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Humans inherently connect to each other in an indigenous context, generate knowledge, and develop a product to be disseminated by way of commerce. Traditionally, Global Innovation practice has seen assembling of people with vital capabilities and essential knowledge via co-location.
Co-location is the gathering of Innovation specialists into a handful of Innovation centers, domestically and in prime markets. The innovative products and/or services created by them are then dispersed to markets throughout the globe.
However, as the array of knowledge required for Global Innovation becomes extensive and diverse, co-location has become inadequate. Today’s dynamic and shrinking world necessitates taking an expanded approach to Innovation Management.
Most of the organizations have not been able to sufficiently internationalize their Innovation Strategies to make use of the multifaceted knowledge scattered world-wide; knowledge necessary for present-day products and services.
Cause of failure is the generally accepted but perceived trade-offs listed below. The challenge is to surmount these trade-offs, which research has shown is possible.
- Approval vs. Disapproval
- Autonomy vs. Control
- Capability vs. Motivation
- Attraction vs. Interest
- Achievement vs. Potential
Most companies leverage their international networks just to engage in mundane tasks, and are unable to make use of opportunities for Global Innovation to gain Competitive Advantage.
Let us go into some detail of these tradeoffs.
Approval vs. Disapproval
When pitched generally, the idea of taking Innovation to the global level is agreed to by everyone across the organization. When the task is directed towards a specific entity or specifics of it are assigned, Disapproval ensues.
Autonomy vs. Control
This is the trade-off between granting local autonomy vs. losing centralized control over the Innovation process. Reason for such interpretation is the inability to consider knowledge and power separately.
Capability vs. Motivation
A singularity exists where companies with elevated Innovation Capability exhaust their enthusiasm for Global Innovation.
Attraction vs. Interest
Taking Innovation to the global scale often necessitates partnerships. Such partnerships typically present the predicament that the more desirable the probable partner appears, the less those feelings are reciprocated.
Achievement vs. Potential
There is a trade-off between the over-emphasis on historical achievements vs. the potential for future achievements, as over-reliance on what has worked in the past will hinder Creativity required for a new environment.
Effective Global Innovation of products and services has the hallmark of unrestricted reciprocity of unstated knowledge between people scattered around the world. Such an evolution can be achieved by optimizing 3 diverse aspects of Innovation, generally simultaneously.
The 3-prong approach to Global Innovation Strategy that overcomes the Global Innovation trade-off of Knowledge Complexity vs. Global Dispersion comprises of:
- Compact & Agile Innovation Footprint
- Capabilities & Structures for Communication
- Internal & External Collaboration
Universal principles of Global Innovation Strategy keep evolving for making each of these attributes work, based on the experience of numerous entities.
Let us delve a little deeper into the 3 principles.
Compact & Agile Innovation Footprint
This relates to the quantity of tangible sites in an Innovation network. Only that number of physical sites should be included in an Innovation network which are able to add exclusive and discerned knowledge.
Capabilities & Structures for Communication
This aspect has to do with overcoming the challenge of distance, time, and culture when taking Innovation to the global level.
Communication is a momentous challenge when there is distance, time, and culture difference. Developing a culture of open knowledge-sharing is vital for taking Innovation to a global scale.
Internal & External Collaboration
This aspect looks at collaboration protocols for co-located sites versus globally dispersed collaboration.
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To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models. In other words, we need to constantly innovate.
Ironically, the more we grow, the harder it becomes to innovate. Large organizations tend to be far better executors than they are innovators. To effectively manage the Innovation process, we need to master both the art and science of Innovation. Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.
Learn about our Innovation Management Best Practice Frameworks here.
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– Roderick Cameron, Founding Partner at SGFE Ltd
Majority 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):
- Avoid a one-size-fits-all approach to SCM
- Develop Agile product design and packaging capabilities
- Restructure the Supply Chain footprint
- Establish partnerships with 3rd party suppliers
- 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.
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– Roderick Cameron, Founding Partner at SGFE Ltd
Employee 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:
- Culture is the root cause of all our failures
- Changing our Organizational Culture is beyond us, forget about it
- Let Human Resources deal with Organizational Culture
- 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:
- Be Practical
- Reinforce New Behaviors
- Seek Out Role Models
- Identify Cultural Carriers
- Leverage Existing Culture
- Be a Role Model
- 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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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.
What 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.
- Discovery—Through a Discovery process, determine what works and what does not for the organization.
- Strategy—Through the Strategy step, group and prioritize what works for the organization.
- Vision—By outlining a Vision statement, line up organizational efforts behind an unmistakably comprehended goal.
- People—Through this step, place the right people in all functions and give them their required resources.
- Execution—Through Execution, elucidate who does what and transfer decision making closer to customers and consumers.
- Organization—Through the Organization process, manage the Growth initiative by establishing communities and networks throughout the organization.
- 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.
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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.
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– Roderick Cameron, Founding Partner at SGFE Ltd
Most organizations aren’t ready to deliver great Customer Experiences across all channels. Many of them have invested heavily in conventional methods of doing business, backed by in person or over-the-phone customer experience. This has led to creation of siloed operational structures within companies, where each silo operates individually.
With the advent of digital channels, these organizations set out to use and proffer their services via digital channels. They did this by creating discrete digital-product groups in their existing operational infrastructure. However, their siloed infrastructure falls short of meeting customers’ requirements in terms of seamless communication and interaction across all channels. The reason being:
- Customers’ utilization of multiple channels and touchpoints across Customer Journeys.
- Requirements of personalized services / products by the customers.
- Anticipation of impeccable coordination and communication by the customers no matter how they interact with the business.
This necessitates the businesses to not only provide great Customer Experiences at each channel, but also make the transitions across these channels simple to improve the overall Customer Experience (CX). However, improving the overall Customer Experience isn’t that simple a feat, especially with silo-based operational infrastructures. Providing consistent amazing Customer Experience warrants:
- Creation of a robust operational ecosystem through Transformation of internal operations, to respond quickly to customers’ expectations.
- Meticulous design and delivery of Customer Experiences.
Most organizations understand the significance of Transforming their Customer Experience—however, they lack the direction and support required to realize this goal. Organizational leadership can make use of the Customer Experience Pyramid to guide their CX Transformation.
The Customer Experience Pyramid is an empirical research based framework, which is quite effective in not only improving individual touchpoints but streamlining the entire Customer Journeys. The CX Pyramid entails 2 core dimensions:
- Focus Areas – the organizational spheres that must change to enable provision of amazing digital Customer Experiences.
- Strategic Building Blocks – the strategies that define how this change can take place and made part of the organizational processes to deliver exceptional Customer Experiences.
The 4 Focus Areas crucial in a business to change in order to deliver top-quality Digital Customer Experiences at scale are:
- Vision and Strategy
- Talent Management
- Operations
- Technology
Let’s discuss the first 2 individual Focus Areas of the CX Pyramid in detail for now.
Vision and Strategy
Redirecting focus on making Customer Experience a part of the Organizational DNA necessitates creating a Vision statement and Strategy to depict, clarify, and plan out the purpose and objectives of serving the customers. The senior leadership needs to come up with a short and crisp Vision statement. The Vision sets out the foundation that reflects the leadership’s focus, importance the organization gives to Customer Experience, and the high-level objectives associated with the provision of quality Customer Experiences.
Next, the leadership should work on developing strategies to build fundamental competencies within the 4 CX Building Blocks—i.e., CX operations, metrics, CX-centric culture, systems and governance protocols.
Talent Management
Once the Vision statement has been agreed upon, it’s time to work towards carrying out the required actions to produce customer-centric outcomes. The first step in that direction involves linking all employees who work in discrete silos (in conventional structures). To align all employees, there is a need to create a Transformation team and define new roles / CX groups. The Transformation team should train and direct teams responsible for the different stages of the Customer Journey, instill new ideas, and foster desired behaviors in them.
Senior Leadership need to also assign a CX Team to run the CX program. The CX Team has to lay out processes and yardsticks to foster cross-functional collaboration and coach functional units to adopt customer-centric design practices in their operations.
Interested in learning more about the other focus areas of the CX Pyramid Framework? You can download an editable PowerPoint presentation on Customer Experience Pyramid here on the Flevy documents marketplace.
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A significant number of Mergers remain unsuccessful, because companies do not employ a thorough and disciplined approach to realizing Post-Merger Integration Synergies. In reasons for failure, we hear remarks like:
- Targets were set several months earlier by the top management without consulting the line managers, or taking ground realities into consideration.
- Assumption base for setting targets was untested.
- Targets were met but the timeframe for achieving them made them ineffective—in terms of diminished returns, shareholder disappointment, or depressed share value.
- Desired Synergies were achieved but at a very high cost or fairly weakened morale.
A disciplined and rational approach to pursuing Merger Synergies is key to successful Post-Merger Integration (PMI). Companies that authenticate and set pragmatic yet ambitious Post-Merger Integration Synergy targets do the following to exceed targets and achieve substantial share price premium and a significant Competitive Advantage:
- Advise Integration Leaders on how to aim high.
- Give managers—responsible for achieving targets—a say in target-setting process.
- Create detailed plans with built-in accountabilities.
- Pursue their targets aggressively.
Successful PMI Synergies—be it in Cost Optimization, Strategic Sourcing, Greater Revenues or any other Cost or Revenue realm—have the common characteristic of leaders pursuing synergies with speed, rigor, discipline, and pragmatism with lots of analysis, planning, preparation, and fine-tuning before the close.
Success can be ensured time and again if the 6 Strategies for Post-Merger Integration Synergies are followed to the letter:
- Link Due Diligence (DD) and Post-Merger Integration (PMI)
- Leverage Clean Teams
- Establish Stretch Targets
- Rapidly Iterate to Targets
- Pursue Both Revenue and Cost Synergies
- Institute Performance Management
Implementation of the 6 Synergy Strategies involves adopting High-Engagement and Rapid Iteration approach which yields effective Stretch Target Validation and High Level of Line Accountability.
Let us delve a little deeper into 2 of these PMI Synergy Strategies.
Link Due Diligence (DD) and Post-Merger Integration (PMI)
Linking DD to PMI ensures realistic estimates on part of the DD team thus avoiding formulation of broad-brushed and imprecise Synergies. Linking also guarantees greater amount of ownership and accountability at the same time enabling more compelling Stretch Targets. Linking of DD to PMI is necessary because:
- Under pressure to complete the M&A, Due Diligence teams frame assumptions with little knowledge of the levers influencing Synergies or the challenges involved in achieving them.
- Due Diligence teams typically project more value in Cost Reduction and enhanced Revenues based on erroneous assumptions—without taking into account either the Operating Model (of the former entities and the freshly created one) or the difference / overlap in Customer Base.
Successful Mergers ensure a harmonized hand-off from Due Diligence teams to Integration Planning teams by ensuring the following:
- Placing members of the Mergers and Acquisition team on the Post-Merger Integration (PMI) team to produce a greater degree of ownership and continuity.
- Involving Business Unit Heads in target setting at the Due Diligence stage and ensuring ownership and accountability.
- Linking of Due Diligence and PMI to enable setting of more profound Stretch Targets.
- Analyzing and detailing drivers of saving at a high-level for creating Synergy Targets and Ranges which make later improvements possible based on subsequent information. These targets and ranges enable evaluation of potential gains from new company’s Operating Model.
Leverage Clean Teams
Clean team is an independent group that is tasked with the collection and analysis of sensitive company data—pre-closure—with the guidance of management. Clean team may comprise of third-party members or employees who can be reassigned out of business in case of deal failure eradicating the risk of compromising confidential information. Clean team is formed by legal contract based on protocols agreed to by both company’s legal departments. Clean teams help by:
- Accelerating PMI planning.
- Enabling the acquiring company to have a clearer picture of the target company without violating anti-trust regulation or confidentiality agreements.
- Assessing risks and enabling companies to achieve Synergies faster.
- Keeping sensitive information of both sides safe—pre-closure—yet embark on planning and preparation even before close in order to save precious time and keep customer confidence high.
- Aiding companies accomplish 3 core integration activities before closing—compiling wide-range baseline data, vetting Synergy targets, and preparing options for key decisions.
- Empowering companies to avoid / diminish confusion caused by overlap in client assignments and sales people.
- Assisting provision of clear information to customers regarding products and services thus avoiding drop in sales.
Interested in learning more about the 6 Strategies for Post-Merger Integration Synergies? You can download an editable PowerPoint on Post-Merger Integration (PMI): 6 Strategies for Synergies here on the Flevy documents marketplace.
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M&A is an extremely common strategy for growth. M&A transactions always look great on paper. This is why the buyer typically pays a 10-35% premium over the of the target company’s market value.
However, when it comes time for the Post-merger Integration (PMI), are we really able to capture the expected value? Studies show only 20% of organizations capture projected revenue synergies and only 40% capture cost synergies. Not to mention, the PMI process is typically very painful, drawn out, and politically charged, often resulting in the loss of key personnel.
Learn about our Post-merger Integration (PMI) Best Practice Frameworks here.
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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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Strategy is about the methods used to attain goals. It’s the “how” of achieving goals—desired future conditions and circumstances towards which effort and resources are spent until their achievement.
If Strategy has any meaning at all, it is in relation to some aim or end in view.
Strategy is 1 of the 4 dimensions of an enterprise structure:
- Goals of the organization.
- Resources at our disposal.
- Strategies for achieving above-mentioned goals –i.e., the methods used to deploy the resources.
- Tactics—i.e., the ways in which the deployed resources are used.
Strategy and tactics – integral part of Strategy Development – bridge the gap between goals and the methods used to achieve those goals. These 4 dimensions of enterprise structure relate to one or both of the 2 domains; Policy and Management. Policies determine the goals of an enterprise, whereas attaining goals is typically a matter of Management. Tactics belong to the managers; strategy is the combined realm of the governors and managers; whereas resources are controlled jointly.
The employed resources through use of Strategies and Tactics give us “certain” conditions. Inspecting them in light of the “desired” conditions enables us to determine future employment of the resources and thus emerges a pattern of actions and decisions which makes Strategy an adaptive and evolving view of what is required, to achieve goals.
We take a look at various perspectives on and definitions of Strategy, as explained by 8 of the most impactful and renowned Strategists in modern times. Familiarity with the perspectives of these strategists enables us to develop a more holistic and thorough understanding of the topic, helping us improve our strategic thinking, decision making, and analytical skills. All of these experts agree on the fact that Strategy is a means to implement a policy or a view envisioned by those who matter. Let’s see how the following strategists define Strategy:
- Michael Porter
- Henry Mintzberg
- Treacy and Wiersema
- H. Liddell Hart
- George Steiner
- Kenneth Andrews
- Kepner-Tregoe
- Michel Robert
Let’s break down how a few of these renown strategists define “Strategy.”
Michael Porter
Michael Porter, the father of modern Business Strategy, views Competitive Strategy as “intentionally opting a collection of activities that are dissimilar to the competitors in order to provide a unique mix of value”– i.e. Competitive Advantage. Porter states that Strategy is about:
- A competitive position.
- Differentiating yourself in the eyes of the customer.
- Adding value through a collection of activities different from competitors.
Henry Mintzberg
Mintzberg is credited with co-creating the Organigraph. He has written extensively on management and business Strategy. His contribution to Organizational Theory in the form of “The Organizational Configurations Framework” is a model that describes 6 valid organizational configurations or Organizational Design.
Mintzberg argues that the contrast of changing realities with intentions necessitates accommodation, generating Strategy. According to him Strategy is a combination of:
- The Perspective – Vision and Direction.
- The Position – Decisions to offer particular products or services in particular markets.
- The Plan – a means of getting from here to there.
- A Pattern in actions over time – for example, a company that regularly markets very expensive products is using a “high end” Strategy.
Treacy and Wiersema
Treacy and Wiersema’s Value Discipline Model talks about 3 different value disciplines: Customer Intimacy, Product Leadership, and Operational Excellence. Their research on market leading organizations reveals that they outdid their competitors through mastering 1 of these 3 disciplines.
Treacy and Wiersema assert that companies achieve leadership positions by narrowing, not broadening, their business focus on any one of the following:
- Operational Excellence – lead the industry in terms of price and convenience and is based on the Strategy of production and delivery of products or services. It implies world-class marketing, manufacturing, and distribution processes.
- Customer Intimacy – Long-term customer loyalty and customer profitability is based on the Strategy of tailoring and shaping products to the increasingly fine definitions of Customer-centric Design.
- Product Leadership – concentrates on quick commercialization of new ideas. It hinges on market-focused R&D as well as organizational nimbleness and agility.
Interested in learning more about the 8 definitions of Strategy? You can download an editable PowerPoint on 8 Perspectives on Strategy here on the Flevy documents marketplace.
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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.
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– Roderick Cameron, Founding Partner at SGFE Ltd
VUCA relates to threats that people and enterprises often encounter. The acronym reflects the constant, dramatically-transforming, and unpredictable world. The concept originated in 1987, based on the theories of Warren Bennis and Burt Nanus. The term was first used by U.S. Army War College to describe the volatile, uncertain, complex, and ambiguous general conditions globally.
The acronym found traction after 2002, when it was considered an emerging idea to be discussed among the strategic leadership. The term VUCA stands for:
- Volatility
- Uncertainty
- Complexity
- Ambiguity
The 4 VUCA challenges reflect the unpredictable forces of change that affect organizations, necessitating new skills, approaches, and behaviors to mitigate them. The 4 elements of VUCA relate to how people view the situations where they make decisions, formulate plans, respond to challenges, cultivate change, and solve issues.
VUCA is a practical code for anticipation, understanding, preparedness, and intervention in the wake of uncertainty and confusion. One of the biggest challenges of managing in a VUCA world involves team members who resist change. Simply training the leaders on key capabilities isn’t adequate to avoid failures resulting due to not handling the VUCA issues properly. What differentiates sound Leadership from mediocre management is the leaders’ ability to ascertain key elements that prevent them from adopting resilience and flexibility.
In this age of disruption, Volatility, Uncertainty, Complexity, and Ambiguity are widespread. These elements will be more prevalent across industries and enterprises in future, and if not managed properly can sap an organization’s and its employees’ strengths.
Let’s discuss these VUCA elements individually.
Volatility
The Volatility element of VUCA talks about the distinct situational categorization of people due to their specific traits or their reactions in particular situations. People react differently in specific settings due to social cues. Volatility describes the influence of situations on stereotypes and social categorization, which is the reason why people perceive others differently.
Two factors connect people to their social identities: Normative fit and Comparative Fit. Normative fit is the degree that a person relates to the stereotypes and norms that others associate with their specific identity. For example, a Hispanic woman cleaning a house does not get gender stereotypes from others in this situation, but when she eats an enchilada ethnic stereotypes emerge and the gender is forgotten. Comparative fit relates to specific traits of a person that are prominent in certain states compared to others, which are obvious as others around a person do not have those traits. For example, a woman in a room full of men stands out, whereas all the men are grouped together.
Uncertainty
The Uncertainty element of VUCA pertains to the unpredictability of information in events, which often occurs in the intention to indicate correlation between events. Uncertainty is often counteracted by using social categorization (stereotypes), as people tend to engage in social categorization when there isn’t much data about an event.
For instance, when there isn’t enough information to clearly appreciate someone’s gender—as in case of an author’s name when discussing written information—majority of people presume the author is a male. Social categorization also occurs in case of a race, when people stereotype a certain race to a particular trait. For example, basketball players are most of the time assumed as black people while golfers are expected to be white.
Complexity
The Complexity element of VUCA relates to the inter-relatedness of several factors in a system. Complexities due to interactions and dependencies within groups and categories bring unexpected results even in a controlled environment. There are certain identities in individuals that are more dominant than others. Other people distinguish these identities, make their assumptions about them, and create stereotypes. However, complexity in a person’s personality makes it difficult to socially categorize that individual accurately.
Different categories trigger in the mind of the observer, creating positive and negative perception. It is that positive perception that the observer is more open-minded despite stereotypes and think past the target’s dominant social trait. Complexities in social identities cause some identities to lessen the noticeability of other identities, making the targets unnoticeable and overlooked.
Interested in learning more about the elements of a VUCA environment, its mitigation, and Robert Johansen’s leadership framework “VUCA Counterweight” or “VUCA PRIME?” You can download an editable PowerPoint on VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) here on the Flevy documents marketplace.
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Based on the thought leadership of top tier consulting firms (including McKinsey, BCG, Accenture) and renown strategists, each slide represents a specific business framework. A “framework” is a structured approach to analyzing and solving a common business situation. It allows us to evaluate and articulate our situation in an organized, thorough, and efficient manner.
Frameworks covered span a diverse array of Strategy & Transformation topics, from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management.
Each slide follows the standard Headline-Body-Bumper format, the slide design methodology used by all leading consulting firms.
Here is the full list of Strategy & Transformation frameworks:
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- 4 Problems in Reorganizations
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- Accenture Nonstop-Customer Experience Model
- Acquisition Integration Approaches
- Balanced Scorecard
- BCG Experience Curve
- BCG Transformation Framework
- Brand Asset Valuator (BAV)
- Brand Development Lifecycle
- Branding Pentagram, Competing Values Framework
- Core Competence Model
- Customer Segmentation Formula
- Customer Segmentation Methodologies
- Digital Transformation
- Dimensions of Service Design
- Disruptive Innovation
- Distinctive Capabilities
- Four Approaches to Ambidexterity
- Greiner Growth Model
- Kano Customer Satisfaction Model
- Kepner-Tregoe Model
- McKinsey 7-S Strategy Model
- McKinsey Customer Decision Journey
- Strategic Management Maturity Model
- Strategic Planning & Execution Approach
- Strategy Map
- Strategy Palette
- Structure-Conduct-Performance (SCP)
- Transformation Trajectories
- Value Differentiation
- Value Perception Gap
Here is a list of 4 PowerPoint documents that convey over 100+ different business frameworks and management models. They cover just about every business concept you can imagine. At the bottom, I’ve listed all the frameworks included in each document.
23 Corporate Strategy and Management Models
https://flevy.com/browse/business-document/corporate-strategy-and-management-models-129
30 Business Performance Improvement Models
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28 Organization, Change, and HR Models
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28 IT Management Models
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Flevy’s full collection of PowerPoint templates can be found here: https://flevy.com/function/powerpoint-templates-ppt
* * * *
CONTENTS OF CORPORATE STRATEGY AND MANAGEMENT MODELS
1. 3 C’s
2. ADL Matrix
3. Acquisitions Integration Approaches
4. Blue Ocean Strategy
5. Capability Maturity Model
6. GE-McKinsey Matrix
7. OODA Loop
8. Profit Pools
9. Resource-based View of Firm
10. Scenario Planning
11. Strategy Maps
12. Application Portfolio Optimization
13. Value Stream Mapping
14. Six Thinking Hats
15. 4 P’s Marketing Mix
16. 7 P’s Marketing Mix
17. 6 Change Approaches
18. Cultural Dimensions Theory
19. Six Sigma Quality Management
20. Change Management Iceberg
21. Organizational Learning
22. Performance Prism
23. Crossing the Chasm
CONTENTS OF BUSINESS IMPROVEMENT MODELS
1. ISO 9001 Quality Management Model
2. Baldrige Performance Excellence Model
3. EFQM Business Excellence Model
4. Balanced Scorecard
5. Hoshin Kanri Model
6. Benchmarking Model
7. Business Process Re-engineering Model
8. Shingo Model for Lean Transformation
9. Lean Management Model (TPS)
10. Lean Leadership & Kaizen Model
11. Lean Maturity Model
12. Value Stream Mapping
13. Eight Types of Waste
14. Lean Levers
15. Gemba Framework
16. Cause & Effect Diagram ( Fishbone Diagram, Ishikawa Diagram)
17. 5S Principles
18. Plan-Do-Check-Act Model
19. PDCA Problem Solving Process
20. Total Productive Maintenance (TPM) Pillars
21. DMAIC Process Improvement Model
22. Law of 10
23. Training Within Industry (TWI)
24. A3 Storyboard Template
25. PACE Prioritization Matrix
26. Payoff Evaluation Matrix
27. Cost of Quality Model
28. SERVQUAL Model
29. ADKAR Model
30. Kotter Change Management Model
CONTENTS OF ORGANIZATION, CHANGE, HR MODELS
1. IMPA HR Competency Model
2. NAPA Competency Model for HR Professionals
3. Ulrich’s HR Competency Model
4. Ulrich’s Matrix on the Four Roles of HR
5. The Harvard Model of Strategic HRM
6. AHRI Model of Excellence
7. People Capability Maturity Model (PCMM)
8. SHRM Elements for HR Success
9. Ulrich’s Stages of Employee Connection to the Organization
10. Talent Management Framework
11. Novations Four Stages of Contribution Model
12. Ulrich’s Five Rules for Leadership (Leadership Code)
13. ASTD Competency Model
14. Senge’s Learning Organization Model
15. High-Impact Learning Organization Model
16. Tuckman’s Model of Team Development Stages
17. The Emotional Competence Framework
18. Bridges’ Transition Model
19. Lewin’s Three Stage Change Model
20. The McKinsey 7S Model
21. ADKAR Change Model
22. Kotter’s Change Management Model
23. Cause & Effect Diagram for HR Systems
24. ISO 9001 Quality Management Model
25. Baldrige Performance Excellence Model
26. EFQM Business Excellence Model
27. Kaplan & Norton Balance Scorecard
28. Xerox Benchmarking Model
CONTENTS OF IT FRAMEWORKS
1. IT Infrastructure Library (ITIL) Model
2. ISO/IEC 20000 IT Service Management Model
3. ISO/IEC 27000 Information Security Management Systems Model
4. COBIT 5 Model
5. Capability Maturity Model Integration (CMMI)
6. People Capability Maturity Model (PCMM)
7. ISO/IEC 15504 (SPICE)
8. Organizational Project Management Maturity Model (OPM3)
9. Portfolio, Programme, Project Management Maturity Model (P3M3)
10. Portfolio, Programme, Project Office Model (P3O)
11. PRINCE2 Project Management Model
12. IDEAL Model
13. Waterfall Model
14. Agile Model
15. Scrum Model
16. Enterprise Data Architecture Models
17. COPC-2000 Model
18. Lean Levers for IT Outsourcing
19. Cause & Effect Diagram ( Fishbone Diagram, Ishikawa Diagram)
20. DMAIC Process Improvement Model (Six Sigma)
21. ISO 9001 Quality Management Model
22. Malcolm Baldrige Performance Excellence Model
23. EFQM Business Excellence Model
24. Balanced Scorecard
25. Xerox Benchmarking Model
26. SERVQUAL Model
27. ADKAR Model
28. Kotter Change Management Model
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