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					4-05-11
Denominator (recession mindset) vs
   Numerator (growth mindset)
The failure of Corporate Entrepreneurship is blamed on a lack of
                          imagination




                        Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
The primary impediment to Revenue growth is not a lack of
   creativity but an unhealthy addiction to Power……..




                    Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
Managers and researchers typically discuss
 strategy as means to create economic
value, but strategic choices have as much
        to do with power as value.




            Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
    The 2 dominant streams of strategy thinking:

•   Industry Structure

•   Resource-based view of the firm


        Both connect strategic choices to value creation by way of
                                Power



                         Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
No wonder powerful firms are so attractive to
   investors, such as Warren Buffett, who
     described his ideal company as an
     economic castle protected by an
            unbreachable moat.



             Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
 Executives crave strategic power as much
     or more than investors do…..it makes
           their lives much easier…..
1.             Managers can get things done by the raw exercise of
                 power over employees, suppliers, distributors, and
                                  even customers.
          2.     Strategic power provides greater certainty about
                            future revenues and profits.
     3.         Strategic power allows firms to weather changes in
                    the marketplace without having to respond
                                    immediately.



                           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
General Motors’ market power in the 1950s
allowed the automaker to survive decades
   of change in technology, regulations,
 competition and consumer preferences
 before finally succumbing to bankruptcy.



           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
Strategy is Power……..but Power corrupts….




            Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
  But the more insidious risk is that the very
market power that companies use to protect
their established business hinders them from
          seizing new opportunities.




             Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
 Strategy Orchestration flips traditional
strategy on its head. Rather than starts with
   what you control, and looks for ways to
    leverage it, managers begin with the
opportunity and then assemble the required
           resources in its wake.



            Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
Strategy Orchestration happens when a
   firm pursues an opportunity, NOT by
 leveraging strategic power, and NOT by
controlling all the required resources BUT by
 assembling and managing a network of
               partners (nodes).



            Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
        “How orchestration differs from classic strategy”
                           Classic Strategy                         Orchestration

                                                                  Individual
   Vantage point          The Individual Firm
                                                              Opportunity/Network

      Source of                                                  Mobilizing other´s
                         Firm´s own resources
  funds(investment)                                                resources
                                                               Identify the needed
                        Upstream/Downstream
    Methodology                                                     resources
                              Integration
                                                             (assemble the network)
                                                                  No-boundaries.
Window of opportunity    Value chain – 180º
                                                                 Peripherical-360º

                            Egocentric                               Allocentric
   Locus of control
                           central control                      distributed control
                                Firm                                  Network
   Scope of value
                            (Adam Smith)                               (Nash)
        Skills                 Power                                 Diplomacy
                             Ruelas-Gossi, Orchestration, EGOS Colloquium, Gothenburg, July 2011.
  An allocentric view allows executives to
 recognise and, more importantly, seize a
whole range of opportunities that could only
  be pursued by a network rather than an
  individual firm, no matter how powerful.



             Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
Strategy Orchestration:
         •   Allows firms to get to market faster
         •   Adapt to changing circumstances
         •   Lower their invested capital

         •   Allowing them to pursue less profitable
             opportunities such as serving emerging
             market consumers……


                     Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
But it also applies to Apple iphone/ipod, RyanAir’s ancillary

Services and Nestle’s Nespresso.




                       Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
I. Put yourself in your customers’ (and partners’) shoes.




                    Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
Asking the same question leads to the
 same tired answers – use better raw
materials and hope the customer will
notice, cut prices to steal share, boost
  advertising, add features or simply
give up and focus on cost reduction.

           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
                          Feeling

                  Being

          Doing

Knowing
What really matters to our customers
           and partners?
What emotional need, beyond the
   purely functional, is unmet?
     What do they hope for?
       What do they fear?

         Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
II. Get partners to play ball.




      Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
 When faced with the need to find
partners, managers accustomed to
  exercising power often look for
  companies they can easily boss
 around, and when that does not
             work……

        Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
    They look to pay the partners to
      play….and that has at least 3
                problems:
 •At BOP, not enough profit to do that

•Risk the winners curse (there is always

               a best offer)
   • Unilateral/transactional attitude




           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
III. Guide the network with a light-touch, not a heavy hand.




                     Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
 Managers aspire to strategic power,
but power corrupts. The same power
that helps capture and sustain profits
 in the short and mid term can limit a
firm’s ability to thrive in the long term.



           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.
   Strategy Orchestration, however,
allows firms to assemble and guide the
   networks necessary to seize many
opportunities that lie outside the grasp
             of any one firm.



           Sull and Ruelas-Gossi, Strategic Orchestration, Business Strategy Review, Winter 2010.

				
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