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  • 1. Learning to Think and Develop Strategy. Strategic Thinking as a Discipline Presented by: Dr. Jesus A. Ponce de Leon JPdeL and Associates April 30, 2004
  • 2. The Academic View of Strategic Thinking
  • 3. What is Strategic Thinking? Visualizing Opportunities Seeing Long Term Thinking about Future consequences Good sense of How to achieve A Vision
  • 4. Research on Developing Managers How to Think Strategically Knowledge Management Scenario Planning Mental Maps
    • Knowledge creation
    • Knowledge diffusion
    • Knowledge sharing
    • Knowledge DB
    • Mental relationships
    • Depth of relationships
    • Cause-effect beliefs
    • Methodology for
    • building scenarios
    • Long term view
  • 5. The Practical Side of Developing Strategic Thinking
  • 6. Strategy Change Break old Paradigms Execution
  • 7. Where does Strategy Come From?
  • 8. Inspirational Leaders (visionaries)
    • Inspire with a vision
    • Often fail to explain details of how to achieve vision.
    Akio Morita (Sony) Steven Jobs (Apple)
  • 9. Ability to see The business Reality and what is failing
    • Have a clear idea of what needs to change.
    • Understand how the business responds
    Jack Welch (GE) Lou Gerstner (IBM)
  • 10. Leader recognizes He alone can NOT think strategy
    • Decides to identify key thinkers in the organization.
    • Gives them task to develop new ways, new ideas, gives time and resources.
    • Personally shows his support.
    L. Zambrano (Cemex) Nokia
  • 11. Reality is that only a very, very, very, very few people have these strategic thinking abilities.
  • 12. How Can We Learn?
  • 13. Strategy Copy / Imitate See recipe in a book Buy solution from a consultant Past Experience
  • 14. We know that successful strategies …
    • are temporal
    • may work for one business and fail in another business
    • Fail because of poor execution
  • 15. What about NEW Strategies that nobody has thought about yet?
  • 16. Strategy Copy / Imitate See recipe in a book Buy solution from a consultant One time Inspiration Divine Intervention Birth Skill Personal Luck
  • 17.
    • Experience Shows:
    • No strategic planning method has proven to develop strategic thinking in managers.
    • No strategic tools (BCG, Five Forces) by themselves develops a strategic mind.
  • 18. Strategic Planning Methods I. Idealized Future Dream of desired future Determine Your actual situation How do we get there? JPdeL and Associates, 2000 III. Structural analysis Determine Your actual situation Strategic groups Industry analysis Competitive position Determine Course of action What others have done Prescribed Recipes IV. Core Capabilities Determine Your Core Competencies Internal core Skills and technologies Industry Activity chain Possible Product/market directions What needs to be done?
    • alliances
    • mergers
    • buy / make
    • develop
    • complement
    New Markets New products
  • 19. Growth Rate Slow Fast Market Share Leader Follower Portfolio Strategies
    • HIGHEST EFFICIENCY
    • LEAN OPERATIONS
    • LOWEST COSTS
    • AGGRESSIVE PRICING
    • DEFEND MARKETS
    • SELECTIVE INVESTMENT
    • TURNAROUND STRATEGIES
    • FOCUSED PRODUCT-MARKETS
    • STRONG MARKETING
    • PRODUCT INNOVATION
    • INVEST TO GAIN MARKET
    • SELL LOSING MONEY BUSINESSES
    • STRONG MARKETING
    • EXPAND MARKETS AND PRODUCTS
    • ADD PRODUCTION CAPACITY
    • AGGRESSIVE PRICING
    • INVEST IN CAPACITY
    • INCREASE SERVICE
    • MAINTAIN LOW COSTS
    • CRM
    • SUPLY CHAIN CONTROL
  • 20. From Business Models The configuration of four elements: Customer Interface Core Strategy Strategic Resources Value Network
    • Order to
    • fulfillment
    • Information
    • & insight
    • Relationship
    • dynamics
    • Pricing
    Source: Hamel, G., 2000.
    • Mission
    • Product/
    • market scope
    • Basis for
    • differentiation
    • Core
    • competencies
    • Structure
    • Core processes
    • Suppliers
    • Alliances
    • Partners
  • 21. Can Anyone Learn How to Develop Strategy?
    • I believe it is possible to Learn.
    • It requires to feel trends and opportunity thinking .
    • It requires training and reflection .
    • It requires reading (learning) about other companies (cases),
    • It requires learning integration .
  • 22. Putting together experience and theory we have suggested to our customers to work on parallel processes: Disciplined Mental Process Appropriate use of Strategic Tools
  • 23. Putting together experience and theory we have suggested to our customers to work on parallel processes: Disciplined Mental Process Appropriate use of Strategic Tools
  • 24. Disciplined Mental Process The Meditation stage The Reality Finding stage Paradigm Discovery stage Eye Opening stage
  • 25. The Meditation stage The Reality Finding stage Paradigm Discovery stage Eye Opening stage
    • Learn to focus your mind.
    • Clean your mind from the day-to-day issues
    • Learn to face reality
    • Learn to set priorities
    • Learn to Reflect
    • Understanding the roots of our business beliefs and our employees behaviors
    • Be brave to let others to test your conclusions
    • Ask yourself if you are ready to make paradigm changes
  • 26. The Meditation stage The Reality Finding stage Paradigm Discovery stage Eye Opening stage
    • Learn to focus your mind.
    • Clean your mind from the day-to-day issues
    • Learn to face reality
    • Learn to set priorities
    • Learn to Reflect
    • Understanding the roots of our business beliefs and our employees behaviors
    • Be brave to let others to test your conclusions
    • Ask yourself if you are ready to make paradigm changes
  • 27. What is a Paradigm ?
    • It is the set of (mostly) unwritten rules and values that guide our
      • Decision Making
      • How we see the world around us
      • Our beliefs (personal, social, political)
  • 28. Example of a Paradigm Finding Procedure Unwritten Rules Unwritten Values Sales Pricing decisions Customer selection Territory selection Products Selections Development Improvements Extensions Service Level of Importance Real or Illusion What is service Employees Investments Other?
  • 29. Appropriate use of Strategic Tools Disciplined Mental Process Now it is Time to Put them Together
  • 30. The Meditation stage The Reality Finding stage Paradigm Discovery stage Eye Opening stage SWOT Industry Analysis Product Market Analysis Strategic Choices
  • 31. The Meditation stage The Reality Finding stage Paradigm Discovery stage Eye Opening stage Industry Analysis SWOT
  • 32. Paradigm Discovery stage Eye Opening stage Industry Analysis SWOT
    • Critical Step
    • Ask someone outside
    • your company to analyze
    • your own notes about
    • - paradigms in your
    • organization
    • - what is important for
    • short and long term
    • Compare Against
    • Your own conclusions
    • Compare Against
    • The SWOT and the Industry analysis
  • 33. Your Personal Conclusions Compare Against Outsider’s view of your business
    • Is their interpretation of the same information different than Yours?
    • What are the most significant differences in Priorities and Problems?
    • What do they see as short term and long term? Do you see the same?
    • What organizational problems they see that you did not see before?
  • 34. Your Personal Conclusions Compare Against SWOT and Industry Analysis
    • What realities are not reflected in the SWOT analysis?
    • What are the most significant short term as well as long term differences in Priorities and Problems?
    • What other problems or opportunities were not they uncovered by the strategy analysis?
  • 35. Your Personal Conclusions Outsider’s view of your business SWOT Industry Analysis Required Comparisons
  • 36. Have these comparisons challenged the actual formulas for success (paradigms)? NO Return to Paradigm Discovery Again YES Is top management ready to change the actual Paradigm mentality?
  • 37. Does Your Strategy Require: 1. Do as before (same) But more and harder Little chance of growing or getting Better.
  • 38. Does Your Strategy Require: 2. To do something different maybe new and untried?
  • 39. Some good books to train your mind about strategy: All the right Moves by C. Markides, Good to Great by Jim Collins 20/20 Foresight by Hugh Courtney Scenario Planning by Gill Ringland The Art of the Long View by Peter Schwartz.
  • 40.