Strategists ToolboxV1 2003

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Information about Strategists ToolboxV1 2003

Published on April 10, 2008

Author: Noormahl


The Strategist’s Toolbox :  The Strategist’s Toolbox Accelerating Innovation Rohit Talwar – FastFuture +44 (0)20 7435 3570 +44 (0)7973 405 145 Fast Future :  Fast Future Strategy Consultancy Workouts Futures Research Innovation Programmes Corporate Venturing Clients & Projects:  Clients & Projects Web Venture Planning & Design Innovation Training Development of Future Scenarios Knowledge Sharing & Innovation Strategy, Service Model & Processes for a Corporate Incubator Processes & Web Systems Design for Corporate Venturing Scenario Planning Sales and Service Strategy Accelerated Redesign of Customer Journey Coaching and Risk Assessment on Transformation Programme Scenario Planning Fast Track Development of Strategy, Service Design and Prototype Strategy, Implementation Support and Review of a New Web-Based Service for Business Clients Panasonic Project & Programme Management Design of Process and Systems Architecture E-business Strategy Change Management Training Public and In-Company Workshops:  Public and In-Company Workshops Innovation Strategies for Innovation Building Innovation Teams The Innovator’s Toolbox Corporate Venturing Corporate Incubation The Innovation Workout Strategy Business Futures and Accelerated Scenario Planning Futures Think Tank The Strategist’s Toolbox The Strategy Workout Change The Change Manager’s Toolbox Improvisational Comedy Open Space Technology Leadership Coaching for Innovation and Change For details contact Objectives:  Objectives Provide participants with a ‘toolbox’ of strategic skills and techniques Enable you to spot and create opportunities to deliver strategic advantage to your business Share experiences and ideas Focus on applications in your organisation Grow your network Have fun Agenda - Day 1:  Agenda - Day 1 Introduction What is strategy? Case Study Lunch Frameworks and approaches - 1 Close Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close Agenda - Day 1:  Agenda - Day 1 Introduction What is strategy? Case Study Lunch Frameworks and approaches - 1 Close Participant Introductions:  Participant Introductions Working in pairs: Introduce yourselves Define what strategy means to you For your organisation What questions would ‘the strategy’ answer? What value does strategy add to the business? Determine your objectives in attending this workshop Your partner should present back what you say in picture form Agenda - Day 1:  Agenda - Day 1 Introduction What is strategy? Case Study Lunch Frameworks and approaches - 1 Close Strategy Addresses:  Strategy Addresses Where do you want to go? How do you want to get there? Loren Gary, Harvard Management Update, Special Report July 2001 Strategy Overview:  Strategy Overview Analysis Design Implementation Analysis Tools Positioning Resource Decision Making Options Measurement Making It Happen Roadmap Communication Strategy Overview:  Strategy Overview External Mapping PESTEC 5 Forces SWOT Internal Core Competencies Balanced Score Card Value Chain Knowledge Management Decision Trees Scenarios Critical Success Factors Successful Strategies:  Successful Strategies Successful Strategy Source: Contemporary Strategy Analysis, R Grant 1998, p 10 The Challenge - Developing Strategies in an Uncertain World:  The Challenge - Developing Strategies in an Uncertain World How do we cope with risk and uncertainty? How do we select the right indicators to track? How do we identify key trends and developments? How do we spot new opportunities, ‘white spaces’ and the potential for major discontinuities? How do we plan, operate and survive in a turbulent and fast-changing world? How do we handle those not playing by ‘our rules'? Agenda - Day 1:  Agenda - Day 1 Introduction What is strategy? Case Study Lunch Frameworks and approaches - 1 Close Agenda - Day 1:  Agenda - Day 1 Introduction What is strategy? Case Study Lunch Frameworks and approaches - 1 Close Slide18:  A Path Through Strategy Environmental Audit - e.g. 5-forces, PESTEC Organisational Audit - e.g. Balanced Scorecard, SWOT, Value Chain Analysis, Knowledge, Resource, Competence Based analysis Map Out alternative Futures - e.g. Scenario Planning Define Rules / Guiding Principles / Values Determine Strategic Direction Develop Business Model Design Strategic Architecture Define Strategies and Objectives for Business Units Create Change Roadmap and Implementation Programmes Embed into Operational Plans Create Measurement and Communications Framework Learn, Implement, Learn Assessing Market Positioning:  Assessing Market Positioning Transaction Efficiency Relationship Management Low High Weak Strong Market Share Firm A Firm B Firm C Firm D Healthcare Insurers:  Healthcare Insurers Threat of Backward Integration % of My Business Low High Low High Market Share Firm A Firm C Firm B Firm D Mapping Exercise:  Mapping Exercise Think of your firm or division Think of two axes with regard to the market e.g. cost vs quality Place your firm or division, and up to 3 of your competitors on the map. This is your view of the market Now redraw the map from how your customers see you Where would this be in 12 months time? Draw the arrows Porter’s 5-Forces Model:  Porter’s 5-Forces Model Suppliers Substitutes Buyers Potential Entrants Bargaining Power Bargaining Power Entry Threat Threat of Substitution Determinants of Competition & Profitability:  Determinants of Competition & Profitability Supplier Power Threat of Substitutes Buyer Power Entry Threat Industry Rivalry Price Sensitivity Product cost vs. total cost Product differentiation Competition between buyers Bargaining Power No./ size / concentration of buyers & suppliers Switching costs Information available Ability to backward integrate Scale economies Cost advantages Capital requirements Access to customers / distribution channels Legal and regulatory barriers Potential for retaliation Buyer propensity to substitute Relative price performance of substitutes Additional benefits offered by substitutes No / size / concentration Diversity of competition Excess capacity Exit barriers Cost structure Distribution channels Power of suppliers relative to buyers is similar to relationship between ‘producers’ and buyers - see below A Major UK Healthcare Insurer:  A Major UK Healthcare Insurer Supplier Power Threat of Substitutes Buyer Power Entry Threat Industry Rivalry Corporate – increased turnover Personal – vote with feet Poor service Cherry picking General insurers Overseas players Self – insure NHS Market leader – 40% of market Corporate – cost competitive Personal – Aging population Mature market Hospitals Geographical dominance Oversupply Doctors Politically strong Control referral Variation 5 Forces Exercise:  5 Forces Exercise Define the industry you are in and draw the 5 Forces Think of levers / bargaining power / likelihood / competitive response / etc in each force Get input from the rest of the group Using PESTEC to Identify Driving Forces:  Using PESTEC to Identify Driving Forces Political Economic Social and Demographic Technological and Scientific Environmental Commercial Slide27:  Example Driving Forces Political DF1 - Britain’s Attitude to the EU Total harmonisation Gradual alignment Growing divergence Fortress Britain DF2 - Political Stability of Europe etc. Economic DF1 - Level of Growth Consistent increases Zero growth Unshakable recession DF2 - US Economic Health etc Slide28:  Example Driving Forces Social and Demographic DF1 - Work - Life Balance 24/7 Society 60 hour working norm Resurgence of 9 to 5 3 Day working week DF2 - Population Growth etc Technological and Scientific DF1 - Impact of Wireless Technology ‘Remote control for life’ Gradual take up of 3G/4G services Technology slow to deliver Health concerns restrict usage DF2 - Genetic Medicine etc Slide29:  Example Driving Forces Commercial DF1 - Prevailing Business Philosophy Short term shareholder returns Long term value creation Socially responsible business Family friendly businesses DF2 - Impact of Globalisation Environmental DF1 - Impact of Environmental Legislation Encourages shift to paperless business Drives up costs Eliminates business sectors Negligible effect on most businesses DF2 - Pollution Levels PESTEC Exercise:  PESTEC Exercise You have in your folders some up to date research about trends under each PESTEC heading Develop a PESTEC analysis of the key forces shaping your environment Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close Rivalry Determinants:  Rivalry Determinants Fight for Market Share and volume if: slow industry growth fixed costs high overcapacity in industry High exit barriers If perceived commodity product, and no switching costs, customers will buy on price Entry Barriers:  Entry Barriers Economies of scale Capital requirements Proprietary differences Brand Switching costs Access to distribution Absolute cost advantage (e.g. access to raw materials, favourable location, etc) Expected retaliation Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close SWOT Analysis:  SWOT Analysis Internal External Leverage Points Change Drivers STRENGTHS OPPORTUNITIES WEAKNESSES THREATS SWOT Exercise:  SWOT Exercise Think of your firm or division Do a SWOT analysis, listing the main or key points only What does this tell you About your positioning About your capabilities About what you have to do? Growth Share Matrix:  Growth Share Matrix Current Market Share Growth Potential High Low Low High Slide38:  TANGIBLE Physical Financial INTANGIBLE Patents / Copyrights Processes / Know-how Trade secrets Brand / Reputation Culture & Environment Partnerships HUMAN Skills & Knowledge Management Commitment & Motivation Communication Resource Based View of the Firm Slide39:  “the collective learning of an organisation, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies” Hamel and Prahalad - The Core Competences of the Corporation HBR May-June 1990 Goldman Sachs - Relationship Management Nomura - Deal Structuring for VC Investments Ikea - Supplier Support Honda - Engine Technology Sony - Mechatronics What are Core Competences? Slide40:  What Are the Characteristics of a Core Capability / Competence? Truly distinctive / unique to you Hard to spot from outside Value recognised internally Enduring /sustainable Widely understood Managed as an asset Embodied / exploited in multiple products / services A combination of processes, skills, systems, resources, licences, etc. Difficult to copy Essential to NPD Fundamental to achieving organisational vision Reflected in key strategic decisions Architectural support Reinforced through training / development Monitored through performance measures Continuously reviewed and enhanced Envied by competitors and benchmark organisations Embodied in more than one person Slide41:  Managing Core Competences - A Hierarchy of Questions What are our ambitions? What is the strategy for fulfilling those ambitions? What organisation level competences / skills are critical to strategic success? Which of these competences do we already have? What additional core competences will we need to develop? How best can we exploit / leverage our competences? Do our people fully understand the nature and importance of our core competences ? Do we know and understand our competences - what are they based on and why are we good at them? How many of our competences are reliant on the expertise of a few key individuals? How will we enhance, build or acquire our competences? Do we have a real process in place for managing core competences ? Core Competencies Exercise:  Core Competencies Exercise In groups Select one company From the outside, what do you perceive as the core competencies? Why? What are the elements that combine to create those core competencies? Value Chain:  Value Chain Competitive advantage from doing specific individual activities better (design, execution, resources) The more activities you do better, the more difficult it will be for others to copy Value Chain Analysis:  Value Chain Analysis Identifying the critical activities of the firm and how they combine to create value McKinsey Business System Technology Service Product Design Operations Marketing Distribution Porter’s Value Chain:  Porter’s Value Chain Support Activities Primary Activities Margin Firm Infrastructure Human Resource Management Technology Development Procurement Outbound Logistics Service Ops Inbound Logistics Marketing & Sales Support Primary Value Chain:  Value Chain Primary Activities Inbound logistics e.g. warehousing, inventory control Operations e.g. machining, packaging, testing Outbound logistics e.g. delivery, order processing Marketing & sales e.g. advertising, channel relations, pricing Service e.g. installation, repair, updates Support Activities Procurement e.g. procedures, supplier management Technology development e.g. R&D, product design HR management e.g. recruiting, training Firm infrastructure e.g. planning, finance, legal Value Chains Integrate:  Value Chains Integrate You Customers Suppliers A Financial Services Model:  A Financial Services Model IS/IT Management External Customers Business Planning People Management Financial Management Quality Management Slide49:  Example Processes New Product Development Research Product Development Marketing Image Building Product Marketing Pricing Transaction Management Transaction Processing Transaction Reporting Settlement Processing Financial Management Financial Reporting Budgeting Tax Management HR Management Staff Appraisal Career Planning Recruitment Management Development Porter’s Value Chain:  Porter’s Value Chain Support Activities Primary Activities Margin Firm Infrastructure Human Resource Management Technology Development Procurement Outbound Logistics Service Ops Inbound Logistics Marketing & Sales Getting and Keeping Customers:  Getting and Keeping Customers Acquire Convert Maintain Advertising Brochures Website Salesforce Showcase References Service Joint ventures Risk share Value Chain Exercise:  Value Chain Exercise Start with the generic categories Identify individual value activities which: Have different economics Have a high potential impact of differentiation Represent a significant or growing proportion of costs Identify linkages (relationships between value activities) within the chain Slide53:  The Balanced Business Scorecard Customer Perspective Financial Perspective Internal Business Process Perspective Innovation & Learning Perspective Slide54:  Strategy as Knowledge Sharing Do we understand the types of information and knowledge required to realise our Vision? Do we know where the knowledge resides within and outside the organisation? Do we have clear processes and mechanisms for acquiring, structuring, interpreting, disseminating and applying knowledge? What processes are in place to support the creation and sharing of knowledge? Does our culture encourage knowledge sharing? Do our people understand the ‘rules of the game’ for knowledge based competition? Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close Visionary Companies:  Visionary Companies Stanford University Research $1 invested in 1926. By 1990, worth General market $415 Visionary companies $6,356 (3M, GE, HP, Merc, Proctor & Gamble, Sony, Walt Disney) Comparison companies $955 (Norton, Westinghouse, Texas Instruments, Pfizer, Colgate, Kenwood, Columbia) Built to Last:  Built to Last Identify core values and sense of purpose greater than profitability alone Preserve the core ideology, but allow all processes to change and progress Challenge the business by continually setting huge, daunting goals Actively encourage a cult-like culture Innovate prolifically and keep what works Employ home-grown management Support mechanisms that create a culture of “good enough is never good enough” James C Collins and Jerry I Porras, “Built to Last: Successful habits of visionary companies!, Random House 1998 Slide58:  Defining Strategic Direction What Is The Basis Of Our Offering? Who Are The Stake Holders? How Will We Measure Ourselves? Strategic Intent Mission Values Specific Goals Scope Scale Speed Distinctive Capabilities Knowledge Product/ Service Portfolio Partnerships/ Alliances Leverage Assets / Resources Customers Policy Financial Commercial Ethical Regulatory Balanced Scorecard: - CSF’s - KPI’s - Learning/Growth - Service - Innovation - Creativity - Financials - Outcomes Why Are We in Business? What Is Our Ambition? Strategic Architecture :  Strategic Architecture People Values Culture Strategy & Stakeholder Relationships Resources & Core Skills Operational Processes, Technology & Structures Knowledge Management Financial and Social Performance Decision Trees:  Decision Trees Develop and launch Strong demand Weak demand Zero demand Market test Favourable Strong demand Weak demand Zero demand Abandon Launch Abandon Strong demand Weak demand Zero demand Abandon Launch Abandon Unfavourable Abandon Assessing Critical Success Factors:  Assessing Critical Success Factors The grid on the following page provides a simple format for: assessing the critical success factors for delivering innovation or change in an organisation identifying supporting actions to achieve the desired results In column one list all of the current and potential critical success factors In column two you can assess the importance (imp.) of each success factor (1-minor relevance, 10-critical) Column three allows you to assess the organisation’s current capability to address the success factor (1-implying that this is an area of major weakness, 10-suggesting that you are operating at the standards of best practice in this area) Column four provides a space to record ideas for supporting actions Critical Success Factors:  Critical Success Factors Success Factor Imp. Cap. Supporting Actions Imp. - Importance 1- Minor Relevance 10 - Critical Cap. - Current Capability 1 - Major Weakness 10 - Best Practice Example Business-wide clarity on customer needs & concerns 10 3 Customer Focus Groups 0800 complaint line System of ‘Listening Posts’ Effective internal communications 10 7 Team Listening structure Intranet Web-sites for all projects 48 hour responses to all project queries Involvement and Participation (I&P) at all levels 8 2 Management workshop on I&P ideas Pilot participative ‘event’ Staff design of business forums Demonstrable support for new culture / ethos 9 6 Regular business forums Team charters at all levels Open access to performance data Process Ownership Infrastructure 7 9 Formal ownership guidelines Regular process owners forums Central process design repository Slide63:  Current Capability Critical Minor Relevance Major Weakness Best Practice Critical Success Factors Example Clarity on customer needs & concerns Effective internal communications Involvement and Participation (I&P) at all levels Demonstrable support for new culture / ethos Process Ownership Infrastructure Formal skill development programmes Performance Measurement Framework Stakeholder Communications Continuous Benchmarking Strong Supplier Partnerships Importance CSF Exercise:  CSF Exercise Identify CSFs for your project Rate them according to Importance, and Capability Identify the supporting actions required to achieve the CSF Critical Success Factors:  Critical Success Factors Success Factor Imp. Cap. Supporting Actions Imp. - Importance 1- Minor Relevance 10 - Critical Cap. - Current Capability 1 - Major Weakness 10 - Best Practice Slide66:  Current Capability Critical Minor Relevance Major Weakness Best Practice Critical Success Factors Importance Approaches:  Approaches Defensive or Offensive – get into a defendable position Positioning – where best for you in industry structure Influence the balance – change [causes of] 5 forces Exploit change – work out where the profits in the industry will be Diversify Work out the Competitive Response Shaping Strategy in the Face of Uncertainty:  Shaping Strategy in the Face of Uncertainty People Values Culture S&SR Resources & Core Skills Operational Processes & Structures Knowledge Management Financial and Social Performance Government Policy Suppliers Public Expectations & Values Interest Groups Alternative Providers Environment Substitutes Workers Regulation Providers of Finance Technology Lifestyles Infrastructure Global Developments Climate Demography The Economy Education Media Commercial Developments Natural World Crime Alternative ‘Futures’ Approaches:  Alternative ‘Futures’ Approaches Stories about the future Strategies, goals, intentions, objectives, plans and tactics Possibilities, options and opportunities Off the wall ideas - blue skies thinking Hunches, predictions, guesses and estimates Trends, extrapolations and movements Projections, assumptions, simulations, models and forecasts Alternative arguments, cases, rationales and causes Models of stakeholder behaviour Follow the Leader / Regulator / Market influencers Anticipation and prediction of events or sequences of events All of these might be considered ‘Scenario Planning’ techniques Slide70:  An Effective Scenario Tells a story about possible future changes in a particular ‘system’, domain, environment, society, etc. Engages the imagination Is written in the past or present tense - as if the forecasted trends and events had already happened Helps clarify the causes and consequences of key developments Challenges our current thought processes and assumptions about the future Enables us to define and assess a range of alternative policies, strategies and actions Is seen as relevant and an important element of the strategic process Typical Approaches to Scenario Development:  Typical Approaches to Scenario Development Discussion and debate - with or without source data System Change - evaluation of every parameter under different conditions (treasury model) Driving Force - identification and assessment of the fundamental influencing factors Developing Scenarios Using Driving Forces:  Developing Scenarios Using Driving Forces Gather Data Identify Driving Forces Build Scenarios Slide73:  The Basic Scenario Process 1. Assess the Current Situation 2. Gather the Data 3. Identify the Driving Forces 4. Generate Alternative Scenarios 5. Assess the Implications for your Environment 6. Assess the Implications for your Organisation 7. Define Strategy and Plans 8. Implement and Monitor Approach:  Approach Create a scenario of the world in 2006 Consider the implications for the world in which we live and work Assess / imagine the implications for your organisations Defining the Scenario:  Defining the Scenario We are going to produce a ‘state of the world’ report for January 1st 2006 Write the headlines for one section of the report: 1 - Politics Today 2 - The Economy 3 - Society and Demographics 4 - Science and Technology 5 - The Environment 6 - Commercial / Business Example Headlines:  Example Headlines Politics Today UN now has 300th members Arab-Israeli war enters its 3rd year The Economy World Bank agrees to wipe debt of 30 more nations Central Bank fears new recession in Europe Society and Culture Swedish retirement age set at 50 Reykjavik - Europe’s favorite city Britain refuses to accept EC 40 hour working week directive Science and Technology Human cloning - the results of legalisation Palm announce first 10 GHz palmtop The Environment President Hilary Clinton signs new emission controls legislation London now most polluted Western European city claims Greenpeace Business France celebrates creation of 1 millionth New Enterprise How India’s Wipro became the world’s largest software company Assessing the Implications:  Assessing the Implications Identify what you think will be the main implications of this scenario on how we will live, how we will work and the general impact on the business environment Identify the implication, threats and opportunities this will create for your company Slide78:  Data Gathering External Commentators / Think tanks / Institutes / Analysts / Economists Stakeholder groups Internet / Desk research / Secondary data Popular culture Government / Agency reports General press / Trade press / Generic business press Books Conferences / Seminars / Forums Internal Management information / Research Regulator / Trade monitoring Benchmarking Slide79:  Sorting the Data MAJOR factors - impact through sheer size / volume e.g. demographics PIVOTAL factors - apply pressure in key / vulnerable areas e.g. regulatory behaviour GERMINAL indicators - early signs of possible trends e.g. Internet Commerce TERMINAL indicators - revealing movement away from current situation e.g. Government as providers Slide80:  Typical Strategy Options Select most probable Hope for the most attractive Parallel strategies - e.g. Nokia Risk Aversion / Hedging Wait for indicators of developments on key drivers Seek to influence - choose your own destiny Ignore Hope is not a strategy Slide81:  Defining Improvement Objectives The clearer we can be about the improvement objectives, the easier it will be to assess whether the new design will meet its requirements. Typical objectives might include: Adding Value Create new customer offerings or product features Improve customer service, added value and responsiveness Provide better, more timely performance information Increasing Efficiency Faster product launch Reduce time spent on routine tasks Reduce paperwork / Minimise processing errors Cut transaction costs / Simplify and streamline processing steps Consolidation and elimination of roles, procedures and tasks Improving Effectiveness Clarify roles and responsibilities Increased empowerment / Devolution of responsibility Standardise processes and procedures performed in multiple locations Make more effective use of technology Improve speed, flexibility and productivity Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close The Implementation Roadmap:  The Implementation Roadmap The roadmap helps us think through how we will deliver the strategy by: Defining timebound objectives Defining the critical components of the operating system that need to be in place to achieve the objectives Identifying the dependencies between components and sub-components Determining the underlying infrastructure requirements Establishing the management framework to guide delivery Roadmap Structure:  Roadmap Structure 0-6 Months 7-12 Months 13-18 Months 19-24 Months Communication - Strategic Principles:  Communication - Strategic Principles How do you give employees clear strategic direction, yet also inspire flexibility and risk taking? A ‘strategic principle’ – pithy, memorable distillation Wal-Mart – Low prices, every day Southwest Airlines – Meet customers’ short-haul travel needs at fares competitive with the cost of automobile travel General Electric – be number one or number two in every industry in which we compete, or get out Orit Gadiesh and James L Gilbert Harvard Business Review – May 2001 page 73-79 Communicating Vision & Strategy:  Communicating Vision & Strategy Describe an example from your own experience of successful communication of vision and / or strategy Explain the situation e.g. Yellow Pages - communicating future sales and service vision Describe the approach used e.g. Physical exhibition to set context and highlight drivers for change, physical prototype, videos to show ‘before and after’, electronic evaluation by audience What impact did it have e.g. Widespread buy-in, greater ownership, accelerated implementation Agenda - Day 2:  Agenda - Day 2 Review of Day 1 Frameworks and approaches - 2 Lunch Defining Strategy Implementation Some Latest Thinking Wrap Up Close Strategy as Simple Rules:  Strategy as Simple Rules Kathleen M Eisenhardt and Donald N Sull, Harvard Business Review January 2001 Page 107-116 The Strategist’s Toolbox :  The Strategist’s Toolbox End Accelerating Innovation

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