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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:
- Sense: Market Sensing
- Think: Strategy Formulation and Investment Planning
- 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:
- No-regret moves
- Strategic bets
- 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.
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“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
Mergers and Acquisitions enable numerous opportunities for growth. Organizations pursue these initiatives for a number of reasons—e.g. to expand further, attract more clients, or to broaden their product / service offerings. Scores of M&A transactions materialize across the globe each year, but not all of them achieve the synergies such deals promise. As a matter of fact, the success ratio is just around 27%.
The M&A Growth Framework is a structured approach to enhance the odds of a successful M&A transaction. This approach is instrumental in helping organizations capitalize on growth opportunities locked in M&A deals. The framework comprises 10 phases scattered across 3 timeframes:
- Pre-deal Preparation
- First 100 Days
- Post-deal Closure
The 10 phases of the M&A Growth Framework organized under the 3 timeframes include:
- PRE-CLOSE PLANNING & PREPARATION
- Growth Opportunities
- Go-to-Market Strategy
- Customer Experience Strategy
- FIRST 100 DAYS
- Customer and Partner Readiness
- Cross-sell Strategies
- Pricing Management
- Brand and Digital Presence Building
- POST-DAY 1 ENVIRONMENT
- Product and Service Roadmap
- Sales Force Transformation
- Long-term Revenue Synergies
The M&A Growth Framework facilitates in finding growth opportunities, aligning them with Go-to-Market Strategy, reinforcing Customer Experience, and enabling Organizational Readiness for integration after the M&A.
Let’s dive deeper into the first 3 phases of the M&A Growth Framework for now.
Growth Opportunities
The first step in achieving growth from a Merger or Acquisition deal is to identify and analyze the opportunities essential for growth.
Identification of growth opportunities necessitates:
- Gauging the ability of the new company to enter target markets.
- Conducting one-to-one interviews and Focus Group Discussions with key people from the management and customers to develop points of reference for existing key competencies.
- Identifying and translating growth opportunities into initiatives.
- Quantifying growth with timeline requirements.
- Prioritizing opportunities based on their magnitude, viability, and potential for effective execution.
- Utilizing clean teams to ensure confidentiality of data.
Go-to-Market Strategy
Identification and prioritization of growth opportunities necessitates delineating the Go-to-Market Strategy of the combined entity. This phase assists in achieving the newly-formed company’s stated growth targets, business continuity objectives, and proficient utilization of unified team and resources.
Key steps involved in this phase include:
- Combining the acquired entity’s product/service portfolio with the buyer’s offerings.
- Ascertaining and prioritizing strategic inputs.
- Translating the information and inputs available into prioritized action items.
- Segmenting the customers and their needs.
- Creating Go-to-Market plans.
- Connecting the sales channels with the unified company’s product mix.
- Ensuring resource readiness, sales targets, coverage, and channel mix.
- Finalizing marketing plans: communication, branding, targeting, product mix.
Customer Experience Strategy
As part of integrating the 2 unified companies, it is critical for the senior leadership to develop and deploy a Customer Experience (CE) Strategy. A consistent Customer Experience derives more value from existing customers, aids in the continuation of operations, and boosts customer spending.
Key steps in this phase entail:
- Appraising the existing customer experience, interactions, and customer pain points.
- Developing a customer-focused organization by creating seamless CE “personas” and customer journey maps.
- Identifying and ranking CE improvement initiatives.
- Implementing CE enhancement initiatives, monitoring outcomes, and correcting the course.
- Integrating the customers and Customer Experiences of the acquirer and the target companies.
Interested in learning more about the other phases of the M&A Growth Framework ? You can download an editable PowerPoint on M&A Growth Framework 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
Most of us have experienced a uniqueness in some organizations. These organizations stand out, exude fervor and zeal. Their customers are pleased with the Customer Centric Design of the company, Employee Engagement is high, and investors and shareholders take pride in being part of it. It is not their exceptional product or service that is the base of Value Creation rather the Purpose that makes organizations unique—their reason for existence and the resulting impact it makes on the world.
Stakeholders identify with organizations that genuinely follow their Purpose. Leadership allocates resources in-line with the Purpose. Employees keep the Purpose front and center while making decisions for the company. On the other hand, in-genuine Purpose may harm the reputation of the company by turning away the stakeholders.
In order to be genuine, Purpose has to be embedded in the company’s DNA, which is no mean task. The “5 Ps of Purpose Framework” shows how this can be successfully achieved. The 5 Ps Framework identifies 5 areas of focus:
- Product Portfolio Strategy
- People & Culture
- Processes & Systems
- Performance Metrics
- Positions & Engagement
There are numerous benefits to transforming into a Purpose-driven Organization. The 5 Ps Framework contributes to unlocking the sources of value for the company and detect points of weakness. Purpose can pay lots of dividends, but it has to be authentic and imbued in the organization’s business model.
Let us delve a little deeper into the first P of the 5 Ps of Purpose.
Product Portfolio Strategy
An organization’s Product / Service offerings and the associated modalities of market and position planning that best cater to the target market ought to imbibe the Purpose of the company in order to appeal to the stakeholders.
The 1st step for achieving this objective has to be the alignment of business portfolio with the company’s Purpose–i.e. we need to integrate Purpose with our Portfolio Strategy. Companies already in existence may not be able to start afresh but they can surely reshape their business mix in a dynamic and resolute manner.
In step 2, the business portfolios are filled out with Products or Services that match the Purpose, and the ones that do not are rooted out. Certain key actions are needed to embed Purpose into the Product or Service offering, they include:
- Rethinking product portfolio — for example pulling out certain products, launching new products.
- Modifying pricing in line with Purpose.
- Re-evaluating portfolio and testing rationale of individual assets in light of common criteria.
A case example is an energy company in the extractive industries, founded 85 years ago, which has proved successfully that Purpose can be reinvented. Being in the extractive business for such a long time has not restricted the company from reexploring what an energy company may look like in the transforming environment of the future.
The company has significantly transformed its Purpose — “reimagining energy for people and planet.” In line with its Purpose, the company has divested from its petrochemicals businesses and plans to reduce its legacy oil and gas business by 40% by the year 2030. The company will instead augment its low-carbon energy businesses such as bioenergy, hydrogen, electric vehicle charging businesses, and aims to be a net-zero carbon emitter by the year 2050.
Interested in learning more about 5 Ps of Purpose Framework? You can download an editable PowerPoint on 5 Ps of Purpose 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
