Strategy ImplementationNorthwestern University Kellogg School of Management

MORS 455 –– T/F 8:30am-11:30amProfessor: Ned Smith, ned-smith@kellogg.northwestern.edu, Jacobs 358, www.ned-smith.com

Office Hours: TBD and By AppointmentTeaching Assistant: Kevin Gaughan, kevin.gaughan@northwestern.edu

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Two-thirds of business and corporate strategies fail not due to poor strategy or flawed logic but poor execution. However smart a new strategy may be, it takes informed managers, strong leadership, and enlightened organizational design to make it a successful one.  This course focuses on strategy implementation, with emphasis on the organizational structures, both formal and informal, decision making processes, and evaluative practices that facilitate the successful attainment of strategic objectives. This class is not about designing business strategy, per se, but rather designing your organization to execute on that strategy. Our guiding framework involves applying principles of organizational architecture and social organization to mobilize the necessary resources to pursue one’s strategic goals and create value.

Students will learn managerial tools and techniques for aligning an organization’s formal and informal structures with its strategic goals. Additionally, students will analyze firm- and market-level data using techniques derived from network analysis to answer questions ranging from competitive firm positioning and strategic partnering to how to organize one’s employees to both create new value and deliver on existing value streams. The course uses a combination of teaching and learning techniques including hands-on data analysis and “technical labs,” lectures, case studies, and direct interaction with outside executives.

Evaluation will be based on active participation, several short in-class quizzes, a mid-term exam, and 2-3 brief presentations based on the technical labs. You can find the course pack at https://www.study.net/Kellogg. Additional (free) readings are posted on canvas. The core reading and review material for the course will be the slide-deck.

NOTE: This syllabus is in draft form and is likely to change.

Course Overview(detailed information on each class session and assignments on pages to follow)

Session  6     Session  7   Session  8     Session  9   Session  10  

Mid-­‐Term  Exam,  Pt  1  

90  minutes,  wri4en  (pen  or  pencil),  no  outside  materials  or  notes.  Answer  on  exam  

booklet.  

 Mid-­‐Term  Exam,  Pt  2  

Small  group  mini-­‐case  analysis  and  “elevator  pitch”  

presentaHon.  Groups  assigned  in  class.    

 

Exam  Debrief  Exams  will  be  in  your  mailbox  1  hour  prior  to  class.  Review  and  come  with  quesHons.  Debrief  is  core  to  learning.    

 Lab  1,  Analyzing  Social  

Network  Data  OrganizaHonal  

Market  /  Industrial  

Lab  1,  PresentaCons  Given  one  of  two  provided  datasets,  present  a  quesHon,  hypothesis,  and  answer  based  

on  your  analyses.    

 Lab  2,  Designing  Social  

Media  Strategies  Social  “Failures”  

Social  “SoluHons”  

 

 

Lab  2,  PresentaCon  Design  and  present  social  media  strategy  for  Kellogg  

based  on  principles  from  prior  class.    

 Special  Session  Lab  3,  

“ScienCst  Meets  Manager”  

Causal  thinking  and  experimental  design  for  

organizaHons  

No  Class  This  Hme  is  reserved  to  meet  with  your  Lab  3  groups  to  finalize  your  presentaHon.    

   

Lab  3,  PresentaCons  

   Class  Debrief  and  Final  

Thoughts    

Session  1   Session  2   Session  3   Session  4-­‐5.1   Session  5.2  

Strategy  &  Structure  IntroducHons  &  Course  

Requirements  A  Manager’s  Tools:  “ARC”  

#strategy  &  #organizaHon  

BIC    

Formal  Structures  &  Work  Processes  

Appex  

Organizing  for  ExecuCon  

Closure,  Trust,  &  High-­‐Performing  Teams  

Liberty  Ships;  Mac;  IBM  Black  Team  

Managing  ReputaHon    

 

Working  Under  Closure  ConnecHvity  &  Stability  

Lehman  Brothers  

Organizing  for  InnovaCon  

Brokerage,  Vision,  &  CreaHvity  

Gene  Stoner  &  the  M-­‐16  

   

The  Diversity  PredicHon  Theorem;  Analyst  Errors  

elBulli  (video)  

Discourse  &  the  Diffusion  of  Novel  Ideas  

Panaceas  &  Pathologies  The  Milgram  Experiments:  A  

ReinterpretaHon  Asch,  Groupthink  

 

 

 

ExploitaHon  and  ExploraHon  Network  cogniHon  

Affymax  (video)  

 

Knowledge  Management  &  Learning  

BP-­‐X  

 Strategic  Partnering:  To  be  Heard  and  to  Enter  

Framing  

ReputaHon,  Borrowed    

Network  DiagnosHcs  

Strategic  Benchmarking  

Charlo4e  Beers  

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Topic Details1. Strategy & StructureIn addition to (re)defining strategy & organization, this session introduces the vehicle through which the leadership of organizations can effectively occur. This vehicle is the “structure” of the firm. We’ll discuss structure as consisting of three basic parts—architecture, routines, and culture, or “ARC”—and consider various companies to highlight the advantages of creating a structure that supports your strategy (and conversely developing a strategy that aligns with your structure). We’ll also discuss a general framework for evaluating whether or not firms’ strategies display strategic “logic.”

IMPORTANT NOTE: Items marked with “1” are generally intended first half of class. Items marked with “2” are intended for second half of class. Prepare accordingly.

“CP” indicates that a reading is in the Course pack. “W” denotes that a reading is posted on Canvas and is NOT in the CP.

Discussion points / Case(s) in class (please note, NOT all things listed here will have an associated reading)

1 – BIC2 – Appex Corporation

Pre-Class Reading (these are things you are expected to read prior to class)

1 – This syllabus. Read in full. Circle anything that doesn’t make sense and ask me about it in class.2 – External Context: Industry Analysis. Ch. 6 in SSP (W, this reading should be a review for you on industry analysis, though you may find that it uses some new terminology)2 – Appex Corporation (CP)

Study questions (these are questions you are expected to consider prior to class)

1 – What is Strategy?2a – What is the nature of the cellular industry and what are the key success factors for Appex?2b – For each of the organizational structures presented in the case (entrepreneurial, circular, functional, product teams, divisional) how are tasks grouped? How are the organizational units linked/integrated with one another? What are the strengths and weaknesses of each structural form? 2c – What would you have done in Shikhar’s place? Were all of the changes in structure necessary? When leading structural changes in your future organizations, what are the important action steps you will be sure to take?

Post-Class Optional Reading (I highly recommend that you at least download these readings each week to skim and read the ones that interest you)

The Strategy Concept I: Five Ps for Strategy (CP)Core Competence of the Organization (CP)St

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Topic Details2. Organizing for Execution Significant value may be harvested from the social structure that exists both within and among organizations. This session will introduce some of the basic elements of social network theory and will introduce the two engines of "social capital," brokerage and closure. Closure, our focus here, is a strategy for delivering on a known value stream. Dense social ties facilitate trust, drive alignment, and lower the cost of monitoring. We will learn about companies who are successful at creating and benefitting from social closure and analyze the organizational and environmental conditions under which doing so is optimal. Shifting gears, we will consider what it is like to work under closure and discuss career concerns—both positive and negative—of working in a closed social system. In this session we will also begin to consider the critical role that networks play in building trust and reputation.

Discussion points / Case(s) in class

1 – Liberty Ships; Macintosh Team; IBM’s “Black Team”2 – Lehman Brothers2 – George Costanza & Mr. Kruger

Pre-Class Reading

1 (may be 2) – Rothschild, M. 1992. “The Henderson Revolution.” Upside Magazine. (W, also reproduced in Slides)2 – Lehman Brothers (CP)

Study questions

2a – What actions of Jack Rivkin led to the spectacular rise of Lehman’s equity research department? 2b – How would you describe the internal (informal) structure of the equity research division? What information from the case are you relying on to make this judgment?2c – How would you describe the position of the equity research division within Lehman? Again, what information from the case are you relying on to make this judgment?

Post-Class Optional Reading

Organizational Alignment: The 7-S Model (CP)Greif, A. 1989. “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders.” Journal of Economic History. (W)Granovetter, M. 1985. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology. (W)Burt, R. 1999. “When is Corporate Culture a Competitive Asset?” Financial Times. (W)St

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Topic Details3. Organizing for InnovationIn contrast to social closure, brokerage is a strategy for creating new value. It involves the recombination of unique sets of knowledge and is a key driver of creativity and innovation. Successful leaders read both markets and organizations to figure out what to do, and who to involve to get things done. We will discuss several companies that effectively utilize principles of social organization and brokerage to innovate. We will analyze data at both the firm and individual levels to understand the value generating potential of brokerage.

Discussion points / Case(s) in class (please note, not all things listed here will have an associated reading)

1 – Inventing the M16 Machine Gun; The Jacquard Loom, Babbage’s Analytical Engine, and Hollerith’s census tabulating machine; Bell Labs; Steinway & Sons2 – elBulli

Pre-Class Reading / Watching

1 – Managing in the White Space (CP, This reading is not meant to insult your intelligence, though it is very juvenile. If you’re lost, you’ll learn at least a little bit by reading this article. If you’re not lost, this is a quick read)2 – elBulli (W, Anthony Bourdain video)

Study questions

2a – What factors made elBulli the best restaurant in the world? Which elements of the elBulli experience create value for the customers?2b – What are the most salient features of the creative process at elBulli?2c – More generally, what is creativity? What is innovation?

Post-Class Optional Reading

Burt, R. 2004. “Structural Holes and Good Ideas.” American Journal of Sociology. (W)Beckman, C. & P. Haunschild. 2002. “Network Learning…” Administrative Science Quarterly (W) Rowley, T., Behrens, D., & Krackhardt, D. 2000. “Redundant governance structures…” Strategic Management Journal (W)McEvily, B. & Zaheer, A. 1999. “Bridging ties: A source of firm heterogeneity in competitive capabilities.” Strategic Management Journal. (W)Shipilov, A. V. & Li, S. X. 2008. “To have a cake and eat it too?...” Administrative Science Quarterly (W)

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Topic Details4 – 5.1. Panaceas and PathologiesValue is created by brokerage, but it is delivered by building a strong team around brokering ties. In this session, we’ll go deeper into what it means to optimize for both brokerage and closure and extend the critical link between reputation, organizational structure, and performance. We will reframe our discussions of social capital using the related business terms of exploration and exploitation and draw important comparisons and contrasts to those ideas. If time permits in the first session we will discuss the micro foundations of brokerage and closure. Failing to understand how your brain processes your network may mean the difference between you capturing versus squandering the value in the world around you. In part two we will extend the concepts of brokerage and closure to explore an increasingly important business practice: knowledge management.

Discussion points / Case(s) in class (please note, not all things listed here will have an associated reading)

1 – Closure Redux, Part II: A Sociologist’s Perspective on the Milgram Experiment2 – Affymax (video)2 – British Petroleum

Pre-Class Reading

1 – Managing Creativity in Small Worlds (CP – may not cover in class, but a great read)2 – British Petroleum: Focus on Learning (CP)2 – Unleashing the Power of Learning (CP)

Study questions

2a – What are the challenges involved in making learning a core competence?2b – Why is BPX well positioned from effective knowledge management? What are the organizational and environmental factors that positively impact that potential value of learning? 2c – How important is culture in the case of BPX?

Post-Class Optional Reading

Casciaro, T & M. S. Lobo. 2005. “Competent Jerks, Lovable Fools, and the Formation of Social Networks.” Harvard Business Review. (W)Sgourev, S. V. & E. W. Zuckerman. 2006. “Improving Capabilities Through Industry Peer Networks.” MIT Sloan Management Review. (W)Smith, E.B., T. Menon, and L. Thompson. 2012. “Status Differences in the Cognitive Activation of Social Networks.” Organization Science (W)Hansen et al. 2001. “What’s your strategy for managing knowledge?” Harvard Business Review. (Available upon request)Burgelman, R. A. & Y. L.. Doz. 2001. “The power of strategic integration.” MIT Sloan Management Review. (Available upon request)

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Topic Details5.2. Partnering: to Enter and to be HeardDense connections within cohesive groups provide a deluge of information, especially on the common enemy that so often helps define such groups. Within such groups “improper” response leads to colleagues correcting, cautioning, or ostracizing the offending party — leading people to turn to one another for quick, “appropriate,” interpretations of events. In their social construction of events, people drag one another into groupthink, dependence, and rigidity, which creates the need for strategic partners. This session is about how it happens, its potentially terrible consequences for businesses as well as individuals, and how to manage it. Specifically, we will ask: what if people cannot accept your ideas or leadership because of gossip-enforced stereotypes about people like you? Perhaps you’re the wrong gender/age/nationality, or you went to the wrong school. This session is about the cure. Finally, we will extend our discussion of strategic partners to analyze firms breaking into new markets, a surprisingly parallel process.

Discussion points / Case(s) in class (please note, not all things listed here will have an associated reading)

1 – Jane Elliott; Bridget Bishop 2 – Charlotte Beers @ Ogilvey & Mather

Pre-Class Reading

NONE

Study questions & Preparation

Please write about a time when a person/people didn’t hear your idea/initiative/suggestion, but they should have. What was the idea? Where did the idea come from? Who did you talk to about the idea first? How did you vet the idea? Did you tweak your idea? Why? Why not? In what way did you tweak your idea? What value would the idea bring? To whom? Who could implement the idea? Now generate two to three explanations about why your idea failed to gain traction.

Post-Class Optional Reading (extending ideas of partners in unique and interesting ways)

Tucker, Zivan, & Camp. “How to Measure Yourself Against the Best” (CP)Hagel & Brown. “Productive Friction: How Difficult Business Partnerships Can Accelerate Innovation” (CP)

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Topic Details6-7.1. Mid-Term Exam Parts 1 and 2 & Exam Debrief

You will have 90 minutes to complete Part 1 of the mid-term exam. You will need only a pen or pencil and your brain. We will discuss the format of the exam in class.

Part 2 of the exam will be completed in small groups. You will be assigned a short case at the beginning of the class and be given approximately 40 minutes (depending on final enrollment and the total number of groups) to analyze the case scenario, devise a response and produce an implementation plan, and create a 3 minute mini-presentation for the class. I will provide more details on this exercise prior to the exam date.

The following class will be partially spent debriefing the exam. Come with questions from your graded exam. Debriefing the exam is an extremely important learning opportunity and an important part of MORS 455.

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Topic Details7.2-8.1. Technical Lab #1 – Analyzing Social Network Data

This is a new lab as of Summer 2016. It will involve learning the basics of social network analysis (SNA), an increasingly common method for analyzing all sorts of data. Students will bring their laptops and/or work in pairs in class. You will be provided a software package prior to class and two datasets, one involving the social interactions of employers in a firm and another the flows of capital between industries that make up the US economy. No pre-existing knowledge (other than the conceptual knowledge from this class) or specialized skills are necessary. It’s my job to teach you those skills. Your assignment will be to use SNA to answer one of several questions that will be posed to you during class. More details will be added to the syllabus in time, and more information provided in class.

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Topic Details8.2-9.1. Technical Lab #2 – Social Media Strategy

Lab #2 will explore social media strategy. I will argue that effectively utilizing social media requires a major shift in the way organizations interact with customers/donors/audiences/etc. The core message will be this: To have a functioning social media strategy, it is necessary to build a unique social solution that addresses a social failure by improving relationships among customers if and only if they undertake, knowingly or unknowingly, a set of organizational functions that directly benefit your organization. We will consider several examples of organizations, firms, and social movements that have developed and executed successful social media strategies according to this criteria. Your assignment will be to design a social media strategy related in one way or another to the Kellogg community, broadly defined.

Core Reading List (to be amended)Aura Living (CP)AMEX (CP)

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9.2-10. Technical Lab #3 – Special Session on ExperimentationA unique component of the MORS 455 curriculum is the “Special Session,” a one-week deep dive into a new and interesting topic that is meant to get students to integrate, apply, and extend the course material. This year, the topic of the special session is experimentation. Please note, I am not talking about psychology experiments run on undergraduate students in laboratories. Our focus is instead on running field experiments inside organizations to gain insights and understand causal patterns in ways that would be difficult or impossible to do without experimenting. Experiments (randomly assigned, controlled, quasi-, natural, etc.) are the lifeblood of academic research and yet are surprisingly uncommon in the “real world.” We will explore why this is so. You will also receive a crash course on “experimental design” (a topic that I teach at the PhD level), specifically tailored for organizational settings. We will hear about several companies that use experiments and analyze (and criticize) their processes. As part of the Lab component of this session, you will choose an organization that you know or have worked for in the past and design an experiment that you believe will shed light on the underlying mechanisms of an important “empirical puzzle” and offer hard data for decision making.

Core Reading List (to be amended)Evidenced-Based Management (CP)Why Businesses Don’t Experiment (W)Enlightened Experimentation: The New Imperative for Innovation (CP)

Supplemental Reading ListAn Economist Sells Bagels: A Case Study in Profit Maximization (W)Field Experiments with Firms (W)(For future reference) Experimental and quasi-experimental designs for generalized causal inference. Wadworth Cengage Learning: Belmont, CA. CH 1-5. (W)

Deliverables & GradingPreparation & Participation (2 x 15 pts = 30 pts; first and second half of course)

-  You are expected to attend all class sessions and participate in class discussions.-  Preparation for class involves a) reading the assigned materials and b) reviewing and answering for yourself any study

questions. If you are not prepared to answer the study questions, you are not prepared for class. -  You may contribute to class discussions in many different ways: Asking clarifying questions; Explaining and justifying

your preferred course of strategic action; Identifying key issues in a reading; Building on discussion using (relevant) personal experiences and other supplementary material (e.g., news, logic); Listening to your colleagues and engaging them in constructive dialogue and debate; Advancing critical evaluations of arguments and evidence.

In class Quizzes (2-3; totaling 10 pts)

-  At random intervals we will begin some classes with a short written quiz based on the assigned readings. The purpose of these quizzes is not to intimidate, annoy, or infantilize you, but rather to ensure a meaningful classroom discussion of the material by incentivizing reading and preparation.

Technical Lab Assignments (3 x 5 pts = 15 pts)

-  Final details to be provided in class. -  At least one will be individual. Two may be completed in groups.

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Deliverables & GradingMid Term Exam (45 pts)

-  The exam will involve no books, notes, or computers. -  The exam is worth a major component of your final grade. I believe that the material covered in this class is so

important for your professional development that I view individual mastery of the material as priority number one in this course.

-  The exam is in two parts. Part I is worth 45 points (not a typo) and is the individual component. Part I consists of 20-25 questions. The goal of Part I is to ensure that you can (1) discuss the concepts introduced in class without having to look them up, (2) apply the concepts to organizational, managerial, and strategy related scenarios, and (3) read and interpret the kinds of charts, tables, and graphs to which you will be exposed throughout the quarter.

-  Part 2 is worth 2 points and is the group component. When you arrive to class you will receive your group assignment and immediately head to a breakout room. With your group you will read a brief problem statement associated with a real or hypothetical firm (i.e., a “mini-case”) and devise a solution. Think of yourselves as a consulting team trying to win a client project. Each mini-case is assigned to two or three groups, depending on total enrollment. Upon returning to the classroom each group assigned to a given mini-case will present to the audience, who will act as the firm. After each of the teams have made their pitch, the firm (i.e., audience) will vote on which team to hire. Teams are awarded points as a function of the audience’s vote. I reserve the right to determine the functional form (e.g., linear, quadratic, logarithmic, etc) of the relationship between the audience vote and points distributed.

-  NOTE – any points gained in part II of the exam are added to your score in Part I. In theory, then, the maximum score possible on the Mid Term Exam is 47 = 45 (Part I regular questions) + 2 (Part II score). If anyone in the class indeed scores above 45 points on the exam, the extra points will be applied to your scores on either Preparation & Participation or Quizzes. In the event that you score maximum points in those categories as well, you should seriously consider getting a PhD (and I would be honored to have you work with me).

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Final Grading & EtiquetteYour final grade will be calculated as follows

-  45 pts Mid-Term Examination + 30 pts Class Participation + 10 pts Quiz + 15 pts Technical Labs = 100 possible points.-  Final grades will be determined according to Kellogg grading rules and standards.

Regrading

Any requests for re-grading must be submitted within 10 days of the receipt of the grade, per Kellogg policy. The request must include an explanation of why you believe the grade to be in error. Grades can go up or down after a re-grade.

Course & Classroom Etiquette

You are expected to adhere to the general principles of Kellogg’s Classroom Etiquette Policy, as described on the Office of Student Life website: http://www.kellogg.northwestern.edu/stu_aff/policies/etiquette.htm

You are expected to adhere to the Kellogg Honor Code, as described on the Office of Student Life website: http://www.kellogg.northwestern.edu/stu_aff/policies/honorcode.htm

Per requests from your own classmates, I strongly discourage the use of laptops or mobile phones in class, unless instructed otherwise. Tablets are fine when used without a keyboard though you should have no reason to be connected to wi-fi during class time.

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