What comes to mind when you hear the word

STRATEGY

What Makes a DecisionA Strategic Decision?

• It’s Effect Won’t Be Known for Sometime

• It’s Impact is Lasting• It Impacts the Mission of the

Organization• It Moves the Organization into a

New Domain or Direction• It Involves Commitment of Key

Resources• It Affects People

Trade-Offs

• Management Chooses to Do This Over Doing That!

• The Choice is – One that Best Proctects from Imitators & Re-

Positioners– One that Carries With It a Unique Set of

Activities

• Once Made, Management Must Be Operationally Effective & Efficient

Effectiveness vs Strategy• Efffectiveness

– Operational effectiveness = performing similar activities better than competitors

– Is This Sufficient for Lasting Success?

• Strategy– Performing Different Activities the Make a

Difference– Performing Activities Differently, with Better

Results– Advantage Emerges Out of the Whole System,

Not Just One Activity

What is the Goal of Strategy?

• To Create a Plan

• To Achieve Your Objective

• To Be Competitive

• To Create a Competitive Advantage

• To Sustain a Competitive Advantage

• To affect the Conditions so that You Don’t Have to Operate in a Competitive Market– To Be More Monopolistic

A Sustainable Advantage Is...• Unique Activities

• Unique Value-Chain

– Relationships Among Functions/Activities

• Uniquely relating activities to produce cohesive harmony

– Degree of Cohesiveness

• Unique Fit

– Alignment of Strengths with Opportunity

• All About Making the Right Trade-offs

A Fit Strategy

• Consistency

– alignment of purpose & functions

• Reinforcing

– synergy among activities

• Optimizing Effort

– eliminate redundancy effort

– minimize waste (material & effort)

Synergy ==> Complimentarity• 1 + 1 > 2

– one compliments the other so that together they produce more than they can separately

• Market Synergy– one product enhances another

• Starbucks w/ Barnes & Noble• Cost Synergy

– shared functions or operations ==> cost advantages• Technological Synergy

– sharing technology across industries• Management Synergy

– skills & talents of each compliment the other

Strategic Thinking Requires

• Divergent Thinking

• Convergent Thinking

• Synthesizing Experience & Novelty

–Creativity

A Strategic Thinking Manager

• Sees What Others Do Not See– Dynamics not Statics– Interconnections not just Events– Possibilities not Only The Probable

• Willingly Questions the Obvious– for Synergy not Supremacy– Asking Right Questions not Looking for Right

Answers

• Is Multi-Perspectivistic

The Post-Conventional Thinking Manager

• Challenges Commonly Held

– Beliefs & Assumptions

• Listens Without Judgment

• Seeks Outsiders who are Inside the Organization

• Engages the Minds of the People

– not just their brains

Scenario Planning• Select several external forces for which changes

could (dramatically) influence the business

• For each force, explore at least 3 future organizational scenarios (worst, reasonable, best case)

• Discuss possible responses the organization might take & what is required in each case

• Identify common threads/themes posed among each scenario

• Determine likelihood of each occurring

Envisioning the Airline Industry in the 21st Century

• What scenarios would you envision?

• How might the industry respond to these?

Product Life CycleV

olum

e

Pre-Intro Intro Growth/ Shake-out Maturity DeclineTIME

Overarching Strategic Intentof an Enterprise

• Sustainability

– Creative

• Retrenchment

– Defensive

– Counter Moves

• Stability

– Maintain

Generic Strategies• Competitive Scope

– Broad Target– Narrow Target

• Competitive Advantage– Low Cost Producer– Differentiation

• Quality

• Reliability

• Innovation

• Responsiveness

Traditional Strategic Management Process• Strategy Formulation

– Determine Mission & Objectives– Identify & Interpret S, W, O & T

• Internal Analysis

• External Analysis

– Select Strategy• Corporate, Business, Functional, Operations

• Strategy Implementation– Mobilize Resources– Management Support System– Monitor & Assess (focus on control)

Planning Linear Hierarchy

Mission

Goals & Measurable Objectives

Strategy & Tactics

Goal Attainment / Performance Assessment

Business as Eco-System

• Open System View of the Organization– Interdependence with Environment– Unit of Survival is Organization + Environment

• Seek to Develop Mutually Beneficial Relationships with Stakeholders– Partnerships

• Suppliers• Customers• Employees• Community

Organic/Systems Strategic Management Process• Uncover, Clarify & Articulate Cultural Values & Vision

– Dialogue with all stakeholders

• Strategy Formulation

– Determine Mission & Objectives

– Identify & Interpret S, W, O & T

• Internal Analysis

• External Analysis (possibly include scenario planning)

– Select Strategy

• Corporate, Business, Functional, Operational

• Vision-Based Strategy Implementation

– Mobilize Resources

– Management Support System

– Monitor & Assess (Focus on Learning)

Planning Systemic Holarchy

VISION

PURPOSE

STRATEGY

TACTICS

Vision

Mission

External InternalAnalysis Analysis

StrategicChoices

Implementation

Objectives + Assumptions

Involves

Forces

Fit

Inquiring Minds