Strategy for a Networked WorldUlf Mannervik

Founding Partner, NormannPartners

Director of Oxford Networked Strategy Lab, Oxford University

The Danish Management Society AGM, Copenhagen on 2 October 2017

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Systems

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Sources: NASA, Lawrence Livermore National Laboratory

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Renewables: Not if, but when and how

“For the second year in a row, renewable

energy accounted for more than half the new

power generation capacity added worldwide.

Sales of plug-in electric vehicles last year were

42 per cent higher than in 2015, growing eight

times faster than the overall market.”

May 18, 2017 FT.COM

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Source: The Beijinger

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Source: Frauenhoffer Institute

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When your system is invadedMusic industry incumbents 15 years ago

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Source: Apple, Napster and Spotify

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80 strategies that failed: why?

“Misleading prejudgments” = 82%

“Misleading experiences” = 64%

“Inappropriate self-interest”, including wanting to be popular = 69%

Source: Think again: Why good leaders make bad decisions – and how to keep it happening to you (Finkelstein, Whitehead, Campbell; 2008)

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Competitive strategyA value chain in automotive…

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Competitive strategyThe value chain view of a customer

A buyer of goods,

pays for it,

and destroys value

Source: Grassrootsmotorsports.com

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Competitive strategyStrategy = how to compete in an industry

Source: Porter (1980, 2014)

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TURBULENCE UNCERTAINTY

NOVELTY AMBIGUITY

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Networked strategySystems thinking, values in use

Sources: Normann (2001), Ramírez & Selsky (2014), Ramírez & Mannervik (2016)

SupplierStake

holder

The client’s system

Value co-created

Client

Stake

holder

Stake

holder

Stake

holder

Stake

holder*

* * *

**

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Networked strategyView of client + other actors

Pays for being

relieved or enabled

to create value(s)

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Networked strategyStrategy = Designing system interactions

Source: Ramírez & Mannervik (2016)

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Networked strategy in healthcareShift from value chain focus, to system

Dominant internal value: Technical performance

Dominant external stakeholder values: Quality of careCostAccess

R&D engineers

Health care providers

Medical specialists

Insurers

Patients

Government

Performance (accuracy, speed) and features

Performance and features

Quality of care

Quality of care and efficiency

Quality of care and comfort

Cost and health outcomes

Cost

Access

Access and cost

Quality of care

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Networked strategy in healthcareShift from competition, to collaboration

PROCESS+

▪ Scientifically validated medical protocols

▪ Efficient internal procedures

▪ Optimisedworkflows

PEOPLE+

▪ Highly qualified medical personnel

▪ Experienced consultants and managers

15%

15%

15%

BETTER OUTCOMES TECHNOLOGY

▪ Better imaging and diagnostic technology

▪ Software system

INFORMATION+

▪ Imaging information

▪ Care system information

▪ Scientific and historical evidence

=

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Systems+

Design

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Networked strategy with design thinking

What ”business”

are we in?

What ”business”

could we be in?

What ”business”

should we be in?

Closing/focusingOpening/distancing

Source: Normann

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A Scania value creating systemWhat business are we in?

Source: Ramírez & Mannervik

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Source: Ramírez & Mannervik

Scenarios stress-test: tensions rising in systemWhat business could we be in?

BIG SYSTEM WASTE +DRIVERS TO MINIMIZE

DRIVING FORCES FORCOMMODITISATION

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LOTS – a new value creating systemWhat business should we be in?

Source: Ramírez & Mannervik

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• Design, set up and operate sustainable logistics systems for recurrent flows

• Minimise waste in flows, and in interfaces between different actors

• Collaborate with local contractors to enhances their operations

• Multi-stakeholder benefits, with profitable sustainable growth for both

customers and their suppliers

Source: Lotsgroup.com

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Roles of system designer:- Identify and quantify waste- Identify and implement improvements- Can also operate the system

TRANSPORTCOMPANIES FORRESTRY

COMPANY

PULPMILL

PAPERMILL

WORKSHOPS

Vis

ual

mgm

tsy

stem

s

Efficient steady flows;Less use of chemicals

Efficient flows;Adapted to demand

€

€€

€€

Source: Lotsgroup.com (ADAPTED)

OEMs

Minimising waste in logistics systemsNetworked strategy design

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Distinct competences (NOT “core”):

• Expertise in road transportation

• Modular products and production systems

• Continuous improvement and lean operations

• Business designSource: Lotsgroup.com

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Source: Ramírez & Mannervik

System vision,and our rolein the system

Visionary leadership – A learning vision, guiding a transformation into a new value creating system

t

Iterative system designGuiding vision + prototyping

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• Stable or TUNA environment?

• Value chains or systems as strategy lenses?

• Main focus on competition or collaboration?

• Understand meaning of value for different actors?

• System leverage on your distinct competences?

Networked strategySome concluding considerations

Thank you!