Fundamentals of Strategy

Building the Future

Douglas Reid

dreid@business.queensu.ca@douglasreid

Recap

Estimating the future

Break

Stress testing assumptions

Making choices under uncertainty

Lunch

Your advice to Executive Mgmt.

Conclusion

What to read

Repetition

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Repetition

RepetitionRepetition

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RepetitionRepetition

Repetition

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Implementation happen primarily by changing the allocation of resourcesconsistent with objectives

Any non-human assetof an organization thata manager can deploy

Brands, equipment, IP, licenses, machinery, information, etc.

Money

People Skills

Time Duration, sequence and project choices to which you apply the money and people that you have

Misalignment

Performance Expectations

Delegation Outcome defined

Importance and urgency communicatedReasonable deadline set

Decision rights set

Resources

Accountability Measures

Reporting process / frequency

Handling exceptions

Leadership

To become a more effective leader, I will…

Do more of…_______________________________________________________________________________________________

Do less of…_______________________________________________________________________________________________

Start doing…_______________________________________________________________________________________________

Stop doing…_______________________________________________________________________________________________

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Is your strategy “good enough” for the future?

Source: Courtney, Kirkland and Viguerie, 1997

Predictable

Discrete possible futures

Range of futures

No clearfuture

Why this matters

Before

After

Sources of threat and opportunity

•Changing customer preferences

• Competitor actions

• Economic conditions

• Social trends / changes

• Political / legal

• Technological advances

• More or less globalization

Your assessment Effect on FCMB’s customers’ willingness to pay

Effect on FCMB’s cost structure

Source Likeliest factor Threat Opportunity Threat Opportunity

Changing customer preferences

Competitor actions

Economic conditions

Social trends / changes

Political / legal expectations

Technological advances

More / less globalization

Predictable Discrete possible futures

Range of futures

No clearfuture

Overall threat assessment:

Overall opportunity assessment:

1 2 34 5

6

1 2 3 4 5

6

What if…?

What assumptions

have youmade?

Now what?

Postures

Shape the future

Adapt to the future

Reserve the right to play

____________________

Tactics

Scenario planning

Option-based decisions

“Plan B”

Measurement

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Priorities for our bank

Advice to FCMB executive management

To achieve excellence as a bank, we recommend that FCMB must…

Do more of…1. ________________________________________2. ________________________________________3. ________________________________________

Do less of…1. ________________________________________2. ________________________________________3. ________________________________________

Start doing…1. ________________________________________2. ________________________________________3. ________________________________________

Stop doing…1. ________________________________________2. ________________________________________3. ________________________________________

Let’s sum up…

You always have choices about building your future

The most importantchoice is to begin.

For your staff, only you can create conditions where their desire for excellence can flourish.

Structural and cultural elements…

that enables an organization to: detect discontinuous change early, interpret the consequences,

and formulate effective responses.

Rene Rohrbeck, 2010

1. Operational Decision Making2. Coaching and Developing Others3. Empowerment/Delegation4. Establishing Strategic Direction5. Influence6. Financial Acumen7. Driving Execution8. Customer Focus

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Source: Courtney, Kirkland and Viguerie, 1997

Predictable

Discrete possible futures

Range of futures

No clearfuture

What kind of future awaits?

Leaders influence

What will you NOT tolerate?

Be clear about your values

Choose action

Seek and embrace responsibility

Enable cooperation

Develop others

To become a more effective leader, I will…

Do more of…_______________________________________________________________________________________________

Do less of…_______________________________________________________________________________________________

Start doing…_______________________________________________________________________________________________

Stop doing…_______________________________________________________________________________________________

Managing, Mintzberg, 2009

Execute, Bossidy and Charan, 2002

What Management Is, Magretta, 2002

The Human Equation, Pfeffer, 1998

What to read

Next step: operational excellence

Thank you!