STRATEGIC BUSINESS LEADERSHIP
Strategic Thinking & the
Strategic Management of Change
J. Michael (Mike) Geringer, Ph.D.
O’Bleness Professor of International Strategy
Director, Center for International Business – College of Business
Ohio University, Athens Ohio, USA
email: [email protected]
April 2014
Materials in this packet copyright © by Geringer & Associates, Inc.
Do not quote, cite, reproduce or otherwise infringe without written permission.
Strategic Business Leadership
Executive Education Seminar
WHAT IS STRATEGY?
Strategy is the pattern evident in the
fundamental choices a firm makes about
developing & deploying scarce resources
to achieve & maintain a unique &
valuable position
l
involves a set of activities
different from competitors, yet
consistent among the activities
… the pieces form a coherent whole
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WHAT IS STRATEGY?
Strategy is about being different in
ways that add value & are clearly
better
V
R
I
O
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Valuable
Rare
Hard to imitate or
substitute for
Organizationally
able to develop,
sustain, & capture benefits
WHAT IS STRATEGY?
Strategy deals with
configurations of activities
l
l
how activities fit with & reinforce
each other
how to constantly upgrade &
leverage capabilities to sustain
competitive advantage
Deciding what not to do is as
important as deciding what
to do
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PERSPECTIVE ON STRATEGY FROM
THE CEO OF A LITTLE $150
BILLION COMPANY…
“Look, what is strategy but resource
allocation? When you strip away all
the noise, that’s what it comes down
to. Strategy means making clear-cut
choices about how to compete. You
cannot be everything to everybody, no
matter what the size your business or
how deep its pockets. You have to
figure out what to say “NO” to.”
Jeffrey Immelt, CEO, General Electric
IMPORTANCE OF CLEAR
STATEMENTS OF STRATEGY
• Clear strategy statements leave no room for
misinterpretation & facilitate communication,
empowerment & resource allocation
• Strategy statement of Edward Jones:
“To grow to 17,000 financial advisors by
offering trusted and convenient face-to-face
financial advice to conservative individual
investors who delegate their financial
decisions, through a national network of
one-financial-advisor offices.”
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A CLEAR PROCESS PROVIDES
STRUCTURE
Macro
Environmental
Analysis (O&Ts)
• PESTE
Evaluate Current
Performance
• Mission, Values,
Vision
• Goals & Objectives
• Strategies
Industry
Analysis (O&Ts)
• Structure
• Evolution
• Competition
Analysis & Position
Strategy
Options
• Business Unit
• Corporate
Evaluation
• Resource
Requirements
• Risk/return
Implementation
• Making it happen
Company
Analysis (S&Ws)
• Structure
• Resources
• Processes
• Staffing
• Culture
How do we get there?
Where should we go?
Where are we
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ACHIEVING SUCCESS: IMPORTANCE
OF KEY SUCCESS FACTORS (KSFs)
KSFs: Those skills or resources that
a firm must master
•
To compete in a particular market or
segment
•
By delivering what customers value
& are willing to pay for
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WHAT IS THE PURPOSE OF
KEY SUCCESS FACTOR ANALYSIS?
KSF analysis provides a framework to build
shared understanding of:
– What players in our industry have to
be good at
– How this is changing
– What our current competitive position
is
– How to develop our competitive
advantage
– How to allocate our resources
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Distinctive Competence
or Skill Needed
INDUSTRY LIFE CYCLE INFLUENCES
KEY SUCCESS FACTORS
Life Cycle Dynamics & Sources of Competitive Advantage
Product Concepts
Creativity
Design Capabilities
New Technologies or Methods
(favors smaller firms early on)
Emerging
Growth
Manufacturing Skills
Process Technology
Process Refinements
Cost-Based Drivers
(favors larger firms
over time)
Segmentation &
Differentiation (finding &
serving attractive niches)
Maturity
Decline
Time
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YOUR CURRENT & FUTURE BUSINESS
MODEL DETERMINES KSFs
Describes overall competition & differentiation strategy
Describes customer value proposition
Operational Excellence
• Low costs
• Good standard quality & service
• Process synchronization
Note: Try to indicate
both current &
desired future
position
Product leadership
Customer focus
• State-of-the-art
products / offerings
• Speed to market
• Customization
• Deep, long-term
relationships
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GETTING “STUCK IN THE MIDDLE”:
NO CLEAR COMPETITIVE POSITION
• Competitive strategies are generally
mutually exclusive
• A clear competitive position is critical to
successful implementation
• A strategic change must be total:
all operations must be realigned
across your company’s chain of
activities in order to support the new
strategy
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Key Point:
Strategy is INTERNAL
as well as EXTERNAL
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ACHIEVING STRATEGIC SUCCESS:
DISTINCTIVE COMPETENCIES
Competencies should define strategy
• Company-specific effects account for ~30% 45% of variation in performance among firms,
vs. ~20% for industry effects
• Should define business around distinctive
skills, not end products/markets
A distinctive competence: what a
company does better than anyone else,
distinguishing your company
competitively
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COMPETENCE GAPS & STRATEGIC
ALTERNATIVES
Strategy
Environment
Key Success Factors
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COMPETENCE GAPS & STRATEGIC
ALTERNATIVES
Strategy
Competencies
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Environment
Key Success Factors
COMPETENCE GAPS & STRATEGIC
ALTERNATIVES
Strategy
Competencies
Key Success Factors
Competency Gap
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Environment
COMPETENCE GAPS & STRATEGIC
ALTERNATIVES
Strategy
Competencies
Key Success Factors
Competency Gap
Internal Development
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Environment
Acquisition
Exit
Strategic Alliance
THE STRATEGIC MANAGEMENT
PROCESS IS NOT JUST TOP-DOWN
Objective
Strategy
Operational Plans
Tactics
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BENEFITS OF STRATEGIC
MANAGEMENT
Use of systematic process, vs. decision or
document, is primary contribution
•aim of process: improved
understanding & commitment
from all managers & employees
through involvement in process
• helps people develop
strategic mindset
Process provides
opportunity to empower
people
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CHALLENGE ASSUMPTIONS ABOUT
HOW TO COMPETE
WORLDVIEWS
• Understand how you filter
information to create meaning
• Challenge your filters so you
don’t miss anything important
• Understand your filters &
those for whom you are doing
the scanning
• And…try & understand
worldviews of the people you
are scanning – which ones
have blind spots, and about
what activities or events?
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The strategic management of change is
about being ready for the future rather
than waiting for it to bite you…
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