Strategy Tools for a Shifting Landscape...

Strategy Tools for a Shifting Landscape

Strategy Tools for a Shifting Landscape

Presentation By:

Gagandeep Singh

Mukesh Kumar

Tejinder Singh Kalsi

by Michael G. Jacobides

In an age when nothing is constant, strategy should be defined by narrative-plots, subplots, and characters rather than by maps, graphs, and numbers.

• Globalization

• Technological Innovation

• Regulatory restructuring

• Demographic shifts and

• Environmental pressures.

Rapidly changing Business Environment

Traditional Strategy ToolsReduces complexity by creating maps and graphs, that offer reliable guidance only when the environment is not changing rapidly.

So Traditional Strategy Tools are: - • Outdated

• Provide good results only in static environment

How IBM and Apple lost to Microsoft and Intel

• IBM thought the money was in owning the customer– May be good for minicomputers but not for

PC’s- Michael

• Apple thought the money was in superior design and GUI– But failed to manage the rest of the system

• While Microsoft and Intel understood the value was in bottlenecks– Bottlenecks was the OS, Software and

Hardware.

What does all this show us?• The structure of the sector changed

o And along with the changes in “who does what”, profits also change

• Profits migrated from one part of the value chain to anothero The parts of the chain used to be profitable

were blown up, others emerged

• New rules of the game changed the landscape

by Michael G. Jacobides

My recent academic research suggests that companies should tackle the challenge of developing strategy by describing the underlying logic, story lines, decisions and motives of all the players that are creating and capturing value in a business.

Playscript- a narrative

• That sets out the cast of characters in a business,

• The way in which they are connected,

• The rules they observe,

• The plots and subplots in which they play a part, and

• How companies create and retain value as the business and the cast change.

Anatomy of a Play script

• The Corporate playscript: - It describes the logic by which the value id created an appropriated.oThe synergies subplotoThe financial subplot

• The Business playscript: - It’s the representation of what happens in your sector and of your own storyline. It consists of…

• Dramatis Personae and their roles The main actors in the sector, their motives and their roles.

• Links and rules The links between companies and the operating rules of the business.

• Present and future plots and subplots

The story lines of how players in a sector generate and capture value.

Marvel Entertainment: From bankruptcy to $4bn in less than a decade

Intrawest: Making money from ski resorts – even in hard times

Hornby: Reviving an Ailing Business by reinventing the playscript

• Step 1 : Write your current corporate and business playscripts

• Step 2 : Rewrite your Playscript

• Step 3 : Future proof your playscript

Developing Your Playscript

• Imaginative

• Outward Facing

• Robust

• Plausible

The five criteria of a good playscript

• A good playscript is robust• Doesn’t depend on too many / implausible

assumptions on others’ actions

• A good playscript is plausible• It is imperative for the firm (and not an

other DP) to implement it

• A good playscript is imaginative • It has considered all potential permutations

and is forward looking

• A good playscript is extrovert (focuses on links, not the protagonist)• It should be externally focused, plausible

for others, not the protagonist!

• A good playscript really improves the plight of the protagonist• What if the best bet is a Phyrric victory?

Retreat might be better...

• First, focus on the causes, not symptoms of performance• Brand or market dominance the result of a

good plot. But erodes quickly• Most firms, in existing markets, cant see the

plot behind the symptoms

• Second, avoid errors of commission• Are we in the right game, or are we funding

our way to failure?• Are our habits and maps and mental models

blindsighting to playscripts?

Benefits from thinking and reinventing your playscript

• Third, avoid errors of omission-Prof. Michael G. Jacobides• It’s easy to miss out on sectors that grow.

So, broaden up your playscript!• Ensure that there is no other playscript

where you’d be really better off...

ENGAGING THE ORGANIZATION

After developing a new playscript , CEO’s need to ensure that the organisation is capable of implementing it .

Take AstraZeneca , which is transforming itself in order to ensure that it can deliver on a new playscript in pharmaceuticals .

In terms of capability development , London based company has forced on becoming more responsive to codevelopment , comarketing , copromoting new drugs .

A company should implement a new playscript on a experimental basis , modifying it along the way . The company can test premises , gauge other players reactions and institute mechanism to institutionalize change processes

Companies can mobilize employees better with playscripts than with other strategy frameworks .

Basing the creation of strategy on playscripts cannot only improve the level of buy-in-within the organisation , increasing the alignment and effectiveness , but also start a feedback loop ,ensuring that the organisation continually updates and modifies the playscript on an internal blog .

EXAMPLE

Playscript allow employees at every level to express opinions about how and why the organisation should change .

People can be asked to adopt the playscript as actors , yet they can purpose changes .

Playscripts offer an opportunity to structure the conversation between corporate world and society .