MSW Course – summary V2.0 andrzej@mazur.

info Porter’s 5 Forces Structural Analysis

Applicable Tools

EA1. SWOT (D)

EA2. PEST (D)

Workshops
EA3. Porter’s 5 Forces Structural Analysis (D)

PEST Analysis

/
Brainstorming (D)
CA1. Project Management (E)

OD1. RACIS Matrix (D)

OD2. Reorganization (E)
PS1. Culture Change Program (E)
PS2. Reward System Change (E)
D – definition phase
E – execution/implementation phase
Project Management
1. Scope
RASIC Matrix Description 2. Time Plan
3. Resource Allocation Plan
- Responsibility for ensuring it occurs;
4. Risk Management Plan
- Approval or veto power;
- must be Consulted;
- must be Informed, and
- must Support by providing service or resource.

Rule1: one of the parties has responsibility for each activity

Rule2: at least one party must provide the support to ensure the
activity is actually completed

If for many activities S belongs to different function then R then

reorganization might be required
MSW Course – summary V2.0 andrzej@mazur.info
MSW components’ definitions
1. Mission - highest-level objectives to be achieved. These must be clear as they provide guidance to those responsible for their achievement
Mission has to be clear not only when it comes to its intend but also definitions must be unambiguous too (i.e. definitions of growth, leading position etc
needs to be provided)
2. Environmental Scanning (internal and external) - systematic identification of barriers to achieving the objectives and enablers that will assist in their achievement,
now and in the future
3. Strategy - high level statement of how the enablers will be utilized and the barriers overcome in order to achieve the highest-level objectives
4. Critical Success Factors (CSFs) - the CSFs are the limited (critical) things that must go well in order for the strategy to succeed. One test of CSFs is to place the
words ‘we must’ before these.
5. Critical Activities (CA) - activities that must be carried out in order to achieve the CSFs
6. Organizational Structures, Processes, Systems - These should be organized in a way that facilitates the critical activities. One particular system, the reward
system, is worthy of close inspection

Cause and effect chain example

Ways to ensure efficient MSW implementation
1. Use of project managers who are responsible for deliveries of MSW components (e.g. during environmental analysis)
2. Use of facilitators during definition of MSW components
3. Involvement of relevant and knowledgeable people
4. Involvement of different functions to avoid bias from singe function of the organization
5. Relevant people shall receive training in the process, how it shall be implemented and how to avoid common pitfalls

Bounded rationality – acknowledges that humans can never properly take into account all relevant factors that could
go into making any given decision
Cause and effect hierarchy in organization
- MSW process breaks down problems to overcome bounded rationality
- Outcome of applying MSW is integrated series of cause and effect chains
- All management decisions are based on assumptions about cause and effect
- MSW process creates alignment between objectives and activities
undertaken by organization

Strategy implementation key success factors

1. Understand limitations of management theories and tools
2. Prioritize systematic analysis of the problem over using fashionable management tools
3. Secure management from the whole team
- empower employees
- overcome ‘silo’ mentality among managers Issues to avoid when defining cause-effect chains
- Promote team work Closed thinking – early selection of specific option without
4. Set the right measures (effectiveness over efficiency) considering alternatives in depth
5. Set ambitious but realistic goals Leaps of logic – skipping through casual links in one leap
6. Communicate objectives ‘Woolly’ / ambiguous – casual chains
7. Secure appropriate organizational structure Transference – application of previously constructed mental
8. Create continuous capability building program (as opposed to shot-gun or over cautious approach) models in new situation for which they are not applicable
9. Motivate people to change (promote ‘bias towards action’) Ignoring time lag between cause and effect
10. Choose correct attitude change program (cultural change program vs. reward led change) Poor data selection (e.g. placing undue importance on recently
11. Develop appropriate control system obtained data)

MSW Course – summary V2.0 andrzej@mazur.info
Competitive advantage – ability to outperform organizations operating in the same industry
Performance can be assessed in terms of achieving long term profitability
Sources of competitive advantage
- It is harder for competitor to match an array of interlocked activities then
it is to imitate e.g. sales force approach or technological process
- trade-off’s create activity fit which is difficult to replicate
- Three levels of fit:
- First order: simple consistency achieved
- Second order: activities are reinforcing (systems, loops)
- Third order: activities reinforced and optimized

Choosing Implementable Strategy

- Market Penetration (best option in case market is not yet saturated)
- Market Development (risky but less then product development since it
often does not require changes to core-value creating activities)
- Product Development (impacts ‘fit’ of value-creating activates – very risky)
- Diversification (as product development also impacts ‘fit’ and is very risky)

- Ability to make strategic choices and ability

implement strategy is a source of competitive
advantage
- Organization becomes more successful if it is able
to implement strategy:
- more efficiently
- at lower cost
- more quickly Implementation
Tool
- with fewer unwanted effects

There are three overlapping sources of strategic positioning according to Porter: Porter has identified three
- Variety based positioning (purchase decision depends on perceived price, generic strategies which can
perceived value) emerge from any of outlined
- Needs based positioning (servicing most/all needs of particular group of positions:
customers) - cost leadership (low price,
- Access based positioning (targeting customers who can be accessed in the low value)
same way) -differentiation (high price, FOCUS
high value)
- Industry choice greatly affects profitability -focus (either cost lead. or
- It is generally difficult to change industry differentiation but aimed at
-Attractiveness of industry can be determined by structural narrow market segment)
analysis (Porter’s 5 forces)
MSW Course – summary V2.0 andrzej@mazur.info
Change Programs – main aim is to bring about change in attitude (motivation) of employees which will lead to change in behavior and hence
to increased levels of performance. There are two competing schools of thought on how best to achieve this behavioral change.

Rewards and accountability system change program Cultural change program

Change sequence: Change sequence:

1. Change the organizational structure to align it with the desired
goals and provide large incentives by way of large bonuses or
promotion, as inducements to achieve these
2. The inducements lead to changes in behaviors
3. The changed behaviors lead to the desired performance levels
(i.e. implementation of the organization's strategy)
4. In time, the changed behaviors lead to a changed organizational
culture
5. The change in culture leads to a change in attitude
1. change of attitudes (captures the hearts and minds)
2. change of attitudes leads to changes in the
organization’s culture (what is and is not acceptable)
3. changed culture leads to a change towards the behaviors
necessary to achieve the desired behaviors (i.e. implementation
of the organization's strategy)
4. The change in behavior leads to the desired performance
5. Once the desired behaviors are achieved, it is suggested that
these should be reinforced by changes to the reward system

Rewards and accountability system change program Cultural change program

Features: Features:

1. Reward system adjustments do not seek to change attitude directly but 1. Generally considered to be difficult to implement
instead it is based on believe that changing incentives will gain the 2. Many cultural change programs failed in the past due to unclear reasons
performance and ultimately attitudes will change 3. Very costly both in terms of the financial costs of introducing these and in
2. Many prefer to adjust reward system because it seems to be more direct disruption to the organization's activities
and easy to implemented compared to culture change program 4. Such program should not be entered into lightly
3. Bonuses below 10% of base salary do not tend to disrupt team working and 5. Check shall be done if environment scanning shows any problems with
cooperation existing reward system (and corrections proposed for any problems)
4. Bonuses above 15% make managers to focus on achieving goals at all
costs
5. Bonus system ideally shall support MSW process by connecting bonus
targets to CSFs (management level) and CA’s (teams and individuals).
Achievement of the goals can also be reviewed during performance
appraisals.
6. Salaries/bonuses on all levels shall be reviewed (including senior
management!)
7. Perks shall be included to reward system review
8. Check shall be done if environment scanning shows any problems with
existing reward system (and corrections proposed for any problems)