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What comes to mind when you hear the word
STRATEGY
What Makes a DecisionA Strategic Decision?
• It’s Effect Won’t Be Known for Sometime
• It’s Impact is Lasting• It Impacts the Mission of the
Organization• It Moves the Organization into a
New Domain or Direction• It Involves Commitment of Key
Resources• It Affects People
Trade-Offs
• Management Chooses to Do This Over Doing That!
• The Choice is – One that Best Proctects from Imitators & Re-
Positioners– One that Carries With It a Unique Set of
Activities
• Once Made, Management Must Be Operationally Effective & Efficient
Effectiveness vs Strategy• Efffectiveness
– Operational effectiveness = performing similar activities better than competitors
– Is This Sufficient for Lasting Success?
• Strategy– Performing Different Activities the Make a
Difference– Performing Activities Differently, with Better
Results– Advantage Emerges Out of the Whole System,
Not Just One Activity
What is the Goal of Strategy?
• To Create a Plan
• To Achieve Your Objective
• To Be Competitive
• To Create a Competitive Advantage
• To Sustain a Competitive Advantage
• To affect the Conditions so that You Don’t Have to Operate in a Competitive Market– To Be More Monopolistic
A Sustainable Advantage Is...• Unique Activities
• Unique Value-Chain
– Relationships Among Functions/Activities
• Uniquely relating activities to produce cohesive harmony
– Degree of Cohesiveness
• Unique Fit
– Alignment of Strengths with Opportunity
• All About Making the Right Trade-offs
A Fit Strategy
• Consistency
– alignment of purpose & functions
• Reinforcing
– synergy among activities
• Optimizing Effort
– eliminate redundancy effort
– minimize waste (material & effort)
Synergy ==> Complimentarity• 1 + 1 > 2
– one compliments the other so that together they produce more than they can separately
• Market Synergy– one product enhances another
• Starbucks w/ Barnes & Noble• Cost Synergy
– shared functions or operations ==> cost advantages• Technological Synergy
– sharing technology across industries• Management Synergy
– skills & talents of each compliment the other
Strategic Thinking Requires
• Divergent Thinking
• Convergent Thinking
• Synthesizing Experience & Novelty
–Creativity
A Strategic Thinking Manager
• Sees What Others Do Not See– Dynamics not Statics– Interconnections not just Events– Possibilities not Only The Probable
• Willingly Questions the Obvious– for Synergy not Supremacy– Asking Right Questions not Looking for Right
Answers
• Is Multi-Perspectivistic
The Post-Conventional Thinking Manager
• Challenges Commonly Held
– Beliefs & Assumptions
• Listens Without Judgment
• Seeks Outsiders who are Inside the Organization
• Engages the Minds of the People
– not just their brains
Scenario Planning• Select several external forces for which changes
could (dramatically) influence the business
• For each force, explore at least 3 future organizational scenarios (worst, reasonable, best case)
• Discuss possible responses the organization might take & what is required in each case
• Identify common threads/themes posed among each scenario
• Determine likelihood of each occurring
Envisioning the Airline Industry in the 21st Century
• What scenarios would you envision?
• How might the industry respond to these?
Product Life CycleV
olum
e
Pre-Intro Intro Growth/ Shake-out Maturity DeclineTIME
Overarching Strategic Intentof an Enterprise
• Sustainability
– Creative
• Retrenchment
– Defensive
– Counter Moves
• Stability
– Maintain
Generic Strategies• Competitive Scope
– Broad Target– Narrow Target
• Competitive Advantage– Low Cost Producer– Differentiation
• Quality
• Reliability
• Innovation
• Responsiveness
Traditional Strategic Management Process• Strategy Formulation
– Determine Mission & Objectives– Identify & Interpret S, W, O & T
• Internal Analysis
• External Analysis
– Select Strategy• Corporate, Business, Functional, Operations
• Strategy Implementation– Mobilize Resources– Management Support System– Monitor & Assess (focus on control)
Planning Linear Hierarchy
Mission
Goals & Measurable Objectives
Strategy & Tactics
Goal Attainment / Performance Assessment
Business as Eco-System
• Open System View of the Organization– Interdependence with Environment– Unit of Survival is Organization + Environment
• Seek to Develop Mutually Beneficial Relationships with Stakeholders– Partnerships
• Suppliers• Customers• Employees• Community
Organic/Systems Strategic Management Process• Uncover, Clarify & Articulate Cultural Values & Vision
– Dialogue with all stakeholders
• Strategy Formulation
– Determine Mission & Objectives
– Identify & Interpret S, W, O & T
• Internal Analysis
• External Analysis (possibly include scenario planning)
– Select Strategy
• Corporate, Business, Functional, Operational
• Vision-Based Strategy Implementation
– Mobilize Resources
– Management Support System
– Monitor & Assess (Focus on Learning)
Planning Systemic Holarchy
VISION
PURPOSE
STRATEGY
TACTICS
Vision
Mission
External InternalAnalysis Analysis
StrategicChoices
Implementation
Objectives + Assumptions
Involves
Forces
Fit
Inquiring Minds