STRATEGIC THINKINGWhat? Why? How?

National Association of Bar ExecutivesABA Annual MeetingJuly 29, 2009Chicago, IL

279 CASTLE BAR ROADROCHESTER, NY 14610(585) 615‐8032 SASSOCI@AOL.COM

STRATEGIC THINKING . . .

Focuses:On finding and developing unique opportunities to create value by enabling a provocative and creative dialogue among people who can affect an Association’s direction.

A way:Of understanding the fundamental drivers of an Association and deliberately challenging conventional thinking about them, in conversation with others.

Center for Applied Research

Strategic Thinking Strategic Planning

Vision of the FutureOnly the shape of the future can be predicted.

A future that is predictable and specifiable in detail.

Strategic Formulation and ImplementationFormulation and implementation are interactive rather than sequential and discrete.

The roles of formulation and implementation can be neatly divided.

Managerial Role in Strategy Making

All levels/stakeholders have a voice in strategy-making, as well as greater latitude to respond opportunistically to developing conditions.

Senior executives obtain the needed information from lower-level managers, and then use it to create a plan which is, in turn, disseminated to managers and employees for implementation.

Control

Relies on self-reference – a sense of strategic intent and purpose embedded in the minds of everyone throughout the organization that guides their choices on a daily basis in a process that is often difficultto measure and monitor from above.

Asserts control through measurement systems, assuming that organizations can measure and monitor important variables both accurately and quickly.

Managerial Role in Implementation

All employees understand the larger system, the connection between their roles and the functioning of that system, as well as the interdependence between the various roles that comprise the system.

Employees need only know his or her own role well and can be expected to defend only his or her own turf.

Strategy Making

Sees strategy and change as inescapably linked and assumes that finding new strategic options and implementing them successfully is harder and more important than evaluating them.

The challenge of setting strategic direction is primarily analytic.

Process and OutcomeSees the planning process itself as a critical value-adding element.

Focus is on the creation of the plan as the ultimate objective.

J.M. Liedtka

FIVE STRATEGIC QUESTIONSYOU SHOULD ASK TO UNDERSTAND WHERE YOUR ASSOCIATION IS GOING

What does your competitive environment look like?In the last three years, what have your competitors done?In the same period, what have you done to them?How might they attack you in the future?What are your plans to leapfrog over them?

NEW ECONOMYKEY FEATURES OF THE NEW RAPIDLY GLOBALIZING AND CHANGING KNOWLEDGE ECONOMY

"It's not the strongest nor most intelligent of the species that survive; it is the one most

adaptable to change" – Charles Darwin

THREE FORCES DRIVING NEW ECONOMY

Knowledge – intellectual capital as a strategic factor; a set of understandings used by people to make decisions or take actions that are important to the company Change – continuous, rapid and complex; generates uncertainty and reduces predictability Globalization – in R&D, technology, production, trade, finance, communication and information, which has resulted in opening of economies, global hyper competition and interdependency of business

COMPARING PRINCIPLES

P. Skat-Rordam G. Ebersole J. Sloan

Look behind the symptoms A systems or holistic view Holistic, conceptual, and complex

Combine intuition and data A focus on intent – a vision, a mission, a set of core values, goals

Awareness and sensitivity to signals from the environment

Recognize the value of synergy An understanding of how people go about finding solutions is often more important that the actual solutions they find

Transferring from nonwork context to work context

Live the life of customer An understanding of thedifference between tacticaland strategic approaches

Informal learning most influential• Intentional• Incidental

Balance the short and long term Thinking in time to link the past, the present and the future

Reframing through questioning and testing

Identifying strategic issues from a wide spectrum of issues put forth for review and discussion

Balance intuition and analysis

Having participants that are active, alert, committed, connected, involved and stimulated

THE TOP TEN ESSENTIAL REQUIREMENTS TO BE A GREAT STRATEGIC THINKER

#1: You must be a forward thinker.#2: You must learn from experience

and commit to using what you learn.

#3: You must learn to use your time efficiently and effectively.

#4: You must have an extremely high level of awareness of what is happening around you and be open to absorbing all that you can.

#5: You must be patient – with yourself and others.

#6: You must have clearly defined and focused milestones and goals.

#7: You must listen with a willingness to be influenced.

#8: In creating ideas, be honest about what is achievable now and what is achievable in the longer term.

#9: You must reserve and set aside time for your self.

#10: You must seek the advice and perspective of others

- M. Sánchez & J. Ebersole

STRATEGIC THINKING COMPETENCIES

J. Sloan J.M. Liedtka K. Yousie

Having an Imagination Systems Perspective – understand implications of strategic actions

Having a rigorous process or framework for dealing with strategic issues

A Broad Perspective Intent Focused – more determined and less distractible than rivals in the marketplace

Asking insightful and relevant questions, having the ability to understand the answers to those questions, and being able to apply that information in a meaningful and action-oriented way

Ability to Juggle, or attend to competing, incomplete, inaccurate information all at once

Thinking In Time – hold past, present, and future in mind at the same time to create better decision making and speed implementation

Communicating in a clear, memorable, and compelling fashion to assist others in the strategic thinking process

Ability to deal with things over which you have No Control

Hypothesis Driven – ensure both creative and critical thinking incorporated into strategy making

Adamant Desire to Win Intelligent Opportunism –responsive to good opportunities

WHY THE GAP?

Something is MissingSomebody’s MissingOutcomes are Missing

INGREDIENTS IN THE RECIPE

Things that MatterUnderstand the overall business & directionRealize there are various strategic viewpointsTake ‘time’ out of definition of strategicUse activities

InsightCombine & analyze diverse information from various sources

InnovationConsider multiple perspectives and possibilities

SOME FUNDAMENTALS

Keep track of who is thinking and how they thinkTake time to thinkUse structure to increase output and efficiency

SOME PRINCIPLES TO CREATE MORE TANGIBLE OUTCOMES

Be prepared with a rigorous prioritization approach.Let participants start narrowing.Perform individual ranking with group input.Keep track of what’s left over.

USED SYNONYMOUSLY

Dialogue (Greek roots)

Meaning flowing through

Discussion (Latin roots)

To investigate by reasoning or argument

Debate (Latin roots)

To beat

Dialogue Discussion/Debate

Seeing the whole among the parts Breaking issues/ problems into parts

Seeing the connections between the parts Seeing distinction between the parts

Inquiring into assumptions Justifying/defending assumptions

Learning through inquiry and disclosure Persuading, selling, telling

Creating shared meaning among many Gaining agreement on one meaning - Elinor & Gerard

STRATEGIC THINKING DIALOGUE

Factors Outcomes

Informed Partners have substantive knowledge & engage from a position of curiosity about wanting to understand the other person(s)

• Stretch parameters of current thinking• Deepen knowledge base• Introduce new data• Expand information & ideas• Listen in different ways

Risky Requires challenging & testing the underlying assumptions & beliefs of our information & thinking

• Broaden perspective• Stimulate imagination• Identify factors we can & cannot control• Increase level & quality of thinking

Critical Brings the strategy partners to a juncture in thinking & acting

• Reflect & respond to questions• Awareness of inconsistencies &

consistencies in ideas & opinions• Use of listening & inquiry• Create clarity & insights

J. Sloan

“WHERE DO WE ADD VALUE?”

First, answer the following questions.

What are the TOP 3 things we do that ADD INCREDIBLE VALUE for our members? What are the TOP 3 things we do that DON'T DELIVER INCREDIBLE VALUE because we can't/don't focus enough time, attention, and/or resources on them? What are the TOP 3 things we do that ADD LITTLE OR NO VALUE for customers?

“WHERE DO WE ADD VALUE?”

For Areas of Current Incredible Value –

How do we continue to grow the value delivered to provide even greater advantage? For Areas that Don’t Deliver Incredible Value Because of Limitations –

How can we work around resource limitations? What are new approaches to increase value? If we can’t fix this, should we eliminate trying to have an impact in these areas? For Areas Where Little or No Value is Delivered –

Is each of these critical? Are there opportunities to exit, eliminate, or re-work these activities? If it’s warranted, what steps can we take to make dramatic improvements in the value delivered?

“WHAT’S IT LIKE?”

The first step is to identify the characteristics of your situation orchallenge, asking yourself the following questions to find ways togeneralize your situation:

What is this really trying to accomplish? How would I describe this situation in 5 – 7 words? What’s this like in other businesses?Identify who else faces a similar situation to your generalized business challenge and then use their perspective to identify how they’d address your situation and solve it:Who else faces this? How are they addressing it? What would it be like if we addressed it similarly?

 

 

ISSUE  OLD INDUSTRIAL ECONOMY  NEW KNOWLEDGE ECONOMY 

Markets  

Economic Development   Steady and linear, quite predictable  Volatile ‐ extremely fast change, with explosive upsurges and sudden downturns, and chaotic ‐ the direction of the economy's changes is not perfectly clear4  

Market changes   Slow and linear  Fast and unpredictable 

Economy   Supplier‐driven  Customer‐driven

Lifecycle of Products and Technologies Long  Short  

Key Economy Drivers   Large industrial firms  Innovative entrepreneurial knowledge‐based firms

Scope of Competition   Local  Global  

Competition: Name of the Game   Size: The big eats the small  Speed: The fast eats the slow

Marketing: Name of the Game   Mass marketing  Differentiation

Enterprise  

Pace of business   Slow  Appreciably faster with ever‐rising customer expectations

Emphasis on   Stability  Change management

Business Development Approach   Strategy pyramid: vision, mission, goals, action plans  

Opportunity‐driven, dynamic strategy

Success Measure   Profit  Market capitalization (the market price of an entire company)  

Organization of Production   Mass production  Flexible and lean production

Key Drivers to Growth   Capital  People, knowledge, capabilities

Key Sources of Innovation   Research  Research, systemic innovation, knowledge management, integration, new business creation, venture strategies, new business models  

 

 

 

Key Technology Drivers   Automation and mechanization  Information and communication technology, e‐business, computerized design and manufacturing  

Main Sources of Competitive Advantage  

Access to raw materials, cheap labor, and capital for conversion; cost reduction through economies of scale  

Distinctive capabilities: institutional excellence, moving with speed; human resources, customer partnership; differentiation strategies; competitive strategies  

Scarce Resource   Financial capital  Human capital  

Decision Making   Vertical  Distributed 

Innovation Processes   Periodic, linear  Continuous, systemic

Production Focus   Internal processes  Enterprise‐wide business process management and entire value chain  

Strategic Alliances with Other Firms   Rare, "go alone" mindset  Teaming up to add complementary resources 

Organizational Structures   Hierarchical, bureaucratic, functional, pyramid structure  

Interconnected subsystems, flexible, devolved, employee empowerment, flat or networked structure  

Business Model   Traditional: command‐and‐control  New: refocused on people, knowledge, and coherence

Work Force  

Leadership   Vertical  Shared: employee empowerment & self‐leadership

Work force characteristics   Mainly male, high proportion of semi‐skilled or unskilled  

No gender bias; high proportion of graduates 

Skills   Mono‐skilled, standardized  Multi‐skilled, flexible 

Education Requirements   A skill or a degree  Continuous learning: It's not what you know, it's how fast you can learn  

Management‐Employee Relations   Confrontation  Cooperation, teamwork

Employment   Stable  Affected by market opportunity / risk factors 

Employees Seen as   Expense  Investment  

V. Kotelnikov