STRATEGIC PLANNING AND EXECUTION

WEEK I: STRATEGY ANALYSIS

I. INTRODUCTION TO STRATEGIC EXECUTION

1. What are the critical conditions for strategy execution to succeed?
- [1] (Strategic) Analysis.
+ The BLACKBERRY case was a failure of strategy analysis. They failed to:
. Understand the market trends (they stuck with their keyboards).
. Read customer demands.
/ Therefore, they chose a bad strategy.
/ They are now only a secondary player in their market.
/ Read more about BlackBerry: wikipedia.org/wiki/blackberry

- [2] (Strategic) Formulation.

+ The KODAK case was a failure of strategy formulation.
. At one level, they understood where the market was going (preferring digital
photography to film photography).
. They however weren’t able to get together as an organization to come up with a
viable strategy.
/ They went bankrupt in 2012.
/ Read more about Kodak: wikipedia.org/wiki/kodak
 - [3] (Strategic) Implementation.
+ The SATURN MOTOR case was a failure of implementation. A failure to:
. Build on their success, and,
. Move forward.
/ Saturn Motor’s production was ended by GM in 2009.
/ Read more about Saturn: wikipedia.org/wiki/saturn_corporation

- These 3 elements are mutually reinforcing.

- Up to 90% of companies fail to execute their strategies well.

II. STRATEGIC ANALYSIS

2. What is strategic analysis?
- The evaluation of an organization’s current competitive position and,
- The identification of future valuable competitive positions and how the
organization plans to achieve them. HOW:
+ From a generalist’s perspective (foundational, integrative).
+ Using strategic reasoning (dynamics, complexity, competition). ?
+ Grounded in data analytics and data. ✅
+ Using appropriate tools and techniques. ✅
3. Who does strategic analysis?
- Those who run organizations / Someone who formulates and implements
strategy:
+ CEO or President.
+ Entrepreneur/Owner.
+ VP Strategic Planning/Chief Strategy Officer.
+ General Manager of a BU.
- Someone who evaluates strategy:
+ Investors.
+ Financial Analysts.
- Someone who recommends future strategic action:
+ Consultants.
+ Secondary Stakeholders (activists, governments, other players in the broader
ecosystem).

4. How to do strategic analysis?

- [1] Identify mission and values.
 - [2] Analyze the competitive environment.
- [3] Analyze competitive position.
- [4] Analyze recommended strategic actions.
- All to create more values.

5. What are a strategist’s challenges?

- To find a “Valuable Competitive Position” sweet spot among:
+ Values.
+ Opportunities.
+ Capabilities.

6. What questions to ask, and what tools to use for [1] [2] [3]?
- OPPORTUNITIES and THREATS from SWOT:

Questions Tools

[1] What market(s) is the firm in, and who Competitor Analysis
are the players in these markets?

[2] What are the growing trends impacting Environmental Analysis

the industry?

[3] Is this an attractive market? Are there Five Forces Analysis

barriers to competition?

[4] How is the competitive structure of the Competitive Life Cycle (CLC)
market likely to evolve? Analysis
- STRENGTHS and WEAKNESSES from SWOT:

Questions Tools

[5] What is the firm’s mission and values? Stakeholder Analysis

What do others expect of the firm?
[6] What are the firm’s unique resources Capability Analysis
and capabilities? How sustainable are they?

[7] Can the firm leverage these assets to Portfolio Planning Matrices
improve their position in a market?

[8] How should the firm position itself in Strategic Maps

the market relative to its rivals?

7. What tools provided in 6. can be used to help with a strategist’s challenge?

Challenges Tools

Values Stakeholder Analysis

Opportunities Competitor Analysis

CLC Analysis
Environmental Analysis
Five Forces Analysis

Capabilities Capability Analysis

Portfolio Planning Matrices
Strategy Maps

8. What questions to ask, and what tools to use for [4]?

- Method 1: Ask questions -> Recommend actions.

Questions Tools

How can we improve our position, i.e. [A-Z order]

create more value, in our competitive Acquisition Analysis
environment? [A-Z order] Hypothesis Testing
- Acquisition? Payoff Matrices
- Entry? Real Options Analysis
- Innovation? Scenario Planning
- Scaling?

What strategic actions do we recommend STRATEGIC ANALYSIS!

going forward?

- Method 2: Recommend actions -> Ask questions.

- Highlighted orange: Decision Making Under Certainty.
Questions Tools

What strategic actions do we recommend STRATEGIC ANALYSIS!

going forward?

What are the underlying assumptions of Hypothesis Testing

this recommendation? Does it meet our
tests?

How are competitors likely to react to Payoff Matrices

these actions?

Does it make sense in future worlds we Scenario Planning

envision?

Does it provide strategic flexibility? Real Options Analysis

Does the value created by these actions Acquisition Analysis

exceed the opportunity cost?

9. What does a robust strategic analysis look like?

- A robust strategic analysis:
+ Is fundamentally integrative.
. INTEGRATIVE (a) involving everyone and every department in the
organization.
+ Leverages the diversity of tools in one’s toolkit.
+ Embraces uncertainty and complexity.
+ Is fact-based and informed by research and analytics.
+ Advances and tests hypotheses.

10. What can a strategic analysis be?

- A strategic planning exercise or consulting program: Takes weeks.
- An overnight request: Takes a night.
- An elevator pitch: The highest level of strategic analysis, requiring a comprehensive
and reasonable response within an extremely short period of time.

III. HYPOTHESIS TESTING

11. What is Hypothesis Testing (Kiểm định giả thuyết)?
- Useful frameworks for analyzing strategic actions.
- Popular among management consultants (as an approach for making decisions).

12. How to do Hypothesis Testing?

- [1] Frame option as a hypothesis.
+ Any strategic option is a hypothesis. This could be:
. Pursue a merger and acquisition (M&A).
. Make investments in capitals.
 . Introduce a new product facility.
. And the like.
- [2] Identify core assumptions.
+ This could be:
. Do we have the expertise to execute?
. Do we have the distribution channels that are required to bring a new
product to market?
. And the like.
- [3] Conduct thought experiments.
+ What we know, and what we need to know. This could be:
. What data do we currently have?
. What data do we ultimately need?
/ This is very useful for a research plan for you to go collect data, and
ultimately test the assumptions that you have behind a hypothesis.
- [4] Collect data and test assumptions.

13. What are the four core assumptions of a hypothesis?

- [1] Value test.
+ Does it create value?
- [2] Execution test.
+ Do we have the existing capabilities to be able to do this?
- [3] Scale test.
+ Can we scale it up to a broader set of consumers or customers?
- [4] Defensibility test.
+ To what degree can others imitate us in what we are doing here?
. How are competitors likely to respond?
. Can they do what we are trying to do?

14. What are the three thought experiments of a hypothesis?

- [1] What do we know?
- [2] What do we not know, but could?
- [3] What do we not know, and can’t?

15. What do the four core assumptions and three thought experiments lead to?
- A (strategy) research plan.

IV. STRATEGY RESEARCH

16. What is Strategy Research to a strategic analysis?
- Strategy Research is critical to a robust strategic analysis because it:
+ [1] Supports your strategy toolkit.
+ [2] Establishes facts and generates insights.
+ [3] Provides evidence to support action.
- And it helps you:
+ [1] Understand market trends.
+ [2] Benchmark competition.
 + [3] Assess internal organization.

17. What are the challenges while doing research for strategy?
- [1] Not enough information.
+ This is the reality: You never have exactly what you need to make a decision.
+ You have to ultimately recognize that you will need to make the decision
under uncertainty and complexity.
+ The worst case is that many organizations often fall into Paralysis by
Analysis:
. Spend too much time on analysis and never execute on it / Spend too much
time trying to make decisions, instead of making decisions and acting.
- [2] More than enough information.
- [3] Conflicting information.
- [4] Desired information is proprietary. /pro^`-prai-`-te`-ri`/
+ Trade secrets.
+ Public vs. private organizations.
. Public organizations are required to release a lot of information that private
organizations are not required to.
- [5] Too expensive to acquire.
+ Requires extensive efforts to collect.
+ Third parties charge for services.

18. What are the data sources that we can use?

- [1] Annual reports.
- [2] Publicly required filings.
+ Taxes and investors.
+ Patents and copyrights.
- [3] Analysts’ and consultants’ reports.
- [4] News articles and press releases.
- [5] Interviews and surveys.
- [6] Big data.

19. What are the research suggestions?

- [1] Devise a research plan:
+ How much time do we have?
+ How much resources are we willing to put forward?
+ What is ultimately the data we need to make a decision?
- [2] Balance needed and desired data:
+ What data is must-have?
+ What data is nice-to-have?
+ What is the marginal value of a particular piece of data?

V. STRATEGY ANALYTICS
20. What is Strategy Analytics?
- [1] Is the conversion of data to gain insights. Could be:
 + Calculations, or,
+ Analyses.
- [2] Is a critical part of a robust strategic analysis, complements research.
- [3] Is facilitated by spreadsheets, statistical software, and data visualization tools.
+ Spreadsheet: MS. Excel.
+ Statistical software: Stata, R.
+ Data visualization tools: MS. PowerBI.
- [4] Often requires creativity and exploration, making the data “speak”.

21. What are [a few of] the Industry Structure Measures [A-Z order]?
- Compound Annual Growth Rate (CAGR).
- Concentration Ratio 4 (CR4).
- Economies of Scale.
- Herfindahl-Hirschman Index.

22. What are [a few of] the Financial Performance Measures [A-Z order]?
- Earnings before Interests and Taxes (EBIT).
- Discounted Cash Flow (DCF).
- Market-to-Book Ratio.
- Price Earnings Ratio.
- ROA.
- ROE.

23. What are [a few of] the Organizational Performance Measures [A-Z order]?
- Growth:
+ Top line.
+ Bottom line.
- Leverage.
- Market Share.
- Revenues.

24. Module Lessons:

- [1] Strategic analysis is only one piece of an effectively executed strategy.
- [2] Strategic analysis is fundamentally integrative, leveraging the diversity of
tools.
- [3] Strategic analysis:
+ Embraces uncertainty and complexity, yet,
+ Is fact-based, and information by research and analytics.
- [4] Strategic analysis advances + tests hypotheses of how to create greater value.
 WEEK II: STRATEGY FORMULATION

VI. PILLARS OF STRATEGY EXECUTION

25. What are the three pillars of Strategy Execution?
- [1] (Strategy/Strategic) ANALYSIS.
+ Something you can do by yourself.
- [2] (Strategy) FORMULATION.
+ Something you can’t do by yourself.
- [3] (Strategy) IMPLEMENTATION.
+ Something you can’t do by yourself.

VII. STRATEGY FORMULATION IN ORGANIZATIONS

26. What are the ways that strategies get set in an organization?
- [1] Top-down (“Deliberate / Intended”).
+ Traditional view.
+ Formal / strategic planning.
+ Executive drives the vision and strategy.
+ Long history.
. The word “strategy” itself came from the Greek word “stratego”, which
means “the art of the general”.
. The idea of strategy came from a military context.
. In the military, there is only top-down, and no bottom-up.
. A legendary book on this is “The Art of War”, by Sun Tzu, written in 2 BC.
. Associated with the scholar Michael Porter - who created the Five Forces
Analysis.
- [2] Bottom-up (“Emergent”).
+ Emerges over time.
+ Responsive to changing conditions.
+ Intended strategy vs. Realized strategy.
. Realized strategy often “emerges” from the difficulties and challenges and
the sort of day-to-day activities of the organization.
+ Influenced / discovered by the rank and file.
+ Associated with the scholar Henry Mintzberg.

27. What makes bottom-up / emergent strategy what it is?

- [1] Challenges and failures:
+ Oftentimes “emergent” strategy arises from challenges - or failures - of
intended strategy.
+ These circumstances can prompt a “realized pattern” that was not necessarily
intentional in the original plan.
- [2] The “Learning Organization”:
+ Adapts more readily.
+ More robust for changing conditions.
VIII. STRATEGY FORMULATION: APPROACHES
28. What are the different ways you can set strategy in an organization?
- [1] Formal strategic planning exercises.
+ Typically cyclical reviews (annual, bi-annual, quarterly) that provide a chance
for a company to examine how they are doing.
. Cyclical (a) occurring in cycles / recurrent.
+ The most common way, but could often become planning exercises, or
worse, purely budgeting exercises - if budget is included.
. Could turn into a dog fight over resources for the next year, as budget is
often viewed as a fixed pie:
/ I got 4% this year.
/ How about 5% next year, because…?
- [2] Strategic “War Room”.
+ Another military analogy, which has its roots in Winston Churchill in WWII.
. A specific room / location set aside where he and his cabinet would think
strategically about war efforts and make their plans.
+ Similarly today, the War Room is a specific space set aside where there is
room for visual representations. The elements of this approach include:
. Storyboards (Sequential thinking/Displayed thinking/Visual sequencing).
/ Putting up visual representations of your assumptions and the
strategies that you think might unfold in the organization. You might think of
this like panels in a graphic novel or cartoon.
/ You need space in your room to launch this.
/ Refers to the thought structure of how things might unfold.
/ Helps you manage data.
. Involvement of organization members.
/ From all across the organization.
/ To gain their insights from the very beginning.
. Involvement of experts.
/ SMEs.
/ Consultants.
/ People on your board that work at other organizations.
/ Others from outside of your organizational structure.
// Help you see something from a different POV.
. Input from diverse perspectives.
. Collaboration.
. Iteration.
- [3] Rapid Prototyping.
+ A concept that comes from the manufacturing and fabrication space.
+ A design-build idea.
+ The whole point of this is:
. Quickly mock up a prototype you can play with, look at, and analyze. To:
/ Get an idea of what potential shortcomings are.
/ Or problems that you might not have anticipated when you
designed it on a computer / on paper.
 + An example is when Apple’s chief designer Jony Ive carried a mock-up
prototype of a to-release version of the iPhone in his pocket for weeks to see:
/ If the size, the dimensions, or the form factor were right.
+ The idea is that you have to try things out.
+ It’s like QA-ing at Gameloft.
+ This approach:
. Encourages “different” thinking.
. Pilots tests and experiments.
. Aims at quick failures (rapidly determines what works and what doesn’t).
/ If you have to fail, fail quickly / rapidly.
/ Try it first at a specific division / product market.
. Is used in instructional design, or corporate initiatives.
. An example is Gameloft HQ gives each studio 1ME per year to try things
out with games.
- [4] Design Thinking.
+ Design thinking is an approach that takes a different starting point to bring a
different perspective. Instead of:
. Thinking scientifically (for example, trying to be analytical), this approach
helps managers …
. Think like designers. If we use this approach, we’ll active these 3 core
beliefs:
/ Empathy.
// Establishing insights based on a deep understanding of a
deep human experience with our product/service, or with our organization.
// An example. You are a company making appliances for the
kitchen. Instead of starting with sketches and ideas, they will go and observe
people. They watch how families interact in the kitchen, how parents prepare
meals, and take notes.
/ Invention.
// This is where we hope to discover new possibilities.
/ Iteration.

- [5] Business Model Canvas.

+ This approach accomplishes a number of things:
 . Focus.
/ Used a lot in the tech industry, because it allows for quick and
to-the-point focus on what the business model is all about.
. Flexibility.
. Transparency.
+ Ideally, it should be something that you can put on one piece of paper.
+ Typically, a business model canvas includes 9 elements:
. Customer segments.
. Value propositions.
. Channels.
. Customer relationships.
. Revenue streams.
. Key activities.
. Key resources.
. Key partnerships.
. Cost structure.

IX. CORPORATE GOVERNANCE

29. What is corporate governance and why is it a strategic consideration?
- [1] Corporate governance:
+ Is a system of checks and balances.
. For example: Internal controls, etc.
+ Is a set of procedures (the “ways things are done”.)
 + Involves the structure of an organization.
. How we are organized.
. Who has oversight of whom.
. What the reporting structure is.
. And the like.
+ Involves risk management.
+ How to deal with external pressure.
+ How to build and maintain trust and culture.
+ In short, it is the way we organize and operate in order to help us
accomplish our purpose.
- [2] It is a strategic consideration because effective corporate governance:
+ Maximizes performance.
+ Minimizes misconduct.
+ These are the two main areas of research related to corporate governance.

30. What are the challenges of corporate governance?

- No uniform best practices.
- Success depends on:
+ (Understanding your) External settings.
. Your context.
. The marketplace you are operating in.
+ Interaction with (key) stakeholders.
. Who are the most important people?
. What are those interactions like?
. What could we do to make those interactions better?
+ Procedures for strategy formulation and execution.
- Not one-size-fits-all.
- Not a checklist.
- Deeply connected to (organizational) strategy.

31. What are the key themes of corporate governance?

- Long-term orientation.
- Effective stakeholder management.
- Effective risk management.
+ We need to think about risks.
+ We need to think about contingency plans.
+ We need to be prepared for the things that could go wrong.

X. THE HUMAN FACTOR

32. What do (strategy) formulation and implementation involve?
- Human beings.
- Human beings can either:
+ Enhance, or,
+ Impair your ability to effectively formulate / implement strategy.
33. What are the basic "human factor" theories?
- [1] Behavioral Theory.
+ Bounded rationality.
. The recognition that human beings are not entirely capable of making
rational decisions.
. Human beings might f*ck up.
. In fact, our decisions are always bounded by other influences:
/ Our past.
/ Our experiences.
/ Our biases.
/ What we like.
/ What we don't like.
// This is neither good nor bad.
// This is not prescriptive, only descriptive.
// Prescriptive (a) that you are sick and a doctor has to
prescribe you.
. In conclusion, human beings are boundedly rational.
+ Satisficing.
. Not a word that you've heard before.
. The idea that we tend to (only) look for acceptable solutions - that bring
only marginal improvements to "satisfy" ourselves - instead of doing the hard
work.
+ Performance assessment.
. The idea that individuals tend to benchmark their performance against:
/ Their own past performance, or,
/ The performance of peers and competitors.
- [2] Institutional Theory.
+ Mimetic isomorphism. /ai`-s`-'mo…/
. The idea that individuals and organizations tend to copy each other. They
tend to "mimic".
. For example: If you drive around the US, you might notice that a lot of radio
stations have a very similar format.
/ Organizations tend to do what other organizations are doing that
they can readily observe.
/ Leads to a lack of creativity and innovation, and maybe a lack of
identity.
/ Copycat?
- [3] Resource Dependence Theory.
+ Power dynamics.
. For example: If there is a stakeholder that we are dependent on because
they have a scarce resource that we need, it turns out that they are going to
have a lot of influence over what we tend to do as an organization.
. Another example: You tend to please your manager because he might give
you a raise or promotion.
. This can be seen in our personal lives, too.
 . Those with more power / authority tend to be able to call more of the shots,
and people's try to fall in line.

XI. COMMON STRATEGY EXECUTION MISTAKES

34. What is the purpose of effective strategy execution?
- [1] Create,
- [2] Occupy, and,
- [3] Defend a valuable competitive position.
- In other words, you want to create value that is consistent with your:
+ Values,
+ Opportunities, and,
+ Capabilities.

35. Do strategies fail?

- Yes. Over 70% of corporate strategic initiatives are never successfully implemented.
- Given that dismal outcome, why bother with strategy?
- Because "better" strategy can be the very key to avoiding that fate.
- It is important to understand common pitfalls to good strategy execution.

36. What are the common mistakes to strategy execution?

- Failure to understand your organization.
+ Do I understand …
. My capabilities and strengths?
. How the marketplace might be changing?
+ Have I done a strategic analysis to understand who we are?
- Failure to understand how you are performing.
- Failure to understand your context.
- Hyperfocus on growth for growth's sake.
+ Can cause an organization to do many stupid things.
+ Need to understand where we should grow and where we shouldn't.
+ Growth at all costs can be a recipe for disaster.
/ Happens to most startups.
- Governance mismatch.
+ For example, between our strategy vs. our structure.
- Competency traps.
+ Get too good at something that is no longer useful.

XII. STRATEGY EXECUTION QUESTIONS TO ASK

37. What are the questions?
- Do we understand our strategy?
+ This is a question about clarity.
. Does our organization have a clear plan?
. Does it have a clear goal?
. Is there clarity about the strategic purpose of the organization?
. What business model is to execute on that purpose?
 . If I cherry-picked someone deep in the organization, and asked them to
explain the organization's strategy, would they be able to give an answer?
/ Unfortunately, in most cases, the answer is No.
- Do we have the right strategy?
- How was our strategy created?
+ Was it fair?
+ Was it open?
+ Or was it something handed down from on high?
+ Have we involved all the people we need?
- Does our governance support the strategy execution?
- Do we have a plan to begin implementation?
+ Are there milestones?
+ How are we going to evaluate the performance of executing on this strategy?
+ Is this important?
+ Is this a priority?

38. Module Lessons:

- [1] Strategic analysis is only the beginning of a successfully executed strategy. Much
more has to be done.
- [2] Careful consideration must be paid to how strategy is formulated and
implemented.
- [3] Strategy can start at the top, or at the bottom.
- [4] Sometimes strategy is deliberate and intended, sometimes emergent and
realized through trial and error.
- [5] A number of approaches to enhance strategy formulation:
+ Strategic "War Room".
+ Rapid Prototyping.
+ Design Thinking.
+ Business Model Canvas.
- [6] Effective governance is deeply intertwined with effective strategy.
- [7] Do not ignore the "human factor".
+ Behavioral Theory.
+ Institutional Theory.
+ Resource Dependence Theory.
- [8] Avoid common mistakes.
- [9] Ask key "execution" questions.
 WEEK III: STRATEGY IMPLEMENTATION

XIII. EFFECTIVE STRATEGY IMPLEMENTATION

39. What did Carlos Ghosn do to turn Nissan Motors around?
- Carlos Ghosn - Former CEO of Nissan Motors - Piano-box escapist.
- He:
+ Reduced the management team from 43 to only around 9.
+ Got the organization aligned around only 7 key priorities.
+ Closed down operations that weren't working well.
+ Simplified the organization.
+ Engendered a more engaged culture around high performance expectations,
and he held people accountable for their results.
+ Unwound the KEIRETSU, a web of suppliers, and vendors, and the Central
Bank to make the organization cleaner and leaner.
+ Empowered the dealers and the distribution network to be much more
flexible and responsive to customer needs and wants.
- In 2 years, he:
+ Reduced debt by 50%.
+ Cut 9-10b dollars of cost.
+ Introduced 22 new car models.
- He said:
+ [1] Only 5% of the challenge is strategy, 95% is execution.

XIV. THE 4A MODEL OF STRATEGY EXECUTION

40. What is one very good quote about research?
- If you steal from one person, it’s theft. If you steal from many people, it’s research.

41. What did the studies find?

- [1] John Kotter - HBR - 2012:
+ 70% of strategic initiatives failed not because the strategy was bad, but
because the organization was poor at execution.
+ Other studies make the number as much as 90%.
+ Nothing wrong with strategies, but organizations fail to put it into action.
- [2] A Chicago University study:
+ 75% of the time of executives is spent on execution issues.
- [3] A Conference Board study:
+ Execution is #1 issue to CEOs.
+ And #2, too.
- [4] A HBR study:
+ Over 1000 executives found that companies, only about a third of the time,
were good at execution, and the rest of the time they struggled.
 42. What makes strategy execution what it is?
- Goes beyond implementing a plan to include all parts of an organization.
- Is enduring, and results from a series of integrated decisions and actions over time.
- Requires disciplined investment in 4 key organizational domains.

43. What are the 4 key organizational domains?

44. What do we need to keep in mind?

- Strategy execution is a key differentiator of top v. bottom quartile firms
+ Strategy execution may be more critical than the strategy itself.
- The sine qua non of competitive advantage - most firms struggle.
. Sine qua non (n) translated literally as “Without which, not…”.
. An indispensable thing / an essential action.
- Despite its importance, most firms have difficulty articulating their approach.
- Multi-dimensional, enduring commitment and investment.

XV. FIRST A: ALIGNMENT (aka DEEP UNDERSTANDING AND AGREEMENT)

45. What are the questions to consider?
- What is alignment, and why is it important?
- Why alignment is difficult to achieve?
- How to achieve alignment?
46. What are the elements of strategic alignment?
- [1] External alignment.
+ The notion that the organization operates in a manner fit for purpose to
support the market strategy.
+ One example is The Four Seasons Hotels and Resorts. Their value
proposition is a one-of-a-kind unique experience that you’d have as a
customer.
. Everything that Four Seasons does is aligned around this value proposition.
/ Where they put the hotels.
/ How they design the hotels.
/ The spas.
/ The restaurants.
/ The reservation system.
/ How they greet and meet people.
/ How they take care of rooms.
. They do not try to be the biggest hotel.
. They try to be the available hotel.
- [2] Internal alignment.
+ All the procedures, practices, and structures work together to create a
mutually reinforcing system.
- [3] Leadership alignment.
+ The consistency of perspective and effort towards a common strategic
intent.
+ In an organization like The Four Seasons, it does not matter whether you are
the CEO or the CFO, or a chambermaid, or a pool guy, everyone is focused
around this one value proposition, and all of their work, as different as it is
from one another, is aligned around this one purpose.

47. What is a cautionary tale of being in alignment and out of alignment?

- In the 1980s, IBM was considered by many to be the greatest company on Earth.
+ Dominant market share.
+ Nobel Prize-winning scientists as employees.
+ Incredible culture that competitors wanted to benchmark.
+ Cutting-edge technology.
+ Innovative product.
+ Talked about not as competition, but as an environment.
- However, 10 years later, they were almost out of business, because they failed to:
+ Make the shift from mainframes (very large and powerful computers) into
smaller distributed systems and PCs.
 (example of an IBM mainframe)
- It was Lou Gerstner that turned IBM around. He said that:
+ [1] Alignment was probably the key to getting this organization (IBM) back
in business.

48. Why is Alignment difficult to achieve?

- [1] Complexity.
+ Systems have a tendency to go towards disintegration.
+ The more complex the systems, the more likely this will happen.
- [2] Change and unpredictability.
+ “No plan survives contact with the enemy”. (Helmuth von Moltke)
+ To simplify it:
. When you are out there, making it happen, things change.
. The rules of engagement change on the ground, and this can destroy
alignment of organizations if they are not ready for it.
- [3] Coordination.
+ People will operate in a way that is consistent with what they see as
important for performance in their world.
 . Someone in HR may have a different set of priorities from someone in FL.
+ In organizations, this represents competing demands.

49. What are the keys to achieving alignment?

- [1] Clearly articulated strategic intent.
+ Whatever strategy you are doing, it needs to be clearly stated and translated
from the top of the organization down into the organization.
+ Not simply communicated, but what does it mean for each employee?
+ Studies found that about 75% of leadership teams did not clearly articulate
their strategy intent. In fact, those teams themselves had a hard time
articulating what their strategy was.
- [2] Shared expectations for high performance (creating an environment where
there are …).
+ Cultures may reinforce other values.
. Fine cultures can reinforce other values.
. They can reinforce creativity, individual innovation, or coordination, etc.
+ Grounded in practices and initiatives.
- [3] Accountability for results.
+ Are there metrics that give us an idea that we are coming close to what we
need to achieve?
+ Do you have people aligned around those metrics?
. “What gets measured, gets done”. (Peter Drucker)
+ Caution: Unintended consequences.
. People may back off of setting very challenging goals …
. If the accountability is too onerous.
. People may choose a fairly conservative approach.

50. What do we need to keep in mind?

- Alignment is important for consistency and coordinated action.
- It may be the first, and most important in strategy execution.
- Alignment is difficult to achieve in complex and dynamic organizations.
- Clarity, shared expectations, and accountability are key.
XVI. SECOND A: ABILITY (aka TALENTS)
51. What are the questions to consider?
- Are people the most important asset?
- Why do firms face talent shortage?
- What are the practices?

52. What is the Talent Syndrome?

- Patterns of syndrome occurring together over time:
+ [1] Chronically short of talent.
. There are talented employees in their organization, but not enough of them
in areas that are critical.
+ [2] Executives spend a preponderance of time reacting to people's issues.
+ [3] Not a “top 3” strategic investment, and usu. the first expense to be cut.
. Despite being chronically short of talent.
+ [4] Unable to execute growth strategies.

53. What are the keys to having all the talent to execute your strategy?
- Identify strategic talent pools.
- Develop a talent pipeline.
- Generate vitality (the energy that builds the talent pipeline over time).
 Skipping this part intentionally.

XVII. THIRD A: ARCHITECTURE

54. What are the questions to consider?
- What are the components of organizational architecture, and which matter most?
- Why does structure help one firm and hold back another?
- What key design principles help firms execute their strategy?

55. What is Architecture?

- All the pieces that help manage:
+ The flow of information.
+ The structure of information.
+ The authority in the organization for driving decisions.
- It includes:
+ Structure.
+ Technology.
+ Information systems.
+ Rewards systems.
+ HR practices.
+ Procedures.
+ And others.
- In the architecture world: “Form follows function”. (Louis Sullivan)
+ The form of the architecture depends on what you want it to do.
+ There is not one that works for everyone.
- In the strategy world: “Structure follows strategy”.
- One example is Tom Monahan’s Domino’s Pizza.

+ Founded the company back in the 1970s.

+ With a simple formula: “Not a better pizza, but a better value proposition”.
+ Monahan said: “What I’m going to do is I’m going to create an organization
that will get you pizza in 30 minutes, or it’s free”.
+ This was a challenge for him, but an opportunity for those who wanted free
pizza.
+ The technology Mohanan used was a conveyor belt oven. It helped him
reduce the time to bake a pizza down to 10 minutes.
+ Then he would have 20 minutes to deliver his pizza.
56. Why does Structure help one firm and hold back another?
- These 2 organizations are typically unable to execute strategy well:
+ [1] Underdeveloped organization.
. Because of a lack of coordination.
+ [2] Bureaucratic organization.
. Too rigid.

57. What are the design principles?

- Strategy creates complexity and dynamism.
+ Dynamism (n, approving) energy and enthusiasm to make new things happen
or to make things succeed.
- Complexity and dynamism lead to uncertainty.
- Structure helps manage uncertainty and information required to make decisions.
- Curvilinear relationship between uncertainty and the value of bureaucracy.

58. What are the practices?

- [1] Flatter, simplified structure works better for execution.
+ This is pushing decisions closer to action, and empowering managers to
make those decisions on their own instead of deferring to someone at the top
of the organization. Example of this is now that Google has turned Alphabet.
 + Why did Google have to restructure into Alphabet?
. Too large and complex.
. Too time-consuming to reach consensus.
/ Not agile enough.
. Lack of transparency.
. Culture differences worldwide.
/ Creating a lot of inefficiencies.
. Duplication of effort and poor execution.
+ Larry Page, the CEO, said the goal is to make a cleaner and more accountable
organization, improving transparency and oversight.
- [2] Streamlined workflow.
+ Eliminate waste, and improve value add.
- [3] Information and connectivity.
+ “Inform” real-time decisions.

XVIII. LAST A: AGILITY

59. What is Agility?
- The responsiveness of an organization.
60. What was Pekka Ala-Pietilä’s advice?

- Former President of Nokia.

- “A few years ago, you would have set your vision and strategy and then start
following it. That does not work any more. Now you have to be alert every day,
week, and month to renew your strategy.”
- In 2007, Nokia’s market share was at 63%.
- In 2013, Nokia’s market share was less than 3%.
- In 2007, Apple introduced the game-changing iPhone.
+ 2007, the game was about the hardware.
+ 2013, it was about the software, the apps, the design and usability.
- Nokia eventually had to sell off its business to Microsoft.
- In contrast, Apple and Google:
+ Centers around customers.
+ Extends the core with new products / services.
+ Adapts.

61. Why was Agility difficult to achieve?

- [1] Uncertainty and ambiguity.
+ What makes it difficult, makes it important.
/ If you can predict everything, agility won’t be too hard.
/ But if you can predict everything, agility won’t be needed.
- [2] Inertia vs. momentum.
+ Inertia (n) when things are sitting stable and not moving.
/ Complacent.
/ Resting on its laurels.
/ The organization can become flat-footed, and,
/ Unable to respond to market changes.
// Flat-footed (a) not prepared for what is going to happen.
+ Momentum (n) when you are too set on doing something.
/ Making it difficult when you need to turn.
- [3] Leader adaptability (with 2 extremes).
+ Too quick to respond.
/ Moving from opportunity to opportunity.
/ Or issue to issue.
 / And the organization can’t keep up.
+ Not quick enough to respond.
/ And opportunities pass by.
- [4] Culture of risk aversion.
+ Avoid falling into the execution trap.

62. What are the keys to Agility?

- [1] Organizational Learning.
+ (a) Be open to the outside.
. Network broadly (with partners, suppliers, clients, and other stakeholders,
etc.).
/ Gathering intelligence.
/ Exchanging information.
. Explore and exploit.
/ Exploring areas outside of the organization’s competencies.
/ Exploiting their competencies.
// Building on those strengths to:
/// Move into new markets.
/// Move into new areas.
+ (b) Experiment continuously.
. Disrupt yourself.
/ If someone is not going to disrupt you, disrupt yourself.
// Try new things.
// Don’t rest with what’s working.
// Think about what might be the next thing.
. Fail quick, fail small.
+ (c) Share information internally.
. Real-time collaboration tools.
. Disciplined reflection.
+ (d) Own and solve problems.
. Data-driven.
. Lead from the middle.
/ Having distributive leaders throughout the organization who:
// Take the responsibility to solve the problems and,
// Have the ownership and empowerment to do that.
- [2] Leadership Unity.
- [3] Resource Fluidity.

63. What is transactive memory?

- We know who knows what, and we know who to go to very, very quickly.
XIX. AD HOC
64. What is the difference between MBA and eMBA?
- MBA students stop working.
- eMBA students keep working.
+ eMBA classes are usually held:
. At night, or,
. On the weekend.

65. What is Bob Hugin’s advice?

- President and CEO of Celgene.
- [1] “Think like an owner, act like an owner, be an owner”.
+ Aspire to find out:
. What is going on at the company?
. Why are things being done this way?
. What is the connection between Department A and Department B?
. And the like.
 WEEK IV: PRACTICAL PERSPECTIVES
STRATEGY EXECUTION PLAN OF GAMELOFT:
MAKING S/SMALL GAMES
Dec 15 2022
1. Introduction to Gameloft
- Gameloft was founded in December 1999 by Ubisoft co-founder Michel
Guillemot.
- Gameloft is both a game producer and publisher. [1]
- The competitive position that Gameloft has:
+ A rich, 22-year legacy since its establishment in 1999.
/ The company has acquired a lot of know-how over the years.
+ 190 available games in the portfolio.
/ Covering a very wide range of genres: Action/Adventure, Arcade,
Casual, Music, Role-Playing, Runner, Strategy, Tycoon, etc. [2]
/ Available cross-platform: Apple Arcade, Android, iOS, Windows
and others etc.
+ > 70m monthly active users (MAU) across all platforms.
+ 15 studios (categorized into creative and outsourcing studios), and many
business offices around the world with:
/ > 3600 employees.
/ > 80 nationalities.
+ Been part of the Vivendi Group - a powerful financial communication
and media French group. Being brothers and sisters to, and taking
advantage of the likes of:
/ Canal+.
/ Editis.
/ Universal Music Group.
/ The Havas Group.
- At the moment, Gameloft has 3 types of games:
+ [1] L/Large Games: Games that cost more than 10ME to produce.
+ [2] M/Medium Games: Games that cost 1-10ME to produce.
+ [3] S/Small Games: Games that cost less than 1ME to produce.
- Not only producing games, Gameloft is also home to Gameloft for Brands [3] and
Gameloft Business Solutions [4]. Basically:
+ Gameloft for Brands offer gamification solutions to brands. Notable
products include: Applaydu, Applaydu and Friends, Exploratio, etc.
+ Gameloft Business Solutions signs deals with vehicle manufacturers to
bring Gameloft games into their cars. Notable clients include Ford,
Renault, and VinFast (a rising star from Vietnam).
- Gameloft’s most successful intellectual properties (IP) includes:
+ The Asphalt franchise.
+ The Modern Combat franchise.
+ Minion Rush.
 + And most recently, Disney Dreamlight Valley.
- Gameloft’s revenue in 2022 was around 350ME. [internal sources]
- Gameloft’s competitors include [5]:
+ King.
+ Zynga.
+ Ubisoft, etc.
2. Strategy Formulation
- The strategy formulation approach chosen for Gameloft is Rapid Prototyping.
This is believed to be the most suitable because:
+ It aims at quick failures to determine what works and what does not. We
can always build a small game (S/Small Games, costing <1ME), which
typically takes no longer than 2-3 months, and launch it at a particular
market to test things out.
/ If the game is a “hit”, we can invest more in it later - to develop
other gameplay and monetization features, and launch it into other
markets.
/ If the game is a “blow”, it will not cost us too much in terms of
time and money.

3. Strategy Analysis
- [1] Frame options as a hypothesis.
+ Create S/Small Games instead of larger ones.
- [2] Identify core assumptions.
+ Will this create value for Gameloft?
/ Definitely. Most profitable titles from Gameloft have been
coming out of this way (for example, Modern Combat, etc.)
+ Does Gameloft have the expertise to execute this?
/ Yes, it does. It has a history of over 22 years, with 190 available
games and 3600 employees worldwide.
+ Does Gameloft have the distribution channels that bring these games
into a particular market?
/ Yes, apart from “studios”, Gameloft has countless “business
offices” worldwide that take care of local distribution.
- [3] Conduct thought experiments.
+ What data does Gameloft currently have?
/ A lot of documentation on how to make a small game.
+ What data does Gameloft want to have?
/ Which genre and platform will be trending, or used the most in
the next 1-2 years?
/ Is there any new technology, or engine, that can help reduce the
amount of time to produce a game?
/ Will conservative countries like China, or the Middle East nations
change their view on games soon in the future (to export games there)?
- [4] Collect data and test assumptions.
/ Which genre and platform will be trending, or used the most in the next
1-2 years?
// Nobody knows for sure. This is uncertainty.
/ Is there any new technology, or engine, that can help reduce the
amount of time to produce a game?
// The Unity Engine.
/ Will conservative countries like China, or the Middle East nations
change their view on games soon in the future (to export games there)?
// Nobody knows for sure. This is uncertainty.

4. Strategy Implementation
- [1] Alignment:
+ External: Gameloft’s value proposition is not to bring to users a game, but
to bring to them a unique experience.
+ Internal:
/ Structure:
// Gameloft has departments to support the creation of a
game from A-Z:
/// Art.
/// Audio.
/// Game Design.
/// PM.
/// Programming.
/// Quality Assurance.
/// Other supporting teams include Digital MKT,
Product MKT, BI, Data, Finance and Legal, HR, Office
Administration, IT and Hardware, etc.
/ Workflow: Everything is streamlined and stored on Confluence.
+ Leadership:
/ Gameloft pays special attention to being as transparent as it
could to its employees.
// Every quarter there will be an all-hands event where
leaders update employees with business results and strategies.
// Every 6 months, and every year there will be a 3-day
digital day for top executives to update the entire company of business
results of this year and strategies moving forward for the next.
- [2] Ability:
+ Gameloft has more than 3600 employees worldwide, offering very
unique work experiences and cultural views.
- [3] Architecture:
 + Gameloft made an attempt to simplify its structure from 18 studios to 15
studios in 2019, and reduced the number of the management team. The
Lean approach was introduced in 2022 to reduce waste.
- [4] Agility:
+ Gameloft realized that if it continued with mobile games only, it would
not survive for the next 5 years. Therefore, in 2022, Gameloft changed its
strategy from mobile-first to console-first for L/Large Games.

5. Citation
- [1] Wikipedia. “Gameloft”.
- [2] Gameloft. “About Us”.
- [3] Gameloft. “Gameloft for Brands”.
- [4] Gameloft. “Gameloft Business Solutions”.
- [5] Comparably. “Gameloft Competitors”.