Strategy Implementation In Large Enterprises Relatively well-known paths It is a skill, requires leadership, and occurs within a context.

t. Follow through matters.. .Beyond What In Retail / Franchising Many well-regarded retailers in Indian towns and cities remain limited to their flagship store. Explicit intent to grow, what holds back small retailers? What conditions permit replication and scaling up via franchising? Entrepreneurial Execution In recent years have merited attention Regarding the abilities of entrepreneurs to improvise, make-do, and generally adapt creatively and flexibly to the needs of the business Topics -bricolage, effectuation, and jugaad Stance or Approach Apply learning to personal work context How do my readings apply to my workplace? Can I contribute better, differently as a result? What do I learn about myself from this class? Not about them Not as critic, observer, consultant, advisor Not take, but shape; doer Recipient of advise; participant; practitioner; action Propose; execute; delegate; manage; follow-through Strategic Planning? What Open ended; exposed to environment How Typically internally directed Gurcharan Das India Unbound Importance of know-how Strategy = Business Policy National Strategy, too Personal: What then do I/We do? CEO: Architect or Guardian of organizational purpose? Evaluate corporate strategy? The need to create and re-create reasons for a companys continued existence sets the strategist apart from every other individual in the company guiding this never ending process, bringing perspective to the midst of action and purpose to the flow not solving the strategic puzzle once is the crowning responsibility of the CEO. Introductions Whos Who Does Strategy group exist formally? Corporate? Industry & competitive attributes Environment attributes How is it Structured? Organizational Chart? Profile of Strategy leader? Idea person, Implementation person? Team player? Image? Leadership Style? Organizational Reach? Women in Leadership ranks? Environment of Business? My Experience with Implementation Who matters: Who links with What, How, Complementary skills in team; Conduct of meetings Ground up, and Top down issues Linking to Individuals Cannot be separate from Formulation Leadership On CEOs Follow through Internal Dynamics of Workplace Politics lay of the land Micro-climate of work group Going to lunch, dinner, outside the workplace Environment Volatile why? External forces Growthv Decline; macro trends Execution separate from Formulation? Leadership Crafting Strategy -Mintzberg Analogy to potter valid? Plans for future, patterns from past Narrative fallacy see Nicholas Taleb, The Black Swan. Events, make sense by a story; connect dots Reality or Truth? Who knows Issues of attribution-Napoleon: great general? Leaders: Things happen around them Strategies: Form & Formulated; Deliberate & Emergent Thought-Action link (independent of, and precedes?) Personal Strategy I think so, and therefore so should the organization Consensus Strategy a bunch of us think so, and then so does the organization Most common: combined deliberation and control, with flexibility and organizational learning Stability and change; balance it in strategy Evolutionary: Quantum changes occur rarely

 Revolutionary in a corner, biding its time Crafting Strategy -India Not sufficient number of large organizations Of sufficient vintage No history of evolution to revolution Entrepreneurial: still with founders Strategy = Founding family, dinner table at home Decades before organizational critical mass Public sector corporations: Mission given, largely unchanging. Counter examples? Crafting: Looking forward, back Detect discontinuity, dislocation Patterns, when to intervene Time to sow, and a time to reap Live strategy in the future, but understand it through the past Life is lived forward, but understood backward -Kierkegaard Blue Ocean Strategy Kim & Mauborgne Blue oceans of uncontested market space demand created, rapid, profitable growth Competition irrelevant; new customers who traditionally werent Red oceans exist, known market space, competitive rules well understood Blue oceans created from within boundaries of existing industries altered Why do Red Oceans predominate? Historical origins of strategy? Creating new land, not divide existing. Military metaphor 84% line extensions; 14% creating new markets or industries; 38% revenues, 61% profits Blue oceans right next to you in every industry Leadership Back in Strategy Competitive game plan? Not! More!!Larger Purpose* CEOs role More than Sustainable Competitive Advantage McKinsey 7-S Framework Recognizable, easily remembered "levers: Structure -the skeleton of the organization, chartStrategy -course of action, allocating resources, achieve identified goals, over time. Systems -the routine processes and procedures followed within the organization Skills -capabilities of the staff within the organization as a whole Style -key managers behaviors in achieving goals, encompasses the cultural style Staff -personnel categories within the organization Shared Values significant, shared meanings; guiding concepts Strategy Implementation India: Why no iconic product? Is there an overwhelming reason why India has not produced a well-recognized software product? Hardware product? Of global reckoning? On Business Models I think historically where we fail is when we back technology. Where we succeed is when we back new business models Trials and Error, or Failure before Success Bob Higgins Successful new businesses typically revise their business models four times or so on the road to profitability successful incumbents must tolerate initial failure and grasp the need for course correction. In effect, companies have to focus on learning and adjusting as much as on executing.- Johnson, Christensen & Haggerman Dow Corning to Xiameter Strategic dissonance what form did it take? Incumbency advantage leveraged New distribution model, new competencies New hires Internet leverage, Truly transformative businesses are never exclusively about the discovery and commercialization of a great technology. Their success comes from enveloping the new technology in an appropriate, powerful business model - Johnson, Christensen & Haggerman BSC: Four Perspectives Financial Customer Internal Business Processes Learning & Growth Vision & Strategy In Large Enterprises Relatively well-known paths It is a skill, requires leadership, and occurs within a context. Follow through matters.. .Beyond What What first? Strategy or BSC Consensus at C level does not mean penetration into the organization the stages of acceptance BSC: Non-additive elements, measures Customer measures and value-propositions are not additive, particularly when BUs has different strategies financial metrics are Driving strategy by communicating and rewarding financial outcomes alone is like teaching people to play tennis by explaining people how to keep scores Learning and Growth Perspective It takes time! Awareness Participation Preference Loyalty

Implementing It takes time! Orchestrating Change : 25 months! .Translating the Vision .Communicating and Linking .Business Planning .Feedback and Learning Scorecard: Unit of Analysis Corporation -Multi-divisional, holding company Division or Strategic Business Unit Project Department Function If a Business Unit has its own mission, strategy, customers, processes then BSC BSC: Corporate and SBU Godrej, TATA, capabilities of the parent Common Staff/Shared Service/Support functions volume purchasing Key personnel, IT systems Holding company structure, e.g., yet aligned SBUs with each other and the corporate entity CEOs Role: BSC CEO style financial control Sub-units to follow directions, even worse, instructions, and adhere to centrally formulated plans will not find BSC compatible Participatory management style Manage by not managing be! How many measures? Financial~ 5 Customer~ 5 Internal ~ 8-10 Learning and Growth~ 5 strategies though valid then they are launched lose their validity as business conditions change. In this environment when new threats and opportunities arise constantly, companies must become capable of double loop learning learning that produces a change in peoples assumptions and theories about cause-and-effect relationships. -Chris Argyris Strategy Scorecard in Non-profit and government Have considerable difficult in defining their strategy WHY? Mission and Vision then Programs Not Outcomes, typically Outputs Results, not Activities State clearly the Intent Effectiveness and Efficiency (engineering pre-occupation, at least as caricature, even in India?) BSC: Intangible personal goals Outcomes v. Activities Speaking with can be contribution Organizing a party contribution Relationship building, understanding , establishing rapport, change mind, influence Develop a framework, use the framework, resultfrom it attribution of outcome!? Customer Outcome, Value drivers As contrasted with, say, EVA leads to cost cuts, capital deployment Longer term revenue drivers Complementarity Quality Programs: BSC helps to focus more outcome, than process, measures in customer perspective BSC: Public, NGO, Non-Profit Measure workload, response time, cost/unit, visits, inspections, numbers served, trained, passed, live, infected, dead, vaccinated, Important v. Urgent BSC can help? Policy Issues Privatization, Renewable Energy, RGGVY, Constituencies Media, Legislators, Universities, Communities, BSC: Public Sector, Non-Profits Revenues v. Budgets process of generating Products/Services v. Programs (.....) Evaluation, Measure Efficiency v Effectiveness Customers who are they? Stakeholders, Constituencies, e.g., with CSR even for private sector Mission of a Municipality, Gram Panchayat, Department, Ministry Red Cross Personal BSC Criteria for developing Balanced Scorecards Contract with yourself and the company, team, supervisor, peers Outcomes over which you have no control, only influence, sometimes BSC: Capability v. Capacity What is the subset? Should they even be compared? Give examples Impair Capacity? Impair Capability? CapacityUtilization? Why not CapabilityUtilization ........ Potential energy to kinetic energy to outcome Six Basics for GMs -Pearson Shaping the work environment Setting strategy

Allocating resources Developing managers Building the organization Overseeing operations

Exerting influence High standards are thus the principal means by which top general managers exert their influence and leverage their talents across the entire business By example long hours, commitment to success, consistent quality of effort Strategy Build 5% share to 10% OR 30% share to 35%? Fewer bets, backed aggressively Performance Lack of management talent # 2 Low standards # 1 Causes of poor performance Hiring achievers, not cronies or loyalists Hire to your weakness Organization Building Get involved in important problem solving, regardless of turf, if crucial to company success Organize around people, not concepts or principles though cannot ignore strategic fit, or organizational logic Turn to individual who has the right skills and style for the job Operations Quality of attention Best GMs are that rare combination of fine operator and fine conceptualizer Right things happen faster and more often which is what all of us want to achieve as general managers Four Conditions: Understanding, Commitment 1. Strong Consensus 2. Blind Devotion 3. Informed Skepticism 4. Weak Consensus Pros and Cons to each Agree on goals, disagree on actions Agree on actions, disagree on goals Managing Consensus Floyd & Woolridge Clear goals and direction absent Agreement among levels of management about fundamental priorities Fully informed, half-hearted now what to do? Strategy does not align with own, personal self-interest now what to do? Understanding Commitment Reinventing Business Model Johnson, Christensen, Kagerman Great new business model, existing technology The most important part (for me) is their description of the New Business Development Process Dow Corning NBM unattractive to internal and external stakeholders CVP Customer Value Proposition CVP Customer Value Proposition Profit Formula Revenue Model Cost Structure Margin Model Resource Velocity Key Resources & Key Processes Secret Sauce -Patience BSC Share: How much, whom All employees? Shareholders? Analysts? If knowledge details of implementation such that competitors can disrupt, caution Advantage lies in soft things BSC: Public Sector, Non-Profits Revenues v. Budgets process of generating Products/Services v. Programs (.....) Evaluation, Measure Efficiency v Effectiveness Customers who are they? Stakeholders, Constituencies, e.g., with CSR even for private sector Mission of a Municipality, Gram Panchayat, Department, Ministry Red Cross Lets want what we can measure! KPI, CSF what does it mean? Not lists, but linked faster, cheaper, better Only three generic strategies possible (True?): Customer Intimacy Product Leadership Operational Excellence Who is the Customer? Paying, or Receiving Red Cross, NGOs, Apply it to India? Give examples? Driving Forces What are they? Control over, no control over

Gender and Diversity Diversity sources? o Race, language, state of origin, age, o English-proficiency? Urban & Rural? o Psychological profile Gender how, why an issue? Mere presence? Advantages of being a woman? Corporate Social Responsibility The business of a business is business The business of America is business The business of India is . Timing Energy Public Policy decided need Energy lobby response Market response Bottom line: No traction in energy What about algae? Strategic Leadership Issues Centralization Restructuring Delegation and Empowerment Activity Audit value-add or not Stakeholders from detached critics IT and Systems utilization Innovation, Improvise, New Technologies Resources, People and Material Intervention by whom, where Leadership or Risk Taking residual? What can be changed? How? What is leadership in this context? The state is a benevolent employer Culture: Thieves unless proven innocent-British legacy? Trust and Verify USA Distrust, Verify and Certify Haunted Job Innovation New Sources of Value New good for you to decide? New method of production yes, choice of technology New market is this possible? Export? Consumers? Civilians? New source of raw material or semi-finished product New organization of industry USA Innovation Levels Business Concept Need Processes for Realization Technology Product Distribution Sales & Marketing For each, how much Novelty? Innovation (and risk) = f (Novelty) Managing Internal Ventures Many of the more difficult problems generated and encountered by Internal Ventures result from growing a new business in the context of an established organization Product championing bootlegging and scavenging tactics ... sub rosa activities; corner cutting activities which deviate from official corporate ways New ventures take 8 to 12 years to mature, beyond time horizon of top management ICV projects by definition fall outside the scope of the current corporate strategy and must overcome the selective pressures of the structural context. Ad hoc negotiations and reliance on political savvy substitute for long term based joint optimization arrangements. This leads, eventually, to severe friction between ICV and mainstream business activities ICV is based on experimentation and selection, not a strategic planning process. It is characterized by ambiguity, discontinuity, even an element of anarchy. ICV is an important source of strategic renewal for the firm, and not just insurance against poor mainstream business prospects. ICV should therefore be considered an integral and continuous part of the strategy-making process. degree of relatedness to corporate capabilities of ICV projects. Middle level managers need to explain how they create value from the corporate point of view with the new ventures they sponsor. To attract top performers in the mainstream businesses of the corporation to ICV activities, at least a few spots on the top management team should always be filled with managers who have had significant experience in new business development. Timely assessment of the true potential of an ICV project remains a difficult problem. Ultimately, ICV remains an uncomfortable process for the large, complex organization as it upsets its carefully evolved routines and planning mechanisms, threatens its internal equilibrium of interests, and requires a revision of the very image it has of itself. As individuals, they act against and/or in spite of the system; not because they value corner cutting and risk taking per se, but because must respond to the logic of the situation. Entrepreneurial Opportunity Commitment, then opportunity I want to start, Opportunity, then commitment

My solution has broad appeal, Opportunity Exists vs Discover Objective vs Personal Exogenous vs Endogenous Process to realize, execute vs Leadership to realize, execute Value Creation Processes Entrepreneurship New Business Development New Product Development Internal Venturing, Intrapreneurship, Corporate Entrepreneurship Organizations Learn Conversations with customers Reports, provide checklists of dos & donts, describe processes and events Personnel Rotation Line to Staff transfers Self-managing teams; education and training Some kinds of knowledge take years to digest, with few visible changes in performance for long periods Organizations Learn There must be time for reflection and analysis dissect customer needs, assess current work systems, invent products Training in brainstorming, problem solving, evaluating experiments Opening up boundaries conferences, meetings, project teams Leadership in Strategy To claim value, create value bring something new to the world, better and different from others If company shuttered, to whom would it matter, why? Thinking and Doing, Formulation & Implementation Good ideas are not adopted automatically. They must be driven into practice with courageous patience Rickover on Implementation the decision as to whether an order has authority or not lies with the persons to whom it is addressed, and does not reside in persons of authority or those who issue orders. Barnard, Chester I. The Functions of the Executive, 1938