10 Jul Directions Strategic Analysis: Under sub headings containing the tool name (under the main heading Strategic Analysis), develop a strategic analysis using three or more

Unit 5: Course Project: Strategic Analysis 2

Directions

Strategic Analysis: Under sub headings containing the tool name (under the main heading Strategic Analysis), develop a strategic analysis using three or more tools. You are to be actually applying the tools to the company you have selected.  So you will DO a SWOT, and DO a 5 Forces, etc  (whichever  three + tools you selected last week). See the overview of this assignment; you are NOT to use any sources which are pre-done SWOT, 5 Forces, etc as any of your sources.  At the end of each tool’s analysis conclude with a summary paragraph of how the information relates to the problem identified (This tool shows that …). 

Submit this section (6-8 pages of body) of your project.

This assignment is worth 150 points.

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CONCLUSION

To master a discipline is quite rare, so too, the ability to rise through the air.

When to Change Strategy

Just as a helicopter pilot monitors his planned course during flight for conditions that would warrant adjustment, we too must monitor our strategic direction to determine when a change in strategy is appropriate. A study of 1,053 companies showed that strategic blunders are at the root of poor performance 81 percent of the time, making them the number-one cause of lost shareholder value.1 The researchers concluded, “About half the time, the loss of value occurred gradually— over many months or even years if the company took too long to grasp a changed strategic environment or lacked the agility to react.”2 While an action resulting in an error may be highly visible, sometimes it’s inaction that is our ultimate undoing. The ability to modify strategy at the right time can literally save or destroy a business. Here is a check- list of five moments when it is critical to evaluate your strategy.

1. Goals are achieved or changed. Goals are what you are trying to achieve, and strategy is how you’re going to get there. It makes sense then, if the destination changes, so too should the path to get there. As you accomplish goals and establish new ones, changes in resource allocation are often required to keep moving forward. In some cases, goals are modified during the course of the year to reflect changes in the market, competitive landscape, or customer profile. It’s important to reflect on the strategy as these changes occur to see if it also needs to be modified. Ask: Have goals been achieved or changed?

2. Evolution in customer needs. The endgame of business strategy is to serve customers’ needs in a more profitable way than the competition. But, as the makers of the Polaroid camera, hard- cover encyclopedias, and pagers will tell you, customer needs evolve. The leaders skilled in strategic thinking are able to continually generate new insights into the emerging needs of key customers. They can then shape their group’s current or future offerings to best meet those evolving needs. Ask: Have customer needs changed?

3. Innovation in the market. Innovation can be described as creating new value for customers. The new value may be techno- logical in nature, but it can also be generated in many other ways including service, experience, marketing, process, etc. It may be earth shattering, or it may be minor in nature. The key is to keep a tight pulse on your market, customers, and competitors to understand when innovation, or new value, is being delivered and by whom. Once that’s confirmed, assess your goals and strategies to determine if they need to be adjusted based on this new level of value in the market. Ask: Is there new value in the market?

4. Competitors change the perception of value. For many years, fast food was fast food. Burgers, tacos, chicken, pizza, and hot dogs were the standard fare. Within each category, there was greater similarity between competing offerings than distinction. As Subway entered a period of rapid expansion through franchising, it began to promote a healthier fast food. Eventually, they used a spokesman who lost weight on the “Subway diet” to lead the campaign, and the fast-food arena slowly started to change. People who never really considered the nutritional aspect of their fast-food meals were now faced with healthier choices. Subway crafted a new perception of value in the market. While we’d like to believe that people choose products and services based on the actual merits of the offerings, we know that this isn’t always the case. Shaping the perceived value of an offering through marketing campaigns, social media, celebrity endorsements, and so on is a powerful weapon or threat, depending on your position. Ask: Have competitors changed the perception of value in the market?

5. Capabilities grow or decline. A final consideration when deter- mining whether or not to change strategies deals with what’s under your own roof. Having led strategic planning sessions for the past 15 years, I’ve observed how challenging it can be for organizations to honestly evaluate their own capabilities relative to competitors. One indication is compiling a meandering laundry list of 15 strengths during the SWOT Analysis exercise (which lists an organization’s strengths, weaknesses, opportunities, and threats). However, objective assessment of the group’s capabilities relative to the competition is a starting point. If your capabilities have significantly grown, it may open up new strategies for capitalizing on opportunities to increase profits. If your capabilities have declined, it may call for new strategies to neutralize competitor initiatives or to exit the market. Ask: What is the state of your capabilities?

Fire Prevention As you consider the five key factors necessary when reviewing strategy to determine any changes in course, keep in mind that fires are generally not a reason to change strategy. However, you may have some managers who are all too eager to don the helmet and hose and swoop in to save the day through urgent but unimportant tasks. The problem with this firefighting mentality is the opportunity costs it bleeds from your business. Time, talent, and budget spent on fighting urgent but unimportant fires are resources that can’t be properly invested elsewhere to support the successful execution of your strategy. Research with 197 global companies on the reasons for the underperformance of strategy found that the biggest contributing factor is, “the failure to have the right resources in the right place at the right time.”3 Taking a few hours here and there each week to attend to fires might not seem like a big deal, but it is. Take those few hours a week and multiply that by the number of managers in the organization. It’s quickly evident how thousands of hours a year can be wasted with no way to regain those precious resources. It’s recommended that at least twice a year you conduct a Fire Prevention exercise with your management team. The Fire Prevention exercise is designed to help you put out some of the recurring fires by taking action on the things that ignite them. The first step in the exercise is to identify the fires: urgent but unimportant activities that are not a part of your plan, but require a resource investment. The second step is to have a strategy conversation with all of the people involved in that fire to shed light on its cause. The third and final step is to create an approach to stop the fire from consuming your resources. There are three potential actions when dealing with a fire:

1. Control: Invest resources the first time (and only the first time) a fire appears in order to control it, prior to further analysis. 2. Delegate: Pass the resource investment requirement to a group or person with the appropriate accountability for such an event. 3. Prevent: Determine and eliminate the root cause.

Examples of internal fires include: ␣ Senior leaders demanding lists or reports that require time, labor, and energy to put together, versus those that can be automatically generated ␣ Flavor-of-the-month initiatives that aren’t directly related to people’s strategic plans ␣ Attendance on conference calls that have no direct business value for the participant

Examples of external fires include: ␣ The same customer continually asking for activities to be per- formed in a much shorter time frame than normal ␣ Requests for proposal (RFP) that don’t match up with your business acquisition criteria ␣ People outside the organization seeking teleconferences or meetings to discuss partnerships or alliances without first providing sufficient business rationale

The template in Table 4.1 will enable you to track your Fire Prevention efforts over the course of time, and decipher patterns of activity.

Tactical Evaluation Matrix Tactics are another factor that can potentially consume huge sums of resources without yielding much in the way of results. Tactics are the tangible actions behind how we accomplish goals and objectives. They represent the specific items you put time and money into in order to carry out the general strategic approach to achieving the goals. Sales brochures, training binders, iPads, apps, and educational programs are examples of tactics. Some managers take the more-is-more approach to tactics, filling their plans with all available tactics so they can’t be faulted for not including a tactic if they didn’t meet their goals. While it may provide political protection internally, the laundry list approach to tactics does little to advance the effective and efficient use of one’s resources. Apple CEO Tim Cook says, “And we argue and debate like crazy about what we’re not going to do, because we know that we can only do a few things great. That means not doing a bunch of things that would be really good and really fun. That’s a part of our base principle, that we will only do a few things.”4

Even the soundest of strategies can be rendered powerless if the tactics employed to realize them are ineffective, undifferentiated, or overwhelming in number. As a senior leader, it’s important to convey to your managers that all tactics are not created equal. Just as managers must be discerning in how to articulate strategy for a product or service, they must also realize that each expenditure of resources on a tactic either brings value to customers or wastes the organization’s resources. While the day-to-day implementation of tactics may not be your job, it’s critical to educate the people whose job it is to ensure they’re using resources effectively to create only value-generating tactics—even if it means eliminating something.

The Tactical Evaluation Matrix is a tool used to assess the tactics of the business on two parameters: efficacy with customers, and differentiation from competitors. Efficacy with customers is determined by two factors: 1. The extent to which the tactic is embraced and utilized by internal customers (company personnel) to influence external customers in the selection and use of your offerings 2. The importance external customers place on the tactic when it’s received

The second criterion of the Tactical Evaluation Matrix is differentiation from the competition. In other words, do external customers

perceive a positive difference in value from this tactic relative to tac- tics the competition provide to them?

Figure 4.1 provides an example of the Tactical Evaluation Matrix. To use this tool, first create a list of all of the tactics that you are currently investing in. Then plot those tactics within the matrix based on their level of efficacy with customers (low to high) and differentiation from the competition (low to high). Each tactic will fall into one of the following quadrants:

Waste: Tactics ineffective and undifferentiated

Antes: Tactics effective but similar

Fool’s Gold: Tactics differentiated but ineffective

Drivers: Tactics effective and differentiated

Strategy Launch Review The U.S. Army introduced the After-Action Review (AAR) to create a process for continuous learning from initiatives. Developed by the National Training Center in 1981, the AAR’s original use in the army’s Opposing Force (OPFOR) has expanded to most military services in one form or another.5 The AAR provides a checkpoint for cultivating the knowledge and insights gained from initiatives by addressing four points:6 1. What were our intended results?

2. What were our actual results?

3. What caused our results?

4. What will we sustain or improve?

We can modify this concept to improve our strategy efforts in non- military organizations as well. Prior to launching a new strategic initiative, have the team leader conduct a Before Strategy Launch Review (BSLR). The BSLR should be a facilitated strategy conversation around the following three questions: 1. What is the goal of the initiative? 2. What is the strategic approach being used to achieve this goal? 3. What are the key challenges to successful implementation of the initiative and how will we address them?

Once the strategy initiative has been completed, modified, or dis- continued, the After Strategy Launch Review (ASLR) should take place. The ASLR answers three questions:

1. What happened?

2. How or why did it happen?

3. What did we learn from it?

The leader should then take the group’s input on these questions and summarize the results of the Strategy Launch Initiative. These summaries should include both the positive—what went right and what we did well—and the negative—what areas need improvement. The results of each ASLR should be kept together and reviewed quarterly to generate recommendations on how to improve the overall strategy initiative process. What’s working? What’s not working? Are there any trends or patterns? Are people educated on and engaged in the process? The ASLR not only provides an opportunity to improve the activities that drive the implementation of strategic initiatives, but it also enables managers to continually improve the thinking that goes into the development of their strategic initiatives in the first place.

Strategy Scaffold A number of man-made masterpieces, including the Egyptian pyramids and Michelangelo’s painting of the ceiling of the Sistine Chapel, were made possible by the use of scaffolds. A scaffold is a temporary structure used to elevate people to a higher place in order to work. Drive by any number of structures being built or refurbished, and there’s a good chance you’ll see scaffolding supporting people to work at greater heights. Scaffolds range from the relatively simple ones used to work on a home project to the grander versions for assisting projects as important as enhancements to the Statue of Liberty. Mastering the three disciplines of advanced strategic thinking— coalesce, compete, and champion—requires the ability to work at a higher level. The Strategy Scaffold provides leaders with a one-page tool to build, adjust, and communicate the foundational elements of the business. A crucial part of the leader’s strategic skill set is to be able to clearly and concisely convey the essence of the business. A study of 1,000 global companies confirmed this importance as the researchers concluded: “The only competency viewed as essential for CEOs, COOs, and CFOs alike was developing an accurate and com- prehensive overview of the business.”7 The Strategy Scaffold provides leaders with the framework to see how the foundational elements of their business connect and support one another. It also can illuminate cracks in the foundation of the business, which if left unnoticed, could lead to its eventual collapse. The Strategy Scaffold consists of the fol-lowing three planks: 1. Purpose: The intent of the business represented by the following elements:

0 Mission: Current purpose; clear, concise, and enduring statement of the reasons for an organization’s existence today 0 Vision: Future purpose; provides a mental picture of the aspirations an organization is working toward 0 Values: Guide purpose; ideals and principles that influence the thoughts and actions of an organization, and define its character 2. Business Model: A structural description of how the organization creates, delivers, and captures value. Create: 0 Core Competency: Primary area of expertise (what you know) 0 Capabilities: Activities performed with key resources (what you do) 0 Value Proposition: Rationale for the offering (customer, need/ job, approach, benefit)

Deliver: 0 Value Chain: Configuration of capabilities to provide value (how you do it) 0 Channels: Customer access points for offerings (where you offer it) Capture: 0 Price Position: Amount customers pay for the offer in relative to alternative options (low, moderate, premium)

3. Plan: The strategic direction of the business. 0 Goals: What you are trying to achieve (general) 0 Objectives: What you are trying achieve (specific) 0 Strategy: How you will achieve the goals/objectives (general) 0 Tactics: How you will achieve the goals/objectives (specific)

Figure 4.2 Strategy Scaffold

Figure 4.2 represents the Strategy Scaffold framework.

Strategic I Am

Pick-up sticks is a game many played as children. A bundle of sticks roughly six inches long are held in a loose bunch and released on a table top, falling in random disarray. Each player then takes a turn removing a stick from the pile, with the goal of not moving or disturbing the remaining ones. Unfortunately, in many organizations, strategy development resembles a game of pick-up sticks. Unable to escape the whirlwind of daily activities, managers annually throw together a strategic planning session comprised of a series of random questions and a SWOT analysis, for good measure. With no rationale as to their sequencing or practical application, this jumble of jargon and templates can best be described as a Pick-up strategy session. People leave these sessions with a frustrated, unfulfilled sense of having done little thinking in an unproductive way that generated no real changes in the business.

As we’ve seen throughout the book, elevated levels of strategic thinking can be guided by a coherent and methodical framework consisting of concepts and tools to help you achieve your business goals. The Three Disciplines of Advanced Strategic Thinking provide a concise, yet comprehensive way for leaders to raise their level of thought in setting strong strategic direction for the business. They are as follows: 1. Coalesce: Fusing together insights to create an innovative business model 2. Compete: Creating a system of strategy to achieve competitive advantage 3. Champion: Leading others to think and act strategically to exe- cute strategy

Mastering these disciplines will take time. Revamping business models, revisiting value propositions, enhancing value chains, mining the market for innovation, assessing competitive advantage, influencing others to buy in, building new habits, facilitating strategy con- versations, and designing a Strategy Scaffold all require a significant investment of time, energy, and commitment. It won’t be easy and it certainly won’t come without risks. Saying no to some potential customers, not saying yes to every internal request that comes across your desk, and forgoing promising opportunities because they don’t fit with your strategy will open you up to risk. Having the intellectual prowess and the sheer guts to make these trade-offs defines the truly strategic leader.

What’s your end game? When your career comes to a close, where will you be? What shape will your business be in? How will your col- leagues, employees, and customers describe you? Most important, how will you assess your run? Contrary to popular belief, it’s not about the little things. It’s about how you create the defining moments that shape the trajectory of a team, a business, a life. It’s about coalescing insights into competitive advantages that you champion. It’s about rising above the fray and seeing things others don’t. And you can make that happen, if you’re willing to elevate.

A common maple seed, like those you tossed up into the air as a kid and then watched as they spun to the ground, uses the same principle of autorotation as a helicopter does when it descends. In fact, single-engine helicopters are designed with this autorotation principle in mind so they can flutter to the ground safely in the event of engine failure. The maple seed’s illustration of the principle behind helicopter flight is just one example of how something complex can be made sim-ple. Leonardo da Vinci, whose design of the aerial screw inspired the future development of the helicopter said, “Simplicity is the ultimate sophistication.” Great strategy should be simple, maybe even as simple as a Dr. Seuss book. And if Dr. Seuss had been a strategist, I think he may have written something like this:

Strategic I Am I am strategic. Strategic I am.

Do you like to think strategically?

I do not like to think strategically,

not in an office, not in a tree.

It’s more fun to think tactically,

stuff I can touch, stuff I can see.

I do not like to think strategically,

I haven’t the time to be so leisurely.

Setting good plans, I’ll leave to others.

Gotta check my e-mail. Even in bed, under the covers.

No, I do not like to think strategically,

I prefer the adrenaline rush of mindless reactivity.

You do not like to think strategically,

so you say. Try it, try it, and you may.

Say! I do like to think strategically.

While others around me only fight fires,

I focus my resources, taking my business higher.

I schedule time, just to think.

Now my goals and strategies are in perfect sync.

Thank you, thank you!

Strategic I am.

Five moments signaling the need for a strategy review:

1. Goals are achieved or changed

2. Evolution in customer needs

3. Innovation in the market

4. Competitors change the perception of value

5. Capabilities grow or decline

Three potential ways to deal with recurring fires: 1. Control

2. Delegate

3. Prevent

The Tactical Evaluation Matrix is a tool used to assess the tactics of the business on two parameters: efficacy with customers, and differentiation from competitors.

The Before Strategy Launch Review (BSLR) asks three questions:

1. What is the goal of the initiative? 2. What is the strategic approach being used to achieve this goal? 3. What are the key challenges to successful implementation of the initiative and how will we address them?

The After Strategy Launch Review (ASLR) should take place when a strategy initiative has been completed, modified, or discontinued. The ASLR answers three questions:

1. What happened?

2. How or why did it happen?

3. What did we learn from it?

The Strategy Scaffold provides leaders with a one-page tool to build, adjust, and communicate the foundational elements of the business including purpose, business model, and plan.

Reference

Rich, Horwath,. Elevate: The Three Disciplines of Advanced Strategic Thinking. Available from: MBS Direct, Wiley Professional Development (P&T), 2014.

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Step 3

Name Your Critical Success Factors

“Success is where preparation and opportunity meet.”1

—Bobby Unser, Three-Time Indianapolis 500 Winner

You have created an ambitious, glowing vision, but perhaps it seems far off and out of reach. So now what? How do you go from dreaming to doing? The key is to examine the elements that set your vision aglow and to list everything you need to bring it to life. By writing it all down, you are taking a tangible step toward making real progress. This is a very brief but essential step. By accomplishing this simple task, you build positive forward momentum that moves you in the right direction before the glow dims and you go back to doing things the way you’ve always done them.

What You Need to Succeed

You already know where you’re headed. If you were sketching out a map, your destination would be the vision you’ve so carefully created. It is time to get specific about what you need so you can figure out how you will make it happen. So, first things first: you will make a list. This step seems so obvious that many people skip right over it. But pausing for a moment to make sure you’ve documented what you need improves the odds that you will put everything in place to get where you’re going.

You can’t make a suit without taking careful measurements, creating a pattern, and procuring fabric, notions, and a sewing machine. Your list of success factors will also help you assess the distance between where you are and where you’re headed. In turn, that will help you see how far you have to travel and how long it might take to arrive.

Let’s look at Raymond, the would-be concert pianist we met in earlier chapters. What would he need to fulfill that vision? With his ambition to be a musician of worldwide renown, here’s a decent list of what he might need:

• Access to a piano

• A concert-level piano teacher

• Space to practice

• Aptitude for the piano

• Money to pay for the piano, space, and lessons

• Membership with an ensemble to practice with other musicians

• Knowledge of music theory

When Your Vision Seems Impossible to Achieve

Diane is a primary care physician at a highly traditional academic medical center. She came for some coaching as she considered the options for advancing her career while reserving ample time to spend with her two young daughters. As always, we began her planning with her creating an inventory of her strengths, interests, and values, and then she wrote her mission and vision statements. Thinking about how she could fulfill her vision overwhelmed her because she didn’t have any role models who had done what she hoped to pull off for herself. She simply couldn’t picture how to make it happen. Her vision included her cooking with her kids several nights a week and enjoying family dinners that they’d created as a team. Her husband, a busy attorney who shared this desire, was willing to commit to being home for those meals and offered to take on cleanup duty. That part seemed doable.

But Diane wanted to establish herself as a national thought leader in medicine, which, following the traditional career path, would require her to set up a research group, secure grants, and publish scholarly articles in prestigious journals. The problem with that scenario is that it didn’t fit well with her busy primary care practice, to which she was passionately committed, and her active home life. Securing research funding is highly competitive and requires long hours in order to excel. Her ambition to have a soaring career while being an involved parent seemed impossible when held up against the realities of her chosen field.

I reminded Diane that until she fully explored all of her options, it was too early to dismiss her ideal as impractical and settle for something less. She was game to move forward, if not terribly optimistic. So I asked her to continue suspending disbelief for a while longer and just list what she would need to have in place for her to achieve this seemingly unworkable balance. She thought it might be more feasible to pull off this feat if she were able to do some of her work at home, so she came up with this list:

• A home office setup, with computer

• A morning clinical schedule that allowed her to be home after school hours

• Deep expertise in an issue of importance to her medical peers

• A platform to communicate her ideas

• The support of her division chief

• Salary for her nonclinical hours

Just committing her list to paper made it seem less overwhelming. While she still couldn’t see how she would make this happen, she could begin to imagine how she might set some goals to further refine her vision. We’ll meet up with Diane in the next step.

When You Don’t Know Where to Start

If your vision is multifaceted, you may want to break it down into separate sections and make an inventory of success factors for each one. Organize them in whatever way works for you. I find it helpful to use different color markers to highlight the various parts of my vision, such as relationships, work, community, and mind/body/spirit pursuits. However, you choose to approach this, make sure to include the joy notes that will make working toward your vision a pleasant journey.

Because my own vision encompasses many disparate yet harmonious activities, I have broken it down into projects and made a list of success factors for each one. For example, writing this book is one aspect of fulfilling both my personal and professional visions. I needed some obvious things:

• A computer

• Time, time, and more time to review and organize mountains of materials

• Welcoming work space

Attractive office with soothing colors

Clean, orderly desk

Inspiring photos

Pots of tea

Music

• Scheduled breaks for exercise and human contact

• Interviews with clients and program participants

This was also an opportunity to get some good “twofers”—activities that serve you in more than one way. Reviewing my vision statement was a great way to see the potential. When I rethought my writing schedule so that I could help my son prepare for his bar mitzvah, I had planned to get back on track by “going underground” to spend some concentrated time writing free from the competing demands of family, consulting projects, and coaching clients. A review of my vision statement reminded me that spending time in nature is critical to nourishing my spirit. Connecting with cherished friends is also central to my well-being, and is a particular challenge given the solitary nature of writing. So, I added to my list of critical success factors:

• Getting “off the grid” for five days

• Time in nature

• Good company for breaks

Just to show you where this is all leading, I’ll jump ahead a couple of steps and demonstrate how this list of success factors led me to a strategy that fulfilled my whole list. I knew from past experience that trying to write for sustained periods from my office was a setup that would lead to distractions and frustration. Blocking off a few hours a day is usually doable, but the time required to get back on schedule meant that wasn’t feasible. So, I decided to rent a cottage on Cape Cod for a few days and invite my sister to join me. The cape is very quiet and beautiful in the autumn and I was able t