1
CHAPTER 8
Plotting the Route and Continuing on the Journey: Strategic Learning as a tool
to identify the right things an...
2
Alignment I set out a leadership process for creating an adaptive enterprise through a
dynamic cycle of sequential steps...
3
8.1 Situational Analysis (Learn)
The purpose of this is to develop superior insights to use as a base for the firm’s
str...
4
Situational Analysis must involve personnel from all over the environment, especially
those closest to the customer, and...
5
8.3 Align the organisation (ALIGN)
Effective project management is required to close the gaps identified. The existing
a...
6
designed to ensure that supportive behaviours continue and destructive behaviours are
extinguished.
8.4 Implement and ex...
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Drawing a new map ch 8

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Transcript of "Drawing a new map ch 8"

  1. 1. 1 CHAPTER 8 Plotting the Route and Continuing on the Journey: Strategic Learning as a tool to identify the right things and to manage the execution phase “If you think education is expensive try ignorance.” ―Derek Bok If strategic planning has been around for a long time and shows limited results, why is Strategic Learning the answer? Managers have developed certain mental models over the years which preclude them from identifying the root causes of the problems in their environment. At the same time, even when some do see the right action they need to take there are good political reasons not to do anything. In The Fifth Discipline Senge offers numerous excellent proposals for dealing with these problems. They include building a culture where mental models are surfaced, shared visions are created, team learning occurs, and where Systems Thinking is used to integrate these disciplines. Yet the focus on short-term profits prevents such a radical rewiring. The shock to personnel, who are suddenly exposed to these different ways of thinking, could be substantial. There is significant risk in that as soon as the guiding coalition moves on, the organisation returns to its original ways of thinking and doing. Part of the problem is that Systems Thinking is best learnt from experience and difficult to teach from theory. I wish to suggest that Strategic Learning as proposed by Pietersen is a good starting point for overcoming these problems. What is helpful about this system is that since it is a simplified form of Systems Thinking, it uses terms that are familiar to managers while making sure that the process stays dynamic and ensuring that experiential learning can occur. Once managers have gone through one or two full cycles using this technique, they should have the confidence to explore Senge’s five disciplines. They should also be able to identify the best aspects of other techniques such as Theory of Constraints, Dialogue Mapping, and know where to apply them to maximize value from the Strategic Learning process. Pietersen makes clear that strategy cannot be an annual event. It is a continuous part of leadership’s responsibilities and requires a sequence of steps that is nothing other than simplified Systems Thinking in action. In order to survive, an adaptive enterprise needs to be built and maintained through adequate leadership. Change is disruptive and is difficult to lead. Continuous change is even harder and executives find it difficult to mobilize their workers behind these new ideas. In the section on Strategic
  2. 2. 2 Alignment I set out a leadership process for creating an adaptive enterprise through a dynamic cycle of sequential steps. In his book The Living Company de Geus observed that “in the future an organisation’s ability to learn faster than its competitors may be its only sustainable competitive advantage”. As Pietersen points out, this does not tell us where to focus our scarce resources in order to adapt successfully. Thus the main job of strategy is to make the most intelligent choices about how to use our limited resources. With an environment that is changing more rapidly, intelligent choice making depends increasingly on an Organisation’s ability to make sense of the changing landscape through learning and discovery, to translate superior insights into strategic action and to do so continuously. We need the right combination of order and chaos for creativity to flourish. The need for leadership has not gone away, but our concept of leadership should change from the pursuit of static goals to one of continuously modifying a firm’s strategic focus in response to changes in the environment. What is Strategic Learning? Strategic Learning is a practical leadership process for mobilizing the five competencies to create an adaptive enterprise. It consists of a continuous dynamic cycle around the following five competencies:  Insight: The ability to make sense of the changing environment (Situational Analysis).  Focus: The ability to create an intense focus on the right things (vision and strategic choices).  Alignment: The ability to align and mobilize the entire organisation behind this strategic focus.  Execution: The ability to implement fast (implement and experiment).  Renewal: The ability to do the these things over and over without stopping.
  3. 3. 3 8.1 Situational Analysis (Learn) The purpose of this is to develop superior insights to use as a base for the firm’s strategic choices. The insights are around customers, competitors, the firm’s own realities, industry dynamics, the broader environment. The idea is to challenge assumptions and to search for trends and root causes. Customers What are the underlying trends in our customers’ expectations? Competitors In what distinctive ways are our traditional competitors serving the market? How does their effectiveness compare with ours in the eyes of the customer? Who are our non-traditional customers and what unique benefits do they offer? Who is the most dangerous, and why? The firm’s realities What are the five-year trends on critical performance measures and what conclusions can we draw from this? Where are we making money and where are we not? Are we addressing our losing propositions? What are our key strengths that we can lever for competitive advantage? Industry dynamics Which trends in our industry are the most important in shaping our destiny? What are we currently doing to exploit these developments so that they produce greater value for our customers? What barriers must we overcome to take the lead in profitably exploiting these trends? What are the top priorities? Broader environment What is happening around us that will impact on our business with regard to economic trends, social habits and attitudes, technology, demographics, government regulation.
  4. 4. 4 Situational Analysis must involve personnel from all over the environment, especially those closest to the customer, and not just the top. With the key insights/trends that have been identified, a list can be made of the alternatives now facing the company as well as the pros and cons. 8.2 Vision and strategic choices (Focus) “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of many of the things we haven’t done as the things we have done.” —Steve Jobs, CEO, Apple. The key output from the strategy process is the clarification of the Vision and the Strategic Choices. This follows from the Situation Analysis. Making choices is more about what we will not do than what we will do. There are three elements to strategic choice:  Which customer will we serve and which not and what products will we offer them?  What will we do differently or better than our competition to achieve greater value for our customers and superior profits for our firm? ( Winning Proposition)  Five key priorities the firm will pursue to realise its winning proposition. Before going to the alignment stage, these priorities need to be broken down into operational goals. Look at each priority and ask what gap needs to be closed for it to occur. For example, as Pietersen says “to raise the sales from products introduced over the last three years from 20% to 40%.” Each gap should contain milestones, should have a champion. Targets should be worldwide best practices and not local ones. If there are better practices out in the rest of the world, sooner or later it will find its way to your market. Strategy is as much about what you choose not to do as it is about what you choose to do. Focus requires trade-offs, and trade-offs introduce risk. Those leaders who are not willing to take risks will never make it to the top of the strategic summit.
  5. 5. 5 8.3 Align the organisation (ALIGN) Effective project management is required to close the gaps identified. The existing alignment has developed in order to support the previous strategy, this now needs to be changed. The following elements must work together in support: measures and rewards, structure and process, people and culture. Measurement and rewards What is the use in trying to introduce a new set of practices while continuing to measure and reward the old ones? Structure and Process In order to support the new strategy, should the firm be organised by product line, customer grouping, function, geography or some other principle? People People need to be focussed, skilled and motivated. For focus we require well-defined and clearly communicated strategic choices. If the skills required are different, the firm may need to find partners or acquire an organisation with the skills available. Since we are compelling people to change, we will run into most of the problem areas discussed earlier in the ebook. Some principles of Change Leadership are:  Set a shining example.  Create a simple compelling statement on the case for change.  Communicate constantly and honestly.  Maximize participation.  If all else fails remove those who resist.  Generate short-term wins. Culture Fixing the culture is the most critical and most difficult part of corporate transformation. Culture can be thought of as a means to an end. In a society culture is a set of beliefs and behaviours that persist over time because they help that society to solve its challenges. Every society has an elaborate system of rewards and penalties
  6. 6. 6 designed to ensure that supportive behaviours continue and destructive behaviours are extinguished. 8.4 Implement and experiment (execute) Since much of the world is unpredictable and thus difficult to interpret a deliberate set of experiments should be rolled out for organisational learning. This step then feeds back into Situational Analysis. This strategy should then be captured in a short document consisting of the following:  Key insights generated by Situation Analysis.  The vision statement.  The strategic choices and a list of key priorities.  The gaps that need to be closed to achieve the priorities.  The plan for aligning the organisation behind strategy.  A list of experiments to stimulate further learning.

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