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Tag Archives: Strategy Development

3-Phase Flywheel Strategy Approach

10 Oct

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Strategy Development has followed a set path since the last century where a predetermined, rectilinear, and inflexible approach defined the process.

In the 21st century, however, business leaders are devising Strategy by evolving it into a probabilistic, repeated, and multifaceted process.  An approach that can both endure and adapt to the growing pace of Change and Disruption that is manifesting itself in all industries.

Using gaming, AI, unremitting execution, and adjustment, with numerous scenarios to deliberate on, leaders create “Flywheels” that successfully tackle the not so deterministic world where the future is highly uncertain.

Flywheel is a concept originally used in the power industry to explain an origin of stabilization, energy storage, and momentum.  The concept was propagated in the Strategy context by author Jim Collins.  Employing the Flywheel concept, executives are able to validate assumptions through simulations as well as in the real-world scenarios.

Rather than using past assumptions and relying on instincts, using the Flywheel Strategy, decision makers exploit the power of Artificial Intelligence (AI) and Advanced Analytics. They model the multitude of variables and produce a sizable number of simulations that propose many strategic bets, option-value bets, and no regret moves.

Instead of numbing decision-makers with a profusion of options they created, the simulations render elucidative insights.  Also, the AI system is made more capable through learning mechanisms called Reinforcement Learning by selecting from the above strategies.

The collection of strategic choices is increased exponentially and cost of experimentation is diminished by this approach.  Decision-makers are also empowered by this tool to make better decisions.  Likewise, organizations are able to select accurate market approaches, pricing, advertising, and customer strategies for several cities and communities, over a time span.

Strategy Flywheels can be used as a basis for developing Growth Flywheels by organizations.  The Flywheel Strategy approach consists of the following 3 phases: 

  1. Sense: Market Sensing
  2. Think: Strategy Formulation and Investment Planning
  3. Act: Performance Evaluation and Learning

The dynamic and resilient Flywheel Strategy of Sense, Think, Act has 3 parts, which are based on establishing policies, contending with dynamic models within the background of environmental assumptions, and handling randomness.

Let us delve a little deeper into the 3 phases.

Sense: Market Sensing

Environmental assumptions are formulated through this procedure of extraneous Market Sensing.

Uncertainties to which probability assignment is difficult are the target of Market Sensing activity.  Most urgent strategic matters can be detected and senior leaders consistently engaged in devising a response to them by recurrently sensing extraneous market changes.

Improvements in Machine Learning and cutting-edge AI can aid in not only expanding the quantity of information scanned but also enhancing the quality of content evaluated.

Think: Strategy Formulation and Investment Planning

Conventional strategic thinking can be aided in the new way of strategizing by the 3-phase process for Gamification—Design and Build, Simulate, and Evaluate.

A stable strategy consists of a portfolio of investments and projects with diverse risk profiles.  Diverse risk profile of performance is a mix of:

  1. No-regret moves
  2. Strategic bets
  3. Option-value bets

Act: Performance Evaluation and Learning

Performance Evaluation and Learning from the efforts has to be carried out so that improvement in proficiency to sense the market and experiment with new ideas occurs.

Interested in learning more about how Amazon and Uber used Flywheels, how the Gamification approach is used in Flywheel Strategy formulation, and what constitutes a diverse risk profile?  You can download an editable PowerPoint on Flywheel Strategy here on the Flevy documents marketplace.

Editor’s Note:

If you are interested in becoming an expert on Strategy Development, take a look at Flevy’s Strategy Development Frameworks offering here.  This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  By learning and applying these concepts, you can you stay ahead of the curve.  Full details here.

Want to Achieve Excellence in Strategy Development?

Gain the knowledge and develop the expertise to become an expert in Strategy Development.  Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  Click here for full details.

“Strategy without Tactics is the slowest route to victory.  Tactics without Strategy is the noise before defeat.” – Sun Tzu 

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics.  Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to “Tactical” Strategy.  Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.  

These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

4 Traits of Exceptional Leaders

9 Oct

Evaluation and onboarding of outstanding leaders is anything but straightforward.  Almost all organizations have set up testing mechanisms or assessment centers to distinguish senior leadership candidates having traits that make up for Exceptional Leaders.  These assessment centers shortlist leaders based on certain indicators and criteria.

However, these assessments are not always accurate in predicting the best leaders.  At times, the entire evaluation exercise results in drafting mediocre leaders and fails to select top influencers and role models for the organization.  The traditional methods of gauging senior leaders prove inadequate based, typically, on 3 common flaws:

  • Granularity – Gauging the candidates for leadership positions using the profiles of successful leaders from the past. Those profiles are not meaningful considering the pace of change today and the future needs of the organization.
  • Long-term Focus – Assessment of candidates based on the traits required to reap the fruits of Business Strategy in 5 years’ time is another ground for not identifying the right leaders.
  • Emphasis on finding typical leadership traits – Instead of looking for traits that separate exceptional leaders from the pack, most assessments are geared towards finding typical leadership traits.

Research by PwC—spanning over a period of 10 years with a sample size of 2500 senior executives, who remained a part of C-suite successions in large organizations—reveals that the common flaws in leadership assessment methods can be confronted methodically.  To find the best C-level executives, leadership evaluations should focus on identifying candidates possessing the following 4 key traits that are typical only of the top C-level executives:

  1. Simplification & Operationalization of Complexity
  2. Drive Enterprise-wide Ambition & Change
  3. Strong Teamwork
  4. Leader Building

Let’s dive deeper into these traits.

Simplification & Operationalization of Complexity

In today’s world of disruption, organizations face new challenges on a day-to-day basis.  Exceptional leaders have the ability to process tremendous volumes of information and simplify things fairly easily.  Leaders who truly standout are well-versed in tackling confusion and learn promptly.  They are great at:

  • Interpreting complexities and creating simplified operational descriptions around them for others’ understanding.
  • Developing visions to influence people and rally them around the shared objectives.
  • Developing & implementing actionable plans to achieve objectives.
  • Developing functional and dynamic storylines encompassing the agenda that demonstrates how the company will execute its strategy. These storylines consistently remind the people to concentrate on the things that matter most to the company (e.g. customers, products).
  • Creating and disseminating robust communication plans—highlighting how their company is best suited to face the challenges of disruption—that are consistently analyzed and improved upon.

Drive Enterprise-wide Ambition & Change

People in an organization often operate in groups.  These groups consider people outside their circle as competitors or “outsiders.”  This tribal mentality is detrimental for an organization and inculcates individual thinking—focusing only on personal / group targets—and debilitates the ability to operate outside one’s comfort zone.  Exceptional leaders have the skills to:

  • Make people come out of this tribal or siloed mentality and think collectively in terms of realizing organizational objectives.
  • Understand different mindsets and know how to influence them constructively.
  • Make people realize their contribution towards the bigger, organizational perspective and work towards achieving their business unit targets rather than personal performance objectives.

Strong Teamwork

Nobody can undermine or deny the importance of teamwork.  Much has been written on the subject. However, in reality, most teams do not quite understand the spirit and commitment fundamental to develop teamwork.

Exceptional leaders:

  • Are aware of the importance of teamwork and collective leadership. They consistently challenge their people to ponder over ways to achieve not only personal but also the strategic organizational objectives.
  • Work with teams to uncover prioritized initiatives critical for organizational growth.
  • Lead their teams and make informed strategic decisions.
  • Focus more on the strategic planning front than tactical way before they reach the C level.
  • Emphasize to the teams the significance of spending time discussing / developing strategy and devising plans.
  • Focus on maximizing the effectiveness of each individual to benefit the organization.

Interested in learning more about the traits of outstanding leaders?  You can download an editable PowerPoint on Exceptional Leadership here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

How Do Porter, Mintzberg, And More Define Strategy?

23 Feb

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Strategy is about the methods used to attain goals.  It’s the “how” of achieving goals—desired future conditions and circumstances towards which effort and resources are spent until their achievement.

If Strategy has any meaning at all, it is in relation to some aim or end in view.

Strategy is 1 of the 4 dimensions of an enterprise structure:

  1. Goals of the organization.
  2. Resources at our disposal.
  3. Strategies for achieving above-mentioned goals –i.e., the methods used to deploy the resources.
  4. Tactics—i.e., the ways in which the deployed resources are used.

Strategy and tactics – integral part of Strategy Development – bridge the gap between goals and the methods used to achieve those goals.  These 4 dimensions of enterprise structure relate to one or both of the 2 domains; Policy and Management.  Policies determine the goals of an enterprise, whereas attaining goals is typically a matter of Management.  Tactics belong to the managers; strategy is the combined realm of the governors and managers; whereas resources are controlled jointly.

The employed resources through use of Strategies and Tactics give us “certain” conditions.  Inspecting them in light of the “desired” conditions enables us to determine future employment of the resources and thus emerges a pattern of actions and decisions which makes Strategy an adaptive and evolving view of what is required, to achieve goals.

We take a look at various perspectives on and definitions of Strategy, as explained by 8 of the most impactful and renowned Strategists in modern times.  Familiarity with the perspectives of these strategists enables us to develop a more holistic and thorough understanding of the topic, helping us improve our strategic thinking, decision making, and analytical skills.All of these experts agree on the fact that Strategy is a means to implement a policy or a view envisioned by those who matter.  Let’s see how the following strategists define Strategy:

  1. Michael Porter
  2. Henry Mintzberg
  3. Treacy and Wiersema
  4. H. Liddell Hart
  5. George Steiner
  6. Kenneth Andrews
  7. Kepner-Tregoe
  8. Michel Robert

Let’s break down how a few of these renown strategists define “Strategy.”

Michael Porter

Michael Porter, the father of modern Business Strategy, views Competitive Strategy as “intentionally opting a collection of activities that are dissimilar to the competitors in order to provide a unique mix of value”– i.e. Competitive Advantage.  Porter states that Strategy is about:

  • A competitive position.
  • Differentiating yourself in the eyes of the customer.
  • Adding value through a collection of activities different from competitors.

Henry Mintzberg

Mintzberg is credited with co-creating the Organigraph.  He has written extensively on management and business Strategy.  His contribution to Organizational Theory in the form of “The Organizational Configurations Framework” is a model that describes 6 valid organizational configurations or Organizational Design.

Mintzberg argues that the contrast of changing realities with intentions necessitates accommodation, generating Strategy.  According to him Strategy is a combination of:

  • The Perspective – Vision and Direction.
  • The Position – Decisions to offer particular products or services in particular markets.
  • The Plan – a means of getting from here to there.
  • A Pattern in actions over time – for example, a company that regularly markets very expensive products is using a “high end” Strategy.

Treacy and Wiersema

Treacy and Wiersema’s Value Discipline Model talks about 3 different value disciplines: Customer IntimacyProduct Leadership, and Operational Excellence.  Their research on market leading organizations reveals that they outdid their competitors through mastering 1 of these 3 disciplines.

Treacy and Wiersema assert that companies achieve leadership positions by narrowing, not broadening, their business focus on any one of the following:

  • Operational Excellence – lead the industry in terms of price and convenience and is based on the Strategy of production and delivery of products or services. It implies world-class marketing, manufacturing, and distribution processes.
  • Customer Intimacy – Long-term customer loyalty and customer profitability is based on the Strategy of tailoring and shaping products to the increasingly fine definitions of Customer-centric Design.
  • Product Leadership – concentrates on quick commercialization of new ideas. It hinges on market-focused R&D as well as organizational nimbleness and agility.

Interested in learning more about the 8 definitions of Strategy?  You can download an editable PowerPoint on 8 Perspectives on Strategy here on the Flevy documents marketplace.

Want to Achieve Excellence in Strategy Development?

Gain the knowledge and develop the expertise to become an expert in Strategy Development.  Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

“Strategy without Tactics is the slowest route to victory.  Tactics without Strategy is the noise before defeat.” – Sun Tzu 

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics.  Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to “Tactical” Strategy.  Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations. 

These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Strategic Human Resources: Evolution of Competition

20 Feb

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Today’s information-based, knowledge intensive, and service-driven economy has forced organizations to make substantial changes to the way they compete.  Changing perspective and responsibility of top management amidst rapid Business and Digital Transformation and the shifting role of HR from being an auxiliary function to that of a driver are some of the dynamics of the evolved competition.

This evolution of Competition has been reached by passing through 3 phases:

  1. Competition for Products & Markets
  2. Competition for Resources & Competencies
  3. Competition for Talent & Dreams

Throughout the evolutionary phases of competition, the focus of Growth Strategy, the tools used, and the key strategic resources have been shifting.  The strategic objective of front-running organizations is on continuous evolution and Transformation, and motivated Human Capital is their key resource.  This realization is now at the forefront of Strategy Development as competition for scarce Talented Human Resources becomes more intense.  However, modern-day managers are still using old tools to deal with an emerging reality.

Dexterity in leadership and management is a prerequisite for leaders now.  Research suggests that the 3 important changes that the CEOs must make in terms of their strategic perspective are in:

  1. Strategic Resources
  2. Value Creation and Distribution
  3. Role of Senior Leadership

More on this topic in our editable PowerPoint presentation on Strategic Human Resources.

With the fast-changing focus in Strategy, Human Resource Managers are finding themselves leading the strategic charge.  However, a large majority is ill prepared for the role.  With Human Capital becoming key strategic resource and basis of Competitive Advantage, HR must adopt 3 core processes to evolve into the strategic HR function that has become their new realm:

  1. Building
  2. Linking
  3. Bonding

Let us delve into the first 2 core processes to strategic HR function in a little more detail.

1. Building

The first core process of Building is all about creating human resource systems, processes, and culture to counter the deep-rooted bias towards financial assets and recognize the value of Human Capital.  For instance, Microsoft annually scans the entire pool of 25,000 U.S. computer science graduates for the best 500 to be given offers, of which 400 – top 2% of that year’s graduates – accept.  This only fills 20% of the positions.  For the rest, Microsoft maintains industry linkages with 300 recruiting experts who scour the industry for the best and the brightest individuals, often wooing them for years.

2. Linking

Developing Knowledge Sharing Networks is core to leveraging Human Capital.  Converting individual expertise into embedded intellectual capital is what linking is all about.  For example, British Petroleum in the 1990s introduced the Knowledge Management and Organizational Learning program.  The main feature of the program was the “Peer Assist” where frontline workers in one location would help solve a problem for workers in another location without the usual hierarchy intervening.  Peer Assist was augmented by the “Peer Groups” of business units—i.e. business units engaged in the same assisting activities as frontline individuals.  This way managers of decentralized operations compare experiences and share ideas.  Once this Information Sharing Network took root it was supported by setting up information-sharing infrastructure – e.g., video conferencing, chat rooms, video clip encoders etc.

Interested in learning more about the details of the 3 Core Processes required to evolve your HR into a strategic HR function and Key Actions needed to implement these?  You can download an editable PowerPoint presentation on Strategic Human Resources here on the Flevy documents marketplace.

Want to Achieve Excellence in Human Resource Management (HRM)?

Gain the knowledge and develop the expertise to become an expert in Human Resource Management (HRM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization’s Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

Learn about our Human Resource Management (HRM) Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Strategic Goals Grid (SGG) – Another tool for Strategic Planning

2 Oct

One of the most popular Strategic Planning tool among executives is the SWOT analysis (or SWOT matrix).  However, sometimes assessing the organization’s Strengths, Weaknesses, Opportunities, and Threats is not enough to set the direction for the planning process or to implement Business Transformation.

An alternative framework to SWOT analysis is the Strategic Goals Grid (SGG).  The SGG gives planners a different perspective to view the organization, the direction it has taken, the course that the collective wisdom of the organization wants to take, and to set goals.  SGG is an extremely effective overall Organizational Analysis tool for senior leaders responsible for Planning, Strategy Development, Transformation, Growth, and Profitability.

SGG is a 2×2 matrix, fashioned by examining the “Yes” and “No” answers to 2 critical questions:

  • Do you want something?
  • Do you have it?

The combination of the “Yes” and “No” answers to these questions define 4 basic categories for goals and objectives:

  1. ACHIEVE – if you want something you do not have, your goal is to obtain it.
  2. PRESERVE – if you want something you already have, your aim is to keep it.
  3. AVOID – if there is something you do not want and do not have, your goal is to avoid it.
  4. ELIMINATE – if there is something you do not want but have, your goal is to get rid of it.

These 4 categories of goals—ACHIEVE, PRESERVE, AVOID, and ELIMINATE—constitute the Strategic Goals Grid when drawn on a 2×2 grid.

The Strategic Goals Grid can be used to facilitate discussions and to record and communicate the results of such discussions.  Individuals can complete the grid separately and then compare, discuss, and integrate their individual efforts into a consolidated matrix.

SGG can be employed for kick-starting the Strategic Planning process in 3 progressive steps:

  1. Visualize and Document
  2. Coalesce
  3. Synthesize and Align

Let us dig a little deeper into the individual framework steps.

Visualize and Document

The 1st step in formulating the Strategic Goals Grid is an individual exercise, which takes about 15 minutes to accomplish.  The step entails taking input from all relevant participants of the Strategy Development workshop.  The activity requires from the participants to write their responses on individual copies of the Strategic Goals Grid.  The participants record their input regarding the critical questions of what to ACHIEVE, PRESERVE, AVOID, and ELIMINATE.

The question, “What do we want to eliminate?” is very effective in triggering group discussions on any issues that exist across the organization.  The question, “What do we want to avoid?” focuses the group’s discussion to anticipated issues and/or threats to the organization.

Coalesce

The 2nd step is a group activity, where the strategy development group engages in an exercise in which individual responses gathered during the first step are shared with the participants.  The individual responses are projected on a large screen and recorded on a computer.  Using one quadrant at a time, the group evaluates the list and repeats this process for all quadrants.  The list of individual responses becomes the collective wish list or the collective wisdom accrued over a period based on realities faced on-ground.

Synthesize and Align

The 3rd step is also a group exercise that entails rationalizing the responses gathered in the previous steps through discussion and analysis.  The list is carefully scrutinized and trimmed considering the objectives for the future.  These objectives are aligned with the priorities and values embodied by the organization.  The list of individual responses are refined and a consensus is developed on the finalized list.

Interested in learning more about the Strategic Goals Grid, its utilization, benefits compared to SWOT Analysis, and how to populate the grid? You can download an editable PowerPoint on the Strategic Goals Grid (SGG) here on the Flevy documents marketplace.

Are you a Management Consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

Want to achieve excellence in Strategy Development?

Gain the knowledge and develop the expertise to become an expert in Strategy Development. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

“Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat.” – Sun Tzu

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to “Tactical” Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.

These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.

The 6 Pillars of Supply Chain Management (SCM) Thinking: A New and Revolutionary Way of Looking at Supply Chain Management

7 Aug

Supply chain thinking used to be limited to the managers of a few global companies—companies that were struggling to coordinate internal information and materials. This, however, led to an exciting boom in cross-business coordination based on Supply Chain Management concepts.

Today, the field has broadened and shifted over time. Current supply chain trends—differentiation, outsourcing, compression, and collaboration—are being used to restructure supply networks and improve coordination. As more companies integrate their networks, capabilities are improving. The levels of product customization and business complexity are also increasing. As this continues, Supply Chain Management is being used in new ways to create uniquely defined customer relationships anchored on appropriate Customer-centric Design.

The field of Supply Chain Management will continue to influence companies. The best way to understand the impact of a long-term trend is to examine how the trend has changed the way executives view their businesses and what issues they choose to focus on.

Rationale Behind Supply Chain Management

Supply Chain Management is the design, planning, execution, control, and monitoring of supply chain activities. It is the management of the flow of goods and services. Essentially, Supply Chain Management addresses the fundamental business problems of supplying products to meet demand in a complex and uncertain world.

Conceptually, Supply Chain Management draws on the value chain concept of business strategist, Michael E. Porter. It conveys the idea of looking at the supply chain issue at the multi-company level.

As the global business environment becomes more complex and competitive, there have been shorter product life cycles and greater product variety. Due to this, it has increased supply chain costs and complexity. The birth and growth of outsourcing, globalization, and business fragmentation has resulted in a crucial need for supply chain integration. Coupled with advances in information technology, this has led to the creation of greater opportunity for Supply Chain Management.

Why is Supply Chain Management essential at this time? There is now an increasing need to create net value, build a competitive infrastructure, leverage worldwide logistics, synchronizing supply with demand, and measure performance globally. Only Supply Chain Management has a systematic process to satisfy these increasing demands.

With the increasing application of Supply Chain Management, there have been shifts in the view of management and influencing Strategy Development.

The 6 Core Pillars of Supply Chain Management Thinking

The 6 Core Pillars of Supply Chain Management Thinking are the major shifts that have redefined management’s view which is far different from traditional Supply Chain thinking.

The first Core Pillar is Multi-company Collaboration. This is the shift from cross-functional integration to multi-company collaboration. Traditionally, Supply Chain thinking was focused on integrating within their companies. But with the new Supply Chain Management perspective, the focus now is on integrating across companies to coordinate and improve supply.

With the shift in thinking, what is asked now is how do we coordinate activities across companies, as well as across internal functions, to supply products to the markets. This is a great deviation from the traditional thinking which ask how do we get the various functional areas of the company to work together to supply product to our immediate customers.

With the first Core Pillar, we get to achieve significant breakthroughs. There are lower supply chain-related costs and improved responsiveness within a chain of companies.

The very essence of Multi-company Collaboration is rethinking how organizations align goals and make decisions.

The other Core Pillars are Market Mediation, Demand Focus, Product Design Influence, Business Model Innovation, and Customized Offerings. Each core pillar is considered an enabler that has a vast impact on Supply Chains.

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Organizational DNA 101: A Guide to Defining Your Organization’s Behavior and Characteristics

3 Aug

Execution has become the new watchword in Boardrooms.  As organizations fail to effectively implement strategies, the importance of execution has risen to the forefront. Essentially, the first step in resolving these dysfunctions is to understand how the inherent traits of an organization influence and even determine each individual’s behavior. Organizations must also understand how collective behavior affects company performance.

The idiosyncratic characteristics of an organization can be codified using the DNA. When the DNA of an organization is purely configured, unhealthy symptoms and counterproductive behaviors are demonstrated.

Understanding the DNA and the Organizational DNA Framework

DNA has been used as a family metaphor to codify the idiosyncratic characteristics of a company.

The Organizational DNA Framework examines all aspects of company architecture, resources, and relationships.  It ensures that managers focus their efforts on reinforcing what works in the organization and modifying what does not. It helps companies identify and expose hidden strengths and entrenched weaknesses.

In identifying unhealthy symptoms and unproductive behavior, the Org DNA Profiler is used as a tool.  It allows management to gain insight into what is and is not working deep inside a highly complex organization.

The 4 Key Areas or Building Blocks

The Org DNA Profiler, as an Assessment tool, was used to fix problems by identifying and isolating them.  Launched in 2003, the Org DNA Profiler measures an organization’s relative strength in 4 Building Blocks on the basis of individual employees’ responses to 19 questions.

What Type of Organization Do You Have?

When diagnosing and overcoming organizational impediments, there is also a need to identify the type of organization that you have. There are 7 broad types of organizations; each organization fitting a certain type.

There is a Resilient Organization.  A Resilient Organization can adapt quickly to external market shifts.  It can remain steadfastly focused on and aligned with a coherent business strategy.  Resilient Organizations can anticipate changes routinely and addresses them proactively. They can attract motivated team players and offers a stimulating work environment, resources, and authority to solve tough problems.

However, there is also a disadvantage when it comes to Resilient Organizations. Resilient Organizations have the tendency to be overly adapted toward one direction or the other.

Another type of organization is the Just-in-Time Organization. The JIT Organization demonstrated an ability to turn on a dime when necessary, without losing sight of the big picture. They can manage to hold on to good people and performs well financially. A Just-in-Time Organization is a stimulating and challenging place to work.

While this may be a good place to work, it can also have its disadvantages. A Just-in-Time Organization is not proactive in preparing for impending changes. In fact, it has not made a leap from good to great. As such, it tends to miss opportunities by inches rather than miles.  It celebrates successes that are marginal rather than unequivocal.

The third type of organization is the Military Organization. This type of organization succeeds through sheer force of will of top executives. However, it has a shallow and short-lived middle management bench.

There are 4 other types of organizations. There can be the Passive-Aggressive Organization, the Fits-and-Starts Organization, the Outgrown Organization, and the Overmanaged Organization.

The Passive-Aggressive Organization is considered the most prevalent of all types of organizations. The Outgrown and Overmanaged Organizations, on the other hand, are those that are often considered unhealthy.

The intricacies and defining characteristics of the 7 types of organizations are effective in creating specific interventions to enhance performance and execution.  Knowing and understanding the types of organizations can better assist organizations in the analysis of their DNA and guide them in undertaking Business Transformation or Strategy Development.

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When Organizational Behavioral Issues Start Affecting Organizations

31 Jul

Most organizations are unhealthy.  Only organizations that are recognized to be Resilient, Just-in-Time, and Military can be described and relatively free from dysfunction.  Yet, only 27% of the responses gathered from the Org DNA Profiler showed a healthy profile.

The Org DNA Profiler is a short online self-assessment tool launched on December 9, 2003. It was used to measure an organization’s relative strength in 4 key areas, on the basis of individual employees’ responses to 19 questions. From a total of 4,007 completed assessments collected, there were 6 Organizational Behavioral issues that were prompted.  These issues can still be turned around by undertaking the appropriate step.

The 6 Key Issues on Organizational Behavior

Organizational Behavioral Issues are observations on the prevalence of dysfunctions among business organizations.

  1. Most organizations are unhealthy. More than 60% of the organizations are either Passive-Aggressive, Fits-and-Starts, Outgrown, or Overmanaged.
  2. Organizational DNA changes as companies grow. Small companies report more Resilient and Just-in-Time behaviors. They become more centralized and demonstrate Military traits as they grow.  Once annual revenues cross the $101B threshold, decentralization occurs. However, often this is undertaken badly.
  3. Attitude determines attitude. There are sharp differences between senior management and lower-level personnel. A disconnect exists between the organizations that senior executives believe they have established and the organizations they are actually running.
  4. Non-executives feel micromanaged. Junior managers feel a lack of maneuvering room compared to senior managers who view their self-professed involvement in operating decisions as good.
  5. Decision rights are unclear. More than 50% of the respondents believe that the accountability for decisions and actions in their organizations was vague.
  6. Execution is the exception, not the rule. Less than 50% of the respondents agreed that important strategic and operational decisions are quickly translated into action in their organizations.

It is expected that all organizations have behavioral issues.  However, unlike humans and other organisms, organizations can change their DNA by adjusting and adapting their building blocks and resolve these issues. There are just processes that organizations must take into consideration to effectively address these behavioral issues and turn them around for the benefit and advantages of the organization.

The Need to Unlearn, Learn, and Relearn

It is advisable for an organization to continue to analyze its organization as it grows into and occasionally out of dysfunction.  This can be done by using a 4-step evolutionary process.

Step 1: $0 – $500 Million. The first step or Step 1 generally demonstrates characteristics depicting Resilient or Just-in-Time profiles.

Organizations at this level are effective at executing and adapting to changes in the environment. They are generally younger small companies that are attuned to and aligned with the vision and strategy of the founders. They are known to be able to adapt more nimbly to market shifts.

Step 2: $500 Million – $1 Billion. The second step is an evolutionary phase where organizations are starting to experience the adverse effect of growth in terms of size.  This is basically the stage where Military profile has reached its peak in revenue segment. These are the organizations that are bureaucratic, slow, and overly politicized. At this point, expanding middle management starts to second guess and interfere in lower-level decision making.

Step 3 is where organizations are becoming too large and step 4 is returning back to a Resilient profile. The 4-step evolutionary process reflects the stages of development of organizations as they start from being small to being large and complex. It is a reflection of the issues they are encountering at each step of development that they are in. Knowing where they are at this point will enable an organization to better undertake their Strategy Development in a most effective approach.

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Understanding The Importance of Organizational DNA: 10 Core Principles

29 Jul

Organizations can change over the years. Change may happen because that is what the customers expect or it is because the organization gets to have even the most coveted skills. Despite the changes, there are those that stay the same—the organization’s brand, its unique culture, and its shared lexicon. These are the underlying organizational and cultural design factors that define an organization’s personality. Metaphorically, these are called Organizational DNA. The Organizational DNA can indicate whether the organization is strong or weak in executing strategy.

Today, execution has come to a fore as organizations fail to effectively implement strategies. Organizations now realize that it must first resolve this dysfunction by understanding how the inherent traits of an organization influence and even determine each individual’s behavior. The idiosyncratic characteristics of an organization can be codified using the DNA. When the DNA of an organization is purely configured, unhealthy symptoms and counterproductive behaviors are demonstrated. High performing organizations have shown that there are precepts that they closely follow to ensure that their Organizational DNA is in order.

The 10 Principles of Organizational DNA

The 10 Principles of Organizational DNA are the precepts upon which high-performance companies are built on.

Let us take a look at 5 of the 10 Principles of Organizational DNA.

  1. Organizations always identify with 1 of 7 behavioral patterns regardless of industry and geography. Enterprise-wide behavior can either be passive-aggressive, overmanaged, outgrown, fits-and-starts, just-in-time, military-precision, or resilient. The complication here is that companies can face and conquer even the most pernicious performance problems by changing personalities. When this happens, it is crucial that the company must be ready for any problems that may arise as a result of the change in personality type. The inability to address these problems may be detrimental to the organization. Changing personality is not easy. It must be well-studied and strategically planned.
  2. Companies contain a mix of personalities. Business units fall under different archetypes, particularly in major acquisitions. At this stage, it is possible that a resilient organization may have a division that matches the fits-and-starts profile, characterized by smart entrepreneurial talent. However, despite that, it may lack the collective discipline necessary.
  3. There is a strong connection between personality type and strategy execution. In the survey conducted, 48% of the respondents fit a profile that is distinguished by weak execution. Passive-aggressive organizations may have people who pay lip service to results but they may consistently undermine some necessary efforts.
  4. Strong execution can be sustained. Organizations with a strong execution archetype cannot afford to be complacent. Leaders must continually seek feedback from the market, encourage and act on criticism from customers and frontline employees, and take action to address minor issues. These must be done before any problem gets bigger.
  5. The combination of building blocks determines the organization’s aptitude for execution. Organization DNA is made up of 4 building blocks. These are decision rights and norms, motivation and commitments, information and mindsets, and structure and networks. Complications may come in when companies decide to improve execution. At this point, building blocks must be considered and these must be considered as a whole and not individually.

The other 5 core principles of Organizational DNA are essentially necessary. Even the company with the most desirable profile, the resilient organization, must continually stay at the top of the game. Hence, it is essential that organizations must adopt the most appropriate behavioral pattern and personality to be able to build high-performance organizations. Strategy Development must be able to integrate into the organization’s Business Transformation the 10 core principles of Organizational DNA.

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Team Resilience In the Midst of COVID-19: Turbocharging Your Organization Against Disruptions

22 Jul

The uncertain times, coupled with the COVID-19 pandemic, have spur leaders to reflect on what kind of organization, culture, and operating model they need to put in place. This is to avoid returning to previous patterns of behavior and instead, be able to embrace the next normal.

In this rapidly changing environment, people in organizations need to respond with urgency, without senior executives and traditional governance slowing things down. Waiting to decide, or even waiting for approval, is the worst thing to happen. Today, some level of coordination across teams and activities is crucial for the organization’s response to be effective.

Getting Ready for Business Resilience

Business Resilience is a management approach that integrates many disciplines into a single set of integrated processes. It is an enterprise-wide term that encompasses Crisis Management and Business Continuity.

Business Resilience enables organizations to face a wide range of risks—risks that can cause long-term harm, from a financial penalty to reputational damage. This is further emphasized with the global economy greatly affected by COVID-19, a pandemic that has overturned business and rattled the entire global business environment.

Addressing the COVID-19 pandemic

Leaders across industries cannot treat the Coronavirus pandemic like any other event. COVID-19 is unlike any other event. No single executive has the answer. In this rapidly changing environment, organizations need to respond with urgency. There are several initiatives that can be undertaken and integrated in Strategy Development. One of these initiatives is to build Team Resilience through the creation of a Network of Teams.

A Network of Teams is a cohesive and adaptable network of teams that are united by a common purpose. It is empowered to operate outside of the current hierarchy and bureaucratic structures of the organization.

The 4-phase Approach to Creating a Network of Teams

The Network of Teams needs to be created in phases for it to be effectively cohesive and adaptable.

Phase 1: Central Team with Response Teams. Phase 1 begins with a Central Team launching a few primary response teams very quickly. There are several key considerations that must be underscored in Phase 1.

Organizations must create teams that will tackle current strategic priorities and key challenges facing the organization. The model that is to be built must be flexible and capable of shifting when mistakes happen. The network must be created to learn, using the information to update actions and strategies. It must spur experimentation, innovation, and learning which is done simultaneously among many teams. There must be spontaneous learning in the face of challenges and opportunities at the individual, team, and network-wide levels.

Team leaders must be creative problem solvers with critical thinking skills, resilient, and battle-tested. Having teams that can respond to the dynamic demands of the external environment is one of the strengths of the network approach.

Phase 2: Hub and Spoke Model. The Hub and Spoke Model emerges when additional teams are launched to address rapidly evolving priorities and new challenges.

After the initial set of teams are created, leaders must shift toward ensuring that multidirectional communication takes place. There should be steady coordination with the central team hub in a daily stand-up meeting. Central Hub must make sure that support teams are using first-order problem-solving principles.

Leaders must take the role of catalyst and coach. The primary goal is to empower teams and support them at the same time, without micromanaging.

The next phase is Phase 3: Hub and Spoke with Subteams and Phase 4: the Network of Teams. The Hub and Spoke Model evolves into a Network of Teams when peripheral teams start connecting and collaborating directly with another.

With the Network of Teams, all self-organizations are turbocharged ready to face any disruptions the business has to encounter.

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