MASTER CLASS IN PRACTICE STRATEGY

Transcription

1 MASTER CLASS IN PRACTICE STRATEGY Copyright, 2013 Paul W. Nakazawa. All Rights Reserved. This presentation includes third-party copyrighted material. For student and classroom use only. Unauthorized reproduction or distribution is strictly prohibited.

2 DISCIPLINE-PROFESSION-PRACTICE

3 DISCIPLINE PROFESSION - PRACTICE Basis and content Participation Authority Accountability Calibration to society Domain overlaps and tensions Discipline Origins in Antiquity Knowledge and Technique Fundamental questions and classes of problems; repertory, methodologies, processes. Agency Ethics and Responsibility Norms, standards, scalability/footprint Profession 19 th century project Practice The Now Value and Innovation Contingent questions and problems; strategy and selection, solutions and execution. Copyright, Paul W. Nakazawa. All Rights Reserved.

4 TRAJECTORY OF PRACTICE

5 PARADIGM SHIFTS IN PRACTICE Craft Clients Specialized knowledge Markets Strategy Development Issues Systems issues strategy specialized SPECIALIZED knowledge KNOWLEDGE craft CRAFT Copyright, 2012 Paul W. Nakazawa. All Rights Reserved

6 CALIBRATION TO DRIVERS OF CHANGE (MACRO) INCREASING RATE OF CHANGE/UNCERTAINTY EPHEMERAL TIMELESS SITUATIONAL/ EVENT-BASED ISSUES STRATEGY SPECIALIZED KNOWLEDGE THE CRAFT Copyright, Paul W. Nakazawa. All Rights Reserved. Population Growth/ Demographics/Patterns of Spatial Settlement/ Displacement Climate Change and Other Environmental Changes Globalization (integrated financial system; markets; trade; transportation; etc.) Culture, Media, Technology Social/Political Paradigm Shifts Economic Factors Competition for Natural and Human Resources

7 DESIGN OPERATIONS

8 DESIGN OPERATIONS proposition, rationale direction CONTEXT strategy CONDITIONS knowledge domains content design form and spatial solutions and integration delivery realization, product, result Copyright, 2012 Paul W. Nakazawa. All Rights Reserved

9 DEVELOPMENTAL ASSETS

10 DEVELOPMENTAL ASSETS IDEAS Intellectual capital Value propositions Knowledge/expertise Intellectual property IMAGE Symbolic capital Identity Reputation Brand equity NETWORKS Social capital Connectivity Constituencies Communities CAPABILITIES Core competences Platform/organization Technologies Financial Copyright, Paul W. Nakazawa. All Rights Reserved.

11 CALIBRATION OF PRACTICE DEVELOPMENT

12 OPERATIONAL EFFECTIVENESS

13 Operational effectivenes is not strategy. Michael Porter, Bishop William Lawrence University Professor, Harvard Business School

14 OPERATIONAL EFFECTIVENESS ( OE ) = Concrete + Actionable Quest for Productivity, Quality, Speed The language of operational effectiveness: best practices process improvement re-engineering total quality management

15 OPERATIONAL EFFECTIVENESS (OE) Higher performance, higher output, better quality, higher speed to market Fewer inputs, fewer defects/errors, lower production/delivery/ distribution costs Potential results: OE contributes to brand equity for enterprises where consistent performance and quality are essential. Market, operational and financial efficacy; improvements to firm s culture and workforce. Risks of reliance on OE as primary source of business advantage: 1. Hitting the productivity frontier maximum value that can be produced at a given price-point, employing all of the methods and techniques available at a given time. Raises the bar for a class of products/services/companies, but doesn t result in a sustainable competitive advantage for any player. 2. Producing competitive convergence, and subsequently, hypercompetition. Adapted from Michael E. Porter, What is Strategy? HBR s 10 Must Reads On Strategy, pp

16 TOTAL QUALITY MANAGEMENT Deming - originator of the quality management Movement. Landmark book, Out of the Crisis, The idea of quality management evolved from manufacturing to encompass enterprises providing products and services. TQM is a holistic approach that views improvement in all aspects of an enterprise as a continuous process, not a goal achievable over a fixed period of time. Example of a contemporary TQM model adopted for health services/hospitals.

17 LEAN PROCESS - DEFINITION The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources. A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste. To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.

18 LEAN PROCESS TACTICAL GROUNDWORK Source:

20 STRATEGY Strategy is not about being the best, it s about being unique. --- Michael Porter

21 Unique positioning, clear choices in differentiation Organization is not simply reactive to the market VISION Activities tailored to strategy OE is a given, not mistaken for strategy Activities are performed differently than competitors Diagram: Copyright, Paul Nakazawa. All Rights Reserved.

22 UPPER MIDDLE LOWER CONTEXT/ STRATEGY CONDITIONS/ EFFICIENCY

23 DIAGNOSE Clarity of purpose and objectives. Our unique strengths and abilities; our weaknesses. FORECAST - What does the future hold/look like? SEARCH - What are the future options for value creation? SELECTION - Choosing a path/approach? COMMIT - Commit to a strategy, communicate with and align stakeholders. Without this commitment, strategy is incomplete. PLAN Plans that produce proximate, tangible goals/outcomes. ACT - Mobilize around agreed strategy.

24 BLUE OCEAN STRATEGY

27 past_their_customers?cid=other-eml-alt-mkq-mck-oth-2410

28 BUSINESS MODELS Modeling Competitive Strategy

29 BUSINESS MODEL DEFINITION A business model describes the rationale of how an organization creates, delivers, and captures value. Alexander Osterwalder & Yves Pigneur, Business Model Generation

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34 CS CUSTOMER SEGMENTS Needs require and justify a distinct offer. Accessed through different distribution channels. Require different types of relationships. Substantially different profitability and/or risk class. Are willing to pay for different aspects of the offer. CS Types: Mass market. Niche market. Segmented (market or client segmented). Diversified (unrelated segments). Multi-sided platform (independent customer segments but all necessary). Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

35 VP VALUE PROPOSITIONS Value Propositions hypothesize the value for a Customer or Market Segment through a distinct mix of elements, such as: Newness. Performance. Customization. Design. Brand/status/exclusivity. Price. Cost and/or risk reduction. Access. Convenience/usability. Getting the job done. Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

36 CH - CHANNELS How customers want to be reached: Awareness of product/service. Evaluation of value proposition. Purchase of products/services. Delivery of value proposition. Post-purchase and post-delivery support. Channel types (for practices): Direct engagement/sales. Quality-based selection processes (QBS). Competitions. Indirect channels (e.g., third-party referrals, partner/teaming arrangements, etc.) Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

37 CR CUSTOMER RELATIONSHIPS Personal contact (initiation, cultivation, and retention of relationships). Co-creation (engagement with the customer/client to cocreate and in some cases to produce and deliver the value proposition). Communities of interest. Self-service and automated service (not appropriate for service-based firms). Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

38 RS REVENUE STREAMS Revenue from discrete transactions. On-going revenue streams. Contingent revenue. Types of Revenue Streams: Asset sale (physical products). Usage fee. Subscription, licensing fee. Leasing, rental. Brokerage fee. Fee for service. Pricing & Terms: T&M, fixed and dynamic pricing models. Standard professional service terms; non-standard terms; statutory terms. Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

39 KR KEY RESOURCES Knowledge-base. People with experience, skills. Capital, bankable. Facilities, equipment, technology infrastructure. Platforms (integrated creative, production and delivery). Related: Key resources that are owned and controlled vs. engaged by contract (e.g., consultants). Business and professional risk factors related to engaging/committing resources to clients and projects. Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

40 KP KEY PARTNERS Key Partnership Types: Strategic alliances between non-competing entities. Co-opetition partnerships between competitors. Joint ventures. Buyer-supplier value chain/value constellation. Key Partnership Motivations: Optimization and economies of scale. Reduction of risk. Completion of resources and competences required for a complete offer. Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

41 C$ - COST STRUCTURE Cost Structure: Cost-driven. Value-driven. Characteristics: Fixed costs (irrespective of volume). Variable costs (volume dependent). Economies of scale. Economies of scope. Differences between goods (tangible) and services (intangibles). Cost issues for the production/ delivery of services (what do we mean by: effectiveness, efficiency, productivity). Adapted from Business Model Generation by Alexander Osterwalder & Yves Pigneur.

42 STRATEGY RESOURCES

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47 This presentation includes third-party copyrighted material. For student and classroom use only. Unauthorized reproduction or distribution is strictly prohibited.