Strategi 2: Strategiprosess Sesjon 2

1. Strategi 2:StrategiprosessSesjon 2 Bjarne Kiil, Ph. D. Professor II, Institutt for strategi Strategi 2, 2001 vinter, sesjon 2

2. Plans, planning and process • Strategy formation process and perspective • Situational needs for plans (Businessplans, IPO, etc) Strategi 2, 2001 vinter, sesjon 2

3. Planning (Programming) • Incrementalism • Logical incrementalism • Strategic Intent • Combinations Different and similar? Strategi 2, 2001 vinter, sesjon 2

4. Comments to the 10 Paradoxes • How integrateable? • Project observations extremes extremes Strategi 2, 2001 vinter, sesjon 2

5. The ten strategy tensions WM 2nd edition 1.1 Strategi 2, 2001 vinter, sesjon 2

6. The rational thinking versus generative thinking perspective Strategi 2, 2001 vinter, sesjon 2

7. Planning versus incrementalism perspective Strategi 2, 2001 vinter, sesjon 2

8. Discontinuous change versus continuous change perspective WM 2nd edition, 4.1 Strategi 2, 2001 vinter, sesjon 2

9. Chapter 5: Introduction W&M Strategi 2, 2001 vinter, sesjon 2

10. Portfolio versuscore competence perspective WM 2nd edition, 6.1 Strategi 2, 2001 vinter, sesjon 2

11. Industry evolution versusindustry creation perspective WM 2nd edition, 8.1 Strategi 2, 2001 vinter, sesjon 2

12. Organizational leadership versus organizational dynamics perspective WM 2nd edition 9.1 Strategi 2, 2001 vinter, sesjon 2

13. Strategy formation is essentially an innovation process (Increasingly, widely accepted) Strategi 2, 2001 vinter, sesjon 2

14. Strategic Planning (Programming) • Characteristics (adv./disadv.) • Modifications (Ansoff, Max, James Quinn) • Not abandon, but improve • Adopting • Too rational/removing obstacles • Comment to “the debate” Strategi 2, 2001 vinter, sesjon 2

15. Professionalizing the planner's job by making strategic planning a science Excessive emphasis on quantification for strategic decisions Unqualified acceptance and misapplication of techniques for strategic analysis Inertia toward an overrationalized planning process The drive for administrative efficiency Is your planning system becoming too rational? Strategi 2, 2001 vinter, sesjon 2

16. Planning process audits • Do those engaged in the planning process understand its basic purpose and structure? • Does the strategic planning process facilitate the identification and interpretation of strategic issues? • Is there a balance between quantitative and qualitative information that sets the stage for innovative thought and action? • Given the utility of information obtained, is the time required to gather and interpret it excessive? Strategi 2, 2001 vinter, sesjon 2

17. Does the planning process provide a means for fully discussing dissenting viewpoints? • Are managers encouraged and rewarded for entrepreneurial initiatives? • Are intangibles such as managerial values, aspirations, and acknowledged responsibilities to society explicitly incorporated into final strategic choices? • Does the process provide adequate time for strategy implementation and evaluation? Strategi 2, 2001 vinter, sesjon 2

18. Organizational consequences • Senior executives Withdraw • Line managers Losing support send same mixed signals to subordinates • Strategic planner Trapped i an "intellectual cocoon of abstractions" • Board members Difficulties in comprehending the complexity and scope of corporate actions Strategi 2, 2001 vinter, sesjon 2

19. Guidelines for preventing an overrationalized planning process • Developing a planning culture • Probing evaluation of plans • Producing the "right numbers" • Force managers to articulate themselves in words instead of numbers • Planning process audits Strategi 2, 2001 vinter, sesjon 2

20. The root causes of failure in strategic planning Strategi 2, 2001 vinter, sesjon 2

21. Incrementalism (emergent strategy) • Characteristics • Strategic direction, vision? • ”Fall and rise” ”Not figuring out in advance, but finding out as things unfold” Strategi 2, 2001 vinter, sesjon 2

22. The fall and rise of strategic planning • Planners shouldn't create strategies, but they can supply data, help mangers think strategically, and program the vision • Strategic planning isn't strategic thinking - one is analysis, and the other is synthesis • Planners should make their greatest contribution around the strategy-making process rather than inside it Strategi 2, 2001 vinter, sesjon 2

23. Real strategic change requires inventing new categories, not rearranging old ones • the goal of those who promote planning is to reduce managers' power over strategy making • Where in the planning literature is there a shred of evidence that anyone has bothered to find out how managers make strategies? Strategi 2, 2001 vinter, sesjon 2

24. Sometimes strategies must be left as broad visions, not precisely articulated, to adapt to a changing environment • Planners as strategy finders • Planners as catalysts Strategi 2, 2001 vinter, sesjon 2

25. Logical Incrementalism(Planning, analysis, emergent) • Logical = “reasonable and well-considered” • Characteristics • James Quinn’s summing up Strategi 2, 2001 vinter, sesjon 2

26. Logical incrementalism(The dynamics of change processes - grounded theory)Seeking: Normative guidance to the strategist • Observation: Such incrementalism is not muddling. It is a purposeful, effective, proactive management technique for improving and integrating both the analytical and behavioral aspects of strategy formulation • Precipitating events - shape future • Analytical - create preparedness, awareness Strategi 2, 2001 vinter, sesjon 2

27. Incrementalism in strategic subsystems • Cope with both the cognitive and process limits on each major decision • Build the logical-analytical framework these decisions require • Create the personal and organizational awareness, understanding, acceptance, and commitment needed to implement the strategies effectively Strategi 2, 2001 vinter, sesjon 2

28. Strategy emerges Strategy deals with the unknowable, not the uncertain. It involves forces of such great number, strength, and combinatory powers that one cannot predict events on i probabilistic sense. Hence logic dictates that one proceed flexibly and experimentally from broad concepts toward specific commitments, making the latter concrete as late as possible in order to narrow the bands of uncertainty and to benefit from the best available information. This is the process of logical incrementalism. Strategi 2, 2001 vinter, sesjon 2

29. Strategic Intent • Concept – “Hybrid”? • Strategic “lighthouse” • Operationalisation (emergent) • Taking the concept one step further (operational) • “One” steppingstone to revolution/innovation? • Business models Strategi 2, 2001 vinter, sesjon 2

30. Vaule = Alliance Concord Peter Hoegan Hallingdal EMBRA SCI Oslo Oslo Readymix SCI Akmene Skåne Finland Baltic cement export Principal alliances behind the growth in Embra Strategi 2, 2001 vinter, sesjon 2

31. Strategic intent Strategicintent Focus Time horizon Effectiveoperation Strategi 2, 2001 vinter, sesjon 2

32. Level of ambition Strategic intent Preferred direction Basis for discovery Principle functions of strategic intent Strategi 2, 2001 vinter, sesjon 2

33. Strategic intent • Within 1995 the company should have established business operations with a realistic potential for considerable profitability based on an external turnover in 97/98 of a different magnitude than the current level • Heavy building materials (bulk) shall represent a large proportion of our product portfolio • The company shall be receptive to entering business activities involving considerable operations in areas outside Scandinavia • The company shall focus on operations with the possibility of achieving an acceptable power position within a period of 3-5 years • The company shall establish a business system, based on the Norwegian and Swedish operations, in which the distribution of power in the business system gives the possibility to operate with a normal acceptable profit level Strategi 2, 2001 vinter, sesjon 2

34. Strategic intent and intent manifestation • Principal strategic intent • Intent derivatives • Supportive / implicit intent Strategi 2, 2001 vinter, sesjon 2

35. Principal intent 9 3 5 7 1 2 4 6 8 Intent derivative 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 87 88 89 90 91 92 93 94 95 34 36 38 41 42 43 44 45 46 47 48 49 50 51 52 53 28 29 30 31 33 32 27 35 37 39 40 Supportive / implicit The numbers refer to item Nos. in table X Strategic intent manifestation Strategi 2, 2001 vinter, sesjon 2

36. "Strategic interaction box" Intent derivatives, support derivatives strategic based interactions Multidimensional alliance Strategic intent Awareness Discovery Structure Negotiation outcome Exploration and negotiation "Operational viability box" Analysis and interaction for operational viability Integrated business development model Strategi 2, 2001 vinter, sesjon 2

37. Factors facilitating discovery Awareness Decision preparedness Operational involvement Strategic intent and intent derivatives Industry knowledge history and dynamics Demanding creative home base Search Network Extensive travel Strategi 2, 2001 vinter, sesjon 2

38. Dimensions of board and strategist interaction Strategic suitability Board/ strategist role Operational acceptability Decision preparedness Strategi 2, 2001 vinter, sesjon 2

39. Elements of decision preparedness Industry competence Case information Decision preparedness Resolve to decide Strategi 2, 2001 vinter, sesjon 2

40. Exploration for structure (possibility space) Exploration for ambition of negotiation outcome Exploration Relative importance Firmness Time Exploration during negotiations, polarised model and gradual shift model Strategi 2, 2001 vinter, sesjon 2