Insead 4.cssg 3 axes of meaning based strategic management

Wirtz,SJ

Wirtz,SJJ

3 pilars of meaning based strategic management

costumer

http://en.wikipedia.org/wiki/Karl_Marx



Wirtz,SJ

Context:

- Customer experience management become more and more a differentiation activity

- In agile markets were new market profiles arose and are co-created the customer approach has to be integrated in any activity a company gets involved with partners as

- - building trust- - creating mutual understanding of moving targets in emerging

industries and- - considering the service encounter attitude and treatment as

applicable to people and companies alikebeing in co-operation network.

- The ecosystem approach can indicate some of the strategic issues one has to address in strategic management

- It implies and somewhat applies that the term sustainable competitive advantage will be transformed into

- Transient as well as co-constructed competitive advantage as in emerging markets a priori concepts may fail as a paradigm shift happens.

Wirtz,SJ

Approach:

Part one:- Look at companies orientation about its environment in emerging markets

Part two:- Extend the integration of important elements into the strategic management

Part three:- Construct building blocks and stepping stone

Highlight finally what this has to do with meaning based

Wirtz,SJ

People Promotion

Process Price

The company links the inside performance with the market performance

inside outside

Meaning based

Leadership

Materialisationbased

Efficiency based

Production Product/Service

Positioning

Place

Strength and Weakness SW OT Opportunity and Threat

Wirtz,SJ

Part 1:

There two genuine strategy development processes with implication for strategic change management A. Prescriptive model of business strategy

Environment

Resources

Purpose

Options

Options

Options

Choice Implement

The prescriptive strategy process Lynch, 2008

is the usual approach and neglects often the limitations that an existing organisation and its culture limits the strategic options

B. Emergent model of business strategy

Environment

Resources

Purpose

Strategy development and implementation

Keypoint: creative, experimental, more difficult to describe but essential according Lynch,

The emergent strategy process – based on Quinn 1990, Senge 1990, Argyris 1977, Mintzberg 1987 and others

What is strategic change management?One approach to emergent processes

Environment

Resources

Purpose

Strategy development and implementation

Emergent theories include:•Survival-based•Uncertainty-based•Human resource-based•Innovation and learning-based

,

Strategic Change Management issues to open the company towards networking

Wirtz,SJJ

Wirtz,SJJ

“Ideating” the other side of innovation by Govindarajan, V, Trimble,C 2010

Wirtz,SJJ

KeyPartners

Key Activities

Value Proposition

CustomerRelationships

CustomerSegments

KeyResources

Channels

Cost Structure

RevenueStreams

Current wave of business model: e.g. Osterwalder:

Consider important environment issues but more as impact on the company than stepping stone

Wirtz,SJJ

The environment needs also to be perceived as constructed and playground for creating emerging markets through co-creation with other companies considering them as lead customers7partners

We genuinely underestimate our weakness and threats to our organization. We have difficulties to embrace vagueness, ambiguity and enter into co-operation without contractual arrangements and wishful outcomes

SOWT Analysis

Strengths Opportunities

ThreatsWeaknesses

outsideinside

Over-EstimateUnder-

In emerging markets a SWOT analysis should be extended highlighting the evaluation, estimation process by regrouping SWOT into a:

Exploring emerging environment and create meaning based activities

The cynefin framework

Watch the explaination: http://www.youtube.com/watch?v=N7oz366X0-8

Wirtz,SJJ

Simple, in which the relationship between cause and effect is obvious to all, the approach is to Sense - Categorise - Respond and we can apply best practice.

Complicated, in which the relationship between cause and effect requires analysis or some other form of investigation and/or the application of expert knowledge, the approach is to Sense - Analyze - Respond and we can apply good practice.

Complex, in which the relationship between cause and effect can only be perceived in retrospect, but not in advance, the approach is to Probe - Sense - Respond and we can sense emergent practice.

Chaotic, in which there is no relationship between cause and effect at systems level, the approach is to Act - Sense - Respond and we can discover novel practice.

The fifth domain is Disorder, which is the state of not knowing what type of causality exists, in which state people will revert to their own comfort zone in making a decision.

That comfort zone including organizational ones can be the biggest hurdle for process driven innovation

Product centered management is still somewhat restricting companies to improve customer-focused services and grow with new service business models.

Many organizations have set the target to launch and develop new customer services as a key element in their strategy.

According to P. Moore ( 1993) In order to adapt to the fast changing customer

needs, delivery of the services requires an ecosystem of organizations..

In many large organizations there is a strong tendency to seek for the clarity of old clear product and organization focused operating models. The value chain thinking and connecting as well connected leadership models can create an extended ecosystem approach

A holistic change is needed in order to design and implement an operating model that enables integrating and managing a set of contracts, indicators and measurements aiming to efficiently adapt a network of organiztions from sales to operations to fulfill customer needs and manage customer expectations.By leveraging ecosystems, companies can deliver complex solutions while maintaining corporate focus but it has to be concerned to contribute to the ecosystem construction as well.

The idea is that each business in the “ecosystem” affects and is affected by the others,

creating a constantly evolving relationship in which each business must be flexible, adaptable and open to new partnerships and evolving networks

The idea is that each business in the “ecosystem” affects and is affected by the others, be it companies, individuals, trendsetters research organization, governments and certain socio-economic events like ageing of society, obesity..

creating a constantly evolving relationship in which each business must be flexible, adaptable and open to new partnerships and evolving networks

- Part 2:Extend the integration of important elements into the strategic management

Co-operation based Strategic Management

Communication based sense making and receptivity

X

Wirtz,SJ

Resource based corporate Strategic Management

Y

ZThe 3 pillars are the axes x,y,z,

Thought-concept

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X

Y

ZThe 3 pillars are the axes x,y,z,

4 reference platform focus on 4 strategic elements

Wirtz,SJ




X

Y

ZThe 3 pillars are the axes x,y,z,4 reference platform focus on 4 strategic elements:

Connected and connecting leadership

Focus on technology and related innovation

Market management

Industry/Arena specific identity

Wirtz,SJ

Resource based corporate St.M

Co-operation based St.M


X

Y

Z

ConceptExecutionz4

ConceptExecutionz3

ConceptExecutionz2

ConceptExecutionz1

ConceptExecutionx3 Concept

Executionx4ConceptExecutionx2Concept

Executionx1ConceptExecutiony1

y2 ConceptExecution

y3 ConceptExecution

ConceptExecutiony4

This will lead to 64 activity blocks differentiated according strategy concept and strategy execution

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X

Y

Z

Hard-ware Soft-ware Tech-ware Customer/User - ware

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X

Y

Z

What industriesarena one is in

How solutionscommercialized

Technologyother than used

Customer- experience mgt.

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X

Y

Z





Competing companies in the same arena, e.g. coffee are very different how they commercialize and address customers/users: Nescafé, Starbucks, illy and how they expand their eco-system, focusing also on co-operation in content and delivery, manipulating, breaking industry communication codes and symbols

Delivery

Industry codes, symbols, slogan

ContentContent

Wirtz,SJ




X

Y

Z





Delivery

This is the standard strategic management approach, based on a company focused control-equity with limited out-side in orientation and seeing costumer experience management slowly as differentiation opportunity, cost reduction in outsourcing delivery and insourcing improved content


ContentContent

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X

Y

Z





Delivery



Eco-system 1, traditional collaboration based mostly on company strength and perceived opportunity

ContentContent

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X

Y

Z





Delivery




Market-com, social media

Uncontrollable social media already disrupts and makes ecosystem 1 additionally volatile

ContentContent

Content

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X

Y

Z




Customer- experience mgt.Content

Delivery




Market-com, social media

Uncontrollable social media disrupts and makes ecosystem 1 volatile

Expanding to ecosystem 2.0

Wirtz,SJJ

Expanding to eco-system 2.0

According to James Moore 1993:Successful businesses are those that evolve rapidly and effectively. They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks anticipate the managerial challenges of nurturing the complex business communities that bring innovations to market: Expansion Bring the new offer to a large market by working with suppliers and partners to scale up supply and to achieve maximum market coverage. Leadership Provide a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer. Self-Renewal Work with innovators to bring new ideas to the existing ecosystem

Wirtz,SJJ


Consumers are adopting increasingly active roles in

-co-creating marketing content with companies and their respective brands.

- In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where

they ‘live' online.

- However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them ( Hanna R et all 2012 )

Wirtz,SJJ

Expanding to eco-system 2.0:Ecosystems are larger, more diverse, and more fluid than a traditional set of bilateral partnerships or complementors. By leveraging ecosystems, companies can deliver complex solutions while maintaining corporate focus:

Six keys to unlock ecosystem advantage:- pinpointing where value is created, - defining an architecture of differentiated partner roles, - stimulating complementary partner investments,- reducing the transaction costs, - facilitating joint learning across the network, and engineering effective ways

to capture profit. ( P.Williamson, A. de Meyer 2012)

Not ignoring three fundamental types of risk: -initiative risks—the familiar uncertainties of managing a project; -interdependence risks—the uncertainties of coordinating with comple-mentary innovators; and -integration risks—the uncertainties presented by the adoption process across the value chain. ( Ron Adner 2006 )

Wirtz,SJ

Expanding to eco-system 2.0:

Consumers are adopting increasingly active roles

- in co-creating marketing content - with companies and their respective brands.

In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where they ‘live' online. However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them. ( see richthofer

Moore describes the evolutionary stages of a business-ecosystem as forms of cooperativechallenges

Birth Work with customers and suppliers to define the new value proposition around a seed innovation. Expansion Bring the new offer to a large market by working with suppliers and partners to scale up supply and to achieve maximum market coverage. Leadership Provide a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer. Self-Renewal Work with innovators to bring new ideas to the existing ecosystem.

Expanding to eco-system 2.0:

Wirtz,SJ




X

Y

Z






Market-comSocial media

ITC, tele-matic, Graphics, EsRP

IMC, gurus brand identity, Trendsetters

Expanding to ecosystem 2.0:

Four additional areas of focus are added

ContentContent

DeliveryStandardization

Virtual company network

Part three: Construct building blocks and stepping stone

Wirtz,SJ




X

Y

Z










Integrated market communication addressing inside and outside of companies, instrumentalization of gurus,Brand Identity of joint service, people connected leader

ContentContent



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X

Y

Z










The ITC is both enabler and biggest hurdle creating cooperate networks, incompatibility ,EsRP that is too company focused, telematic as a language, lack of engineers, execution control via access level to IT

ContentContent



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X

Y

Z










Achieving fast accepted standards in the network is a power, definition and user’s rights of IP is changing, free-conomics

ContentContent



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X

Y

Z










Value chain co-operation among different companies, no red tape management, success orientation with failure tolerance,connecting leadership

ContentContent



Wirtz,SJ




X

Y

Z










The ITC is both enabler and biggest hurdle creating cooperate networks, incompatibility ,EsRP that is too company focused, telematic as a language, lack of engineers, execution control via access level to IT

Integrated market communication addressing inside and outside of companies, instrumentalization of gurus,Brand Identity of joint service, people connected leader

Achieving fast accepted standards in the network is a power, definition and user’s rights of IP is changing, free-conomics

Value chain co-operation among different companies, no red tape management, success orientation with failure tolerance,connecting leadership

ContentContent



Content

Wirtz,SJ Co-operation based St.M


X

Y

Z





Delivery


Expanding to eco-system 2.0,Integrating 4 levels of conjoint orientation and meaning oriented activities:

Standardization




IMC, gurus Brand identityTrendsetters

Dialogue, ideatizingCreating knowledgecommunities,, action platforms

Tech-integration, virtualization, cloud,3 D printing, AR , IPE Standards,royalties,

POS, on/offline, connectivity, longtail m-commerce, blogs

cost

Cost control, Web3.0 C.I.,perceived quality, open vs closed, CSR, bundeling, investor relat

The four areas focus the co-operation and dys-functional discussions on a cohort of issues, therefore leading to integration and new arena differentiation. It provides meaning through understanding arising solution providers’ challenges.

Content

Wirtz,SJ Co-operation based St.M


X

Y

Z





Delivery


Expanding to eco-system 2.0,Integrating 4 levels of conjoint orientation and meaning oriented activities:

StandardizationVirtual company network



IMC, gurus Brand identityTrendsetters

cost

Cost control, Web3.0 C.I.,perceived quality, open vs closed, CSR, bundeling, investor relat

Tech-integration, virtualization, cloud,3 D printing, AR , IPE Standards ,royalties,

POS, on/offline, connectivity, longtail m-commerce, blogs

Dialogue, ideatizingCreating knowledgecommunities,, action platforms

Wirtz,SJ

It results in 3D cube with 64 activity blocks like

It results in 3D cube with 64 activity blocks like a rubic cubic.


Z

Y

X



64 buildings block need then to be filled out and differentiated according to Strategic concept and strategic execution:

Block: x4,y4,z4Facilitating partner co-operation and managing the experience over timeConcepts:Customer experience management applied to partners and competitors,Momentum Effect:

Execution: Forum, TED and clubs originating joint activities and providing solution in an open source ware, funding start ups and spin offs

Wirtz,SJ