Can We Model Strategic Issues?

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Can We Model Strategic Issues?

  1. 1. Not to be copied or cited without the author’s prior approval Can We Model Strategic Issues? Geoff Coyle Visiting Professor of Strategic Analysis, Bath School of Management Outline of talk: Types of model ‘Strategic’ issues A workable approach to practical strategy A case study Teaching practical strategy E:ACADEMICLECTURESSTRATEGIC MODELLING SEMINARHandout Copyright © R G Coyle, 2004 1
  2. 2. Not to be copied or cited without the author’s prior approval Software demonstration geoff.coyle@btinternet.com www.actifeld.com E:ACADEMICLECTURESSTRATEGIC MODELLING SEMINARHandout Copyright © R G Coyle, 2004 2
  3. 3. Not to be copied or cited without the author’s prior approval A ‘model’ a tool for thinking with a simplification of reality designed to answer well-chosen questions Type of question Possible modelling method (Illustration only) What is an optimal Linear programming in an production policy? oil refinery How do I get from A to B? Cartographical map What makes best use of my Wooden blocks to represent factory space? machines How can I understand A novel (modelling in words) human relationships? How can my business survive Business strategy case studies in a changed market? A ‘modelling’ approach? E:ACADEMICLECTURESSTRATEGIC MODELLING SEMINARHandout Copyright © R G Coyle, 2004 3
  4. 4. Not to be copied or cited without the author’s prior approval Some ‘Strategic’ Issues 1. Littleworth and Thrupp’s legal business might decline drastically within the next few years. What should they do? 2. The Defence Department of X’s requirements cost about 300% of the defence budget over the next 10 years. What should they buy? 3. Overseas Carers is involved in disaster relief in the Third World. The Republic of Cataclysmia has had a major natural disaster. What role, if any, should Overseas Carers offer to play? How can they ensure that they will be able to provide aid in the next disaster? 4. X’s Ministry of Transport has to arrange for a vastly expensive tunnel its markets to those of its neighbours. What is the most satisfactory long-term plan? 5. Herrington-Jones, a major retail chain, needs to think ahead to the year 2010. What kind of business should it be by then and how will it reach that target? 6. The Murray Darling river basin covers a vast area of Australia and supports 40% of the nation’s agricultural product. There are fears that the rivers might effectively be dead within 20 years. What strategies should the River Basin Authority pursue? E:ACADEMICLECTURESSTRATEGIC MODELLING SEMINARHandout Copyright © R G Coyle, 2004 4
  5. 5. Not to be copied or cited without the author’s prior approval . W h a t p ro b le m d o w e fa c e ?, Fo c u s G ro u p s w h a t q u e s tio n s h o u ld w e a s k ? C a n w e u n r a v e l th e c o n te x t I n flu e n c e D ia g r a m s , to m a k e s e n s e o f it? M in d M a p s e tc S c e n a r io te c h n iq u e s , b u t e s p e c ia lly F ie ld A n o m a ly R e la x a t io n TO W S C u rren t S an d W C o n te x t-s p e c ific T a n d O V ia b le F ir m M a t r ix D o e s it fit o u r g o a ls , C o n g r u e n c e a n d R e s o u r c e A n a ly s e s c a n it b e re s o u rc e d ? C a n o b s ta c le s b e c o p e d w ith ? F o r c e F ie ld A n a ly s is W ill th e s tr a te g y w o r k ? D r a w in g C o n c lu s io n s N o Yes, but E:ACADEMICLECTURESSTRATEGIC MODELLING SEMINARHandout Copyright © R G Coyle, 2004 5
  6. 6. Not to be copied or cited without the author’s prior approval The ACTIFELD™ Process Step 1- A – Asking a strategic question Step 2 - C – Coming to grips with, or unravelling, the complexity Step 3 - T – Thinking about what the future might hold Step 4 - I – Identifying the actions required to deal with the question against the future’s uncertainties Step 5 - F – Finding a viable organisation to implement those actions. Step 6 - E – Evaluating the acceptability to the stakeholders of the changes and assessing the resource requirements Step 7 - L – Looking for obstacles, finding ways of overcoming them and developing an action plan. Step 8 - D – Drawing conclusions about the feasibility of the action plan and assessing the risks. NOTE The process invites the reformulation of the question after every stage. Sometimes the original question survives intact, in other cases it might be revised three or four times. E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 6
  7. 7. Not to be copied or cited without the author’s prior approval FIGURE 14.1 THE MURRAY/DARLING BASIN E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 7
  8. 8. Not to be copied or cited without the author’s prior approval . i ty a bil ta in n ti o S us ag r ea ric u lt r ec u re in d u s try a es th eti c a nds w etl ti o n pol en lu t a vi R ec r e ro y io nm it a lg a l bloom s nt n s a lin ity en a t qua qu l i ty c ed P u b l i c p res s u r e du w a ter tro in flora /fa u n a n a ti v e T M EN S R ON OC NVI IA E es L p ty p se No R eg en er a ti n g C ro we Fe ra d th e M D ge co Ir r i g nt B a sin n p roce rol EC a tio ss P O L IT IC S ON irrig en t OM lopm IC S d ev e L o c a l p o l i ti c s a g ri cu ltu re f er t i l i z er s S p es t ta icid te r ec r es po ea ti lit pollu on on ic tio n is la ti s l eg pow ia S ou th A u s tra l er Qu in g een d rin k s la y) n it d nt ig n o re ua (q W rice rice NS q u a n ti ty on c otton c ott F ig u r e 1 4 .2 M in d M a p f o r th e M u r r a y /D a r lin g B a s in . E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 8
  9. 9. Not to be copied or cited without the author’s prior approval T H E C A R P The influence of StakeHolder Long-term Condition of the Agricultural Recreational Palliative the cooperation Economic river impact on the usage measures environmental Potential river movement T1 H1 E1 C1 A1 R1 P1 Strong at all levels All parties agree Flourishing Pristine No usage, no Unrestricted Effective and growth pollution vigorously applied T2 H2 E2 C2 A2 R2 P2 Heard at most Majority Steady growth Sustainable Sustainable Low regulation Applied without levels cooperate pollution and drive usage T3 H3 E3 C3 A3 R3 P3 Heard in some Half the parties No growth Borderline Mild pollution, Moderate Partially effective areas agree restricted usage regulation T4 H4 E4 C4 A4 R4 P4 Heard in one area Less than half Negative growth Poor Moderate Highly regulated Would be cooperate pollution and effective if applied usage T5 H5 E5 C5 A5 R5 P5 Not heard at all No cooperation Collapse Unusable Heavy pollution Banned No effort applied and usage P6 Makes it worse TABLE 14.1 A FAR SECTOR/FACTOR ARRAY FOR THE MURRAY DARLING BASIN E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 9
  10. 10. Not to be copied or cited without the author’s prior approval C a ta stro p h e M in o r S u sta in a b le Im p ro vem en t F u tu re 2021 + 2016 2011 2006 2001 ‘B a d ’ ‘G o o d ’ F ig u r e 1 4 .3 S c e n a r io s fo r th e M D B E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 10
  11. 11. Not to be copied or cited without the author’s prior approval THREATS OPPORTUNITIES T1 Conflicting interests (e.g. O1 Local action groups/volunteers political conflict) O2 Popular opinion T2 Recreational activity O3 Good state of the economy T3 Irreversible degradation O4 Tourism/recreation T4 Reluctance to fund O5 Less dependence on resource- T5 Complacency intensive industry T6 Reduction in water quality O6 Availability of international T7 Reduction in water quantity research T8 Increased land clearance and O7 Potential for new industries degradation O8 Alternatives to hydro power T9 Introduced flora and fauna O9 Coordinated government effort T10 Increased population T11 Unintended consequences of remedial measures WEAKNESSES STRENGTHS W1 Lack of consensus S1 Visibility of consequences W2 Conflict of interests S2 Number of interest groups W3 Number of interest groups S3 Increased environmental W4 Regulatory concern conflicts/inconsistencies S4 Health concerns W5 Limited water volume available S5 Memory of prior condition W6 Limited funds for research and S6 Existing research base development S7 Improved agricultural practices W7 Insufficient implementation of S8 New low water –use practices remedial measures S9 Wetland development W8 Extent/size of the problem, S10 Landcare and other initiatives required financial resources. S11 Conflicting urban/rural views Table 14.2 First Step in TOWS Analysis E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 11
  12. 12. Not to be copied or cited without the author’s prior approval Threats Opportunities Weaknesses 1 Develop procedures to plan on long-term basis. 8 Fund/support sound (W2,W4,T1,O9) environmental practices and research 2 Increase public awareness (O3,W6,W7,W8,S7,S8,S9,S10,T6, (W1,W2,W3,W5,T1,T2,T5,S1,S2,S3,S11) T7,T8,T9) 3 Encourage community involvement 9 Promote new industries using international (O1,O2,O4,T1,T3,S1,S2,S3,S4,W2,W3) research to reduce water usage and improve quality 4 Encourage private investment in sustainable (O6,O7,T6,T7,T8,T9,W5) industries (O5,O7,W5,W6,S3,T4) Strengths 5 Capitalise on existing research base by increased 10 Use improved agricultural practices and support/funding for its application international research to improve quality of the (W6,S6,S7,O7,T4,T6,T7,W5) river (O6,O7,T6,S6,S7,S8) 6 Encourage alternative energy sources 11 Enable interaction between interest groups to (6,O7,O8,W5,S3,S4,S9) reduce conflicts of interests 7 Foster new practices to counteract immediate (O1,O9,S2,S11,W1,W2,W3,W4) problems (S7,S8,S9,S10,T2,T3,T6,T7) 12 Promote eco-tourism to increase awareness and provide revenue for research (S3,T5,O4,W6) TABLE 14.3 ACTIONS IDENTIFIED FROM TOWS ANALYSIS E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 12
  13. 13. Not to be copied or cited without the author’s prior approval GROUPED ACTIONS BROAD AREA OR STRATEGY 2 Increase public awareness. A Promote awareness. 3 Encourage community involvement. 12 Promote eco-tourism to increase awareness and provide revenue for research. 5 Capitalise on existing research by increased support/funding for its B Promote research and capitalise on application. knowledge. 8 Fund/support sound environmental practices and research. 10 Use improved agricultural practices and international research to reduce water usage and improve quality. 1 Develop procedures to plan on long-term basis. C Increase coordination of funding, support 7 Foster new practices to counteract immediate problems. and planning. 11 Enable interaction between interest groups to reduce conflicts of interests. 4 Encourage private investment in sustainable industries. D Promote new industries. 6 Encourage alternative energy sources. 9 Promote new industries using international research to reduce water usage and improve quality. 12 Promote eco-tourism to increase awareness and provide revenue for research. TABLE 14.4 STRATEGIC AREAS AND RELATED ACTIONS E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 13
  14. 14. Not to be copied or cited without the author’s prior approval H I D F R A C Human Incentives Development, Financial Regulation Awareness Coordination and Resources Research and Resources Planning Applications H1 Large number I1 Wide range of D1 Dedicated R and F1 Fully funded by R1 Absolute power A1 Intensive C1 Effective plan of trained experts, incentives. D effort effectively government and to regulate relevant educational and with high level of volunteers, applied private enterprise. activities. media-based consensus. administrators etc. campaign. H2 Sufficient I2 Consciously D2 Dedicated and F2 Fully funded by R2 Sufficient power A2 Educational and C2 Effective plan number of trained chosen but limited shared R and D, government. to regulate. media-based with medium level experts, volunteers, number (>4) of adequately applied campaign. of consensus administrators etc. incentives H3 Barely adequate I3 2 to 4 incentives D3 Shared R and D F3 Partially funded. R3 Strong influence A3 Educational and C3 Adequate plan number of trained adequately applied with regulators. print media with medium level experts, volunteers, campaign. of consensus administrators etc. H4 Not enough I4 1 or 2 incentives D4 R and D F4 No funds. R4 Mixture of A4 Print media C4 Inadequate plan trained experts, inadequately regulation and campaign only. with little consensus volunteers, applied persuasion. administrators etc. I5 No incentives D5 Piecemeal R5 Laissez-faire. A5 No campaign. unfocussed Dedicated R and D and application. TABLE 14.5 A VIABLE POLICY MATRIX FOR THE MDB PROBLEM E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 14
  15. 15. Not to be copied or cited without the author’s prior approval H I D F R A C Human Incentives Development, Financial Regulation Awareness Coordination and Resources Research and Resources Planning Applications . I1 Wide range of F1 Fully funded A1 Intensive C1 Effective plan incentives. by government educational and with high level of and private media-based consensus. enterprise. campaign. H2 Sufficient D2 Dedicated and R2 Sufficient A2 Educational number of trained shared R and D, power to regulate. and media-based experts, adequately applied campaign. volunteers, administrators etc. I3 2 to 4 F3 Partially A3 Educational incentives funded. and print media campaign. D4 R and D R4 Mixture of C4 Inadequate inadequately regulation and plan with little applied persuasion. consensus TABLE 14.6 VIABLE POLICY MATRIX WITH CURRENT (SHADED) AND REQUIRED (BLUE) SITUATIONS E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 15
  16. 16. Not to be copied or cited without the author’s prior approval Sector Aspect FROM TO GAP Human resources Training 3 3 0 Recruitment 3 3 0 Incentives 3 4 1 Specific skills 3 4 1 Incentives Adequate funding 2 4 2 Free access to relevant 2 4 2 organisations Access to expert advice 3 3 0 Appropriate tax legislation 1 4 3 R and A Application Adequate funding 2 3 1 Skilled scientists 3 3 0 Infrastructure 1 3 2 Commercial sponsors 1 3 2 Financial Resources Access to all levels of government 1 4 3 Funding 1 4 3 Access to private organisations 1 3 2 Regulation Access to relevant government 1 3 2 levels Strength of regulatory base 1 3 2 ‘Deputy sheriff’ to enforce. 1 3 2 Awareness (PR) PR skills, access to media 2 4 2 Ability to galvanise volunteers 2 4 2 Encourage eco-journalism 1 3 2 Encourage environmental 1 3 2 education Commercial sponsors 1 3 2 Coordination/planning Involvement of unions 1 3 2 Involvement of agricultural 2 4 2 organisations etc Highly skilled planning team 1 4 3 Detailed, well-coordinated plan 1 4 3 Involvement of all levels of 2 4 2 government Net effect of gaps 50 TABLE 14.7 RESOURCE ANALYSIS FOR THE MDB E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 16
  17. 17. 2 2 3 1 4 2 3 1 4 2 G oal H I D F R A C u rren t 1 2 /3 H I D F R A C C 1 4 M e L d ia aw ack a re o f ne ss Ed uc a tio Po or n PR La S ck a n u ita b o d r le co f go le g e g u t a x m m ve is la la t o it m r n m t io r y en ent n t B io co phys In f R & m p E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs ra s le x ic a l tru D it y c tu re Vo lu n te e Ap rs a th M a y at i { p r e n ta in se nt HR le v el Fu Fu sh nd nd o r t in g Copyright © R G Coyle, 2001 in g ag e In c in c r e a s L en in c a c k tiv e d en of es t iv es Po in d N e w co or w us nd trie it io o r k Co m s ns { { sp m er La on s o c ia l m a ck o rs rk e f ts A Not to be copied or cited without the author’s prior approval go cces ve at r s t Bu a ll n m e o re a le v n t u e ls c ra cy ‘D e { s h p u ty e ri ff ’ F ig u r e 1 4 .4 F o r c e F ie ld D ia g r a m fo r M u r r a y /D a r lin g B a s in Op De lo b p o s i ta b y tio n p la ile d g ro b y n up s P la n te a n in g m 17
  18. 18. Not to be copied or cited without the author’s prior approval 1.The current level of human resources is adequate but must not be allowed to slip. 2.The should be a wide range of incentives, not just a couple. 3.Dedicated and shared R and D is required and needs to be adequately applied. 4.Funding must increase with money coming from all levels of government and from private enterprise. 5.Governing bodies should not have to rely on persuasion but should have power to regulate. 6.Education and media campaigns must be intensified. 7.An effective management plan for a 20 year period is imperative for success. E:ACADEMICBOOKSSTRATEGIC THOUGHTMurray-Darling OHPs Copyright © R G Coyle, 2001 18
  19. 19. Not to be copied or cited without the author’s prior approval Techniques for Strategic Consultancy  DAY 1 DAY 2 DAY 3 DAY4 DAY 5 0900 Introduction to the course. Strategic Analysis of the Develop futures Viable Firm Matrix Congruence, Resource - Academic Contract Tree (continued) Analysis and Force Field 1000 Types of problem and model analyses. (Continued) G G L 1000 A structured methodology. Unravelling complexity for - the chosen problem Progress reports Develop VFM 1100 Strategic questions L (use suitable method) G G GP 1100 Progress reports TOWS and Strategies Prepare Final Reports - Define syndicate strategic 1200 question and report back G GP L G 1200 Unravelling complexity – Futures methodologies. Create TOWS matrix and Progress reports - Influence Diagram cases and strategies 1300 techniques Field Anomaly Relaxation L G GP G 1400 Define futures issues for the Congruence analysis, Syndicate presentations. - chosen problem. Resource analysis, Force 1500 L Field Analysis L 1500 The Case of the Academic Develop FAR Progress reports Congruence, Resource - Contract matrix Analysis and Force Field 1600 GP analyses. GP I G 1600 Private Study Develop futures Private Study Private Study - tree 1700 G Evening Practical Strategy Chapters 1 to 9, QPID paper. Chapters 13 to 15 of PS and Reading MOA paper. E:ACADEMICBATH UNIVERSITYTECHNIQUES FOR STRATEGIC CONSULTANCYTime table Copyright © R G Coyle, 2002
  20. 20. Not to be copied or cited without the author’s prior approval A Few Recent MBA Projects/Assignments Regeneration of a An outsourcing company Strategies for a national country’s decrepit mining for software applications airline that is struggling to industry. in the Asian market. survive. Crime and safety in a Immigration systems for a Should one low-cost European country. country (not the UK). airline buy another? Operating a call centre. Fire protection in the A nation’s foreign policy Amazon rain forest. Border controls between a The growth and Grand Tours of the central European country development of a two- Scottish highlands in and its neighbours. person chiropody practice. classic cars and staying at luxury hotels. Promotion of sport for An environmental A supplier of components young children. consultancy for the Great for factory automation. Barrier Reef. Pollution in Mexico City. Security strategies for a The use of e-commerce by hospital maternity unit. watch retailers. Lifestyle strategies for Survival strategies for a Developing world-class high-profile celebrities. failing political party. strategies for a nation’s procurement systems. Should the RAF continue Encouraging children to Saving Venice from the with low-flying? adopt a healthy lifestyle sea (not an engineering problem but an issue of governance) Etc… E:ACADEMICBATH UNIVERSITYTECHNIQUES FOR STRATEGIC CONSULTANCYTime table Copyright © R G Coyle, 2002
  21. 21. Not to be copied or cited without the author’s prior approval This may be in the vein of ‘soft’ OR It is very qualitative But it can be no other as the strategic questions are broad • Regeneration of Poland’s decrepit mining industry • Lifestyle strategies for ‘celebrities’ • Fire prevention in the Amazon rain forest • Endless business problems Course originated with programme for Polish/Ukrainian civil servants. Developed for Military OR Degree in Australia (most lap it up, some struggle with softness). Encouraged book. MBA students at Bath queue up to get on the course Role in OR Degrees? The whole area is ripe for intelligent research E:ACADEMICBATH UNIVERSITYTECHNIQUES FOR STRATEGIC CONSULTANCYTime table Copyright © R G Coyle, 2002

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