Grateful 7 speech thanking everyone that has helped.pdf
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Strategy as Transformation
1. 1/30/2015 1
Successful
Transforming Strategy
âStrategy is the means for making
changes that result in sustainable
competitive advantage resulting in
superior value added for customers
and superior returns to
shareholders.â
3. Discussion Outline
ďŹ What we are transforming (a 7-C model)
ďŹ Transformation of ends and means
ďŹ Transformation of gaps and risks
ďŹ Targets for strategic transformation
ďŹ Financial performance
ďŹ Structure
ďŹ Interaction
ďŹ Industry
ďŹ Generic strategies
ďŹ Resources and competencies
1/30/2015 3
4. Discussion Outline
ďŹ Targets for strategic transformation
ďŹ Competitors
ďŹ Diversification
ďŹ Management
ďŹ Business model
ďŹ Creative tensions
ďŹ 46 realities of strategic transformation
ďŹ Essential outcomes
ďŹ Structural realities
ďŹ External forces
ďŹ Internal forces
1/30/2015 4
5. What we are Transforming â a 7C
Model
ďŹ The Seven
Dimensions of
Every
Organization:
1) Core
2) Culture
3) Context
4) Capability
5) Capacity
6) Competency
7) Customer
1/30/2015 5
6. What we are Transforming â a 7C
Model
ďŹ CORE: the central
reason-for-being
of the
organization:
ďŹ Its PURPOSE â why the
company exists in terms of
excellence, discovery, and/or
service
ďŹ Its IDENTITY â how the
organization wants to be
thought of by other
stakeholders â its brand
ďŹ Its INTENTIONS â what
values drive the long run
sustainability of the
organization and the legacy
it will leave1/30/2015
7. What we are Transforming â a 7C
Model
ďŹ CONTEXT: the
fundamental
operational framework
for the organization
ďŹ Strategy â the comprehensive
vision that defines the desired
direction and impact of the
organizationâs operations
ďŹ Goals â desired/expected
organizational end results
ďŹ Measures â metrics by which
successful goal achievement is to
be judged in-process and end-of-
process
ďŹ Systems â mechanisms by which
decisions are made and actions
are carried out
ďŹ Structure â position descriptions
and assignments and interactions
between positions
ďŹ Technology â facilitation of
decisions and actions through
decision, production, and delivery
tools or mechanisms
1/30/2015
8. What we are Transforming â a 7C
Model
ďŹ CAPABILITY: underlying
strengths and limitations
of the organization
ďŹ Portfolio management â
the range and diversity of
products and services to
be offered
ďŹ Process management â
the ability to produce
desired products and
services
ďŹ Program management â
the ability to develop and
deliver strategic initiatives
ďŹ Project management â
the ability to develop and
deliver tactical initiatives
1/30/2015
9. What we are Transforming â a 7C
Model
ďŹ COMPETENCY:
competitively superior
expertise in the
organization
ďŹ Distribution of
competency: individual,
interpersonal and
institutional
ďŹ Drivers of competency:
observation,
understanding, decision,
action
ďŹ Disciplines of
competency â
marketing,
management, finance,
information systems
1/30/2015
10. What we are Transforming â a 7C
Model
ďŹ CAPACITY: the
scalability of the
organization or its
ability to grow w/o
damaging the other
âCâ factors
ďŹ Value-chain growth
capabilities
ďŹ Strategic arena
growth capabilities
1/30/2015
13. What we are Transforming â a 7C
Model
ďŹ CULTURE: the way
people work
together:
ďŹ Their ASPIRATIONS â what
people want for and from
themselves
ďŹ Their EXPECTATIONS â what
people want from and for others
ďŹ The ANATOMY of the culture â
structural characteristics
including reporting and
accountability paths, power and
control sources and distribution
[may be formal AND informal)
ďŹ The PHYSIOLOGY of the
culture â relational
characteristics including
communication flows, decision
flows, influence flows1/30/2015
14. What we are Transforming â a 7C
Model
ďŹ CUSTOMER: the
nature and nurturing-
desires of those who
purchase and/or use
our products and
services
ďŹ Product, place, price
and promotion
preferences
ďŹ Resource capacities
(money, time
information)
ďŹ Alternative or substitute
sources of satisfaction
ďŹ Demographic trends
1/30/2015
15. What we are Transforming â a 7C
Model
ďŹ Observation 1:
Much of what we
âknowâ about an
organization reflects
informed judgments
based on incomplete
information.
Transformation,
therefore, is both:
ďŹ Art and science
ďŹ Fact and judgment
ďŹ Analytical and intuitive
ďŹ Proactive and reactive
ďŹ Trial and error
16. What we are Transforming â a 7C
Model
ďŹ Observation 2: All
organizations are
undergoing both
planned and
unplanned
transformation
continuously in one or
more parts of the
organization. The
decision to be made is
whether that
transformation will be
systematically
observed, understood,
decisioned and acted
upon purposefully and
progressively.
17. What we are Transforming â a 7C
Model
ďŹ Observation 3:
Managers of the
transformation process
are neither
ďŹ Omniscient â they know
things incompletely
ďŹ Omnipotent â they
influence things
incompletely
ďŹ So, effective
transformational
management requires
imagination, risk taking,
humility, dependence on
others, learning the right
lessons from failure and
success, persistence
and resilience.
18. What we are Transforming â a 7C
Model
ďŹ Observation 4:
While change may
BEGIN in any of the
7C arenas, it
ultimately must work
its way through all
the arenas in order
for the organization
to act in a
coordinated way that
is sustainable. All
arenas exist in a
mutually
interdependent
relationship.
19. Strategic Transformation of
Ends and Means
ďŹ By its very nature, effective
strategy is about deep and
wide change â change that
seeks to transform an entire
organization.
ďŹ These transformations can be
in what, where, how, for
whom, and/or when an
organization acts.
20. Strategic Transformation of
Ends and Means
SAME
ENDS
(Markets)
NEW
ENDS
(Markets)
SAME
MEANS
(Methods)
Tuning
the
organization
Turning
the
organization
NEW MEANS
(Methods)
Tempering
the
organization
Transforming
the
organization
⢠Tuning = incremental improvements in current markets
and methods
⢠Turning = seeking significant changes in what we
market and who we market to
⢠Tempering = seeking significant changes in how we
operate, manage, market, finance, ...
⢠Transforming = seeking significant changes in both
markets and methods at the same time
21. Strategic Transformation of
Gaps and Risks
ďŹ Strategy manages the risks that
occur because of the gaps.
ďŹ We cannot (and would not choose to)
eliminate the risks
ďŹ There is a clear and positive
relationship between risks and return
ďŹ There is a real difference, however,
between taking a risk, and taking a
chance.
ďŹ Risks can, and strategically should
be, managed.
22. Strategic Transformation of
Gaps and Risks
Possible gaps The risk involves
âŚ
Strategy can help
manage the gap by âŚ
Intention
vs
Execution
⌠the potential gap
between what we
intend to do and
what we actually do
⢠Identifying crucial
execution points
⢠Providing standards to
judge the quality of
execution
Information
vs
Reality
⌠the potential gap
between perceptions
and truth
⢠Encouraging a wider
scope of investigation
⢠Encourages honest
questioning
Corporation
vs
Customer
⌠the potential gap
between corporate
and customer
interests
⢠Focuses attention on
customer issues
⢠Asks the organization to
focus on value added for
the customer
23. Strategic Transformation of
Gaps and Risks
Possible gaps The risk involves
âŚ
Strategy can help
manage the gap by âŚ
Investment
vs
Return
⌠the potential gap
between time and
resources spent and
rewards received
⢠Identifies high priority
resources and key
timing issues
⢠Establishes targets for
return on investment
Corporation
vs
Competition
⌠the potential gap
between perception
vs realities of
competitor and the
competitive
environment
⢠Encourages a high
respect for competitor
capabilities
⢠Anticipates multiple
sources of competitive
pressure
Objectives
vs
Outcomes
⌠the potential gap
between goals and
achievements
⢠Encourages thoughtful
goal establishment
⢠Continuous comparison
of goals vs
accomplishments
24. Targets for Strategic
Transformation - Financial
ďŹ Transforming strategy
generates superior financial
performance
ďŹ It allows an organization to obtain
financial returns greater than its cost
of capital
ďŹ It allows financial returns ( and
reinvestment potential) greater than
those of competitors
ďŹ It allows a company to achieve
superior financial returns that are
sustainable in the long run
25. Targets for Strategic
Transformation - Structure
ďŹ Transforming strategy fosters
a Six-F Firm
ďŹ FAST: designed and operated to reduce
process times and optimize reaction and pro-
action speeds
ďŹ FOCUSED: built round core activities to which
all other business units are truly related
ďŹ FLEXIBLE: willing and able to change
whenever change is called for, and whatever
needs changing
ďŹ FLAT: less hierarchic structure, with a broad
span of control, and with authority given to
expertise
ďŹ FRIENDLY: collaborative, trusting and relaxed
both inside and outside the organization
ďŹ FUTURED: because it is well equipped for the
best method of prediction: making the future
happen the way you want.
26. Targets for Strategic
Transformation - Interaction
ďŹ Transforming strategy fosters an
organization-wide strategic planning
interaction and communication
ďŹ The process encourages thinking about
tomorrow in proactive and creative ways
throughout the organization
ďŹ The process encourages establishing
objectives throughout the organization
ďŹ The process encourages participation and
collaboration throughout the organization
ďŹ The process encourages questioning and
reflection throughout the organization
ďŹ The process encourages complexity and
flexibility in thinking throughout the
organization
27. Targets for Strategic
Transformation - Industry
ďŹ Transforming strategy
focuses on choosing an
attractive industry
ďŹ Competition comes primarily from
rival firms in the same industry
ďŹ Industries exhibit life-style stages
(that can be challenged, but with
difficulty)
ďŹ Every industry has attractive and
unattractive segments, niches
that can be reached through an
effective business model
28. Targets for Strategic Transformation
â Generic Strategies
ďŹ Transforming strategy examines
generic strategies thoughtfully
ďŹ Cost control is essential for any
strategy â but a simple lower price
strategy is unsustainable over time
ďŹ Differentiation works when the
difference is visible and valuable to
buyers, financially attractive for both
the company and the customer, and
sustainable against competitors
ďŹ It is possible to balance value and
costs in a unique business model
â but this requires expertise in both
conceiving and executing strategy.
29. Targets for Strategic Transformation
â Resources and Competencies
ďŹ Transforming strategy recognizes
the importance of resources and
competencies
ďŹ Resource uniqueness, durability and
competency in deployment are a crucial
part of every strategy
ďŹ Competencies âŚ
ďŹ âŚ especially are embedded in the talents
and attitudes of personnel
ďŹ âŚ can also be embedded in organizational
systems
ďŹ âŚ can become liabilities if they lead to core
rigidities leading to strategic momentum
and/or inertia
30. Targets for Strategic
Transformation - Competitors
ďŹ Transforming strategy seeks
to outsmart, out perform and/or
out maneuver competitors
ďŹ Competitive advantage is always
temporary â so we must be
prepared to adopt, act on and
abandon strategies rapidly
ďŹ The advantage is found in fast
thinking an innovative, agile action
ďŹ The key capabilities become
speed, creativity and action-
implementation
31. Targets for Strategic
Transformation - Diversification
ďŹ Transforming strategy
considers judicious
diversification
ďŹ Competencies can be transferable
ďŹ There are limits to the
expandability of a core business
model
ďŹ Diversification leads to strategic
complexity â different firms have
different abilities to manage such
complexity
32. Targets for Strategic
Transformation - Management
ďŹ Transforming strategy
encourages us to see strategic
management is a dynamic
process
Entrepreneurial
Initiatives
Engineering
Initiatives
Enterprise
Initiatives
33. Targets for Strategic
Transformation â Business Model
ďŹ Transforming strategy seeks to
change the current business model
ďŹ A business model is comprised of:
ďŹ Financial returns to the business
ďŹ Value propositions to customers
ďŹ Character of inputs
ďŹ How inputs are transformed (including
technology)
ďŹ Character of outputs
ďŹ Scope
ď§ Vertical scope
ď§ Horizontal scope
ď§ Geographic scope
ďŹ Nature of customers
ďŹ How to organize
34. Targets for Strategic Transformation
â Creative Tensions
ďŹ Transforming strategy seeks to
balance a variety of creative
tensions inherent in successful
organizations:
ďŹ Aiming vs Adapting
ďŹ Competition vs Cooperation
ďŹ Dreaming vs Doing
ďŹ Effectiveness vs Efficiency
ďŹ Fixed vs Flexible
ďŹ Incremental vs Innovative Change
ďŹ Individuality vs Integration
ďŹ Intuition vs Investigation
ďŹ Kapturing vs Keeping vs Killing
35. Targets for Strategic Transformation
â Creative Tensions
ďŹ Transforming strategy seeks to
balance a variety of creative
tensions inherent in successful
organizations:
ďŹ Managing vs Marketing
ďŹ Navigating vs Negotiating
ďŹ Owning vs Outsourcing
ďŹ Opportunity vs Obstacle
ďŹ Performance vs Promise
ďŹ Past vs Present vs Possibilities
ďŹ Retrenchment vs Refinement vs
Refocus vs Regeneration
ďŹ Systematic vs Serendipitous
36. Targets for Strategic Transformation
â Creative Tensions
ďŹ Transforming strategy seeks to
balance a variety of creative
tensions inherent in successful
organizations:
ďŹ Today vs Tomorrow
ďŹ Usual vs Unusual
ďŹ Value Invested vs Value Added vs
Value Returned
ďŹ Work vs Working vs Workers
38. 1/30/2015 38
46 Realities of Strategic
Transformation
Essential
Outcomes
⢠Effectiveness
⢠Efficiency
⢠Efficacy
⢠Elasticity
⢠Energy
⢠Emergence
Effectiveness Operational and strategic achievement
Efficiency Operational and strategic economy
Efficacy Operational and strategic impact
Elasticity Operational and strategic flexibility
Energy Operational and strategic momentum
Emergence Operational and strategic learning
39. 1/30/2015 39
46 Realities of Strategic
Transformation
Structural
Realties
⢠Purposefulness
⢠Wholeness
⢠Openness
⢠Transformation
⢠Interrelatedness
⢠Control
Purposefulness Systems are dominated by intentions
Wholeness Systems achieve aggregate results
Openness Systems have permeable boundaries
Transformation Systems process resources
Interrelatedness Systems have connected parts
Control Systems seek to be regulated
40. 1/30/2015 40
46 Realities of Strategic
Transformation
Transience Impermanence is found in relationships
Novelty History provides little guidance
Diversity Consensus is challenging
Uncertainty Causes-effects are less predictable
Complexity Interrelationships are hard to map
Dependency Problems-symptoms are interconnected
External
Forces
⢠Transience
⢠Novelty
⢠Diversity
⢠Uncertainty
⢠Complexity
⢠Dependency
41. 1/30/2015 41
46 Realities of Strategic
Transformation
Internal
Forces
⢠Conflict
⢠Conformity
⢠Momentum
⢠Inertia
⢠Gravity
⢠Entropy
Conflict Tendency to focus on differences
Conformity Tendency to focus on similarities
Momentum Tendency to continue the past
Inertia Tendency to resist change
Gravity Tendency to lower performance standards
Entropy Tendency to loose direction and energy
43. Organizational change
interventions â creating meaning
ďŹ Strategy ALWAYS seeks to change things â those
changes may be of different degrees:
ďŹ Change advocacy requires the leader to deal in
meaning: what does the change mean, and how do
we make it meaningful to each person?
Same ends New ends
Same means Restoring Retargeting
New means Revising Revisioning
1/30/2015 43
44. Organizational change
interventions â transformation
targets
1/30/2015 44
HEAD
HEART
WILL
HANDS
THINKING: Costs vs Benefits
DOING: Familiar vs ForeignFEELING: Pleasure vs Pain
WILLING: Commitment
vs Resistance
49. Economics-focused change
interventions
Perspectives
⢠Developmental
⢠Instructional
Problems
⢠Inadequate resources
⢠Unavailable resources
Point
⢠Resources
⢠Distribution systems
Promotion
⢠Resource development
⢠Resource distribution
Promise
⢠Strategic resource
acquisition
⢠Strategic resource
allocation
Perils
⢠Things >People
⢠Measuring short/long
term costs/benefits
1/30/2015 49
50. Politically-focused change
interventions
Perspectives
⢠Political
⢠Alliances
Problems
⢠Low power
⢠Poor negotiation skills
Points
⢠Power
⢠Networking
Promotions
⢠Power development
⢠Political maneuvering
Promises
⢠Power is acquired
⢠Power is appreciated
⢠Power is applied with
principle
Perils
⢠Unprincipled manipulation
⢠People treated as means
rather than ends
1/30/2015 50
51. Entrepreneurially-focused change
interventions
Perspectives
⢠Innovation
⢠Alliances
Problems
⢠Organizational timidity (risk
aversion)
⢠Organization bureaucracy
Points
⢠Opportunity recognition
⢠Opportunity analysis
⢠Risk management
Promotions
⢠Courage and creativity
⢠Removing organizational structural and procedural impediments
Promises
⢠Quick on the OUDA Loop
⢠Aggressive opportunism
⢠Lean organizations
⢠Appetite for risk taking
Perils
⢠Inadequate discussion and
debate about options
⢠Action prized over thinking
1/30/2015 51
52. Bureaucratically-focused change
interventions
Perspectives
⢠Incremental
⢠Experimental
Problems
⢠Lack of experience with
change
⢠All-or-nothing mentality
⢠Rush to judgment
Points
⢠Phased, limited change
⢠Feedback
Promotion
⢠A variety of small adaptations
⢠Growing accumulation of small successes
Promises
⢠Identifying small, high-
success probability targets
of opportunity
⢠Achievable change
expectations
⢠Slow, steady progress up
the learning curve
Perils
⢠Too little change, too late
⢠Assumes evolution will
triumph over revolution
1/30/2015 52
53. Value-focused change
interventions
Perspectives
⢠Inspirational
⢠Emotional
Problems
⢠Lack of passion for change
⢠Lack of sustained
commitment for change
Points
⢠Ideals and values
⢠Motivation
Promotion
⢠Charismatic leadership rooted in passionate vision
⢠Compelling devotion to change
Promises
⢠Articulation of deeply held
values
⢠Alignment of personal
values with group causes
Perils
⢠Mere cheerleading
⢠Triumph of emotion over
substantive development
1/30/2015 53
54. Environmentally-focused change
interventions
Perspectives
⢠Environmental
⢠Catalytic
Problems
⢠Ignorance of
environmental realities
⢠Intransigence in the face of
environmental pressures
Points
⢠Environmental sensitivity
⢠Environmental
adaptability
Promotion
⢠Environmental awareness and analysis
⢠Early and sustained adaptability
Promises
⢠Environmental opportunity
perspective
⢠Alignment of personal
values with group causes
Perils
⢠Inaction because of the
desire for more certainty
⢠Reactive rather than
proactive responses
1/30/2015 54
55. Organizational change
interventions: some observations
ďŹ Change is occurring
somewhere,
somehow, in every
organization.
ďŹ Changes occur in
different degrees and
stages in various
places throughout the
organization
1/30/2015 55
56. Organizational change
interventions: some observations
ďŹ However, change is also
resisted â there are
individual, interpersonal
and institutional
reasons for this
resistance
ďŹ Not all resistance is bad
â organizations are
designed to bring
stability and
predictability
1/30/2015 56
57. Organizational change
interventions: some observations
ďŹ Effective change
management requires
managing the meaning of
the change
ďŹ What the existing state is
and what the desired state
is
ďŹ What elements need to be
changed to reach the desired
state
ďŹ How and when the
changes needed can best
be achieved
1/30/2015 57