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Nexus Winter 2003

  1. 1. nexus The magazine of the Warwick Business School Alumni Association Winter 2003 Strategic change at WBS - new building continues evolution - focus on strategy b u
  2. 2. 2 | nexus news WBS in the news Alumni in the news WBS appeared in news and business related Since graduating from WBS in July 2002, media between eight and ten times every week Anoop Maini (BSc ManSci 1999-02) has been over the past year. Articles have appeared in actively involved in the setting up of the publications as diverse as The Times, The Weekly National Executive Network for Social Action Telegraph, Gulf News, Nikkei magazine, Hong (NENSA). He explains, “NENSA is an Kong, and Management Today, to name but a organisation that basically empowers young few. The WBS European MBA continues to people to make social changes within society, by receive attention, as does the WBS football bringing together business, government and management course and its participants. voluntary sector organisations in a unique way. The projects are envisioned and led by young Financial Times people, to help create a social enterprising In the FT Business Education Supplement culture that is championed and led by the published in September 2002, WBS ranked 4th future leaders of society.” out of 22 MBA programmes. Favourable Anoop is also making a short film, as well mention was also made of the interest in WBS’s as collaborating on a book on European MBA programme, in association with Entrepreneurship. As an 18-year-old, he won his the University of Mannheim in Germany and local borough council’s Young Citizen of the ESSEC in France. Year Award, when he set up Oadby and Interest in Enterprise Wigston Youth Council. A series of prominent articles by Professor Medarex Inc appointed WBS alumnus Geoffrey David Storey, Director of WBS Centre for Small Nichol (DL-MBA 1991-96) as Senior Vice & Medium Sized Enterprises (CSME) appeared Anoop Maini (photo courtesy of Leicester Mercury). President, Product Development on 9 in the Financial Times recently, on issues that September. Medarex is a biopharmaceutical affect government policymaking on SMEs. A company focused on the discovery and John Eary (MSOR 1971-73) is co-writer of an great deal of interest has been received for development of therapeutics to treat life- article on organising work/life balance in the David’s research on older entrepreneurs, as well threatening and debilitating diseases. September issue of Training Journal, urging as his work on the UK’s fastest growing SMEs. Commenting on his appointment, Dr. Nichol people to stop and think about their daily His report on decline in investment in smaller said, “I am enthusiastic to be leading product schedule. John is head of NCC Skills Source quoted companies was also featured in an FT development at Medarex at such an exciting Consultancy at The NCC Group. A WBS post- article. time in the development of its monoclonal grad, he has carried out many staffing reviews Independent view antibody therapeutics portfolio.” Dr. Nichol in the public and private sectors addressing Dean of WBS, Howard Thomas outlined his comes from Novartis Pharmaceuticals organisational and performance issues. He has plans to raise the School’s global profile in an Corporation, where he held the positions of managed projects that have won the European interview for The Independent on Thursday 26 Head, Global Medical Marketing Excellence and Training Technology Award and four UK September. The task of making the School Head, Global Project Management. awards for innovation and effectiveness. John is better known outside European university a regular commentator in the computer press circles depends on making Warwick’s defining on skills and staffing issues. characteristics, which have put it in the top e or visit European business schools, famous in a wider w field. “There is a brand here (Warwick), it is a An email interview with Simon Woods, brand of innovation, excellence, cutting-edge currently studying for his Masters in Public research and relevance to the corporate body,” Administration at WBS, appeared in the Howard explained to the reporter. Birmingham Post in July 2002. Simon is Chief Award winning Executive of the Birmingham School of Speech At the prestigious annual National Training & Drama. When asked what his job entails, Awards held in London in November, WBS won Simon explained, “Strategy, vision and people. a Regional Training Award for its innovative Essentially I see my role as a facilitator, programme of training for the Royal Bank of providing my colleagues with the space and Geoffrey Nichol. confidence to excel. We have a very clear vision Scotland Group (RBSG). The redesigned course combines the best of of making BSSD the best drama school in Alumni Clive Austin (MBA 1990-91), director of face-to-face and online delivery methods in a Europe.” 3i Ireland and Hina Patel (MBA 1999-01) 16-week networked programme. Now on its consultant for AT Kearney, flew the flag for Lonely Planet’s founder Tony Wheeler appeared sixth cohort of operations managers from every WBS in interviews which appeared in the on the cover of the September issue of part of the RBSG, almost 90% of participants August issue of Mergers & Acquisitions Ambassador, the AMBA magazine. After have received the MBA-level Certificate in magazine. In the article entitled “A good move: graduating from Warwick in 1969, Tony did an Operations Management from WBS. According but are MBAs essential for corporate MBA at LBS and founded his company in 1972. to one delegate, “The programme has enhanced wannabes?”, Clive and Hina both credited the Also featured in Ambassador is a story on WBS’s my operational control and planning and given WBS MBA with helping their careers. An article new certificate for football managers, and the me a more structured approach and support by Clive Austin on his experiences at 3i Guardian’s employability table that rates WBS tools for work tasks.” g appeared in the last edition of Nexus. Alumni as ‘most employable’. g
  3. 3. alumni events nexus | 3 Growing excitement diary dates WITH EVENTS IN PARIS, Oslo, Shanghai, Beijing, Hong Kong and New York, as MBA Refresher 2003 well as the celebrated WBS Academic Update held on campus, it has been an Images of Strategy, Images of exceptionally busy and exciting autumn for the Alumni team. the Firm WBS academics hosted alumni events around the world, co-ordinated Dates: 2-5 February 2003 by alumni. Venue: Radcliffe House, Starting in Paris, where Dr Chris Smith of the WBS Marketing & University of Warwick Strategic Management (MSM) group led a round-table discussion with Parisian alumni discuss strategy. London Evening Seminar alumni on ‘The meaning and manifestation of strategy in different cultural and Leadership and Organisation organisational contexts’. Organiser Thierry Chappe (MBA 1990-91), reported: “We had a very interesting and Speaker: Professor Andrew passionate discussion with Chris about the meaning and purpose of strategy that all the participants thoroughly Pettigrew enjoyed. This was a great event.” Date: 4 February 2003 In China, Dr Simon Collinson, Associate Dean (MBAs) and Senior Lecturer Venue: Prudential plc, in International Business, hosted events in Beijing, Shanghai and Hong Kong, London EC4 (report and photos on page 15) At an evening event in Oslo, Andrew Pettigrew, Associate Dean - Research The Warwick Debate and Professor of Strategy & Organisation, spoke to Norwegian alumni on the Speakers: Sir David Tweedie, subject ‘Does leadership make a difference to organisational performance?’ Feedback Chair of the International from organiser Per-Egill Frostmann, “Thank you for making this alumni meeting Accounting Standards Board happen - I think it was a good start. Andrew’s lecture was an interesting and to and Peter Wyman, the point, especially the prerequisites for successful change initiatives in large President of ICAEW Leading the way in Oslo. organisations which were particularly relevant.” Chair: Professor Keith Hoskin, ‘Are you happy? Job Satisfaction and Work-Life Balance in the United States Warwick Business School and Europe’ was the topic discussed when Professor Andrew Oswald, the Date: 3 March 2003 renowned Warwick economist, hosted a popular event for alumni in New Venue: Warwick Business School York City on 5 November. International MBA Refresher Organiser Ranan Lachman New Issues in Intercultural confirmed, “It was an excellent Management meeting, with around thirty Dates: 22-25 April 2003 people attending and taking the Venue: The Hotel Ambassador, opportunity to join in the Paris discussion.” New Yorkers debate work/life balance. Back on campus, 100 First Annual Warwick alumni and guests attended the eagerly awaited WBS Academic Business School Dinner Update, entitled ‘New economy - new ways of organising?’ on 19 October Hosted by: Lord Jeff Rooker Academic update draws 100 alumni. at Radcliffe House. Four WBS academics, John McGee, Simon Croom, (MA Industrial Relations 1971-72) Jacky Swan and Leslie Willcocks spoke on a variety of topics including Supply Date: 8 May 2003 Chain and E-business. Following his address, Dean Howard Thomas joined alumni and current MBA students for Venue: House of Lords, discussion over lunch. “An excellent Academic Update, it was good to have the mind stretched again,” confirmed London alumnus Clive South (EMBA 1996-99). “A unifying theme and four different departments certainly made for a MBA Summer Ball varied day.” “I benefited from meeting people, seeing friends and learning about the topics discussed. Leslie 11 July 2003 Willcocks’ presentation was particularly interesting,” added Alex Clark (MBA 2000-01). g Warwick Business School Regional UK Events Visitors to campus Forthcoming events London 7 February & 7 March 2003 A PACKED PROGRAMME OF events is Midlands planned for 2003: starting with a Birmingham Women’s Group seminar, with guest 6 February 2003 speaker alumna Dame Sheila McKechnie (MA Industrial Relations Oxford 1970-72), director of the Consumers 17 January 2003 Association; London Evening Seminar, sponsored by The Prudential, speaker Professor Andrew Full listing of events and online Pettigrew, to be held 4 February; a booking at the WBS web site: joint AMBA event with Sir David Tweedie in March; and the first ever Annual WBS dinner at the House of Lisa Wickham-Branche (MBA 1996-97), TV presenter from Trinidad & Tobago Lords, hosted by Lord Jeff Rooker with Emily Fay, Alumni Manager and Richard Sammy, FTMBA. Mike Porteous (MA IR 1988-90), HR Director, British Airways, also visited (MA Industrial Relations 1971-72) in campus in November to present to MA IR students. May; to name but a few. g
  4. 4. 4 | nexus Dean’s Foreword THIS EDITION OF NEXUS focuses on the subject of strategic management, with a series of articles which reveal the extent and quality of research and teaching in this field at Warwick. There are also a few articles from WBS alumni, showing how they used some of the knowledge gained at Warwick to develop their own corporate strategy. Warwick has been at the forefront of work on strategy for several years. Andrew Pettigrew’s work through the Centre of Creativity, Strategy and Change, developed Warwick’s reputation in the processual field of strategy and others (including Peter Doyle, John ‘Warwick has been McGee, Howard Thomas and Robin Wensley) have contributed to a wide range of research on competitive at the forefront of work strategy. on strategy.’ In this particular issue, Andrew Pettigrew and David Wilson have pointed out the manner in which the field of strategy is changing and must keep on changing to take account of the processes of strategising in the modern organisation. Their short articles demonstrate not only their own work but the considerable efforts achieved by both of them in developing major books in the field of strategy over the last few years. Andrew Pettigrew led the development of a major review of the field entitled Handbook of Strategy and Management, Sage Publications, 2001 (with Howard Thomas, WBS and Richard Whittington, Oxford) and David Wilson has co-edited a book with Stephen Cummings called Images of Strategy, which critiques many modern strategy theories and raises a whole series of questions about the strategy field. Both books have a European multi-disciplinary perspective and reflect the School’s view on the field of strategy. Peter Doyle’s article on value-based marketing reflects the importance of his work in the whole area of value-based strategic management and planning. Peter’s reputation as a teacher, researcher and consultant precedes him and his recent book on value-based marketing has been extremely well-received by academics and practitioners alike. Simon Collinson and Qing Wang focus on the issue of developing capabilities for competitive advantage - Simon in the context of China and Qing, more generally, in relating dynamic capabilities to the radical changes brought about by new technologies. Their on-going research work reflects the competitive capabilities, core competences and competitive advantage focus of some of the WBS strategy research. Two articles by former students reflect strategy development in digital pay television broadcasting and in strategic change consulting. They illustrate how MBA students at Warwick worked with faculty and others to build corporate strategy in their own organisations. The Chair of the School’s Board, Val Gooding (BUPA’s Chief Executive Officer), presented her company strategy to an audience of students and faculty recently in the Business School. The synthesis of her talk shows clearly a theme stressed by Andrew Pettigrew, namely, that many companies see their strategy and organisational model as one and the same. Obviously, there is other work in the strategy field being undertaken at Warwick in areas which include David Storey’s leadership in research on entrepreneurship through the ‘Many companies see their centre for Small and Medium-sized Enterprises, research on the strategic use strategy and organisational of mergers and acquisitions and, more generally, in international strategy. A new model as one and the same.’ development in the public/private area is a focus on good citizenship through work on corporate citizenship, corporate social responsibility and the design of public/private sector partnerships. This work is undertaken through association with the School’s Local Government Centre and its Corporate Citizenship Unit. I hope you enjoy these articles - they reflect the tradition of cutting edge research and teaching excellence which Warwick Business School encourages and on which it wishes to build over succeeding years. I encourage you to become more involved with WBS and its Alumni Association, and to consider contributing to the School through the WBS Fund for Academic Excellence, which seeks to expand income streams to enable us to develop facilities, research and faculty quality over the next several years. g MBE honour Howard Thomas LINDA DICKENS, PROFESSOR OF Industrial Relations at WBS, recently received her MBE from Prince Charles at a Buckingham Palace Investiture. The MBE was conferred in the in this issue Queen’s Jubilee Honours List for her ‘services to employment relations.’ Linda has since been Health assured - strategy at BUPA 6 Strategising/organising in the modern organisation 8 appointed to chair The Pay Commission for Dynamic capabilities in a time of radical change 11 Alumni profile - Warwick Insight 13 Local Government Services’ Staff. g Value-based marketing 14 Advantage China? 15 Careers 17
  5. 5. nexus | 5 highest honour BY PAM BARNES PROFESSOR ANDREW PETTIGREW, Associate Andrew’s research style has involved the Dean of Research and Professor of Strategy & detailed analysis of change, governance and Organisation at WBS, received the prestigious performance processes in organisations over Distinguished Scholar Award from the US several levels of analysis and over long periods Academy of Management in August 2002. of time. This approach has not mirrored the As the first European to be awarded the predominant style of research in the USA but honour in its 20-year history, this represented a has challenged it. Andrew feels that the kinds of supreme accolade. Andrew explains, “This is knowledge deriving from this style of research not just an award make for an easy transition into the classroom. ‘This is not just an award for a particular for a particular “The development of management of change in piece of research WBS and now the area of strategy and practice piece of research but a lifetime career but a lifetime has been driven by this kind of research. Many career award, alumni will have experienced this in classes they award, recognising work done over 30 years.’ recognising work took here,” he affirms. done over 30 years. When presenting the award, the Chair of It also signifies US recognition that European the Committee, Professor Joanne Martin of the management research can be world-class.” Graduate School of Management, Stanford Andrew feels strongly that this award puts University in California, praised Andrew’s Warwick Business School into the premier achievements, “This year’s winner blends a league of research led business schools in respect for theory with love of data and juggles Europe and the same league as the top a concern for scholarly precision with abiding American business schools. commitment to helping organisations function Previous winners come from US universities more effectively and humanely.” g such as Harvard, Stanford, Wharton, Michigan and Yale and include such notable scholars as Herbert Simon, James March, Alfred Chandler, Oliver Williamson, Karl Weick, Chris Argyris, Professor Joanne Martin, Stanford University, and Rosabeth Kanter. According to presenting the Andrew, “These people are an Distinguished Scholar extraordinarily distinguished Award to Professor group - to be included Andrew Pettigrew at in that reference the annual meeting of the US Academy of group is a very Management in great honour.” Denver, Colorado, in August 2002.
  6. 6. 6 | nexus health BY EMILY FAY assured WARWICK ALUMNA VAL GOODING, CEO of BUPA, presented her A management training programme called ‘Leading One Life’ company strategy to Warwick MBA and other postgraduate was implemented which focused on continuous improvement, but students in October. Val, named the UK’s fourth most powerful also on staff concerns and staff working with each other to develop woman in August’s Management Today, delineated where BUPA’s ways of better serving customers. problems lay when she joined the company in 1998 and how, in Val also improved the four years, she had turned the company around. systems at BUPA so that The problems sounded familiar to students already delving call-centres, for example, into case studies as part of their course. Although BUPA is could easily access records currently the UK’s largest private health insurance and health when customers phoned services provider with 40% of the private health insurance market, in. BUPA invested heavily when Val took over as CEO the company was stagnant with low in the call-centres with profits, poor systems, dropping staff morale, and it was losing soft fabrics; curved desks customers. to encourage team When she arrived at BUPA, Val chose to focus on the support, staff restaurant organisational culture. As Andrew Pettigrew explains in his article and recreational facilities, in this magazine, many companies see their strategy and their and a room for people to organisational model as one and the same. recover from a difficult call. The investment was ‘Organisational structure has to work by significant but morale is much higher and serving the customer well, at the same customers notice the Val Gooding, CEO, BUPA. difference in speed and time as the interests of the organisation.’ service when they phone in. All of this has to be measured through complaint monitoring, “Organisational structure has to work by serving the customer and health outcomes: how initial calls were dealt with, how well, at the same time as the interests of the organisation,” Val quickly was a patient seen, diagnosed, treated and how successful explained when interviewed for Human Resources magazine in was that treatment. September. Through investing in people, systems, processes and new BUPA’s UK insurance arm is its largest business. When Val products, the improved service, customer retention, growth in arrived, the culture was a traditional insurer’s: inward-looking, sales and profits have all been achieved. g focusing on rules and probabilities and numbers. Although customers were treated politely, they were dealt with by the rules, regardless of how they might be feeling in the midst of a health Val Gooding’s presentation to students was part of the crisis. Warwick MBA Forum series which brings CEO-level speakers Val worked with staff to put in place a culture of serving to campus to talk to students. Previous presenters include: customers which now permeates the entire company. She did this Sir Nick Scheele, Chief Operating Officer of the Ford Motor to increase customer satisfaction with BUPA, but also to raise staff Company, and George Cox, Director General of the Institute morale. In order to serve customers well, BUPA employees have to of Directors. Val also serves as Chair of the Warwick Business enjoy and believe in what they are doing. School Board.
  7. 7. focus on strategy | 7 IMAGES OF STRATEGY IS edited by Professor David Wilson and WBS Alumnus, Professor Stephen Cummings, and contains contributions from the editors as well as from most of WBS’s MSM Department and some past members of images the Department. “Our book has a European, multi- disciplinary perspective and a Warwick voice which makes it different and exciting,” says of Strategy WBS’s David Wilson, explaining why this book moves the field of strategy on. “It also considers A book that could radically change how the field of the problems of implementation as at least equal to problems of analysis,” David continues, strategy is viewed, taught and researched, has been “indeed, the problems of putting strategy into written by members of Warwick Business School’s practice have been some of the major challenges faced by strategic management.” Finally the Marketing and Strategic Management Group. book steps outside traditional management disciplines and incorporates views on strategy Creativity and strategy their independence and creativity but allowing drawn from history, philosophy, theatre and One of the case studies included in David them to market as a group. media studies. Wilson’s book Images of Strategy, concerns Matt For example, a radio station, a ticket seller Traditionally, the field of strategy has been Hardisty. Matt worked as a ‘coolhunter’, and clothing labels all share what Matt calls a dominated by material from the United States helping companies identify what would be ‘cool’ ‘tribal frequency’ and can benefit from creating and has been predominantly about planning in a few years’ time, before commencing the MA a brand equity. They can market through the and analytical frameworks. Strategy has been in Creative and Media Enterprises at Warwick. internet together, benefiting the sites they about finding and exploiting the gaps between While at Warwick and subsequently he formed market through, but with all of the balance and imbalance for financial gain. With two new companies: and Naked entrepreneurs maintaining their own some notable exceptions (for example the work Communications. independence. of Henry Mintzberg and colleagues) traditional “What we do at Naked is to help our clients “The individualised approach is difficult for material has generally concentrated on think of themselves as not contained within traditional strategists to map and Images planning and analysis. traditional boundaries or channels,” explains explores this. People at senior levels in media Matt. “We network a web of channels into a industries create a real challenge for strategists ‘Images of Strategy is a dynamic family that helps develop complex to understand,” explains David Wilson. must read.’ relationships with customers to convey a sense of something truly different in order to capture “However, we have a lot to learn from each other and this widening of the boundaries of R Edward Freeman, Darden University of Virginia people’s imagination.” His companies bring strategy can only be positive for strategists.” g creative entrepreneurs together, maintaining “Our book is European and skewed towards the practice of strategy. It locates strategy historically - from the Greeks onward,” explains David. “This approach to strategy can be a capstone to a range of organisation issues - all of which are currently taught separately - but the Images approach shows how closely you can mix a range of teaching disciplines. It will persuade students to think about strategy and management in an inter-disciplinary way and should persuade those who teach it around the world to expand their vision.” The original idea had been to have a case study at the end of the book to which all the authors provided a view from their own perspective. However, in another twist on traditional immobile texts, it was decided to include the case study but to have the authors’ views of it on a web page. In this way the authors can update their views over time. They can feed in current research thought, as well as comments and arguments they receive from readers of the book. Unlike most strategy books, Images concludes with a chapter that gives a vigorous critique of many assumptions that underpin traditional strategic theories and it raises a whole series of questions. The web site will allow dialogue Some of the ‘Images’ authors at work (from left) Dr Chris Smith, Professor John McGee, Professor Andrew between readers and authors to develop. g Pettigrew, Dr Duncan Angwin and Professor David Wilson.
  8. 8. 8 | focus on strategy strategising/organising in the modern organisation ANDREW PETTIGREW PROFESSOR OF STRATEGY & ORGANISATION ASSOCIATE DEAN RESEARCH WARWICK BUSINESS SCHOOL The field of strategy has changed and must keep changing. We have THE NEW EMPHASIS FIRST of all redefines structure and relabels it with the broader label moved from an era when strategy was much about static notions of of organisation. In this formulation, the competitive position of the firm, to an era when strategy is organisation still includes the form of the organisation but also now incorporates a new fundamentally an innovation contest where the bureaucratic and preoccupation with the relationship between form, processes, systems and organisational inflexible will not survive. In this era, the old dictum that strategy boundaries. With this new more inclusive view, drives structure has been superseded by a new emphasis on the organisation moves from being the poor cousin of strategy to being an equal partner. As John relationship between strategy and organisation. Browne, the CEO of BP has put it ‘Our strategy is our organisation’ (Organising for Growth by Jonathan Day, The McKinsey Quarterly, 2001, Number 2,4-5). Others may not yet be prepared to go this far but there is certainly a wider recognition than ever before that strategy and organisation form an inseparable duality. Secondly, our latest research on innovative forms of organising makes it clear that static nouns can no longer capture the realities of how many firms are attempting to make and execute strategy. We prefer therefore to use the more active verbs of strategising and organising to capture these more dynamic processes of setting direction and executing that direction. Strategising and organising are now better characterised as continuous processes than as mechanistic movement from one state or condition to another. What is driving the new emphasis on Strategising/Organising? As ever, big questions are rarely answered by single causes. There appears to be a convergence of factors economic, technological, informational and political driving the emergence of innovative forms of organising. Heightened international competition, efficiency drives to reduce costs, pressures to concentrate manufacturing resources regionally and to simplify complex matrix structures are all impacting firms.
  9. 9. nexus | 9 Technological change is shortening product Warwick research suggests no simple pattern of The modern firm is seeking to empower life cycles and pressuring firms to build novel practices. Instead firms are experimenting and hold the ring, to be simultaneously organisations with greater flexibility. Advances with different views of what strategy is and decentralising and centralising. This duality is in information technology and communications learning by doing as they try out alternative creating complex political dynamics in the are enabling network formation. This facilitates mechanisms to make strategy on a continuous multi business firm. A lot of these dynamics are utilisation and permits a quality and quantity of basis. So one can see within the same firm focused around and triggered by the loose-tight hierarchical control and lateral knowledge nature of the emergent sharing previously considered impossible. These changes in organising have often ‘Evidence of forward looking critical strategy processes in many of those firms. achieved their objective of creating greater organisational flexibility and sometimes reflection is much part of the strategy Different business units within the same creativity but one of the knock-on effects has been to challenge some of the old orthodoxies group at Warwick.’ firm often have different cycle times, of what strategy is and how it should be made different markets and and executed. The direction of change at this annual budgetary processes that incorporate resources and varying views about and needs moment in time appears to vary from firm to some hints of strategy co-existing alongside for strategic thinking. They may also have firm. meta level strategy thinking at different views about what issues are worthy of In many firms large planning the very top of the firm. organisational attention, prioritisation and departments have One company has resourcing. The spotting and resolution of these long since described the outputs of this issues then becomes a focal point for strategic been meta level thinking as the leadership, an issue which I hope to return to in dismantled creation of a set of rules or a forthcoming issue of Nexus. g but a form of principles which provide an planning may ongoing systematic bias to still exist. In top decision making rejecting processes. These biases rigorous annual become crucial in shaping planning cycles direction. They help in firms have also setting priorities, in Further reading rejected the spotting issues for mechanistic view decision making and in The Handbook of Strategy and Management of strategy that filtering out strategic (Pettigrew, Thomas and Whittington, underpinned the initiatives which 2002) provides an up-to-date and critical numerically based emerge from assessment of most of the existing fields of strategy process of increasingly strategy and at the same time helps to the past. With the decentralising develop some new sub fields in the demise of business units. discipline. The recent research study mechanistic planning The strategy/ published, The Innovating Organisation processes has also operations duality (Pettigrew and Fenton, 2000) offers a first come scepticism of creates its own look at the European findings of a global long distance or blue demands and its study of new forms of organising and sky strategy making. own dynamic. The blurring of the company performance. The sequel to this Firms may also be distinction between strategy and operations book Innovative Forms of Organising querying old distinctions means that the effective CEO has to be mindful (Pettigrew et al, 2003) provides a between strategy and operations and seeking to and effective at both. John Browne has certainly summative account of the research and achieved this in BP compares innovative forms in Europe, ‘Strategy is fundamentally an innovation and so has Niall Fitzgerald in Japan and the USA. Andrew Pettigrew and Evelyn Fenton contest where the bureaucratic and Unilever. It is noteworthy that in (Eds) The Innovating Organisation, London, Sage Publications, 2000. inflexible will not survive.’ both of these organisations, Andrew Pettigrew, Howard Thomas and strategising skills are Richard Whittington (Eds) The Handbook put in place a strategy process which is alive to as important as organisation development of Strategy and Management, London, Sage both managerial requirements. So the skills. In both organisations there is a history in Publications, 2002. organising/strategising duality is recent times of clear target setting and Andrew Pettigrew et al (Eds) Innovative complemented by the strategy/operations achievement. The strategic and the operational Forms of Organising, London, Sage duality. are well aligned and well aligned on a Publications, 2003. But what is emerging in the vacuum created continuous basis and not just at one moment in by the challenge to the old strategy time. Richard Whittington et al (1999) Change orthodoxies? and Complementarities in the New Competitive Landscape, Organisation Science, (1999) 10.5: 583-600.
  10. 10. 10 | nexus strategy sky HAVING WORKED IN THE Digital Pay-TV Broadcasting industry as a software development engineer, product and project manager since 1995, I was fascinated by the top players in the pay-TV business and wanted to understand and learn from their most successful strategies. During this summer I had the opportunity to do my dissertation as part of an MBA Consultancy Project in the Strategic Planning Group of one of the most successful pay-TV operators in Europe, British Sky Broadcasting (BSkyB). Pay-TV has been available in the UK for over a decade and is leading the way in high digital TV. There are currently some 10.2 million pay-TV subscribers in the UK, almost 45% of the entire TV households. The potential is clear. Digital transmission opens the way for many more channels, including interactive services and telecom applications. The challenge for BSkyB is to make it pay. Most other operators so far have tried and failed - not only in Britain but also throughout Europe. Today, BSkyB is the premier pay-TV company with more than 6 million satellite subscribers (see fig 1). By exploiting CHRISTIAN HOEFTER the digital shift in Britain more than any other company, BSkyB has underlined its PROGRAMME MANAGER claim to be the pay-TV business model, in the UK and across Europe. BETARESEARCH/KIRCHGRUPPE Having stated that, my MBA consultancy project focused on BSkyB’s successful FULL-TIME MBA 2001-02 business model and its underlying strategic success factors. The project analysed how BSkyB triumphed so quickly and so completely by looking at both the company’s analogue and digital business in greater depth. Since pay-TV operators, and in particular BSkyB, are dealing not only with information and its programming, but also increasingly with sophisticated technologies, a new framework was introduced to review BSkyB’s strategic 6.1 Fig. 1 strengths with respect to the information economy. Four strategic levels were systematically examined - a framework developed by John McGee, Professor of 5.1 Strategic Management (see fig 2): 4.9 consumer network ‘Overall BSkyB has been physical platforms supply chain spectacularly successful, technology standards subscribers in millions Using interviews with not once but twice.’ 2.4 2.3 managers within BSkyB and 2.0 1.6 documentary data collection, the primary research has highlighted specific but 1.3 1.1 quite diverse strategic key success factors for both BSkyB’s analogue era from 1989 0.8 0.7 to 1997 and BSkyB’s digital business success until now. In addition, it was found that these factors are part of a more complete picture BSkyB (Britain) Canal + (France) Canal + (Europe ex France) KichPayTV (Germany) NTL (Britian) Sogecable (Spain) Telepui (Italy) Telewest (Britain) TPS (France) ViaDigital (Spain) Stream (Italy) of BSkyB’s strategic success, an overall ‘Sky formula’. Focused on the most essential strategic key issues, the formula supports BSkyB’s current ambition ‘Sky to every household’: build penetration build average revenue per user minimise churn Due to the company’s ambitious targets in the future, BSkyB’s strategy must leverage the company’s assets to a new, unprecedented level of growth. However, the ‘Sky formula’ will need to overcome key challenges in the future mainly related to issues such as content, technology and policy, since these topics are always a source of threat in the information economy. Strategic levels Concepts Although BSkyB’s business is part of the new economy, the main characteristics of positive feedback, such as lock-in effects, network effects and/or Consumer Network externalities demand-side economies of scale were not really relevant for the company’s success. Network Expectations management However, some mechanisms of positive feedback are starting to kick-off and may Customer lock-in & switching costs enlarge BSkyB’s subscriber Physical Open vs closed platform ‘You may not want it but you will be base further. Overall, BSkyB has Platforms Build alliances for positive feedback Technology lock-in & switching costs unable to avoid the service because been spectacularly successful, not once but Supply Chain Open vs closed value chains Alliances & collaboration soon every home in Britain will have twice. Its ‘Sky formula’ has Supplier lock-in & switching costs worked brilliantly so far. Technology Versioning of standards a Sky TV channel beamed into it.’ Even if history is not an Standards Evolution vs revolution Tony Ball, CE of BSkyB indicator of future Costs of switching standards performance, BSkyB’s past success and its strategic key success factors will help the company to remain the Fig. 2 Strategic levels of network industries UK’s leading pay-TV company. The question of future sustainable growth nevertheless remains open. g
  11. 11. nexus strategy | 11 IN A TIME OF radical change brought about by new technologies such as Internet protocol and digital technology, firms need to acquire new capabilities in order to stay competitive. An on-going research initiative led by Dr Qing Wang at Warwick Business School in collaboration with SPRU at Sussex University found that a primary goal of firms when facing such radical change was to simplify. These new technologies are so-called General Purpose Technologies (GPT), which involve high fixed costs in invention and low marginal costs in reproduction. The expenses associated with finding applications for them are determined by the costs of co-development with localised users. The users, who may be individual consumers or institutions, will be interested in the services performed and the supporting infrastructures. Therefore radical change is defined not in terms of change in technical characteristics, but in terms of the discontinuous consequences to the consumers. It is characterised by a sudden increase in complexity along two dimensions. The invention of a GPT represents complexity in depth, whereas its integration with the localised and idiosyncratic infrastructure and consumer demographics denotes complexity in breadth. To understand the implications for firms, we need to turn to the demand side of this equation. The invention of a GPT may result in a rapid increase in the producer capacity, for instance the capacity to provide speedy and potentially unlimited access to information. However, this rapid increase in capacity will not be sustainable without matching demand from the consumers. Meanwhile, matching consumer demand for radical dynamic capabilities innovations is difficult. In many instances, this involves a process of co-evolving and co-learning between the producers and the consumers. The salient question is in a time of how to solve the tension between capacity and variety that is inherent at this intersection. Firms which have invested heavily in a GPT may find themselves sitting on unutilised capacity with the painful realisation that the capability that enabled them to occupy a leading position in a GPT, would not automatically give them the advantage when developing user-related applications. radical change A closer look at the consumer behaviour in adopting radical innovation will indicate that the answer lies in the marketing capability. Satisfying one’s ever- DR QING WANG evolving demand is not without cost to individual consumers, as it requires learning about new LECTURER IN MARKETING & product categories, often through inference to existing categories. As radical innovations represent STRATEGIC MANAGEMENT mental leaps, inference to existing categories can be very difficult for potential users. In such events, WARWICK BUSINESS SCHOOL there exists a strong “learning-through-using” effect where a significant amount of new product knowledge is acquired during rather than prior to using a new product. Consequently, consumers’ perceptions and preferences are expected to change continuously through using. Further reading Our research findings have at least two Wang and von Tunzelmann Complexity and the ‘The question is how to solve implications. Firstly, continuous functions of the firm: breadth and depth, Research involvement with users and developing long Policy, 2000, Vol. 29, 805-818. the tension between capacity term relationships with valued customers is one, if not the only, effective way of building von Tunzelmann and Wang Capabilities and and variety.’ competitive advantage. Secondly, branding Production Theory, Structural Change and and labelling can be extremely powerful in Economic Dynamics, 2003 influencing consumer perception of a radically new product towards more familiar categories. For von Tunzelmann and Wang Dynamic example, the application of digital technology in image capabilities in the context of radical change, processing has resulted in several new product categories, Journal of Management Studies, (in revision). one of which is the digital camera. Its adoption is largely enabled by the perceived similarity of functional and aesthetic design to the analogue camera, which is carefully crafted into the new product. To conclude, firms will have significant competitive advantage in the new markets if they incorporate critical technical and user knowledge into the new application in such a way that it simplifies the learning requirement for the consumers. The ability to identify such critical knowledge and to incorporate it into the design and development of new applications constitutes the dynamic capability of firms in a time of radical change. g
  12. 12. 12 | nexus The Warwick Hot off the Press The Handbook of Strategy and Debate Management (Pettigrew, Thomas and Whittington, 2002) provides an up-to-date and AS STOCK MARKETS ARE plumbing successive lows, the warnings of double-dip recession and an era of critical assessment deflation are getting louder. Even if the current wave of audit scandals has so far been US-based, the loss of of most of the credibility for the audit and accountancy profession has been worldwide. existing fields of There is consequently a renewed interest in strategy and at the importance of regulation for the conduct of the same time helps orderly markets and the enforcement of to develop some new sub fields in rigorous audit across the corporate world. The the discipline. future of regulation and of the accountancy profession has therefore become of more than Images of Strategy, edited by Professors specialist interest. David Wilson and Stephen Cummings, So it is with great pleasure that we will be published by announce a joint AMBA-Warwick Business Blackwell in March School event to be held on 3rd March at 2003. Contains Warwick Business School on these themes. Sir contributions from David Tweedie, the Chair of the International the editors as well Accounting Standards Board, will be the as from most of keynote speaker at The Warwick Debate. He WBS’s MSM will be joined by Peter Wyman, chairman of the Department and UK’s Institute of Chartered Accountants and a some past senior partner at PricewaterhouseCoopers. The members of the event will be chaired by Professor Keith Hoskin, Department. of the WBS Accounting and Finance group. The Warwick Debate will be held on 3rd March 2003 at Radcliffe House, University of Warwick. For more details w g Sir David Tweedie. WBS building continues evolution WBS in Dubai partnership WBS HAS TEAMED UP with Knowledge Horizon, a United Arab Emirates-based education agency recognised by the UAE Ministry of Higher Education and Scientific Research, to promote the Warwick MBA. The first intake of students, initially numbering around 25-30 and recruited from the UAE, will begin study by distance and online learning in January 2003. Dr Ma’en Al Qatamin is Managing Director of Knowledge Horizon and studied for his doctorate at WBS. He explained: “We are proud to be associated with a name of quality such as WBS. The Warwick MBA is globally recognised and internationally accredited, and WBS has won acclaim and approval from all the leading national and international assessors and Designed by the Tate Modern architects, phases one and two of the new WBS building have been completed and accreditation bodies.” g the Dean anticipates commencing phase three in the near future.
  13. 13. alumni profile | 13 Warwick insight from house to mouse BY PAM BARNES RICHARD WYATT-HAINES (DLMBA 1997) and Simon Ricketts (DLMBA 1998) named their company Warwick Insight, reflecting their strong links with WBS. “We owe a lot to Warwick and are proud of the place,” affirms Richard. Established in 1998, their consulting practice focuses on strategy, strategic change and organisation performance management. Their relationship with clients is very much a partnership approach. As Richard explains, “With strategy and strategic change, there is always stress and pain to be suffered. Clients need ‘The world is dynamic and someone alongside them in a academics enable us to partnership role with the enthusiasm and experience to see the issues and make support them through.” Richard firmly endorses sense of the chaos.’ Andrew Pettigrew’s views on the changing role of strategy. “Strategy is about a way of behaving, it is not about a document. It is about how you think and behave within an organisation, so that people understand the reason for their role and how it fits into the strategic direction of the business. There cannot be a five-year plan in Simon and Richard with that mouse. today’s environment; traditional planning methods can constrain and lead to missed opportunities. Strategy must be used as an enabler and decision making filter, rather than a constraint.” Simon and Richard strongly believe in keeping up to date with academic thinking at Warwick. “We take academic thinking and ideas and bring them alive and make them practical for clients,” says Richard. “The world is dynamic and academics enable us all to see the issues and make sense of the chaos. At Warwick Insight we take that clarity and deploy it appropriately and sensitively to ‘We are taking academic thinking and create value for the client. Warwick gives us that foundation by providing access to leading edge thinking and approaches to strategy and change ideas and making sure we bring them management.” The Warwick association features strongly in the story of their alive and make them practical for clients.’ partnership. Although they both did their MBA by Distance Learning at WBS, they had never met until Simon’s CV arrived on Richard’s desk at his previous employers, an accountancy practice. With the Warwick connection, Richard said, “I just had to meet him.” The two hit it off immediately but soon found working within an accountancy firm too constraining. From very small beginnings, working out of Richard’s back bedroom and the cupboard under Simon’s stairs; four years later their team of eight is based in the South-West on the edge of Dartmoor, in premises with meeting, training and planning facilities. They consult for clients such as Walt Disney (Europe, Middle East and Africa), Liverpool Victoria, Department of Health, the Financial Services Authority and most recently, an investment bank in Russia. The WBS magic worked again when, on a course run by Robert Johnston of the WBS Operations Management Group, they met a delegate from Disney. Richard explains, “She asked us to do a single workshop and from there it has grown into business with four or five divisions. It was a massive leap for us. Last year we doubled our income and we hope to increase by 50% again this year. Recommendations and repeat business form the bulk of our work and over this year we have gained several blue chip clients.” Richard and Simon agree, “The biggest constraint to our growth is the availability of the right people with the right behaviours and experience. Highly bespoke consulting demands people with a special mindset and the ability to draw client sensitive solutions from both practical and academic experience and knowledge. Perhaps there are other WBS students and alumni who feel they have what it takes...” Check out their web site on w g