1 winning strategy john viljoen (phd) 19 october, 2012
TRANSCRIPT
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Winning Strategy
John Viljoen (PhD)
19 October, 2012
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Presentation overview
1. The impact of volatility on strategy2. Four keys to a winning strategy
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Volatility
Economic / GFC
New or game changing
Technologies
Increased customer churn
Increased or unexpected Competition
Local, regional, global regulations
Increased employee churn
Shorter product life cycles
Changed distribution channels
Number of volatility factors
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Volatility causes reduced business predictability
• Forecasting errors– Contingency planning and scenarios, “what if….?”
• Reluctance to invest at scale– Less product testing /smaller production trials
• Customer base uncertainty – Build brand equity, how do we become “first choice”?
• Unexpected competitors – How can we build barriers to entry?
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Vision
What we aspire to be
Values
The approach we will take to running our
businessGoals
What we want to achieve – the
specific targets
Strategies
Actions we will take to achieve our Goals
Purpose
What we will do achieve our Vision
Volatility affects every aspect of “Strategy”
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Winning strategies are clear and simple
1. Strategy produces business transformation
RUN – ENHANCE – TRANSFORM• Big fixes, big innovation, big change
2. Keep strategy simple• Strategic plan-on-a-page• Simple does not mean “easy”
“Sir, I am writing you this long letter because I didn’t have time to write a short one”
Sir Winston Churchill
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Our Strategic Plan-on-a-PageStrategic Goals
GrowthQuality at
feasible costSkilled
employeesCustomer
satisfaction
Strategic Priorities
Partnerships
Technical innovation
Easiest to work with
Distribution channels
Tasks and accountabilities
Strategic KPIs
Revenue increaseIncrease incustomer
satisfaction
Quality improvement
Lower employee turnover
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Four Keys to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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Key #1 to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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• Efficiency (doing things right)
• Effectiveness (doing the right things)
Managing the present from the future builds effectiveness
“There is a propensity in most organisations to do better and better that which should not be done at all”
Peter Drucker
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Corporate Strategy
What lines of business should we
be in?
SCOPE
Business Strategy
In each of these lines of business, how can we be as successful
as possible?
OPTIMISE
Increased “Scope” helps businesses cope with volatility
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Scope change can also put your winning strategy at risk
Ansvar: A specialist insurance business– Churches– Heritage buildings– Museums– Private schools– Global operations – The “general insurance products” decision
• Home and content• Motor cars• Income protection
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Markets
ProductsEXISTING NEW
EXISTING
NEW
Market Penetration Product/service development
Market development Diversification
What opportunities lie here?
Priorities for scope increase
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Risk filterGo
Present Future
Ongoing core
businessoperations
Scenarios & detailed data
analysis
Exhaustive options & risk
analysis
Unexpected “+” or
“-”
Rapid assessment
Select preferred
option
Traditional strategy development cycle (stability)
Strategy development under volatilityOptions for
test selected
Test / pilot / roll-out
• By distribution channel
• By region• By product• By service• By technology• Decide “go / no go”
No G
o
Direct transition
Volatility requires more “live” testing of strategy
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Key #2 to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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Challenge conventional wisdom
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Why we need to challenge convention
We “lock-in” strategies that work for us,
through structure, systems and expert
staff
The business environment of is characterised by constant change
Strategists “zero base” their decisions
We create convention
In the face of change
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Strong
Differentiation
Weak
Low cost
Perf
orm
an
ce
Stuck in the middle(No added value & no low cost)
“Gravitypull”
Strategy
Str
ate
gy
: C
ut
cost
s
Str
ate
gy
: A
dd
valu
e
Question: Is your business “stuck in the middle”?
Convention creates “stuck-in-the-middle”
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Winning strategy creates “patterns of investments”
Differentiation• Add product features• Build product and
business brand profile• Heavy customer focus • Service support – nothing
is too difficult
Do whatever it takes to support a price premium
Low cost• Scalability • Process integration• Streamlining• Reducing input costs• Mass distribution• Just-in-time
Get the quality & features right and then “squeeze”
Mutually exclusive “patterns of investment”
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Protect your differentiation• Creates value as defined by the customer (revenue
impact)
• Difficult to copy (barrier to entry by competition)
• Sustainable in the longer term (time to generate ROI) Differentiating raw sugar (commodity)
Technical differentiation
(Brazil)
Customer service
differentiation
(Australia)
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2“What is it we currently can’t do, but if we could,
wouldn’t that be something?”
Work on your business not in it
3“If we weren’t already doing this, would we bother to
get in to it now”?
1Find a way to differentiate, or fail.
“I am famous because everyone understands me, Einstein is famous because nobody understands him” Charlie Chaplin
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Key #3 to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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Strategy development
Strategy Implementation
Leadership
You are only as
strong as your
weakest link
A Winning Strategy will fail if it is poorly
managed
AN
D A
ND
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For each manager…..
I am accountable for this strategy
My part of this strategy
is…..
My supporting role for this
strategy is….
Single point accountability
I have no role in this
strategy
Manager’s Performance Agreement
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“Hard” levers “Soft” levers
Structure Systems Capabilities Culture
• Roles/teams• Authority levels• Business,
Functional & Horizontal integration
• Performance management
• Risk management
• People management
• IT systems• Reporting• Communication
• Staff skills• Flexibility of
people resources
• Capability gaps
• Workforce planning
• Values & Behaviours
• Leadership• Quality• Professionalism• Teamwork
Defining the future
Delivering the future
Ou
rV
isio
n,
Valu
es,
Goals
&
Str
ate
gie
s an
d
fun
din
g p
lan
Financial management
Balanced strategy implementation plans
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Key #4 to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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Strategy Implementation
Leadership
You are only as strong as
your weakest link
Strategy development
A Winning Strategy will fail if it is poorly managed
AN
D A
ND
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Volatility and leadership
1. How many squares are there?
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1. How many squares are there?
2. How can we win the next T20 World Cup?
Volatility and leadership
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Pro
ble
ms
Pre
dic
amen
ts
Complex
issues
Right/wrong
solutionsVersus
Many possible solutions
Complicated
issuesVersus
Leadership to inform & implement
Leadership to build agreement
Versus
Strategy solves problems that have no solution
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1. “Is sought out for advice on big business issues”
2. “Knows when to make a decision – not too early, not too late”
3. “Is original and value-adding”4. “Looks for clear, straightforward solutions”5. Excels when business issues get really
complex or difficult”
Leadership for a winning strategy in Pernod Ricard
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Four Keys to a winning strategyThink & Analyse Act
Key 1 Manage the present from the future
1. Business scope2. Pilot projects
Key 2 Challenge conventional wisdom
1. Differentiation & innovation
Key 3 Think through to the finish line
1. Balanced implementation plans
2. Clear accountability
Key 4 How will we lead this transformation?
1. Strategic leadership audit
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Thank you.