CHAPTER 4FOCUS ON THE BIG PICTURE, NOT THE NUMBERSPresentation By:

Robert Brinkmann, Justin Weden, Courtney Karcasinas, Stephen Gonzalez, & Adam Hall

Objectives

Focusing on the Big Picture Drawing You Strategy Canvas Visualizing Strategy at the Corporate

Level Overcoming the Limitations of Strategic

Planning

Focus on the Big Picture, Not the Numbers

Principle is key to mitigating the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves.

Based on drawing a strategy canvas. Opens the companies’ eyes to Blue

Oceans

Focusing on the Big Picture

Strategic Profile of an Industry Strategic Profile of Competitors Strategic Profile of Company Focus, Divergence, and a Compelling

Tagline

Drawing your Strategy Canvas Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication

Drawing your Strategy Canvas1. Visualizing Awakening

2. Visual Exploration

3. Visual Strategy Fair

4. Visual Communication

• Compare your business with your competitors’ by drawing your “as is” strategy canvas.

• See when your strategy needs to change.

• Go into the field to explore the six paths to creating blue oceans.

• Observe the distinctive advantages of alternative products and services.

• See which factors you should eliminate, create, or change.

• Draw you “to be” strategy canvas based on insights from field observations.

• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.

• Distribute your before-and-after strategic profiles on one page for easy comparison.

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Step 1: Visual Awakening

Common mistake is discussing strategy changes before resolving differing opinions

Another problem; executives are often reluctant to accept change

EFS Example

Divided senior managers into two teams to develop two value curves

Managers had a hard time agreeing on competitive factors.

Different factors were important to different managers

Both teams presented the value canvases to the rest of the group

The value curves demonstrated a lack of organizational focus

Curves mirrored competitors’ curves, and there were major contradictions between them.

After looking at the curves, EFS realized their top competitor was leaving the red ocean

Faced with these facts EFS realized it was time for a change

The Four Steps of Visualizing Strategy

1. Visualizing Awakening

2. Visual Exploration

3. Visual Strategy Fair

4. Visual Communication

• Compare your business with your competitors’ by drawing your “as is” strategy canvas.

• See when your strategy needs to change.

• Go into the field to explore the six paths to creating blue oceans.

• Observe the distinctive advantages of alternative products and services.

• See which factors you should eliminate, create, or change.

• Draw you “to be” strategy canvas based on insights from field observations.

• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.

• Distribute your before-and-after strategic profiles on one page for easy comparison.

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Step 2: Visual Exploration

Go into the field to explore the six paths to creating blue oceans.

Observe the distinctive advantages of alternative products and services.

See which factors you should eliminate, create, or change.

The Four Steps of Visualizing Strategy

1. Visualizing Awakening

2. Visual Exploration

3. Visual Strategy Fair

4. Visual Communication

• Compare your business with your competitors’ by drawing your “as is” strategy canvas.

• See when your strategy needs to change.

• Go into the field to explore the six paths to creating blue oceans.

• Observe the distinctive advantages of alternative products and services.

• See which factors you should eliminate, create, or change.

• Draw your “to be” strategy canvas based on insights from field observations.

• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.

• Distribute your before-and-after strategic profiles on one page for easy comparison.

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Step 3: Visual Strategy Fair

Draw your “to be” strategy canvas based on insights from field observations.

Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.

EFS: Before and After

EFS and Traditional Competitions’ “Before”

Strategy

Low

High

EFS’s “After” Strategy

The “After” Strategy

Eliminated highest-cost elements Relationship managers Account executives

Emphasized: Ease of use Security Accuracy Speed

Frees up Corporate Dealers Time Richer Market Commentary (key success factor)

Value Innovation

Eliminate Raise

Relationship Management

Ease of UseSecurityAccuracy

SpeedMarket Commentary

Reduce Create

Account ExecutivesCorporate Dealers

ConfirmationTracking

The Four Steps of Visualizing Strategy

1. Visualizing Awakening

2. Visual Exploration

3. Visual Strategy Fair

4. Visual Communication

• Compare your business with your competitors’ by drawing your “as is” strategy canvas.

• See when your strategy needs to change.

• Go into the field to explore the six paths to creating blue oceans.

• Observe the distinctive advantages of alternative products and services.

• See which factors you should eliminate, create, or change.

• Draw you “to be” strategy canvas based on insights from field observations.

• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.

• Distribute your before-and-after strategic profiles on one page for easy comparison.

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Step 4: Visual Communication After determining your future strategy, it

must be communicated throughout the corporation.

EFS did this through distribution of a one page picture.

EFS: Before and After

EFS and Competitions’

“Before” Strategy

Low

High

EFS’s “After” Strategy

Eliminate-Reduce-Raise-Create: EFS

Eliminate Raise

Relationship Management

Ease of UseSecurityAccuracy

SpeedMarket Commentary

Reduce Create

Account ExecutivesCorporate Dealers

ConfirmationTracking

The distributed picture became a reference point for all investment decisions.

Only ideas that helped move EFS from the old value curve to the new curve were given the go-ahead. EFS IT Department example

Visualizing Strategy at the Corporate Level

Visualizing Strategy can greatly inform the dialogue among individual business units and the corporate center in transforming the company from a red ocean to a blue ocean player.

To do this companies can have their individual business units complete their own Strategy Canvases.

When individual business units present their strategy canvases to one another they: Deepen their understanding of the other

businesses in the corporate portfolio. Foster the transfer of strategic practices

across units.

Using the Strategy Canvas: Samsung

In 1998 Samsung Electronics established the Value Innovation Program (VIP) Center

Core cross-functional teams from their various business units come together to discuss their strategic projects. Typically focused on the unit’s strategy canvases.

The teams assist one another in making their product and service offering decisions using the value innovation knowledge they have developed.

Since 1999, Samsung has held a annual Value Innovation Corporate Conference.

Through the use of these VIP branches and conferences great value for their customers.

As wells as establishing the common language and corporate culture that drives the company from red oceans to blue.

Pioneer-Migrator-Settler Map Pioneer

Offer unprecedented value Migrator

Offer improved value Settler

Offers value the same as competition

Pioneers

Blue Ocean strategists Source of profitable growth Mass following of customers Value curve diverges from competition

Settlers

Me-to businesses Not contribute much to growth Stuck in Red Ocean

Migrators

Lie in between Pioneers and Settlers More for less

Don’t alter basic shape of value curve though

Improved value, but not innovate value Strategy falls in between Red and Blue

Oceans

Change

Senior executives should move portfolio towards pioneers

Settlers have marginal growth potential but are usually cash generators

Pioneers have the most potential but use cash when expanding

Overcoming Limitations

Creative component instead of being analysis-driven

Motivational and invoking willing commitment

Move away from bargaining-driven which produces negotiated commitment

Need to still discuss numbers but that will fall in place as you go