business acumen program for qualcomm

QualcommBusiness Acumen Series

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Strategic Planning for Engineers


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Our Goals for Today...

• Examine and apply the key fundamentals of Strategic Thinking/planning and scenario planning.

• Learn what to do and not to do when creating a plan and how to avoid the common mistakes in writing a strategic plan.

• Practice using a framework that will assist you in going through the process successfully.


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Do NOT freak out!• I have a ton to cover and I will go pretty fast.• Please take notes and ask questions.• I will gladly send you a copy my strategic

planning workbook. • I am happy to answer any of your questions,

offer advice and recommend books at any time.

Go to my website: www.johnspence.com and you can send me an email requesting whatever you need.

http://www.johnspence.com/


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Most people think of:S.W.O.T.

Competitive PositioningCustomer Intimacy / CRM

Industry trendsGlobal trends

Regulatory / Political IssuesM.E.C.E.KRA’s

Strategic ThrustsCorporate Objectives

SMART GoalsMBO

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Five Foundations of Effective Strategic Thinking

Business Acumen

Personal Experience

Pattern Recognition

Strategic Insight

Disciplined Execution

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The Four – I’s• Ignorance• Inflexibility• Indifference• Inconsistency

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How to avoid the Four I’s • Aggressive external market focus.• Aggressive customer focus.• Keep the “Main Things” the main things.• Bullish on knowledge sharing and learning.• Passion and commitment at all levels.• Foster a healthy paranoia.

• Revel in change.– be agile, adaptive, and anticipatory.


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Do you have a clearly focused and well-communicated strategy for success?

Effective Strategy = Valued Differentiation x Execution


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Breakthrough Strategies

• GE: number 1 or 2 – fix, sell close.

• Intel: memory to processors

• Microsoft: installed base

• Apple: chaos to elegance

• Saturn: no haggling / no pressure


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Southwest

One type of planePoint-to-point

Fast turnsLow fares / no frills

Friendly staff

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Dell

BTOJIT

Inventory turnsLogistics vs. Technology

VOC

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100,00

ELP

NO FRILLS

LOGISTICS

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From the CEO of a little 152 billion dollar company…

Look, what is strategy but resource allocation?

When you strip away all the noise, that’s what it

comes down to. Strategy means making clear-cut

choices about how to compete. You cannot be

everything to everybody, no matter what the size

your business or how deep its pockets. You have

to figure out what to say “no” to.

Jeffrey Immelt


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Educated GuessDifferentiated Strategy

FocusResource Allocation

Bold Not RiskyWhat NOT To Do


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The problem with strategic thinking?It takes a lot of TIME…Study:

In Search of Excellence, Good to Great, Built to Last, Results Rule, The Leadership

Challenge, Who Says Elephants Can’t Dance, A Great Place To Work, The Toyota

Way, Lessons in Excellence, What Really Works, Small Giants, Think Big – Act

Small, What the Best CEOs Know, The 12 Simple Secrets of Microsoft

Management, Tough Management, Practice What You Preach, The Art of What

Works, The Four Pillars of High Performance, The Leadership Challenge, The Rise

and Fall of Strategic Planning, Getting Results, Creating Competitive Advantage,

Credibility, The Discipline of Teams, A Passion for Excellence, Liberation

Management, The Wisdom of Teams… 25 @ 7,000p

Experience: More than just your industry, your company, your job, and your

personal experience

Vision: 20% of your time on reflection, observation and strategic thinking


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A short diatribe before we get to the business models…

• I don’t like benchmarking.• I think copying other businesses is stupid!• Typically, by the time people start benchmarking a

company five years has past since they initiated their strategies.

• There is no way to guarantee that what worked for them will work for you…

• But what I absolutely can guarantee is… you will not come up with any innovative, effective or remarkable strategies completely on your own. You must look around you to find good ideas… then take those ideas and make them better as you apply them to your specific challenges and opportunities.


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To get the most from our session together…

It is absolutely critical that you be brutally honest with yourself today.

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Organizational Effectiveness

Audit Page 3

So let's get started with

a little self-test…


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Microsoft• Total World Domination• The Top 5 %• Bet the Company• Require Failure• Managers are Qualified• Perform, Perform, Perform• Shrimps vs. Weenies• Stop the Insanity• Espirit De Corps

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From: The Twelve Simple Secrets of Microsoft Management by Thielen


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74%88%

23,000,000

Trust & Respect


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Winning Culture = Engaged Employees = Involved Customers• 2007 surveys by Towers Perrin, Gallup and Vivaldi of 9,000

companies in the US.• Based on hundreds of studies that correlate independently, all

findings support the view that sustained profitability depends largely on the enthusiasm generated by the customer’s experience, which, in turn, depends largely on the enthusiasm and involvement of the employees serving the customer.

• In quantitative terms 70% of how the customer perceives your organization is the result of the customer’s experience with your employees.

• The results are indisputable: engaged and enthusiastic employees drive business success.

• What , then, creates engaged and enthusiastic employees? It is all about leadership and culture.


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Top High-Potential VPs from GE, Microsoft, IBM, Verizon, Merrill Lynch and the Mayo Clinic…

1. Credible

2. Respectful

3. Approachable

4. Team Player

5. Highly Professional


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“A Great Place to Work”From the 100 Best Companies to Work For Study Fun

FairFriends

FreedomPride Praise

Meaning


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In other words…

• Opportunity

• Respect

• Appreciation

• Meaning


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Charlie Trotter’sHire for Desire

Teamwork: NP

Communication

Highest Standards

Innovation

Truly Delight Customers

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From: Lesson in Excellence from Charlie Trotter by Clarke

Whole RoughWhole Peeled

ChunkedChopped

Finely ChoppedSliced

Thinly SlicedDiced

Finely DicedJulienned

Finely Julienned


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Lessons from seven top CEOs

• Have an outside-in perspective• Be deeply passionate about your job• Understand the importance of culture• Create or adapt next generation

products, processes and solutions• Implement the best ideas regardless of

origin4

From: What the Best CEOs Know by Krames

Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B

1-10


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2007 p/T @13.9B>p/F+GM+DC+VW+BMW+

JAG+RR+HUM+MC


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The Toyota Way• Challenging Vision

– We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.

• Kaizen– We improve our business operations continuously, always driving for

innovation and evolution.• Genchi Genbutsu

– We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed.

• Respect, Challenge and Help your People and Suppliers– We respect others, make every effort to understand each other, take

responsibility and do our best to build mutual trust.• Teamwork

– We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance.

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New study of 25 top companies renowned for building winning corporate cultures…

• GE• Dell• Wal-Mart• Toyota• Nordstrom• Starbucks

• Southwest Airlines• IBM• P&G• Whole Foods• Ritz Carlton• Intel

The pattern of six common traits for all of these firms…

From Results Rule by Randy Pennington


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They understand that: Results Rule!

1. Tell themselves the truth and value candor and honesty.

2. Pursue the best over the easiest in every situation.

3. Leverage the power of partnerships both internally and externally.

4. Focus the energy to make the main things the main thing.

5. Show the courage of accountability.

6. Learn, grow and improve every single day.

From Results Rule by Randy Pennington

51-10


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Is Your Company Up To Speed?

1. Do you have an emotional bond?

2. Does your strategy stand out?

3. Are you a fun place to work and a fun organization to do business with?

4. Are you built to change?

5. Do you embrace the value of values?

6. Are you winning the battle for talent?

7. Are you as disciplined as you are creative?

8. Do you use technology to change expectations and reshape your business?

9. Are you built for speed?

10. Have you built a company of leaders?

Fast Company June 2003

Pages 6-7


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Good To Great• Level 5 Leadership

• First Who…then What

• Confront the Brutal Facts

• Culture of Discipline

• Technology Accelerators

• Flywheel – Doom Loop

• Hedgehog Concept…

8From: Good to Great by Jim Collins


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Good to Great:1,483 to 11400 – 700%15+ years

EdgeWater Boats

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Twice weekly surveys for five years of 2,000+ senior managers and executives at:

• IBM• GE• Morgan Stanley• Merck• 3M• Microsoft• CIGNA• Heineken• MasterCard

• Fidelity• Motorola• Ikon• American Express• Progressive• Bank of America• AT&T• SAP• Borders 8


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Keys to effective management…

• Communicate clearly• Force the hard decisions• Focus on results• Remain flexible to change• Prove your value to the customer• Force collaboration• Rigorous but not ruthless

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1 - 10

From: Think Big – Act Small by Jennings


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The Evergreen Project

• 10 year study of 160 top companies

• 40 distinct industries

• 200 management practices

• Winners, climbers, tumblers, losers

• Winners had an average Total Return to Shareholders of 945%... the Losers only averaged a TRS of 62%

From: What (really) Works by Joyce, Nohria, Roberson 9


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The Four Primary Practices:1. A sharply focused, clearly communicated and

well-understood strategy for growth.

2. Flawless operational execution that consistently delivers the value proposition.

3. A performance-oriented culture that does not tolerate mediocrity.

4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work.

From: What (really) Works by Joyce, Nohria, Roberson 10


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The Secondary Management Practices:

• Talent = find and keep the best people.• Key leaders show commitment and

enthusiasm for the business.• Embrace strategic innovation.• Master the power of partnerships.

From: What (really) Works by Joyce, Nohria, Roberson

Score yourself on the 1–10 scale for all eight practices on page 11


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Individual Workshop• Go back and look at all of your audits.• Where were your low scores, where were your

high scores – what is the pattern?• Look over your notes – what were the key

themes? What are the most important ideas?• Study The Organizational Effectiveness Audit

very carefully.• Answers all the questions on pages 10 – 12.• Put in as much detail as possible.• Be very honest with yourself.• Think in terms of actions and outcomes.


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Thinking to Planning


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What Business Planning is Not !• Business planning does not attempt to make

future decisions.• Business planning is not forecasting.• Business planning is not an attempt to blueprint

the future.• Business planning is not necessarily the

preparation of massive plans and reports.• Business planning is not an effort to replace

good management judgment.


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Why Planning Pays Off

• Asks & answers questions of importance.

• Simulates the future.

• Forces the setting of objectives.

• Gives a framework for decisions.

• Develops performance measurements.

• Improves communications.


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Common Problems• Putting It Off• Idea inflation• Fear and Dread• Vague goals• Diluted priorities


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What makes a truly competitive strategy?

Is it unique, defendable and valuable in the marketplace?

Is the strategy coherent? – Does it generate clarity, commitment and consensus?

Is it deliverable?

Is the strategy ever- evolving?


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10 – 15 %

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What Inhibits Execution?National Survey of 4,000 Senior Executives

4. Inability to work together (21%)

3. Company culture (23%)

2. Economic climate (29%)

1. Holding onto the past / unwillingness to CHANGE (35%)


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Vision+

Values

Strategy

Commitment

Alignment

Systems Communication

Support

Adjust /Innovate

Reward /Punish

Where are we going + How will we behave on the way.

FocusDifferentiation“No”

All key stakeholders + guiding collation

Vision + ValuesStrategyPlansGoals / ObjectivesTactics / Actions

Procedures / Protocols

Repeatable ProcessClear / consistent / relentless

Training +time / money /

supplies / people

Measure / TrackOver-communicate

Transparency Renewal

Praise + Celebration and

Eliminate Mediocrity

9 Steps forEnsuring

Effective Execution


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Some thoughts on measurement

• Less is more• Results not activity• Easy / Hard• Post and review• Help not punishment


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Scenario Planning…

Is a process that stimulates imaginative and creative thinking to better prepare an organization by rehearsing for the future to avoid surprises and break

through the illusion of certainty. Probability & Impact

Trigger points


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“The purpose of the exercise is

not to develop a forecast,

because you know it would be

wrong. Instead, the aim is to

draw a circle around multiple

possibilities and think about

whether you are prepared to

face the range of various

futures that might unfold. It also

helps you think about how you

might be a catalyst in moving

the world a little bit in the

direction you’d like to go.”


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The Harvard Scenario Planning Model:

• Key Focal Issue• Driving Forces• Critical Uncertainties• Scenario Framework• Scenarios• Narratives


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Key Focal Issues• A significant upcoming decision or strategic

uncertainty that has long-range consequences for the future of the organization. (Strategic Inflection Point)

• Scope and timeframe for choices and concerns should be clearly defined.

• Typically posed as a strategic question:– Should we build a facility in Mexico in the next three years?– Should we invest more in R&D around a new consumer trend?– What is the future of talent acquisition in the high-tech arena?– What does the growth of India and China mean to our business in

the next 10 years?


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Driving Forces• Themes and trends that are likely to

impact, shape and influence the Key Focal issue in a significant way…– Economic (strength of dollar to Euro, recession, price of

oil…)

– Social (demographics, consumer demands, population…)

– Political (regulations, elections, tax, legal…)

– Technology (Moore’s Law, patents, innovation…)

– Corporate (changes in strategy, leadership, culture…)

– Competition (strategy, market share, innovation…)


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Critical Uncertainties

• The top two most relevant uncertainties that impact your scenario.

• Defined by level of uncertainty and importance.


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Example: Boat CompanyGas Prices / Recession


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Scenario Framework: 2 Critical Uncertainties / 4 Scenarios

Short

Short

Long

Long

How long will gas prices stay high in US?

How long willthe US

recession last? Hold on -stay domestic -slow production

Invest in electric engine

R&D

Close factories

Focus on international

business-move production offshore


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Possible Scenarios1. Short / Short = Hold on

2. Short / Long = New engines

3. Long / Short = Close factories

4. Long / Long = Go international

Now for each you would create a narrative…


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Narrative Stories• A detailed, coherent and logically consistent story of

what this future would actually look like.• Should read like a well-developed novel – but be as

realistic as possible.• Should answer the question: “How exactly did the

world get from here to there?”• It is important to place the organization in the

scenario and explore all of the implications that this unique future would have on the organization. What would the impact be? What decisions would have to be made? What are some possible options? How would it change strategy for the organization?


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• Probability• Impact • Trigger Points


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Then based on the scenarios…

Contingency Plan


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Summary of Key Ideas• Three major elements: thinking, planning, execution

• Strategic thinking = study + experience + pattern recognition

• Strategy = bold bets on resource allocation – what you say NO to.

• Analysis is critical – but it is not strategy.

• More, better, faster is not a strategy.

• This is not blueprinting the future.

• Scenario Planning =– Key Focal issues

– Driving Forces

– Critical Uncertainties

– Scenario framework

– Scenarios -> -> -> Narratives -> -> -> Implications

• Probability & impact = Contingency Planning


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Workshop• Identify the top three to five Key Focal Issues you believe are facing your group at

this time. Then choose one specific issue to pursue.

• What are the major Driving Forces that affect that issue? Regulation, innovation, politics, corporate culture, competition, legal, social, consumer trends…

• What are the TWO Critical Uncertainties that are the most important to this issue?

• Create a Scenario Framework of the four possible future scenarios around those two Critical Uncertainties. Then choose TWO scenarios from the framework to pursue.

• Craft a short, but detailed Narrative for these two scenarios – Think: newspaper story. Make it as realistic as possible. How did the world get from here to there? Discuss the various implications of this future scenario on your group and your current strategy. What actions would you take if this scenario played out?

• Determine Impact, Probability and Trigger Points for both scenarios.

• Make a recommendation as to whether either requires a full Contingency Plan.


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“A good plan violently executed today, is better than a perfect plan next week.”

General George S. Patton

Thank YouIf you would like copies of these slides or any information / advice on strategy, leadership, customer service or high performance teams – just give me a call or send an email – all my contact information is at: www.johnspence.com . You might also find some valuable ideas on my blog.

[email protected]

http://www.johnspence.com/

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