Chapter 4 focus on the big picture, not the numbers

1. Chapter 4focus on the big picture, not the numbers Presentation By: Robert Brinkmann, Justin Weden, Courtney Karcasinas, Stephen Gonzalez, & Adam Hall

2. Objectives • Focusing on the Big Picture • Drawing You Strategy Canvas • Visualizing Strategy at the Corporate Level • Overcoming the Limitations of Strategic Planning

3. Focus on the Big Picture, Not the Numbers • Principle is key to mitigating the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves. • Based on drawing a strategy canvas. • Opens the companies’ eyes to Blue Oceans

4. Focusing on the Big Picture • Strategic Profile of an Industry • Strategic Profile of Competitors • Strategic Profile of Company • Focus, Divergence, and a Compelling Tagline

5. Drawing your Strategy Canvas • Visual Awakening • Visual Exploration • Visual Strategy Fair • Visual Communication

6. Drawing your Strategy Canvas

7. Step 1: Visual Awakening • Common mistake is discussing strategy changes before resolving differing opinions • Another problem; executives are often reluctant to accept change

8. EFS Example • Divided senior managers into two teams to develop two value curves • Managers had a hard time agreeing on competitive factors. • Different factors were important to different managers

9. Both teams presented the value canvases to the rest of the group • The value curves demonstrated a lack of organizational focus • Curves mirrored competitors’ curves, and there were major contradictions between them.

10. After looking at the curves, EFS realized their top competitor was leaving the red ocean • Faced with these facts EFS realized it was time for a change

11. The Four Steps of Visualizing Strategy

12. Step 2: Visual Exploration • Go into the field to explore the six paths to creating blue oceans. • Observe the distinctive advantages of alternative products and services. • See which factors you should eliminate, create, or change.

13. The Four Steps of Visualizing Strategy

14. Step 3: Visual Strategy Fair • Draw your “to be” strategy canvas based on insights from field observations. • Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.

15. EFS: Before and After High EFS’s “After” Strategy Low

16. The “After” Strategy • Eliminated highest-cost elements • Relationship managers • Account executives • Emphasized: • Ease of use • Security • Accuracy • Speed • Frees up Corporate Dealers Time • Richer Market Commentary (key success factor)

17. Value Innovation

18. The Four Steps of Visualizing Strategy

19. Step 4: Visual Communication • After determining your future strategy, it must be communicated throughout the corporation. • EFS did this through distribution of a one page picture.

20. EFS: Before and After High EFS’s “After” Strategy Low

21. Eliminate-Reduce-Raise-Create: EFS

22. The distributed picture became a reference point for all investment decisions. • Only ideas that helped move EFS from the old value curve to the new curve were given the go-ahead. • EFS IT Department example

23. Visualizing Strategy at the Corporate Level • Visualizing Strategy can greatly inform the dialogue among individual business units and the corporate center in transforming the company from a red ocean to a blue ocean player. • To do this companies can have their individual business units complete their own Strategy Canvases.

24. When individual business units present their strategy canvases to one another they: • Deepen their understanding of the other businesses in the corporate portfolio. • Foster the transfer of strategic practices across units.

25. Using the Strategy Canvas: Samsung • In 1998 Samsung Electronics established the Value Innovation Program (VIP) Center • Core cross-functional teams from their various business units come together to discuss their strategic projects. Typically focused on the unit’s strategy canvases. • The teams assist one another in making their product and service offering decisions using the value innovation knowledge they have developed.

26. Since 1999, Samsung has held a annual Value Innovation Corporate Conference. • Through the use of these VIP branches and conferences great value for their customers. • As wells as establishing the common language and corporate culture that drives the company from red oceans to blue.

27. Pioneer-Migrator-Settler Map • Pioneer • Offer unprecedented value • Migrator • Offer improved value • Settler • Offers value the same as competition

28. Pioneers • Blue Ocean strategists • Source of profitable growth • Mass following of customers • Value curve diverges from competition

29. Settlers • Me-to businesses • Not contribute much to growth • Stuck in Red Ocean

30. Migrators • Lie in between Pioneers and Settlers • More for less • Don’t alter basic shape of value curve though • Improved value, but not innovate value • Strategy falls in between Red and Blue Oceans

31. Change • Senior executives should move portfolio towards pioneers • Settlers have marginal growth potential but are usually cash generators • Pioneers have the most potential but use cash when expanding

33. Overcoming Limitations • Creative component instead of being analysis-driven • Motivational and invoking willing commitment • Move away from bargaining-driven which produces negotiated commitment • Need to still discuss numbers but that will fall in place as you go