Strategy in Practice E-Book

George Tovstiga

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 471

Veröffentlichungsjahr: 2015

Beschreibung

A practitioner-focused approach to strategy and real-world strategic thinking

This 3rd edition has been revised and updated throughout to reflect the current thinking in strategy in view of the current economic and business climate. It questions how we are thinking differently about strategy now, in light of emerging from the global economic crisis. It includes new and updated case illustrations throughout, plus a new chapter on Strategy Execution and Performance Appraisal. Rigorously founded on current thinking and theoretical concepts in the field of strategic management, Strategy in Practice:

• Provides the strategy practitioner with a systematic and insight-driven approach to strategic thinking
• Establishes and translates the relevance of strategy theory to its application in the practice field
• Leads you through the strategic thinking process, beginning with the formulation of compelling and clearly articulated strategic questions that set the scene for practical issues
• Provides tools of strategic analysis in combination with informed intuition to understand the strategic landscape
• Has additional online resources available for instructors

Leseprobe

Contents

Cover

Title Page

Copyright

Preface to the First Edition

Preface to the Second Edition

Preface to the Third Edition

About the Author

Chapter 1: Introduction to Strategy in Practice

Strategy: A Persistent Dilemma

What then is “Strategy”?

Where Does this Leave “Strategic Planning”?

Insight-Driven Strategy

Summary and Structuring of the Book

Notes

Chapter 2: Strategic Thinking

Scoping and Articulating the Strategic Challenge

Triggers

Framing the Issues

Articulating Strategic Questions

Assumptions, Paradigms, and Prevailing Logic

Notes

Chapter 3: Sense Making and Strategic Insight

Perspectives on Sense Making

Sense Making: A Spatial Perspective

Sense Making: A Process Perspective

Sense Making and Learning

Sense Making in Complex Environments

Insight Formation

Notes

Chapter 4: Insight-Driven Strategic Analysis

Strategic Rational Analysis: How

Rational

is it Really?

Further Limitations of Rational Strategic Analysis

Getting Started: Value and Stakeholders' Perspectives

High-Level and Supporting-Level Strategic Analysis

Setting Up and Conducting a Strategic Analysis

Notes

Chapter 5: High-Level, “Big-Picture” Strategic Analysis

The Strategic Value Imperative

Value Proposition Concept, Framework, and Analysis

Unique Competing Space Framework and Analysis

The Unique Competing Space, Value Proposition, and Competitive Positioning

Unique Competing Space and the Firm's Strategic Boundaries

Unique Competing Space: Portfolio Perspective

Opportunity–Response Analysis Framework

Opportunity–Response: Competing Trajectories

Opportunity-Side Perspective

Response-Side Perspective

Opportunity–Response: A Dynamic Capabilities Perspective

Notes

Chapter 6: Supporting-Level Strategic Analysis

Supporting-Level Analysis: External and Internal Analysis Frameworks

Externally Focused Supporting Frameworks of Strategic Analysis

Macro-Economic Environment

Sector and Industry-Level Analysis

Market-Level Analysis

Internally Focused Supporting Frameworks of Strategic Analysis

The Formal and Informal Organization: “Getting the Organizational Act Together”

Notes

Chapter 7: Strategy Formation and Evaluation of Strategic Options

Formation of Strategic Options

Strategy Formation and Ambidexterity

Strategy Formation: An Opportunity–Response Perspective

Evaluation of Strategic Options

A Strategic Thinking Approach to Strategy Evaluation

Finally, Some Caveats

Notes

Chapter 8: Strategy Execution and Performance Appraisal

Strategy Execution: A “Third Boundary” Perspective

Link between Strategy Formation and Strategy Execution

Strategy Execution: Where and Why it Typically Fails

Strategy Execution: Basic Principles

Strategic Performance

Strategic Maturity Continuum

Stakeholder Engagement: Monitoring and Management

Notes

Chapter 9: Insight-Driven Strategy in Perspective

Multiple Possible Futures Perspective

Organizational Learning Perspective

A Closing Reflection on Insight-Driven Strategy in Practice

Notes

Appendices: Putting Strategy to Practice

Appendix A: Probing the Strategic Boundaries of the Firm's Unique Competing Space

Boundary “1”: The Interface to Competitors' Offerings and the Competition

Boundary “2”: The Interface to Stakeholders' and/or Markets' Needs

Boundary “3”: The Firm-Internal Threshold

Consolidation of Analysis Findings with a Critical Reflection on Implications for the Firm's Unique Competing Space

Inter-Boundary Analysis: Scoping Linked Issues

Appendix B: Strategy Mapping and Narrative (based on Analysis of the Relevant Strategy Building Blocks)

Strategy Mapping

Strategy Narrative

Index

End User License Agreement

List of Tables

Table 3.1

Table 7.1

Table 8.1

Table A1

Table A2

Table A3

Table A4

Table A5

Table A6

List of Illustrations

Figure 1.1

Figure 1.2

Figure 2.1

Figure 2.2

Figure 2.3

Figure 3.1

Figure 3.2

Figure 3.3

Figure 4.1

Figure 4.2

Figure 5.1

Figure 5.2

Figure 5.3

Figure 5.4

Figure 5.5

Figure 5.6

Figure 5.7

Figure 5.8

Figure 5.9

Figure 5.10

Figure 6.1

Figure 6.2

Figure 6.3

Figure 6.4

Figure 6.5

Figure 6.6

Figure 6.7

Figure 6.8

Figure 7.1

Figure 7.2

Figure 7.3

Figure 7.4

Figure 7.5

Figure 7.6

Figure 7.7

Figure 7.8

Figure 7.9

Figure 8.1

Figure 8.2

Figure 8.3

Figure 8.4

Figure 8.5

Figure 8.6

Figure 8.7

Figure 8.8

Figure 8.9

Figure 8.10

Figure 8.11

Figure 8.12

Figure 9.1

Guide

Cover

Table of Contents

Begin Reading

Chapter 1

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Strategy in Practice

A Practitioner's Guide to Strategic Thinking

Third Edition

George Tovstiga

This third edition first published 2015

© 2015 John Wiley & Sons, Ltd

First edition published 2010, second edition published 2013 by John Wiley & Sons, Ltd

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A catalogue record for this book is available from the Library of Congress

Tovstiga, George.

Strategy in practice: a practitioner's guide to strategic thinking/George Tovstiga. — 3rd Edition.

pages cm

Revised edition of the author's Strategy in practice, 2013.

Includes index.

ISBN 978-1-119-12164-0 (pbk.) — ISBN 978-1-119-12168-8 (ebk.) — ISBN 978-1-119-12167-1 (ebk) — ISBN 978-1-119-16915-4 (ebk)

1. Strategic planning. I. Title.

HD30.28.T68 2015

658.4'012--dc23

2015019356

A catalogue record for this book is available from the British Library.

ISBN 978-1-119-12164-0 (paperback)

ISBN 978-1-119-12168-8 (ebk)

ISBN 978-1-119-12167-1 (ebk)

ISBN 978-1-119-16915-4 (obk)

Cover design: Wiley

Cover image: ©carlo fornitano/Shutterstock

Preface to the First Edition

Strategy is still a source of contention in most organizations. It seems that since the beginning of time man has associated strategy with mystery and esoteric rituals restricted to only an enlightened inner circle. The ancient Greeks consulted their oracle at Delphi for guidance before moving into battle. Indeed, in preparing for the historic battle at Salamis in 480 BC that pitted the Greek coalition against the might of Xerxes' fearsome Persian army it took the persuasive and cunning ‘vision’ of the Athenian strategoi (general) Themistocles, commander of the Greek allied navy, to provide an interpretation of the oracle that ultimately encouraged the Greeks to stay and fight in the face of almost certain defeat against the Persian army. Some had interpreted the oracle's sign to predict defeat. Themistocles skillfully and convincingly interpreted the oracle's omen to mean victory. Little, of course, could he or his Greek compatriots have appreciated the historical significance of their great victory in that battle.1

Many managers today still seek out their ‘oracles’ when faced with strategic decision making. The modern manager's oracle often takes on the form of endless reams of essentially meaningless data generated by management information systems. Many managers find solace in numbers, just as the early Greeks did in the Delphian oracle's signs.

Strategy need not be enigmatic. It need not be a mystical codex with seven seals. Good strategy is about clarity of thinking; of balancing insight based on well-founded intuition with rational analysis – particularly in the face of incomplete information and complex circumstances. Strategy is practiced in social contexts; that is to say, in organizations and their competitive environments. Admittedly, these represent ambiguous contexts that often defy rational analysis. Andrew Lo of MIT's School of Management has remarked that while in the physical sciences three laws can explain 99% of behavior, 99 laws in finance can at best explain only 3% of the behavior.2 The latter can be argued for the social sciences in general. However, while the context in which strategy is practiced is complex and fraught with ambiguity, the basic premise of this book is that how we approach strategy need not be. In this book we develop an approach to strategy that seeks to fulfill that purpose. An underpinning element of this approach is the strategic thinking process that leads to the generation of strategically relevant insight, even in highly ambiguous and complex competitive contexts.

This book builds on several relatively simple assumptions. The first is that strategy is a practice discipline. While this extends to the field of management science in general, it is arguably in the strategy area that ‘getting it wrong’ leads to the more serious consequences. Strategy attains meaning only in the practice field; indeed, some strategy thinkers even go so far as to suggest that strategy attains meaning only in the retrospective; that is, after the fact. Strategy may look impressive on paper, but it is in the practice field that it fulfills its ultimate purpose. While this may seem readily apparent to any military commander, it is not necessarily what the strategic management literature would lead us to believe. Second, strategy is not only about rational analysis and the models that support the analysis. No doubt, analysis is important in strategy. Indeed, as will be argued in this book, appropriately selected frameworks of analysis can generate a lot of useful insight. But as we will see, analysis is only one of several inputs to the strategic thinking process. Intuition, reflection, and above all a predisposition for experimentation and learning are its other important constituents.

This book is about strategy in practice. It draws on strategy theory and current thinking in the field of strategic management. However, this book is written with the practitioner of strategy in mind – the manager who faces strategic decision making in every day management practice. This is where strategy has the potential for making a difference in the business outcome of a firm. In my experience, both as management practitioner and consultant, this is where we often still find substantial gaps in the understanding of even very basic strategy concepts in firms. Managers typically have difficulty in knowing where to begin with strategy. Of those who do succeed in getting started, many quickly get bogged down in the maze of strategic analysis. This book seeks to address those gaps in understanding strategy; it aims to provide the strategy practitioner with a balanced compendium consisting of essential theory and pragmatic, practitioner insight. The strategic thinking approach that forms the core theme of this book delineates the path through the strategy forest.

Setting the right strategy is arguably the most critical managerial challenge facing a firm. Strategy is about making appropriate choices about why, where, and how to compete. Decisions of this type are invariably being made under conditions of incomplete information in increasingly complex contexts. This doesn't make the task any easier. It does, however, reflect the reality of the complex, fast-changing and messy real world we compete in. In that context, strategy is first and foremost about being different and doing things differently in deliberate response to opportunities in the firm's external competitive environment. This response invariably takes on the form of creating and delivering a superior value offering to the market. However, strategy might also have an inward focus; it might also be thought about as seeking and achieving competitive advantage through differentiation in the strategic (re-) positioning of the firm. This might require a realignment of resources and capabilities to better fit changing circumstances in the external market environment.

Good strategy, whatever its pretext, demands astute and discerning insight – strategic insight which is grounded in a suitably balanced mixture of rational analysis, intuition, healthy skepticism, reflected experience, and the willingness and ability to continually challenge the prevailing logic and paradigms. In this book we explore the strategic thinking process which leads to strategic insight. This may seem a questionable proposition – a systematic approach to understanding a complex context? No doubt, competitive contexts are highly complex. Firms' external competitive environments are continually changing; internal organizational contexts are no less complex. Complexity, we know, inherently defies structure and order.

Why then a book about anything even remotely related to structure given the messy real world we are competing in? In this book we clearly differentiate between a firm's reality marked by complex and changing contexts and an appropriate response on the part of the firm to that reality. The former, the firm obviously can neither influence nor impose structure onto. The latter, however, clearly lies within the firm's realm of strategic choices. Strategy is about clarity of thinking; about making appropriate choices under conditions of incomplete information. Strategic thinking can be a powerful means to that end.

The strategic thinking approach developed in this book does not seek to achieve simplification of the firm's complex competitive context; rather, it seeks to bring structure to the thinking that allows managers not to lose sight of the wood for the trees. Good structured thinking begins with asking the right strategic questions – those that really have potential to make a difference to the firm's ability to compete in its markets. There might be numerous questions on a manager's plate, but in reality only relatively few of these have potential for really making a difference to a business's competitive situation. Managers will want to ensure that they are indeed focusing on the few high priority issues. Strategic thinking also continually challenges the prevailing business logic. It seeks to establish relevant insights and to understand these in their current strategic context. Insight ultimately leads to the emergence of patterns that reflect the firm's competitive landscape. Though inevitably incomplete and spotty, this level of granularity is often the best there is available. The good news in all of this is that the firm's competitors are no better off in this regard.

Arguably, strategic thinking leading to an insight-driven approach to strategy is an increasingly critical strategic capability enabling those firms that have acquired skill and acumen in its application to recognize and act on opportunities faster than their competitors; alternatively, it can help to avert situations that might prove to be detrimental to the firms' competitive position. Hence, there is a lot at stake. The purpose of this book is to provide a relatively accessible guide toward achieving mastery of this important skill.

The strategic thinking process developed and discussed in this book represents an accumulation of insights, experiences, and reflections that have evolved as a result of my various roles over the years as management practitioner in industry, as strategy consultant, and as professor of strategy. This book represents a summary of the insights distilled from experiences gained wearing these various hats both in the practice field and in academia. Boxed inserts throughout the book under the heading ‘Strategy in Practice’ underscore the pragmatic emphasis on strategy. These provide practical insights and suggestions for applying the key notions and concepts discussed in the respective chapters.

There is little in this book that is really new. It would be equally pretentious to assume that a book of this brevity can exhaustively deal with strategy in its breadth. The focus of this book is on the front end of the strategy process; it is about setting the right strategic direction from the outset. To that end, this book does purport to make a unique contribution; its aim is to provoke a new and different approach to thinking about strategy.

In compiling the book, I have poached without remorse ideas and thinking put forward by fellow scholars. I am particularly indebted to former colleagues in industry and consulting, current colleagues in academia, my MBA, and doctoral students. Particular mention must go to those at Bayer, ABB, Arthur D. Little, Henley Business School, the Private Hochschule Wirtschaft (PHW) in Zurich, Switzerland, and the University of St. Gallen, Switzerland. This book is as much a tribute to their generosity of spirit in sharing insights and experiences as it is to their relentless challenging of my thinking both in the practice field and classroom, respectively.

I am particularly grateful to several individuals who have contributed directly to the book. I am indebted to the following for their reviews of the manuscript, valuable feedback, and endorsement: Professor Peter Lorange, Lorange Institute of Business Zurich (Switzerland); Leif Bergman, Managing Director of Henley Nordic (Denmark); David Wright, MD of AllCloud Networks and formerly a Strategy Director and Business Vice President at Hewlett Packard; Professor John McGee, Warwick University (UK); and Professor David Collis, Harvard Business School (USA). Further, I am grateful to Rosemary Nixon, Senior Commissioning Editor at John Wiley & Sons, for her unwavering support from the outset. Last, but by no means least, I am indebted to my wife, Heidi, for her meticulous scrutiny of several versions of the book's manuscript, and for engaging and challenging discussions on its content as it evolved.

I am grateful to all. It has been a great learning journey and I look forward to sharing some of the insights that have emerged with you in this book.

George Tovstiga

Henley-on-Thames

March 2010

Notes

1.

Greene, R. (2006)

The 33 Strategies of War

, London: Profile Books.

2.

The Economist

, Schumpeter – The Pedagogy of the Privileged (September 26, 2009).

Preface to the Second Edition

The need for clarity and structure in strategic thinking is greater than ever. Since publication of the first edition of this book, companies are facing ever greater challenges in a global economy marked by widespread uncertainty. New worries triggered by the Euro crisis have driven business confidence levels to unprecedented depths. Indeed, there is no end to the recession in sight as the threat of a “triple dip” recession in the foreseeable future appears ever more probable. More than ever, firms are seeking new ways to approach their strategy; if not to achieve strategic growth, then to counter threats with more effective defensive strategies. Strategy, the way we know it, appears to have arrived at an evolutionary crossroads. The current economic crisis has introduced several important changes to the way in which we think about strategy.