Senior Managers Program

Strategy Formation &

Strategy Execution
Hamish Scott
27-29 November, 2022

Triple Accredited – Benchmarks of the Quality and

Standards in Education we provide
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
Learning review
Focus on the essential formula

LONG TERM PROFIT POTENTIAL COMPETITIVE ADVANTAGE

OF INDUSTRY OF FIRM
PROFITABILITY
OF
= or +/- IN THAT
MARKET SECTOR
FIRM
SEGMENT

Two fundamental Where will be the How should we beat

questions for pots of gold? others to them?
managers

McKinsey research about what 25% of your success 40% of your success
drives success:
 Can we build competitive advantage?

Do we get competitive advantage from…

Our 1. the way we do things: our processes, our internal relationships (internal architecture)
organisation 2. our relationships with our customers and suppliers (external architecture)
architecture
3. our networks, our relationships with complementors
Our reputation 4. our goodwill and brand
5. the reluctance of customers to switch from us and face risk
Our ability to 6. our ability to innovate faster
innovate 7. our ability to turn that innovation into advantage

Our strategic assets 8. the natural monopoly that comes from our scale
9. the prior investment in assets, or skills or reputation
10. exclusivity of locations or contracts or technology
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
Strategy Paper - sample
Making the case
Deductive argument

What we need to deal with

Proposed
What we could do action

What we should do: Reasoning

Proposed (benefits of my proposal)
action
Evidence that proves the benefits

Inductive argument
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
What gets in the way of
successful implementation
Mindsets
An organisation wedded to
the status quo
Can’t see the way forward
Resources Alignment
An organisation with An organisation with
insufficient resources to inappropriate structures,
make the change processes, culture
Can’t afford to implement Can’t deliver the strategy

Motivation Politics
An organisation with people not An organisation with
minded to change powerful resistors
Can’t muster the effort Can’t stop the vetoes
The alignment model

High-level
An organisation should be Strategic Choices
fully aligned with its
strategic choices Organisational Operating
Methods Processes

Culture & People &

Attitudes Skills

Leadership
Tushman & O’Reilly
Method & Style
Identify alignment challenges
Complete an Alignment model analysis

Choose a
high-level
Transform into an ecommerce leader delivering service beyond rivals
goal of
organisation

What would a
perfect
alignment
look like?

What
changes are
needed to
achieve
better
alignment?
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
What gets in the way of successful
implementation
Mindsets
An organisation wedded to
the status quo
Can’t see the way forward
Resources Alignment
An organisation with An organisation with
insufficient resources to inappropriate structures,
make the change processes, culture
Can’t afford to implement Can’t deliver the strategy

Motivation Politics
An organisation with people not An organisation with
minded to change powerful resistors
Can’t muster the effort Can’t stop the vetoes
Mental models may be useful to an
organisation

Mental Model = shared views, maybe unconscious

About:

How we do things - eg “customers come first”

What matters most - eg “safety comes first”

What makes someone good - eg “a helpful worker is a good worker”

What our future holds – eg “our growth will continue”

Mental models may be useful to an
organisation ….or toxic
Mental Model = shared views, maybe unconscious Toxic assumptions are those shared views
that you take for granted
We assume that: but don’t have to be
and may hold back your ability to see
“we dont need to pay market rates because everyone the new opportunity,
wants to work at the BBC” a better way,
a bigger problem.
“the government will always fund the BBC”

“all around the world, people wait for the BBC news”
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
 Change
House
▪ "We are the best!”
▪ Very bureaucratic
THE ▪ Ignoring the outside world
CONTENTMENT
ROOM
 Change
House
▪ "They are responsible”
▪ "Yes, but.....”
THE
CONTENTMENT ▪ Persecute the innocent
ROOM
▪ Protect the guilty
▪ "It can't happen to us"
THE
DENIAL
ROOM

Source Claes Jensen

 Change
House
▪ Hire and fire!
▪ A new strategy every day!
THE ▪ Lots of uncoordinated
CONTENTMENT initiatives
ROOM
▪ Consultants in large numbers
▪ Hiring from outside
THE THE
DENIAL CONFUSION
ROOM ROOM

Source Claes Jensen

 Change
House ▪ "Let's make it happen!”
▪ High motivation and energy
▪ Taking responsibility
THE THE
CONTENTMENT RENEWAL ▪ Trust and delegation
ROOM ROOM
▪ Continuous improvement in things
that matter

THE THE
DENIAL CONFUSION
ROOM ROOM

Source Claes Jensen

 Change
House
Move your
THE
CONTENTMENT
THE
RENEWAL
people to the
ROOM ROOM
next Room
THE THE
DENIAL CONFUSION
ROOM ROOM

Source Claes Jensen

From Contentment To Denial
▪Facts!

▪Get people to consider the benchmarks

▪Get people to listen to the customer
▪Provide data / stories on how well other companies are
doing
▪Provide news-givers with a platform
From Denial To Confusion

▪Increase the shocks - layoffs, 4 day week, etc., and start behaving differently
▪Expose the majority of the employees to the problem
▪Avoid providing solutions
▪Support those with energy looking for solutions
▪Fire those really stuck in denial
From Confusion To Renewal

▪Provide a vision and a direction

▪Sell solutions, don't tell!
▪Focus on the first steps
▪Keep feeding back results quickly
▪Use cross-functional teams
▪Reward new behaviours / performance
▪Encourage experimentation
Preventing Slippage Into Contentment

▪Constantly ratchet performance targets

▪Keep providing feedback - both internal and external
▪Keep refining and transmitting the strategy
▪Celebrate success but always link to new targets / objectives / visions
▪Seek next change issue
CHANGE HOUSE: Key Messages

▪You can only go one way through the house - but slippage is
possible
▪Different groups will be in different rooms, for different time
spans...…
▪..and you need different strategies to move them on
▪There is no end point
YOU managing CHANGE

▪Think of a change that your area is facing

▪Where are the people? Place them in the Rooms

▪Identify the different communications and activities to move them around the House
Agenda
Your needs, your starting point
The imperatives:
1. Address the three components of strategy
2. Run a strategy development process, with purpose & posture
3. Plan for the level of uncertainty
4. Define the basic question
5. Build strategy architecture
6. Develop the full set of ‘how’
7. Put structure into innovation
8. Analyse markets for pots of gold and what wins
9. Sell the strategy and structure the strategy
10. Design for organisational alignment
11. Remove the toxic assumptions
12. Manage people through the process of change
What do you take away?