Business Acumen Program For Qualcomm


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Strategic thining - strategic planning and scenario planning. Presentation for engineers at Qualcomm - 04/09

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Business Acumen Program For Qualcomm

  1. 1. Qualcomm Business Acumen Series Strategic Planning for Engineers 1
  2. 2. Qualcomm Business Acumen Series Our Goals for Today... • Examine and apply the key fundamentals of Strategic Thinking/planning and scenario planning. • Learn what to do and not to do when creating a plan and how to avoid the common mistakes in writing a strategic plan. • Practice using a framework that will assist you in going through the process successfully. 2
  3. 3. Qualcomm Business Acumen Series Do NOT freak out! • I have a ton to cover and I will go pretty fast. • Please take notes and ask questions. • I will gladly send you a copy my strategic planning workbook. • I am happy to answer any of your questions, offer advice and recommend books at any time. Go to my website: and you can send me an email requesting whatever you need. 3
  4. 4. Qualcomm Business Acumen Series Most people think of: S.W.O.T. Competitive Positioning Customer Intimacy / CRM Industry trends Global trends Regulatory / Political Issues M.E.C.E. KRA’s Strategic Thrusts Corporate Objectives SMART Goals MBO 2 4
  5. 5. Qualcomm Business Acumen Series 5
  6. 6. Qualcomm Business Acumen Series Five Foundations of Effective Strategic Thinking Business Acumen Personal Experience Pattern Recognition Strategic Insight Disciplined Execution 2 6
  7. 7. Qualcomm Business Acumen Series The Four – I’s • Ignorance • Inflexibility • Indifference • Inconsistency 2 7
  8. 8. Qualcomm Business Acumen Series How to avoid the Four I’s • Aggressive external market focus. • Aggressive customer focus. • Keep the “Main Things” the main things. • Bullish on knowledge sharing and learning. • Passion and commitment at all levels. • Foster a healthy paranoia. • Revel in change. – be agile, adaptive, and anticipatory. 8
  9. 9. Qualcomm Business Acumen Series Do you have a clearly focused and well-communicated strategy for success? Effective Strategy = Valued Differentiation x Execution 9
  10. 10. Qualcomm Business Acumen Series Breakthrough Strategies • GE: number 1 or 2 – fix, sell close. • Intel: memory to processors • Microsoft: installed base • Apple: chaos to elegance • Saturn: no haggling / no pressure 10
  11. 11. Qualcomm Business Acumen Series Southwest One type of plane Point-to-point Fast turns Low fares / no frills Friendly staff 11
  12. 12. Qualcomm Business Acumen Series BTO JIT Inventory turns Logistics vs. Technology VOC Dell 12 12
  13. 13. Qualcomm Business Acumen Series 13 13
  14. 14. Qualcomm Business Acumen Series From the CEO of a little 152 billion dollar company… Look, what is strategy but resource allocation? When you strip away all the noise, that’s what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size your business or how deep its pockets. You have to figure out what to say “no” to. Jeffrey Immelt 14
  15. 15. Qualcomm Business Acumen Series Educated Guess Differentiated Strategy Focus Resource Allocation Bold Not Risky What NOT To Do 15
  16. 16. Qualcomm Business Acumen Series The problem with strategic thinking? It takes a lot of TIME… Study: In Search of Excellence, Good to Great, Built to Last, Results Rule, The Leadership Challenge, Who Says Elephants Can’t Dance, A Great Place To Work, The Toyota Way, Lessons in Excellence, What Really Works, Small Giants, Think Big – Act Small, What the Best CEOs Know, The 12 Simple Secrets of Microsoft Management, Tough Management, Practice What You Preach, The Art of What Works, The Four Pillars of High Performance, The Leadership Challenge, The Rise and Fall of Strategic Planning, Getting Results, Creating Competitive Advantage, Credibility, The Discipline of Teams, A Passion for Excellence, Liberation Management, The Wisdom of Teams… 25 @ 7,000p Experience: More than just your industry, your company, your job, and your personal experience Vision: 20% of your time on reflection, observation and strategic thinking 16
  17. 17. Qualcomm Business Acumen Series A short diatribe before we get to the business models… • I don’t like benchmarking. • I think copying other businesses is stupid! • Typically, by the time people start benchmarking a company five years has past since they initiated their strategies. • There is no way to guarantee that what worked for them will work for you… • But what I absolutely can guarantee is… you will not come up with any innovative, effective or remarkable strategies completely on your own. You must look around you to find good ideas… then take those ideas and make them better as you apply them to your specific challenges and opportunities. 17
  18. 18. Qualcomm Business Acumen Series To get the most from our session together… It is absolutely critical that you be brutally honest with yourself today. So let's get started with a little self-test… Organizational Effectiveness Audit Page 3 3 18
  19. 19. Qualcomm Business Acumen Series Microsoft • Total World Domination • The Top 5 % • Bet the Company • Require Failure • Managers are Qualified • Perform, Perform, Perform • Shrimps vs. Weenies • Stop the Insanity • Espirit De Corps 4 19 From: The Twelve Simple Secrets of Microsoft Management by Thielen
  20. 20. Qualcomm Business Acumen Series 23,000,000 74% 88% Trust & Respect 20
  21. 21. Qualcomm Business Acumen Series Winning Culture = Engaged Employees = Involved Customers • 2007 surveys by Towers Perrin, Gallup and Vivaldi of 9,000 companies in the US. • Based on hundreds of studies that correlate independently, all findings support the view that sustained profitability depends largely on the enthusiasm generated by the customer’s experience, which, in turn, depends largely on the enthusiasm and involvement of the employees serving the customer. • In quantitative terms 70% of how the customer perceives your organization is the result of the customer’s experience with your employees. • The results are indisputable: engaged and enthusiastic employees drive business success. • What , then, creates engaged and enthusiastic employees? It is all about leadership and culture. 21
  22. 22. Qualcomm Business Acumen Series Top High-Potential VPs from GE, Microsoft, IBM, Verizon, Merrill Lynch and the Mayo Clinic… 1. Credible 2. Respectful 3. Approachable 4. Team Player 5. Highly Professional 22
  23. 23. Qualcomm Business Acumen Series “A Great Place to Work” Fun From the 100 Best Companies to Work For Study Fair Friends Freedom Pride Praise Meaning 23
  24. 24. Qualcomm Business Acumen Series In other words… • Opportunity • Respect • Appreciation • Meaning 24
  25. 25. Qualcomm Business Acumen Series Charlie Trotter’s Whole Rough Hire for Desire Whole Peeled Chunked Teamwork: NP Chopped Finely Chopped Communication Sliced Thinly Sliced Highest Standards Diced Finely Diced Innovation Julienned Finely Julienned Truly Delight Customers 4 25 From: Lesson in Excellence from Charlie Trotter by Clarke
  26. 26. Qualcomm Business Acumen Series Lessons from seven top CEOs Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B • Have an outside-in perspective • Be deeply passionate about your job • Understand the importance of culture • Create or adapt next generation products, processes and solutions • Implement the best ideas regardless of origin 1-10 4 26 From: What the Best CEOs Know by Krames
  27. 27. Qualcomm Business Acumen Series 2007 p/T @13.9B> p/F+GM+DC+VW+BMW+ JAG+RR+HUM+MC 27
  28. 28. Qualcomm Business Acumen Series The Toyota Way • Challenging Vision – We form a long-term vision, meeting challenges with courage and creativity to realize our dreams. • Kaizen – We improve our business operations continuously, always driving for innovation and evolution. • Genchi Genbutsu – We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed. • Respect, Challenge and Help your People and Suppliers – We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. • Teamwork – We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance. 5 28
  29. 29. Qualcomm Business Acumen Series New study of 25 top companies renowned for building winning corporate cultures… • • GE Southwest Airlines • • Dell IBM • • Wal-Mart P&G • • Toyota Whole Foods • • Nordstrom Ritz Carlton • • Starbucks Intel The pattern of six common traits for all of these firms… 29 From Results Rule by Randy Pennington
  30. 30. Qualcomm Business Acumen Series They understand that: Results Rule! 1. Tell themselves the truth and value candor and honesty. 2. Pursue the best over the easiest in every situation. 3. Leverage the power of partnerships both internally and externally. 4. Focus the energy to make the main things the main thing. 5. Show the courage of accountability. 6. Learn, grow and improve every single day. 5 1-10 30 From Results Rule by Randy Pennington
  31. 31. Qualcomm Business Acumen Series Is Your Company Up To Speed? 1. Do you have an emotional bond? 2. Does your strategy stand out? 3. Are you a fun place to work and a fun organization to do business with? 4. Are you built to change? Pages 6-7 5. Do you embrace the value of values? 6. Are you winning the battle for talent? 7. Are you as disciplined as you are creative? 8. Do you use technology to change expectations and reshape your business? 9. Are you built for speed? 10. Have you built a company of leaders? Fast Company June 2003 31
  32. 32. Qualcomm Business Acumen Series Good To Great • Level 5 Leadership • First Who…then What • Confront the Brutal Facts • Culture of Discipline • Technology Accelerators • Flywheel – Doom Loop • Hedgehog Concept… 8 From: Good to Great by Jim Collins 32
  33. 33. Business Acumen Series Qualcomm EdgeWater Boats Good to Great: 1,483 to 11 400 – 700% 15+ years 8 33
  34. 34. Qualcomm Business Acumen Series Twice weekly surveys for five years of 2,000+ senior managers and executives at: • • IBM Fidelity • • GE Motorola • • Morgan Stanley Ikon • • Merck American Express • • 3M Progressive • • Microsoft Bank of America • • CIGNA AT&T • • Heineken SAP • • MasterCard Borders 8 34
  35. 35. Qualcomm Business Acumen Series Keys to effective management… • Communicate clearly • Force the hard decisions 1 - 10 • Focus on results • Remain flexible to change • Prove your value to the customer • Force collaboration • Rigorous but not ruthless 8 From: Think Big – Act Small by Jennings 35
  36. 36. Qualcomm Business Acumen Series The Evergreen Project • 10 year study of 160 top companies • 40 distinct industries • 200 management practices • Winners, climbers, tumblers, losers • Winners had an average Total Return to Shareholders of 945%... the Losers only averaged a TRS of 62% 9 From: What (really) Works by Joyce, Nohria, Roberson 36
  37. 37. Qualcomm Business Acumen Series The Four Primary Practices: 1. A sharply focused, clearly communicated and well-understood strategy for growth. 2. Flawless operational execution that consistently delivers the value proposition. 3. A performance-oriented culture that does not tolerate mediocrity. 4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work. 10 From: What (really) Works by Joyce, Nohria, Roberson 37
  38. 38. Qualcomm Business Acumen Series The Secondary Management Practices: • Talent = find and keep the best people. • Key leaders show commitment and enthusiasm for the business. • Embrace strategic innovation. • Master the power of partnerships. Score yourself on the 1–10 scale for all eight practices on page 11 From: What (really) Works by Joyce, Nohria, Roberson 38
  39. 39. Qualcomm Business Acumen Series Individual Workshop • Go back and look at all of your audits. • Where were your low scores, where were your high scores – what is the pattern? • Look over your notes – what were the key themes? What are the most important ideas? • Study The Organizational Effectiveness Audit very carefully. • Answers all the questions on pages 10 – 12. • Put in as much detail as possible. • Be very honest with yourself. • Think in terms of actions and outcomes. 39
  40. 40. Qualcomm Business Acumen Series Thinking to Planning 40
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  43. 43. Qualcomm Business Acumen Series What Business Planning is Not ! • Business planning does not attempt to make future decisions. • Business planning is not forecasting. • Business planning is not an attempt to blueprint the future. • Business planning is not necessarily the preparation of massive plans and reports. • Business planning is not an effort to replace good management judgment. 43
  44. 44. Qualcomm Business Acumen Series Why Planning Pays Off Asks & answers questions of importance. • Simulates the future. • Forces the setting of objectives. • Gives a framework for decisions. • Develops performance measurements. • Improves communications. • 44
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  46. 46. Qualcomm Business Acumen Series Common Problems • Putting It Off • Idea inflation • Fear and Dread • Vague goals • Diluted priorities 46
  47. 47. Qualcomm Business Acumen Series What makes a truly competitive strategy? Is it unique, defendable and valuable in the marketplace? Is the strategy coherent? – Does it generate clarity, commitment and consensus? Is it deliverable? Is the strategy ever- evolving? 47
  48. 48. Qualcomm Business Acumen Series 48
  49. 49. Qualcomm Business Acumen Series 10 – 15 % 49 49
  50. 50. Qualcomm Business Acumen Series What Inhibits Execution? National Survey of 4,000 Senior Executives 4. Inability to work together (21%) 3. Company culture (23%) 2. Economic climate (29%) 1. Holding onto the past / unwillingness to CHANGE (35%) 50
  51. 51. Qualcomm Business Acumen Series Vision Where are we going + How will we behave on the way. + Values Praise + Celebration Focus Reward / and Differentiation Strategy Punish Eliminate Mediocrity “No” 9 Steps for Measure / Track Over-communicate All key stakeholders + Adjust / Ensuring Commitment Transparency guiding collation Innovate Renewal Effective Execution Training + Vision + Values time / money / Strategy Support Alignment supplies / people Plans Goals / Objectives Tactics / Actions Procedures / Protocols Systems Communication Clear / consistent / relentless Repeatable Process 51
  52. 52. Qualcomm Business Acumen Series Some thoughts on measurement • Less is more • Results not activity • Easy / Hard • Post and review • 52 Help not punishment
  53. 53. Qualcomm Business Acumen Series Scenario Planning… Is a process that stimulates imaginative and creative thinking to better prepare an organization by rehearsing for the future to avoid surprises and break through the illusion of certainty. Probability & Impact Trigger points 53
  54. 54. Qualcomm Business Acumen Series “The purpose of the exercise is not to develop a forecast, because you know it would be wrong. Instead, the aim is to draw a circle around multiple possibilities and think about whether you are prepared to face the range of various futures that might unfold. It also helps you think about how you might be a catalyst in moving the world a little bit in the direction you’d like to go.” 54
  55. 55. Qualcomm Business Acumen Series The Harvard Scenario Planning Model: • Key Focal Issue • Driving Forces • Critical Uncertainties • Scenario Framework • Scenarios • Narratives 55
  56. 56. Qualcomm Business Acumen Series Key Focal Issues • A significant upcoming decision or strategic uncertainty that has long-range consequences for the future of the organization. (Strategic Inflection Point) • Scope and timeframe for choices and concerns should be clearly defined. • Typically posed as a strategic question: – Should we build a facility in Mexico in the next three years? – Should we invest more in R&D around a new consumer trend? – What is the future of talent acquisition in the high-tech arena? – What does the growth of India and China mean to our business in the next 10 years? 56
  57. 57. Qualcomm Business Acumen Series Driving Forces • Themes and trends that are likely to impact, shape and influence the Key Focal issue in a significant way… – Economic (strength of dollar to Euro, recession, price of oil…) – Social (demographics, consumer demands, population…) – Political (regulations, elections, tax, legal…) – Technology (Moore’s Law, patents, innovation…) – Corporate (changes in strategy, leadership, culture…) – Competition (strategy, market share, innovation…) 57
  58. 58. Qualcomm Business Acumen Series Critical Uncertainties • The top two most relevant uncertainties that impact your scenario. • Defined by level of uncertainty and importance. 58
  59. 59. Qualcomm Business Acumen Series Example: Boat Company Gas Prices / Recession 59
  60. 60. Qualcomm Business Acumen Series Scenario Framework: 2 Critical Uncertainties / 4 Scenarios Long Focus on international Close business-move factories production offshore How long will the US recession last? Hold on - Invest in stay domestic - electric engine slow production R&D Short Short Long How long will gas prices stay high in US? 60
  61. 61. Qualcomm Business Acumen Series Possible Scenarios 1. Short / Short = Hold on 2. Short / Long = New engines 3. Long / Short = Close factories 4. Long / Long = Go international Now for each you would create a narrative… 61
  62. 62. Qualcomm Business Acumen Series Narrative Stories • A detailed, coherent and logically consistent story of what this future would actually look like. • Should read like a well-developed novel – but be as realistic as possible. • Should answer the question: “How exactly did the world get from here to there?” • It is important to place the organization in the scenario and explore all of the implications that this unique future would have on the organization. What would the impact be? What decisions would have to be made? What are some possible options? How would it change strategy for the organization? 62
  63. 63. Qualcomm Business Acumen Series • Probability • Impact • Trigger Points 63
  64. 64. Qualcomm Business Acumen Series Then based on the scenarios… Contingency Plan 64
  65. 65. Qualcomm Business Acumen Series Summary of Key Ideas • Three major elements: thinking, planning, execution • Strategic thinking = study + experience + pattern recognition • Strategy = bold bets on resource allocation – what you say NO to. • Analysis is critical – but it is not strategy. • More, better, faster is not a strategy. • This is not blueprinting the future. • Scenario Planning = – Key Focal issues – Driving Forces – Critical Uncertainties – Scenario framework – Scenarios -> -> -> Narratives -> -> -> Implications • Probability & impact = Contingency Planning 65
  66. 66. Qualcomm Business Acumen Series Workshop • Identify the top three to five Key Focal Issues you believe are facing your group at this time. Then choose one specific issue to pursue. • What are the major Driving Forces that affect that issue? Regulation, innovation, politics, corporate culture, competition, legal, social, consumer trends… • What are the TWO Critical Uncertainties that are the most important to this issue? • Create a Scenario Framework of the four possible future scenarios around those two Critical Uncertainties. Then choose TWO scenarios from the framework to pursue. • Craft a short, but detailed Narrative for these two scenarios – Think: newspaper story. Make it as realistic as possible. How did the world get from here  to there? Discuss the various implications of this future scenario on your group and your current strategy. What actions would you take if this scenario played out? • Determine Impact, Probability and Trigger Points for both scenarios. • Make a recommendation as to whether either requires a full Contingency Plan. 66
  67. 67. Qualcomm Business Acumen Series “A good plan violently executed today, is better than a perfect plan next week.” General George S. Patton Thank You If you would like copies of these slides or any information / advice on strategy, leadership, customer service or high performance teams – just give me a call or send an email – all my contact information is at: . You might also find some valuable ideas on my blog. 67