Career ExecutiveStrategic Officers

Presentation to the National Convention ofCareer Executive Service OfficersNovember 11, 2011 • Heritage Hotel, Manila

InternalExternal

Corporate Strategy

Strategy:

‘The pursuit of long-term goals

by applying valuable internal resources and capabilities to

the mostadvantageous

external opportunities’

Goals

The Strategy Pyramid

Alfred Chandler (1962):

“… the definition of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.”

Objectives Choice Allocation ImplementationOptions

A Planning View of Strategy

ImplementationChoiceOptions AllocationObjectives

An Emergent View of Strategy-Formation

Henry Mintzberg (1984):

‘Strategy in general, and realized strategy in particular, will be defined as a pattern in a stream of decisions’

The Strategy Cycle

Organisational Change Is Multi-Dimensionaland Synergistic

Strategies

Systems

Structures

The Virtuous Circle of Complementarities

Spelling Out Your Strategy• Objective (Ends)• Scope (Domain)• Advantage (Means) . . . in 35 words max

News Corporation‘To build a leading and profitable presence in both old and new

media, drawing on competitive advantages in terms of the scale, diversity and international range of our businesses’

Edward Jones‘To grow to 17,000 financial advisers by 2012 by offering trusted

and convenient face-to-face financial advice to conservative individual investors through a national network of

one-financial adviser offices’

Collis and Rukstad (2008), ‘Can You Say What your Strategy Is?’, Harvard Business Review

Internal Core competence Serious SWOT Value Innovation Activity Systems

External 5 Forces Profit pools Value net Scenarios

Corporate Strategy

Goals Three Horizons Strategy Statements Stakeholders Vision/Mission Strategizing Map

The Strategy Pyramid: Techniques

SWOT Analysis

From SWOT To Strategies

Start-Ups, Stars, Cows and Dogs

Shareholders and Stakeholders

Return on

Capital

Sales/Capital

Profit/Sales

Investors

Employees

Suppliers

Community

Customers

Shareholder view:The goal of the business is to maximise return on investors’ capital

Stakeholder view:The goal is to satisfy all those with legitimate stakes in the business

Managers

Stakeholder Mapping

Interest

Power

High

Low

Low High

Keep satisfied

Minimal attention

High attention

Keep informed

Styles for Radical Change

predictability urgency for radical improvement short-term targets

uncertainty and adaptive problems fast-changing industry long-term value and purpose

planning andmonitoring

detailed hands on control

hierarchical commandstructure

scenarios, intent and direction

values and purpose encouragement and

coaching

full-time programme management

critical path networks operational and

financial micro-measures

change as part of normal responsibilities

co-ordination through communication

balanced scorecards macro-measures

“need to know” involvement

following instructionsand procedures

top-down messages

extensive involvement breakthrough cultures self-initiated change

and learning

‘infrastructure’ redesign

facilitation and knowledge management

NavigationNavigation Leadership Leadership

Enablement OwnershipEnablement Ownership

Programmatic/Technical Leadership Transformational/Adaptive Leadership

Context Context

The challenge of engaging in change and the role of leadership

‘Technical Challenge’

• Set goal and task• Tell why• Explain what and how• Give instruction• Motivate• Measure and monitor

‘Adaptive challenge’

• Set the context• ‘Get on the balcony’• Describe a view of the future• ‘Give the work to the

people’• Manage conflict• Encourage, coach, challenge

Three Horizons: Thinking Strategically

Time (years)

Profit

Horizon 1 > extend and defend core business

Horizon 2 > build emerging businesses

Horizon 3 > create viable options

Source: M. Baghai, S. Coley and D. White, The Alchemy of Growth, 2000, Texere Publishers: Figure 1.1

Note: ‘profit’ on the vertical axis can be replaced by non-profit objectives; ‘ business’ can refer to any set of activities; ‘time’ can refer to a varying number of years.

The National Health Service Journey2000 2002 2004 2006 2008 2010 2012

Some keyoutcomes

• key illnesses• throughput• capacity

• health priorities• waiting times• financial stability

• quality, safety• patient experience• 18 weeks• credibility

• health & well-being• equity• joined up care

Self-sustaining Health

Transforming care system

ReconfiguringService Delivery

Financial Stabilisation

Growth, Expansion & Delivering the ‘Basics’

Targets &Performance Management

SHA/PCT/TrustsChoice & ProvidersCommissioningConnecting for Health‘REFORM’

Journey

Local Capability & Self-improvementBreakthrough & Innovation

Social MovementsCo-creation

Centre’s‘LEADERSHIP’ Journey

Technical LeadershipAdaptive Leadership

Target setter +Performance manager +Delivery leader

Regulator +National Standards +System leader

‘SERVICE’ Journey

A journey for the country?

1960 1970 1980 1990 2000 2010

Forming & awakening

Visioning & connecting

Unleashing and transforming

Adaptive leadership

Technical leadership

Building & reforming

Self-sustaining

Independence & identityControl over conflictStabilitySecurityStrong leadership

Good governanceEconomic reformInfrastructureRegulation & TrustFinancial systems Fight disease and povertyetc

Engaging everyoneCreating a visionRegional cooperationReputation buildingInward investmentImporting skills & knowledge

Competitive advantageExport led growthGlobal partnersInnovationPublic service transformationCommunity & citizen-led changeGovernment as enabler

2011

Complexity and Uncertainty

Purposes

Qualitativescenarios

Decisionscenarios

Scenariotracking

Sense making,and/or norming

Strategyformation

Continuous sense-makingof strategic environment

Publicscenarios

Engagement

Scenario Planning

Complexity: complex causes can have simple effects – emergence of order

Chaos: small causes can have large effects – unpredictability

Chaos and Complexity

Conventional Strategy View

Actions and resources are linear/curvilinear

Performance in vertical axis

Combinations of actions/resources in the horizontalaxes

- a world of smooth, single-peaked landscapes

Chaos Strategy ViewActions and resources form complementary, interdependent systems,with non-linear effects

- a world of rugged landscapes

Performance in vertical axis

Combinations of actions/resources in the horizontalaxes

High

Importance

Low

UncertaintyLow High

?

Scenario Drivers

WEF on Global Financial Systems

High

Importance

Low

UncertaintyLow High

Globalgrowth

Energy prices

Globalsavings

Demo-graphics

Info.security

Globaltrade

Financeliteracy

Corruption

Extrem-ism

NB: original has 30 factors

Change Strategies

Your teams are 5-6 strong, in a dense fog, with phones and altimeters, but no GPS, maps etc. Starting from a westerly position, design a strategy

to find the highest peak first in:

a smooth landscape world a rugged landscape world

Think about: decision-rules, team organisation, objective setting, competitor reactions, decision rights, planning, expectations management, incentives…

Complexity: complex causes can have simple effects – emergence of order

Chaos: small causes can have large effects – unpredictability

Metaphors of Chaos and Complexity

Today’s Agenda

• Creating a framework for strategic change– The what?– The how?

• Understanding and navigating the journey

• The challenge of complexity

• Some personal reflections and conclusions

How high is the bar…or is it a different sport?

TechnicalIncremental productivity,

efficiency, process streamlining, transactions

Known knowledge

Standardisation and consistency

Teach solution and motivate

AdaptiveRadical service or business innovation, new propositions,

transforming culture

Unknown and many solutions

Innovation, diversity and deviancy

Set purpose, challenge and coach

Type of change

Answers?

Focus of change

Leaders role

A Journey for the Country - UK past 100 years

‘Privatiser & regulator’?

‘Moderniser & transformer’??

A changing role for Government

‘Provider’?

Owner?

The view of the citizen

I belong I need I want I can

1900s 2000s

A Journey for the Country

‘Privatiser & regulator’?

‘Moderniser & transformer’??

A changing role for Government

Imperialism

Fiefdoms

Conflict

Independence

Identity

Survival

Democracy

Isolationism

Economic growthSafe and secure

Global partner

Leading the way

Health & wellbeing

‘Provider’?

Owner?

Financial stability

Leading change – horses for courses

‘Technical’ or ‘Programmatic’ Leadership

• Top down• Traditional• Tight programmes • Task prescription• Terrifying targets

‘Adaptive’ or ‘Transformational’ Leadership

• Enterprise or system wide• Entrepreneurial• Energising• Engaging everyone• Empowering

Where are you on your journey?Context and history?

Clarity on the ‘strategic intent’ and outcome/customer proposition?

Distinctive capabilities, culture, processes and infrastructure?

Stages of the journey – technical and adaptive challenges?

Approach and style of change – navigation, leadership, ownership, enablement?

Your collective and personal role?