Strategy Dilemmas

15 strategy dilemmas

# 1: Outside-in vs. Inside-out.# 2: Trying things out vs. Planning.# 3: Creative thinking vs. Analytical thinking.# 4: Creativity vs. Productivity.# 5: Continuous change vs. Revolutionary change.# 6: Collaboration vs. Competition.# 7: Connections vs. Transactions.# 8: Inclusive / inviting vs. Exclusive / isolating.# 9: Company perspective vs. Business unit perspective.# 10: Shape markets vs. Adapt to markets.# 11: Self management vs. Hierarchical management.# 12: Globalization vs. Localization.# 13: Long term focus vs. Short term focus.# 14: People vs. Product.# 15: Outcome vs. Income.

Strategy dilemma # 1 Outside-in vs. Inside-out

Jeff Bezos, Amazon.com founderSourcehttp://www.businessweek.com/magazine/content/08_17/b4081064880218_page_2.htm

Customer needsSource: http://www.scribd.com/doc/56785190/Customer-Needs

Internal External Change Driver Change Driver #1 #2 Emotionalengagement Shock Feedback from focus treatment customers and freelance workers #4 #3 Rationalengagement Get 2 or more Benchmark with focus jobs competitors

Strategy dilemma # 2 Trying things out vs. Planning

Build a just try it culture – emphasize ”test and learn” instead of ”plan and execute”Source: Hamel, Gary: The Future of Management, p. 120.

The “discovery” model reflects what a company is like in its start-up phase. In this period management is likely to be relatively informal, and even vague about how work should get done and to what end. Google began life using the discovery model, and to some extent still does.Source:http://www.ft.com/cms/s/0/6ce11196-35f3-11df-aa43-00144feabdc0.html

Experiments require short-term losses for long-term gains. experiments require short-term losses for long-term gainsSource: http://hbr.org/2010/04/column-why-businesses-dont-experiment/ar/1

[At Ciba-Geigy, everything was planned to the level of the smallest detail]. [I had to provide a plan that showed virtually minute by minute what would happen during the two days, and the company was clearly willing to commit all the time it might take to design as nearly perfect a meeting as possible].Source:Schein, Edgar H.: Organizational Culture and Leadership, p. 367-368.

In a turbulent world, strategy making can no longer be a top down activity. What is required instead is a strategy process that reflects the biological principles of variety, selection, and retention.Source:http://blogs.wsj.com/management/2009/03/02/management-moonshots-part-ii/

”Today’s hypercompetitive environment and the rapidly changing business landscape create a situation where the once-a-year strategic planning process is simple not sufficient.”Source:Buhler, Patricia M.: Managing in the new millenium. SuperVision, November 2008.

Strategy dilemma # 3 Creative thinking vs.Analytical thinking

Creative approach:From few to many possibilities

Idea Idea Idea Smelling Commu- HearingIdea nicating Idea Obser- Reading ving Thinking Idea Idea Idea

Analytic approach:From many to few possibilities

Analysis AnalysisAnalysis Result Analysis Analysis

Strategy dilemma # 4 Creativity vs. Productivity

Sourcehttp://www.vijaygovindarajan.com/2006/03/strategy_as_transformation.htm

To be creative To be efficientThink outside the box Stick to your knittingExplore what you don’t know Exploit what you knowAnticipate future customer needs Meet current customer needsAllow freedom and flexibility Demand accountabilityAvoid process and encourage Impose process and structureunstructured interactionSourceGovindarajan, Vijay & Trimble, Chris: 10 Rules for Strategic Innovators, p. 3.

Smart growth focuses on economic creativity - because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create.Source:Umair Haque.http://blogs.hbr.org/haque/2009/01/davos_discussing_a_depression.html

Strategy dilemma # 5Continuous change (Kaizen)‫‏‏‬ vs. Revolutionary change

”Kai” = Change.”Zen” = Good.

Toyota implements a million new ideas a year, and most of them come from ordinary workers. (Japanese companies get a hundred times as many suggestions from their workers as U.S. companies do.) Most of these ideas are small - making parts on a shelf easier to reach, say - and not all of them work. But cumulatively, every day, Toyota knows a little more, and does things a little better, than it did the day before.Sourcehttp://www.newyorker.com/talk/financial/2008/05/12/080512ta_talk_surowiecki

Continuous Change Revolutionary Change Constant renewal CreativeProactive Crowdsourcing destruction Change Social mediaReactive Adapt Adjust Turn aroundChange

Short term Long term Fire ProactiveDynamic extinguishing Inactive Static

Strategy dilemma # 6 Collaboration vs. Competition

To meet the pressure for cooperation, firms must actually become part of a broader ”team”, spinning a web of close collaborative relationships. The question dividing strategizing managers is whether firms should be more embedded or more independent.Source: De Wit, Bob & Meyer, Ron: Strategy Synthesis, p. 168.

Strategy dilemma # 7 Connections vs. TransactionsSource:http://blogs.hbr.org/haque/2009/01/davos_discussing_a_depression.html

Strategy dilemma # 8Inclusive / inviting vs.Exclusive / isolating

Strategy dilemma # 9 Company perspective vs. Business unit perspective

Strategy dilemma # 10 Self management vs. Hierarchical management

”The strategic planning process is one today that dictates the involvement of essentially all organizational members.” ”Those frontline employees working in boundary spanning positions can often provide important insights into external environment changes – particularly with changing customer needs.”SourceBuhler, Patricia M.: managing in the new millenium. SuperVision, November 2008.

Few participants Many participants Closeddecisionprocess Opendecisionprocess

“A léchelle des salariés, les blogs internes constituentune version moderne du Kaizen japonais, incitantchaque employé à émettre des suggestions. Les idéesremontent plus facilement, avec moins de barrières” Hervé Collignon, AT KearneySource: La lettre du Conseil, November 1, 2007.

Strategy dilemma # 11 Shape markets vs. Adapt to markets

”To put things simply, when it faces very high levels of uncertainty about variables it can influence, shaping makes most sense. Adapting is preferable when key sources of value creation are relatively stable or outside the company’s control.”Source:Courtney, Hugh: Making the most of uncertainty. The Mckinsey Quarterly, 2001, number 4.http://www.mckinseyquarterly.com/article_page.aspx?ar=1128&L2=21&L3=37&srid=378&gp=0

Strategy dilemma # 12 Globalization vs. Localization

Globalization and localization 10 examplesSourcehttp://www.slideshare.net/frankcalberg/globalization-and-localization

Strategy dilemma # 13 Long term focus vs. Short term focus

Given the significant focus that the Nordic countries have placed on higher education and training over recent decades, it is not surprising that Finland, Denmark, and Sweden continue to occupy the top three positions in the higher education and training pillar.Source: http://www.weforum.org/documents/GCR0809/index.html

Strategy dilemma # 14 People vs. ProductSource:http://blogs.hbr.org/haque/2009/01/davos_discussing_a_depression.html

Strategy dilemma # 15 Outcome vs. Income

Smart growth measures peoples outcomes - not just their incomes. Are people healthier, fitter, smarter, happier?Sourcehttp://blogs.hbr.org/haque/2009/01/davos_discussing_a_depression.html

Strategy Dilemmas

by Frank Calberg Services on Mar 25, 2010

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