Strategic Thinking March 4, 2011

1. Strategic ThinkingMarch 4, 2011 How to Take a Strategic Approach to Your Everyday Work v.4.1

2. Strategic Thinking Defined A skill set and a habit of mind for more deliberately considering the best courses of action for creating value for one’s enterprise that results in a way that: • systems • processes • people behave to create a competitive advantage.

3. Key Subject Assumptions Strategic Thinking • Complex skill • Responsibility of all • Part of daily work • Habits of mind and tools & skills needed • Individual and collective • Can be dangerous

4. Early Lessons in Stakeholder Value • Raw Materials • Display Stand • Refrigeration • Signage • Labor • Transportation • Taxes

5. Current Discussion • Middle East Uprisings • Apple’s product launch strategy (iPad v.2 launch)

6. Competitive Advantage The Importance: Competitive Advantage

7. Exploring Perspectives Discerning Significance Involving Others in Strategic Conversations Envisioning Possibilities Strategic Thinking Model What is going on? What might we do about it? What does it mean?

8. Strategic Thinking Model What happens if any of these three disciplines are weak and poorly executed? What are examples of companies or organizations executing these three disciplines differently?

9. Examples in Your Company Exploring Perspectives • What questions are you asking today? • What data do you gather? Discerning Significance • Technology? Regulatory? Economics? Other….? • Impact? Envisioning Possibilities • What scenarios can you envision? • What scenarios can’t you envision?

10. 2 Assessment of Current State 1 Desired Future Strategy and Implementation 3 Where are we now? How will we get there? Where do we want to go? Strategic Thinking and Effective Choices

11. Strategic Conversations Strategic Thinking Strategic Action Linking Thought and Action

12. Leader-Strategist as Lone Genius “A general must see alone, meaning that he must see what others do not see and know what others do not know. Seeing what others do not see is called brilliance, knowing what others do not know is called genius. Brilliant geniuses win first, meaning that they defend in such a way as to be unassailable and attack in such a way as to be irresistible.” Sun Tzu, The Art of War

13. Self-Assessment • Rate yourself on each question • Add scores as indicated • Share results with a partner • Identify one challenge/focus

14. Exploring Perspectives Discerning Significance Involving Others in Strategic Conversations Envisioning Possibilities Exploring Perspectives

15. Bird’s-eye View Treetop View Ground View 3-D Thinking: Level

16. 3-D Thinking: Position

17. Possible Global Population Growth Scenarios Highest Growth Scenario Lowest GrowthScenario Highest Growth Scenario Developing Countries Developed Countries Lowest Growth Scenario 3-D Thinking: Time

18. Strengths • Weaknesses • Opportunities • Threats Strategic Data Gathering Environmental Trends and Changes • Industry Success Factors • Competitor Information • Market Information • Organizational Core Competencies

19. Data Collection Plan • Check data your organization gathers • Identify additional data to collect • Assign team members • Share plan with a partner

20. Strategic Drivers

21. Positive Negative (Weaknesses-Threats) (Growth-Opportunity) • New technology available in marketplace • New competition External Forces Drivers of Change • New capabilities—people or systems • Loss of key personnel Internal Conditions Strategic Drivers Map

22. What is Driving Your Strategy? • Review strategic drivers • Identify 2-3 drivers per quadrant • Identify 2-3 drivers with biggest impact

23. Exercise: Challenging Assumptions

24. Implications Wheel

25. Implications Wheel • Choose one strategic driver • Brainstorm primary effects of driver • Brainstorm secondary effects • Determine action steps to respond to driver • Discuss with a partner

26. In Summary: Exploring Perspectives Means to Improve in this Discipline: • People • Data

27. Exploring Perspectives Discerning Significance Involving Others in Strategic Conversations Envisioning Possibilities Discerning Significance

28. Discerning Significance - What Does it Mean? Strategic Thinking requires interpreting information and developing the judgment or discernment to determine the fuller significance of information. Discerning Significance involves: • Making decisions about relevance and impact of information • Being able to discern key pieces of information, weigh their importance • “SEEING” the broad picture, implications, opportunities, and threat

29. Steps of Discerning Significance • Validate information • Understand context and system • Clarify what has been learned

30. Linear Solution to a Complex Problem • Our mental model Influences how we “see” the problem • Simple problem should result in a simple solution • Dynamic problem enables many possible “right” answers

31. Clarify What Has Been Learned • Different ways of categorizing lead to greatly differing results and therefore conclusions • Context shapes perception • Single information source hinders validating data • Emotion = part of equation

32. Bird’s-eye View Treetop View Ground View Discerning the System

33. Levels of Explanation Focusing on: • Event • Pattern of behavior • Systemic causes

34. Blip, Fad, Trend or Cycle? Blip: Quick flash or spot of light Fad: Fashion taken up with great enthusiasm Trend: Direction of movement; course Cycle: Periodically repeated sequence of events

35. Recognizing Patterns In the past hour, have you noticed any significant patterns that might be impacting our learning?

36. Exploring Perspectives Discerning Significance Involving Others in Strategic Conversations Envisioning Possibilities Envisioning Possibilities

37. Envisioning Possibilities - What are the options? Robust Strategic thinking involves the imaginative capacity to project oneself and one’s business into not just a single future, but a variety of futures. Envisioning Possibilities involves: • Identifying a range of options, choices, and moves available • Playing out scenarios and testing them-evaluate outcomes • Laying out pro’s and con’s of specific courses of action-draw conclusions

38. Four Elements of a Scenario • Current state • Future environment • Strategic approach • Desired future state

39. A “Good” Scenario • Connected to mission and goals • Neither too reactive nor too grandiose • Have flesh and color • Tested out • Easily understandable and actionable

40. Key Stakeholders Current State Future State Strategic Conversations ________________ ________________ ________________ ________________ Strategic Approach/Actions ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ Driver Assumptions Strategic Blueprint

41. The Work of Strategic Leadership

42. Transferring Your Learning • Identify behaviors you want to • Start • Stop • Continue • to be a more effective strategic thinker

43. Thinking about Your Organization • Select a key challenge • Identify 1-3 related organizational factors • Identify 1-3 strategic actions to take

44. Exploring Perspectives • Data Collection Plan • Strategic Drivers Map • Implications Wheel Discerning Significance • Scenario Planning • Strategic Blueprint Involving Others in Strategic Conversations Envisioning Possibilities • Opportunities • Tips for Resistance • Blip, Fad, ... • Organizational Perspectives Map Takeaways