Strategy comprises… A diagnosis –that defines the nature of the challenge i.e., Framing A guiding policy –for dealing with the challenge Vision, mission and strategic priorities A set of coherent actions –Designed to carry out the guiding policy Tasks and actions From “Good Strategy, Bad Strategy”, R.P.Rumelt,2011

Roku-dan meta-framework Strategic Thinking (Differentiation, value proposition) Strategic Thinking (Differentiation, value proposition) Operation- alization (Translate to execute, Align actions) Operation- alization (Translate to execute, Align actions) Strategic Analysis (validation, selection) Strategic Analysis (validation, selection) Strategic Management & Execution Domain knowledge Intuition Framing Context switching Sense making RBV TCE Porter M&A theory Game Theory Diversification Generic strategies Network externalities Communicate Budgets Pre-mortems Process design Deliberate Emergent Measurement Adapting Learning

The Four Components Strategic Thinking Strategic Analysis Operationalization (Where the rubber hits the road) Execution & Management

Strategic Thinking Framing the problem —What really matters, what doesn’t? Context switching —What other problems have similar features? What do different frames / contexts imply —Projecting out Translating (fitting) the new frame or context to the situation at hand Defining the problem / opportunity

Framing On the Labor Party's defeat in the 2015 general election: “The party took a huge bet that this was an economic change election; in fact it was an economic security election.” Ed Miliband on Fareed Zakaria GPS, May

Different context switches Industry Country Time From one… … to another British Airways / Hertz IBM / American Express Starbucks: US / Italian cafes IBM RCS / the cloud Terminal  PCs  Thin clients

Asking the right questions Questions should ultimately be: —Tractable “How can we grow revenues”? is too big – break down into smaller questions It’s also imprecise —Directly actionable “Why is the competition gaining ground”? isn’t But these are: –“What do customers want”? (market research) –“What do we offer”? –“What are they offering” (competitive intelligence)

Asking the right questions Look at Small as well as Large issues – Small items compound Use many different perspectives – Team Diversity Leverage team heterogeneity to challenge assumptions and avoid group-think Focus on Day-to-Day – Where is the action? Do not over simplify interpretations – nothing is that simple You do not have all the answers – Learn Develop domain specific knowledge – the devil is in the detail

Framing Mental models (or ‘schemas’) —We all use mental models to represent a complex world —Models must include how things work (cause and effect) —Must be challenged and updated with new information or changes How you frame a situation shapes the solution —Activates different schemas —Logic of appropriateness —E.g. Opportunity (offense) or Threat (defense) Adopt multiple frames – multiple perspectives Leaders must be careful not to impose personal frames

Intuition Look for Cues or Clues —Focus on Higher Impact Pattern recognition & matching Pattern matching produces scripts to follow Strategic Imagination —project into the future

Sensemaking Most things are not Linear —Sensemaking is an iterative process Trial and small errors —Sensemaking = understanding cause & effect Sensemaking relies on intuition

Strategic Thinking Gain insight… Strategic Thinking Asking the Right Questions Framing the Information Sense Making Intuition and Strategic Imagination External Insight Internal Insight 1. Strategic Thinking (Differentiation, value proposition) Strategic Thinking (Differentiation, value proposition)

Strategic Analysis (validation, selection) Strategic Analysis (validation, selection) External Analysis Internal Analysis Customer Analysis Competitor Analysis Market Analysis Capability Analysis Financial Metrics Customer Metrics Financial Metrics Financial Metrics Operating Metrics Miller / Okumoto, Inc. Financial Metrics Development Metrics Strategic Analysis Environmental Analysis

Operationalization Creating Alignment Financial Metrics Strategic Themes / Priorities Financial Metrics Strategic Programs Financial Metrics Strategic Projects Financial Metrics Strategy Mapping Internal Alignment Miller / Okumoto, Inc. Operation- alization (Translate to execute, Align actions) Operation- alization (Translate to execute, Align actions) McKinsey 7S

Management & Execution Execute Measure Compare / assess Correct… –Actions (SLL) –Goals (DLL) Repeat Strategic Management & Execution Continuous Learning…