Insead 4.cssg 3 axes of meaning based strategic management

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It refers to 2 additional dimensions in strategic management based on the experience that companies co-create also much more with other companies in an extended eco-system.including content and delivery. In addition to understanding the vector of technology the communication part of symbols, social media, telematic and concept gurus enables a better understand why and what we are doing in emerging new overlapping industries

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Insead 4.cssg 3 axes of meaning based strategic management

  1. 1. Wirtz,SJ
  2. 2. 3 pilars of meaning based strategic management costumer Wirtz,SJ
  3. 3. Context: - Customer experience management become more and more a differentiation activity - In agile markets were new market profiles arose and are co-created the customer approach has to be integrated in any activity a company gets involved with partners as - - building trust - - creating mutual understanding of moving targets in emerging industries and - - considering the service encounter attitude and treatment as applicable to people and companies alike being in co-operation network. - The ecosystem approach can indicate some of the strategic issues one has to address in strategic management - It implies and somewhat applies that the term sustainable competitive advantage will be transformed into - Transient as well as co-constructed competitive advantage as in emerging markets a priori concepts may fail as a paradigm shift happens. Wirtz,SJ
  4. 4. Approach: Part one: - Look at companies orientation about its environment in emerging markets Part two: - Extend the integration of important elements into the strategic management Part three: - Construct building blocks and stepping stone Highlight finally what this has to do with meaning based Wirtz,SJ
  5. 5. Wirtz,SJ
  6. 6. Part 1: The company links the inside performance with the market performance Leadershi p Meaning based inside outside People Promotion Positioning Materialisatio nbased Production Product/Service Place Efficiency based Process Price Strength and Weakness SW OT Opportunity and Threat Wirtz,SJ
  7. 7. There two genuine strategy development processes with implication for strategic change management A. Prescriptive model of business strategy Options Environment Purpose Options The prescriptive strategy process Lynch, 2008 Choice Implement Resources Options is the usual approach and neglects often the limitations that an existing organisation and its culture limits the strategic options
  8. 8. B. Emergent model of business strategy The emergent strategy process – based on Quinn 1990, Senge 1990, Argyris 1977, Mintzberg 1987 and others Environment Purpose Resources Strategy development and implementation Keypoint: creative, experimental, more difficult to describe but essential according Lynch,
  9. 9. What is strategic change management? One approach to emergent processes Environment Strategic Change Management issues to open the company towards networking Purpose Resources , Strategy development and implementation Emergent theories include: •Survival-based •Uncertainty-based •Human resource-based •Innovation and learningbased
  10. 10. Wirtz,SJ
  11. 11. “Ideating” the other side of innovation by Govindarajan, V, Trimble,C 2010 Wirtz,SJ
  12. 12. Wirtz,SJ
  13. 13. Current wave of business model: e.g. Osterwalder: Key Partners Key Activities Key Resources Cost Structure Value Proposition Customer Relationships Customer Segments Channels Revenue Streams Consider important environment issues but more as impact on the company than stepping stone
  14. 14. The environment needs also to be perceived as constructed and playground for creating emerging markets through co-creation with other companies considering them as lead customers7partners Wirtz,SJ
  15. 15. In emerging markets a SWOT analysis should be extended highlighting the evaluation, estimation process by regrouping SWOT into a: SOWT Analysis inside Strengths outside Opportunities OverEstimate Under- Weaknesses Threats We genuinely underestimate our weakness and threats to our organization. We have difficulties to embrace vagueness, ambiguity and enter into co-operation without contractual arrangements and wishful outcomes
  16. 16. Exploring emerging environment and create meaning based activities The cynefin framework Watch the explaination: http://www.youtube.com/watch?v=N7oz366X0-8
  17. 17. Simple, in which the relationship between cause and effect is obvious to all, the approach is to Sense - Categorise - Respond and we can apply best practice. Complicated, in which the relationship between cause and effect requires analysis or some other form of investigation and/or the application of expert knowledge, the approach is to Sense - Analyze - Respond and we can apply good practice. Complex, in which the relationship between cause and effect can only be perceived in retrospect, but not in advance, the approach is to Probe - Sense - Respond and we can sense emergent practice. Chaotic, in which there is no relationship between cause and effect at systems level, the approach is to Act - Sense - Respond and we can discover novel practice. The fifth domain is Disorder, which is the state of not knowing what type of causality exists, in which state people will revert to their own comfort zone in making a decision. That comfort zone including organizational ones can be the biggest hurdle for process driven innovation Wirtz,SJ
  18. 18. Product centered management is still somewhat restricting companies to improve customer-focused services and grow with new service business models. Many organizations have set the target to launch and develop new customer services as a key element in their strategy. According to P. Moore ( 1993) In order to adapt to the fast changing customer needs, delivery of the services requires an ecosystem of organizations.. In many large organizations there is a strong tendency to seek for the clarity of old clear product and organization focused operating models. The value chain thinking and connecting as well connected leadership models can create an extended ecosystem approach A holistic change is needed in order to design and implement an operating model that enables integrating and managing a set of contracts, indicators and measurements aiming to efficiently adapt a network of organiztions from sales to operations to fulfill customer needs and manage customer expectations. By leveraging ecosystems, companies can deliver complex solutions while maintaining corporate focus but it has to be concerned to contribute to the ecosystem construction as well.
  19. 19. The idea is that each business in the “ecosystem” affects and is affected by the others, creating a constantly evolving relationship in which each business must be flexible, adaptable and open to new partnerships and evolving networks
  20. 20. - Part 2:Extend the integration of important elements into the strategic management The idea is that each business in the “ecosystem” affects and is affected by the others, be it companies, individuals, trendsetters research organization, governments and certain socio-economic events like ageing of society, obesity.. creating a constantly evolving relationship in which each business must be flexible, adaptable and open to new partnerships and evolving networks
  21. 21. Thought-concept Communication based sense making and receptivity Z The 3 pillars are the axes x,y,z, Resource based corporate Strategic Management X Y Co-operation based Strategic Management Wirtz,SJ
  22. 22. Communication based sense making and receptivity Z The 3 pillars are the axes x,y,z, 4 reference platform focus on 4 strategic elements Resource based corporate Strategic Management X Y Co-operation based Strategic Management Wirtz,SJ
  23. 23. Communication based sense making and receptivity The 3 pillars are the axes x,y,z, Z 4 reference platform focus on 4 strategic elements: Connected and connecting leadership Focus on technology and related innovation Market management Industry/Arena specific identity Y Co-operation based Strategic Management Resource based corporate Strategic Management X Wirtz,SJ
  24. 24. Communication based sense making and receptivity Z z4 Concept Execution z3 Concept Execution z2 Concept Execution z1 y1 Concept This will lead to 64 activity blocks differentiated according strategy concept and strategy execution Resource based corporate St.M Concept Execution Concept Execution x1 Concept Execution x2 Concept Execution x3 Concept Execution x4 Concept X Execution y2 Execution Concept y3 Execution y4 Concept Execution Y Co-operation based St.M Wirtz,SJ
  25. 25. Communication based sense making and receptivity Z Resource based corporate St.M Hard-ware Y Co-operation based Strategic Management Soft-ware Tech-ware Customer/ X User - ware Wirtz,SJ
  26. 26. Communication based sense making and receptivity Z Resource based corporate St.M CustomerX What industries How solutions Technology arena one is in commercialized other than used experience mgt. Y Co-operation based St.M Wirtz,SJ
  27. 27. Communication based sense making and receptivity Z Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Y Co-operation based St.M Competing companies in the same arena, e.g. coffee are very different how they commercialize and address customers/users: Nescafé, Starbucks, illy and how they expand their eco-system, focusing also on co-operation in content and delivery, manipulating, breaking industry communication codes and symbols Wirtz,SJ
  28. 28. Communication based sense making and receptivity Z Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery This is the standard strategic management approach, based on a company focused control-equity with limited out-side in orientation and seeing costumer experience management Y slowly as differentiation opportunity, cost reduction in Co-operation based St.M outsourcing delivery and insourcing improved content Wirtz,SJ
  29. 29. Communication based sense making and receptivity Z Eco-system 1, traditional collaboration based mostly on company strength and perceived opportunity Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery This is the standard strategic management approach, based on a company focused control-equity with limited out-side in orientation and seeing costumer experience management Y slowly as differentiation opportunity, cost reduction in Co-operation based St.M outsourcing delivery and insourcing improved content Wirtz,SJ
  30. 30. Communication based sense making and receptivity Z Uncontrollable social media already disrupts and makes ecosystem 1 additionally volatile Eco-system 1, traditional collaboration based mostly on company strength and perceived opportunity Market-com, social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery This is the standard strategic management approach, based on a company focused control-equity with limited out-side in orientation and seeing costumer experience management Y slowly as differentiation opportunity, cost reduction in Co-operation based St.M outsourcing delivery and insourcing improved content Wirtz,SJ
  31. 31. Communication based sense making and receptivity Z Uncontrollable social media disrupts and makes ecosystem 1 volatile Expanding to ecosystem 2.0 Eco-system 1, traditional collaboration based mostly on company strength and perceived opportunity Market-com, social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery This is the standard strategic management approach, based on a company focused control-equity with limited out-side in orientation and seeing costumer experience management Y slowly as differentiation opportunity, cost reduction in Co-operation based St.M outsourcing delivery and insourcing improved content Wirtz,SJ
  32. 32. Expanding to eco-system 2.0 According to James Moore 1993: Successful businesses are those that evolve rapidly and effectively. They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks anticipate the managerial challenges of nurturing the complex business communities that bring innovations to market: Expansion Bring the new offer to a large market by working with suppliers and partners to scale up supply and to achieve maximum market coverage. Leadership Provide a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer. Self-Renewal Work with innovators to bring new ideas to the existing ecosystem Wirtz,SJ
  33. 33. Expanding to eco-system 2.0 Consumers are adopting increasingly active roles in -co-creating marketing content with companies and their respective brands. - In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where they ‘live' online. - However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them ( Hanna R et all 2012 ) Wirtz,SJ
  34. 34. Expanding to eco-system 2.0: Ecosystems are larger, more diverse, and more fluid than a traditional set of bilateral partnerships or complementors. By leveraging ecosystems, companies can deliver complex solutions while maintaining corporate focus: Six keys to unlock ecosystem advantage: - pinpointing where value is created, - defining an architecture of differentiated partner roles, - stimulating complementary partner investments, - reducing the transaction costs, - facilitating joint learning across the network, and engineering effective ways to capture profit. ( P.Williamson, A. de Meyer 2012) Not ignoring three fundamental types of risk: -initiative risks —the familiar uncertainties of managing a project; -interdependence risks —the uncertainties of coordinating with comple-mentary innovators; and -integration risks —the uncertainties presented by the adoption process across the value chain. ( Ron Adner 2006 ) Wirtz,SJ
  35. 35. Expanding to eco-system 2.0: Consumers are adopting increasingly active roles - in co-creating marketing content - with companies and their respective brands. In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where they ‘live' online. However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them. ( see richthofer Wirtz,SJ
  36. 36. Expanding to eco-system 2.0: Moore describes the evolutionary stages of a business-ecosystem as forms of cooperative challenges Birth Work with customers and suppliers to define the new value proposition around a seed innovation. Expansion Bring the new offer to a large market by working with suppliers and partners to scale up supply and to achieve maximum market coverage. Leadership Provide a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer. Self-Renewal Work with innovators to bring new ideas to the existing ecosystem.
  37. 37. Part three: Construct building blocks and stepping stone Communication based sense making and receptivity Expanding to ecosystem 2.0: Z IMC, gurus brand identity, Trendsetters Four additional areas of focus are added ITC, tele-matic, Graphics, EsRP Market-com Social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Virtual company network Y Co-operation based St.M Wirtz,SJ
  38. 38. Communication based sense making and receptivity Z IMC, gurus brand identity, Trendsetters Expanding to eco-system 2.0 Integrated market communication addressing inside and outside of companies, instrumentalization of gurus, Brand Identity of joint service, people connected leader ITC, tele-matic, Graphics, EsRP Market-com Social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Virtual company network Y Co-operation based St.M Wirtz,SJ
  39. 39. Communication based sense making and receptivity Z Expanding to eco-system 2.0 IMC, gurus brand identity, Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media The ITC is both enabler and biggest hurdle creating cooperate networks, incompatibility ,EsRP that is too company focused, telematic as a language, lack of engineers, execution control via access level to IT Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Virtual company network Y Co-operation based St.M Wirtz,SJ
  40. 40. Communication based sense making and receptivity Z Expanding to eco-system 2.0 IMC, gurus brand identity, Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Virtual company network Y Co-operation based St.M Achieving fast accepted standards in the network is a power, definition and user’s rights of IP is changing, free-conomics Wirtz,SJ
  41. 41. Communication based sense making and receptivity Z Expanding to eco-system 2.0 IMC, gurus brand identity, Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Virtual company network Value chain co-operation among different companies, no red tape management, success orientation with failure tolerance, Y Co-operation based St.M connecting leadership Wirtz,SJ
  42. 42. Communication based sense making and receptivity Z IMC, gurus brand identity, Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media Expanding to eco-system 2.0 Integrated market communication addressing inside and outside of companies, instrumentalization of gurus, Brand Identity of joint service, people connected leader The ITC is both enabler and biggest hurdle creating cooperate networks, incompatibility ,EsRP that is too company focused, telematic as a language, lack of engineers, execution control via access level to IT Resource based corporate St.M Industry codes, symbols, slogan CustomerX What industries How solutions Technology Content arena one is in commercialized other than used experience mgt. Content Delivery Standardization Achieving fast accepted standards in the network is a power, definition and user’s rights of IP is changing, free-conomics Virtual company network Value chain co-operation among different companies, no red tape management, success orientation with failure tolerance, Y Co-operation based St.M connecting leadership Wirtz,SJ
  43. 43. Communication based sense Expanding to eco-system 2.0, making and receptivity Integrating 4 levels of conjoint orientation Z and meaning oriented activities: IMC, gurus Brand identity Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media Industry codes, symbols, slogan Content Content Delivery Standardization Virtual company network Y Co-operation based St.M Dialogue, ideatizing Creating knowledge communities,, action platforms Tech-integration, virtualization, cloud, 3 D printing, AR , IPE Standards,royalties, POS, on/offline, connectivity, longtail m-commerce, blogs CustomerWhat industries How solutions Technology Cost control, Web3.0 X C.I.,perceived quality, arena one is in commercialized other than used experience mgt. cost open vs closed, CSR, bundeling, investor relat The four areas focus the co-operation and dysfunctional discussions on a cohort of issues, therefore leading to integration and new arena differentiation. It provides meaning through understanding arising solution providers’ challenges. Wirtz,SJ
  44. 44. Communication based sense Expanding to eco-system 2.0, making and receptivity Integrating 4 levels of conjoint orientation Z and meaning oriented activities: IMC, gurus Brand identity Trendsetters ITC, tele-matic, Graphics, EsRP Market-com Social media Industry codes, symbols, slogan Content Content Cost control, Web3.0 C.I.,perceived quality, cost open vs closed, CSR, bundeling, investor relat POS, on/offline, connectivity, longtail m-commerce, blogs CustomerX What industries How solutions Technology arena one is in commercialized other than used experience mgt. Delivery Standardization Virtual company network Y Co-operation based St.M Dialogue, ideatizing Creating knowledge communities,, action platforms Tech-integration, virtualization, cloud, 3 D printing, AR , IPE Standards ,royalties, Wirtz,SJ
  45. 45. It results in 3D cube with 64 activity blocks like Wirtz,SJ
  46. 46. Z Communication based sense making and receptivity It results in 3D cube with 64 activity blocks like a rubic cubic. X Y Co-operation based Strategic Management Resource based corporate Strategic Management
  47. 47. 64 buildings block need then to be filled out and differentiated according to Strategic concept and strategic execution: Block: x4,y4,z4 Facilitating partner co-operation and managing the experience over time Concepts: Customer experience management applied to partners and competitors, Momentum Effect: Execution: Forum, TED and clubs originating joint activities and providing solution in an open source ware, funding start ups and spin offs Wirtz,SJ

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