07 Getting Your Strategy Right
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Transcript of 07 Getting Your Strategy Right
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Martyn MENSAH
What difference does it make?
Getting your Strategy Right
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Martyn MENSAH
Model for ChangeC = D x V x F>R
in English,Change will only happen providedthe product of D, V & F is greater
than R
C = changeD = dissatisfaction with the status quoV = vision of a different (better) futureF = first steps towards changeR = resistance to change
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We have a BIG problem
We Dont
use our most powerfulresource !
Status Quo cap Current reality overload
Neglect of our cognitive powers
Lazy solution development
Ideas deficitme toism
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Martyn MENSAH
The World Today is Constantly changing
More difficult to predict Complexities of business models &
economies
Hyper-competition
The information & knowledge paradox
Affects us both outdoors and indoors Competition from everywhere
Government decisions & actions
Customer behaviour & market dynamics
Margin pressure, driving cost & efficiencyimperatives
The influence of Organizational culture &personal behaviour
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The fact of the matter is.
There is no such thing as a permanently excellentcompany or permanent competitive advantage or a
permanently attractive industry
Each day the world we operate in changes; we also
change
Our response to change is what determines whether we
will survive, thrive or fade away
There are a million possible responses We are pre-conditioned to think in terms of existing
options
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The orthodoxy.
The Economics of the Fixed Cakealso known as the trade-off mindset
You need to lose something to
gain something
Construct barriers to protect the
cake
We can only gain at someones
expense or
If they are gaining, I am losing!
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The orthodoxy.
The only way to get betteris to squeeze more out of
the same
Do the same thing but withmore control of the system
Measure everything and try
and improve thosemeasurements
and often we try to do this
without changing anything
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Strategy is simple.A response that is often employed in the quest for how to
create value, ensure growth, overcome a crisis and improve
or transform your organization
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Martyn MENSAH
The Building Blocks
PURPOSE
BUSINESS
MODEL
ORGANISATIONAL
CHARACTER
GOALS/PRIORITIES/
ACTIONS
STRATEGIC CONVERSATION
How do we create value?
What kind of organization
should we be?
What must we do and how
will we make it happen?
How will we win the support
of our stakeholders?
Why do we exist
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Managements job is not to see the organization as itis..but as it can become
An organization exhibits strategic intent when itrelentlesslypursues an ambitious strategic objective andconcentrates its competitive actions and energies onachieving that objective.
Effective Strategy requires an understanding of thedynamics of business especially a phenomenon knownas a STRATEGIC INFLECTION POINT
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Business grows
Business
declines
Inflection point
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Creating an Inflection Point
UT FINANCIAL SERVICES
IMAGINED financial services in a radically different
way
Changed the focus of the financial industry Placed REAL customer need at the centre its
operations
Banked the untouchables & did it in 48 hours
Actually collected their loans Customer need
Doing things differently
Possibility thinking
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> market boundaries are
not given> they are reconstructedby the actions & beliefsof industry players
BUT
HOW?Ideas Imagination
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The orthodoxy.
Imagine & believe that there is nolimit to the size of the Cake inother words develop a Trade-Onmindset
Look over the BARRIERBarriers are easy to dismantle/notas strong a defense as they appear
We can gain by making the
competition irrelevantIf they are gaining, I am gainingmore and faster and moresustainably than they are!
REVERSE
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There are infinite number of ways to
do anything
Change the mindset
Open eyes of your people to see
things differently
Slaughter the sacred cows
Imagination is the only limiting factor
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Martyn MENSAH
Traditional strategic thinking head-to-head competition in search of
sustained, profitable growth. Prevalent terminology = competitive
advantage, market share and differentiation.
RESULTa bloody red ocean of rivals fightingover a shrinking profit pool.
D
ontcom
petewithrivals,make
t
hemi
rre
levant
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BLUE OCEAN STRATEGYhypothesizes that thisstrategy is increasingly unlikely to createprofitable growth in the future.
New strategic thinking succeed notby battling competitors, but by creating
blue oceans of uncontested market space ripe forgrowth .
Focus on MARKET SPACE not market share thinking
This requires VALUE INNOVATION
D
ontcom
petewithrivals,make
t
hemi
rre
levant
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Martyn MENSAH
1. reconstruct market boundaries
2. focus on the big picture
3. reach beyond existing demand
4. get the strategic sequence right
5. overcome organizational hurdles
6. build execution into strategy
D
ontcom
petewithrivals,make
t
hemi
rre
levant
VALUE INNOVATION creates a leap in Value for
customers as well as for the company
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R
ed
vs.
Blue
RED OCEAN BLUE OCEAN
Compete in existing market
space
Create uncontested market
space
Beat the competition Make the competition
irrelevant
Exploit existing demand Create & capture new
demand
Make the value/cost trade-
off
Break the value/cost trade-
off
Align the whole system of a
firms activities with its
strategic choice of
differentiation OR low-cost
Align the whole system of a
firms activities in pursuit of
differentiation AND low cost
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Martyn MENSAH
Identifyindustry
success factors
Compare withcompetitors (i)
Challenge theorthodoxy
THINK
IMAGINE
DESCRIBE EMPATHIZE
Compare with
competitors(ii)
EXECUTE
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Four Action Framework
Eliminate
Reduce
Raise
Create
Which of the factors
that the industry takes
for granted should be
eliminated?
Which factors shouldbe reduced well below
the industry standard?
Which factors shouldbe created that the
industry has never
offered?
Which factors should
be raised well below
the industry standard?
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0
1
2
3
4
5
6
7
8
9
10
Bank A Bank B fut Loan Shark Bank B b4
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Sincere and purposeful thought
Understand your industry but
dont be afraid to IMAGINE it tobe different
Know that every great achievementbegan as a thoughtan idea
Be Customer Obsessive
Be true to yourself
THINK!
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G A P
The Power of ExecutionThere are a million excellent strategic plans in the
corporate worldOnly a few succeed The difference is in execution
Developing the ideas does not automatically result intheir execution
Be Aware of the:
KNOWING DOING
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Why Strategies Fail
The IDEA was wrong
The walk does not match the talk.
Irrelevance it is out of touch with reality.
A vision or strategy should never be viewed as a magiccure for organisational ineffectiveness and inefficiency.
It is not sharedFair process (3Es)
It lacks implementation focus/execution focus.
It lacks vertical & horizontal fit.
It lacks stretch Business as usual
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The Secret to winning..1. Throw out the old perspective
2. Scrutinize the environment & customerworld for blue ocean opportunities
3. Learn to manage the most powerfulresource the mind (IDEAS &IMAGINATION)
4. Reach beyond existing demand
5. Think through execution as you develop
strategy6. Win by making the competition
irrelevant
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We succeed only as we identifyin life, or in war, or in anythingelse, a single overridingobjective, and make all other
considerations bend to that oneobjective.
Dwight Eisenhower
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The Art of WarSun Tzu
Knowledge of the problem is key to
its solution
Plan for what is difficult while it iseasy, do what is great while it is
small. The most difficult things in
the world must be done while they
are still easy, the greatest things in
the world must be done while theyare still small. For this reason sages
never do what is great, and this is
why they can achieve that
greatness.
Do something before it exists, sensesomething before it becomes
active, see something before it
sprouts.
Luke 14:26-33
26If anyone comes to me & does not hate
his father & mother, wife & children,
brothers & sisters, yes, and his own life
also he cannot be my disciple
27 And whoever does not bear his cross
and come after me cannot be my disciple
28 For which of you intending to build a
tower does not sit first & count the cost
whether he has enough to finish it. 31 or what king going to make war against
anther king does not sit down first &
consider whether he is able with 10,000
men to meet him who comes against him
with 20,000?
32 or else whilst the other is still a great
way off he sends a delegation and asks
conditions of peace