[email protected] @winmarkglobal ohmae “the mind of the strategist
TRANSCRIPT
© 2017 Winmark Ltd
…Strategy has many meanings
From...
“Strategy is the great
work of the organisation.
In situations of life or
death, it is the Tao of
survival or extinction. Its
study cannot be
neglected”
“What business strategy is all
about is competitive advantage.
The sole purpose of strategic
planning is to enable a company
to gain, as efficiently as possible,
a sustainable edge over its
competitors. Corporate strategy
thus implies an attempt to alter a
company’s strength relative to its
competitors in the most efficient
way”
Kenichi Ohmae
“The mind of the
strategist”
Strategic Planning - Meanings
© 2017 Winmark Ltd
A definition of strategy
Strategy is the direction and scope of an
organisation over the long term: ideally,
which matches its resources to its
changing environment, and in particular its
markets, customers or clients so as to
meet stakeholders’ expectations.
Realising the Corporate Vision
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A strategy should
• Be focused and yet enable individuals to make decisions freely to achieve
the aim.
• Be competitive and provide a clear and sustainable point of
differentiation.
• Be able to cater for and profit from market and environmental changes.
• Be innovative and encourage and energise individuals and the business.
• Organise and utilise resources to achieve their maximum impact.
Strategic planning can be simple or …….
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or… complicated!
Strategic Planning
Fortune 100 Companies 1970 - 20151970 1985 2000 2015
100% 69% 23% 17%
100% 28% 19%
100% 57%
100%
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STRATEGIC CHOICE
STRATEGIC ANALYSIS
STRATEGIC
IMPLEMENTATION
Key Steps In Strategy
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STRATEGIC CHOICE
STRATEGIC ANALYSIS
STRATEGIC IMPLEMENT
ATIONIMPLEMENTATION
EnvironmentPurposeCulture
Capability
EvaluatingOrganising
PracticeChangingProcesses
BusinessCorporate
InternationalInnovation
Acquisitions & Alliances
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STRATEGIC CHOICE
STRATEGIC ANALYSIS
STRATEGIC IMPLEMENTATI
ONIMPLEMENTATION
TOOLS:PESTEL5 Forces
TOOLS:
Ansoff Strategic ChoicesSources of Competitive AdvantageValue Chain Analysis
TOOLS:McKinsey 7SsDisciplinePORTS
… and YOU
Activity
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Political Economic Social Technological Environmental Legal
• Government stability and likely changes
• Bureaucracy• Corruption level• Tax policy (rates and
incentives)• Freedom of press• Regulation/de-regulation• Trade control• Import restrictions (quality
and quantity)• Tariffs• Competition regulation• Government involvement in
trade unions and agreements• Environmental law• Education law• Anti-trust law• Discrimination law• Copyright,
patents/intellectual property law
• Consumer protection and e-commerce
• Employment law• Health and safety law• Data protection law• Laws regulating environment
pollution
• Growth rates• Inflation rate• Interest rates• Exchange rates• Unemployment
trends• Labour costs• Stage of business
cycle• Credit availability• Trade flows and
patterns• Level of consumers’
disposable income• Monetary policies• Fiscal policies• Price fluctuations• Stock market trends• Weather• Climate change
• Health consciousness• Education level• Attitudes toward imported
goods and services• Attitudes toward work, leisure,
career and retirement• Attitudes toward product
quality and customer service• Attitudes toward saving and
investing• Emphasis on safety• Lifestyles• Buying habits• Religion and beliefs• Attitudes toward ‘green’ or
ecological products• Attitudes toward and support
for renewable energy• Population growth rate• Immigration and emigration
rates• Age distribution and life
expectancy rates• Sex distribution• Average disposable income
level• Social classes• Family size and structure• Minorities
• Basic infrastructure level
• Rate of technological change
• Spending on research & development
• Technology incentives• Legislation regarding
technology• Technology level in
your industry• Communication
infrastructure• Access to newest
technology• Internet infrastructure
and penetration
• Weather• Climate change• Laws regulating
environment pollution• Air and water pollution• Recycling• Waste management• Attitudes toward
‘green’ or ecological products
• Endangered species• Attitudes toward and
support for renewable energy
• Anti-trust law• Discrimination law• Copyright,
patents/intellectual property law
• Consumer protection and e-commerce
• Employment law• Health and safety law• Data protection
PEST – PESTEL: Scanning The Environment
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Political Economic Social Technological Environmental
Legal
Local
National
Global
Next 3 Months
Next 6 Months
Next 12 Months
Long - PESTEL - Activity
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Source : Competitive Strategy: Michael E Porter
Bargaining
power of
suppliers
Threat of
substitute products
or services
Threat of
new
entrants
Bargaining
power of
buyers
INDUSTRY
COMPETITORS
Rivalry among
Existing Firms
Potential Entrants
Suppliers Buyers
Substitutes
Porter’s 5 Competitive Forces
369
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Strategy Choices
Porter: the optimum position for a company
within an industry. Often, a determinant of a
company’s profitability is the attractiveness
of the industry in which it operates.
Ansoff: helps managers devise their product
and growth strategies highlighting their risk
implications and analysing growth opportunities.
Existing Products New Products
Exis
tin
g M
arke
tsN
ew M
arke
ts
Market Penetration
Market Development
Product Development
Diversification
Markets where business competes
Broad Narrow
Sou
rce
of
Co
mp
etit
ive
Ad
van
tage
Dif
fere
nti
atio
nC
ost
s
Cost Leadership
Differentiation Leadership
Cost Focus
Differentiation Focus
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Firm Infrastructure
(e.g. Legal, Finance, Planning)
Human Resource Management
Technology Development
Procurement
Inbound
Logistics
Operations
Manufacturing
Outbound
Logistics
Marketing
& Sales
After-sale
Service
Primary Activities
Support
Activities
Porter’s Value Chain
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Value Change Dynamics (Legal Sector)
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Uses
• Diagnose important variables in an
organisation
• Diagnose relationship of variables
• Analyse hard and soft elements
• How do 7 elements interact
• Assess relationship, then act
McKinsey’s 7 S’s
Strategy
Structure
Systems
Shared
Vision
Style
SkillsStaff
Hard variables
Soft variables
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First you need discipline
Disciplined people
Disciplined thought
Disciplined actions
© 2017 Winmark Ltd 17
The Matrix of Creative Discipline
Hierarchical
Organisation
Bureaucratic
Organisation
Great
Organisation
Start-up
Organisation
High
Low
HighLow
Ethic of Entrepreneurship
Cu
ltu
re o
f D
isc
iplin
e
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Partner (Lawyer) Buy-In
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Wise Words
Strategy is not just for top
managers: the best companies
are those where everybody
lives the strategy to make up
low cost or unique products or
service
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Realised strategy
Unrealised
strategy
Deliberate
strategy
Emergent
strategy
Source: “Five Ps for Strategy” by Henry Mintzberg
Why do we plan / imbed? Drift
• Deliberate and emergent strategies
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Embedding through PORTS
• P Purpose
• O Objectives
• R Results & Accountability
• T Tasks & Responsibility
• S Schedule
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PORTS in action
Purpose Objectives Results Accountability Tasks Responsibilities Schedule
Purpose of
business unit
or function
One of a number
of objectives
Target with date XY Specific task EF Xx/xx/10
Target with date AB
a. sub task GH Xx/xx/10
b. Priorities list GH Xx/xx/10
c. Time line / production EF Xx/xx/10
d. Allocate who does what EF Xx/xx/10
Target with date XY Permanent meeting agenda AB Xx/xx/10
Target with date CD
a. Specific task EF Xx/xx/10
b. Specific task GH Xx/xx/10
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What is a CxO?
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How many ‘Xs’ are there?
C X O
AAuditAdministration
DDigitalData
IInformationInvestment B
Brexit
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Responsibility Shifting
C O
C
HR
The Chief HR Officer was temporarily made responsible for
Information Security
IS O
C O
C
M
The Chief Marketing Officer took responsibility for the
Employee Brand
HR O
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How should the Board be made up?
Support activity leads ?
Primary activity leads ?
Primary activity process leads?
How many people and what % from which group ?
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Structural Problems
CXO CXO CXO CXO
Holes between silos
Holes in language and perception
Holes in knowledge of business areas
Holes in resource (sick, transition etc)
Potentially internal rivalry
Direction
Management
Complexity
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• CXOs working in each others functions
• CXOs shadowing each other
• CXOs being appointed as cover for each other
• CXOs presenting each other’s work (board)
Practical Solutions
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X CO
www.winmarkglobal.com 1
C X O
C X
X
Officer
Chief
Executive
C
X
O
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The problem with appraisals !
C X O
Appraisal Focus
CEO Focus
Capital
Creation
Why did the CEO
laugh at them?
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“As a manager moves into a leadership role, his or her network must reorient itself
externally and toward the future.”
Hermania Ibarra
Chaired Professor of Organisational Behaviour
Insead (HBR, Jan 2007)
© 2017 Winmark Ltd
Your Career
Junior Executive / Analyst
Senior Executive / Manager
Partner / Director
0 to 5 years
5 to15 years
0 years, if networked!
The Power Players
Your organisation
Your network
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The Glass Ceiling
Your organisation
Your network
C
X
O
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Directors / Partners
(learning / career)
Clients
(income streams)Your
Customers
Junior to Senior Exec Partner / Director
The Owners Cub
& Leading Performers
Business Leaders
Essential Services
(learning / leverage)
Leading Peers
(best practice know-how)Your
Friends
Media Moguls
& The Ministers
Contemporary “lighthouse”
(knowledge)
Sector “lighthouse”
(influence)Your
RoleYour “brand”
X C O
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Power Source
The Owners Club Money (old & new)
Business (family & entrepreneurs)
ROU Asset (rare or unique)
Media Moguls People with Followers (social following of commenters)
Stars or Anchors
Controllers & Creatives
Leading Performers The Chiefs (Role Power)
Personal Talent & Brand
ROU Access (rare or unique)
The Ministers Political & Religious
Class & Social Orders
Influential Groups
Who is in the group?O
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Chief Executive, FTSE 100
Obviously the most effective measures of whether a senior executive is ready for promotion, are their current performance, their ability to create sustainable value and to build relationships at every level …
© 2017 Winmark Ltd
Personal Exercise - Rank your business unit
• World Class – on the journey to World Class where does my business unit sit ?
• Board – do I have good relationships with the board and c-suite and appropriate
influence ?
• Integration – how well does my business unit operate with other parts of the
business ?
• People – do I have the best team in place performing excellently ?
• Operations – do I have excellent infratstructure and operations in place ?
• ROI – does my business unit offer an excellent return on investment (think private
equity) ?
Does they way I run my business unit:
• Set an example to other parts of the business
• Make the whole business more valuable
• Make the business more competitive (do we out perform)
C
O
World Class
1 to 10
Yes or No
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Good Test Questions
Is this the best team I have ever led ?
Do our systems make even our average people excellent ?
If a member of the team was suddenly away could we pick up on everything they do ?
Are the any opportunities to improve our systems ?
Is our business / function seen as an internal gold standard and innovator ?
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Winmark & The C-Suite