the guardian masterclass - strategic transformation

18
The Guardian One-Day MBA Masterclass Strategic Transformation Professor George Yip Associate Dean, Executive Programmes

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Page 1: The Guardian Masterclass - Strategic Transformation

The Guardian One-Day MBA MasterclassStrategic Transformation

Professor George YipAssociate Dean, Executive Programmes

Page 2: The Guardian Masterclass - Strategic Transformation

Imperial means Intelligent BusinessImperial College Business School 2

Strategic Objective

Business Model

What is Strategy

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EXECUTIVE STRATEGIC OBJECTIVE(example of one)

STRATEGIC MOVES(example of one)

EXECUTION(example of one)

Chief Executive Diversify Create new line of business

Select and start up new business, appoint general manager

General Manager Make the new business a success

Develop appealing new products

Set up new product development unit, appoint unit manager

New Product Development Unit Manager

Run the unit well, including delivering successful new products

Put in the right processes, systems and workers

Monitor processes, systems and workers

Cascade of objectives, strategic moves and execution

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• All strategies need to be executed

• Not the same as operational execution

• Strategy execution new, different situation (Lexus)

• Operational execution same situation (perhaps better but not different)

• Some strategies are more difficult to execute than others, depending on

– Extent of stretch in strategic objectives

– Fit with current business model

– Change capabilities of organization

– Implementation capabilities of organization

Defining strategy execution

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Source: Laurent Mirabeau and Steve Maguire, “From Autonomous Strategic Behavior to Emergent Strategy,” Strategic Management Journal 35 (2014), pp. 1202-1229.

Intended versus emergent strategy

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Product launch

Acquisitions

Market development

Related diversification

Strategic decisions

Strategies evolve and inform strategic decisions, which in turn consolidate strategic direction

Evolving strategic direction

Source: Johnson, Whittington and Scholes, Exploring Strategy.

Strategic direction from prior decisions

Page 7: The Guardian Masterclass - Strategic Transformation

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EnvironmentalChange

PHASE 1Incremental

Change

PHASE 2Strategic

Drift

PHASE 3Flux

PHASE 4Transformational

Change or Demise

Amou

nt o

f cha

nge

Time

Source: Gerry Johnson and Kevan Scholes

The problem of strategic drift

Page 8: The Guardian Masterclass - Strategic Transformation

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• Individual cognitive limits

• “Steady as you go”

• Core rigidities

• Organizational culture

• Lagged performance effects

• Past success: The Icarus Paradox

Source: Gerry Johnson

Why strategic drift?

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“When the rate of change inside the company is exceeded by the rate of change outside the company, the end is near.”

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When it goes bankrupt

When it loses money, consistently

When it loses market share

When sales go down

BUT BY NOW IT IS TOO LATE to avoid trauma for the company, shareholders, employees, customers, partners and managers.

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How to tell when your business needs strategic transformation

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Look for the following indicators:

• A new technology or product form introduced into your industry

• By someone else

• Which your top managers refuse to regard as significant (e.g., motorcycles, personal computers, coffee, music downloads, Apple iPhone, etc.)

How to anticipate the need for strategic transformation

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Sales and profits good.BUT the most innovative/fashionable/desirable customers desert you.e.g. Cadillac, Nissan in U.S. in 1990s

• Customer loyalty and retention declines • The smartest employees do not join you• Your company is worth more broken up

How to anticipate the need for strategic transformation (cont.)

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• State owned until 1982• BA =“ Bloody Awful”• Rules for flight attendants• New advertising campaign• Product innovations

No. 1 among world business travellers

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Transformation of British Airways

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Develop the Organization

Achieve Mobilization

Create the Vision

Build the Measures

Construct an Economic Model

Align Physical Infrastructure

Achieve Market Focus

Invent New Businesses

Change Rules Through Information Technology

Create Reward Structure

Build Individual Learning

Redesign Work Architecture

Transforming the organisation

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Conclusion

A strategy is a journey not a destination.

The best strategy ideas are the outcome of a creative process strongly grounded in deep knowledge and understanding of both the external and the internal environment.

The best strategies are successfully executed.

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Manuel Hensmans, Gerry Johnson and George Yip, Strategic Transformation: Changing While Winning, Basingstoke, England: Palgrave Macmillan, 2013.

Gerry Johnson, George Yip and Manuel Hensmans, “Achieving Successful Strategic Transformation,” MIT Sloan Management Review, Spring 2012, pp. 25-32.

Gerry Johnson and George S. Yip, “Transforming Strategy,” Business Strategy Review, 18/1 Spring 2007, pp. 11-15.

([email protected])

References

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