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The Strategy Circus reflection sheet

Submitted to: Prof. Sabyasachi Sinha IIM Lucknow

Section E
Submitted By: Amit Yadav (PGP28263)

The strategy-circus reflection sheet


Contents
My interconnections with among the cases so far ....................................................................................... 3 Similarities:................................................................................................................................................ 3 Differences: ............................................................................................................................................... 3 Are there any patterns in the occurrences of events, causes or consequences that I have seen within or across the situations? ................................................................................................................................... 4 Have I discovered any interrelations among the events, causes and consequences? ................................. 4 My illustrations of ten (or more) terms from articles and chapter readings................................................ 5 My Decisions and My Analysis ...................................................................................................................... 6 My abstractions for the subsequent sessions .............................................................................................. 8 How this course so far has changed/developed me (my thinking process, biases, world view, attitudes, habits, etc.) ................................................................................................................................................... 8

The strategy-circus reflection sheet


My interconnections with among the cases so far
What are the similarities and differences in the situations I got involved in?

Similarities:
Below are the few similarities among all the situations I got involved in during the course. 1. Leadership: In all cases I found that change in leadership changed the functioning of organization. The leader transferred its traits to the people in the organization. He transformed the culture of the organization. 2. Cycle change (McKinsey 7 S framework): In all cases I found that change is not standalone. It requires change in all the aspects of organization like style, structure, staffing etc. These 7 steps help us in understanding what we need to change in order to bring a change in strategy or structure or any other aspect. 3. Hazy solutions: In all cases I found that solution of the problems are hazy and require management discretion to make final decision. There is no clear cut answer to the problem. 4. Tradeoff: Each decision in cases required some tradeoff to be made before making a decision. E.g entering a business with a high growth potential but on the other hand there is huge investment and risk of failure 5. Dilemma between focused versus diversified Approach: In most of the cases we found that company faced a dilemma whether they should pursue a more focused approach or more diversified approach. 6. Short term versus Long term: In all cases there were short term decision which were required to be taken to sustain the company whereas long term decision were required for future growth opportunities. 7. Alignment of Goals: All the short term and long term, goals aligned with the company strategy and were in line with the CEOs vision for the company.

Differences:
Below are the few differences among all the situations I got involved in during the course. 1. Kind of decision making: Some CEOs were required to turnaround the company whereas some of the CEOs were appointed when company was really doing well. For example in case of GE, the new CEO took the position when company was generating 23 % return for shareholders, whereas in Domestic Auto parts when the new CEO took over, she needed to turnaround the company as company was growing at a rate less than Industry average. 2. Transforming strategy versus Aligning Strategy: In some situations leaders were required to transform the overall strategy company was following whereas in other situations the they just needed to align the other elements of McKinsey 7s framework e.g in Domestic Auto Parts case, strategy itself required to be changed to a customer focused approach. This required operational changes, change in culture, change in structure etc. On the other hand in McKinsey case the strategy (knowledge management) was not required to be changed but new initiatives has to be in line with the current strategy of the firm. 3

The strategy-circus reflection sheet


Are there any patterns in the occurrences of events, causes or consequences that I have seen within or across the situations?
There are some patterns in the occurrence of the events I have seen across situations. The problem arises mainly when it has crossed the line. It does not get noticed when it is still in its nascent stage. Hence to identify the problem when it has just started arising is very important. Secondly these events occur when external environment is not doing well and economy is not doing well. Hence these particular situations arise as a result of external factors most of the time but they serve as a means to expose internal problems as well. The causes of the events are external as well as internal factors. The company deals with new situation by changing the leadership and by bringing in new approach to the problem solving. The consequence in most of the cases is that new leader tackles the situation by changing the strategy of the firm and then changing other elements (like style, structure, staffing etc.) subsequently. Sometimes the change in strategy is not required but all other supporting elements are needed to be changed.

Have I discovered any interrelations among the events, causes and consequences?
Yes, I found that all events are interrelated in a way the problem arises in the firm. Secondly every firm faces some kind of problem after a phase of continued growth. The problem may be related to leadership, strategy change, structure change, operational efficiency, maintaining growth rate etc. The causes are also somewhat similar on a broader level. The causes are a mix of internal and external factors. But this mix changes for every firm. In some firm, it inclines towards internal factors whereas in other firms it inclines more towards external factors.

The strategy-circus reflection sheet


My illustrations of ten (or more) terms from articles and chapter readings
Key Terms of the articles Structure shapes strategy My Illustrations The structure of the firm determines the duration and time frame for implementing the strategy of the firm. A more rigid structure will have a time frame of 5-10 years of time frame for strategic implementation. On the other hand flexible structure may allow a time frame of six months. Sometimes the strategy itself involves structural change. Hence strategy and structure influence each other. Disruptive innovations focus on underlying problems itself rather than doing incremental improvements in products or processes. The firms who follow this approach focus on creating solution for the customers by removing that root cause of problem. They create a better solution to the problems of its customers. These kind of innovations change the way of doing business by the firms. The firms who focus on reverse innovation create products which better suit the requirement of emerging markets and then with some modification market their products in developed markets. These firms focus on huge market potential of middle class people in the emerging economies. The firm who focus on open innovation focus on the improvement in their business model. The firms use others IP if it will help in their business model and license even their own innovation if it does not help in their business model improvement. In this way these firms reduce their internal development costs and increase their total revenue by earning royalties on their innovations used by other companies. Strategy maps convert strategy level decisions into specific objectives. It divides objectives into four parts; one is financial perspective, second is customer perspective, third is internal process perspective and fourth is learning and growth perspective. Then interrelationship among all the four parts is drawn into the map. Through this interrelationship we can come to some specific objectives and how they all help in achieving the overall objective of the firm Boundary less organizations have their boundaries 5

Disruptive Innovation

Reverse Innovation

Open Innovation

Strategy Maps

Boundary less Organization

The strategy-circus reflection sheet


more open and permeable. There are in general four types of boundaries; one is between various hierarchies, second is between different functions, third is between different, third is between external agents like supplier and fourth is between various geographical locations. In a boundary less organization all four types of boundaries are open. In barrier free organization there are very few differences between internal and external boundaries. In case of internal issue more focus is given on team rather than on individual to reduce internal boundaries. On the other hand to reduce external boundaries firms bridge the gap between their goals and align their objectives. Hence it allows the firm to establish good partnership with its suppliers and distributors. In modular organization the firms retains only its core activities whereas outsources its non core activities to outside firms. It allows the firm to focus on its core competence. The firm can leverage the core competence of other firms and reduce its costs. In virtual organizations firms form a network of individual companies who share their expertise, experience and markets and make a best of all organizations. It allows the each firm to produce equally competitive products and provide access to global markets.

Barrier free Organization

Modular Organization

Virtual Organization

My Decisions and My Analysis


Specific Decisions Taken by me Case2(McKinsey) Case3(DAP) In this case Rajat Gupta should focus on developing the knowledge more. Because sometimes in knowledge management we forget the important aspect of knowledge creation. Hence he should focus on knowledge creation. In DAP I was in favor of implementing the JIT system as it will improve many of the operational efficiency in the company and will help the company in achieving not only its operational objective but also help in achieving other objectives. E.g It will

Case1(Corning) In corning I was not in the favor of reducing R& D spend in telecom sector. As investment in R&D are long term and cannot be stopped at once. Although some of the projects can be stalled. I was also of the opinion that the firm should

Case4(GE) In case of GE the new CEO should first focus on making the company sustain the shareholders return at 23 % But to prove himself as a leader than a follower. He should invest in new avenues. He should invest in future businesses. 6

The strategy-circus reflection sheet


invest in new technologies which have the potential of being future growth driver. The company should garner benefits from its competence in glass and invest in information display. The company should also find new uses for its existing R & D. e.g. Finding photonics application in Medical equipment industry. It can be a short term objective to recover from this situation. The company can also license some of its innovation which are not in line with its business objevtives. Secondly he should use modern information technology to facilitate smooth flow of information. On the other hand he should strike a balance between personal interaction and use of IT. The use of informational technology should not to such an extent that personal touch is lost. help in cutting down inventory cost. It will also help in reducing the lead time and hence improve the customer responsiveness and hence it will help in making the company customer oriented. It will also increase the asset utilization and hence fulfill the financial objectives. Next decision was to integrate R& D and marketing to produce better products which suit the requirement of customers. It was because 69 % customers give 90 % of the profit. He should also make the transition into e business smooth. It will help him earn the title of a good CEO and investor will also put their faith in him. The new CEO should also invest in developing good leaders so that this legacy is maintained and his successors also continue the path of growth set by him and his predecessor.

The strategy-circus reflection sheet

My abstractions for the subsequent sessions


Based on my Involvement, Have I been able to augment a framework? Develop a new checklist of questions? Challenge a Concept? I think in none of the frameworks we discussed the impact of CSR and sustainability. For example in most of the cases the resistance of employees to change is main barrier towards any strategic change or implementation. In such cases we can garner the benefits from or CSR and align our new strategy with our CSR. We can show how it will help the overall society and urge the employees to be a part of this initiative. We can even show financial benefits of the initiative and its contribution to CSR. It will help in achieving the strategic change in less time.

How this course so far has changed/developed me (my thinking process, biases, world view, attitudes, habits, etc.)
Till now what I had learnt was only the theories of strategy like low cost strategy, differentiation. But how these theories are applied in real life I have learnt through this course. I just use to think of strategies in standalone. Now I can understand how changing strategy may involve lot of other things like structure, staffing etc. Sometimes structure of the organization may not allow a change in strategy. Hence then decision of flexibility in structure is to be taken into account i.e. how much flexible structure the firm has and how much scope it provides in changing the strategy of the firm. This relates to the tower building exercise we did in class. Flexible structures allowed some change in strategy at a later stage. But in case of rigid structure, it becomes very difficult to change the strategy. I also learnt about various innovation processes. I also learnt that a firm should continuously innovate to maintain its position but should also invest in disruptive innovation for long term sustainability of its business. I learned a new concept of boundary less organization and how they can help in achieving the business objectives using minimum resources. Next I learnt that the idea of licensing your innovations which are not in line with your business can create a revenue opportunity which otherwise would have gone wasted. I learnt that it is more important to make your business model better rather than being first entrant to market. Sometime you earn more by entering later but with a better business model.