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Strategy as Simple Rules
Chris BinghamProfessor and Area Chair of Strategy & EntrepreneurshipPhilip Hettleman Distinguished ScholarCo-Director, Kenan Entrepreneurship InitiativeUNC Chapel Hill
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2
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/ 01
Can the patient follow
instructions?
/ 02
Does the patient have a pulse
rate below 120 or a
respiratory rate between 10-
30 breaths per minute?
Medicine “Rules” for effective triage
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4
“Rule” for locating serial criminal:
Take the midpoint of the two most recent crime
scenes
Criminology
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02
Head in the
same
direction as
your nearest
neighbors
01
Avoid
collisions
03
Stay close to
your nearest
neighbors
Simple Rules can drive complex adaptive behavior
01As long as someone
walks over you, you stay
put
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CAPTION CAPTION
What are simple rules?
CAPTION
Short cut strategies that save time and
effort by focusing our attention and
simplifying how we think
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CAPTION CAPTION
How can organizations
benefit from simple rules?
CAPTION
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8
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"Then we have all our rules here. We've got our rules, so you can't
have more than 42 minutes. These are just things you just have to
remind yourselves of all the time. The rules are important”
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NO YES
Many rules or scripted
routines
Universal rules (your rules
are my rules)
Vision statement or
platitudes
Simple rules are
simple (few, not many)
Simple rules depend
on the person and
situation
Simple rules relate to a
defined activity
Features
of Simple
Rules
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Eat real food that
your grandmother
would recognize
1
CAPTION
2
CAPTION
Eat small
portions
3
CAPTION
Eat mostly
plants
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Always eat
breakfast1
CAPTION
2
CAPTION
Stay
hydrated
3
CAPTION
Eat as much as
you want, and
anything you want
as long as you
can pick it, pluck
it or kill it
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CAPTION CAPTION
Types of simple rules
CAPTION
Boundary rules• Focus leaders on which opportunities can be
pursued and which are outside the scope
How-to rules• Spell out the key features of how a process is
executed
Priority rules • Help leaders rank the accepted opportunities
Timing rules• Synchronize leaders with the pace of
emerging opportunities and other parts of the
company
Stopping rules• Help leaders decide when to pull out of
yesterday's opportunities
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CAPTION CAPTION
What value do you
see in simple rules?
CAPTION
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CAPTION CAPTION CAPTION
RELATIONSHIP
BETWEEN
STRUCTURE AND
PERFORMANCE
(Davis, Eisenhardt, and Bingham, 2009)
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17
S I M P L E R U L E S A P P L I C A T I O N
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CAPTION CAPTION CAPTION
S I M P L E R U L E S A P P L I C A T I O N
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CAPTION CAPTION CAPTION
Understand strategic priorities
Locate bottleneck
Create simple rules
S I M P L E R U L E S : W O R K P L A C E A P P L I C A T I O N
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Understand strategic priorities
Locate bottleneck
Create simple rules
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Group 1- Disruptive Technology: Carly Deskins, Ronald Wright, Willie King, Clifton Luber, Allison Edwards, Jaime Alvarez,
Rickey Hawkins
Many emergent technologies such as nanotechnology, additive manufacturing, AI, Block Chain and IoT are becoming more
predominant in logistics. In what ways will disruptive technology make military logistics easier and in what ways more
difficult?
Group 2- Logistics Transportation: Michelle Starr, Richard Sullivan, Rosalie Pena, Anitria Wright, Chris Greene, Todd
Diskey
Transportation and distribution systems required to support military logistics are complex and difficult to manage. This
sometimes creates readiness challenges. In what ways can we rethink our transportation and distribution systems?
Group 3- Contracting/budget policies: Colin Eshleman, Zealetta Barton, Leah Cotton, Patrick Kelleher, Gerard Dale,
Jacob Kotula
The DoD contracting process is criticized as being convoluted, bureaucratic time-consuming and inefficient. How might we
reconsider these policies and processes?
Group 4- Data integrity and availability: Adam Tutulo, Steven Douglas, Anthony Sanders, Ida Mae Jackson, Judy
Stafford, Angela Schueller
Data integrity and availability impact many processes in the DoD, including demand forecasting. In what ways can we
improve data access and reliability?
Group 5- Disruptive Technology: Richard Alexander, Scott Long, Karen January. Carlos Rodriguez Rivera, Ally Caro,
David Hansell
Many emergent technologies such as nanotechnology, additive manufacturing, AI, Block Chain and IoT are becoming more
predominant in logistics. In what ways will disruptive technology
Group 6- Cyber Security: Kurt Carlson, Dylan Hayden, Sandra McCandies, Ekaterina Thormann, Pamela Bartlett, Montez
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CAPTION CAPTION CAPTION
1.What are our top priorities?
2.How do we measure progress on those
priorities?
3.What are our specific goals related to
progress (i.e., quantify measures in step 2)?
Understand strategic priorities
Locate bottleneck
Create simple rules
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CAPTION CAPTION CAPTION
•What is preventing us from reaching our goals?
1.Does it represent ongoing decisions (vs. one-off
choices)?
2.Is it a specific activity (vs. an overarching process)?
3.Does it require coordination with others?
Understand strategic priorities
Locate bottleneck
Create simple rules
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CAPTION CAPTION CAPTION
•What data can we use to develop rules?
•What rule categories do we have/not have? (Boundary,
How-to, Priority, Timing, Stopping)
•Which rules are most important?
•How can we quickly and cheaply test first-cut rules?
Understand strategic priorities
Locate bottleneck
Create simple rules
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MORE INFO
MORE INFO
MORE INFO
1.What is preventing us
from reaching our
goals?
• Does it represent
ongoing decisions?
• Is it a specific activity?
• Does it require
coordination with
others?
Understand strategic priorities
Locate bottleneck
Create simple rules
1.What are our top
strategic priorities?
2.How do we measure
progress on those
priorities?
3.What are our specific
goals related to
progress (i.e.,
quantify measures in
step 2)
1.What data can we use
to develop rules?
2.What rule categories
do we have/not have?
3.Which rules are most
important?
4.How can we quickly
and cheaply test first-
cut rules?
01. 02. 03.
SIMPLE RULES SUMMARY
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CAPTION CAPTION CAPTION
W R A P - U P
The counter-intuitive insight is that
when environments become more
ambiguous and complex, the most
effective strategies are often the
most simple
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1 2
3 4
Simple rules balance the
tension between flexibility and
efficiency
Simple rules
produce better
decisions
Simple rules promote
collective behavior
The simplicity of rules makes them hard to
imitate
W R A P - U P
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P O W E R O F P E R S P E C T I VE
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CAPTION CAPTION CAPTION
D I S C U S S I O N
What are the broader skills and
behaviors that will help you
manage dynamism as a leader?
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31
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C R E A T I V I T Y : N A T U R E O R N U R T U R E ?
32
*
* In a IBM poll of 1500 CEOs creativity was cited as the #1 “leadership competency” of the future. See - IBM, “Capitalizing on Complexity: Insights from the Global Chief Executive Officer Study,” May 18, 2010
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CAPTION CAPTION CAPTION
S U R V E Y
For each question give yourself a score of 1-5
1 = strongly disagree
2 = somewhat disagree
3 = neutral
4 = somewhat agree
5 = strongly agree
Please answer based on your actual behavior NOT what you would
like to do
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CAPTION CAPTION CAPTION
• DELIVERY SKILLS - The EVEN-numbered
items.
– Very high = 45 and above
– High = 40-45
– Moderate to High = 35-40
– Moderate to Low = 29-34
– Low = 28 or less
Source: Dyer et al., 2009
S U R V E Y
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CAPTION CAPTION CAPTION
• DISCOVERY SKILLS - The ODD-numbered
items.
– Very high = 45 and above
– High = 40-45
– Moderate to High = 35-40
– Moderate to Low = 29-34
– Low = 28 or less
S U R V E Y
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CAPTION CAPTION
WHERE ARE YOU NOW?
WHERE DO YOU WANT TO BE?
CAPTION
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QUESTIONING
WHAT ARE THE KEY DISCOVERY SKILLS?
NETWORKIN
GOBSERVING
EXPERIMENTIN
G
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QUESTIONING
WHAT ARE THE KEY DISCOVERY SKILLS?
NETWORKIN
GOBSERVING
EXPERIMENTIN
G
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CAPTION CAPTION CAPTION
DESCRIBE THE IDEAL VACATION
FOR THE PERSON NEXT TO YOU
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40
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80% of children under the age of 8 must be sedated to get a get a reliable scan
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CAPTION CAPTION CAPTION
QUESTIONING• Survey questions: 3, 11, 17
High = 12+
Medium = 7-11
Low = 6 and below
• Personal application: Ask questions that both impose
and eliminate constraints; this will help you see a
problem or opportunity from a different angle.
– What are two things you can do to ask better
questions?
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QUESTIONING
WHAT ARE THE KEY DISCOVERY SKILLS?
NETWORKIN
GOBSERVING
EXPERIMENTIN
G
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CAPTION CAPTION CAPTION
THE STRENGTH OF WEAK TIES
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CAPTION CAPTION CAPTION
BOARD OF DIRECTORS
• Diane B. Greene - Naval architecture
• John L. Hennessy – Computer Science
• Ann Mather – Accounting
• Alan R. Mulally – Aeronautical engineering
• Paul S. Otellini – Economics
• K. Ram Shriram – Math
• Shirley M. Tilghman - Biochemistry
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CAPTION CAPTION CAPTION
HOW WILL YOU BETTER NETWORK?
• Personal application:
– Take 5 minutes and send an email/text to
someone you admire asking if he/she
would be willing to be on your personal
board of advisors.
Survey questions: 1, 11, 13
• High = 12+
• Medium = 7-11
• Low = 6 and below
Personal application: Create your own
personal board of advisors with weak ties
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QUESTIONING
WHAT ARE THE KEY DISCOVERY SKILLS?
NETWORKIN
GOBSERVING
EXPERIMENTIN
G
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CAPTION CAPTION CAPTION
HELIOTROPIC EFFECT
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CAPTION CAPTION CAPTION
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CAPTION CAPTION CAPTION
OBSERVATION OF POSITIVE
COMMUNICATION• 60 firms
• Public and private companies
• 16 industries
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CAPTION CAPTION CAPTION
POWER OF POSITIVE COMMUNICATION
SOURCE: Gittell, Cameron, Lim 2006
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CAPTION CAPTION CAPTION
OBSERVE PEOPLE’S STRENGTHS
SOURCE: Cameron, 2014
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CAPTION CAPTION CAPTION
EXERCISE• Think of at least 3 people in the room to whom
you will give positive feedback based on what
you have observed interacting with them.
Everyone will stand and pair up with a person of
your choice. You have 1 minute to address the
following:
1. Here is what I have noticed about your strengths; or
here is what I admire.
2. Here is an example of when I saw you display that
strength or capability (i.e., this is an example of you
at your best).
• This process will be repeated 3 times with 3
different people across 3 minutes. You will move
to next person after 60 seconds
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CAPTION CAPTION CAPTION
EXERCISE
• Take 1 minute and write down what you heard.
• Draw some conclusions about your strengths as
a leader based on the feedback you received.
• Write down at least one way you can leverage
your strength to better manage ambiguity.
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CAPTION CAPTION CAPTION
EXERCISE
• Energy: How did energy in the room
change as people observe and
provide positive feedback?
• Emotions: What were your feelings
when receiving feedback?
• Connections: How does this
positive feedback influence your
ability to lead and manage
ambiguity?
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CAPTION CAPTION CAPTION
OBSERVING
• Survey questions: 5, 15, 19
High = 12+
Medium = 7-11
Low = 6 and below
• Personal application:
–What can you do to improve
observation?
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QUESTIONING
WHAT ARE THE KEY DISCOVERY SKILLS?
NETWORKIN
GOBSERVING
EXPERIMENTIN
G
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CAPTION CAPTION CAPTION
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CAPTION CAPTION CAPTION
EXPERIMENTING
Create
MeasureLearn
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CAPTION CAPTION CAPTION
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CAPTION CAPTION CAPTION
+
+ = TAX
RETURN
SNAPTAX: EXPERIMENT #1
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CAPTION CAPTION CAPTION
SNAPTAX: EXPERIMENT #2
Downloadfreeapp
Answerquestions
SnapphotoofW2fromphone
e-Filefromphone
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CAPTION CAPTION CAPTION
SNAPTAX: EXPERIMENT #3
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“We plan to use our location in Dallas, Ga., to learn how best to work with our
partners to deliver the quality, affordable and accessible care customers want, with
the goal to take the Walmart Health center model to the other communities we
serve, starting with our second location opening in Calhoun, Ga., early next year.”
- Sep 16, 2019
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CAPTION CAPTION CAPTION
EXPERIMENTING
• Survey questions: 7, 9, 15
High = 12+
Medium = 7-11
Low = 6 and below
• Personal application:
–What can you do to improve
experimentation?
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S U M M A R Y
•Practice questioning, networking, observing, and
experimenting skills
•Practice makes the skills part of your DNA and allows
you to become increasingly confident of your ability to
lead in dynamic environments
•What is one area you would like to focus on?
•What is one small but specific thing you will you do
this week to improve?
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CAPTION CAPTION CAPTION
PERSONAL PLAN
• WHAT?
–What have I learned?
• SO WHAT?
–What have I learned that has high
relevance for me?
• NOW WHAT?
–What is my plan for improvement?
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CAPTION CAPTION CAPTION
DON’T LIVE BELOW YOUR
PRIVILEGES
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Thank you!