Post on 29-Nov-2014
description
can accelerate
entrepreneurial How
thinking
growthin large corporations
1. Growth Framework
2. Dynamic forces driving a company growth
3. Entrepreneurial strategy making
4. Final Lesson
Pros Business model advantages
Promote business development
Build credibility
Human talent development
Financial value creation and financing
Business model challenges
Business execution & renewal
Human & other resources constraints
Management challenges
Funding challenges/dilution
Cons
Growth accelerators and inhibitors 1. Top management
2. Human resources/culture
3. Strategy
4. Company financing
5. R&D / new product
6. Product/after sales
7. Operations management
8. Customer/market opportunity
9. Marketing/branding
10. Sales/distribution
11. Partnership
12. Capital markets
13. Acquisitions/mergers
14. Regulatory/government/taxation
15. Economic/corporate environment
16. Legal/lawsuits
2. Dynamic forces
driving a company
growth
Introduction A company is an ecology in which strategic initiatives arise following a certain pattern. Knowing how strategy originates and how strategy making takes place is crucial for the company to control its destiny.
Strategy making depends on two variables: decision making power concentration and simultaneity of strategic action.
Strategic initiatives within the company compete for limited resources.
Every company has its own cultural and administrative mechanisms to decide what initiatives are supported and how resources and
attention are assigned amongst them.
Robert Burgelman’s Rubber band Model Basis of competitive advantage In the industry
Competition at the company’s position in the industry as a result of external forces (Porter + analysis)
What the company does The consequential action in which the company engages. It links position and competencies
Strategic action
Distinctive competencies
Skills, assets and routines to meet the basis if competitive advantage in the industry
Beliefs on market domain and the relative importance of the competencies to achieve a competitive advantage. Values and principles of what we will do and what will not
Official Corporate Strategy Internal selection
contextReestablishes alignment in both axis when it is altered
Misalignment 1Basis of competitive advantage In the industry
What it takes to win
What the company does
Strategic action
Distinctive competencies
What we’ve got
What we say
Official Corporate Strategy
Internal selection context
Culture
Misalignment 2Basis of competitive advantage In the industry
What it takes to win
What the company does
Strategic action
Distinctive competencies
What we’ve got
What we say
Official Corporate Strategy
Internal selection context
Culture
Strategic Dissonance
Dissonance
Time
Rev
enu
e G
row
th
Sources of Strategic Dissonance
Dissonance is Strategic if:
- There is a divergence between Basis of Competitive Advantage and Distinctive Competence.
- There is a divergence between Official Corporate Strategy and Strategic Action.
Initially the signals are usually weak so our job as leaders is to discern signals from noise
3. Entrepreneurial strategy
making
Strategy Processes
Autonomous strategic action.
Induced Strategic Action
EmergingExternal
Environment
O�cial Corporate Strategy
Structural Context
Known environment
Strategic Context
Induced Autonomous
DefinitionsKnown environment: This is where the induced strategic process takes place. Threats and opportunities arise form here, forcing the company to adjust the induced strategy process.Emerging external environments: Unfamiliar, unknown environments where the autonomous strategy process takes place. Many of them do not survive but others may grow and complement or even substitute the familiar environment. Official Corporate Strategy: Beliefs on what the company does well, in what markets it can succeed, what are its values and what goals it aims to achieve.Induced Strategic Action: Initiatives on the part of operational and middle level managers that fit the concept of the official corporate strategy. Is oriented toward gaining and maintaining leadership in the company’s core businesses. Autonomus strategic action: Strategic initiatives outside the scope of the official corporate strategy. They differ from the induced ones in the technology they use, the value proposition or the target clients. They rely on new competencies or in a new combination of the existing ones. They lead to new businesses that are different from the core business, complementing or even substituting it. Structural Context: Administrative and cultural mechanisms to keep coherence between the official corporate strategy and the induced strategic action. The larger the company the more complex they are. Transforms “concept” into “action.Strategic Context: Administrative and cultural mechanisms to evaluate and choose strategic initiatives outside the structural context. Transforms “action” into “context”.. It allows to assess the adaptive potential of the autonomous strategic action to the official corporate strategy (which will change upon this incorporation).
Conclusion
The autonomous strategy process begins with strategic initiatives that often emerge fortuitously and unexpectedly. Initially there is no clarity about their strategic importance and how they may relate to the induced strategy process. Solving this indetermination is the most important challenge for company evolution. Hence why the design of the strategic context is crucial.
4. Final
Lesson
Two systems one company
Internal selectioncontext
Structural Context
Strategic Context
.