05[1]. strategic thinking

7/30/2019 05[1]. Strategic Thinking

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StrategicThinking

Session 03- 04


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Formal Planning- Very analytical

- Preservation and rearrangement of

established categoriesthe existing levels ofstrategy

Real strategic change demands inventing new

ones rather than such a rearranging theestablished categories.

Adapted from Mintzberg, H (1994)


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Strategic thinking generates the

creative act of synthesizingexperiences into a novel strategy(Synthesis of the insight to transform

the company).

Synthesis: combining of elements into a whole.


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Strategic planning:

- Expected to formulate best strategies- Outlined step-by-step instructions for carrying out

those strategies.

- Based on the manipulation of numbers (analysis)that spoils strategic thinking

- Suppresses managers creative thinking.

Indeed, strategic planning is not strategic thinking.

The most successful strategies are visions, not

plans



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Strategy-making process should be capturing what

managerslearn from all sources(soft and harddata) and then synthesizing that learning into avision of the direction that the business shouldpursue(Mintzberg 1994).

Planners can help strategists for strategyprocesses through formal analyses (or supplyinghard data) rather than influencing to discover the

one right way.



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Strategic Programming !

Strategic Planning, as it has beenpracticed, has really beenstrategic

programming, the articulation and

elaboration of strategies, or vision, that

already exist.

Mintzberg, 1994.

Articulation: act or mode of jointing. b joint.


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What Strategic Thinking is ?

Strategic Thinking is aboutsynthesis. Itinvolves intuitionand creativity. The

outcome of strategic thinking is an

integrated perspective of the enterprise,a not-too-precisely articulated vision of

direction

Adapted from Mintzberg, 1994.

Intuition: immediate insight or understanding without conscious reasoning.

Synthesis: combining of elements into a whole.


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Strategic Thinking: Emergent

Strategies

Strategies, evolve through strategicthinking, cannot be emerged on schedule(set of steps; and formalizing those steps)and immaculately conceived. They must befree to appear at any time and at any placein the organization, through messyprocesses of informal learning at various

levels of the organization.Adapted from Mintzberg, H (1994)

Immaculately= perfect messy : difficult to deal with; awkward.


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Strategy making goes beyond the

boxes, life is larger than ourcategories.


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The pitfalls of planning

Calculating style of management, not a

committing style

To reduce the power of managementover strategy making.


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Fallacies of Strategic Planning

Prediction: the world is supposed to staythe same while a plan is being developed

and implemented

Detachment: strategists can be detached

from the subjects of their strategies

Formalization of strategy making process

Fallacy: 1 mistaken belief. 2 faulty reasoning; misleading argument.


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Innovation has never been

institutionalized. Systems have never beenable to reproduce the synthesis created bythe genius entrepreneur or even ordinarystrategist

Strategic planner is trying to paint the bigpicture with little strokes who abstracts the

daily details (Mintzberg 1994).


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Strategic Thinking:an act of geniuses?

If an organization is managed by

intuitive geniuses there is no need for

formal strategic planning.

But how many organizations are so

blessed?

And, if they are, how many times areintuitives correct in their judgment.

George Steiner in Mintzberg, 1994.


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Left- and Right- Handed Planners

Analytic thinker: S/he is dedicated tobringing order to the organization

Creative thinker: S/he seeks to open upstrategy-making process. As a softanalyst, s/he likes to find strategies instrange places and encourage othersto think strategically.


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Danger of Formalization

It limits (or badly affect) our creativeactivities

Systems do not think, when they are used

for more than the facilitation of humanthinking, they can suppress thinking

Strategic planning has a greater usewithout arbitrary formalization, and acontribution around the strategy makingprocess.

St t iM h i l S t


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IntuitionStrategicThinking

Analysis of Essence

Transformation of ChangedConfiguration

Local optimization

or Seeing the Treenot the Forest

Rearrangement ofElements

ProblemPrototype

Process ofThought

Solution

Mechanical SystemsThinking

Three Kinds ofThinking Process


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prototype : original as a pattern for imitations, improved forms,representations,


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Setting Organizational Direction:

Industrial Foresight and Strategic

Intent


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What is Industry Foresight?

A deeper insight

of the futureA deeper insight

of the future


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Gaining an understanding of the

trends and discontinuities of the

environment, deeper than the

competitors

Transform industry boundaries

and create a new competitive

space

&


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How to See the Future

Looking

Outward

Spending much time to look in to the

external issues rather than internal ones

Looking

Forward

Spending much time for understanding the

future rather than dealing with current

issues

Build a collective

view of the future

Consulting colleagues to build a

collective view of the future and

the ways of dealing with it.


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Why Industry Foresight

Quest for industry foresight

Gaining an understanding of the trends and

discontinuities deeper than the competitors,

Stakeout aleadership

position in

the market

Informscorporate

directions

Lets thecompany

control the

evolution of

the industry

Lets thecompany

control its

own destiny


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What it requires?

Creativity and imagination Unlimited Curiosity

Desire to spend a great amount of time

on understanding the future Significant expenditure of intellectual

energy

Willingness to move far beyond theissues on which it can claim expertstatus


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What it requires?...

Not being customer-led but be muchmore than that: (Desire to do more thansatisfying customers amazing them)

Not taking competitors as benchmarks

Going beyond traditional modes ofmarket research


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The Danger Of Being

Customer- Led Customers are notoriously lacking inforesight.

Meeting only the articulated needs

of customers already served

you cedes vast opportunities to

more farsighted competitors.

cede : formal give up one's rights to or possession of


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THE DANGER OF BEING CUSTOMER- LED

Todays

Business

C

U

S

T

O

ME

R

N

E

ED

S

Unarticulated

ArticulatedServed UnservedCUSTOMER TYPES


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Strategic Fit

Strategic Intent

Vs


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? Strategic Fit ?

Tries to create a fit between theexisting resources of a company andcurrent environmental opportunities,and not enough upon building new

resources and capabilities to createand exploit future opportunities

Strategies formulated through thismodel tend to be more concerned withtodays problems than tomorrowsopportunities


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Strategic Intent

The notion that strategy formulationshould involve setting ambitious goals,which stretch a company, and then

finding ways to build the resources andcapabilities necessary to attain thosegoals.


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Strategic intent envisions a desiredleadership position and establishes the

criterion the organization will use tochart its progress.

Examples:

Komatsu set out to EncircleCaterpillar. Canon sought to BeatXerox.

Honda strove to become a secondFord an automotive pioneer.

Strategic intent concept also encompasses an


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Focusing the organizations attention on theessence of winning.

Motivating people by communicating the

value of the target. Leaving room for individual and teamcontributions.

Sustaining enthusiasm by providing newoperational definitions as circumstanceschange.

Using intent consistently to guide resource

allocations.

Strategic intent concept also encompasses anactive management process that includes


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Strategic Intent vs. Strategic Fit

Two approaches are not mutually

exclusive

Managers do have to analyze the externalenvironment, analyze companys

resources and capabilities as they did inthe fit model,but strategic management process shouldbegin with challenging goals and, through

out the process the emphasis should beon finding ways to develop the resourcesand capabilities necessary to achievethese goals.


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The role of strategic levelmanagers on strategic intent

For corporate challenges to lead tocompetitive advantage, top

management must:

Create a sense of urgency

Develop a competitor focus at everylevel through widespread use ofcompetitive intelligence


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Provide employee with the skills theyneed to work effectively

Give the organization time to digest

one challenge before launchinganother

Establish clear milestones and reviewmechanisms.

05[1]. strategic thinking

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