CHAPTER 4 FOCUS ON THE BIG PICTURE, NOT THE NUMBERS Presentation By: Robert Brinkmann, Justin Weden,...
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Transcript of CHAPTER 4 FOCUS ON THE BIG PICTURE, NOT THE NUMBERS Presentation By: Robert Brinkmann, Justin Weden,...
CHAPTER 4FOCUS ON THE BIG PICTURE, NOT THE NUMBERSPresentation By:
Robert Brinkmann, Justin Weden, Courtney Karcasinas, Stephen Gonzalez, & Adam Hall
Objectives
Focusing on the Big Picture Drawing You Strategy Canvas Visualizing Strategy at the Corporate
Level Overcoming the Limitations of Strategic
Planning
Focus on the Big Picture, Not the Numbers
Principle is key to mitigating the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves.
Based on drawing a strategy canvas. Opens the companies’ eyes to Blue
Oceans
Focusing on the Big Picture
Strategic Profile of an Industry Strategic Profile of Competitors Strategic Profile of Company Focus, Divergence, and a Compelling
Tagline
Drawing your Strategy Canvas Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication
Drawing your Strategy Canvas1. Visualizing Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
• Compare your business with your competitors’ by drawing your “as is” strategy canvas.
• See when your strategy needs to change.
• Go into the field to explore the six paths to creating blue oceans.
• Observe the distinctive advantages of alternative products and services.
• See which factors you should eliminate, create, or change.
• Draw you “to be” strategy canvas based on insights from field observations.
• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.
• Distribute your before-and-after strategic profiles on one page for easy comparison.
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
Step 1: Visual Awakening
Common mistake is discussing strategy changes before resolving differing opinions
Another problem; executives are often reluctant to accept change
EFS Example
Divided senior managers into two teams to develop two value curves
Managers had a hard time agreeing on competitive factors.
Different factors were important to different managers
Both teams presented the value canvases to the rest of the group
The value curves demonstrated a lack of organizational focus
Curves mirrored competitors’ curves, and there were major contradictions between them.
After looking at the curves, EFS realized their top competitor was leaving the red ocean
Faced with these facts EFS realized it was time for a change
The Four Steps of Visualizing Strategy
1. Visualizing Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
• Compare your business with your competitors’ by drawing your “as is” strategy canvas.
• See when your strategy needs to change.
• Go into the field to explore the six paths to creating blue oceans.
• Observe the distinctive advantages of alternative products and services.
• See which factors you should eliminate, create, or change.
• Draw you “to be” strategy canvas based on insights from field observations.
• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.
• Distribute your before-and-after strategic profiles on one page for easy comparison.
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
Step 2: Visual Exploration
Go into the field to explore the six paths to creating blue oceans.
Observe the distinctive advantages of alternative products and services.
See which factors you should eliminate, create, or change.
The Four Steps of Visualizing Strategy
1. Visualizing Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
• Compare your business with your competitors’ by drawing your “as is” strategy canvas.
• See when your strategy needs to change.
• Go into the field to explore the six paths to creating blue oceans.
• Observe the distinctive advantages of alternative products and services.
• See which factors you should eliminate, create, or change.
• Draw your “to be” strategy canvas based on insights from field observations.
• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.
• Distribute your before-and-after strategic profiles on one page for easy comparison.
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
Step 3: Visual Strategy Fair
Draw your “to be” strategy canvas based on insights from field observations.
Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.
EFS: Before and After
EFS and Traditional Competitions’ “Before”
Strategy
Low
High
EFS’s “After” Strategy
The “After” Strategy
Eliminated highest-cost elements Relationship managers Account executives
Emphasized: Ease of use Security Accuracy Speed
Frees up Corporate Dealers Time Richer Market Commentary (key success factor)
Value Innovation
Eliminate Raise
Relationship Management
Ease of UseSecurityAccuracy
SpeedMarket Commentary
Reduce Create
Account ExecutivesCorporate Dealers
ConfirmationTracking
The Four Steps of Visualizing Strategy
1. Visualizing Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
• Compare your business with your competitors’ by drawing your “as is” strategy canvas.
• See when your strategy needs to change.
• Go into the field to explore the six paths to creating blue oceans.
• Observe the distinctive advantages of alternative products and services.
• See which factors you should eliminate, create, or change.
• Draw you “to be” strategy canvas based on insights from field observations.
• Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers.
• Distribute your before-and-after strategic profiles on one page for easy comparison.
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
Step 4: Visual Communication After determining your future strategy, it
must be communicated throughout the corporation.
EFS did this through distribution of a one page picture.
EFS: Before and After
EFS and Competitions’
“Before” Strategy
Low
High
EFS’s “After” Strategy
Eliminate-Reduce-Raise-Create: EFS
Eliminate Raise
Relationship Management
Ease of UseSecurityAccuracy
SpeedMarket Commentary
Reduce Create
Account ExecutivesCorporate Dealers
ConfirmationTracking
The distributed picture became a reference point for all investment decisions.
Only ideas that helped move EFS from the old value curve to the new curve were given the go-ahead. EFS IT Department example
Visualizing Strategy at the Corporate Level
Visualizing Strategy can greatly inform the dialogue among individual business units and the corporate center in transforming the company from a red ocean to a blue ocean player.
To do this companies can have their individual business units complete their own Strategy Canvases.
When individual business units present their strategy canvases to one another they: Deepen their understanding of the other
businesses in the corporate portfolio. Foster the transfer of strategic practices
across units.
Using the Strategy Canvas: Samsung
In 1998 Samsung Electronics established the Value Innovation Program (VIP) Center
Core cross-functional teams from their various business units come together to discuss their strategic projects. Typically focused on the unit’s strategy canvases.
The teams assist one another in making their product and service offering decisions using the value innovation knowledge they have developed.
Since 1999, Samsung has held a annual Value Innovation Corporate Conference.
Through the use of these VIP branches and conferences great value for their customers.
As wells as establishing the common language and corporate culture that drives the company from red oceans to blue.
Pioneer-Migrator-Settler Map Pioneer
Offer unprecedented value Migrator
Offer improved value Settler
Offers value the same as competition
Pioneers
Blue Ocean strategists Source of profitable growth Mass following of customers Value curve diverges from competition
Settlers
Me-to businesses Not contribute much to growth Stuck in Red Ocean
Migrators
Lie in between Pioneers and Settlers More for less
Don’t alter basic shape of value curve though
Improved value, but not innovate value Strategy falls in between Red and Blue
Oceans
Change
Senior executives should move portfolio towards pioneers
Settlers have marginal growth potential but are usually cash generators
Pioneers have the most potential but use cash when expanding
Overcoming Limitations
Creative component instead of being analysis-driven
Motivational and invoking willing commitment
Move away from bargaining-driven which produces negotiated commitment
Need to still discuss numbers but that will fall in place as you go