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
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
No comments:
Post a Comment