BN 926 Strategy and Management of Change

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BN 926 Strategy and Management of Change

• What Is Strategy and what are the future
  challenges to its successful management?
• Professor Julian Lowe

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Aims of Session

• Re introduce the concept of strategy
• How does strategy work in successful
  organizations?
• Assess strategic tensions and resolution of
  dilemmas in strategy
• What is strategy and what it is not?
• Does strategy matter and how do we know?
• Key challenge to effective strategy and its
  management in the 21st Century

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The Impact of Strategy

• 1 in Coca Cola in 1919 now worth 200,000
• 1 in a portfolio of Forbes in 1919 now worth
  4100
• Why do some firms do spectacularly well, whilst
  others fail or achieve only modest growth?

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The Impact of Strategy

• Take any three organizations of you think are
  successful.
• What is it that they do right?
• Is this strategy?

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A history of strategy
5. Strategy as organisation, interpretation,
chaos Hypercompetition/moving on
4. Strategies for stretch Create the
future
3. Planning for fit Think strategically
Dynamic analysis Static analysis
2. Forecast-Based Planning Predict the
future

• Financial Planning
• Meet annual budget

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Strategy as the Resolution of Strategic Tension
Strategy Strategic Tension Strategy Perspectives
Strategic Thinking Logic vs. Creativity Rational Thinking vs. Generative Thinking
Strategy Formation Deliberateness vs. Emergentness Planning vs. Incrementalisam
Strategic Change Revolution vs. Evolution Discontinuous Change vs. Continuous Change
Business Level Strategy Markets vs. Resources Outside-in vs. Inside-out
Corporate Level Strategy Responsiveness vs. Synergy Portfolio vs. Core Competence
Network Level Strategy Competition vs. Cooperation Discrete Organisation vs. Embedded Organisation
The Industry Context Compliance vs. Choice Industry Evolution vs. Industry Creation
The Organisational Context Control vs. Chaos Organisational Leadership vs. Organisational Dynamics
The International Context Clobalisation vs. Localisation Global Convergence vs. International Diversity
Organisational Purpose Profitability vs. Responsibility Shareholder Value vs. Stakeholder Values
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Mission Vision and Strategy
Mission This is what we do and how we relate
to stakeholders Vision These are our aspirations
and what we hope to become Strategy This is how
we will achieve our goals, more towards our
vision and fulfill our mission
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Seeing Strategy From Different Perspectives
Processes
Context
Content
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Images of strategy Stephen Cummings and David
Wilson

• Strategy and ethos
• Strategy as organizing
• Strategy as intention and anticipation
• Strategy as orchestrating knowledge
• Strategy as data plus sense-making
• Strategy as creativity
• Strategy as process, power and change
• Strategy as animation and orientation

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Mintzbergs 5 Ps

• Plan
• Position
• Pattern
• Perspective
• Ploy

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Corporate V. Competitive

• Portfolio management v. positioning
• Synergy and structure v. SBU performance
• Setting organisational parameters v. competitive
  strategy
• Scope of corporation v. scope of SBU

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Industry or enterprise?
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Porters Critique

• Too Many Firms Pursue Best Practice and Seek
  Operational Effectiveness Through Benchmarking,
  TQM, JIT Etc. But This Is Not Strategy.
  Strategy Is About Being Different, Not Being As
  Good As.

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The Failure to Choose

• Flawed Strategic Thinking
• Best practice mentality is pervasive
• Industry conventional wisdom homogenizes
  competition
• Customer focus is misinterpreted to mean
  serving all customer needs
• Managers believe that tradeoffs no longer exist
• Making tradeoffs is perceived as organisationally
  risky (no choices v. bad choice)
• Leaders are reluctant to disappoint valued
  managers or employees by setting limits
• .

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• Operational Effectiveness
• Strategic Positioning
• Strategy is about trade-offs, choosing what not
  to do as well as what to do
• Strategy is fit
• Strategy is about continuity over time
• Strategy in the past and the future

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Beyond a static view
from to
Industries, products and resources Organisational processes
Top down Democratise
SBU Synergy
Firms Networks
Contracts Trust
Customers Technology
Financial performance Innovation
Physical assets Knowledge
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Strategy, was is Long-term Distant
return Ambition Risk-taking Commitment Big
bucks The new frame we are suggesting here is
different Long-term A point of view about
industry evolution and how to shape
it Ambition A stretching aspiration that is
derisked through the tools of resource
leverage Commitment An intellectual and
emotional commitment that ensures
consistency and constancy
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Paradigms of Strategy(Teece, Pisano and Schuen)
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• nbnbnbn

Markides critique

• Strategy must decide on a few parameters
• Which customers and which not
• What products and what not
• How will it be done ie which activities and which
  not
• Who comes up with the ideas?
• Everyone!
• Utilise ideas throughout the organisation
• Get variety in teams, institutionalise a culture
  of innovation
• Who decides?
• Strategy is a mosaic of overlapping systems and
  activities synergy
• Achieve fit without losing flexibility
• Strategy needs to be supported by an appropriate
  organisational
• environment

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GE Case

• Why has GE been so successful?
• How would you describe strategy at the corporate
  and competitive level in GE?
• What role did Jack Welch play?
• Assess Jeffrey Immelts leadership since 2001
• What contrasts do you perceive between their
  strategy and leadership styles?