Course Objectives - The Alpha Strategies

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Management 1:

The New Manager’s Course


Strategic and Business Planning


Alan
Kennedy

November 2013




© 2013 Alan W. Kennedy

on behalf of
Schulich

Executive Education Centre (SEEC). All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, elec
tro
nic,
mechanical, recording, photocopying or otherwise, without written permission of the copyright
holder

©

About the Presenter

Alan

has

been

teaching

strategy

for

the

Schulich

Executive

Education

Centre

since

1992
.

His

principal

course

is

Strategic

Management,

a

three

day

course

on

Situation

Analysis,

Strategic

Planning,

and

Business

Planning
.

In

addition

to

being

a

member

of

the

faculty

for

Management

I,

Alan

also

teaches

in

the

Insurance

Industry

Leadership

Program,

a

one

week

program

for

insurance

industry

executives
.

Alan

is

a

frequent

speaker

on

matters

of

strategy
.

Alan’s

book,

The

Alpha

Strategies



Understanding

Strategy,

Risk,

and

Values

in

Any

Organization

was

published

in

February

is

now

available

at

all

online

retailers

and

for

free

in

pdf

format

at

www
.
thealphastrategies
.
com


Alan

is

a

Honor

Roll

member

of

the

Canadian

Association

of

Management

Consultants
.

Alan

received

his

degrees

from

Dalhousie

University

and

served

as

Senior

Vice

President

&

General

Counsel

for

both

Oxford

Development

Group

and

Campeau

Corporation

and

as

a

member

of

the

Board

of

Directors

for

both

companies
.


Alan

Kennedy

B
.
A
.

LLB
.

CMC

Alan

is

a

partner

with

Gibson

Kennedy

&

Company,

a

Toronto

consulting

firm

offering

Canadian

clients

strategy

counsel

and

competitive

research

services

since

1990
.

Gibson

Kennedy

is

the

authorized

correspondent

in

Canada

for

Kaiser

Associates

Inc
.
,

a

Washington
-
based

consultancy

offering

global

competitive

research

services

to

North

American

based

clients
.

Alan’s

practice

focuses

exclusively

on

matters

of

strategy,

risk,

and

capital

projects

planning

and

communication

using

The

Alpha

Strategies

model

he

pioneered
.

©

The Day’s Objectives

1.
how strategic planning
differs
from
business
planning


2.
how stakeholder identification & expectations
analysis factor in strategy decisions


3.
how
a business plan implements the intent of
the

strategic
plan


Your Issues / what do you want to learn more about?

















©

Module One


A Brief Introduction to Strategy & its History


The Issues in Strategy

Source: Robert
F. Felton and Pamela Keenan
Fritz, The View from the Boardroom

McKinsey Quarterly 2005
Special
Edition: Value and Performance

June 4, 2013


-
A
majority of leaders (64 percent) said the biggest frustration for managers is
having too many conflicting priorities
.


-
Most
executives (54 percent) said they do not believe that their company’s
strategy will lead to success
.


-
Most
(53 percent) could not say their strategy is understood by employees and
customers
.


-
Only
a third (33 percent) said they feel the company’s core capabilities fully
support the company’s strategy
.


-
Only
21 percent could say all of their businesses leverage their core
capabilities
.


http://www.booz.com/global/home/press/display/coherence
-
profiler
-
results

“Strategy is a description of a chosen course of action”

“Our long term strategy is to be around for the long term. Our short term strategy is to
not do anything that would screw
-
up our long term strategy”


Stanfield’s,
The Underwear Company
Truro, Nova Scotia

Strategy Definition

©

A Competitive Researcher’s Perspective on Strategy

-

8
strategies
are common to all organizations

-

1 strategy is the organization’s dominant strategy

-

3 types of strategy are common to all organizations

10

8 strategies
are the source

of
all
subsequent implementation strategy

and organization design


Origin of The 8 Strategies

The 8 Strategy Definitions

Business Definition /

Mandate

Focus on positioning the business / on interpreting the mandate
parameters

Risk

Focus on the unacceptable and ways to manage it

Growth

Focus on type and rate of growth

Financial Management

Focus on sourcing, allocation, and management of capital and
revenues

R&D / Technology

Focus on the creation and/or use of intellectual capital / technology

Organization Mgmt

Focus on sourcing, allocation, and management of personnel

Marketing / Communications

Focus on identifying and capturing customers and clients (
i.e

marketing through to sales)

Service Delivery / Production /
Manufacturing

Focus on fulfilling the marketing promise of value / relevance

The Generic Strategies

Business
Definition /

Mandate

Business Positioning
: Niche, Specialty, Commodity

Mandate:

Narrow Interpretation; Middle
-
of
-
the
-
Road; Broad Interpretation

Risk

Focus:

Internal; External; Both

Management:

Accept, Avoid, Transfer, Mitigate

Growth

Type:

Internal, External (acquisitions, partnerships, alliances, joint ventures)

Rate:

Bigger, Smaller, No Change

Financial
Management

Sourcing:

Capital markets, debt, equity, self
-
funding

Allocation:
Strategies; Business Units

Management:

Performance; Control, Both

R&D / Technology

Follower, Leader, Adapter

Organization
Mgmt

Sourcing:
Internal; External

Allocation
: Employee; Contract; Outsourcing

Management:

Entrepreneurial; Bureaucracy; Adhocracy; Centralized,
Decentralized

Marketing /
Communications

Identifying:

(
ie
. Marketing): Product / Service; Price; Place; Promotion

Capturing:

(
ie
. Sales): Targeting; Approaching; Pitching; Overcoming
Objections; Closing; Follow
-
Up

Service Delivery /
Production /
Manufacturing

Delivering the Promise:
Needs / Requirements; Inputs; Production; Quality;
Delivery; Follow
-
up (Warranty)

Management 1 Course Structure

14

The 8 Strategies

Wednesday

Business Definition / Mandate

Risk

Growth

Financial Management

Thursday

R&D / Technology

Organization Management

Monday, Tuesday, Friday

Marketing / Communications

Tuesday

Service Delivery / Production /
Manufacturing

Understanding Current Strategy

©

Module Two


How
strategic planning differs from business planning


3 types of strategy are common to all organizations

Alpha

is the one strategy which
leads the organization and
sets its character.

e.g. Nike is Marketing

Influencers

are the three strategies which most
closely guide and constrain
implementation of the Alpha and the
remaining four strategies, the Enablers

Enablers

are the remaining strategies

©

Examples of Dominant Strategy

WalMart
,
Stantec
, McDonald’s

IBM

Pepsi, Coca
-
Cola, Nike, The Bay, United Way

CHMC, Bank
of
Canada, RCMP, Sun Life, OTPP, CRA

Growth

Business
Definition (but not Mandate)

Marketing / Communications

Risk

Organization

Dominant Strategy

Toyota, FedEx, Amazon, many Hospitals, much of Government

Service
Delivery / Production /

Manufacturing

Bank of
Montreal, Ontario Financing Authority

Financial Management

Google, Intel, NASA, NRC

R&D / Technology

Frank
Gehry

Architects

Organization Management

How are your strategies organized?

Enablers

Influencers

Alpha

The Alphas

Blackberry

Business
Definition

To be the global leader in wireless data communications

Risk

To protect our intellectual property and to protect network security and integrity

Growth

To focus on expanding our customer and subscriber base through marketing efforts,
strategic alliances, and acquisitions

Financial
Management

To access capital markets through TSX /
NASDAQ

listings

Technology

To focus research on broad market applications for products derived from the existing
technology base.

Organization
Mgmt

To use the strength of market position and value proposition to enable HR “pull”
potential employees and to leverage proximity and relationship with University of
Waterloo

Marketing

To encourage the adoption of our platform by wireless network service providers
globally and their customers, and to focus on licensing components of the BlackBerry
platform to key handset and service vendors

Manufacturing

To deliver wireless data security and network reliability

Blackberry

Growth

Risk

Business Definition

Financial Management

Organization Management

R&D / Technology

Marketing

Enablers

Influencers

Alpha

Manufacturing

Blackberry

The Alphas

Tarion

Strategic Plan

Mandate

Administration of the ONHWP Act.

Risk

Use of insurance industry practices and regulatory authority to manage
risks to new homebuyers

Growth

Rise and fall with the new home building industry cycles

Financial

Use of insurance industry capital reserving practices; revenues from
fees from sale of warranties and from builder licensing

Technology

Enable management productivity; e.g. call center, web
-
based services

Organization

Regulator decisions are isolated from interference by the Board or the
Insurance function

Marketing

To educate new home buyers and home builders

Service
Delivery

To deflect risk away from the program onto builders

Growth

Risk

Mandate

Financial Management

Organization Management

R&D / Technology

Marketing

Enablers

Influencers

Alpha

Service Delivery

The 8 Strategies

Strategy Description

Alpha

Influencer

Enabler

Business Definition /

Mandate

How is the organization positioned?

What is the mandate?

-

Risk

How are risks identified and managed ?

-

Growth

How does the organization grow?

-

Financial

How are the finances managed?

-

R&D / Technology

What is the focus of R&D / Technology ?

-

Organization

Where are people sourced; how are
responsibilities and authority delegated; what is
the culture i.e. alpha?

-

Marketing / Communications

How does the organization identify and capture
customers / the perception of value?

-

Service Delivery / Production

How are products / services are produced?

-

The One
-
Page Strategic Plan

Module Three


How
stakeholder identification & expectations
analysis


factor in
strategy decisions




The Facts that Support Strategy Decisions

Customers (Users)

& Markets (Need Demand)

Industry Dynamics

Competitors

Trends

Best Practices

Stakeholder Expectations

Current Strategy

Stakeholder Types

Actual Stakeholder Names

























The Authority Group

Those Stakeholders who approve the plan and
authorize implementation

The Involve Group

Stakeholders who should be involved because of
the role they will play in implementation

The Inform Group

Stakeholders who need to be told what to do so that
their actions are consistent with implementation

The Consider Group

Any Stakeholders not falling in any of the above
categories and who could have a response to
implementation

Stakeholder Identification

©

Expectations Are Widely Used for Individual Planning




Exceeding Expectations




Meeting Expectations




Not Meeting Expectations

x

28

Expectations in Public Sector Planning

Cabinet
Strategy

Cabinet Implementation Expectations

Ministry Strategies

To Satisfy Expectations

Business Plan
Detail

Boeing Goal Flowdown / Expectations
Process

See: http://baldrige.nist.gov/PDF_files/Boeing_Aerospace_Application_Summary.pdf

Canadian Military Use of Expectations Based Planning

a.k.a. Expectations

Source:

See: http://www.mors.org/meetings/cbp/read/TP
-
3_CBP.pdf

The 3 Levels of Expectations

Rigid

Clear & Rigid Expectations Set Across all 8 Strategies

Do Your Own Thing

Usually only 2 or 3 Expectations Identified

Moderate


Expectations not set for 3 or 4 the 8 Strategies

Which level applies to you?

The 8 Strategies

Expectations Imposed

on your function / department / business unit

Business Definition /

Mandate

What is the mandate of the function / business unit


/ department ?

-

Risk

What expectations are imposed by risk?

-

Growth

What expectations are imposed by growth?

-

Financial Management

What expectations are imposed by financial management?

-

R&D / Technology

What expectations are imposed by R&D / Technology?

-

Organization Management

What are the expectations are imposed by Organization
Management?

-

Marketing / Communications

What expectations are imposed by marketing /
communications?

-

Service Delivery / Production

What expectations are imposed by service delivery /
production?

-

Tell us about your functional area

©

Module
Four


How
business
plans implement
the intent of
the strategic
plan




Building the Business Plan

You have just been made the manager of a facility within your organization.

Which expectations seem to be the most important achieving success

and what would be your plan to meet those expectations?

The 8 Strategies

Expectations imposed on the operator

Business Definition

-
To offer fast food services within a hospital

Risk

-
To comply with all mandated health and safety policies and procedures

Growth

-

To grow the per capita spend

Financial

-
To follow mandated reporting requirements

-
To achieve imposed margin expectations

-
To make all required remittances to the VP Finance of the hospital on time

Technology

-

To use mandated information systems

Organization

-
To maintain a staff of 25


30 to be able to run the location 24/7

-
To develop a customer
-
centric team

-
To hire and train employees to deliver to mandated service standards

-
To comply with the Collective Bargaining Agreement at all times

Marketing

-

To follow all mandated promotions

Service Delivery

-
To be a 24 / 7 operation

-
To follow all mandated processes for service delivery

-
To deliver to mandated quality standards

-
To offer all mandated products and services

Pros & Cons Analysis

Expectation:

Pros

Cons

Expectation:

Pros

Cons

37

Building the Action Plan


a Visual

Long Term

Today

1.

2.

3.

4.

6.

5.

E

A

B

D

C

F

G

Steps

What

How

Who

Schedule

Metrics

Budget

1.

A to B

-


2.

B to C

-

3.

C to D

-

4.

D to E

-

5.

E to F

-

6.

F to G

-

Short Term

Seeing the Plan as the Big Picture

Today

1.

2.

3.

4.

6.

5.

E

A

B

D

C

F

G

Short Term

Mid Term

Long Term

©

The Day’s Objectives

1.
how strategic planning
differs
from
business
planning


2.
how
stakeholder identification &

expectations
analysis
factor in
strategy
decisions


3.

how
a business plan implements the intent of the

strategic
plan