Transcript Strategic Thinking

Session 03- 04
Strategic
Thinking
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Formal Planning
- Very analytical
- Preservation and rearrangement of
established categories –the existing levels
of strategy
Real strategic change demands inventing
new ones rather than such a rearranging
the established categories.
Adapted from Mintzberg, H (1994)
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Strategic thinking generates the
creative act of synthesizing
experiences into a novel strategy
(Synthesis of the insight to transform
the company).
Synthesis: combining of elements into a whole.
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…
Strategic planning:
- Expected to formulate best strategies
- Outlined step-by-step instructions for carrying
out those strategies.
- Based on the manipulation of numbers
(analysis) that spoils strategic thinking
- Suppresses managers’ creative thinking.
Indeed, strategic planning is not strategic
thinking. The most successful strategies are
visions, not plans
Adapted from Mintzberg, H (1994)
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…
‘Strategy-making process should be capturing
what managers learn from all sources (soft and
hard data) and then synthesizing that learning
into a vision of the direction that the business
should pursue’ (Mintzberg 1994).
Planners can help strategists for strategy
processes through formal analyses (or
supplying hard data) rather than influencing to
discover the one right way.
Adapted from Mintzberg, H (1994)
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Strategic Programming !
Strategic Planning, as it has been
practiced, has really been strategic
programming, the articulation and
elaboration of strategies, or vision, that
already exist.
Mintzberg, 1994.
Articulation: act or mode of jointing. b joint.
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What Strategic Thinking is ?
Strategic Thinking is about synthesis. It
involves intuition and creativity. The
outcome of strategic thinking is an
integrated perspective of the enterprise,
a not-too-precisely articulated vision of
direction…
Adapted from Mintzberg, 1994.
Synthesis: combining of elements into a whole.
Intuition: immediate insight or understanding without conscious reasoning.7
Strategic Thinking: Emergent
Strategies
Strategies, evolve through strategic
thinking, cannot be emerged on
schedule (set of steps; and formalizing
those steps) and immaculately
conceived. They must be free to appear
at any time and at any place in the
organization, through messy processes
of informal learning at various levels of
the organization.
Adapted from Mintzberg, H (1994)
Immaculately= perfect
messy : difficult to deal with; awkward.
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Strategy making goes beyond the
boxes, life is larger than our
categories.
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The pitfalls of planning
• Calculating style of management,
not a committing style
• To reduce the power of management
over strategy making.
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Fallacies of Strategic Planning
• Prediction: the world is supposed to
stay the same while a plan is being
developed and implemented
• Detachment: strategists can be
detached from the subjects of their
strategies
• Formalization of strategy making
process
Fallacy: 1 mistaken belief. 2 faulty reasoning; misleading argument.
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“Innovation has never been
institutionalized. Systems have never
been able to reproduce the synthesis
created by the genius entrepreneur or
even ordinary strategist”
Strategic planner is trying to paint the
big picture with little strokes who
abstracts the daily details (Mintzberg
1994).
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Strategic Thinking:
an act of geniuses ?
If an organization is managed by
intuitive geniuses there is no need for
formal strategic planning.
But how many organizations are so
blessed?
And, if they are, how many times are
intuitives correct in their judgment.
George Steiner in Mintzberg, 1994.
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Left- and Right- Handed Planners
• Analytic thinker: S/he is dedicated to
bringing order to the organization
• Creative thinker: S/he seeks to open up
strategy-making process. As a soft
analyst, s/he likes to find strategies in
strange places and encourage others
to think strategically.
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Danger of Formalization
• It limits (or badly affect) our creative
activities
• Systems do not think, when they are used
for more than the facilitation of human
thinking, they can suppress thinking
• Strategic planning has a greater use
without arbitrary formalization, and a
contribution around the strategy making
process.
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Three Kinds of
Thinking Process
Mechanical Systems
Thinking
Intuition
Strategic
Thinking
Problem
Prototype
Process of
Thought
Analysis of Essence
Solution
Rearrangement of
Elements
Local optimization
or Seeing the Tree
not the Forest
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Transformation of Changed
Configuration
prototype : original as a pattern for imitations, improved forms,
representations,
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Setting Organizational Direction:
Industrial Foresight and Strategic
Intent
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What is Industry Foresight?
A deeper insight
A deeper insight
of the future
of the future
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Gaining an understanding of the
trends and discontinuities of the
environment, deeper than the
competitors
&
Transform industry boundaries
and create a new competitive
space
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How to See the Future
Looking
Outward
Spending much time to look in to the
external issues rather than internal ones
Looking
Forward
Spending much time for understanding the
future rather than dealing with current
issues
Build a collective
view of the future
Consulting colleagues to build a
collective view of the future and
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the ways of dealing with it.
Why Industry Foresight
Quest for industry foresight
Gaining an understanding of the trends and
discontinuities deeper than the competitors,
Informs
corporate
directions
Stakeout a
leadership
position in
the market
Lets the
company
control the
evolution of
the industry
Lets the
company
control its
own destiny
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What it requires?
• Creativity and imagination
• Unlimited Curiosity
• Desire to spend a great amount of time
on understanding the future
• Significant expenditure of intellectual
energy
• Willingness to move far beyond the
issues on which it can claim expert
status
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What it requires?...
• Not being customer-led but be much
more than that: (Desire to do more than
satisfying customers – amazing them)
• Not taking competitors as benchmarks
• Going beyond traditional modes of
market research
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The Danger Of Being
Customer- Led
• Customers are notoriously lacking in
foresight.
• Meeting only the articulated needs
of customers already served
you cedes vast opportunities to
more farsighted competitors.
cede : formal give up one's rights to or possession of
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THE DANGER OF BEING CUSTOMER- LED
C
U
S
T
O
M
E
R
N
E
E
D
S
Unarticulated
Articulated
Today’s
Business
Served
Unserved
CUSTOMER TYPES
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Strategic Fit
Vs
Strategic Intent
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? Strategic Fit ?
• Tries to create a fit between the existing
resources of a company and current
environmental opportunities, and not
enough upon building new resources
and capabilities to create and exploit
future opportunities
• Strategies formulated through this
model tend to be more concerned with
today’s problems than tomorrow’s
opportunities
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Strategic Intent
The notion that strategy formulation
should involve setting ambitious goals,
which stretch a company, and then
finding ways to build the resources and
capabilities necessary to attain those
goals.
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Strategic intent envisions a desired
leadership position and establishes the
criterion the organization will use to
chart its progress.
Examples:
• Komatsu set out to “Encircle
Caterpillar”. Canon sought to “Beat
Xerox”.
• Honda strove to become a second
Ford an automotive pioneer.
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Strategic intent concept also encompasses an
active management process that includes
• Focusing the organizations attention on the
essence of winning.
• Motivating people by communicating the
value of the target.
• Leaving room for individual and team
contributions.
• Sustaining enthusiasm by providing new
operational definitions as circumstances
change.
• Using intent consistently to guide resource
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allocations.
Strategic Intent vs. Strategic Fit
• Two approaches are not mutually
exclusive
• Managers do have to analyze the external
environment, analyze company’s
resources and capabilities as they did in
the fit model,
but strategic management process should
begin with challenging goals and, through
out the process the emphasis should be
on finding ways to develop the resources
and capabilities necessary to achieve
these goals.
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The role of strategic level
managers on strategic intent
For corporate challenges to lead to
competitive advantage, top
management must:
• Create a sense of urgency
• Develop a competitor focus at every
level through widespread use of
competitive intelligence
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• Provide employee with the skills they
need to work effectively
• Give the organization time to digest
one challenge before launching
another
• Establish clear milestones and review
mechanisms.
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