Intermediate Strategic Management

1. Intermediate Strategic Management Marco Clemente Spring 2014

2. What is this course about? "Execution is the only strategy that your consumers…ever see” “I have a great business idea, I will become billionaire” How many of you dropped it?

3. Strategyimplementationseems to bechallenging… 9 out of 10 companiesfail to executestrategy Source: Kaplan and Norton (1996, 2004)

4. How? Individual Work Experience / Doing (informally assessed) Group Work Class discussion Content (formally assessed in the exam) Companies’ presentation Lectures Book

5. Group work

6. About myself

7. 2004 2006 2014 2009 2013 2011 • P&G vs. Education: Strategy is more about sociology and psychology than economics • Research interest: Strategic implications of social misconduct, actions that contravene social norms, but are not necessarily illegal. • When is an organization (someone) punished for misbehaving? • Is an organization (someone) rewarded for behaving well? • In general,I love strategy, I think that can it can powerful tool to improve people life and make them achieve their goals and dreams Rome Marketing Manager Rome -Geneva PhD BA Management Engineering Msc in Management Erasmus Madrid

8. My mission statement To create emotional value in the world, through: • practicing (as a manager and entrepreneur) • studying (as a researcher), • mentoring (as a father and member of the community), • and teaching (as a professor) how individuals, organizations and countries can build a sustainable competitive advantage while respecting the values and norms of the social environment.

9. Agenda Administrativematters Introduction to StrategyImplementation Strategycommunication

10. Administrativematters

11. Course Objectives (assessed in the exam) After the course, the participant should (1) understand different schools in strategic management (2) and understand strategy implementation

12. Course structure and requirements 8 in-classsessions (Independent) study of textbook Examination

13. In-class sessions Five theory sessions on key topics of strategy implementation 3 guest speakers from practice • March 12 PiaKall, SVP Strategy and M&A, Outotec • March 17 TimoRaikaslehto, Partner, PwC Ari Viljakainen, Consulting, PwC • March 24 Kati Hagros, CIO & SVP, KONE Check possible in-class session schedule updates in Noppa! Attendance is expected (Exam partly based on sessions)

14. Why having a guest speaker? Provide real case examples (implementation of strategy implementation tools…) Know different companies / companies’ culture Examples for your job interviews They may (will) be your future bosses  Need some preparation for it!

15. Topicsthisspring February 26 Introduction to Strategy Implementation March 3 Strategy and Structure March 5 Managing through strategic controls • March 12 PiaKall, SVP Strategy and M&A, Outotec • March 17 TimoRaikaslehto, Partner, PwC Ari Viljakainen, Consulting, PwC March 19 Culture, leadership • March 24 Kati Hagros, CIO & SVP, KONE March 31 Strategic Change

16. Course Book Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, Strategy Safari, 2nd edition, Prentice Hall, 2009 12 chapters • 10 chapters: each for a school of strategy • 1 introduction / 1 conclusion

17. Exam First chance to take the exam: 09.04.2014 This course will be discontinued in 2014/2015. It will be replaced by another course to be announced later. Examrequirements • Lectures – contents and discussion • Textbook contents Course evaluation: 100% exam

18. Course communication The main source for information is the course home page in Noppa • News, schedule updates, assignments, exam results etc. will be published there You have the possibility to submit questions after each session. These will be discussed during concept reviews in one of the following sessions. • My email is marco.clemente@aalto.fi • The course assistant KalleKangasniemi: kalle.kangasniemi@aalto.fi • Assignments (individual and group) should be emailed to Kalle with me in copy • For logistics questions you can ask directly Kalle. For content-related questions you can also contact me directly. Pleasemention the coursecode and name in the subject of allcourserelatedcommunications

19. Feedback loop • The course was taught in 2012 (exam-only in 2013) • Key feedback: • The course book was not taught in class • Presentations should be more interactive / Brief and debrief for the presentations • The topic of strategic change should be given more attention

20. My personalObjectives (notassessed in the exam) After the course, the participant should (1) Know better herself or himself (2) Trying to understand the world through strategic lens (3) Apply strategic tools to her or his life

21. Group work 1/2 1. Presentation of the schools in the course book Each class there will be 2 (or 3) presentations of the schools Each group will present 1 school Each group will criticize the other presentation Send the presentation within 2 days before the class • Monday night for a Wednesday class • Friday night for a Monday class 2. Guest lecturer Each group need to read about the company and prepare some questions (company website, history, recent news)  We are going to discuss these questions the class before the presentation (send the questions in advance)

22. Group work 2/2 3. Twitter Post information on news/articles/pictures about companies about: • strategy implementation • execution (pictures) • More in general on strategic decision Username: ismspring2014 Password: Ismspring2014! Use #: group1 ‪#ismspring2014 group 2 #ismspring2014 ….

23. Individual work – Diary of the course What did you learn in class that you could apply to your personal or professional life? • Your own start-up • Future job as an employee • Your career objective • Relationship • Understanding reality / business news • …. Send it within the next day of the class I would give you my comments to the diary at the end of the course. I may take some sentences to discuss in class (anonymously!!!)

24. How? Individual Work Experience / Doing (informally assessed) Group Work Class discussion Content (formally assessed in the exam) Companies’ presentation Lectures Book

25. Strategic implementation Questions?

26. Strategic management • Strategic management includes understanding the strategic position of an organization, strategic choices for the future and turning strategy into action Strategic Analysis Strategy Creation Strategy Implementation Porter 5 forces VRIN framework Blue Ocean Strategy… Corporate strategy Business strategy Alliances M&A…

27. Sowhat is strategyimplementation • Strategy implementation refers to the methods for translating the chosen strategy into organizational action so as to achieve strategic goals and objectives.

28. Strategyimplementationseems to bechallenging… 9 out of 10 companiesfail to executestrategy Whywouldweseesuch a highfailurerate? Source: Kaplan ja Norton (1996, 2004)

29. Strategyimplementationseems to bechallenging… Source: Kaplan and Norton (1996, 2004)

30. Another viewpoint on implementation failure Source: L. Hrebiniak: Making strategy work, 2005

31. Levers of strategyimplementation Communication Structure Systems and Controls • Budgets • Incentives • IT infrastructure Culture & Leadership Change management

32. Strategy communication

33. Somethoughtsaboutstrategycommunication Twowaycommunicationversusonewaycommunication The principle of receiverbasedcommunication Emotionalcommitment Remember to KISS Less is more

34. The Communications Loop Transmission SENDER RECEIVER Feedback

35. Your audience – The feedback starts before the transmission! • Start by thinking of your audience needs • What is likely on your audience mind at the moment? • What are they likely looking for from you? • Frame your message to specific needs of the audience • The needs/interests of the CEO, mid managers and front-line employees are fundamentally different

36. How to win emotional commitment I KNOW I UNDERSTAND YES, I THINK I CAN I WILL gap P&G Leadership model - 5Es: ENVISION:  Create the future ENGAGE:  Build relationships & Collaboration ENERGIZE: Inspire others ENABLE:  Build capability EXECUTE:  Deliver outstanding results gap gap Providing people information is only the first step towards emotional commitment and action

37. Clear or Unclear communication?

38. Clear or Unclear communication?

39. Remember to KISS- Keep It Simple, Sam - • Less is better. • Don’t distract from the main point. • Don’t introduce anything that can distract the audience from your message – if they can get distracted, they will get distracted. • Not too many colors. • Not too much animation. The next 6 slides based on Henry (2007) the Art and Psychology of Effective Presentations

40. The Magic Number 7 • Psychological research has shown that our brains max out with more than 7 bits of information in a short period of time. • Organize your presentation to only 7 points. Or better yet, fewer. • If there are two points that are similar, group them. For example, “There was an decrease in headcount in Finance, Marketing and R&D.” Parallel construction of grammar helps organize points.

41. Next class • Group work: Guidelines: • Group 1 presents Design School and criticize Planning school • Group 2 presents Planning School and criticize Design school • 6mins for presentation + 6 mins for discussion • Convince the audience that your school is the best one, even if they are criticism • Apply the communication tips and try to link to the topics in class • Use words + images + examples

42. Class structure 5-10 minutes Twitter / discussion previous class Strategy implementation topic 30 minutes presentations on schools of strategy (5/10 minutes to discuss the questions for the guest lecturer)

43. 1st Diary Who are you / small background (program, work experience, international experience) Why you are enrolled in this course? What do you expect from this course? Provide a definition of strategy (even your own one) Where would you like to work? What did you learn in class that you could apply to your personal or professional life? • Your own start-up / Future job as an employee / Your career objective / Relationship/ Understanding reality / business news  Send it within the next day of the class

44. Otherdeadlinesnextweek

45. Group work 2/2 3. Twitter Post information on news about companies about: • strategy implementation • execution (pictures) • More in general on strategic decision Username: ismspring2014 Password: Ismspring2014! Use #: ‪#ismspring2014 group1 #ismspring2014 group2 ….