Competing on the Edge: The use of time- pacing

The common traps in strategic change– The chaos versus the bureaucratic trap– The lockstep versus the star trap– The overconnect versus the disconnect

trap– The foresight versus the no-sight trap

The use of time pacing and developing a strategic rhythm

3M Optical Systems Summary and conclusions

Commitment to a future and flexibility for a future

The collective vision of our business isClear …………………………………………… Ambiguous

Our future success depends on particular industry scenarioYes ………………………………………………. No

Our approach to the future is to Plan ……………………………………………… React

Our attention to the future isFrequent ………………………………………… Rare

We have several meaningful products and future oriented strategic alliancesYes ………………………………………………. No

Our business is considered to be a Leader …………………………………………… Follower

Focus onCreating plans

Focus onCreating plans

One industry

VisionTightly configured

PlansSporadic attention

To future

One industry

VisionTightly configured

PlansSporadic attention

To future

Symbolic importance of

planningManage complex

resourceallocations

Symbolic importance of

planningManage complex

resourceallocations

Plans often wrongSingle bet on the futureStrategic drift

Plans often wrongSingle bet on the futureStrategic drift

The Foresight Trap

Source ofForesight

Warning Signals

Focus oncurrent

operationsonly

Focus oncurrent

operationsonly

No visionReacting to

eventsNo attention to

the future

No visionReacting to

eventsNo attention to

the future

Complete attentionon today’s competition

Complete attentionon today’s competition

FrustrationLate product andservicesReactive strategiesMissed opportunities

FrustrationLate product andservicesReactive strategiesMissed opportunities

The No-sight Trap

Source ofNo-sight

Warning Signals

Experimentation at the edge of time

Key Concepts

• Vision of the business• Wide variety of low-cost probes• Constant but thin attention

Management Practices

• Craft a vision of the business not the industry• Probe the future with a wide variety of low cost probes across multiple time horizons• Where appropriate, measure the probe results and use these to shape strategic direction• Frequently revisit the future without investing too much

Results

•Insight into possible futures•Anticipatory moves•Flexible strategy•Constant

Rules for picking probes

Develop many types of low-cost probes. Be sure to choose some probes that have a

chance of small failures. Pick up some probes that require

implementation followed by a measurement of results.

Use more probes when the market place is particularly volatile.

Break big probes into small ones as much as possible.

Place more probes into the most likely future. Pick some probes randomly. Build on the results of your probes to shape

the next strategic moves. Do not probe endlessly in a particular area.

Getting into the rhythm of time pacing

New product or service concepts are introduced in your business at rhythmic intervals

T F Your business has specific metrics, such as time to launch a global

product, months to deliver a product, or percentage of annual revenue from new sources, that evaluate performance using time

T F Your business has explicit procedures for transitions such as moving

into new markets, integrating acquisitions, or ramping up to volume manufacturing

T F Your business has a routine for leaving old business areas

T F Your business is synchronized with the rhythms of key customers and

suppliersT F

Time pacing and developing a strategic rhythm

It involves changing because of the passage of time, not the influence of events.

It helps to ensure the early anticipation of future events.

It reminds managers to search for existing rhythms.

It creates a sense of relentless urgency. It requires synchronization with the

marketplace and with the internal capabilities of the business.

Which of the following do you have in your organization?

Introduction of new product or service concepts at rhythmic intervals

Use of specific metrics that evaluate performance using time dimension

Existence of explicit procedures for transitions in terms of markets, products, or production facilities

Use of specific sun-set rules for leaving old business areas

3M Optical Systems: Managing corporate entrepreneurship

What practices make 3M such an innovative company?

Develop a time line of Andy Wong’s actions. How effective has he been?

Develop a time line for Paul Guehler’s actions. How effective has he been?

What should Andy Wong do with the computer privacy screen AFE?– Postpone/Reject the proposal– Fund it within the business– Get funding from Guehler– Go to a senior mentor for funding

Rules of Competing on the Edge: Lessons Learned On Strategy

Advantage is temporary so continuously generate new sources of advantage

Strategy is diverse, divergent and complicated so develop a semi-coherent strategy

Reinvention is the goal so find out new ways of creating value rather than simply being more efficient in what you do.

On OrganizationLive in the present and maximize the advantages

of minimum structureStretch out the past and maximize learningReach into the future and experiment by probing

the futureTime pace change and not become the hostage of

external events

Lessons Learned…

On LeadershipGrow the strategy by correcting the clearest

cases of over – and under – structuringDrive strategy from the business level by

letting it evolve bottom-upRepatch businesses to markets and

articulate the whole by shaping a simple synthesis of the firm that captures the essence of of the businesses without constraining your front line managers

Structural alternatives for introducing change in organizations

Cocooned Model: The change team is made up of the best and the brightest talent available from across the organization. The team members remain within their particular organizational units but have a charter from senior management to operate across organizational boundaries.

Direct Delivery model: The organization creates a distinct unit with its own brand, business goals, and the freedom to compete with other organizational units.

The Ring Model: The organization surrounds a single manager with a ring of personnel drawn from all areas of the firm featuring a non-hierarchical structure and the allocation of overlapping responsibilities to team members.