Strategy

dilemmas

# 1: Outside-in vs. Inside-out.

# 2: Trying things out vs. Planning.
# 3: Creative thinking vs. Analytical thinking.
# 4: Creativity vs. Efficiency.
# 5: Continuous change vs. Revolutionary change.
# 6: Collaboration vs. Competition.
# 7: Inclusive / involving vs. Exclusive / isolating.
# 8: Company perspective vs. Business unit perspective.
# 9: Self management vs. Hierarchical management.
# 10: Shape markets vs. Adapt to markets.
# 11: Long term focus vs. Short term focus.
# 12: Globalization vs. Localization.

Strategy dilemma # 1
Outside-in
vs.
Inside-out

Question
Every company claims to be customer-focused.
Why do you think so few are able to pull it off?
Answer
Companies get skills-focused instead of
customer-needs focused.

Jeff Bezos

http://www.businessweek.com/magazine/content/08_17/b4081064880218_page_2.htm

Do all of innovations come from inside of the

firm, where we develop the new ideas
internally and execute them ourselves?

Or do we systems set up so that the ideas we

execute can come from anywhere, and some
of our own ideas end up being brought to
market by someone else?
http://timkastelle.org/blog/2011/12/ten-tensions-in-innovation-revised/

Further inspiration
http://www.slideshare.net/frankcalberg/customer-needs
http://www.slideshare.net/frankcalberg/pestel
http://www.scribd.com/doc/36349465/Capital

Strategy dilemma # 2
Trying things out
vs.
Planning

Experiments require short-term

experiments require short-term losses for long-term gains

losses for long-term gains.

http://hbr.org/2010/04/column-why-businesses-dont-experiment/ar/1

http://www.innovationmanagement.se/2011/11/15/unlearn-your-mba/, minute 11.

The discovery model reflects what a

company is like in its start-up phase. In this
period management is likely to be relatively
informal, and even vague about how work
should get done and to what end.
Google began life using the discovery
model, and to some extent still does.
http://www.ft.com/cms/s/0/6ce11196-35f3-11df-aa43-00144feabdc0.html

When pharmaceutical companies conduct clinical trials to test the

safety and efficacy of their drugs as part of the process for
obtaining regulatory approval, some patients receive the drug and
others some standard existing treatment or a sugar pill (placebo).
A comparison of the two sets of results tells us whether the drug
improves patients symptoms and has side effects.
Many potential changes in your organizations can be subjected to
a similar experiment: implement the change in some places,
but not in others, and compare performance in the two groups
to learn whether the change is effective.
http://blogs.hbr.org/2014/10/experiment-with-organizational-change-before-going-all-in/

Strategy dilemma # 3
Creative thinking
vs.
Analytical thinking

Creative approach:
From few to many possibilities

Idea
Idea

Idea
Smelling
Thinking

Idea

Observing

Hearing

Idea

Reading
Communicating

Idea
Idea

Idea

The abductive logic is oriented

towards the future, what you
imagine may be possible.
To innovate, stop using the 2
words prove it.
http://youtu.be/txhBTi1STn8
http://youtu.be/e7pk8DOtsYw

Research by Marius Usher shows that when

people made choices based only on instinct,
they made the right call up to 90% of the time.

http://blogs.hbr.org/hbr/nayar/2013/05/listening-to-your-inner-voice.html

Analytic approach:
From many to few possibilities

Analysis

Analysis

Result
Analysis

Analysis
Analysis

Question
When it comes to innovation, what is the biggest
challenge that you see organizations facing?

Roger Martin
It is the dominance of analytical thinking which holds that unless
something can be proven by way of deductive or inductive logic,
it is not worthy of consideration or investment. No new idea in
the world has been proven before being tried. So as long as
analytical thinking is allowed to dominate, innovation is deeply
and profoundly challenged.
http://www.innovationexcellence.com/blog/2012/06/15/balancing-intuition-with-analysis/

The inductive and deductive logic

is based on the past experiences.

Focus is on proving things.

http://youtu.be/txhBTi1STn8
http://youtu.be/e7pk8DOtsYw

Further inspiration
http://www.slideshare.net/frankcalberg/creativity-exercises
http://www.slideshare.net/frankcalberg/creativity-and-innovation-6546087

Strategy dilemma # 4
Creativity
vs.
Efficiency

Industrial firms thrive on reducing variation

(manufacturing errors);

Creative firms thrive on increasing variation

(innovation).
Reed Hastings
http://hbr.org/2014/01/how-netflix-reinvented-hr/ar/1

To be creative
Think outside the box.

To be efficient
Stick to your knitting.

Explore what you dont know.

Exploit what you know.

Anticipate future customer needs.

Meet current customer needs.

Allow freedom and flexibility.

Demand accountability.

Avoid process and encourage

unstructured interaction.

Impose process and structure.

Govindarajan, Vijay & Trimble, Chris: 10 Rules for Strategic Innovators, p. 5.

http://www.vijaygovindarajan.com/2006/03/strategy_as_transformation.htm

Strategy dilemma # 5
Continuous change
vs.
Revolutinary change

Toyota implements a million new ideas a year, and most of

them come from ordinary workers. (Japanese companies get a
hundred times as many suggestions from their workers as U.S.
companies do.) Most of these ideas are small - making parts
on a shelf easier to reach, say - and not all of them work.
But cumulatively, every day, Toyota knows a little more, and
does things a little better, than it did the day before.
http://www.newyorker.com/talk/financial/2008/05/12/080512ta_talk_surowiecki

Kai = Change.
Zen = Good.

Continuous change

Revolutionary change

Proactive
Change

Continous improvement

Creative destruction

Reactive
Change

Adapt / adjust

Turn around

Strategy dilemma # 6
Collaboration
vs.
competition

Santander went into partnership with Funding

Circle. The bank recognized that a segment of its
customer base wanted access to peer-to-peer
lending and acknowledged that it would be costly
to build a world-class offering from scratch.
http://www.mckinsey.com/insights/strategy/strategic_principles_for_competing_in_the_digital_age

Sharing information and expertise is a great

way to build trust with your competitors.
http://blogs.hbr.org/2014/02/use-co-opetition-to-build-new-lines-of-revenue/

Strategy dilemma # 7
Inclusive / involving
vs.
Exclusive / isolating

How should companies react

to creative external people?

Active

Passive

Resist

Enable

Actively restrain what creative

customers do with product /
service.

Actively facilitate what creative

people do with product /
service.

Discourage

Encourage

Ignore what creative customers do

with product / service.

But dont actively

facilitate.

Degree of positive attitude towards customer innovation

http://www.slideshare.net/IanMcCarthy/when-customers-get-clever-managerial-approaches-to-dealing-with-creative-consumers

Executives at organizations that are experimenting with more

participatory modes of strategy development cite two major benefits:
Benefit # 1
Improving the quality of strategy by pulling in diverse and detailed
frontline perspectives that are typically overlooked but can make the
resulting plans more insightful and actionable.
Benefit # 2
The second is building enthusiasm and alignment behind a companys
strategic direction.
https://www.mckinseyquarterly.com/Strategy/Strategy_in_Practice/The_social_side_of_strategy_2965

Further inspiration
https://delicious.com/frankcalberg/crowdsourcing
http://www.slideshare.net/frankcalberg/rethinking-recruitment-8077077

Strategy dilemma # 8
Company perspective
vs.
Business unit perspective

Wal-Mart stores established its digital

business away from corporate headquarters
to allow a new culture and new skills to grow.

http://www.mckinsey.com/insights/strategy/strategic_principles_for_competing_in_the_digital_age

In the long run, internal competition

causes every participant to lose.
When leaders look for ways to encourage
cooperation and generate common goals,
they become more successful.
http://blogs.hbr.org/cs/2013/02/how_poor_leaders_become_good_l.html

Strategy dilemma # 9
Self management
vs.
Hierarchical management

Few participants

Many participants

Closed
decision
process

Open
decision
process

Use of crowdsourcing /
social media

Further inspiration
http://www.slideshare.net/frankcalberg/3-ways-of-organizing
http://www.slideshare.net/frankcalberg/good-leadership

Strategy dilemma # 10
Shape markets
vs.
Adapt to markets

Adapting is preferable when key sources of

value creation are relatively stable or
outside the companys control.

https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Making_the_most_of_uncertainty_1128

To put things simply, when it faces very high

levels of uncertainty about variables it
can influence, shaping makes most sense.

https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Making_the_most_of_uncertainty_1128

A shaping strategy is best in unpredictable

environments that you have the power to change.

In new or young high-growth industries where barriers to

entry are low, innovation rates are high, demand is very hard
to predict, and the relative positions of competitors are in flux,
a company can often radically shift the course of industry
development through some innovative move.
http://blogs.hbr.org/cs/2012/09/know_which_strategy_style_is.html

A shaping strategy embraces short

or continual planning cycles.
Flexibility is paramount, little reliance is placed
on elaborate prediction mechanisms, and the
strategy is most commonly implemented as a
portfolio of experiments.
http://blogs.hbr.org/cs/2012/09/know_which_strategy_style_is.html

Strategy dilemma # 11
Long term focus
vs.
Short term focus

Short term

Long term

Dynamic

Fire extinguishing

Proactive

Static

Inactive

Further inspiration
http://www.slideshare.net/frankcalberg/time-15259416

Strategy dilemma # 12
Globalization
vs.
Localization

Further inspiration
http://www.slideshare.net/frankcalberg/globalization-and-localization

Thank you for your interest. For further inspiration

and personalized services, please feel welcome to visit
http://frankcalberg.com
Have a great day.