Key note speech at The Danish Management Society AGM based on the book Strategy for a networked world

1. Strategy for a Networked World
Ulf Mannervik
Founding Partner, NormannPartners
Director of Oxford Networked Strategy Lab, Oxford University
The Danish Management Society AGM, Copenhagen on 2 October 2017

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Systems

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Sources: NASA, Lawrence Livermore National Laboratory

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Renewables: Not if,
but when and how
“For the second year in a row, renewable
energy accounted for more than half the new
power generation capacity added worldwide.
Sales of plug-in electric vehicles last year were
42 per cent higher than in 2015, growing eight
times faster than the overall market.”
May 18, 2017 FT.COM

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− Source: China Daily
Source: The Beijinger

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− Source: Rob Stephenson

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Source: Frauenhoffer Institute

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When your system is invaded
Music industry incumbents 15 years ago

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Source: Apple, Napster and Spotify

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80 strategies that failed: why?
“Misleading prejudgments” = 82%
“Misleading experiences” = 64%
“Inappropriate self-interest”, including
wanting to be popular = 69%
Source: Think again: Why good leaders make bad decisions – and how to keep it happening to you (Finkelstein, Whitehead, Campbell; 2008)

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Competitive strategy
A value chain in automotive…

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Competitive strategy
The value chain view of a customer
A buyer of goods,
pays for it,
and destroys value
Source: Grassrootsmotorsports.com

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Competitive strategy
Strategy = how to compete in an industry
Source: Porter (1980, 2014)

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TURBULENCE UNCERTAINTY
NOVELTY AMBIGUITY

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Networked strategy
Systems thinking, values in use
Sources: Normann (2001), Ramírez & Selsky (2014), Ramírez & Mannervik (2016)
Supplier
Stake
holder
The client’s system
Value co-created
Client
Stake
holder
Stake
holder
Stake
holder
Stake
holder
*
* * *
*
*

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Networked strategy
View of client + other actors
Pays for being
relieved or enabled
to create value(s)
© NormannPartners

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Networked strategy
Strategy = Designing system interactions
Source: Ramírez & Mannervik (2016)

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Networked strategy in healthcare
Shift from value chain focus, to system
Dominant internal value:
Technical performance
Dominant external
stakeholder values:
Quality of care
Cost
Access
R&D
engineers
Health care
providers
Medical
specialists
Insurers
Patients
Government
Performance
(accuracy, speed)
and features
Performance
and features
Quality
of care
Quality of care
and efficiency
Quality of
care and
comfort
Cost and
health
outcomes
Cost
Access
Access
and cost
Quality
of care

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Networked strategy in healthcare
Shift from competition, to collaboration
PROCESS+
▪ Scientifically
validated
medical
protocols
▪ Efficient
internal
procedures
▪ Optimised
workflows
PEOPLE+
▪ Highly
qualified
medical
personnel
▪ Experienced
consultants
and
managers
15%
15% 

15% 
BETTER
OUTCOMES TECHNOLOGY
▪ Better
imaging and
diagnostic
technology
▪ Software
system
INFORMATION+
▪ Imaging
information
▪ Care system
information
▪ Scientific and
historical
evidence
=

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Systems
+
Design

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Networked strategy with design thinking
What ”business”
are we in?
What ”business”
could we be in?
What ”business”
should we be in?
Closing/focusingOpening/distancing
Source: Normann

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A Scania value creating system
What business are we in?
Source: Ramírez & Mannervik

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Source: Ramírez & Mannervik
Scenarios stress-test: tensions rising in system
What business could we be in?
BIG SYSTEM WASTE +
DRIVERS TO MINIMIZE
DRIVING FORCES FOR
COMMODITISATION

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LOTS – a new value creating system
What business should we be in?
Source: Ramírez & Mannervik

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• Design, set up and operate sustainable logistics systems for recurrent flows
• Minimise waste in flows, and in interfaces between different actors
• Collaborate with local contractors to enhances their operations
• Multi-stakeholder benefits, with profitable sustainable growth for both
customers and their suppliers
Source: Lotsgroup.com

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Roles of system designer:
-Identify and quantify waste
-Identify and implement improvements
-Can also operate the system
TRANSPORT
COMPANIES FORRESTRY
COMPANY
PULP
MILL
PAPER
MILL
WORKSHOPS
Visualmgmtsystems
Efficient steady flows;
Less use of chemicals
Efficient flows;
Adaptedto demand
€
€
€
€
€
Source:Lotsgroup.com (ADAPTED)
OEMs
Minimising waste in logistics systems
Networked strategy design

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Distinct competences (NOT “core”):
• Expertise in road transportation
• Modular products and production systems
• Continuous improvement and lean operations
• Business design
Source: Lotsgroup.com

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Source: Ramírez & Mannervik
System vision,
and our role
in the system
Visionary leadership – A learning
vision, guiding a transformation
into a new value creating system
t
Iterative system design
Guiding vision + prototyping

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• Stable or TUNA environment?
• Value chains or systems as strategy lenses?
• Main focus on competition or collaboration?
• Understand meaning of value for different actors?
• System leverage on your distinct competences?
Networked strategy
Some concluding considerations

33. Thank you!