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1 Winning Strategy John Viljoen (PhD) 19 October, 2012.

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Presentation on theme: "1 Winning Strategy John Viljoen (PhD) 19 October, 2012."— Presentation transcript:

1 1 Winning Strategy John Viljoen (PhD) 19 October, 2012

2 2 Presentation overview 1.The impact of volatility on strategy 2.Four keys to a winning strategy

3 3 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

4 4 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?

5 5 Vision What we aspire to be Values The approach we will take to running our business Goals 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

6 6 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 didnt have time to write a short one Sir Winston Churchill

7 7 Our Strategic Plan-on-a-Page Strategic Goals Growth Quality at feasible cost Skilled employees Customer satisfaction Strategic Priorities Partnerships Technical innovation Easiest to work with Distribution channels Tasks and accountabilities Strategic KPIs Revenue increase Increase in customer satisfaction Quality improvement Lower employee turnover

8 8 Four Keys to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

9 9 Key #1 to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

10 10 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

11 11 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

12 12 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

13 13 Markets Products EXISTINGNEW EXISTING NEW Market Penetration Product/service development Market development Diversification What opportunities lie here? Priorities for scope increase

14 14 Risk filter Go Present Future Ongoing core business operations Scenarios & detailed data analysis Exhaustive options & risk analysis Unexpected + or - Rapid assessment Select preferred option Traditional strategy development cycle (stability) Strategy development under volatility Options for test selected Test / pilot / roll-out By distribution channel By region By product By service By technology Decide go / no go No Go Direct transition Volatility requires more live testing of strategy

15 15 Key #2 to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

16 16 Challenge conventional wisdom

17 17 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

18 18 Strong Differentiation Weak Low cost Performance Stuck in the middle (No added value & no low cost) Gravity pull Strategy Strategy: Cut costs Strategy: Add value Question: Is your business stuck in the middle? Convention creates stuck-in-the-middle

19 19 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

20 20 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)

21 21 2 What is it we currently cant do, but if we could, wouldnt that be something? Work on your business not in it 3 If we werent already doing this, would we bother to get in to it now? 1 Find a way to differentiate, or fail. I am famous because everyone understands me, Einstein is famous because nobody understands him Charlie Chaplin

22 22 Key #3 to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

23 23 Strategy development Strategy Implementation Leadership You are only as strong as your weakest link A Winning Strategy will fail if it is poorly managed AND

24 24 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 Managers Performance Agreement

25 25 Hard leversSoft levers StructureSystems 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 Our Vision, Values, Goals & Strategies and funding plan Financial management Balanced strategy implementation plans

26 26 Key #4 to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

27 27 Strategy Implementation Leadership You are only as strong as your weakest link Strategy development A Winning Strategy will fail if it is poorly managed AND

28 28 Volatility and leadership 1. How many squares are there?

29 29 1. How many squares are there? 2. How can we win the next T20 World Cup? Volatility and leadership

30 30 Problems Predicaments Complex issues Right/wrong solutions Versus Many possible solutions Complicated issues Versus Leadership to inform & implement Leadership to build agreement Versus Strategy solves problems that have no solution

31 31 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

32 32 Four Keys to a winning strategy Think & AnalyseAct Key 1 Manage the present from the future 1.Business scope 2.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

33 33 Thank you.


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