The Alaska Gold Mine

The Alaska Gold Mine

• You have taken a three-month option on a
possible gold mine in Alaska. During your trek
and exploration, you have remained relatively
healthy except for an injured left hand which
sometimes can suddenly become quite weak.
With two weeks to go before your option
expires, you have finally discovered gold in
what appears to be good quantity. You have
exactly two weeks to get to the claims office. If
you arrive late and attempt to secure the
property with the owners knowing you have
visited it, they will probably hold an auction, at
which you, given your limited resources, could
easily be outbid.
• The weather is only moderately favorable; a
mountain storm may be brewing. You will know
within 48 hours if the storm is coming and will
know whether the mountain is passable (if the
storm comes) about one day later.
The Alaska Gold Mine
Here are your alternatives:
1. Wait three or four weeks until
the weather warms up and
enjoy a safe trip home.
The Alaska Gold Mine
Here are your alternatives:
2. Go over the mountains. This is
dangerous. It is sometimes
impassible. It is quick, however
(usually 7 to 10 days), if you can
make it without harm. If you
encounter storms or are injured
before you reach the top, you will
probably have to turn back. In
either case, you may perish,
because the longest part of the
journey is on the way over the top.
The Alaska Gold Mine
Here are your alternatives:
3. Go through the valley passes.
This is less dangerous and is
usually passable. However, it
is slow and tiring. Most
people can usually complete
this journey in two to three
weeks.
The Alaska Gold Mine
Here are your alternatives:
4. Wait two to four days, take
#2 if the weather permits; if
not take #3. (There is no
advantage to waiting if you
prefer #3 anyway, and
waiting to take #1 = #1).
 Gold Mine
(You have 14 days)
Possible Personal
Option Min Time Max Time Gain Risk
#1
(wait 3-4 weeks)

#2
(over top)

#3
(valley)

#4
(wait 3 days)
 Gold Mine
(You have 14 days)
Possible Personal
Option Min Time Max Time Gain Risk
#1 (wait 3-4 No $$$ None
weeks)

#2 (over top)

#3 (valley)

#4 (wait 3 days)
 Gold Mine
(You have 14 days)
Possible Personal
Option Min Time Max Time Gain Risk
#1 (wait 3-4 weeks) No $$$s None

#2 (over top) 7 days 10 days For sure Life

$$$s
#3 (valley)

#4 (wait 3 days)
 Gold Mine
(You have 14 days)
Possible Personal
Option Min Time Max Time Gain Risk
#1 (wait 3-4
No $$$s None
weeks)

#2 (over top)
7 days 10 days For sure Life
$$$s
#3 (valley)
14 days 21 days Maybe None
$$$s
#4 (wait 3 days)
 Gold Mine
(You have 14 days)
Possible Personal
Option Min Time Max Time Gain Risk
#1 (wait 3-4
No $$$s None
weeks)

#2 (over top)
7 days 10 days For sure Life
$$$s
#3 (valley)
14 days 21 days Maybe None
$$$s
10-13 days 12-21 days $$$, if top Win if no storm
#4 (wait 3 days) Lose, if storm Lose if storm
to top to valley
 Gold Mine
(You have 14 days)

• Framing—other options
– Valley 3 days, then reassess
– Bluff
– Bring a sat phone next time so that you can
order a helicopter 
 CONCEPTUAL OVERVIEW

The Environment -
GOAL
“Threats & Opportunities”

Management’s values &

STRATEGY
attitude toward risk

Capabilities -
“Strengths & Weaknesses”
 Part II
• Assume you chose the valley pass (#3). Five days later you are halfway
there. But, you may have pushed too hard as you sprained your ankle.
Fortunately, you run into Pat, and old friend on a trapping expedition. Pat
could get you to the claims office and offers to take you. If you were
healthy, you could get there easily in 7 days, but you cannot make it alone
without a few days rest, and even then it could take 10 days or more,
depending on how your ankle holds up. Traveling together, you might make
it in 10 to 14 days. If you tell Pat about the gold and make a deal, Pat alone
could get there in 8 to 10 days.
• Your are not sure whether Pat can exercise the option and file the claim
correctly, because Pat is not bright, tends to drink in excess, and is not the
single-minded hustler that you are. Pat is a simple, decent person who likes
trapping but would, you suspect, both need and desire financial
independence. You think you could trust Pat if you offer to split 50-50,
because Pat would need your expertise to capitalize on the discovery.
• What is your decision? Go it alone__ Go with Pat__ Send Pat__
 CONCEPTUAL OVERVIEW

The Environment - GOAL

“Threats & Opportunities”
Implementation Levers:

Management’s values &
attitude toward risk
Organization structure
Systems and processes
People and rewards
STRATEGY Strategic Leadership:

Lever and resource

allocation decisions
Develop support among
stakeholders
Organization’s resources
and capabilities -
“Strengths & Weaknesses”

Performance
 Strategy Formulation &
Implementation

Implementation Levers:
Organization structure
Systems and processes
People and rewards
Realized &
Intended
Emergent
STRATEGY Strategic Leadership:
STRATEGY
Lever and resource
allocation decisions
Develop support among
stakeholders