Thinking Strategically in a Global Context

1
Thinking Strategicallyin a Global Context

• Pete Laburn

2
What is Strategy ?
3
the science and art of military command as
applied to the overall planning and conduct of
large- scale combat operations American
Heritage Dictionary
a pattern in a stream of decisions or actions
Henry Mintzberg
4
Discovering the Future
The first step to unlocking our resistance to
change is to understand it. Change leads those
who will, and drags those who wont. Radical
solutions to problems are frequently discovered
by considering the impossible. Flexible
paradigms are a prerequisite for a successful
future. A successful past frequently blocks our
vision of the future. When a paradigm shifts,
everyone goes back to zero. Past success
guarantees nothing when the rules
change. Paradigm pioneers are frequently
outsiders who, not having invested in the old
paradigm, have nothing to lose by creating new
paradigms.
Ref Joel Barker
5
Why is thinking strategically so important ?
6
Strategic Change
Do you know with certainty where your industry is
going over the next 5 years?
Strategic Readiness Beyond necessary
Imperative
7
Change Imperative
catch up?
Rate of change
2 years
catch up
Time
2 years
8

• Strategies need to be changed
• not because the historical strategies
  may have been wrong , but because past strategies
  (however good they were) may be obsolete and no
  longer appropriate
• the rules have changed

9
Hidden realities of change

• Comes at us
• without asking permission
• without making a sound
• without giving us a template of how to cope

10

• The illiterate of the 21st Centurywill not be
  those who cannot read and write, but those who
  cannot learn, unlearn, and relearn.
• Future
  Shock
• 
  by Alvin Toffler (p4)

11
The Challenge of unlearning

• A lesson from Edward de Bono

Because information comes in asynchronously, and
we need to be able to reorder it regularly. What
you really need to do is take all the data /
information and rearrange it from scratch NOT
just add it to your existing shapes.
You need to be prepared to unlearn!
12
Beyond Strategy to Purpose

• Top managements role is to prevent core
  competencies becoming core rigidities! They have
  to beware of making their organisations better
  and better at the wrong things. And since they
  cannot possibly make every decision, they have
  to empower others to be creative, inventive and
  responsive.
• Changing Role of Top Management
• Bartlett Ghoshal

13
Strategy is not Operation Tactics

• Strategy - are we really doing the right things?
  Are we effectively going in the right direction
  bearing in mind all the things that are changing?
• Operational Tactics - the things that we choose
  to do, do we do them right / really well, with
  maximum efficiency?

14
Strategy vs Tactics
HIGHEFFICIENCY
THRIVE
DIE QUICKLY
TACTICS
Doing thingsright
SURVIVE
DIE SLOWLY
LOWEFFICIENCY
LOW EFFECTIVENESS
HIGHEFFECTIVENESS
STRATEGY
Doing the right things
Ref Prof M McDonald
15
Strategic Drive Chain
EXTERNAL
INTERNAL
CHANGINGWORLD
CHANGINGCOUNTRY
CHANGING MARKET
ORGANISATIONALCAPABILITIES
LEADERSHIP
STAKEHOLDERS
STRATEGY
TACTICS
IMPLEMENTATION
FORMULATION
Ref Peter Laburn
16
Strategic reality

• The only strategy you will implement
• is what you are capable of
• Therefore strategy is largely determining what
  you should, want to be capable of delivering in
  your future markets
• or
• creating a capability to respond
• to future market dynamics

17
Strategic Drive Chain NB!

• Get in touch with the world/country anticipate
  market changes
• Strategy and tactics are totally dependant on
  Organisational Capabilities
• It doesnt matter what you strategize you will
  only implement what you are capable of
• Take your stakeholders with you dont let them
  shape your agenda
• Organisational Capabilities are the hardest to
  change
• Leadership drives everything

Ref Peter Laburn
18
Global Trend Analysis and Creating Competitive
Advantage
19
Learning from the Future
Strategic Actions
Today
Future
1. Our Business
6. Our Business
2. Our Customers
5. Our Customers
3. The Environment
4. The Environment
Strategic Inputs
Ref Future Perfect, Stan Davis
Lessons in Radical Innovation, Wolfgang Grulke
Ref 2020 Vision, by Stan Davis
20
Where are these trends going to ???

• Pick any three trends / forces already identified
• Extrapolate them out 3 years
• Postulate what they may have developed into
• What Emerges ?
• What do they Co Produce ?
• What Mutual Impacts ?
• What opportunities does this present for your
  business unit?
• Dont forget the Pre-reading, Serving the
  Worlds Poor, Profitably

21
Building on some trends

• Globalisation Compliance - the way of doing
  business is constantly changing
• The way the industry is structured changing
• Differing values of countries, industries,
  companies in a global environment
• Consumerism - how consumers operate within the
  market - in response to self change and industry
  change availability of information, increasing
  demand
• Convergence of industries cross functionality,
  multi-skilled vs specialist
• War on talent - growing inability to learn
  quickly increasing pace of change, more
  doing-less thinking, increasing people turnover
  (loss of institutional knowledge within
  organisations) learning retention vs people
  retention, increasing speed of knowledge,
  inability to unlearn, countrys high growth rate,
  living for longer, global ability to move
• AIDS the need for an increased workforce to
  account for sick leave without compromising
  organisation performance
• Global warming / climate change the impact of
  resources, catastrophes
• Class differentiation increasing impact on
  crime, poverty gap increasing, strong middle
  class emerging
• World of work generational thinking
  behaviour, technology, culture mix
• Oil crisis 2020 - will we run out of oil? The
  pursuit of power / control
• Technology ease of access to information,
  allows freedom of choice (where to work, what to
  buy etc), integration into everything, rapid
  pace of change, new ways of interaction
• Rise of Biotechnology genetically modified
  agriculture supply demand
• Urbanisation impact on infrastructure (roads,
  water, power), food supply (less farming),
  society in general
• Leadership crisis what is the appeal in ever
  growing change, threats, complexity of people,
  global interaction etc ?
• Infrastructure pressure on roads, water, power
  etc and impact of non-delivery
• China India the rise of China and India as
  global powers, pull on resources, western vs
  eastern values, cultures etc
• Remember that trends interact with and impact
  each other

22
Understanding the Changing Environment

• What we know about the future
• The only space in time on which humans can have
  an impact is the future.
• There is not one future, but many possible
  futures, including those that are (most) probable
  as well as preferable futures.
• The future cannot be predicted (or foretold),
  only understood.
• The future is not predetermined or ordained.
• The future is influenced by our actions.
• A preferred future can to a large extent be
  produced if we act purposefully in cooperation
  with others, and with insight, understanding and
  wisdom.

external factors
Ref Institute for Futures Research
23
Understanding the Changing Environment

• How organizations attempt to understand the
  future
• Designs for the expansion and contextualisation
  of knowledge typically environmental scanning
  and organizational learning designs.
• Designs by synthesis for making sense of the
  future
• scenario development is one of the best ways
  of making sense of the future.

external factors
Ref Institute for Futures Research
24
Understanding the Changing Environment

• Environmental scanning
• Trend analysis
• PESTIR analysis

external factors
25
Turning Data into Strategy

• Scenarios

26
From data to opportunities to strategy
Strategy
InfoData Stats
Opportunities
Scenarios
27
Understanding the Changing Environment

• SWOT TOWS
• Threats and Opportunities created by trend
  identified external to organization
• _________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________________________________
  _______________________
• 2. Organizations Strengths and Weaknesses to
  deal with each Threat and Opportunity
• _________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________________________________
  __________________________

external factors
28
Understanding the Changing Environment

• Scenario development is a thinking tool designed
  to stimulate interesting strategic conversations.
• 2. It is to help decision makers understand
  driving forces and to identify the critical
  uncertainties in the business environment, and
  how they may unfold in the long term.
• 3. Scenario planning is a process where we
  invent, and then consider in depth, several
  varied scenarios of equally plausible futures,
  with the objective to bring forward surprises and
  unexpected leaps of understanding.

Scenario Planning
Ref Institute for Futures Research
29
Understanding the Changing Environment
Control
Options
Decisions
Uncertainties
Certainties

• Key uncertainties
• Scenarios

Rules of the game
No control
Scenario Planning
Ref Institute for Futures Research
30
Understanding the Changing Environment

• Driving Forces
• Rules of the Game
• Key Uncertainties

Scenario Planning
Ref Institute for Futures Research
31
Understanding the Changing Environment

• Driving Forces
• These are the underlying and impacting factors
  that set the pattern of events and determine
  outcomes in the business environment or the
  forces that make things happen.

Scenario Planning
Ref Institute for Futures Research
32
Understanding the Changing Environment
3
PESTIR ANALYSIS
2
Nature of the environment
Hierarchy of influence and control
1 Organization

• The internal
• processes, structure
• as functions
• of an organization
• Transactional
• environment of
• organizational
• stakeholders
• Context of multiple
• environmental
• forces

• Organization has
• total control
• Organization has
• influence, but little
• control
• Organization has little
• influence and no control
• can only adapt

Contextual Environment
Scenario Planning
Ref Porter Institute for Futures Research
33
Understanding the Changing Environment
3
Economic Perspective
Technological Perspective
2
1 Organization
Institutional Perspective
Resource Perspective
Political Perspective
Social Perspective
Scenario Planning
Ref Michael Porter
34
Understanding the Changing Environment

• Driving Forces
• These are the underlying and impacting factors
  that set the pattern of events and determine
  outcomes in the business environment or the
  forces that make things happen.
• Rules of the Game
• Rules of the game can be descriptive ( license
  to operate), normative ( ethical and corporate
  governance) as well as aspirational ( rules to
  win).
• Key Uncertainties
• Those factors that can have a major impact on
  your business and affect the outcome of the game.
  Uncertainties can be economic, political, social,
  technological, legal or revolve around your
  market or competitors strategies. The can be
  international, local, related to your specific
  industry, or internal eg succession planning.
• the surprises that may necessitate a change in
  strategy or tactics Sunter and Illbury

external factors
Ref Institute for Futures Research
35
Understanding the Changing Environment
Impact / Uncertainty Chart
Low
Impact
High
High Dont know
Low either likely or unlikely
Uncertainty
external factors
Ref Institute for Futures Research
36
Understanding the Changing Environment
5. Building the Gameboard
Y1
X1
X1 -
Y1 -
external factors
Ref Institute for Futures Research
37
Understanding the Changing Environment

• Develop the scenarios create narratives that
  describe the impact. Put yourself 5 years in
  future and describe what has happened.
• Analyse the impact of the scenarios on key
  concerns, and their impact on the drivers.
• Analyse the implications for the organization.

external factors
Ref Institute for Futures Research
38
Strategy Formulation
39

• The successful company in the global economy
  will be - indeed, must be - a new phenomenon,
  owing little to the precedents of the past. If we
  are to compare it to a living being, it must
  largely turn its back on its parentageand
  ancestry. It must be genetically different from
  them.
• The
  Next Global Stage
• 
  by Kenichi Ohmae (p245)

40
PLi Strategic Framework 4 Key Components
STRATEGIC AGENDA 3 YEAR VISION STRATEGIC
FIELD KEY INITIATIVES
MARKET REALITIES CHANGING ENVIRONMENT.
COMPETITIVE DYNAMICS
ORGANIZATIONAL PHILOSOPHIES PURPOSE / VALUES
ENABLING CULTURE / LEADERSHIP CAPABILITIES
FOR EMPOWERED, FLEXIBILITY TO DELIVER
Ref Peter Laburn
41
PLi Strategic Framework
STRATEGIC AGENDA 3 YEAR VISION STRATEGIC
FIELD KEY INITIATIVES
MARKET REALITIES CHANGING ENVIRONMENT.
COMPETITIVE DYNAMICS
LIVING THE STRATEGY COHERENT TEAMS
/ ORGANIZATION
ORGANIZATIONAL PHILOSOPHIES PURPOSE / VALUES
ENABLING CULTURE / LEADERSHIP CAPABILITIES
FOR EMPOWERED, FLEXIBILITY TO DELIVER
Ref Peter Laburn
42
PLi Strategic Framework
STRATEGIC AGENDA 3 YEAR VISION STRATEGIC
FIELD KEY INITIATIVES
MARKET REALITIES CHANGING ENVIRONMENT.
COMPETITIVE DYNAMICS
ORGANIZATIONAL PHILOSOPHIES PURPOSE / VALUES
ENABLING CULTURE / LEADERSHIP CAPABILITIES
FOR EMPOWERED, FLEXIBILITY TO DELIVER
Ref Peter Laburn
43
Ashbridge ModelBuilding Organizational
Effectiveness

• PURPOSE Why we are in business?
• VALUES What the company believes in?
• VISION What we could / should? become
• STRATEGIES Minimum requirements / core
  competencies / differentiation
• CULTURE Policies and modus operandi that
  encourage behaviors that are consistent with
  purpose / values, that helps us achieve our
  vision

Ref Ashbridge
44
Business Philosophies / Purpose

• Excellence
• .. delivers the highest quality products
  /service / support in . market
• Discovery
• . offers most innovative / refreshing
  approach to products / service in the ..
  market
• Altruism
• . is caring and supportive in its product
  design and service delivery always there for
  partners / valued clients
• Heroism
• . has set itself the goal of leading change
  in .. market by leading a cause for .. in
  the market
• Exploitation
• Just get the bottom line budget meet financial
  targets

Ref Nikos Mourkogiannis A Guide to Moral
Purpose
45
Business Philosophies / Purpose

• Our business has never been better
• and it started when we
• stopped watching the bottom line
• and started focusing on the customer

C.E.O. of TESCO
46
Business purpose - or what / who really
drives your organizations behavior?
47
Three Drivers

Shareholders
What is your focus ???
Employees
Customers
48
Shareholders

• So the question is, do corporate executives,
  provided they stay within the law, have
  responsibilities in their business activities
  other than to make as much money for their
  stockholders as possible ?
• And my answer to that is , no they do not.
• Milton
  Friedman

49
Shareholders

• There is something sick about a person
• whose only interest is money,
• and I think the same can be said for a
• company whose sole goal is profit
• RICHARD HAAYEN
• CHAIRMAN ALLSTATE INSURANCE COMPANY

50
Business purpose

Making money for shareholders is a totally
uninspiring raison dete for the vast majority
of employees it is a dream / goal that they
simply do not associate with.
51
Business purpose
Making money for shareholders is a totally
uninspiring raison dete for the vast majority
of employees it is a dream / goal that they
simply do not associate with.

This is a simple businesstruth that sadly and
inexplicably very few business leaders
understand .. even in 2005 !!
52
Customers

• There is only one valid definition of the
  purpose of business to create a customer
  
• Peter
  Drucker
• There is only one boss the customer
• 
  Sam Walton
• Every companies greatest assets are its
  customers, because without customers there is no
  company.
• 
  Michael LeBoeuf

53
Customers

• In every instance we found that the best run
  companies as stay as close to their customers
  humanly possible
• Tom Peters

54
Employees

• Treat your employees with care and concern if
  that is the way you want them to treat each other
  and your customers
• South West
  Airlines

55
Employees

• Three groups of stakeholders to keep happy
  shareholders, customers and staff.
• If you focus on keeping shareholders happy,
  you will not necessarily keep others two happy
• If you focus on keeping customers happy, the
  same applies others wont necessarily be happy
• But . If you focus on keeping staff happy,
  the benefit is that you will indirectly keep the
  customers and shareholders happy as well
• 
  Richard Branson

56

• Making money can never be the primary goal of
  business. Making money is necessary in order to
  sustain a business for the long.
• It is an enabling condition to fulfilling a
  goal or vision.
• Ref Jim
  Collins Built to Last
• It is not cash that fuels the journey to the
  future but the emotional and intellectual energy
  of every employee.
• 
  Hamel and Prahalad

57
Business purpose
Business needs to create a compelling dream /
goal / intent that employees can strongly
identify with and want to associate themselves
with voluntarily i.e. - one they can be / are
proud of People only really work for a cause
one that they believe in

58
Organizational purpose and values

• Balancing Stakeholder Demands
• Shareholders
• Customers
• Staff
• Unions
• Government
• Industry Bodies
• Pressure Groups
• Family
• Others

Degree of Influence ?
Now 2007
Future 2011
Ref Peter Laburn
59
HistoricalStrategic Models
60
Classical Strategic Models
Ref Adizes
61
Classical Strategic Models
Ref Adizes
62
Classical Strategic Models
Ref Adizes
63
Classical Strategic Models
Ref Adizes
64
Classical Strategic Models
Stages of Organizational Development
Alliance stage
Psychological saturation crisis
Collaboration stage
Red tape crisis
Coordination stage
Co-Ordination / Control crisis
Size of organization
Delegation stage
Autonomy crisis
Direction stage
Leadership crisis
Creativity stage
Age of Crisis
Ref Larry Greiner
65
Ansoffs Matrix
Diversification
New market development New Regional distribution
New
Market
Status quo Grow share Consolidation Withdrawal
New product development
Present
Present
New
Product
Ref Ansoff
66
The BCG Matrix
STAR
PROBLEM CHILD
HIGH
Market Growth Rate
DOG
CASH COW
LOW
LOW
HIGH
Market Share
Ref Boston Consulting Group
67
Classical Strategic Models
Who is being satisfied? Customer groups
What is being satisfied? Customer needs
Definition of business
How are customer needs being satisfied? Distinct
ive competencies
Ref Derek Abell
68
Enter ..... Michael Porter

• As a firms profitability was determined by the
  characteristics of its industry and the firms
  position within it, so these should determine
  strategy also

69
Competitive Advantage - Porter
DifferentiationCompetition
Cost Leadership
Broad target
COMPETITIVE SCOPE
Cost Focus
Differentiation Focused / Unique
Narrow target
Lower cost
Differentiation
COMPETITIVE ADVANTAGE
Ref Prof Michael Porter
70
MICHAEL PORTERAnalysing Environmental Issues
ECONOMIC ISSUES
POLITICAL/LEGAL ISSUES
COMPETITIVE SITUATION
INFRA STRUCTURAL ISSUES
RESOURCE ISSUES
SOCIAL ISSUES
TECHNOLOGICAL ISSUES
Ref Prof Michael Porter
71
MICHAEL PORTERAnalysing Environmental Issues
ECONOMIC ISSUES GDP and Consumer
spending Government spending Interest
rates Exchange rates Investment factors
POLITICAL/LEGAL ISSUES Parties and power New
legislation Government relations with employers
and unions
The Organization
RESOURCE Environment Climatic
INFRASTRUCTURAL Road,Water,Elec,Municiple INSTITUT
IONAL Industry, competition,
TECHNO ISSUES Potential new product
development Cell phone / Web development IT / MIS
SOCIAL ISSUES Demographic changes Values and
attitudes Generation and new economy
theories Life styles
Ref Prof Michael Porter
72
MICHAEL PORTEREstablishing the Rules of the Game
ECONOMIC ISSUES
POLITICAL/LEGAL ISSUES
Bargaining power of SUPPLIERS
COMPETITIVE SITUATION
EXISTING COMPETITORS
POSSIBLE SUBSTITUTES
POTENTIAL ENTRANTS
SOCIAL ISSUES
TECHNOLOGICAL ISSUES
Bargaining power of BUYERS
Ref Prof Michael Porter
73
Classical Strategic Models

• MICHAEL PORTER - Competitive Advantage of Nations

INTESITY OF RIVALRY
INTESITY OF RIVALRY
NATIONAL COMPETITIVE ADVANTAGE
LOCAL DEMAND CONDITIONS
FACTOR CONDITIONS BASIC AND ADVANCED
NATIONAL COMPETITIVE ADVANTAGE
COMPETITIVENESS OF RELATED AND SUPPORTING INDUSTRI
ES
Ref Prof Michael Porter
74
Logical Incrementalism

• In reality organizations proceeded by trial and
  error, constantly revising strategy in the light
  of experience
• James Quinn

75
Modern thinking .

• its not about existing resources being matched
  to market opportunities
• rather it should be about
• setting goals which stretch organizations far
  beyond existing capabilities
• Gary Hamel and C.K.Prahalad

76
Classical Strategic Models

• Into the 90s a new strategic paradigm
• The competitive challenge
• Reengineering the processes Regenerating the
  processes
• Organizational transformation Industry
  transformation
• Competing for market share Competing for
  opportunity share
• Finding the future
• Strategy as learning Strategy as forgetting
• Strategy as positioning Strategy as foresight
• Strategic plans Strategic architecture

Ref Hamel Prahalad
77
Classical Strategic Models

• Into the 90s a new strategic paradigm
• Mobilizing for the future
• Strategy as fit Strategy as stretch
• Strategy as resource allocation Strategy as
  resource accumulation and leverage
• Getting to the future first
• Competing within an existing Competing to shape
  future industry
• industry structure structure
• Competing for product leadership Competing for
  core competence
• leadership
• Competing as a single entity Competing as a
  coalition
• Maximizing the ration of new Maximizing the
  rate of new product
• product hits learning
• Minimizing time to market Minimizing time to
  global preemption

Ref Hamel Prahalad
78
Classical Strategic Models

• Understanding your current economic engine

What is our basic value proposition? How have we
segmented the market? What kid of customers do we
serve? Where are our customers?
Concept of the market served
Where in the business system do we take
profit? Where do our margins come from? What has
determined the size of our margins? What are the
major cost and price drivers?
Revenue and margin structure
What do we believe we know how to do well? What
physical infrastructure supports our
business? What kinds of skills predominate in our
company? What is the trajectory of our
development spending?
Configuration of skills and assets
How alert are we to new value delivery
models? How easily could investment programs be
reoriented? How easily could the infrastructure
be reconfigured? Which constituencies would most
resist change?
Flexibility and adaptiveness
Ref Hamel Prahalad
79
Classical Strategic Models

• Limits to your current economic engine

What customers and needs arent we serving?
Concept of the market served
Could profits be extracted at a different point
in the value chain?
Revenue and margin structure
Might customer needs be better served by an
alternate configuration of skills and assets?
Configuration of skills and assets
Flexibility and adaptiveness
What is our vulnerability to new rules of the
game?
Ref Hamel Prahalad
80
But doesnt this all seems so Red Ocean ?

• Red ocean represents
• The know market space
• Current boundaries
• Existing competitive rules
• World of scarcity
• Grab bigger slice of existing pie.
• Structuralist view
• or Environmental determinism
• at the mercy of market forces

Ref Kim Mauborgne
81
Blue Ocean Strategy

• Represents
• Industries not in existence
• Unknown market space
• Untainted by competition
• Created rather that fought over

Ref Kim Mauborgne
82
Red Ocean vs Blue Ocean Strategy
Red ocean strategy Compete in existing market
space Beat the competition Exploit existing
demand Make the value/cost trade off Align the
whole system to a companys activities with its
strategic choice or or differentiation or low
cost
Blue ocean strategy Create uncontested market
space Make the competition irrelevant Create
and capture new demand Break the value / cost
trade off Align the whole system of a companys
activities in pursuit of differentiation
and low cost
Ref Kim Mauborgne
83
Current Strategic Models

• Competitor analysis
• Relative size, growth, market share
• Core competencies basis of competition
• Strategic positioning what they say they do
• New initiatives over past 12 months
• What challenges is the competitor facing?
• Are these different to your challenges?

84
Current Strategic Models
Creating a Strategic Canvas

• The four steps of Visualizing Strategy
• Visual Awakening
• Compare your business with your competitors by
  drawing your as is strategy canvas as well as
  what your think theirs would be.
• See where your strategy differs
• Visual Exploration
• Use field research to verify your assumptions
• Identify other distinctive advantages of
  alternative organizations
• Determine the adoption hurdles for your non
  customer
• Determine which factors you should eliminate,
  create or change

Ref Kim Mauborgne
85
Current Strategic Models
Creating a Strategic Canvas

• The four steps of Visualizing Strategy (Cont)
• 3. Visual Strategy Fair
• Draw your revised to be strategic canvas based
  on your insights
• Get feedback from customers, lost customers,
  competitors customers and non customers
• Visual Communication
• Distribute your before and after strategic
  canvas for ease of reference
• Support only those projects that drive you to
  achieving new strategy.

Ref Kim Mauborgne
86
Current Strategic Models
Creating a Strategic Canvas

• Creating a picture will
• Show the strategic profile of an industry by
  depicting clearly the factors that affect
  competition among industry players as well as
  those factors that might in the future
• Shows the strategic profile of current and
  potential competitors, identifying factors they
  invest in strategically
• Draw the companys strategic profile or value
  curve, showing how it invests in the factors of
  competition and how it might invest in them in
  the future.

Ref Kim Mauborgne
87
Current Strategic Models
Creating a Strategic Canvas
Hi
Other airlines
Level of Offering
Southwest
Car
Lo
seating choices
price
meals
lounges
friendly service
speed
frequent departures
hub connectivity
Factors of competition
Ref Kim Mauborgne
88
The Fallacies ofStrategic Planning

• Prediction
• Detachment
• Formalisation

Ref Mintzberg
89
Old Concept of Strategic Planning
Mintzbergs 3 Fallacies Prediction,
Formalization, Detachment
Extraction
Desired vision
Why bother?!
X
X
CEO
X
Its not my plan!
Tow the line
Do what Im told
Current position
Ref Peter Laburn
90
Laburns Law

• If there is any person in your organisation that
  you believe not important enough to be part of
  the strategic process
• please outsource that role or exit the
  employee

91
Some Newer Thoughtson Strategic Thinking
92

• WELCOME .
• to a World of Quantum Paradox
• and Systems Thinking

93
A Move to Quantum Thinking
20th centuryNewtonian Worldview
21st century Quantum Worldview
94
A Move to Quantum Thinking

• Newtonian
• Simplicity
• Control
• Separation
• Uniformity
• Certainty
• Cause and effect
• Linear logic
• Binary logic
• Empiricism

• Quantum
• Complexity
• Influence
• Integration
• Diversity
• Enquiry
• Multi causes
• Systems thinking
• Synthetic thinking
• Intuition

95
Leadership and the New Science

• Order can emerge out of chaos
• Accept chaos as an essential process by which
  natural systems including organizations, renew
  and revitalize themselves
• Information informs us and forms us
• Share information as the primary organizing force
  in any organization
• Relationships are all there is
• Develop the rich diversity of relationships that
  are all around us to energize our teams
• Vision is an invisible field
• Embrace vision as an invisible field that can
  enable us to recreate our workplaces, and our
  world

Source Margaret Wheatley
96
Some Newer Thoughts
Wheatleys Thoughts Field Theory, Molecular
Biology,Quantum Physics, Chaos Theory
Its more important to clear what NOT to do / or
what NOT to be, than to try and determine exactly
what to do.
Enabling
CEO

• Create a strategic field
• Open source information flow
• Maximize relationships
• Keep organization in mild form of chaos

Ref Peter Laburn
97
Value Chain

• Populate this value chain
• Who plays what role?
• Where does the balance of power sit?
• Which parts do you (business unit) contribute to?

• Assign value to each link in the value chain

END USER
X
X
X
X
X
X
X

• What are the Key Drivers of this Value Chain?

98
Transactional environment
Competition
Buyers
Suppliers
END USER
New Products
99
Strategic Implementation !!
100
The surplus society has a surplus of similar
companies, employing similar people, with similar
educational backgrounds, coming up with similar
ideas, producing similar things, with similar
prices and similar quality. Funky Business
Kjell Nordström and Jonas
Ridderstråle
101
Strategic Context is 2012

• Relative size of strategy and strategic response
  Relative coping with 2011 demands operationally
  and strategically

X
Direction of thinking
2002
2012
2007
Direction of thinking
2002
2007
2012
102
PLi Strategic Framework
STRATEGIC AGENDA 3 YEAR VISION STRATEGIC
FIELD KEY INITIATIVES
MARKET REALITIES CHANGING ENVIRONMENT.
COMPETITIVE DYNAMICS
ORGANIZATIONAL PHILOSOPHIES PURPOSE / VALUES
ENABLING CULTURE / LEADERSHIP CAPABILITIES
FOR EMPOWERED, FLEXIBILITY TO DELIVER
Ref Peter Laburn
103
Translating formulation into implementation

• Why do great companies fail?

Accumulation of abundant resources
Unparalleled track record of success
Optimized business system
Success confirms strategy
A view that resources will win out
No gap between expectations and performance
Deeply etched recipes
Momentum is mistaken for leadership
Contentment with current performance
Vulnerability to new rules
Failure to reinvent leadership
Resources substitute for creativity
Inability to escape the past!
Inability to invent the future!
Ref Hamel Prahalad
104
Strategic Implementation
Provides direction and inspiration to the
organization
Vision
Gives the organization its competitive advantage
Keeps the organization moving forward
Strategic positioning
Strategic initiatives
Ref various
105
Strategic Implementation
Whilst a good vision provides stretch to the
organization it should also be grounded in the
reality of the organizations strategic
positioning and core competencies
Vision
Strategic positioning should be aligned with the
organizations vision and capabilities
These should help the organization achieve
its vision and strategic positioning
Strategic positioning
Strategic initiatives
Ref various
106
Strategic Implementation
Vision Strategic Intent Big Hairy Audacious GoalS
Vision
Market focus Target segments Competitive
positioning Market offering
Capability building Strategic projects Action
plans MA
Strategic positioning
Strategic initiatives
Ref various
107
PLi Strategic Framework
STRATEGIC AGENDA 3 YEAR VISION STRATEGIC
FIELD KEY INITIATIVES
MARKET REALITIES CHANGING ENVIRONMENT.
COMPETITIVE DYNAMICS
ORGANIZATIONAL PHILOSOPHIES PURPOSE / VALUES
ENABLING CULTURE / LEADERSHIP CAPABILITIES
FOR EMPOWERED, FLEXIBILITY TO DELIVER
Ref Peter Laburn
108
Introduction to Systems Thinking
Global market/industry/environmental change
Business Organisational Development - Equal
importance and not mutually exclusive
Business development
Organisation development
Business development
Organisation development
Inner environment - human resource capacity
Ref Elisabeth Dostal - Biomatrix
109
The world of systems thinking

• Strategic Context
• Think system or the whole
• Emergence
• Co Production
• Mutual Impacts
• Levels of Hierarchy
• Synergy or dis-Synergy
• Paradox
• Iteration problem dissolution
• Momentum
• Future Ideal

Ref Elisabeth Dostal - Biomatrix
110
Evaluation of Functions moving from current to
ideal
Ideal
Ideal high unobtainable desirable
result Ideal is timeless Back- cast objectives
(flags) i.e. set goals to achieve new
momentum This is how transformation is achieved
creates a new momentum towards the ideal End
is fixed, means are variable
Outer environment
Current
CurrentFuture
space
Momentum drives direction and power Forecastin
g Habit driven More of the same The more
momentum, the more difficult it is to
change Prophecy (i.e. do something different
to be ok)
Self
CurrentFuture
Means are fixed, end is variable
Inner environment
time
Ref Elisabeth Dostal - Biomatrix
111
1. ENVIRONMENTAL INTERACTION (outer
inner) (contextual transactional)
Biomatrix - 7 Aspects Approach
7. MEI Matter, Energy, Information (substances/r
esources)
2. ETHOS (values, worldview, culture, brand,
ethics, aesthetics, perception, belief, theories,
attitude, collective unconscience)
3. AIMS (vision, mission, strategic objectives,
operational goals, action plans)
i.e. DNA of the organisation Influences how the
organisation behaves (i.e. culture)
What the organisation wants to achieve (i.e.
purpose)
6. GOVERNANCE (rules, regulations, standards,
controls, measurements) Who are the decision
makers, regulators, hierarchy
4. PROCESS (mei flow activities)
5. STRUCTURE (mei configuration, effective
interaction)
How the organisation does things
How the organisation is set up the flow / design
i.e. material, human, technical, knowledge,
finance (master) resources e.g. materials,
electricity, knowledge
Ref Elisabeth Dostal - Biomatrix
112
Building a Strategy
113
Remember Maslow ?
Self Actualization
Self Esteem
Love and Friendship
Safety Needs Shelter , security
Physiological Needs Hunger , Thirst
Ref Maslow
114
Along came Hertzberg
Self Actualization
Self Esteem
Motivating factors
Motivating factors
Love and Friendship
Safety Needs Shelter , security
Hygiene factors
Hygiene factors
Physiological Needs Hunger , Thirst
Ref Herzberg
115
Building Market Strategy
Competitive Advantage what will differentiate you
from competitors
Entry to the Game If you dont offer this ..
you are not an option
Ref Peter Laburn
116
Core Competence
Competitive Advantage
Entry to the game
Core Competence What you are really good at What
you focus on
Ref Peter Laburn
117
Strategic Implementation

• Core Competence
• A bundle of distinct and defensible skills and
  technologies that enable a company to provide a
  particular benefit to customers
• Hamel and Prahalad

118
Core Competence
No advantage anymore !!
Competitive Advantage
Sustained Advantage is difficult for anyone to
copy
Tactical Advantage use it while you have it
Entry to the game
Core Competence What you are really good at What
you focus on
Ref Peter Laburn
119
Strategic Implementation

• Creating Market Leadership

• In the Future
• Which customers will you serve?
• Through what channels?
• Who will you competitors be?
• What will be the basis of competition?
• Where will your margins come from?
• What skills or capabilities will
• make you unique?

• Today
• Which customers do you serve?
• Through what channels do we
• reach them?
• Who are our competitors?
• What is the basis for your
• competitive advantage?
• Where do your margins come from?
• What skills or capabilities make
• you unique?

Ref Hamel Prahalad
120
Strategic Positioning

Tactical Advantage capitalize while you can
Sustained Advantage build future Strategy on
Must do to be in game but not core
CORE COMPETENCE
Must do and core. What you build your business
on
CORE COMPETENCE
Ref Peter Laburn
121
Strategic Implementation
Two concepts of the corporation
SBU
Core competence
Competitiveness of todays products
Interfirm competition to build capabilities
Basis for competition
Portfolio of businesses related in product
market terms
Portfolio of competencies, core products /
businesses
Corporate structure
Autonomy is sacrosanct the SBU owns all
its resources other than cash
SBU is potential reservoir of core competencies
Status of the business unit
Discrete businesses are the unit of analysis,
capital is allocated business by business
Business and competencies are the unit of
analysis, top management allocates capital and
talent
Resource Allocation
Optimizing corporate through returns through
capital allocation trade offs among businesses
Enunciating strategic architecture and
building competencies to secure the future
Value added of top management
Ref Hamel Prahalad
122
Sustained Competitive Advantage

• REMEMBER .
• Build on core competencies
• How will core competencieslogically deliver
  sustained competitive advantage ?
• Different to tactical advantage

123
Making it stick
124
Translating Formulation into ImplementationLesson
from Good to Great
Breakthrough
Build up
Level 5 leadership
First who then what
Confront the brutal facts
Hedgehog concept
Culture of discipline
Technology accelerators
Fly wheel
Ref Jim Collins Good to Great
125
The Strategic Change Process 4 Key Elements
Pressure for Change
Clear Shared vision
Capability to Change
Actionable Steps
Change

126
The Strategic Change Process What happens when
1 element is missing?
Clear Shared Vision
Capability to Change
Actionable steps
Bottom of the In Tray

Fast start / Conflicting Agendas
Pressure for Change
Capability to Change
Actionable steps

Frustration / Anxiety
Pressure for Change
Clear Shared Vision
Actionable steps

False starts / haphazard approaches
Pressure for Change
Clear Shared Vision
Capability to Change

127
The eight step process of successful change

• Set the stage
• Create a sense of urgency
• Pull together the guiding team
• Decide what to do
• 3. Develop the change vision and strategy
• Make it happen
• 4. Communicate for understanding and buy in
• 5. Empower other to act
• 6. Produce short term wins
• 7. Dont let up
• Make it stick
• 8. Create a new culture

Ref John Kotter Our Iceberg is Melting
128
Strategic Thinkingat JohnsonDiversey

• Your responsibility!

129

• Pete Laburn
• web http//www.petelaburn.com
• email petelaburn_at_iafrica.com
• cell 27 82 553 3198

Synthesis of this presentation byThe
TomorrowToday.biz frameworkers Multimedia
courtesy of the naughty world of MP3 and MPG, as
registered with SAMRO, and under international
fair use regulations. Purchase the albums at our
on-line store.