Business is About Choices
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1 Business is About Choices The Art of Strategic Thinking Doug Williamson President & C.E.O. More Thinking vs. More Planning? The Extreme Future The Extreme Future The Extreme Future Chaotic 2008-? Chaotic 2008-? Complex Complex Complicated Complicated Simple Rational Simple Certain 1
2 The Extreme Future The Extreme Future Irrational Chaotic 2008-? Confused Complex Predictable Complicated Predictable Complicated Rational Simple Rational Simple Certain Foggy Certain Foggy Uncertain Ambiguous The Extreme Future The Two Big Challenges? Irrational Chaotic 2008-? Confused Complex Predictable Complicated Rational Simple Certain Foggy Uncertain Ambiguous # 1 Dealing with Complexity # 1 Dealing with Complexity The world is not a simple place No one wants to be led by the simple minded Turbulence is a permanent new reality Leaders must be able to make sense of things 2
3 # 2 Coping with Uncertainty # 2 Coping with Uncertainty?? True Ambiguity True Ambiguity A Range of Futures A Range of Futures Alternate Futures Alternate Futures A Clear Enough Future A Clear Enough Future Classic Business Failure Traps Classic Business Failure Traps The Breakdowns Classic Business Failure Traps Classic Business Failure Traps Skills Skills People Process Structure The Breakdowns Process Structure The Breakdowns The Result of Poor Engineering Architecture Strategy Strategy 3
4 Classic Business Failure Traps Strategic Thinking Breakdowns Skills People Process Structure The Breakdowns The Result of Poor Engineering Architecture Strategy Thinking Strategic Thinking Breakdowns Strategic Thinking Breakdowns Hurdles Point of View The Scope Nature of Change Low Narrow Cautious Transactional Hurdles Point of View The Scope Nature of Change Strategic Thinking Breakdowns Brawl with no Rules Low Hurdles High Narrow Point of View Wide Cautious The Scope Ambitious Transactional Nature of Change Transformational 4
5 Can t Fight Blind Can t Fight Blind We believe that strategy must be managed explicitly like any other major process in an organization. In most organizations, this process either does not exist or is incomplete. Strategy must be managed explicitly, like any other major process in an organization. However, in most organizations, the Strategic Thinking process either does not exist or is woefully incomplete. What s Coming? Multiple Views of the Future World Future Society Institute for Global Futures Institute for the Future National Intelligence Council The Bottom Line? The Cascading Impact The future doesn't just happen to us or arrive unannounced. People create it through their actions or inactions today. 5
6 The Cascading Impact? The Forces & Pressures Broad External / Market Forces Organizations & Businesses Society & Workplace People The Forces & Pressures The Forces & Pressures The Forces & Pressures The Forces & Pressures 6
7 Navigating the Turbulence Navigating the Turbulence Navigating the Turbulence Evolution in Thinking The Traditional View Part I The Traditional View Part II Sustain - your competitive advantage Seek - stability & consistency Stick - to the knitting Be Safe Avoid - frontal attacks Retreat - to low rivalry markets Focus - on hard to replace / niche markets Stay out of the risky unpredictable situations 7
8 The New View The New View Everything - is in motion and flux Learn - to take advantage of it by moving quickly Embrace full frontal hypercompetition Create - disequilibrium and change Everything - is in motion and flux Learn - to take advantage of it by moving quickly Embrace full frontal hypercompetition Create - disequilibrium and change Today s Maxim The Duality of Leadership Success depends not on how you position yourself today Senior Leadership But on how you anticipate, act and react over time Operational Leaders Skilled in managing the currently invested resources to help gain market share and profit in today s markets Strategic Leaders Skilled in identifying and selecting future markets in which to invest resources for future growth and emerging opportunities The Duality of Leadership The Duality of Leadership Senior Leadership Senior Leadership Operational Leaders Skilled in managing the currently invested resources to help gain market share and profit in today s markets Operational Leaders Skilled in managing the currently invested resources to help gain market share and profit in today s markets Strategic Leaders Skilled in identifying and selecting future markets in which to invest resources for future growth and emerging opportunities 8
9 Strategic Paths The Options? Strategic Paths The Options? Context Broad Perspective Tangible Position Strategic Planning Strategic Thinking Deliberate Plan Process Flexible Plan Strategic Paths The Options? Yesterday The Old Thinking Exploitation Exploration Current Reality Strategic Planning Creating Alignment Today - Thinking Changed How they Differ? Strategic Thinking Disrupting Alignment Current Reality Desired Future Strategic Planning Creating Alignment 9
10 Strategic Thinking Continuum Strategic Thinking Continuum Peters & Waterman Peters & Waterman Zabriskie & Huellmantel Mintzberg Zabriskie & Huellmantel Mintzberg Liedtka Liedtka Hamel Hamel Michael Porter Michael Porter Ohmae Prahalad Ohmae Prahalad Strategy as Science Left Brain I Analytical Strategy as Art Right Brain I Creative Strategy as Science Left Brain I Analytical Strategy as Art Right Brain I Creative Strategic Thinking Defined? The Ability to Project Connect Visualize Why is it important? The Hurdles? Creating new space Getting to that space first Establishing a distinct advantage Overcoming hurdles Reframing dimensions/perceptions of value 10
11 The Hurdles? The Biggest Hurdle? Cognitive An organization wedded to the status quo Political Opposition from powerful vested interests Resources Limited resources Political Opposition from powerful vested interests Resources Limited resources Motivations Unmotivated staff Motivations Unmotivated staff Strategic Inflection Points Strategic Inflection Points Business and relevance improves Inflection Point Business and relevance declines About Framing the Puzzle About Framing the Puzzle What do you do? Look for the corners Certain colour combinations Pieces that somehow look similar What do you do? Start with the corners Certain colour combinations Pieces that somehow look similar Experiment. Try it. Fill in the white space. 11
12 Beneath the Disorder Disorientation There is a certain form of order There actually are orderly patterns of - unpredictable behavior - unlikely relationships - unusual interdependencies Many leaders are - direction-impaired They lack what is called: geographic intelligence ability to orient in time and space Breakdowns in Thinking? Breakdowns in Thinking? Assumption Conclusion Assumption # 1 Conclusion # 1 Conclusion # 2 Premise Premise Conclusion # 3 Assumption # 2 Conclusion # 4 The Strategic Thinking Process? Best in Class 12
13 Scenario Planning When Scenario Planning Helps? Leaders who can expand their imaginations to see a wider range of possible futures will be much better positioned to take advantage of unexpected opportunities that will come along. Uncertainty is high relative to the ability to predict The quality of fresh thinking is low Too many costly surprises have occurred in the recent past The team wants a common language and framework The team does not perceive or generate new opportunities There are strong differences of opinion, with multiple options When Scenario Planning Helps? When Scenario Planning Helps? Uncertainty is high relative to the ability to predict Too many costly surprises have occurred in the recent past The team does not perceive or generate new opportunities Uncertainty is high relative to the ability to predict Too many costly surprises have occurred in the recent past The team does not perceive or generate new opportunities The quality of fresh thinking is low The team wants a common language and framework There are strong differences of opinion, with multiple options The quality of fresh thinking is low The team wants a common language and framework There are strong differences of opinion, with multiple options The Scenario Planning Process What Does it Mean for You? Pioneer Preparation Reconnaissance Navigate Map 13
14 # 1 - Refining Your Intuition # 2 - Evolving your Mindset # 2 - Evolving your Mindset # 3 - Developing 3D Thinking Appetite for Change - + B D A C - + Tolerance for Ambiguity # 3 - Developing 3D Thinking Insight - the ability to 14
15 Insight - the ability to Foresight - the ability to Recognize the hidden patterns Identify the similarities Make relationships Think visually Foresight - the ability to Peripheral Vision - the ability to Look ahead See emerging trends Build the courage to influence it Peripheral Vision - the ability to About Possibilities View things with a wide angle lens Relatedness not separateness Not the parts thinking in wholes 15
16 Not Probabilities About Prototypes Challenge assumptions Make connections Visualize Harmonize Improvise Reformulate Not Perfection About Insight Roughly right is good enough Simultaneous evaluation & correction Not Information About Design Data has never solved a problem Only choked the answer 16
17 Not Engineering Your Choice? Thinking first & Building later Sense & Sensibility Look & Feel More Cemeteries of Information? New Cradles of Knowledge? The Art of Strategic Thinking Doug Williamson President & C.E.O. 17
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