Strategy grand-tour-20096


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Strategy grand-tour-20096

  1. 1. Strategy Grand Tour Stefano Mastrogiacomo 04.2007
  2. 2. What does strategy mean ? Etymology"art of a general"from Fr. stratégie, from Gk. strategia "office orcommand of a general," from strategos "general,"from stratos "multitude, army, expedition "Based on the Online Etymology Dictionary. Douglas Harper, Historian. 22 May. 2007.
  3. 3. What does strategy mean today ? A plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result. Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.
  4. 4. Strategy is aboutdealing with apossible future …and this is a matterof perspective…
  5. 5. Some people think the future is predictable. Success is matter of destiny.
  6. 6. Some other think the future is chaotic and unpredictable. Success is a pure matter of chance.
  7. 7. We think (and we’re not the only ones) that the future is inventedand created every day. And there are great tools for that.
  8. 8. Today’s AgendaTo have a betterunderstanding onhow to make rightassumptions aboutthe future in order togain a competitiveadvantage.
  9. 9. Defining Corporate Strategy
  10. 10. “the direction and scope of an organizationover the long term, which achievesadvantage for the organization through itsconfiguration of resources within a changingenvironment and to fulfill stakeholdersexpectations”Exploring Corporate Strategy, Johnson and Scholes, 2002
  11. 11. A simple strategic journey
  12. 12. Winners and losers
  13. 13. Vocabulary Resources/Core capabilites Vision/Goals Strategy/Plan Point B Environment/ Decisions Circumstances Point A Competitors time now the future
  14. 14. Different approaches, different tools,different purposes rivalry alignment processes A D1 strategy as… B C D2 E co-creation free rider environment learning process x x x x x x x technology cognition manipulation
  15. 15. Strategy as rivalry
  16. 16. Michael Porter
  17. 17. Elements of industry structure
  18. 18. Productivity frontier
  19. 19. Value chain
  20. 20. Activity systems
  21. 21. Example: US automotive industry(70’-80’)
  22. 22. Strategy as alignment processes A D1 B C D2 E
  23. 23. Robert Kaplan and David Norton
  24. 24. The need for focus Here Ok Here CEOs Managers Staff
  25. 25. Strategy-Focused Organization principles 2. TRANSLATE STRATEGY TO 1. Mobilize CHANGE THROUGH OPERATIONAL TERMS EXECUTIVE LEADERSHIP 2.1 Strategy map developed 1.1 Top leadership committed 2.2 Balanced Scorecard created 1.2 Case for change clearly articulated 2.3 Targets established 1.3 Leadership engaged 2.4 Initiatives rationalized 1.4 Vision and strategy clarified 2.5 Accountability assigned 1.5 New way of managing understood 1.6 Program manager identified STRATEGY- FOCUSED 3. ALIGN THE Organization Organization 5. GOVERN TO MAKE STRATEGY A TO THE STRATEGY CONTINUAL PROCESS 3.1 Corporate role defined BEST PRACTICES 5.1 BSC reporting system established 3.2 Corporate – SBUs aligned 5.2 Strategic review meetings conducted 3.3 SBU – Support units aligned 5.3 Planning, budgeting, and strategy integrated 3.4 SBU – External Partners aligned 5.4 HR and IT planning linked to strategy 3.5 SBU – Board of directors aligned 5.5 Process management linked to strategy 4. MOTIVATE TO 5.6 Knowledge sharing linked to strategy MAKE STRATEGY 5.7 Strategic Management Office EVERYONE’S JOB established 4.1 Strategic awareness created 4.2 Personal goals aligned 4.3 Personal incentives aligned 4.4 Competency development alignedBalanced Scorecard Collaborative •
  26. 26. Strategy Map example Maximize return on assets Financial Manage Profitable operation costs Leverage asset growth base Customer Residential, Commercial, Industrial Socially Innovative Reliable Supplier Competitive responsible solutions energy supply stability price energy sources Internal Optimize Core Business Continued Public Support Customer Service Excellence Business Growth Capitalize on Optimize Seamless Proactively build deregulation asset cross-group & manage opportunities utilization delivery of relationships services Use Trading alliances & opportunities joint- Continued Ensure reliable Develop ventures Max Returns cost service innovative on resource management service allocation Effective offerings Understand customer Enterprise- drivers of Communication service wide risk customer value and education processes management Cross-group programs R&D Learning & Growth World-class Ensure market-driven Industry leading leadership skill development employee satisfaction effectiveness© 2005 Balanced Scorecard Collaborative •
  27. 27. Balanced Scorecard example Targets Objectives Measures (D=Drivers) Initiatives FY03 FY04 FY05 Financial • Maximize returns • ROCE 14% 14.5% 15% • Profitable growth • Revenue growth 6% 8% 12% • Leverage asset base • Asset utilization rate 80% 85% 90% • Manage operating costs • Operating costs / customer $150 $140 $125 • Industry leading customer loyalty • Customer satisfaction rating 80% 85% 90% • Customer loyalty program Customer Optimize Core Business • Optimize core utilization • % revenue from deregulated products/services 5% 7% 10% • Telecom infrastructure development • % trading revenue 10% 12% 15% • Trading risk assessment (work support) • Max. return on resource allocation • Revenue from new services $500M $550M $600M • % customers served through alliances and joint ventures 10% 20% 25% • Continued cost management • NPV product/service pipeline $500M $550M $600M • Enterprise-wide risk management • % R&D projects meeting protocol gates (D) 90% 95% 100% • Research alliance program Continued Public Support • Customer/partner satisfaction (5 point scale) 4.0 4.5 4.5 • Preventative maintenance • Proactively manage relationships • Reliability index 90/100 92/100 95/100 • Ensure reliable service • Communication/education coverage (%) 100% 100% 100% • Community outreach program Internal • Communicate/educate customers • % communication/education plans executed (D) 80% 85% 90% Customer Service Excellence • Promised delivery % 90% 95% 97% • Cross-selling marketing program • Seamless cross-group delivery • New product uptake rate 20% 25% 30% • Service dispatch automation • Understand customer drivers • On-time market research projects (D) 90% 95% 100% • Effective customer services • Customer satisfaction rating – C.S. Center (see above) 85% 89% 95% • CIS upgrade Business Growth • Problem resolution cycle time – Customer Service Center (D) 6hr 4hr 3hr • Call center software integration • Capitalize on deregulation opportunities • % rated capacity attained 80% 85% 90% • Optimize trading opportunities • Fossil maintenance benchmark • Develop innovative services • Employee productivity improvement 2% 3% 4% • Use alliances and joint ventures • Leverage cross-group R&D • % cost reduction 4% 5% 6% • Shared service benchmark/outsourcing • Cost of disruption vs. plan +/-15% +/-10% +/-5% initiative • Time to recovery (D) 8 hr 4 hr 2 hr • ERP implementation • Ensure market-driven skill • Strategic skill coverage ratio 65% 75% 85% • Competency profiling Learning & • Hours in strategic skills training (D) 10 12 15 Growth • Industry leading employee satisfaction • Employee satisfaction rating (5 point scale) 3.0 4.0 4.5 • Performance compensation link • World-class leadership effectiveness • Leadership effectiveness rating (upward appraisal―5 point 4.0 4.5 4.5 • Leadership training program scale)© 2005 Balanced Scorecard Collaborative •
  28. 28. Examples
  29. 29. Strategy as learning andas an emergent process
  30. 30. Henry Mintzberg
  31. 31. Emergent strategy
  32. 32. And also Peter Senge (learning organization)
  33. 33. Strategy in a networked society
  34. 34. Arnoldo Hax and Dean Wilde
  35. 35. Strategic Options System lock-inTotalcustomer Bestsolutions Product Total customer solutions System lock-in Best product Competition for the Competition around the control Competition based on customer « interaction of the ecosystem determinants product ’s economic system » attributes Complementors lock-in Redefining customer ’s competitor lock-out Low cost or mere experience differentiation Proprietary standard
  36. 36. Example
  37. 37. Example
  38. 38. Strategy as a free rider experience x x x x x x x
  39. 39. Kim and Mauborgne
  40. 40. Kim and Mauborgne“The only way to beat thecompetition is to stop tryingto beat the competition”
  41. 41. Red and blue ocean strategies Red Ocean Strategy Blue Ocean Strategy Compete in existing market space. Create uncontested market space. Beat the competition. Make the competition irrelevant. Exploit existing demand. Create and capture new demand. Make the value/cost trade-off. Break the value/cost trade-off. Align the whole system of a company’s Align the whole system of a activities with its strategic choice of company’s activities in pursuit of differentiation or low cost differentiation and low cost.
  42. 42. Strategic canvas 5 - high value curveperformance 3 - medium 1 - low 1 2 3 8 te te te te bu bu bu … bu ttr i tri tri ttr i a at at a
  43. 43. by Alex Osterwalder
  44. 44. Other examples
  45. 45. Strategy as co-creation with customers
  46. 46. C.K. Prahalad
  47. 47. Collaboration as co-creation of value discovering and creating new opportunities sharing and shared destiny creating and co-creation prerequisites for collaboration knowledge of value sharing shared practices information and co-innovation (transaction data) collaboration with suppliers, key customers, partners arm’s-length relationship traditional business approach market-based, improved joint Joint goals; transaction business development; joint leverage of driven; across processes; co-management competencies business unit across legal of the enhanced boundaries boundaries network collaboration intensity
  48. 48. Strategy as environmental configuration
  49. 49. Chris Anderson
  50. 50. Example
  51. 51. Other examples
  52. 52. Strategy as cognition
  53. 53.
  54. 54. Ackermann, Eden, Finn, Bryson, …
  55. 55. Four Barriers to Strategy Execution The Vision Barrier Only 5% of the workforce understand the strategy The People Barrier The Management BarrierOnly 25% of managers have 9 of 10 companies 85% of executive teamsincentives linked to overall fail to execute strategy spend less than one hour strategy month discussing strategy The Resource Barrier 60% of organizations do not link budgets to strategy© 2005 Balanced Scorecard Collaborative •
  56. 56. 1% 18%Strategy 300%Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper,risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felispulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros necTextdiam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod.Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor.Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibusvulputate. Proin dignissim eros at augue.Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulumcondimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tinciduntet, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitaepurus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tinciduntblandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque.Development plan Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci. Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem. Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat12% fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut Words lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat.
  57. 57. Causal maps
  58. 58. Military foundations of strategy
  59. 59. Strategy as persuasion and manipulation
  60. 60. Sun Tzu – The Art of War (~500 BC)
  61. 61. Sun Tzu “if they are strong, avoid them”
  62. 62. any comment ?
  63. 63. Strategy as enemy total destruction
  64. 64. Karl von Clausewitz (~1800)
  65. 65. On war "The complete or partial destruction of the enemy must be regarded as the sole object of all engagements.”
  66. 66. Biological foundations
  67. 67. Daniel Dennett
  68. 68. Genotype and phenotype genotype + environment → phenotype
  69. 69. IntentionalityThe intentionality characteristic of humans is a result ofevolutionary processes. Humans have goals and desiresand tend to operate in order realize their goals(according to their understanding of the world or theirbeliefs).
  70. 70. Darwinian creaturesKinds of Minds: Towards an Understanding of ConsciousnessDaniel C. Dennett
  71. 71. Popperian creaturesKinds of Minds: Towards an Understanding of ConsciousnessDaniel C. Dennett
  72. 72. Gregorian creaturesKinds of Minds: Towards an Understanding of ConsciousnessDaniel C. Dennett
  73. 73. Summary
  74. 74. Different approaches, different tools,different purposes rivalry alignment processes A D1 strategy as… B C D2 E co-creation free rider environment learning process x x x x x x x technology cognition manipulation
  75. 75. Quick checklist Identify the strategic issues 1. What’s the problem ? What’s the context ? Select the right method and tools 1. Read reference books 2. Ask questions to experts 3. Use the internet Co-create strategy with all future participants Operationalize: translate concepts into daily activities Monitor execution (measure progress) Update strategic destination if necessary
  76. 76. Thank you
  77. 77. Many thanks to Flickr and McMollie Jimurphy Grafixation leonzerider ayalan