1. Strategy as Strategic Decision Making, Ch. 4 Presented by: Nicholas Kirkwood Nicholas Kirkwood Ching Ling Ching Ling Pichamon Adulavidhaya Pichamon Adulavidhaya Roar Bjordal Roar Bjordal Vegard Sandberg Vegard Sandberg

2. Michael Dell’s Advice to Entrepreneurs http://www.youtube.com/watc h?v=bBsCZpomy24 http://www.youtube.com/watc h?v=bBsCZpomy24 http://www.youtube.com/watc h?v=bBsCZpomy24

3. Strategy as Strategic Decision making What is strategy? Simple but powerful definition from the “Economist”: Simple but powerful definition from the “Economist”: - “Where do you want to go?” and “How do you want to get there?” Yet in today’s hotly competitive markets, these questions are incomplete Yet in today’s hotly competitive markets, these questions are incomplete

4. “Competing on the edge” A different perspective on strategy with the following approach: A different perspective on strategy with the following approach: Combination of the questions of “where” and “how” to create a continuing flow of temporary and shifting competitive advantages Combination of the questions of “where” and “how” to create a continuing flow of temporary and shifting competitive advantages

5. Stated by successful CEOs “No advantage and no success is ever permanent. The winners are those who keep moving” “No advantage and no success is ever permanent. The winners are those who keep moving” John Browne, CEO of British Petroleum “The only constant in our business is that everything is changing. We have to be ahead of the game.” “The only constant in our business is that everything is changing. We have to be ahead of the game.” Michael Dell, CEO of Dell

6. Cornerstone of effective strategy The ability to make fast, widely supported, and high-quality strategic decisions on a frequent basis The ability to make fast, widely supported, and high-quality strategic decisions on a frequent basis

7. Four approaches emerged from studies/research on strategy in high-velocity markets Building collective intuition that enhances the ability of a top-management team to see threats and opportunities sooner and more accurately Building collective intuition that enhances the ability of a top-management team to see threats and opportunities sooner and more accurately Stimulating quick conflict to improve the quality of strategic thinking without sacrificing significant time Stimulating quick conflict to improve the quality of strategic thinking without sacrificing significant time Maintaining a disciplined pace that drives the decision process to a timely conclusion Maintaining a disciplined pace that drives the decision process to a timely conclusion Defusing political behavior that creates unproductive conflict and wastes time. Defusing political behavior that creates unproductive conflict and wastes time.

8. Build collective intuition Successful executives use their intuition to make profitable business decisions Successful executives use their intuition to make profitable business decisions A recent study shows that 62% of CEOs rate Gut feelings as being highly influential in their business decisions A recent study shows that 62% of CEOs rate Gut feelings as being highly influential in their business decisions ----- 2006, PRWeek/Burson-Marsteller CEO survey

9. The downside of “Gut feeling” Anxious people will more than likely associate all of the bad someone or something does and totally rule out any positive feelings they may have because the “bad” will outweigh the “good” in their minds. Anxious people will more than likely associate all of the bad someone or something does and totally rule out any positive feelings they may have because the “bad” will outweigh the “good” in their minds. Build collective intuition

10. What makes an effective decision maker? Use as much as information Use as much as information Hold regularly scheduled meeting Hold regularly scheduled meeting Rely on extensive, real-time information Rely on extensive, real-time information Avoid accounting-based information and predictions Avoid accounting-based information and predictions

11. Sharing information Sharing information at “must attend” meeting is an essential part of building collective intuition. Sharing information at “must attend” meeting is an essential part of building collective intuition. Result in a forum for signaling collaborative opportunities across business and shaping the collective strategy. Result in a forum for signaling collaborative opportunities across business and shaping the collective strategy. Build collective intuition

12. Why “real-time” information” and “must attend” meeting matter? Intense interaction Intense interaction - Short-term vs. Long-term - Short-term vs. Long-term - Status quo vs. Change - Status quo vs. Change Develop intuition through experience Develop intuition through experience Accelerate decision process Accelerate decision process Build collective intuition

13. Intuition Generation Emotional Intelligence Using intuition

14. Stimulate quick conflict Improve the quality of decision making Conflict stimulates innovation Conflict stimulates innovation Conflict creates a fuller understanding of options Conflict creates a fuller understanding of options Conflict improves decision effectiveness Conflict improves decision effectiveness Effective strategic decision makers accelerate it Effective strategic decision makers accelerate it In dynamic markets, conflict is a natural feature of decision making In dynamic markets, conflict is a natural feature of decision making

15. Organizational Conflict The Good, The Bad & The Ugly The Good, The Bad & The Ugly Opportunity Opportunity Unpleasant, time-consuming Unpleasant, time-consuming Need not be destructive Need not be destructive If conflict is identified and is managed properly, it can actually benefit teams If conflict is identified and is managed properly, it can actually benefit teams Managing conflict effectively requires that all parties understand the nature of conflict in the workplace. Managing conflict effectively requires that all parties understand the nature of conflict in the workplace. Source:http://www.work911.com/articles/organization.htm

16. Method to stimulate conflict Assembling diverse team Age Age Gender Gender Functional background Functional background Corporate experience Corporate experience A high-growth venture in Silicon Valley A high-growth venture in Silicon Valley Older executives rely on their expertise Older executives rely on their expertise Younger executives bring in fresh ideas Younger executives bring in fresh ideas Alliance decision Alliance decision

17. Method to stimulate conflict Frame-breaking techniques Create alternatives to obvious points of view Create alternatives to obvious points of view Scenario planning Scenario planning a strategic planning method that some organizations use to make flexible long-term plans. a strategic planning method that some organizations use to make flexible long-term plans. Role-plays of competitors Role-plays of competitors A multibusiness technology firm A multibusiness technology firm

18. Method to stimulate conflict Creating multiple alternatives Develop alternatives as quickly as possible Develop alternatives as quickly as possible Team can work with an array of possibilities simultaneously Team can work with an array of possibilities simultaneously The power of multiple alternatives Speed up conflict Speed up conflict Provide executives the confidence Provide executives the confidence Defuse the interpersonal tension Defuse the interpersonal tension

19. Resolve Conflict, Boost Creativity Resolve Conflict, Boost Creativity Consensus decisions At best, conflict provide improved result At best, conflict provide improved result At worst, conflict destroy individual self-esteem, increase tension, decrease participation and productivity At worst, conflict destroy individual self-esteem, increase tension, decrease participation and productivity Company leaders as mediators Company leaders as mediators Enhance understanding Enhance understanding Develop constructive conflict Develop constructive conflict Source: HR Magazine

20. Maintain the pace

21. Less effective strategic decision makers: Believe that every strategic decision is unique Believe that every strategic decision is unique Believe that they must decide as quickly as possible Believe that they must decide as quickly as possible Effective strategic decision makers: Maintaining decision pace, not pushing decision speed Maintaining decision pace, not pushing decision speed Cut off debate at the appropriate moment Cut off debate at the appropriate moment Use rules of how long a decision should take Use rules of how long a decision should take

22. Maintain the pace Two-step method called: ”Consensus with qualification” ”Consensus with qualification” Bring decision making to a close Bring decision making to a close Managers conduct the decision process Managers conduct the decision process Choice is made when consensus is reached Choice is made when consensus is reached Use voting if consensus does not emerge Use voting if consensus does not emerge Allowing managers to make the decision Allowing managers to make the decision

23. Maintain the pace Decision-making rhythm: Help managers plan their progress Help managers plan their progress Make the progress more predictable Make the progress more predictable Emphasizes that hitting decision timing is more critical than achieve consensus Emphasizes that hitting decision timing is more critical than achieve consensus ”The worst decision is no decision at all!”

24. Maintain the pace Prototyping: Encourages managers to take action Encourages managers to take action Removes the probabilities for procrastination Removes the probabilities for procrastination Keeps the managers focused on the goal Keeps the managers focused on the goal Lowers the barriers to choice and spurs the managers toward a conclusion Lowers the barriers to choice and spurs the managers toward a conclusion

25. Maintain the pace Consensus with qualification: Maintains the pace Maintains the pace Consensus will still not exist Consensus will still not exist Resolve a conflict in a way that team members perceive as equitable Resolve a conflict in a way that team members perceive as equitable Gives managers a strong voice in decisions Gives managers a strong voice in decisions ”Consensus is nice, but we have to keep up with the train”

26. Group Activity

27. Politicking More effective strategic decision makers take a negative view on politicking. More effective strategic decision makers take a negative view on politicking. Politicking: Politicking: Involves managers using information to their own advantage. Involves managers using information to their own advantage. Distorts the information base. Distorts the information base. Leads to poor decision making. Leads to poor decision making.

28. Defusing Politics Creating common goals Creating common goals Not homogenous thinking but rather a shared vision of where they want to be and who their competition is. Not homogenous thinking but rather a shared vision of where they want to be and who their competition is. Balanced power structure Balanced power structure Each key decision maker has an area of responsibility but in which the leader is the most powerful decision maker. Each key decision maker has an area of responsibility but in which the leader is the most powerful decision maker.

29. Defusing Politics Humor Humor Relieve tension by making business fun. Relieve tension by making business fun. Emphasize the rush and excitement of fast paced markets. Emphasize the rush and excitement of fast paced markets. Puts people in a positive mood and strengthens the collaborative outlook. Puts people in a positive mood and strengthens the collaborative outlook.

30. Less Effective Strategy Inward/competitive focus Inward/competitive focus Lack of teamwork Lack of teamwork Dysfunctional power structure Dysfunctional power structure