Sunday, June 9, 2013

Navigating Strategy via Inquiries

A competitive advantage is achieved by (a) creating value, (b) being unique, and (c) being difficult to imitate. Additionally, strategy should be simple.

Navigating strategy takes strategy and asking the right sets of strategic questions as well, as business becomes more dynamic than ever, strategy making shouldn't be just annual event, business executives need to continue review and revise strategy accordingly.
 Building the right set of questions in navigating strategy and execution is next practice for business executives. 

1. Three ‘W” Questions to Define Fundamentals of Corporate Strategy

If you want to define the fundamentals of your Business Strategy, you need only to answer three questions:

1) Who is the Target Customer?

2).What is the Value Proposition to that Customer?
3).What are the essential Capabilities needed to deliver that Value Proposition? 

2. Set of Questions to Score Corporate Strategy

If you want to score your Business Strategy, here are the 10 Strategic Tests:

1). Will your Strategy beat the Market?

2). Does your Strategy tap a true source of advantage?

3). Is your Strategy granular about where to compete?

4). Does your Strategy put you ahead of trends?

5). Does your Strategy rest on privileged insights?

6). Does your Strategy embrace uncertainty?

7). Does your Strategy balance commitment and flexibility?

8). Is your Strategy contaminated by bias?

9). Is there conviction to act on your Strategy?

10). Have you translated your Strategy into an action plan? 

3. Checklist of Scenario upon How to Make Strategic Decision 

Kami's 12 points/steps: (From “Trigger Points: how to make decisions three times faster)

1: Step 1: Where Are We? Develop an External Environment Profile

Key focal point: What are the key factors in our external environment and how much can we control them? 

2)   Step 2: Where Are We? Develop an Internal Environment Profile
Key focal point: Build detailed snapshots of your business activities as they are at present. 

3)  Step 3: Where Are We Going? Develop Assumptions about the Future External Environment 
    Key focal point: Catalog future influences systematically; know your key challenges and threats. 

4)    Step 4: Where Can We Go? Develop a Capabilities Profile
Key focal point: What are our strengths and needs? How are we doing in our key results and activities areas? 

5)    Step 5: Where Might We Go? Develop Future Internal Environment Assumptions
Key focal point: Build assumptions, potentials, etc. Do not build predictions or forecasts! Assess what the future business situation might look like.

6)   Step 6: Where Do We Want to Go? Develop Objectives
Key focal point: Create a pyramid of objectives; redefine your business; set functional objectives. 

7)    Step 7: What Do We Have to Do? Develop a Gap Analysis Profile
Key focal point: What will be the effect of new external forces? What assumptions can we make about future changes to our environment? 

8)   Step 8: What Could We Do? Opportunities and Problems
Key focal point: Act to fill the gaps. Conduct an opportunity-problem feasibility analysis; risk analysis assessment; resource-requirements assessment. Build action program proposals. 

9)    Step 9: What Should We Do? Select Strategy and Program Objectives
Key focal point: Classify strategy and program objectives; make explicit commitments; adjust objectives. 

10) Step 10: How Can We Do It? Implementation
Key focal point: Evaluate the impact of new programs. 

11) Step 11: How Are We Doing ? Control
Key focal point: Monitor external environment. Analyze fiscal and physical variances. Conduct an overall assessment. 

12) Step 12: Change What’s not Working Revise, Control, Remain Flexible
Key focal point: Revise strategy and program objectives as needed; revise explicit commitments as needed; adjust objectives as needed.

4. 5W+1H to Navigate Strategy 

1) WHY does the business make profit? What gap in the market does it fill? 

2).HOW does the business make profit? What are the transactions that generate cash flow and margin for the business? 

3).What is our specific objective?

4).What is our scope? 

5).What is our competitive advantage? (How are we better, cheaper, or different than the alternatives?)

6).What is our strategic sweet spot?

7).What is the relevant products in the market and their geographic coverage? 

8).Who are the buyers, suppliers, competitors, substitutes, and potential entrants? 

9).What forces control profitability? (see diagram)

10) Where is the inflection point in strategic changes.

5. Nine Business Model Building Blocks

(From the Business Model Generation book by Osterwalder & Pigneur)
1)  Value proposition: what is the company VP, product portfolio, pricing, branding.

2)    Customer segments: who are our target segments, markets, sectors.

3)     Key channels: what are our distribution channels, sales channels.

4)    Customer relations: how do we add value for each service, long term relations..

5)    Key partners: who are our vendors, alliances.
6)    Key activities: what do we do in terms of value chain, processes, project management?

7)     Key resources: How do we capitalize on HR, networking, know-how, financial resources?

8)     Revenue streams: how do we generate revenues..

9)     Cost structure: How can we optimize costs. 

6. Ten Questions in Bridging Strategy & Execution 

1)   All stakeholders are part of the game since inception - who are theses stakeholders, we do not include, miss, know about, over and over? – governance

2)     Hierarchy of variables / functions / R&R / organizations / disciplines are addressed - understand well root causes, why, what and how? influences - systemic approach 

3)    Outputs are optimized with limited resources - cannot maximize all variables and outputs at the same time ! - do we accept and understand that, emotionally and intellectually ? Is our reward scheme based on that fact , to drive right behavior, based on greater good ? 

4)   Balanced view of external and internal risks and opportunities - who has the right to ask indefinitely questions to open options, and knows when to shut up to close and move on ? 

5)    Obstacles are removed, and maturity / capacity / core competencies are accelerated - culture, consciousness, communication, nomenclature, knowledge, ego, ....- do we address these topics openly, in a transparent way, or still a bit tabu, in 21st century ? 

6)    Soft skills - motivation, creativity, intentions, trust, relationships, informal dialogues, engagement are our most valuable assets to build solid sustainable value propositions - how do we maintain them at Excellency levels? 

7)    Value proposition should be customer focused, like our org, and define the ideal business model, distribution, products & services, Brand by segments we want to go after. Can our Holistic Marketing drive the Enterprise and Business Strategy ?

8)    The whole value chain needs to be aligned, engaged, contributing by sharing the value so customers and stakeholders - from suppliers, to factories, employees, shareholders, get their fair share - how balanced and effective is our value chain? 

9)   Do we have common values and a dynamic enterprise business model that takes into account initial customer investments, life cycle of our customers, products, services, economical cycles, market shifts to insure flexibility and positive results throughout ? 

10) How to win, the primary objective of strategy for competitive advantage. A competitive advantage is achieved by (a) creating value, (b) being unique, and (c) being difficult to imitate. Additionally, strategy should be simple.

A good strategy takes multitude of disciplines that would include: Sciences: exact - math, natural - chemistry, biology, physics, climatolog. Human - anthropology, psychology, sociology; Business disciplines: Marketing & Sales, HR & Finance and Supply chain - production & logistics. Spirituality: serendipity, inner voices, intuition, really address the essence in the complex systems in a dynamic, continuous improvement way! 


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