Transcript Planning Holarchy - Villanova University

What comes to mind when you
hear the word
STRATEGY
What Makes a Decision
A Strategic Decision?
• It’s Effect Won’t Be Known for
Sometime
• It’s Impact is Lasting
• It Impacts the Mission of the
Organization
• It Moves the Organization into a New
Domain or Direction
• It Involves Commitment of Key
Resources
• It Affects People
Trade-Offs
• Management Chooses to Do This Over
Doing That!
• The Choice is
– One that Best Proctects from Imitators & RePositioners
– One that Carries With It a Unique Set of
Activities
• Once Made, Management Must Be
Operationally Effective & Efficient
Effectiveness vs Strategy
• Efffectiveness
– Operational effectiveness = performing similar
activities better than competitors
– Is This Sufficient for Lasting Success?
• Strategy
– Performing Different Activities the Make a
Difference
– Performing Activities Differently, with Better
Results
– Advantage Emerges Out of the Whole System,
Not Just One Activity
What is the Goal of Strategy?
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To Create a Plan
To Achieve Your Objective
To Be Competitive
To Create a Competitive Advantage
To Sustain a Competitive Advantage
To affect the Conditions so that You Don’t
Have to Operate in a Competitive Market
– To Be More Monopolistic
A Sustainable Advantage Is...
• Unique Activities
• Unique Value-Chain
– Relationships Among Functions/Activities
• Uniquely relating activities to produce
cohesive harmony
– Degree of Cohesiveness
• Unique Fit
– Alignment of Strengths with Opportunity
• All About Making the Right Trade-offs
A Fit Strategy
• Consistency
– alignment of purpose & functions
• Reinforcing
– synergy among activities
• Optimizing Effort
– eliminate redundancy effort
– minimize waste (material & effort)
Synergy ==> Complimentarity
• 1+1>2
– one compliments the other so that together they
produce more than they can separately
• Market Synergy
– one product enhances another
• Starbucks w/ Barnes & Noble
• Cost Synergy
– shared functions or operations ==> cost advantages
• Technological Synergy
– sharing technology across industries
• Management Synergy
– skills & talents of each compliment the other
Strategic Thinking Requires
• Divergent Thinking
• Convergent Thinking
• Synthesizing Experience & Novelty
–Creativity
A Strategic Thinking Manager
• Sees What Others Do Not See
– Dynamics not Statics
– Interconnections not just Events
– Possibilities not Only The Probable
• Willingly Questions the Obvious
– for Synergy not Supremacy
– Asking Right Questions not Looking for Right
Answers
• Is Multi-Perspectivistic
The Post-Conventional
Thinking Manager
• Challenges Commonly Held
– Beliefs & Assumptions
• Listens Without Judgment
• Seeks Outsiders who are Inside the
Organization
• Engages the Minds of the People
– not just their brains
Scenario Planning
• Select several external forces for which changes
could (dramatically) influence the business
• For each force, explore at least 3 future
organizational scenarios (worst, reasonable, best
case)
• Discuss possible responses the organization
might take & what is required in each case
• Identify common threads/themes posed among
each scenario
• Determine likelihood of each occurring
Envisioning the Airline Industry
in the 21st Century
• What scenarios would you envision?
• How might the industry respond to these?
Volume
Product Life Cycle
TIME
Pre-Intro Intro Growth/ Shake-out Maturity Decline
Overarching Strategic Intent
of an Enterprise
• Sustainability
– Creative
• Retrenchment
– Defensive
– Counter Moves
• Stability
– Maintain
Generic Strategies
• Competitive Scope
– Broad Target
– Narrow Target
• Competitive Advantage
– Low Cost Producer
– Differentiation
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Quality
Reliability
Innovation
Responsiveness
Traditional Strategic Management Process
• Strategy Formulation
– Determine Mission & Objectives
– Identify & Interpret S, W, O & T
• Internal Analysis
• External Analysis
– Select Strategy
• Corporate, Business, Functional, Operations
• Strategy Implementation
– Mobilize Resources
– Management Support System
– Monitor & Assess (focus on control)
Planning Linear Hierarchy
Mission
Goals & Measurable Objectives
Strategy & Tactics
Goal Attainment / Performance Assessment
Business as Eco-System
• Open System View of the Organization
– Interdependence with Environment
– Unit of Survival is Organization + Environment
• Seek to Develop Mutually Beneficial
Relationships with Stakeholders
– Partnerships
• Suppliers
• Customers
• Employees
• Community
Organic/Systems Strategic Management Process
• Uncover, Clarify & Articulate Cultural Values & Vision
– Dialogue with all stakeholders
• Strategy Formulation
– Determine Mission & Objectives
– Identify & Interpret S, W, O & T
• Internal Analysis
• External Analysis (possibly include scenario planning)
– Select Strategy
• Corporate, Business, Functional, Operational
• Vision-Based Strategy Implementation
– Mobilize Resources
– Management Support System
– Monitor & Assess (Focus on Learning)
Planning Systemic Holarchy
VISION
PURPOSE
STRATEGY
TACTICS
Vision
Mission
External
Analysis
Internal
Analysis
Objectives + Assumptions
Strategic
Choices
Implementation
Science & Art of Using All Forces
Why?
Involves
Foresight
Insight
Inquiring Minds
Strategy
10/2/2000 - v3
&/OR
Forces
External
Internal
human energy
Structural
Cultrual
Fit
Capability
SYNERGY