1. Whirlpool Europe, Comerio, Italy
From Product to Business Model Innovation: Fostering Strategic Agility for Renewed Growth
Whirlpool Europe, Comerio, Italy
27 May 2008
Yves Doz
The Timken Chaired Professor of Global Technology & Innovation
Professor of Business Strategy
INSEAD
Mikko Kosonen
Executive Vice President
SITRA
(ex-Chief Strategy and Information Officer, Nokia)

2. The most critical challenge today
How to discover and implement new business models, to transform one’s core business and rekindle growth
Where is Strategic Agility most needed?
CISCO: From corporate to consumer markets
INTEL: From processors to “ambiant” usage model solutions
IBM: From Hardware to integration services, and “on-demand” computing
NOKIA: From “devices” to internet-based mobility services
SAP: From proprietary ERPs to “Fortune 1000” to internet platforms for the next 200,000
HP: From disparate products to integrated service solutions
Strategic Rigidity
Strategic Agility
Entrepreneurial Insight and Flexibility
Operational
Excellence
Growth
Time

3. Sources of Sustained Growth and High Performance
Clear Direction and focus
We should have a clear vision for the future of our core business
We should have a sustained effort at maximally leveraging our core business
We should have a tight focus on continuous improvement
We should have a leadership position in everything we do
We should have self-confidence and an action orientation
High Efficiency
We should have strong business units with sufficient autonomy as they grow
We should have highly efficient business systems and processes
We should have deep collaborative relationships with our key customers and partners
We should learn by doing and build on our experience
Quick Commitment
We should have clear charters for all organizational units
We should have strong and experienced leaders with proven track record
We should make decisions fast
We should promote successful leaders

4. Single-minded attention to clear direction and focus leads to…
Leadership position in everything we do
Tight focus on continuous improvement
Sustained effort at maximally leveraging our core business
Clear vision for the future of our core business
Driver
High action orientation and self-confidence
Strategic myopia
Dominance mindset
Reluctance to open collaboration and experimentation
Short term internal orientation
Tyranny of the core business
Framing everything in the light of the core business
Tunnel vision
Considering everything outside the core as non- relevant
Toxic side-effect
Consequence
Action hero syndrome, no time and interest for alternatives
Snap judgment and intellectual laziness

5. Single-minded attention to High Efficiency leads to…
Learning by doing and building on experience
Deep collaborative relationships with key customers and partners
Highly efficient business systems and processes
Strong business units with sufficient autonomy as they grow
Driver
Toxic side-effect
Management mediocrity and competence gaps
Forgiven and hidden misbehavior and shortcomings
Ties that Bind
Customer & partner ‘lock in’ and decreasing strategic freedom
Activity system rigidification
Increasingly differentiated and specialized (‘fit for purpose’) activity systems
Resource imprisonment
Core business managers ‘sitting on their resources’
Consequence

6. Single-minded attention to quick commitment leads to…
Driver
Emotional apathy
Tired hero syndrome; future opportunities looking less thrilling than past experiences
Expert management
Decisions elevating to the top team; decisions made by the ‘same’ leaders
Heady charm of fame and power
Inflated egos, overly bold commitments, implicit pecking order
Management divergence
Declining intensity of dialogue and decreasing need for collective commitments
Toxic side-effect
Consequence
Clear charters for all organizational units
Strong leaders with proven track-record
Preference for fast decision making
Successful leaders

7. Strategic Agility easily Turns into Strategic Paralysis Over Time …
The Curse of Success
Strategic Agility easily Turns into Strategic Paralysis Over Time …
Strategic Sensitivity
Tunnel Vision
Tyranny of the core business
Strategic Myopia
Dominance mindset
Snap judgment and intellectual laziness
Resource Fluidity
Management divergence
Heady charm of fame and power
‘Expert’ management
Emotional apathy
Imprisoned resources
Business system rigidity
Ties that bind
Management mediocrity and competence traps
Leadership
Unity

8. Why Strategic Agility Now? Why so hard ?
Fast
Corporate Entrepreneurship
Strategic Agility
Operational
Performance
Speed
of Change
Focus on
Operational
Excellence
Strategic Planning
Slow
Simple/
Linear
Nature
of Change
Complex/
Systemic

9. The Strategic Agility Imperative
Most companies die not because they do the wrong things,
but because they keep doing what used to be the right things…
for too long.

10. How to discover and implement new innovative business models?
Strategic Sensitivity
Both the sharpness of perception and the intensity of awareness and action
Resource Fluidity
The internal capability to reconfigure business
systems and redeploy resources rapidly
Leadership
Unity
The ability of the top team to make bold decisions
fast, without being bogged down in “win-lose” politics at the top

11. Key Capabilities enabling Strategic Agility
Strategic Sensitivity
Open Strategy Process
Heightened Strategic Alertness
High Quality Internal Dialogue
Cabinet responsibility
Top team collaboration
Leadership style and capabilities of the CEO
Resource Fluidity
Fluid re-allocation and utilization of capital resources
Mobility of people and knowledge
Modular structures
Leadership
Unity

12. Through the magnifier lens: Drivers of Strategic Sensitivity
Co-strategizing with
multiple stakeholders
Open Strategy process
Experimentation
Stretched vision
Contradictory goals
Heightened
Strategic Alertness
STRATEGIC
SENSITIVITY
Open business definition
Factual and conceptual
richness
High Quality
Internal Dialogue
Cognitive diversity

13. Strategic Sensitivity
A peek into the microscope… Comparison of the approaches and methods used to foster
Strategic Sensitivity
INTEL
CISCO
SAP
NOKIA
IBM HP
Open Strategy Process
- Studies end-user future behaviour and usage models driving the demand for its products and services.
- Shares its future product and technology roadmaps with all major value chain members to secure alignment for R&D efforts.
- Active ecosystem building.
- Intel Software Solution Group, responsible for promoting Intel technology - across all IT domains, has people continuously working in its customers premises.
- Systematic online interaction with all customers.
- Active participation on key industry forums.
- Joint experimentation and shared “roadmaps” with strategic partners.
- Dedicated consultant unit (IBSG) focusing on customer understanding and business consulting (mainly but not exclusively external).
- All senior managers expected to meet with external stakeholders every two weeks and report their learnings.
- War rooms and competitive action scenarios (“Sun Tzu” reports).
- Corporate Strategy Group actively conducting and facilitation dialogue with multiple stakeholders, including new partners.
- Extensive strategic collaboration with key global customers (in the core business domain).
- Assigned designated corporate and business level strategists to drive and facilitate corporate-wide strategic collaboration with key partners.
- Active co-strategizing with key global customers (in core business).
- Systematic, process for continuously screening new business ideas.
- Active co-strategizing with Key Global Customers.
Global Innovation Outlooks
“Engineering & Technology Services” (ETS) unit to directly interface with R&D in different companies across industries.
- Teams of scientists and management consultants to work on client problems.
- Meetings with CEOs of client companies.
- Teams Strategy +techn.
- Emerging Business Opportunities
- Innovation Jams with whole personnel and key partners.
- Active co-strategizing with Key Global Customers.
- HP Labs as ‘platform’ for learning from the ‘periphery’ and ‘open innovation’.
- Global ‘innovation fair’ where the best business ideas are presented and evaluated.
Heighte-ned Strategic Alertness
- Multidimensional organization with global businesses and shared resources.
- Stretched goals/
CEO promises.
- Multidimensional organization (ex: The R&D head runs all the product lines and technologies, the head of sales and marketing all geographies and industries, …)
- Multidimensional organization.
- Stretched goals/ CEO promises.
- Open ‘business’ definition: “Life goes Mobile”.
- Systematic recruitment from other businesses.
- Open business definition.
- Global Innovation Outlooks and technology outlooks.
- Corporate-wide cross business unit themes for new business development (mobility, security etc.).
Quality of dialogue
- Training and Promotion of ‘Constructive Confrontation’.
- Systematic resource acquisition from prime management consultancy companies and companies from other industries and internally.
- Rotation to line organization after three years.
- Define core business(es) in a conceptually tight but broad manner fostering growth into new market domains.
- Segment councils for cross-functional solution development.
- Corporate Strategy Group (30 person strong internal consultancy team) recruited from consulting and investment banking to improve the quality of strategic dialogue, common frameworks and concepts that allow rich interpretations of strategic issues in a common language.
- Create an environment where everybody has the freedom to speak up, criticize, be out of the box. Discuss first as a team at the top. “Openness to disagree forces a true team”.
- Strategic agenda :10 major strategic issues that are continuously followed up, on emerging technologies, business models, or other important trends relevant for more than one business group.
- ‘Hand-pick’ 10 of the most capable individuals from any part of the organization to work on selected vision themes.
- Strategy process involving thousands of people, supported by web-based dialoguing tools.
- Safeguard new insights and opportunities: developed a process of time ‘Horizons’ to manage its emerging businesses.
- 3 top teams focusing on:
. strategy
. technology
. senior executives and selected (by CEO) other contributors (for 1 year).
- Securing cognitive diversity by appointing ‘best brains’ to fully mandated top team members for a year at a time.
- CTO/CSO network facilitating internal strategy dialogue.

14. A peek into the microscope…
SAP
NOKIA
Heightened Strategic Alertness
- Stretched goals/CEO promises.
- Multidimensional organization.
- Assigned designated corporate and business level strategists to drive and facilitate corporate-wide strategic collaboration with key partners.
- Stretched goals/ CEO promises.
- Open ‘business’ definition: Life goes Mobile.
- Systematic recruitment from other businesses.
Quality of dialogue
- Corporate Strategy Group (30 person strong internal consultancy team) recruited from consulting and investment banking to improve the quality of strategic dialogue, common frameworks and concepts that allow rich interpretations of strategic issues in a common language.
- Create an environment where everybody has the freedom to speak up, criticize, be out of the box. Discuss first as a team at the top. “Openness to disagree forces a true team”.
- Strategic agenda :10 major strategic issues that are continuously followed up, on emerging technologies, business models, or other important trends relevant for more than one business group.
- ‘Hand-pick’ 10 of the most capable individuals from any part of the organization to work on selected vision themes.
- Strategy process involving thousands of people, supported by web-based dialoguing tools.

15. A peek into the microscope…
SAP
NOKIA
Heightened Strategic Alertness
- Stretched goals/CEO promises.
- Multidimensional organization.
- Assigned designated corporate and business level strategists to drive and facilitate corporate-wide strategic collaboration with key partners.
- Stretched goals/ CEO promises.
- Open ‘business’ definition: Life goes Mobile.
- Systematic recruitment from other businesses.
Quality of dialogue
- Corporate Strategy Group (30 person strong internal consultancy team) recruited from consulting and investment banking to improve the quality of strategic dialogue, common frameworks and concepts that allow rich interpretations of strategic issues in a common language.
- Create an environment where everybody has the freedom to speak up, criticize, be out of the box. Discuss first as a team at the top. “Openness to disagree forces a true team”.
- Strategic agenda :10 major strategic issues that are continuously followed up, on emerging technologies, business models, or other important trends relevant for more than one business group.
- ‘Hand-pick’ 10 of the most capable individuals from any part of the organization to work on selected vision themes.
- Strategy process involving thousands of people, supported by web-based dialoguing tools.

16. Drivers of Leadership Unity
Shared agenda &
incentives
Cabinet responsibility
Mutual dependency
Embracing conflict +
dialogue
LEADERSHIP UNITY
Top team collaboration
Institutionalized
top team renewal
CEO First among peers
Leadership style and
capabilities of the CEO
Capability to play
multiple roles

17. Drivers of Resource Fluidity Fluid Re-allocation and Utilization
Freeing strategic direction
from org.structure
Dissociating results
from resource ownership
Fluid Re-allocation and Utilization
of Capital Resources
Assumption based
planning/resource
allocation process
Institutionalized
job rotation
Mobility of People and
Knowledge Sharing
Resource
Fluidity
Values and management
system emphasizing
knowledge sharing
‘Plug and Play’ modular
structures
Modular structures

18. Operational Excellence
Summary
Strategic Agility results from the multiplicative effect of:
Strategic Sensitivity: Seeing and framing opportunities in a new insightful way X
Resource Fluidity: Fast and efficient resource mobilization and redeployment
. Leadership Unity: Collective decision making and commitment to decision outcomes
Fast Change
Strategic
Agility ?
Curse of
Success
Operational Excellence
Complex Change

19. Key Levers of Strategic Leadership
Strategic Sensitivity:
Seeing and framing opportunities in a new insightful way
Cognitive
Organizational
Emotional
Resource Fluidity:
Fast and efficient resource mobilization and redeployment
Relational
Leadership Unity:
Collective decision making and commitment to decision outcomes

20. From Strategic Paralysis to Strategic Agility The "CORE" drivers
Emotional Drivers:
Re-energizing hearts and redirecting efforts, leading through values, articulating aspirations
Organizational Drivers:
Re-integrating the organization, creating interdependent processes, common rewards, integrated value creation
capabilities
Activities
Capabilities
Strategic Agility
(or Rigidity!)
Cognitive Drivers:
Developing and sharing new broader perspectives engaging in higher quality dialogues
Relational Drivers:
Re-uniting the top team, fostering an open and honest dialogue around key collective decisions, and sticking with them.

21. Opening the Cognitive Context
Encouraging the expression of new ideas
Planting and nurturing seeds of change
Opening spaces and providing fora for sense-making dialogues
Pacing the exploration journey to gain credibility
Reframing away from the lime-lights
Fencing-in resources for investment
Matching level of attention to level of learning
Clustering and bending

22. Adjusting the ‘Organizational Context’
Unpacking the core business system
Putting the organization ‘off-balance’
Allowing for rapid entry and exit into/from new businesses
Allowing flexible and dynamic differentiation and integration

23. Renewing the Relational Context
Putting top team members under renewed tension
Creating a sense of crisis
Changing the top team composition
Letting the new top team gradually develop a new common and more conceptual language

24. Re-energizing the Emotional Context
Cognition does not immediately translate into emotions! Emotions precede vision
Transition spaces and periods (mourning the old, adopting the new)
Redefining the new to mobilize the attachment to the old
Executive leadership (leading by example) is fundamental, emotions are contagious
But regaining strategic agility calls for a shift in emotional attachment

25. Strategic agility is a never ending quest
Success is blinding
Strategic agility is a never ending quest
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