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05 strategy
This document discusses different strategic approaches and schools of thought. It contrasts deliberate strategies that involve extensive planning versus emergent strategies that emphasize adapting to changes. It provides examples of companies like Sony that committed to an inflexible strategy with their Beta format and Microsoft that hedged their bets by developing Windows alongside DOS. The document also discusses balancing deliberate and emergent strategies depending on the type of innovation and risk involved.
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05 strategy
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- 2. Algorithms Hardware Software Strategy Interface Automation & AI KeyTopics Bridging the Gap Intended or Emerging Prescriptive or Descriptive Finding a Strategy Mix
- 3. “Everyone has aplan until they get punched in the face” – Mike Tyson
- 4. Source: The ThrillingAdventures of Lovelace and Babbage: The (Mostly) True Story of the First Computer by Sydney Padua
- 5. Source: The ThrillingAdventures of Lovelace and Babbage: The (Mostly) True Story of the First Computer by Sydney Padua
- 6. Deliberate: Plan &Implement Emergent: Adapt & Improvise
- 8. Mintzberg’s 5Ps ofStrategy Perspective Influence of organizational culture and collective thinking on the strategic decision making of the company Plan Strategy is developed in advance and with purpose Position How the organization relates to its competitive environment and what it can do to make its products unique in the marketplace Pattern What was successful in the past can lead to success in the future Ploy A way to outsmart the competition (buy a patent to block others)
- 9. Objective: Adapt toChange Chart a direction but change paths along the way to avoid obstacles Prescriptive Schools Descriptive Schools Objective: Design and Plan Find a path by mapping all obstacles and design a plan to overcome them Prescriptive Schools Seek to create strategy by consciously separating formulation from implementation and relying heavily on rationality, numbers and logic as the base for their ideas. The also focus heavily on notions of scientific management and assumptions of a stable or at least predictable set of future conditions. Descriptive Schools Look at the past to learn the steps and processes that companies actually used to arrive at their current state of affairs. The emphasis is on learning and qualitative data. The schools also focus on the role of leadership, culture and politics as factors in strategy creation Strategy Schools Mintzberg et al. have studied and evaluated the various management theories by experts and organized them into 10 schools of thought. In Strategy Safari he divides the schools into two categories:
- 10. Sony’s BETA BetParadox Premise: most strategies are built on specific beliefs about an unpredictable future, but current strategic approaches force leaders to commit to an inflexible strategy regardless of how the future might unfold. Example: in the 1990s Sony developed BETA tapes as an optimal solution for home video recorder; however, the technology was proprietary and expensive paving the way for VHS as consumers opted for the cheaper and lower quality format. In the end Sony was committed to its BETA strategy from which it could not deviate. Uncertainty Cone Knowledge Funnel Uncertainty Cone VHS BETA SONY JVC Present Future
- 11. Emergent Strategy DeliberateStrategy As time moves on the number of suitable choices decreases As time moves on the number of possible scenarios increases
- 12. Microsoft’s Gamble: Ridingthe Bear Premise: Instead of planning or betting on a single technology to succeed, companies should hedge their bets through scenario or contingency planning so that as choices narrow down, their ability to change direction and adapt remains. Example In the 1990s Microsoft began developing windows in parallel with their DOS platform which was used by IBM and clone systems. When IBM decided to develop their own OS, Microsoft broke their relationship and followed the windows path, betting that GUI would be the wave of the future Present Future Uncertainty Cone Uncertainty Cone WIN Web DOS IBM
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- 14. Low Priority MediumPriority High Priority Innovator Dilemma: Sustaining Risk Strategy: Deliberate Diffusion of innovation: Proprietary Innovator Dilemma: Disruptive Risk Strategy: Emergent Diffusion of innovation: Open Diffusion of Knowledge Innovation Type Risk Strategy Strategy Mix
- 15. Hackers Low PriorityMedium Priority High Priority Sustaining Innovation Deliberate Strategy Proprietary Disruptive Innovation Emergent Strategy Open to all Diffusion Innovation Risk
- 16. Low Priority MediumPriority High Priority Diffusion Innovation Risk Hippies Sustaining Innovation Deliberate Strategy Proprietary Disruptive Innovation Emergent Strategy Open to all
- 17. Low Priority MediumPriority High Priority Diffusion Innovation Risk Brains Sustaining Innovation Deliberate Strategy Proprietary Disruptive Innovation Emergent Strategy Open to all
- 18. Low Priority MediumPriority High Priority Diffusion Innovation Risk Suits Sustaining Innovation Deliberate Strategy Proprietary Disruptive Innovation Emergent Strategy Open to all