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The Guardian Masterclass - Strategic Transformation

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Professor George Yip, Associate Dean for Executive Programmes at Imperial College Business School, shares his tips on how to successfully execute business strategies at The Guardian's one-day MBA masterclass held on 22 May 2016.

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The Guardian Masterclass - Strategic Transformation

  1. 1. The Guardian One-Day MBA Masterclass Strategic Transformation Professor George Yip Associate Dean, Executive Programmes
  2. 2. Imperial means Intelligent BusinessImperial College Business School 2 Strategic Objective Business Model What is Strategy
  3. 3. Imperial means Intelligent BusinessImperial College Business School 3 EXECUTIVE STRATEGIC OBJECTIVE (example of one) STRATEGIC MOVES (example of one) EXECUTION (example of one) Chief Executive Diversify Create new line of business Select and start up new business, appoint general manager General Manager Make the new business a success Develop appealing new products Set up new product development unit, appoint unit manager New Product Development Unit Manager Run the unit well, including delivering successful new products Put in the right processes, systems and workers Monitor processes, systems and workers Cascade of objectives, strategic moves and execution
  4. 4. Imperial means Intelligent BusinessImperial College Business School 4 • All strategies need to be executed • Not the same as operational execution • Strategy execution  new, different situation (Lexus) • Operational execution  same situation (perhaps better but not different) • Some strategies are more difficult to execute than others, depending on – Extent of stretch in strategic objectives – Fit with current business model – Change capabilities of organization – Implementation capabilities of organization Defining strategy execution
  5. 5. Imperial means Intelligent BusinessImperial College Business School 5 Source: Laurent Mirabeau and Steve Maguire, “From Autonomous Strategic Behavior to Emergent Strategy,” Strategic Management Journal 35 (2014), pp. 1202-1229. Intended versus emergent strategy
  6. 6. Imperial means Intelligent BusinessImperial College Business School 6 Product launch Acquisitions Market development Related diversification Strategic decisions Strategies evolve and inform strategic decisions, which in turn consolidate strategic direction Evolving strategic direction Source: Johnson, Whittington and Scholes, Exploring Strategy. Strategic direction from prior decisions
  7. 7. Imperial means Intelligent BusinessImperial College Business School 7 Environmental Change PHASE 1 Incremental Change PHASE 2 Strategic Drift PHASE 3 Flux PHASE 4 Transformational Change or Demise Amountofchange Time Source: Gerry Johnson and Kevan Scholes The problem of strategic drift
  8. 8. Imperial means Intelligent BusinessImperial College Business School 8 • Individual cognitive limits • “Steady as you go” • Core rigidities • Organizational culture • Lagged performance effects • Past success: The Icarus Paradox Source: Gerry Johnson Why strategic drift?
  9. 9. Imperial means Intelligent BusinessImperial College Business School 9 “When the rate of change inside the company is exceeded by the rate of change outside the company, the end is near.”
  10. 10. Imperial means Intelligent BusinessImperial College Business School 10
  11. 11. Imperial means Intelligent BusinessImperial College Business School 11 When it goes bankrupt When it loses money, consistently When it loses market share When sales go down BUT BY NOW IT IS TOO LATE to avoid trauma for the company, shareholders, employees, customers, partners and managers. 11 How to tell when your business needs strategic transformation
  12. 12. Imperial means Intelligent BusinessImperial College Business School 12 Look for the following indicators: • A new technology or product form introduced into your industry • By someone else • Which your top managers refuse to regard as significant (e.g., motorcycles, personal computers, coffee, music downloads, Apple iPhone, etc.) How to anticipate the need for strategic transformation
  13. 13. Imperial means Intelligent BusinessImperial College Business School 13 Sales and profits good. BUT the most innovative/fashionable/desirable customers desert you. e.g. Cadillac, Nissan in U.S. in 1990s • Customer loyalty and retention declines • The smartest employees do not join you • Your company is worth more broken up How to anticipate the need for strategic transformation (cont.)
  14. 14. Imperial means Intelligent BusinessImperial College Business School 14 • State owned until 1982 • BA =“ Bloody Awful” • Rules for flight attendants • New advertising campaign • Product innovations No. 1 among world business travellers 14 Transformation of British Airways
  15. 15. Imperial means Intelligent BusinessImperial College Business School 15 Develop the Organization Achieve Mobilization Create the Vision Build the Measures Construct an Economic Model Align Physical Infrastructure Achieve Market Focus Invent New Businesses Change Rules Through Information Technology Create Reward Structure Build Individual Learning Redesign Work Architecture Transforming the organisation
  16. 16. Imperial means Intelligent BusinessImperial College Business School 16 Conclusion A strategy is a journey not a destination. The best strategy ideas are the outcome of a creative process strongly grounded in deep knowledge and understanding of both the external and the internal environment. The best strategies are successfully executed.
  17. 17. Imperial means Intelligent BusinessImperial College Business School 17 Manuel Hensmans, Gerry Johnson and George Yip, Strategic Transformation: Changing While Winning, Basingstoke, England: Palgrave Macmillan, 2013. Gerry Johnson, George Yip and Manuel Hensmans, “Achieving Successful Strategic Transformation,” MIT Sloan Management Review, Spring 2012, pp. 25-32. Gerry Johnson and George S. Yip, “Transforming Strategy,” Business Strategy Review, 18/1 Spring 2007, pp. 11-15. (g.yip@imperial.ac.uk) References

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