficult to administer

VII. Motivate without Money
*********************************
VIIa. Use Prestige rewards (Kerr, 2009)
***************************************
increase people's stature, inside the company or out
eg. Job Titles, direct access to top leadership, size location amenities of one's office

VIIb. Offer Job Content rewards [Easy to administer; but Usually not thought of at all; overlooked, underutilized]
************************************
Increase employee's job satisfaction through
- work on important and interesting tasks
- Performance feedback
- Recognition
- Responsibility
- Challenge
- Autonomy
- opportunity to participate in decision-making
- opportunity to develop professional and leadership skills

VIII. Rewards Administration Issues
*****************************************
Availability - Job content reward, unlike money, are always available
*************
- you create your own supply; you are limited by your own imagination
- performance feedback, opportunities to participate in decision making can always be given
- "Value comes from scarcity" mindset prevents people from using it more

Timeliness - Rewards should be received soon after a reward-worthy action occurs.
*************
Reversibility - Financial rewards are irreversible; Job content rewards are reversible
***************
Fundamental principle: For a reward to be reversible, it must look and feel reversible.
If you don’t vary your routine from the start, you may not be able to change it later.
Beware Thanksgiving Turkey experience at Hughes Corporation. Good intentions have to be weighed carefully against human nature.

Additionally, the Citibank HBS case assignment helps reinforce performance evaluation principles and internalize best practices.

Great training in people management.
Dr DP

Lead with Quality of ideas at the center

 JWI 520, People Management, 8/6/12

This is much too exciting a concept and I feel compelled to document it early in Week6.
It answers a long held question that I have struggled with.

Managing Older Employees (Jack Welch  & Suzy Welch video)
***********************
In this day and age it is not unsusual at all to have older employees managed by much younger employees. Sometimes this causes awkwardness and conflict.

How to make this relationship work ?
*****************************
Give them voice
Listen to their ideas
Make them feel part of the team
Make them feel like they are not on an Island by themselves in yesterday's world
Bring them into the equation
Make sure their ideas count

Get the organization to where Quality of ideas counts more than age, experience or anything else
******************************************************************************
Then you won't have this issue

Bottom line: It is all about paying respect to people
******************************************
- Giving them dignity
- Giving them voice

Voice and dignity are the two most important things you can give to employees
****************************************************************
to get the most out of them

***

What a fantastic insight and concept this is. This explains why Jack Welch is such a great leader.

When leaders lead with quality of ideas at the center, with dignity and voice given to every brain in the game, a team can rise to its full potential and deliver the very best it is capable of producing.

To sustain high performance, I understand now that considerations based on politics, age and other factors should be set aside and Quality of ideas must be allowed to take center stage.

Amazed and stunned by the deep insights stated so simply by the legendary Jack Welch.
A light bulb is turned on and I can see much better now.
Dr DP

How to do Performance Evaluations

 JWI 520 People Management, Week5 Summary, 8/5/12

It has been a fruitful week of learning with many great concepts that I barely knew about.

The DQs reinforced the learning and I have a much better idea about how to give and receive performance evaluations.

This week we analyzed the effects of performance assessment and feedback on the culture of the organization. We discussed how to apply a performance assessment process that attracts, retrains, and motivates individuals.

Here are the specific take aways for me:

(0) Welch, “High Performers Won’t Wait” (Business week, June 2008)
***********************************
Holding back promising employees until they "pay their dues" is folly
Talent war is real.
Promotion is more art than science.

(1) Performance
****************
Does the candidate consistently post superior results ?
Not just delivering the numbers.
Superior results mean a person has expanded his job duties and brought insights to the team
be they about work processes, market challenges, or unseen opportunities.

Superior results mean a person has overdelivered - a leading indicator that he's ready for more.

(2) Values
***********
Does the candidate consitently demonstrate behaviors the company wants to see from its leaders ?
Is she customer-focused ?
Does she share ideas ?
Does the candidate live and breathe the values ?

(3) Tail wind?
***************
Did the candidate benefit from his predecessor's work: high functioning team, backlog of orders

Promote internal candidates sooner rather than later.
It is a fast way to attract good people to your ranks.
It will help make you a talent magnet.
It will keep your best performers inside.
Don't nudge your highfliers into the open arms of your rivals

(4) Positive Traits and challenges of Armed Forces who enter business
******************************************************************
Positives: Whip-smart, tenacious, can-do upbeat attitude, Edge - make yes or no decisions on the spot, superb people skills; great motivators, team builders
They (Junior Military Officers - JMOs) will move anywhere; your toughest location may be better than the best outpost they've endured

Challenges: Bureacracy is in their system; embrace rules and regulations that slow them down
Lack visionary thinking - less inclined to take risks in business


Promoting young insiders not only keeps your best people from leaving
but also has a way of turning your company into a talent magnet

(5) Video: Jack Welch, Evaluations (3:00)
**************************************
Assess Behaviors, Numbers

Qualitative - Behavior, soft values
Quantitative - Numbers

Type1 - Has values, Has numbers: onward & upward
Type2 - Does not have values or numbers: ask them to move on
Type3 - Has values, does not have numbers: give them a second chance
Type4 - Does not have values, has the numbers: horse's ass - get rid of them

How often to evaluate ? Twice or thrice a year

When giving stock options, bonus, raises, sit them down - here is what I like about what your are doing, here is what I would like you to improve
Never miss an opportunity to give this in a piece of paper with two columns

(6) Video: Jack Welch,  Negative Feedback (1:50)
*********************************************
Managers hate giving negative feedback becaus they are afraid of demotivating people
they want to Inspire rather than demotivate

In a right culture - it is pretty straightforward
people know it is a meritocracy - a Performance based culture
If you are not delivering you want to know where you need to improve
you want to show them where they can go if they do  this this and this...
lay out this this and this ...show them where they can go

Show them what they need to do to change and move up in the org or make the org better
coach them and show them what they will get if they deliver
Dont hide behind bad news...it is good news

Show them a personal vision of whtat they can do
show a concrete example of what they have done wrong
No one should leave saying that boss of mine did not understand at all what I am doing
Thrash that out between the two of you


(7) Lecture One: The Essential Art (and Science) of Performance Evaluations
************************************************************************************
Most people would agree that candid, timely, accurate performance feedback is essential to the effective functioning of any organization.

Candid, timely, accurate performance feedback is essential to the effective functioning of any organization.
Yet the process is chock full of problems
Managers doing the assessing generally don't like it
Employees being assessed like it even less
It shouldnt be this way, here is why

(i) If your company's assessment process is unreliable, people may end up in wrong jobs


(ii) In the absence of competent assessments, it is virtually impossible to give people accurate performance feedback.
Without such feedback, people have no instruction to systematically improve their behavior.

(iii) Incompetent assessments generate dysfunctional reward systems.
********************************************************************
By NOT aligning measurements and rewards, you often get what your are NOT looking for (Welch & Byrne, 2003).


(iv) Forget about terminating perennial malcontents and trouble makers
***********************************************************************
In the absence of carefully documented, highly reliable performance data,
any corrective action is likely to result in consequences that are far more negative for the company than for the employee.

(8) Getting Performance Evaluations Right
**************************************
(i) Give timely performance reviews (2-3 times a year)
************************************
Performance should be assessed and formal reviews should be conducted at least twice a year.
Informal appraisals should happen all the time (Welch, 2005)
Annual review has a lot riding on it
- compensation in next year
- career prospects
- job security
- self esteem
People labeled as poor performers will receive smaller pay increases and may even lose their jobs
(ii) Include a performance development component
*************************************************
Giving performance reviews different times a year has benefits
- lower the stress associated with a single annual review
- become good at the process
- focus on different objectives in each one
- use spring review for informal development purpose only: no hard copies to HR, no salary or career decisions based on the evaluation
level of candor rises sharply
peers and subordinates speak more freely for 360 degree feedback
no one will be fired or have her salary frozen as a result of this conversation
focus on past, not on future
Conversation goes like this:
- discuss employee's strengths, based on observed behaviors and accomplishments during the year just ended
- discuss development needs, based on observed behaviors and accomplishments
- implications of performance on compensation and career progress

Discuss about the future
Re-energize the employee and generate some agreed-upon yardsticks against which employee's performance will be assessed upcoming year

(9) Remember that most employees beleive they're unusually high performers
*******************************************************************************

(10) Challenges in managing stars (video)
************************************
Every managers dream to have a company filled with stars
Building confidence is one of the jobs of a leader
fine line between over confidence and arrogance
Manage with candor - if they get too full of themselves, swelling rather than growing
No one is indispensable
Rather be dealing with stars with overconfidence than people who need to be pulled up

When a star demoralizes the team with his actions
cracks the core of a team's values - take the person out of the team
cant have a boiling cancer in the middle of a team eroding the fundamental fabric of a company

Most human beings judge themselves by their intentions not their actions
When she misses a deadine, she blames garbled orders from boss
when he does not land a key client prospect, he points at promised staff support which never materialized
the bosses see things differntly

No matter how professionally a manager conducts a formal review, a fair number of employees are going to be disappointed by the feedback they receive.
Some are going to be angry. That moment is not the time to say, "now, let us talk about your development".

A month later, when the employee is calm, open the conversation.
"You know, I didn't particularly enjoy our last conversation, and I got the feeling that you weren't too crazy about it either.
Let's have a discussion now about what each of us needs to do differently going forward so that our future performance reviews are much more enjoyable.”

(11): Base evaluations on both quantitative and qualitative measures.
**********************************************************************
Let's start by saying something that may strike you as absurd:
There is no such thing as an objective measure of performance.
***************************************************************

(12) Take into account the importance of the work performed.
***********************************************************
Organizations fail to consider not only
- the value of the work an individual actually does
- but the value of the work required for a particular position

Positions strategically important today may not be tomorrow
************************************************************
Every company needs to continually assess whether or not the tasks its employees are performing are still adding value

Loyal employees continue their high performance on their tasks
while the tasks they are performing have ever-lower strategic value

Companies need to establish a systematic, centrally administered auditing process that assess the value to the company of a centrally administered auditing process
that assess the value to the company of each position without becoming embroiled in emotional circumstances of each particular situation

Competent performance evaluation and feedback is not only valuable in its own right;
it also allows your company to establish an effective process for motivating and rewarding its people.
That will be the subject of our next lecture.


(13). Performance Evaluations
***************************
Beware of what to say and what not to say based on DiSC types of employees

(14) How to Give Constructive, Candid Performance Feedback
***********************************************************
the culture of many organizations tends to discourage people from being candid.
In a similar way, the norms and practices that surround most performance reviews and feedback processes reduce the
likelihood that the information conveyed will be honest.

(15) Norman Maier Technique for Performance feedback
***********************************************
(i) Mutual Identification of the problem
(ii) Proposing rather than taking a fixed position
(iii) Free and open communication
(iv) Starting with things in common

End goal: let people know where they stand in the organization today
and what their prospects are for tomorrow

First, the leader begins the session not with good news or bad news,
but with areas where both parties essentially have the same view of the employee's performance.
There will be a positive dynamic in the room.

And second, by the time they get to the areas where they do disagree,
they will know that they are not disagreeing about everything, nor even about most things.


Typically, using Maier’s technique, the areas of contention amount to much less than half of the performance categories under discussion.
(This is especially likely to be true if the end-of-year review is preceded by a midyear feedback session, as was recommended in the previous lecture)

Every leader's responsibility is to deliver the truth

(16).Constructive Feedback
Keycomponents of a performance assessment plan that might attract future employees, encourage professional growth, and motivate current employees
Performance management techniques influence (positively or negatively) the culture of the organization

Dr DP

How to Develop a Strategy

JWI 540 Strategy, Week5 Summary, 8/5/12

This has been a demanding week for me. The DQs and the Assignment were thought provoking.
Thoroughly enjoyed identifying stages in strategy development, and learning to generate and evaluate strategic options.

(1) 3 basic strategies - Cost, Execution, Innovation
*************************

(2) Get Creative to generate strategies
*******************
Systematically generating options - slow and too easy for competitors to predict and imitate

Get more creative - with options that are less related to your company's existing activities or with completely new industry
Surprise the competition and gain greater advantage

Brainstorm - no rules set, no judgments passed on ideas, get past self-filtering
Come up with different options

Pain points - eliminate them and capture value

radical departure vs incremental unexciting strategic options
surprising combinations, unexpected advantages

(3) Involve Right Option Generators
******************************************
Right skills, personalities, knowledge
include creative, lateral thinkers - ability to articulate ideas
skilled in debate and diplomacy
unafraid to voice their views, but tolerant of viewpoints
should not bristle when laughed at and should be comfortable with ambiguity

Know org, industry, technologies, competitors, regulatory issues
naive questions may open up new areas of exploration

(4) Evaluate after generating strategic options
******************************************************
eliminate weak ideas
eg. look at top 3, eliminate 9

Is market big ?
does it match and fit with our org ?
is there demand - market ready ?


(5) Pose the right questions, the ideas will flow freely (21 great questions, Kevin Coyne et al, HBR, 2007)
*************************************************************************************************************************
fertile questions focus the mind on valuable overlooked corners of a universe of possible improvements
(i) Dont Get lost
***********************
take middle path between Boundless speculation, quantitative data analysis
create new boxes to think inside - prevent people from getting lost by giving a basis

(ii) organize and conduct effective brainstroming sessions
******************************************************************
remove obstacles to free idea flow

(iii) Generate 50 breakthrough ideas from spectrum of industries
**************************************************************************
Focus on top 3
the few you will work on

(iv) 21 great questions for developing new products
**************************************************************
de-average buyers and users
examine binding constraints
explore unexpected successes
imagine perfection
look beyond the boundaries of our business
revisit the premises underlying our processes and products

(v) Ask potential customers with pain points at the time they are experiencing the pain if they like the idea

(vi) Focus the mind on a subset of possibilities that differ markedly from those explored before
overlooked corners, see the opportunity first

(vii) Bound the range of acceptable ideas, select and tailor the questions
(viii) select participants who can produce original insights
(ix) Fishbone technique
(x) Keep to 10 people as bigger groups are unwieldy


(6) How to develop a strategy
**********************************
There is no step-by-step model, no standard template for setting company's strategy.
Most successful firms don't follow a structured process.

A strong leaders with inspired vision lays down the path and the organization follows.
or
Strategy emerges as the cumulative outcome of dozens of decisions that different people and group make.

(7) For Strategy to emerge, need patience and a strong stomach.
**************************************************************************
Actively develop a strategy
- establish a strategic objective
- define what you'll achieve
- based on one or more of your competitive advantage.

(8) How often should you rethink your strategy
******************************************************
annually coinciding with budget cycles
update strategic plan with specifics

short strategy cycle: overhaul every 3-4 years in fast moving technology industries
long strategy cycle: capital intensive industry

review strategy when something big happens eg global economic crisis, game changing technology, a merger, a new CEO
Companies are often slaves to corporate calendar - they ignore strategically relevant changes in their environment.

(9) strategic planning process
************************************
Resource Allocation - money, people - to the activities that further your strategic objective rather than the setting of that objective.
Strategy is a living, breathing set of objectives that must be changes when the world changes.

(10) Where to Begin a formal strategy development process
*****************************************************
Determine strategic objective
******************************
Identify strategic advantages
******************************

(11) Emerging industry - opportunity rich: Energy sector
*********************************************
lot of strategic headroom - few rules with high odds of winning
Few established players
tastes are fluid among abundance of consumers
demand is strong and growing
consumers and suppliers have low power => Industry is attractive (5 forces model)

(12) Mature industry - opportunity starved: automotive
************************************************
limited strategic freedom - many rules with low odds of winning
established and powerful players
scarce raw materials
Forced to identify advantages over rivals

(13) Strategy development is iterative, non-linear, messy
****************************************************************
Rarely follows distinct sequential steps

(14) Fundamentals of strategy development
***************************************************
inspired by imagination
but it cant be an exercise in fantasy
understand the limitations, devise a way to win, without relying on skills you dont yet have

(15) Four Stages of Strategy Development
****************************************
Analyze, Generate & Evaluate, Craft, Choose & Test (AGE CCT)
**************************************************
Some strategic options may already be on the table at the beginning, analysis of situation will follow from those.
CEO will propose a specific strategy, related options re discussed and evaluated before a final decision is made.

Step1 - Analyze the situation
******************************
What reality does the firm face ?
Study the industry
Identify core competencies
Use SWOT framework to organize thinking - identify and articulate internal strengths, weaknesses, external opportunities and threats
Focus on future trends rather than simply assessing current situation or looking at rearview mirror

Step2 - Generate and Evaluate options
*************************************
Options are the input to a strategy.
What choices does the company have ? eg IKEA can enter restaurant business or expand existing furniture business into new geographies
Identify general area of opportunity that customers value.
Get specific and identify actual products and services to capitalize on the opportunity
Is it feasible for the firm to produce or deliver ?
Is risk of failure higher than tolerable ?

Step3 - Craft possible strategies
*********************************
What are interesting ways to combine the options into a winning game plan ?
Great strategies are complementary activities.
Zappos uses unusual service strategy
- 365 day product return policy
- always open customer call center
- relies on combination of hiring practices, training, compensation systems, marketing, shipping policies, other activities

Step4 - Choose and Test a Strategy
**********************************
- Will company's proposals stand up in a competitive environment ?
- How easy is it to imitate the chosen strategy ?

Use Discovery-driven mindset
- small experiments in different parts of the company or selected markets to get data and refine the strategy (McGrath & MacMillan, 2009)
- Quantitative tests: predict strategy's cost and revenues over time

- Does it get you excited ?
- Is it easy to understand ?
- Is it in synch with the company's culture and values ?
    strategies that go against the grain of a company's existing culture or values, despite the economic potential, will not succeed.
    A modest strategy executed well because it is well suited to corporate culture will always beat a terrific strategy executed poorly

Timing is important
********************
- how long will it take to get results ?
- take ahard look at whether the firm is too far ahead of its time or if company's resources are wasted playing catch up

(16) Who to involve
***************************
- rely heavily on CEO's support
*******************************
if task is outsourced to consultants or emerges from deep within the organization,
top management will lack passion & understanding required to implement the strategy
ie setting priorities, aligning organizational resources, communicating key messages to customers, suppliers, employees, shareholders

- Analysts: Get information about past performance of company, what rivals are up to, current industry trends
*****************
Company specialists in areas like competitive intelligence, regulatory analysis
Marketing, Finance, Operations, engineering

- Business unit heads
**********************

Experience of setting strategy can turbocharge a manager's advancement within an organization.
Rising stars take on broader responsibilities and keep a perspective beyond their function and business unit.
Involvement in strategy-development raises visibility with top management
Presents new intellectual and political challenges - an opportunity to create lasting value through analysis and actions

(17) Web Ex  (Dr D)
************************
Each of our situation is unique - Recognize a new way to look at something
Pull value and wisdom from wherever you can to make the best strategy tools perspectives

exhausted but in a good way
Dr DP