Future Strategic Profile & Strategic Thinking Overview

1. Future Strategic Profile & Strategic Thinking Overview

2. Strategic Profile References • The Strategist CEO - How Visionary Executives Build Organizations by Michel Robert • E-Strategy Pure & Simple – Connecting Your Internet Strategy to Your Business Strategy by Michel Robert and Bernard Racine • Strategy Pure & Simple II – How Winning Companies Dominate Their Competition by Michel Robert • Strategic Supremacy Pure & Simple – Don’t Change the Rules, Change the Game by Michel Robert

3. The Future Strategic Profile encompasses a broad array of directional information about an organization’s future….. Strategic Profile Introduction • Business Concept - organization’s reason for being or purpose • Driving Force - what drives the organization toward certain products, markets and customers • Required Areas of Excellence - activities that require excellence exceeding any competitor • Scope of future products, markets and users - breadth and depth considerations • Guidelines for size, growth and profitability - detailed direction • Critical issues that must be managed

4. The business concept influences all aspects of an organization’s activities. It determines the scope of products and services, the structure, the technologies required, distribution channels, marketing and selling techniques, and even the type of people employed. It sets the tone, climate and behavior of the organization Industry examples: Volvo – “durability and safety” Rolex – “jewelry…not watches” Federal Express – “guaranteed overnight delivery of letters and small parcels” Daimler-Benz – “the best engineered car in the world” Apple – “a personal computer for the home” J&J – “products for nurses, doctors, patients and mothers” Strategic Profile Introduction – Business Concept

5. Identifying which component of an organization is its driving force is a key elements of strategic thinking Geographic Market Industry Market Customer User Strategic Profile Introduction – Driving Force Technology Size/ Growth Profit/ Return Sale/ Marketing Method Distribution Method Product/ Service Production Capacity/ Capability Natural Resources

6. What drives an organization toward certain products, markets and customers… the single force or motive that gives an organization its identity, momentum and edge in the marketplace. It tends to bound the scope of products and markets. Each of below listed strategic components are found in most organizations. However, only one of these is strategically most important and drives the organization forward to success. Strategic Profile Introduction – Driving Force

7. Notions “There is only one driving force in a company – return/profit.” “Every organization must be user-driven.” Every corporation needs to be user-sensitive, but not all are user-driven. Depending on the driving force being pursued, each organization is user-sensitive, but in a slightly different manner. Examples: Product-driven – looking for new users of current products or modified products to satisfy its current user groups User-driven – continuous dialog to try to identify unique new needs that can be satisfied by totally new or different products Technology-driven – looking for users that have applications for a technology the organization has or is willing to acquire. Once applications are found, then products are designed and developed. Sales/Marketing-driven – looking for new products/services that can be sold to current users through current sales methods or new users that can be reached though the same selling method Distribution-driven – looking for new products/services that could be sold to current or new users though its existing distribution system Strategic Profile Introduction – Driving Force

8. The strength of a company’s business concept is maintained by deliberate cultivation of excellence in two or three areas that are key to the sustained health of the business concept Area of excellence is a skill, capability or area of expertise and/or competence cultivated to a degree of proficiency beyond anything else accomplished Strategic Profile Introduction – Areas of Excellence

9. Corporate beliefs are the values, beliefs and principles that a company possesses that set the tone of behavior and mold the scope of its products and markets. Moral foundation upon which an organization seeks to realize its future strategic profile Some examples: Customer is the reason for being Employees are the only sustainable competitive advantage Continuous learning/continuous improvement Team does not mean weak individuals Diversification Professionally and technically competent Individual respect and integrity Strategic Profile Introduction – Corporate Beliefs

10. Strategic Profile Framework A framework that helps produce a strategic profile of what an organization wants to become which in turn helps it make vital choices around products, customers and markets Business Model/Plan Assessment Review Financial Returns Confirm strategic themes, conclusions, future state, gaps and objectives Anticipated financials and strategy Analyze internal and external environments Strategic Variables Assessment Size/Growth Guidelines Ranges of numbers in terms of sales, revenues and growth Corporate Beliefs Market/User Scope Values, beliefs and principles; key driver Preferred markets and users Strategic Business Concept Product Scope Products suited to the business concept that will be emphasized Clear, concise organizational purpose Single force viewed from a product, market and customer perspective that gives identity/differentiates the organization Driving Force Areas of Excellence Activities that require a degree of excellence greater than any competitor

11. Strategic thinking process: Attempts to determine what an organization should look like. Strategic planning helps choose how to get there Identifies the key factors that dictate the direction of an organization together with the process that management of an organization uses to set direction A framework that helps produce a profile of what a company wants to become which in turn helps it make vital choices around products, customers and markets Strategic thinking: Is the difference between planned growth and growth by momentum Shapes management’s conclusions about the future Strategic Thinking

12. Competitors A Final Strategic Profile B Internal External Strategic Inputs C Critical Issues 1. 2. 3. Strategic Thinking Process Analysis of Strategic Variables Driving Force #1 Start Up Driving Force #2 Tentative Strategic Profile + Driving Force #3 • Clarification of the current situation • Analysis of strategic variables • Exploration of different driving forces and possible strategic profiles • Development of a future strategic profile • Development of competitive profiles • Testing the strategic profile • Final strategic profile • Identification of critical issues

13. Clarification of vision and beliefs The first step in the process is to take stock of where the entity currently is. During this step, the team will explore items such as: Trends Scope of the geographic areas served User groups attracted Market share and that of the entity’s competition Organization structure in place to support the above product/market division Strategic Thinking Process – Current Profile Start Up

14. The best inputs for the analysis of strategic variables are from a company’s leadership. Future direction is greatly influenced by leadership experience and perception about the internal and external environment in which the organization will compete. A questionnaire/survey should be developed to obtain each person’s view on key areas of the external and internal environment: Internal Internal External External Strategic Inputs Strategic Inputs Strategic Thinking Process – Analysis of Strategic Variables • Responses to the questionnaire will serve as the basis for developing a strategic profile

15. Analysis of the external and internal environment can provide clues as to whether the existing driving force is suitable to the environment. Internal External Strategic Inputs Strategic Thinking Process – Exploration of Different Driving Forces & Possible Strategic Profiles Driving Force #1 Driving Force #2 Driving Force #3

16. In developing a future strategic profile, the following elements need to be clearly stated: Timeframe Driving force and business concept Areas of Excellence Product scope Market/user scope Size/growth guidelines Return/profit guidelines Driving Force #1 Driving Force #2 Tentative Strategic Profile Driving Force #3 Strategic Thinking Process – Development of the Future Strategic Profile

17. It should be relatively easy to determine the driving force of key competitors by assessing and analyzing their actions in the marketplace. Knowledge of the competition’s driving force provides the opportunity to anticipate what products, markets and user groups its competition will pursue and which ones they won’t. Competitors A B C Strategic Thinking Process – Development of Competitive Profiles

18. Test of the future strategic profile encompasses the following: Versus the current start up situation Versus the strategic inputs Versus the competitive profiles Strategic Thinking Process – Testing the Strategic Profile

19. Versus start up How large are the gaps? What changes are required to go to the product scope? Market scope? User groups? What resources/skills will be required? Is it realistic to achieve the profile within the timeframe established? How should the strategy and profile be modified in view of the above? Strategic Thinking Process – Testing the Strategic Profile Start Up Tentative Strategic Profile

20. 2. Versus the strategic inputs Are unique strengths being exploited? Are unique weaknesses being minimized? Are any beliefs being compromised? Are all major opportunities being exploited? Are all major threats being avoided? How should the profile be modified? Internal External Strategic Inputs Strategic Thinking Process – Testing the Strategic Profile Tentative Strategic Profile

21. 3. Versus the competitive profiles Is the strategy running up against their strengths? Are their weaknesses being exploited? How will they react to this strategy? How can their actions be counteracted? What is driving their strategy? How can areas of excellence be exploited? Competitors A B C Strategic Thinking Process – Testing the Strategic Profile Tentative Strategic Profile

22. The profile test may surface a number of issues and provides the opportunity to try to “shoot holes” in the team’s thinking Affords the team a final chance to reshape the strategy and profile before final adoption Strategic Thinking Process – Final Strategic Profile Final Strategic Profile

23. Issues uncovered during the final profile review may surface a number of key issues to resolve as the future strategic profile becomes a reality Issues are the bridge between the current profile assessment and the final product Direction-setting should now become a reality. Managing this direction now begins with the management of the identified critical issues Final Strategic Profile Critical Issues 1. 2. 3. Strategic Thinking Process – Identification of Critical Issues

24. PHASE I – Strategic profile kickoff and complete the provided survey. Purpose of the survey is to extract each person’s best thinking on all key elements of the company and its environment PHASE II – Using the completed questionnaires: Agree on the business concept Agree on the two or three most important strategic inputs Select two or three driving forces Develop profiles for each potential driving force and compare them to the current driving force Select a tentative strategic profile Develop competitive profiles Test the profile and surface critical issues. Shape the final strategic profile PHASE III – Address and resolve the critical issues Strategic Thinking Process – Approach