MANAGING CHANGE

STRATEGICALLY
J. Michael (Mike) Geringer, Ph.D.
O’Bleness Professor of International Strategy
Director, Center for International Business – College of Business
email: geringer@ohio.edu

October 2013
Materials in this packet copyright © by Geringer & Associates, Inc.
Do not quote, cite, reproduce or otherwise infringe without written permission.

Leading Change in Turbulent Times

Executive Education Seminar
 WHAT IS STRATEGY?

How would YOU define strategy?

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 WHAT IS STRATEGY?
Strategy is the pattern evident in the fundamental
choices a firm makes about developing &
deploying scarce resources to achieve & maintain
a unique & valuable position

involves a set of activities
different from competitors, yet
consistent among the activities
… the pieces form a coherent whole

© Geringer & Associates, Inc.

 WHAT IS STRATEGY?
Strategy is about being different in ways
that add value & are clearly better
V Valuable
R Rare
I Hard to imitate or
substitute for
O Organizationally
able to develop,
sustain, & capture benefits

© Geringer & Associates, Inc.

 WHAT IS STRATEGY?
Strategy deals with
configurations of activities

how activities fit with & reinforce each other

how to constantly upgrade & leverage
capabilities to sustain competitive advantage

Deciding what not to do is as

important as deciding what to do

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PERSPECTIVE ON STRATEGY FROM THE
CEO OF A LITTLE $150 BILLION
COMPANY…

“Look, what is strategy but resource

allocation? When you strip away all
the noise, that’s what it comes down
to. Strategy means making clear-cut
choices about how to compete. You
cannot be everything to everybody, no
matter what the size your business or
how deep its pockets. You have to
figure out what to say “NO” to.”
Jeffrey Immelt, CEO, General Electric
 IMPORTANCE OF CLEAR STATEMENTS OF
STRATEGY

• Clear strategy statements leave no room for misinterpretation

– facilitates communication, empowerment & resource
allocation

• Strategy statement of Edward Jones:

“To grow to 17,000 financial advisors by offering
trusted and convenient face-to-face financial advice to
conservative individual investors who delegate their
financial decisions, through a national network of one-
financial-advisor offices.”

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 A CLEAR PROCESS PROVIDES
STRUCTURE
Macro
Environmental
Analysis (O&Ts)
• PESTE

Evaluate Current Evaluation

Performance Industry Strategy • Resource
• Mission, Values, Analysis (O&Ts) Options Requirements
Vision • Structure • Business Unit • Risk/return
• Goals & Objectives • Evolution • Corporate Implementation
• Strategies • Competition • Making it happen
Analysis & Position

Company
Analysis (S&Ws)
• Structure
• Resources
How do we get there?
• Processes
• Staffing
• Culture Where should we go?
Where are we
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 ACHIEVING SUCCESS: IMPORTANCE
OF KEY SUCCESS FACTORS (KSFs)

KSFs: Those skills or resources that a firm

must master
• To compete in a particular market or
segment
• By delivering what customers value & are
willing to pay for © Geringer & Associates, Inc.
 WHAT IS THE PURPOSE OF
KEY SUCCESS FACTOR ANALYSIS?
KSF analysis provides a framework to build shared
understanding of:
– What players in our industry have to be good
at
– How this is changing
– What our current competitive position is
– How to develop our competitive advantage
– How to allocate our resources

© Geringer & Associates, Inc.

 INDUSTRY LIFE CYCLE INFLUENCES
KEY SUCCESS FACTORS
Life Cycle Dynamics & Sources of Competitive Advantage
Distinctive Competence
or Skill Needed

Product Concepts
Creativity Manufacturing Skills
Design Capabilities Process Technology
New Technologies or Methods Process Refinements
(favors smaller firms early on) Cost-Based Drivers
(favors larger firms
over time)
Segmentation &
Differentiation (finding &
serving attractive niches)

Emerging Growth Maturity Decline

Time

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YOUR CURRENT & FUTURE BUSINESS
MODEL DETERMINES KSFs
Describes overall competition & differentiation strategy
Describes customer value proposition
Operational Excellence
• Low costs
• Good standard quality & service
• Process synchronization Note: Try to indicate
both current & desired
future position

Product leadership
Customer focus • State-of-the-art
• Customization
products / offerings
• Deep, long-term
• Speed to market
relationships

© by Geringer & Associates, Inc.

GETTING “STUCK IN THE MIDDLE”:
NO CLEAR COMPETITIVE POSITION
• Competitive strategies are generally mutually
exclusive
• A clear competitive position is critical to
successful implementation
• A strategic change must be total:
all operations must be realigned across your
company’s chain of activities in order to
support the new strategy

© by Geringer & Associates, Inc.

 Strategy is INTERNAL
Key Point:
as well as EXTERNAL

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ACHIEVING STRATEGIC SUCCESS:
DISTINCTIVE COMPETENCIES
Competencies should define strategy
• Company-specific effects account for ~30% - 45% of
variation in performance among firms, vs. ~20% for
industry effects
• Should define business around distinctive skills, not
end products/markets

A distinctive competence: what a company does

better than anyone else, distinguishing your
company competitively

© Geringer & Associates, Inc.

 COMPETENCE GAPS & STRATEGIC
ALTERNATIVES

Strategy Environment

Key Success Factors

© by Geringer & Associates, Inc.

 COMPETENCE GAPS & STRATEGIC
ALTERNATIVES

Strategy Environment

Competencies Key Success Factors

© by Geringer & Associates, Inc.

 COMPETENCE GAPS & STRATEGIC
ALTERNATIVES

Strategy Environment

Competencies Key Success Factors

Competency Gap

© by Geringer & Associates, Inc.

 COMPETENCE GAPS & STRATEGIC
ALTERNATIVES

Strategy Environment

Competencies Key Success Factors

Competency Gap Exit

Internal Development Acquisition Strategic Alliance

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 THE STRATEGIC MANAGEMENT
PROCESS IS NOT JUST TOP-DOWN

Objective
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Operational Plans

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Tactics
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 BENEFITS OF STRATEGIC
MANAGEMENT
Use of systematic process, vs. decision or
document, is primary contribution
• aim of process: improved
understanding & commitment from all
managers & employees through
involvement in process
• helps people develop strategic
mindset
Process provides
opportunity to empower
people
© Geringer & Associates, Inc.
CHALLENGE ASSUMPTIONS ABOUT
HOW TO COMPETE
 WORLDVIEWS
• Understand how you filter
information to create meaning
• Challenge your filters so you don’t
miss anything important
• Understand your filters & those for
whom you are doing the scanning
• And…try & understand worldviews
of the people you are scanning –
which ones have blind spots, and
about what activities or events?

© by Geringer & Associates, Inc.

 CRITERIA FOR EVALUATING STRATEGY
 Does your strategy fit what is going on in the environment?
Does your strategy recognize key trends, opportunities & threats in the market? Does it create value for
customers, now & over time? Will it be distinctive?
 Are the elements of your strategy internally consistent?
Have you made the necessary choices & do they all fit & mutually reinforce each other?

 Does your strategy exploit your key resources & capabilities?

With your particular mix of resources, does this strategy give you a good head start on competitors? Can
you pursue this strategy more economically than competitors?
 Do you have enough resources to pursue this strategy?
Do you have the money, managerial time & talent, & other capabilities to do all you envision? Are you
sure you’re not spreading your resources too thinly?

 Is your strategy implementable?

Will your key constituencies allow you to pursue this strategy? Can your organization make it through the
transition? Are you & your management team able & willing to lead the changes?

 Will your envisioned differentiation be sustainable?

Will competitors have difficulty matching you? If not, does your strategy explicitly include a ceaseless
regimen of innovation & opportunity creation?

© by Geringer & Associates, Inc.

The strategic management of change is about
being ready for the future rather than waiting for
it to bite you…
© Geringer & Associates, Inc.