Session 03- 04

Strategic Thinking
1

Formal Planning
- Very analytical - Preservation and rearrangement of established categories –the existing levels of strategy Real strategic change demands inventing new ones rather than such a rearranging the established categories.

Adapted from Mintzberg, H (1994)

2

Strategic thinking generates the creative act of synthesizing experiences into a novel strategy (Synthesis of the insight to transform the company).

Synthesis: combining of elements into a whole.

3

Suppresses managers’ creative thinking. strategic planning is not strategic thinking. Indeed.Outlined step-by-step instructions for carrying out those strategies.Expected to formulate best strategies .Based on the manipulation of numbers (analysis) that spoils strategic thinking . . The most successful strategies are visions.… Strategic planning: . not plans Adapted from Mintzberg. H (1994) 4 .

Planners can help strategists for strategy processes through formal analyses (or supplying hard data) rather than influencing to discover the one right way.… ‘Strategy-making process should be capturing what managers learn from all sources (soft and hard data) and then synthesizing that learning into a vision of the direction that the business should pursue’ (Mintzberg 1994). H (1994) 5 . Adapted from Mintzberg.

or vision. has really been strategic programming. as it has been practiced. 6 . b joint. 1994. the articulation and elaboration of strategies. Articulation: act or mode of jointing. that already exist. Mintzberg.Strategic Programming ! Strategic Planning.

The outcome of strategic thinking is an integrated perspective of the enterprise. Intuition: immediate insight or understanding without conscious reasoning. It involves intuition and creativity. Synthesis: combining of elements into a whole. a not-too-precisely articulated vision of direction… Adapted from Mintzberg. 1994.7 .What Strategic Thinking is ? Strategic Thinking is about synthesis.

awkward. evolve through strategic thinking. and formalizing those steps) and immaculately conceived. cannot be emerged on schedule (set of steps. 8 . They must be free to appear at any time and at any place in the organization. through messy processes of informal learning at various levels of the organization. Adapted from Mintzberg.Strategic Thinking: Emergent Strategies Strategies. H (1994) Immaculately= perfect messy : difficult to deal with.

Strategy making goes beyond the boxes. life is larger than our categories. 9 .

not a committing style • To reduce the power of management over strategy making. 10 .The pitfalls of planning • Calculating style of management.

misleading argument. 11 .Fallacies of Strategic Planning • Prediction: the world is supposed to stay the same while a plan is being developed and implemented • Detachment: strategists can be detached from the subjects of their strategies • Formalization of strategy making process Fallacy: 1 mistaken belief. 2 faulty reasoning.

12 .“Innovation has never been institutionalized. Systems have never been able to reproduce the synthesis created by the genius entrepreneur or even ordinary strategist” Strategic planner is trying to paint the big picture with little strokes who abstracts the daily details (Mintzberg 1994).

how many times are intuitives correct in their judgment. 13 . 1994. But how many organizations are so blessed? And. if they are.Strategic Thinking: an act of geniuses ? If an organization is managed by intuitive geniuses there is no need for formal strategic planning. George Steiner in Mintzberg.

s/he likes to find strategies in strange places and encourage others to think strategically. As a soft analyst.Handed Planners • Analytic thinker: S/he is dedicated to bringing order to the organization • Creative thinker: S/he seeks to open up strategy-making process. 14 .and Right.Left.

15 . when they are used for more than the facilitation of human thinking. they can suppress thinking • Strategic planning has a greater use without arbitrary formalization.Danger of Formalization • It limits (or badly affect) our creative activities • Systems do not think. and a contribution around the strategy making process.

Three Kinds of Thinking Process Problem Prototype Mechanical Systems Thinking Intuition Strategic Thinking Process of Thought Analysis of Essence Solution Rearrangement of Elements Local optimization or Seeing the Tree not the Forest 16 Transformation of Changed Configuration .

representations.prototype : original as a pattern for imitations. 17 . improved forms.

Setting Organizational Direction: Industrial Foresight and Strategic Intent 18 .

What is Industry Foresight? A deeper insight A deeper insight of the future of the future 19 .

deeper than the competitors & Transform industry boundaries and create a new competitive space 20 .Gaining an understanding of the trends and discontinuities of the environment.

How to See the Future Looking Outward Spending much time to look in to the external issues rather than internal ones Looking Forward Spending much time for understanding the future rather than dealing with current issues Build a collective view of the future Consulting colleagues to build a collective view of the future and 21 the ways of dealing with it. .

Informs corporate directions Stakeout a leadership position in the market Lets the company control the evolution of the industry Lets the company control its own destiny 22 .Why Industry Foresight Quest for industry foresight Gaining an understanding of the trends and discontinuities deeper than the competitors.

What it requires? • Creativity and imagination • Unlimited Curiosity • Desire to spend a great amount of time on understanding the future • Significant expenditure of intellectual energy • Willingness to move far beyond the issues on which it can claim expert status 23 .

.What it requires?. • Not being customer-led but be much more than that: (Desire to do more than satisfying customers – amazing them) • Not taking competitors as benchmarks • Going beyond traditional modes of market research 24 ..

cede : formal give up one's rights to or possession of 25 .Led • Customers are notoriously lacking in foresight.The Danger Of Being Customer. • Meeting only the articulated needs of customers already served you cedes vast opportunities to more farsighted competitors.

LED C U S T O M E R N E E D S Unarticulated Articulated Today’s Business Served Unserved CUSTOMER TYPES 26 .THE DANGER OF BEING CUSTOMER.

Strategic Fit Vs Strategic Intent 27 .

? Strategic Fit ? • Tries to create a fit between the existing resources of a company and current environmental opportunities. and not enough upon building new resources and capabilities to create and exploit future opportunities • Strategies formulated through this model tend to be more concerned with today’s problems than tomorrow’s opportunities 28 .

29 . which stretch a company. and then finding ways to build the resources and capabilities necessary to attain those goals.Strategic Intent The notion that strategy formulation should involve setting ambitious goals.

30 . Examples: • Komatsu set out to “Encircle Caterpillar”.Strategic intent envisions a desired leadership position and establishes the criterion the organization will use to chart its progress. • Honda strove to become a second Ford an automotive pioneer. Canon sought to “Beat Xerox”.

• Motivating people by communicating the value of the target. • Using intent consistently to guide resource 31 allocations. . • Sustaining enthusiasm by providing new operational definitions as circumstances change.Strategic intent concept also encompasses an active management process that includes • Focusing the organizations attention on the essence of winning. • Leaving room for individual and team contributions.

32 . but strategic management process should begin with challenging goals and.Strategic Intent vs. Strategic Fit • Two approaches are not mutually exclusive • Managers do have to analyze the external environment. through out the process the emphasis should be on finding ways to develop the resources and capabilities necessary to achieve these goals. analyze company’s resources and capabilities as they did in the fit model.

top management must: • Create a sense of urgency • Develop a competitor focus at every level through widespread use of competitive intelligence 33 .The role of strategic level managers on strategic intent For corporate challenges to lead to competitive advantage.

• Provide employee with the skills they need to work effectively • Give the organization time to digest one challenge before launching another • Establish clear milestones and review mechanisms. 34 .

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