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Business strategy for the aspiring project professional webinar

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Business strategy for the aspiring project professional webinar
Wednesday 30 September 2020

presented by
Dr Jon Broome

The link to the write up page and resources of this webinar:
https://www.apm.org.uk/news/business-strategy-for-the-aspiring-project-professional-webinar/

Published in: Education
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Business strategy for the aspiring project professional webinar

  1. 1. © 2020 +44(0)7970 428 929 JON@LEADINGEDGEPROJECTS.CO.UK WWW.JONBROOME.COM © Welcome to …. Business Strategy for aspiring project managers presented by Dr Jon Broome
  2. 2. © 2020 © Webinar Objective To provide an introduction to what good strategy looks like and how to develop it, so that ▪ the aspiring project professional can develop their career and contribute to an organisation’s strategic direction, ▪ avoid having to deliver projects and programmes which are flawed from the outset. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  3. 3. © 2020 © Programme 1. Introduction and background 2. Definition(s) of business strategy. 3. What are we aiming for? The six sources of competitive advantage. 4. Bad strategy: four+ common mistakes. 5. How do you lose a competitive advantage … and how do you gain it ? 6. What good strategy looks like: process, components and a few tools. 7. A few comments on delivery. 8. Q & A’s +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  4. 4. © 2020 © Background ❖ As a self-investor, looking for Q-GARP companies (Quality Growth At a Reasonable Price). ❖ Quality: some sort of sustainable competitive advantage i.e. a moat. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  5. 5. © 2020 © Background ❖ As a trustee of APM, got increasingly interested in strategy & its development with the obvious twist that we are a charity. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  6. 6. © 2020 © How this webinar came about … says For an individual project professional’s development, they “need to go beyond classic technical project management skills and build the ability to engage with, and provide leadership to, varied project stakeholders”. More specifically, in order for project professionals to take a place at the top table, they need to be able to “Shape strategy not just delivery.” +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  7. 7. © 2020 © Disclaimer alert ❖ I am not an expert, just someone who is trying to: o sort the wheat from the chaff, o make sense of the literature and think about how it can be applied. ❖ I don’t intend to say anything about APM strategy. ❖ Anything I do say or can reasonably be inferred is my personal view and does mean that it is the view of other trustees and executives or the board as a whole. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  8. 8. © 2020 © My definition of strategy (which is similar to Richard Rumelt’s) The application of your organisation’s relative strengths to either: ❖ your competitions’ weaknesses &/or ❖ emerging opportunities ahead of any/the competition to create, sustain or enhance sources of competitive advantage. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  9. 9. © 2020 © The six sources of sustainable competitive advantage / moats. ❖ Intangible Assets ❖ Switching costs ❖ Network Effect ❖ Scale economies ❖ Scarce or cornered resource / efficient scale ❖ Organisational design +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  10. 10. © 2020 +44(0)7970 428 929 JON@LEADINGEDGEPROJECTS.CO.UK WWW.JONBROOME.COM Regulatory Licenses Intangible Assets Brands Intellectual Property ‘Know-how’ Proprietary databases Customer Relationships
  11. 11. © 2020 © Switching Costs ❖ Where a product or service becomes so embedded in how you work, that switching to another supplier is too disruptive, risky and expensive. ❖ The Apple Ecosystem is a consumer example. ❖ Enterprise system suppliers are a B2B example. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  12. 12. © 2020 © Network Effect ❖ The more people who use the service or product, the more it is worth. ❖ E.g. a telephone network ❖ Examples include Facebook (or any social network) and Rightmove. ❖ Can also apply to standards e.g. Microsoft. ❖ Tends to lead to ‘first to get it right’ leads to a ‘winner takes all’ outcome. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  13. 13. © 2020 © Scale Economies ❖ High capital costs and low running costs mean have to make a large investment to become a player. ❖ Extra units cost relatively little to produce and distribute e.g. Unilever, Diageo, Coca-Colas distribution networks. ❖ Applies to IT where distribution costs are zero so the ‘first mover who gets it right’ can invest more than the (current) competition to get further ahead of the competition. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK ❖ Netflix originals is a blue ocean example
  14. 14. © 2020 © Scarce or Cornered Resource / Efficient Scale ❖ Where size of ‘red’ market only allows for limited number of profitable players. ❖ Reduces attractiveness to new entrants. ❖ Makes any aggressive move to increase market share unattractive as ultimately hurts all. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  15. 15. © 2020 © Organisational Design ❖ May involve elements of other moats, but … ❖ Brand, structure, systems, culture, talent development etc. are all so: o tightly interwoven & o mutually reinforcing makes it very hard to copy successfully. I.e. to compete you have to copy the lot.
  16. 16. © 2020 © The six sources of sustainable competitive advantage / moats. ❖ Intangible Assets: Regulatory Licences, Intellectual Property, Brands, Proprietary Licenses, Customer Relationships & ‘Know-how’. ❖ Switching costs ❖ Network Effect ❖ Scale economies ❖ Scarce or cornered resource / efficient scale ❖ Organisational design +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  17. 17. © 2020 © Bad strategy: 4 common mistakes to democratise home ownership to be the financial intermediary of choice for our customers Strategic Objectives To increase our loan book size An Inspirational Leader To be the most profitable bank in our sector To delight our customers Targets Mission: Vision: Targets Targets Targets Targets Targets Targets Targets Targets Targets Values: - Determination - Teamwork - Collaboration Targets Targets Little or no sense of how to achieve these targets or prioritision etc etc
  18. 18. © 2020 © ❖ Inspirational leadership as a substitute for, rather than a turbo-charger of, good strategy. ❖ Belief in positive thinking ❖ Fluff: big grandiose words ❖ Templating: e.g. VisionMissionObjectivesStrategiesTactics with a lack of analysis = not rooted in reality. ❖ Unwillingness to focus & therefore not to do things whether due to organizational politics, fear of upsetting people, history of company, lack of insight/analysis etc. ❖ ’Operational effectiveness’: efficiency in a ‘me too’ sector is not a competitive strategy. It is necessary but not sufficient condition. Bad strategy: 4+ common mistakes +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  19. 19. © 2020 © How lose to your competitive advantages … 1. Don’t anticipate or respond to emerging technology and other trends 2. Don’t anticipate or respond to changing regulatory requirements 3. Mindset/biases: arrogance, head in sand, fear, sunk cost fallacy. 4. Failure to anticipate competition. 5. Lack of consideration of efficient market ‘attractor’ state and positioning as a result. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  20. 20. © 2020 © How to gain competitive advantages … 1. Anticipate and respond to emerging technology and other trends e.g. 2. Anticipate and respond to changing regulatory requirements 3. Be open to change, however much you might not like it. 4. Respond promptly to emerging competition, (even if it means ultimately eating your own business) 5. Sketch out the efficient market ‘attractor’ state and start positioning early as a result. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  21. 21. © 2020 +44(0)7970 428 929 JON@LEADINGEDGEPROJECTS.CO.UK WWW.JONBROOME.COM What does good strategy look like? Process Science Information & analysis of existing knowledge e.g. literature review Hypothesis Design experiment Do experiment Test & refine Strategy A diagnosis of the situation A Guiding Policy A pathway of actions Start implementing Test, refine & update Comparison has been made to good science: STRATEGIC INSIGHT
  22. 22. © 2020 © Some red ocean tools for the ‘diagnosis of the situation’ ❖ Porters Five Forces Model ❖ Emerging trends ❖ Attractor state ❖ SWOT analysis, inc moats, of yourself and competitors ❖ Deeper analysis of competitors: what is their business model, policies, culture etc. ❖ Do a current state strategy canvas for the sector +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  23. 23. © 2020 © Some blue ocean questions for ‘strategic insight’ ❖ What alternatives are there for customers ? E.g. Southwest Airlines & road journeys, not other airlines ❖ Can we target a different buyer? E.g. traders for Bloomberg versus IT managers for Reuters & Telerate ❖ What is the total customer experience? What detracts and what could enhance that experience ? ❖ Where on the function/emotion spectrum does the industry operate? How could you add the opposite? E.g. full broker service vs. self-service investment platforms. ❖ What are the customer groupings? Is there a gap? Can we eliminate the superfluous or provide an upgrade? +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  24. 24. © 2020 © A blue ocean tools for ‘strategic insight’. ❖ Current state strategy canvas for wine. ❖ A final state strategy canvas for yellowtail What can be eliminated or reduced (that is not valued by target customer) ? What can be raised or created (that is/will be valued by target customer)? Source:ShortformSource:Shortform
  25. 25. © 2020 © But how do we achieve at least one of the six sustainable competitive advantages? ❖ There is no permanently sustainable competitive advantage because: o the world might change o you have to put the effort into sustain it. ❖ Once pointed out, I saw this pattern time & time again in the winning examples: the existing incumbents would have to eat their own business to compete, thus giving the ‘newbie’ time to build one or more moats.
  26. 26. © 2020 +44(0)7970 428 929 JON@LEADINGEDGEPROJECTS.CO.UK WWW.JONBROOME.COM What does good strategy look like? Process Science Information & analysis of existing knowledge e.g. literature review Hypothesis Design experiment Do experiment Test & refine Strategy A diagnosis of the situation A Guiding Policy A pathway of actions Start implementing Test, refine & update Comparison has been made to good science: STRATEGIC INSIGHT
  27. 27. © 2020 © What does GREAT strategy look like? It is anticipatory both of emerging trends and how the competition is likely to respond. Targeted to the organisation attractor state - a fleshed-out vision – based on targeted niche. It provides superior value to your targeted customer / niche. It differentiates you from the competition, ideally so there isn’t any (immediate) competition. It establishes new, or enhances existing, moats. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  28. 28. © 2020 © What does GREAT strategy look like? It’s focussed: it clearly states what activities will and won’t be done. It’s coherent with activities that are mutually reinforcing, so that o it’s a hard to replicate system o the total > sum of of the parts. It’s actionable: what needs to be done easily drops out. The kernel of the strategy – diagnosis, policy, actions - can be expressed clearly & succinctly. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  29. 29. © 2020 © A few comments on implementation ❖ Most of the stuff on implementation sounded like good project management to me ! E.g. programme & benefits management etc. ❖ What stood out from one article1 was: o Need to go beyond Roles and into Responsibilities, especially who is the decision maker and the need for continuity. o Communications, both informal and formal, including access to data, is critical to make good coherent strategic decisions. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK 1. Neilson G L, Martin K & Powers E, The Secrets to Successful Strategy Execution in HBR’s 10 Must Reads: On Strategy
  30. 30. © 2020 © My definition of strategy (which is similar to Richard Rumelt’s) The application of your organisation’s relative strengths to either: ❖ your competitions’ weaknesses &/or ❖ emerging opportunities ahead of any/the competition to create, sustain or enhance sources of competitive advantage. +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK
  31. 31. © 2020 © Q & A’s +44(0)7970 428 929 E: JON@LEADINGEDGEPROJECTS.CO.UK

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