Envisioning Strategy

Business Models Visualized(created for and by students)

© Sunil Mehrotra

What you will learn in this course:• Envisioning Strategy

– Definition– Framework– Visual Models

• External Analysis– PEST– PEST Impact Analysis

• Industry and Competitive Analysis– Industry Structure– Evolution of Industries– Industry Supply Chain– Potential Industry Earnings– Porter’s 5 Forces Analysis– Competitive Intensity– Strategies for minimizing competitive forces– Perceptual Map– Barriers to Entry/Incumbency advantages– DSIR effect

• Company Resources and Capabilities– ARC Analysis/HR– SWOT Analysis– Value Creating Processes/Core Competencies– Strategic Game Board– Balanced Scorecard– Change Management © Sunil Mehrotra

How you will do it

Visualize

Think Clearly

Understand Deeply

Communicate Effectively

Share the Vision

Act Coherently

www.idiagram.com

Envisioning Strategy: Visual Models

www.idiagram.com

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Visualize Think Clearly

Thinking clearly stretches your mind

"A mind once stretched by new thoughts can never regain its original shape."-Albert Einstein

Why Visualization works:Factoid

Eyes 10,000,000 40Ears 100,000 30Skin 1,000,000 5Taste 1,000 1Smell 100,000 1

Total Bandwidth (bits/second)

Conscious Bandwidth (bits/second)

http://www.informaworld.com/smpp/section?content=a743900378&fulltext=713240928

Dan Roam on Visual Thinking

http://www.thebackofthenapkin.com/

Visualization helps to think clearly andcommunicate effectively: examples

http://awesome.goodmagazine.com/goodsheet/goodsheet004gas.htmlWhere does your money go when you buy a gallon of gas?

http://awesome.goodmagazine.com/goodsheet/goodsheet006economy.htmlIt's the Economy Stupid!

http://nytimes.com/interactive/2008/07/20/business/20debt-trap.htmlDebt trap.

http://blogs.wsj.com/health/files/2008/04/waystogo.jpgOdds of Dying

http://www.susannahertrich.com/img/RC_screen.jpgActual versus Perceived threats

http://awesome.goodmagazine.com/transparency/007/trans007studentdebt.htmlStudent debt

http://www.nytimes.com/interactive/2008/05/03/business/20080403_SPENDING_GRAPHIC.htmlAll of inflations little parts

The environmentThe environment

International lawInternational law

GovernmentsGovernments

Standards bodiesStandards bodies

StakeholdersStakeholders

SupplierSupplier’’s supplierss suppliers CustomerCustomer’’s customerss customers

New entrantsNew entrants

CustomersCustomersSuppliersSuppliers

CompetitorsCompetitors

SubstitutesSubstitutes

OrganisationOrganisation

A Visual ModelBusiness Ecosystem

New Paradigm Consulting

Business Ecosystem: A more granular view

Mbam619 framework models

Strategic Management

• Deals with

– How to grow the business

– How to satisfy customers

– How to compete with rivals

– How to respond to changing environment

– How to manage each functional piece of the business

– How to build organizational capabilities and align organization to achieve desired goals

– How to achieve strategic and financial objectives

Strategic Planning

• Planning is not about predicting the future

• Planning is not about writing a detailed road map into the future

• Planning is not about a few people writing a vision statement & then getting ‘buy-in’ from everyone else

Mbam619 framework models

Strategic Planning

• Planning is about learning

• Planning is about increasing the possibilities for the organisation

• Planning is about discovering how fit the organisation is for its environment

• Planning is about discovering and telling compelling stories about the future

Strategic Management in a nutshell !What is the vision?

Strategic Management

• Is the process by which an organization

–Establishes its goals and objectives both short and long-term

–Formulates plans and charts a course of action for meeting these goals and objectives in the desired time-frame.

–Implements the actions

–And analyzes progress and result

Behind every strategy should be solid financial reasoning

Mission, Vision and Values

• Vision articulates a view of a realistic, credible, attractive future for the organization…it is the all-important bridge from the present to the future of the organization.

• Mission describes the purpose of the organization. It represents the present.

• Values reflect the organization’s culture and norms of corporate behavior.

Goal, Scope and Objectives

• Goal articulates a desired outcome for the business over a specific time period

• Scope describes the focus of the business– geography, product lines and customer segments.

• Objectives are the measurable and tangible results to be achieved over a specified time period

Source: "Thinking Strategically", McKinsey Quarterly, 2000

Understanding Strategic Management is like pealing an onion

Strategic Planning Framework

External Factors Internal Factors

Analyzingthe

Environment

Analyzingthe

Industry

Analyzingthe

Competition

Analyzingthe firm’s

Strengths &Weaknesses

Analyzingthe firm’s

Architecture,Routines &

Culture

Market OpportunitiesFirm’s Resources &

Capabilities

Aligning Market Opportunitiesto firm’s resources and capabilities

•What strategic options does the firm realistically have?•What is the best strategy for maximizing Shareholder value? Shareholder

Returns

The right of any corporation to exist is not perpetual but has to be continuously earned.—Robert Simons

Strategy: Whose responsibility is it?

• Ultimately the CEO/leader “owns” the company's strategy and is responsible for executing against the strategy.

• Leadership styles vary

• Commanding

• Logical

• Inspirational

• supportive

• Nature of strategic initiative may require a particular style for success

Leadership matters, why?

Leadershiprole

Make choices/decisions

Lead people toimplement

How?

Leadership style

http://www.nytimes.com/2008/12/06/business/06motors.html?_r=1&pagewanted=2&ref=business

● Uses reasoning ● Expects commitment ● Systems-oriented ● Looks for new directions ● Incremental improvements ● Structured problem solving

● Engenders trust ● Has charisma ● Creates future visions ● Envisions new opportunities ● Empowers others ● Very creative ● Heuristic solutions

● Is considerate ● Peer approbation ● Cooperative environment ● Relates well with others ● Tries for mutual agreement

● Intuitive ● Demands loyalty ● Expects results ● Takes charge ● Insists on compliance ● Finds workable solutions

Broad and fu

ture

oriented

Performance Transformational

Narrow and Short-

Ran

ge S

pecific

Logical Imaginative

Commander Supportive

http://gbr.pepperdine.edu/084/leadership.html

scope

Outcome

Lea

ders

hip

Styl

e

Leadership Patterns

• Pattern 1: Ideation. Ideation is a combination of the logical and imaginative basic styles. This pattern hinges on visualizing or imagining a future that is both achievable and practical and is helpful in planning an organization’s strategic future. Ideation is the hallmark of successful CEOs, top executives, and those who are determined to achieve a new vision for their organization. Leaders in this category use logic and detailed analysis as well as vision and imagery to direct the organization.

• Pattern 2: Stewardship: A combination of the logical and the commander basic styles, it is necessary in areas of

financial or risk management within organizations. Leaders who utilize this style focus on resources—conserving them, allocating them wisely, and acquiring sufficient amounts to carry out the mission of the organization. Effective executives with this pattern are financial planners, managerial accounting analysts, and managers of detail and logistics.

• Pattern 3: Coordination. A combination of the logical, commander, and imaginative basic styles, this triangular

pattern is more common in smaller firms and in the second- and third-tier levels of larger organizations. The logical/commander components of this style tend to be almost equal, with an imaginative backup. In small entrepreneurial firms, the imaginative style may be the most dominant, with the commander style a strong second and the logical style a weak backup. This coordination leadership pattern represents the popular, "traditional" upper-management pattern from the study of 294 male managers that established the "norm" for Decision Systems Analysis (DSI) and has held constant for the LSI as well.

http://gbr.pepperdine.edu/084/leadership.html

Leadership Patterns

• Pattern 4: Exploration. This combination of imaginative and commander styles is typical of leaders in entrepreneurial start-ups, especially female entrepreneurs. The imaginative style tends to dominate and the "follow-the-star" method of reaching a desired goal trumps everything.

• Pattern 5: Customer-Centric. This pattern represents a combination of the supportive and commander basic styles and

is dominant in strong marketing- and sales-oriented organizations. Supportive behavior comes first because empathy for customer needs is more important than the drive to convince or persuade. Empathy means understanding and wanting what is best for the customer because satisfying the customer is also in the best interests of the firm. Nonetheless, leaders must also utilize the commander style to drive results.

• Pattern 6: Employee-Centric: A combination of the supportive and imaginative basic styles, this pattern is necessary

for understanding and supporting the needs of employees, associates, and customers, as well as having the imagination to inspire through external and internal public relations, advertising, promotion, and employee empowerment programs. It is essential for human resource leaders.

http://gbr.pepperdine.edu/084/leadership.html

Leadership traits

Pay for performance?

http://www.nytimes.com/imagepages/2006/04/09/business/09value.graphic.htmlPay for Performance of CEOs? Sometimes!

Nappies—Key Concepts

The power of visual thinking?

What is Strategic Management?-strategic planning framework

What is the role of the CEO/Leader?-Leadership styles

Mnemonic 1