What comes to mind when you hear the word STRATEGY

What Makes a Decision A 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 > 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 21 st Century What scenarios would you envision? How might the industry respond to these?

Product Life Cycle Volume Pre-Intro Intro Growth/ Shake-out Maturity Decline TIME

Overarching Strategic Intent of 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