Module 2 - Strategic Thinking

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If everybody is thinking alike, then someone isn’t thinking. General George S. Patton

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Strategic thinking

Transcript of Module 2 - Strategic Thinking

Page 1: Module 2 - Strategic Thinking

If everybody is thinking alike, then someone isn’t thinking.

General George S. Patton

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VCU School of Business Mgmt 642 - Session 2 2

What is the right mind-set for thinking about strategy?What is the problem with a competition-to-be-the-best mindset?

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Ensuring that a firm has Sustainable Competitive Advantage means that a great deal of strategic thinking (and maybe some luck) has been going on…

Recent decisions (experiments) impacting well known brands –

•McDonald’s goes all vegetarian in India•Chipotle experiments with catering •Apple considers cheaper iPhone model•Dell considers going private

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• Ordinary Intuition• Vague hunch; gut feeling; form of emotion; not thinking.

• Expert Intuition• Drawing rapid conclusions based on education, knowledge, and

experience.

• Strategic Intuition Requires that you recognize when a situation is new. Turn off your expert intuition. It is about the future. It is the way strategic innovation is created

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• Every advance in society is based on a new idea.• Since (most) everything we

sense, feel (emotion), think and do is biologically based in the

brain, to understand how ideas are created, we must understand how the brain works.

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The art of strategy depends on the ability to think both critically and creatively, to use all parts of the brain interactively to generate Flashes of Insight.

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The Four Steps of “coup d’oeil” – a “strikeof the eye” What is?

1.Intelligent memory 2.Presence of mind 3.The Flash of Insight 4.Resolution

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Steve Job's Speech

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“It is in the highest importance in the art of detection to be able to recognize out of a number of facts which are incidental and which are vital. Otherwise your energy and attention will be dissipated instead of being concentrated.”

Sherlock Holmes

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Collection of hard data(the scientific skills)

Collection of soft data(the perceptual skills)

Accumulation of facts andevaluation of probabilities

Accumulation of uncertaintiesand ambiguities

Use of analytical models todefine the opportunities

Use of intuition to definethe opportunities

Unique interpretationOf the opportunity

Th

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ati

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al T

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Science Art

Logic without emotion is a chilly, Spock-like existenceEmotion without logic is a weepy hysterical worldA Whole New Mind

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Strategic Intuition:

•What is the distinction between analysis (the Jomini model) and intuition (the von Clausewitz model)? •Describe how one’s personal experiences sets the stage for strategic intuitive thinking.•What does presence of mind mean?•Have you ever had a flash of insight? If so, describe it.•Summarize the Gates and Allen story about the start-up of Microsoft as it illustrates Duggan’s view of strategic intuition.

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1. AssociatingAbility connect seemingly unrelated questions, problems or ideas from

different fields.2. Questioning

Don’t look for the right answers, ask the right questions“Why?” “Why Not?” “What if?”

ObservingScrutinize common phenomena, esp. behavior of customers and others messing around in your space.

ExperimentingTry out new ideas by creating prototypes and pilots learning experientially

NetworkingNetworking with diverse set of individuals provides different perspectives and new ideas.

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Data with meaning and relevance becomes information which is collected through experience and learning.

Information that is understood, and enhanced by identification of patterns and trends (often built on statistical analysis) becomes Intelligent Memory or knowledge.

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Decision Making:•A manager constantly makes decisions•The question: How do we make these decisions?•In short, How do we think?•Do we use passion or reason?•Are we creative or analytical? Can We be both?

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?_r=2&pagewanted=all%3Fsrc%3Dtp&smid=fb-share

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VCU School of Business Mgmt 642 - Module 214

Decision Making:

Target’s Guest Marketing Analytics department crunches data to develop insights that help target marketing and advertising campaigns. Target analysts managed to develop a pregnancy prediction score based on a customer's purchasing history of 25 products; they also manage to estimate a woman's due date "within a small window" and can send women advertising that aligns very well with the stage of their pregnancy.

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• Paradigms are our maps of reality, based in part on facts we have learned, and in part on opinions or assumptions we have developed.

• Like any map, they have limitations. They may be incomplete or inaccurate.

• Need to learn to recognize them, in ourselves and in others

• Then need to be willing to question their validity

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Thinking “in the box” – Dogmatic paradigms that are not open to question

Thinking often needs to be “outside the box” Don’t be too sure; keep looking

If you do not expect it, you will not find the unexpected

Dr. Loren EisleyThe Unexpected Universe

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A Bend in the Road A Change in direction

The elements:Begin with existing knowledge, theories or models

+Add new data or information

+Your own reason

=An InsightThe Bend

Past FutureNot a Leap but a

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There is a creative process: The Idea The Investigation The Flash of Insight Kairos: the moment to commit Experiential learning

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• Critical thinking – not negative criticism• But, rational, disciplined, analytical, unbiased reasoning based upon an objective view of reality• Confronts the brutal facts of reality• Critical thinkers do not ignore their emotions but rather are aware of them, attempt to control them, and are not driven by them.

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• The context or situation• Our personality and that of others who are involved• Our morals, ethics and values• Our paradigms• Our intellectual honesty• Our aptitudes, knowledge and experience

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The Business artist is the entrepreneur. A definition:

“The art of business requires the intuitive ability to grasp the essence of a unique market situation, the creative ability to

devise a practical solution, and the strength of purpose and skill to execute the act.”

Entrepreneurship is a highly intuitive and creative way of thinking critically

“Talent” hits a target no one else can hit; “Genius” hits a target no one else can see. - Anonymous

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The pessimist sees difficulty in every opportunity. The optimist see the opportunity in every difficulty. -Winston Churchill

Creative ThinkingArt or Science?

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Entrepreneurs: Who they are – traits, tastes, abilities, interests What they know - education, training, experience, expertise Who they know – social and professional networks Who knows them - reputation

Creative ThinkingWhat Makes Entrepreneurs Entrepreneurial?

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Entrepreneurs start with Imagining what they can do with their means Some sense of what they want to do What’s closest at hand Move almost directly into action without elaborate planning Live and breathe execution – exploring and learning

through experience as they react and change Eventually, emerging effects coalesce into clearly

achievable and desirable goals

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Innovation is the tool of the entrepreneur

Systematic innovation is to strategy as R&D is to invention - Drucker

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Loss of objectivity. Over optimism. Biased analysis/Agenda/Ideology. Escalating commitment. Stops analyzing, starts selling. Attitudes

Lack of expertise and relevant experience. Well intentioned incompetence

Blind spots

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Buddha – “What we think is what we become”Collins and the Ancients:

Success or Arête: A reinforcing cycle of excellence and ambition

Hubris: Excessive pride, arrogance born of success, leads to overreaching

Denial or Ate: Isolation from reason Denial or Nemesis: desperate self destruction

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Strategic Intuition:

•What is the distinction between analysis (the Jomini model) and intuition (the von Clausewitz model)? •Describe how one’s personal experiences sets the stage for strategic intuitive thinking.•What does presence of mind mean?•Have you ever had a flash of insight? If so, describe it.•Summarize the Gates and Allen story about the start-up of Microsoft as it illustrates Duggan’s view of strategic intuition.

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How the Mighty Fall: Jim Collins

Hubris born of Success : Excessive pride, arrogance born of success

Undisciplined Pursuit of More: Overreaching capabilities and infrastructure

Denial: Isolation from reason and the brutal facts

Grasping for Salvation: Desperate self destruction

Capitulation to Irrelevance or Death: Unable to rebound from significant set backs

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Know your limits

Never exceed your limits. You push the envelope, and you live for those moments when you are right on the edge, but you don’t go over…You have to know your strengths and limitations and live within your means….The sooner a company tries to be what it is not, the sooner it tries to ”have it all”, the sooner it will die.

Yvon Ghouinard, founder of PatagoniaLet my people go surfing – p74

Why Do Successful Companies Fail?

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