Strategy dilemmas

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

Published in: Business, Technology

Strategy dilemmas

  1. 1. Strategy dilemmas
  2. 2. # 1: Outside-in vs. Inside-out. # 2: Trying things out vs. Planning. # 3: Creative thinking vs. Analytical thinking. # 4: Creativity vs. Efficiency. # 5: Continuous change vs. Revolutionary change. # 6: Collaboration vs. Competition. # 7: Inclusive / involving vs. Exclusive / isolating. # 8: Company perspective vs. Business unit perspective. # 9: Self management vs. Hierarchical management. # 10: Shape markets vs. Adapt to markets. # 11: Long term focus vs. Short term focus. # 12: Globalization vs. Localization.
  3. 3. Strategy dilemma # 1 Outside-in vs. Inside-out
  4. 4. Question Every company claims to be customer-focused. Why do you think so few are able to pull it off? Answer Companies get skills-focused instead of customer-needs focused. Jeff Bezos http://www.businessweek.com/magazine/content/08_17/b4081064880218_page_2.htm
  5. 5. Do all of innovations come from inside of the firm, where we develop the new ideas internally and execute them ourselves? Or do we systems set up so that the ideas we execute can come from anywhere, and some of our own ideas end up being brought to market by someone else? http://timkastelle.org/blog/2011/12/ten-tensions-in-innovation-revised/
  6. 6. Further inspiration http://www.slideshare.net/frankcalberg/customer-needs http://www.slideshare.net/frankcalberg/pestel http://www.scribd.com/doc/36349465/Capital
  7. 7. Strategy dilemma # 2 Trying things out vs. Planning
  8. 8. experiments Experimerenquitre sshorrt-teermq lousseisr foer lo nsgh-terom gratins- term losses for long-term gains. http://hbr.org/2010/04/column-why-businesses-dont-experiment/ar/1
  9. 9. http://www.innovationmanagement.se/2011/11/15/unlearn-your-mba/, minute 11.
  10. 10. 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. http://www.ft.com/cms/s/0/6ce11196-35f3-11df-aa43-00144feabdc0.html
  11. 11. When pharmaceutical companies conduct clinical trials to test the safety and efficacy of their drugs as part of the process for obtaining regulatory approval, some patients receive the drug and others some standard existing treatment or a sugar pill (placebo). A comparison of the two sets of results tells us whether the drug improves patients’ symptoms and has side effects. Many potential changes in your organizations can be subjected to a similar experiment: implement the change in some places, but not in others, and compare performance in the two groups to learn whether the change is effective. http://blogs.hbr.org/2014/10/experiment-with-organizational-change-before-going-all-in/
  12. 12. Strategy dilemma # 3 Creative thinking vs. Analytical thinking
  13. 13. Creative approach: From few to many possibilities
  14. 14. Idea Thinking Hearing Communicating Observing Reading Smelling Idea Idea Idea Idea Idea Idea Idea
  15. 15. The abductive logic is oriented towards the future, what you imagine may be possible. To innovate, stop using the 2 words ”prove it”. http://youtu.be/txhBTi1STn8 http://youtu.be/e7pk8DOtsYw
  16. 16. Research by Marius Usher shows that when people made choices based only on instinct, they made the right call up to 90% of the time. http://blogs.hbr.org/hbr/nayar/2013/05/listening-to-your-inner-voice.html
  17. 17. Analytic approach: From many to few possibilities
  18. 18. Analysis Result Analysis Analysis Analysis Analysis
  19. 19. Question When it comes to innovation, what is the biggest challenge that you see organizations facing? Roger Martin It is the dominance of analytical thinking which holds that unless something can be proven by way of deductive or inductive logic, it is not worthy of consideration or investment. No new idea in the world has been proven before being tried. So as long as analytical thinking is allowed to dominate, innovation is deeply and profoundly challenged. http://www.innovationexcellence.com/blog/2012/06/15/balancing-intuition-with-analysis/
  20. 20. The inductive and deductive logic is based on the past experiences. Focus is on proving things. http://youtu.be/txhBTi1STn8 http://youtu.be/e7pk8DOtsYw
  21. 21. Further inspiration http://www.slideshare.net/frankcalberg/creativity-exercises http://www.slideshare.net/frankcalberg/creativity-and-innovation-6546087
  22. 22. Strategy dilemma # 4 Creativity vs. Efficiency
  23. 23. Industrial firms thrive on reducing variation (manufacturing errors); Creative firms thrive on increasing variation (innovation). http://hbr.org/2014/01/how-netflix-reinvented-hr/ar/1 Reed Hastings
  24. 24. To be creative To be efficient Think outside the box. Stick to your knitting. Explore what you don’t know. Exploit what you know. Anticipate future customer needs. Meet current customer needs. Allow freedom and flexibility. Demand accountability. Avoid process and encourage unstructured interaction. Impose process and structure. Govindarajan, Vijay & Trimble, Chris: 10 Rules for Strategic Innovators, p. 5.
  25. 25. http://www.vijaygovindarajan.com/2006/03/strategy_as_transformation.htm
  26. 26. Strategy dilemma # 5 Continuous change vs. Revolutinary change
  27. 27. 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. http://www.newyorker.com/talk/financial/2008/05/12/080512ta_talk_surowiecki
  28. 28. ”Kai” = Change. ”Zen” = Good.
  29. 29. Continuous change Revolutionary change Continous improvement Creative destruction Proactive Change Reactive Adapt / adjust Turn around Change
  30. 30. Strategy dilemma # 6 Collaboration vs. competition
  31. 31. Santander went into partnership with Funding Circle. The bank recognized that a segment of its customer base wanted access to peer-to-peer lending and acknowledged that it would be costly to build a world-class offering from scratch. http://www.mckinsey.com/insights/strategy/strategic_principles_for_competing_in_the_digital_age
  32. 32. Sharing information and expertise is a great way to build trust with your competitors. http://blogs.hbr.org/2014/02/use-co-opetition-to-build-new-lines-of-revenue/
  33. 33. Strategy dilemma # 7 Inclusive / involving vs. Exclusive / isolating
  34. 34. How should companies react to creative external people?
  35. 35. Active Resist Actively restrain what creative customers do with product / service. Enable Actively facilitate what creative people do with product / service. Passive Discourage Ignore what creative customers do with product / service. Encourage But don’t actively facilitate. Degree of positive attitude towards customer innovation http://www.slideshare.net/IanMcCarthy/when-customers-get-clever-managerial-approaches-to-dealing-with-creative-consumers
  36. 36. Executives at organizations that are experimenting with more participatory modes of strategy development cite two major benefits: Benefit # 1 Improving the quality of strategy by pulling in diverse and detailed frontline perspectives that are typically overlooked but can make the resulting plans more insightful and actionable. Benefit # 2 The second is building enthusiasm and alignment behind a company’s strategic direction. https://www.mckinseyquarterly.com/Strategy/Strategy_in_Practice/The_social_side_of_strategy_2965
  37. 37. Further inspiration https://delicious.com/frankcalberg/crowdsourcing http://www.slideshare.net/frankcalberg/rethinking-recruitment-8077077
  38. 38. Strategy dilemma # 8 Company perspective vs. Business unit perspective
  39. 39. Wal-Mart stores established its digital business away from corporate headquarters to allow a new culture and new skills to grow. http://www.mckinsey.com/insights/strategy/strategic_principles_for_competing_in_the_digital_age
  40. 40. In the long run, internal competition causes every participant to lose. When leaders look for ways to encourage cooperation and generate common goals, they become more successful. http://blogs.hbr.org/cs/2013/02/how_poor_leaders_become_good_l.html
  41. 41. Strategy dilemma # 9 Self management vs. Hierarchical management
  42. 42. Use of crowdsourcing / social media Closed decision process Open decision process Few participants Many participants
  43. 43. Further inspiration http://www.slideshare.net/frankcalberg/3-ways-of-organizing http://www.slideshare.net/frankcalberg/good-leadership
  44. 44. Strategy dilemma # 10 Shape markets vs. Adapt to markets
  45. 45. Adapting is preferable when key sources of value creation are relatively stable or outside the company’s control. https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Making_the_most_of_uncertainty_1128
  46. 46. To put things simply, when it faces very high levels of uncertainty about variables it can influence, shaping makes most sense. https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Making_the_most_of_uncertainty_1128
  47. 47. A shaping strategy is best in unpredictable environments that you have the power to change. In new or young high-growth industries where barriers to entry are low, innovation rates are high, demand is very hard to predict, and the relative positions of competitors are in flux, a company can often radically shift the course of industry development through some innovative move. http://blogs.hbr.org/cs/2012/09/know_which_strategy_style_is.html
  48. 48. A shaping strategy embraces short or continual planning cycles. Flexibility is paramount, little reliance is placed on elaborate prediction mechanisms, and the strategy is most commonly implemented as a portfolio of experiments. http://blogs.hbr.org/cs/2012/09/know_which_strategy_style_is.html
  49. 49. Strategy dilemma # 11 Long term focus vs. Short term focus
  50. 50. Short term Long term Dynamic Fire extinguishing Proactive Inactive Static
  51. 51. Further inspiration http://www.slideshare.net/frankcalberg/time-15259416
  52. 52. Strategy dilemma # 12 Globalization vs. Localization
  53. 53. Further inspiration http://www.slideshare.net/frankcalberg/globalization-and-localization
  54. 54. Thank you for your interest. For further inspiration and personalized services, please feel welcome to visit http://frankcalberg.com Have a great day.

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