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SCMMajority of pharmaceutical companies are persisting with decade old processes and routines.  They have transactional relationships with suppliers, lack of concerted efforts to progress ahead, and no vision to reap productivity rewards.  The reasons for continuing with these traditional practices include tax regimes, regulatory hurdles, and stable revenues from customers dependent on existing industry offerings.

Disruption—spurred by technological Innovation, fluctuating customer demand patterns, and more agile and creative competitors—has forced the pharmaceutical sector to think of ways to face these challenges, survive, and thrive.  One of the strategic response to this competitive disruption—by leading manufacturers—is to reexamine their manufacturing operations, embracing agile principles, reducing costs, revolutionizing procurement and distribution functions, and striving to achieve Operational Excellence.  Above all, they view their supply chain not as a cost center, but as a source of Competitive Advantage.

The increasing influence of generic drugs is another challenge for large multinational pharmaceuticals.  In the past, multinational companies (MNCs) dominated the market owing to possessing a number of high-market drugs protected under patents.  Patent protection afforded them the leverage to set high prices on each product.  The scenario is fast changing.  Expiry of high-market drugs patents is creating a huge opening for generic competitors and the space is widening compared to the past.

In the past, pharma manufacturers were able to counter the threat to generic competitors by developing new drugs.  However, this is becoming difficult and the new drugs pipeline is shrinking with time.  R&D expenditure has continuously gone up, however, drug approval from the authorities has not kept paced with it.  It has rather declined, straining the MNCs further.

Other disruptive factors include newer distribution methods, public health plans favoring generic drugs over proprietary ones due to cost effectiveness, the newer internet / mail delivery options displacing traditional pharmacy dispensing options.  Pharmacy chains—e.g. Walgreens—have given a leverage to the retailers to negotiate reduction in medicine prices where again generics have an edge over MNCs.

Moreover, the trend of drugs purchased through a formal tender process is increasingly gaining acceptance, adding to the difficulties of large pharma manufacturers.  Additionally, strict regulations are minimizing the cost benefits that MNCs traditionally enjoyed in the past.

All these factors have forced the pharma companies to reorganize their Supply Chains in a more flexible manner to manage complexities, bring in efficiency, and contain costs to compete in off-patent segment with generics.

Reorganization of a conventional pharmaceutical Supply Chain into an Agile, flexible, and inexpensive Supply Chain warrants developing Operational Excellence and Cost Reduction competencies.  This necessitates 5 strategic steps (phases):

  1. Avoid a one-size-fits-all approach to SCM
  2. Develop Agile product design and packaging capabilities
  3. Restructure the Supply Chain footprint
  4. Establish partnerships with 3rd party suppliers
  5. Enhance planning capabilities

Let’s discuss these steps in detail.

Step 1 – Avoid a One-size-fits-all Approach to SCM

Large pharma MNCs typically maintain the Supply Chain of all of their drugs with a single strategy of retaining high inventory and service levels.  Such a strategy can only work for products having a high profit margin, in a static environment.  It is not suitable for low-margin products, contrasting environments, and does not take into account fluctuations in demand patterns.  An appropriate approach is to implement a multiple Supply Chains model based on individual products and markets.

Step 2 – Develop Agile Product Design and Packaging Capabilities

The 2nd step in Pharma Supply Chain Reinvention involves quick distribution of different versions of products to markets based on demand. For low-margin products with high demand volatility, the Supply Chain Management Strategy should be to employ Pack-to-Order system.  The Pack-to-Order approach involves developing a version of a product that could be timely dispatched to several markets of varying demand across the globe.  This approach coupled with Postponement Strategy—where products are packed to order during later stages of production based on regional demand—assists in trimming down the inventory, reducing complicatedness, and enhancing Supply Chain nimbleness to demand volatility.

Interested in learning more about how to reinvent your Pharmaceutical Supply Chain?  You can download an editable PowerPoint on Pharmaceutical Supply Chain Reinvention here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

opportunity 2Potential opportunities always surround leaders.  It is up to them to pounce on those or regret overlooking them, when someone else takes advantage of them.

Leaders’ personal beliefs and assumptions often clash reality.  The trait is categorized as “confirmation bias” in Psychology, where individuals pick the data that supports their existing opinions and approaches and doubt information which defies their mindsets.  Leadership needs to develop themselves to the level to consider the slight hints of the opportunities surrounding them.

There are 10 hidden strategic opportunities that—exist in all businesses and geographies but—are often overlooked by the leadership due to personal biases.  These opportunities go unnoticed because they are often disguised in the form of anomalies and contradictions to leaders’ existing beliefs and assumptions.  It’s up to the leaders to control personal bias; explore anomalies; and develop capabilities to uncover and seize these 10 Hidden Strategic Opportunities before rivals do.

In this article, we will discuss the first 3 strategic opportunities.

Opportunity 1: Assuming a product already exists, but actually it doesn’t.

Most people assume that a certain product already exists.  Its only when an organization ventures into that segment—with a new value proposition—that people realize that there was a void there.  Such gaps are there in almost all industries, but only visionaries are able to recognize and capitalize on them—through innovation and creative product development.  A number of well-known inventions—e.g., tablet computers—were thought to have already existed, but actually didn’t.

For instance, Kate Brosnahan, accessories editor for Mademoiselle magazine, realized in the 1990s that the handbag market lacked stylish yet economical functional bags.  The market at the time was replete with expensive but impractical bags from top designers and functional bags deficient in style.  Kate left her job and founded Kate Spade LLC, with her partner Andy Spade.  Together they began creating fabric handbags which were practical as well as trendy.  Soon, their products started getting appreciation from customers, including media icons.

Opportunity 2: Customer Experience should be anything but strenuous, costly, or irritating (but most of the time it is).

Fragmented and delayed customer experience results in customer churn.  Annoyance caused by poor Customer Experience presents potential strategic opportunity to win customers by fixing it.  They are able to see the bigger picture and strive hard to relieve customers’ aggravation and offer exemplary Customer Experience.

For instance, creation of Netflix Inc. was the result of Reed Hastings having to pay a fine of $40 as late fee for a rented video cassette he had lost.  Leading organizations, such as Netflix, offer quality offerings and provide their customers seamless, quick, and pleasing experiences.

Opportunity 3. An item is often priced low only because not many people know about it.

Hidden merits of a location offers an opportunity for sharp people to invest in for future appreciation.  One of the reasons for inexpensive resources or items is the lack of their awareness and cognizance of their true potential among people.  When people recognize the potential of a property or resource, its price rises steeply.

Interested in learning more about the other hidden strategic opportunities?  You can download an editable PowerPoint on 10 Hidden Strategic Opportunities here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

brain3Business Transformation initiatives are typically undertaken to solve a pressing issue, bring about improved performance, or to serve customers better.  A critical element of the success of such initiatives entails transforming the existing behaviors of the employees across the organization.  However, this isn’t a straightforward task.

Attitudes and practices get reinforced in people by following established routines day in and day out.  Such practices become a part of an Organizational Culture over time.  Ingrained organizational behaviors and practices aren’t considered burdening until the organization’s performance starts declining considerably over time.  That’s when the leaders start thinking about changing these beliefs and habitual actions.

Psychology and Neuroscience can help enterprises change the deeply embedded attitudes and practices of people and replace those with new beliefs and practices.  Leading organizations are using psychology and brain research to induce successful change.  Specifically, they focus on the right priorities to enable Organizational and Behavioral Change and take the following 6 steps—or 6 Rs of Behavioral Change:

  1. Recognize
  2. Relabel
  3. Reflect
  4. Refocus
  5. Respond
  6. Revalue

Let’s dive deeper into the first 3 steps critical to render behavioral change.

Step 1 – Recognize

The first step involves the leadership reflecting on the behaviors that are required to be transformed.  Leaders are responsible for articulating the future vision of an organization, prioritizing and implementing initiatives to achieve the vision, and take measures to tackle disruption caused by technology and rivals.  Self-Reflection on undesired behaviors by role models (including senior leaders) is essential to make other people ponder over their behaviors.

Leadership behaviors inform the workforce about the Transformation required, assist in championing the agenda, and make these behaviors resonate across the board.  Individuals, in turn, should contemplate on the alignment of their behaviors with their personal / organizational goals, think of new improved ways of doing things, and dump convenient yet unproductive behaviors.

Step 2 – Relabel

The 2nd step of the 6 Rs to Organizational Change necessitates categorizing and naming the flawed or unfit behaviors.  Neuroscience research has revealed that by naming behaviors and understanding that thoughts are merely ideas, persons with Obsessive Compulsive Disorder can disregard useless thoughts and behaviors that trigger them to wash their hands again and again.

Relabeling thoughts allows individuals to stop reflecting on useless thoughts.  Likewise, in an organizational setting leadership needs to evaluate which shared thoughts don’t work well, categorize them, and communicate the reasons for their unsuitability across the organization.

Step 3 – Reflect

In this step, senior management replaces outdated beliefs and behaviors and outlines the vision or desired objectives and behaviors.  The outlined desired objectives and behaviors need to be explicit, translated into daily actions, and attractive to the people.  This may warrant training of people to reflect on the desired expectations and behaviors collectively.  Effective communication of benefits of altered objectives and behaviors assists in subsiding the unrest associated with change in people and relaxing their mind and thoughts.  This must include informing people that uncertainties are part of business and that they should keep their focus on organizational values and what matters most during change.  Reflection creates a sense of ownership among employees that is otherwise difficult to be achieved by any cascaded top-to-bottom directives.

Interested in learning more about the other steps or Rs critical to engender Change ?  You can download an editable PowerPoint on 6 Rs to Behavioral Change here on the Flevy documents marketplace.

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“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.”

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“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.”

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“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

neuroscience change 2Business Transformation initiatives are typically undertaken to solve a pressing issue, bring about improved performance, or to serve customers better.  A critical element of the success of such initiatives entails transforming the existing behaviors of the employees across the organization.  However, this isn’t a straightforward task.

Attitudes and practices get reinforced in people by following established routines day in and day out.  Such practices become a part of an Organizational Culture over time.  These ingrained behaviors and practices aren’t considered burdening until the organization’s performance keeps declining considerably over time.  That’s when the leaders think about changing these beliefs and habitual actions.

Psychology and Neuroscience can help enterprises change the deeply embedded attitudes and practices of people and replace those with new beliefs and practices.  Leading organizations are using psychology and brain research to induce successful Organizational Transformation.

The practices that these organizations employ to engender Transformation are based on the following 6 core Principles of Neuroscience:

  1. The brain is hardwired to hold on to habits, making it difficult to change them.
  2. Connections in the brain—even deeply embedded thoughts—are quite flexible to transform.
  3. Concentrating on new ways of thinking can overhaul individuals thinking habits.
  4. Don’t tell people what is wrong, just focus on drawing their attention to the positives.
  5. Encourage the ability to reject negative cerebral impulses.
  6. The competence to focus attention has to be created bit by bit.

Let’s dive deeper into these first 3 principles of Neuroscience.

Principle 1 – The brain is hardwired to hold on to habits, making it difficult to change them.

Our thinking patterns are stored in circuits by brain parts—including the habit center (basal ganglia), amygdala (emotion center), and hypothalamus (which manages hunger, thirst etc.).  These brain parts, especially the basal ganglia, process info unconsciously and the activity feels rewarding to the individual.  This activity makes stronger neuronal connections with other areas and gets the activity reinforced.

For the desired behaviors and practices to get embedded, the organization need to make stronger connections with the entire workforce’s’ basal ganglia to enable deep rooted neuronal circuits.  The practices ingrained this way are difficult to remove.

Principle 2 – Connections in the brain—even deeply embedded thoughts—are quite flexible to transform.

People with obsessive compulsive disorder keep deliberating on their impulse to wash hands to ensure cleanliness.  This fortifies brain circuits in the basal ganglia, which takes over their behaviors.  However, Neuroscience reveals that even the most well-established notions can be altered.  This can be done by making the individuals aware of what they are thinking and where their focus is in a given moment.

Training and directing people to think about their thoughts can make them conscious of their undesired behaviors, disengages brain areas notable for causing distraction, and adopt new behaviors.

Principle 3 Concentrating on new ways of thinking can overhaul individuals thinking habits.

The 3rd principle highlights that persistent focus on unfamiliar, desired thoughts and objectives activates the habit center of the brain, which turns these desired thoughts into habits.  The mechanism according to Neuroscience is such that basal ganglia’s caudate nucleus region processes…

Interested in learning more about the other principles of Behavioral Transformation?  You can download an editable PowerPoint on 6 Core Principles of Neuroscience here on the Flevy documents marketplace.

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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

org culture 1Employee behaviors are critical for the success of Business Transformation endeavors.  However, transforming the ingrained behaviors and mindsets of the workforce isn’t straightforward, and when tackled cause the enterprise’s emotional state to go down.

Leaders need to identify the components of Culture that are in line with their Corporate Strategy.  They have to ascertain and harness the positive elements of culture that can drive the desired Transformation and suppress those that obstruct it.

For the desired Organizational Culture to sustain, leaders should work on gaining acceptance of the transformed behaviors.  Leaders who do not give culture its due importance risk ruining their strategic endeavors, as they lack the commitment required from the employees to achieve success.

The real question is why senior leaders fail to use the positive elements of Organizational Culture constructively in the first place.  The answer is simple; there are 4 common yet wrong assumptions—or myths—regarding culture change that are deeply established in most businesses that are anything but facts.  Paying heed to—and acting on—these 4 myths results in grave consequences:

  1. Culture is the root cause of all our failures
  2. Changing our Organizational Culture is beyond us, forget about it
  3. Let Human Resources deal with Organizational Culture
  4. Culture is the responsibility of top management

When senior executives devise a strategy to transform the deeply entrenched organizational culture—by putting in place new policies, practices, reward structures, and performance management systems—there is strong resistance that outplays the strategy.

This is primarily due to employees’ reservations and uncertainties regarding the impact of these changes on their work, colleagues, atmosphere, routines, family, and their enterprise’s reputation.  Transforming the Organizational Culture using the individual’s actions and conduct necessitates seeking assistance from 7 guiding principles:

  1. Be Practical
  2. Reinforce New Behaviors
  3. Seek Out Role Models
  4. Identify Cultural Carriers
  5. Leverage Existing Culture
  6. Be a Role Model
  7. Explain Impact of New Behavior

Application of these guiding principles facilitates in transpiring successful culture change.  Let’s dive deeper into a few of these guiding principles.

Be Practical

The first guiding principle to changing the culture involves starting rationally and pragmatically.  It is not feasible to strive to change every behavior at once.  Leaders need to concentrate on the behaviors most critical for the organization.   The ones that reverberate with the existing company culture and have a key role in improving the organizational performance.  This entails ascertaining groups of employees whose behaviors should be transformed immediately.  A clear demonstration of the requisite changes goes a long way in reinforcing the desired behaviors and culture in the organization.

Reinforce New Behaviors

The 2nd principle to changing culture involves emphasizing new behaviors.  The desired behaviors should be reinforced using formal and informal mechanisms.  Formal reinforcement mechanisms include metrics, processes, appraisals, salary reviews, training, and incentives to reward new behaviors.  These formal mechanisms allow people to practice new behaviors repetitively, until they begin to realize their value.  Informal reinforcement mechanisms include support networks and associations to nurture sensitivity and devotion needed to cope with uncertainties.

Seek out Role Models

Organizational Culture Transformation necessitates distinguishing role models to demonstrate the desired behaviors.  Culture change begins when change practitioners act by modeling the new behaviors.  These change practitioners are pride builders for an organization.  The examples set by these practitioners assist in inculcating pride in others about embracing the desired behaviors.  This action is referred to as “positive deviance” or constructive non-conformity.  These pride builders in turn identify and develop more exemplars.

Interested in learning more about the other guiding principles of culture change?  You can download an editable PowerPoint on 7 Guiding Principles of Culture Change here on the Flevy documents marketplace.

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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.”

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“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

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 stay ahead of the curve.  Full details here.

9786713076?profile=RESIZE_400xWhat makes companies great in their industries is sustained above-average Growth.

Conventional approach to Organic Growth has business leaders extending their existing product lines and brands, as well as entering new geographic regions.  This conventional Growth Strategy at some point in time starts failing to provide the results required to hold market leadership positions.

Focus-driven Growth is an approach that provides results regardless of the economic environment.  The approach demands that the leadership team keep a methodical approach that covers the entirety of the business cycle i.e., from Strategic Planning and Strategic Vision to Strategy Execution and Performance Management.

Outwardly mature businesses can be reinvigorated by making a small number of—but larger—bets and by concentrating unremittingly on implementing a straightforward but forceful vision.

This approach has been successfully tested and has proven its mettle in at least 3 well-known companies, on 3 continents, over a span of 10 years.

Focus-driven Growth demands that the organization progress sequentially through a set of 7 steps.

  1. Discovery—Through a Discovery process, determine what works and what does not for the organization.
  2. Strategy—Through the Strategy step, group and prioritize what works for the organization.
  3. Vision—By outlining a Vision statement, line up organizational efforts behind an unmistakably comprehended goal.
  4. People—Through this step, place the right people in all functions and give them their required resources.
  5. Execution—Through Execution, elucidate who does what and transfer decision making closer to customers and consumers.
  6. Organization—Through the Organization process, manage the Growth initiative by establishing communities and networks throughout the organization.
  7. Metrics—Through this step, keep a track of Growth with objective yet uncomplicated scorecards.

When taken collectively in the right order, these steps embody a formidable prescription for generating profitable Growth.

Let us delve a little deeper into some of the steps.

Discovery

Every organization has segments of Growth areas.  This step entails discovering those areas for further processing.  Leadership of the organization should gather in a series of workshops and identify which areas of the business are performing far better than the others.  Identified segments become the focus areas of Growth because it is easier to refine and enlarge the successful areas rather than remedy what is not working.

Strategy

Focus areas discovered in the 1st step need to be grouped and prioritized in order to delineate the focused bets that the company ought to make.  Focus areas may be categories, brands, geographies, platforms, that are doing well.

A single page preliminary strategy roadmap giving priority for each area results from the above process.

Vision

Outcomes of Step 2 have to be summarized into a forceful yet uncomplicated Vision which serves to align efforts behind a clearly grasped goal.

Interested in learning more about Focus-driven Growth?  You can download an editable PowerPoint on Focus-driven Growth here on the Flevy documents marketplace.

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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

OrgD2Research by PwC indicates that leading companies are in a near perpetual state of Reorganization.  This upsurge in Organizational Design initiatives is owing to the accelerating pace of strategic change caused by disruption of industries, changing competitor landscape, customer behaviors, and distribution channels.

Companies opt to commence efforts to restructure their organization in the hopes of enhancing efficiency, perpetuating growth, and surviving in future.  Some shift their Business Models, few alter their focus from products to customer-centric; whereas others adopt new behaviors, systems, or IT architecture.  However, merely a quarter of the Organizational Design initiatives succeed in achieving their anticipated objectives.

The reason for this high failure rate is simple.  Reorganization is not about changing a company’s organogram.  It’s a methodical processes that necessitates transforming / streamlining the decision-making process, mindsets, talent pipeline, reward structures, reporting lines, and the way responsibilities are assigned.

There is no cookie-cutter approach to Reorganization that can work across all organizations.  However, research and management best practices reveal 10 principles that are critical for developing an effective Organizational Design, applicable to any enterprise:

  1. Don’t get caught in past Reorganization initiatives
  2. Consider Organizational Design elements
  3. Transform Organization Chart in the end
  4. Don’t overlook top talent
  5. Converge attention towards controllable factors
  6. Encourage responsibility
  7. Use best practices with care
  8. Harmonize organizational hierarchy with Strategic Objectives
  9. Give due emphasis to intangible elements of organization
  10. Make efficient use of company culture and practices

Let’s dive deeper into these guiding principles.

1. Don’t Get Caught in Past Reorganization Initiatives

Leaders at most organizations tend to keep discussing and focusing on the old reorganization initiatives.  This takes away much of their time and energy which should rather be spent on making the current Organizational Design a success.

Organization Design should be created on the basis of an enterprise’s sense of purpose, strategy, core competencies, products, competitive advantage, and experience offered to customers and employees.  Senior leaders need to be able to see the broader perspective, set clear organizational objectives, and steer the workforce to achieve their personal as well as organizational objectives.

2. Consider Organizational Design Elements

Reorganization is a complex undertaking, but a structured approach to Organizational Design assists in identifying and prioritizing key priorities.  Organizational Design has 8 fundamental elements that are important for all organizations, Business Models, sectors, or regions.  These elements can be categorized into 4 pairs.  Each of these 4 pairs constitute a formal (tangible) and an informal (intangible) element:

  • Decisions team up with Norms (the way people act).
  • Motivators (the way people are influenced to work) pair with Commitments (what affects people’s thoughts about work).
  • Information (the way data is processed) pairs with Mindsets (how people process knowledge and meaning).
  • Structure (reporting lines) pairs off with Networks (how people collaborate).

Leaders should select fewer, prioritized Organizational Design elements to work on that have the most impact on their organizations.

3. Transform Organization Chart in the End

Most leaders consider Organization Structure to be the most critical element to Business Transformation.  In reality, there are other key organizational elements that need to be tackled first to improve effectiveness.  Revisiting the organogram does not have much effect on the way business is done—or to improve it.  Structure depicts reporting lines and changing it can reduce costs temporary.  Changing structure alone—without transforming other organizational elements—allows the redundant reporting lines to reappear and put the organization back to its earlier state of affairs.  Instead of changing the organogram, core organizational issues should be prioritized and confronted first.  Structure will adjust accordingly once the issues resolve.

4. Don’t Overlook Top Talent

Top talent often go unnoticed when it comes to Reorganization.  The skills and traits of the senior leadership has a profound impact on Organizational Design.  Mapping of technical capabilities and leadership abilities of top leadership is an important step to Reorganization.

Interested in learning more about the guiding principles critical for Organizational Design?”  “You can download an editable PowerPoint on 10 Principles of Organizational Design 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

Lead1Evaluation 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

AI-2Artificial Intelligence (AI) is one area considered by many executives to enable Automation and steer positive growth.  A couple of years ago, most executives thought that deployment of Artificial Intelligence isn’t a big deal.  However, revamping traditional systems, implementing AI, and scaling it, in reality, is not as simple as it seems.

A survey by PwC Research in 2020, which gathered responses of 1062 business leaders, validates that scaling and industrializing AI is not straightforward at all.  Only 4% of the respondents asserted that they plan on implementing organization-wide AI in 2020.  A year earlier, the same survey revealed 20% of the executives planning to do that.  The survey shows a significant decrease in the number of senior leaders thinking of executing AI.

The reason for this dwindling interest in AI deployment is mainly because of the tough prerequisites necessary—contemplation, resources, preparedness, overhauling legacy systems, and integration of technology applications—for enterprise-wide AI implementation.

A robust AI Implementation Strategy needs to be first devised in order to assist the organizations in moving forward with their AI deployment plans.  Research reveals 5 key priorities of AI Strategy that businesses should follow to position themselves as AI leaders and reap value from Transformation in future.  These priorities not only highlight the key requirements for AI deployment but also pinpoint ways to maximize pay offs associated with the initiative:

  1. Boring AI
  2. AI-ready Workforce
  3. Responsible and Ethical AI
  4. AI Operationalization
  5. Business Model Innovation

Let’s delve deeper into a few of these key priorities.

Boring AI

One of the key reasons to employ AI, as cited by PwC research, is to automate routine administrative functions—e.g., using AI to pull information from tax forms, bills of lading, or invoices that can otherwise take up long hours of human effort.  44% of respondents revealed that AI will help them operate more efficiently.

To ensure AI adds value to the business, leaders should develop a strategy to identify the areas where AI can have a much deeper impact; build capabilities to do that; develop AI solutions, govern them, and embed them with existing systems.

AI-ready Workforce

Building or enhancing the capabilities of the workforce to become AI ready is critical today not only for technology enterprises but also for other businesses.  Organizations should identify the skills required for AI and train their people to deploy AI solutions.

However, thinking of achieving this through traditional means of offering training sessions isn’t a viable strategy to tap the opportunities offered by AI.  In addition to training people, organizations should cross-skill their people in multiple trades and provide them the opportunities to apply and hone in the skills learnt.  In fact, organizations should reward people who apply what they learn into real-time problem-solving and productivity enhancement.

Responsible and Ethical AI

AI can be perilous if adequate understanding of its responsible use and necessary procedures to protect against its risks and negative usage are not taken.  There are growing apprehensions around AI related risks e.g., biased algorithms, facial recognition tools, and deep fakes.  As per PwC survey, a large majority of respondents, using AI routinely, declared readiness in their organizations in terms of taking sufficient measures to protect against AI risks.

However, in reality most organizations are quite far from implementing controls around data and decisions generated using AI.  Just about 33% businesses mentioned having the ability to fully tackle risks associated with data powering AI, AI models, outputs, and reporting. It is imperative to have rigorous Risk Management processes in place to effectively use AI in the workplace and address the risks associated with it.   AI risks can be mitigated by integrating processes, tools, and controls needed to address AI bias, explainability, security, accountability, and ethics.

Interested in learning more about the other key strategic priorities essential for AI deployment readiness?  You can download an editable PowerPoint on Artificial Intelligence Strategy: Top Priorities 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

Obstacle 1Agile is a robust approach to value creation.  More and more organizations are adopting Agile Software Development approach.

Becoming Agile is imperative to meet and exceed customer expectations and emerging business trends.  Implementing the Agile approach to Software Development leverages significant benefits, including:

  • Rapid design and development of new product and service offerings
  • Revolutionizing processes
  • Managing talent
  • Reforming organizations

However, Agile alone is not enough.  Agile Transformation can slip-up as Agile teams can stagger while working together and depending on others.  In order to become an effective Digital organization, companies have to steer clear of the obstacles that bog down the rapid progress of Agile software development.  These organizational obstacles to Agile include:

  1. Rigid Technology Architecture
  2. Poor Talent Management
  3. Lack of Product Mindset

Overcoming these barriers necessitates sincere harmonization, persistent effort, and commitment from the business and technology leadership.  Anticipating and addressing these major organizational obstacles is integral to becoming Agile.

Let’s discuss these obstacles in detail.

Rigid Technology Architecture

Using and expanding the same old codes and plugging gaps with software patches renders the IT Architecture cumbersome and unyielding, at most organizations.  Many organizations have outdated systems to manage operations and facilitate their customers.  The integration of these outdated systems with modern applications and IT architecture isn’t easy, making them inflexible.  Most of these systems and aps are inter-reliant and connected.  A small change in a code has serious implications on other connected applications.

IT executives have to consider a number of factors before modernizing their IT architecture.  These factors include potential value envisaged from the new architecture, requirement for new functionalities, risk of disruption, complications involved in the process, extent of fragmented data, and costs.  Based on thorough evaluation of these factors, executives select one of these 4 common approaches to revolutionize their IT architecture:

  • InactionThe investment in overhauling certain applications is thought to be nonviable as their impact is considered insignificant in the overall architecture.
  • IntegrateUncover the old system’s essential function / elements and connect them with modern systems using interfaces (APIs).
  • OverhaulModify the design of applications—e.g. dissecting the code into distinct, autonomous sections and eliminating any hard-coded values.
  • ReplaceDesign innovative applications and deploy latest architecture (e.g. micro-services).

Poor Talent Management

Most leaders understand the importance of finding and staffing top talent in becoming Agile.  However, outdated HR Management practices at some organizations become a major hurdle in attracting and retaining talented individuals.  The issue with IT management at most technology firms in the recent past was their shortcoming in visualizing the problems through a business perspective.  This led to the depletion of technical capabilities due to hiring of more and more people with strong business sense, but inadequate technological prowess.

Another factor compounding the talent deficit is entrusting the hiring function to external contractors by scores of IT organizations.  This practice, although, assists in staffing talent and gaining new capabilities promptly, but diverts much of the executives’ time in supervising the external contractors.  This leaves little time for them to acquire new technical skills and gives the contractors too much control over innovation.  Outsourcing the software maintenance to 3rd parties is another factor that leads to poor accountability and Talent Management.

To mitigate these issues, technology companies need to transform, strengthen their technical capabilities, eliminate dependencies on 3rd parties, and clearly define responsibilities.

Interested in learning more about the obstacles to becoming Agile?  You can download an editable PowerPoint on 3 Organizational Obstacles to Agile 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