Leading Change: Session

1
Intro to Strategy &
Change
Elspeth Murray
MMAI 804
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Overview of the Course

• 2 related team deliverables + peer evaluation

• Presentation (max 12 minutes) + 2-page memo
• Design a dashboard for overseeing change management +
launch plan for its implementation
• First 4 classes – extensive use of Accor Hotels Case
• Focus on an overall approach to leading change + the
specific tools of change to execute
• We will start by looking at the role strategy plays in
successful change
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Level Setting Our Discussions

• 37.8% of companies have created a data driven-organization

• 45.1% state they compete on data and analytics .. Which means 54.9% stated they do not!
• 98.8% reported that they are investing in data initiatives, with approx 1/5 (or 18.3%)
stating they have invested more than $500M
• 57.3% of firms have created at CDO (Chief Data Officer) .. But only 28% report the role
has been successful
• Exactly 50% of firms reported they are managing data as a business asset
• Only 9.1% reported that technology is the principal challenge to becoming data-driven
• …. Cultural factors (people and process) were cited by 90% of executives surveyed
AS THE PRINCIPLE CHALLENGE TO BECOMING DATA DRIVEN
• 1 in 4 executives reported that they have successfully forged a data culture
Source: “Why Culture Is the Greatest Barrier to Data Success”, MITSloan Management Review, September 30,2020
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Culture & Scale Up – A Tale from the Trenches

• Large U.S. apparel retail chain
• Successful pilot project
• Small subset of stores
• Machine learning for online product recommendations, predictions for
optimal inventory and rapid replenishment models, and merchandising
• Buyers threatened because ordering product is their ‘thing’;
intuition based
• Buyers ‘organized’ and went to merchandising manager to ask
that the program be killed ….
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Dual Challenge

Leadership
Strategy

Strategic Planning
Innovation
Success
Game Plan
Change
People
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Poll Question

Which is more difficult? Getting a great strategy or

making it happen?
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Which is More Difficult?

STRATEGY

-------------------------------------------------------------------

EXECUTION/CHANGE
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Discussion/Chat

What makes change so difficult?

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It is All About the People - The 20-70-10 Principle

• In undertaking major change, people do not behave as a homogeneous group

• 20% are typically "true believers"
• 70% are typically "fence sitters"
• Perceived "resisters"
• Often "resist" for good reasons
• 10% are (sadly) "saboteurs"
• Passive-aggressive types
• True "resisters"
• The leadership challenge
• Identify the 20%
• Engage and leverage the 20% to covert the 70%
• Deal with the 10%
**70% of digital transformations fail, most often due to resistance from employees.**
It is All About People, But Not the Hierarchy

Board Board Board

EVPs EVPs EVPs

SVPs SVPs SVPs

VPs VPs VPs

Directors Directors Directors

Managers Managers Managers

Supervisors Supervisors Supervisors

Frontline Frontline Frontline

20% 70% 10%

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Plan for Today

87% of senior business leaders say that

digitalization is a company priority, but do
they have a good digital strategy?

Only 16% of employees think investments in

digital are improving performance. What are
the barriers to execution?

So, what do you need to know about digital

strategy?
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Problem #1
Digital should not be a strategy, or an afterthought.

Digital is the strategy.

Growth is Not a Strategy

Growth is the outcome of a well

crafted and well executed
strategy
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A Reminder - What is Strategy?

• Many, many definitions … so many, that the term itself has All of these choices are
become somewhat meaningless grounded in Vision,
Mission/Purpose, and Values
• Regardless, at the core, all definitions of 'strategy' indicate that
it's about choice
• Choices about:
1. Where you will play (geographies, markets)
2. What you will do (products, services) Business
Model
3. How you will win (specific capabilities, agility/innovation, customer Strategy
centricity, etc.)
4. How you will make money
5. Sequencing of moves
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Aligned – Strategy Operates at Multiple Levels

• What
Corporate businesses?

• How to compete
Business within those
Unit businesses or
divisions?

• How to enable
the above AND
Function be excellent in
our sphere?
How Would You Spot A Great Strategy .. That “Gets”
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Digital/Data/Analytics …

• Reflected in Vision statement

• Elements of required culture factored into Values statement
• Key pillar in Corporate Strategy, BU strategy and Digital Strategy*
and these are aligned
• Focused thought given to the sequencing of priorities and activities
• .. And of course the content in all of these statements reflects the
fundamental changes that data and analytics bring to organizations

16
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A Quick Look At The Automotive Industry

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Big “S” Strategy … and Little “s” Strategy

Lots of ‘mini’ curves inside

the big ones, and that’s
part of the problem
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BIG “S” – Game Changers

Customer-centricity Rethinking a product

at the core as a service

Manage the market Platforms are vital

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BIG “S” – Game Changers

Networks & markets, Value Chain

not hierarchies connectivity

Data is Everything Agility in technology

and process
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What Are the Benefits?

• Survival
• Advantage
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How Do You Get There?

It takes guts
and risk taking
It takes a
mindset shift
It takes a Big “S”
change in strategy
It takes an ability
to execute
Source: Digital Reinvention: Unlocking the
How, Digital/McKinsey, January 2018
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Big “S” Strategy … and Little “s” Strategy

Lots of ‘mini’ curves inside

the big ones, and that’s
part of the problem
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Back to the Automotive Industry

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Five Little ‘s’ Game Changers

• Enhance critical thinking

• Design thinking put customers (employees, partners) at the core
• Systems thinking manages the existing system (market) by leveraging platforms,
at the core are needed to manage the market and leverage platforms, networks,
connectivity.
• Reframe product management to digital product management.
• Data analytics and artificial intelligence
• Flexible and agile technology management practices.
• Senior leaders that aren’t afraid and have the ‘muscle’ to lead through it.
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Strategy & Change

• They are inextricably linked

• Successful change/transformation results from unstoppable

momentum towards some future state/outcome

• There are many models of change and transformation, and

they essentially say the same thing: The Winning
Conditions must be in place

• Guidance + Speed x Critical Mass = Momentum

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The Winning Conditions Are Like An F1 Race

• Every race is a little bit
different … but a race is a
race
• The ‘winning conditions’ for
a race are all the same:
capable driver, great car,
great pit stops, knowledge
of the track, practice,
constant communication,
rapid decision making, ‘eye
on the prize’ …
• Every week or so, there’s a
new race … that’s the
business and no one expects
anything different
 Guidance - The First Four Winning Conditions

1. Legitimate need for change

2. A Great Strategy and 'Game Plan'
3. Correct Diagnosis of the Task Ahead
4. Broad and Deep Shared Understanding

Guidance + Speed x Mass = Momentum

 It All Starts With A Legitimate Need for Change … and
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A Strategy
1. Knowing where you are currently on your
strategy curve

2. Knowing what to really focus on to drive

success .. Separating the signal from the
noise

3. Knowing when to ‘press the button’ to

move, and to move quickly
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Let’s Talk About Accor

1. THE NEED FOR CHANGE –
WHERE ON THE STRATEGY
CURVE AND WHY
 Making The Case: Where Are You?
Strategic (Future) Health
Strong
Current Health
CHANGE
DO NOTHING
JUMP STRATEGY RIDE
The Performance
THE Scorecard BETTER THE
CURVE OVERHAUL EXECUTE CURVE
THE ENTIRE EXISTING
BUSINESS STRATEGY
Weak
Weak Strong
Sample Performance Scorecard Elements
• Indicators of strategic (future) health
• Macro environment
• Industry environment DATA
• Competitive environment DATA
• Organizational DATA
• Rate changes in earnings, revenue growth, share of wallet, production, etc. DATA
DATA
DATA
• Indicators of current (now) health DATA
• Revenues DATA
• Profitability DATA
• DATA
EPS
• Employee turnover
Small Groups – 15 minutes

In which quadrant is Accor? Why?

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2. WHAT TO FOCUS ON & HOW

TO FIGURE THAT OUT
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Aligned – Strategy Operates at Multiple Levels

• What
Corporate businesses?

• How to compete
Business within those
Unit businesses or
divisions?

• How to enable
the above AND
Function be excellent in
our sphere?
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Strategic Planning – Getting a Great Strategy

Prep Work Size-Up Strategic Strategy Selection
Workshop Execute
Issue Analysis and Plan Preparation
Environmental Scan
What is our 'planning'
Scenario What did we learn Implement
"Voice of the context?
Development from the interim via series of
Customer" analysis?
What is happening in action
our world? plans/
Context Setting What are our sprints
decisions?
What does this mean
for the changes we
Board What "guardrails" do
need to make? Discussions we need to establish?
One-on-ones with Review
people What decisions do we Progress
What is the plan?
have to make?
Data, data, data Market
What resources do we
What are the actual Experiments
need?
War-gaming issues/opportunities?

Ongoing 1 - 2 days 4 - 6 weeks 1 - 2 days

Task Force Work
The OODA Loop
Developed by: U.S. Air Force Colonel John Boyd

Act Observe
Key Takeaway: Key Takeaway:
Agility can Know what you
overcome raw can, make other
power. assumptions, take
action.

Decide Orient
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Size Up Workshop – Essential Analytical Tools

Size-Up • PESTLE Analysis (Macro Environment)
Workshop
(ORIENT)
• Industry Analysis (Porter's 5/6 Forces)
• Competitive Analysis
What is our 'planning'
• Internal Analysis
context? • Customer Journey Mapping **

What is happening in
our world?

What does this mean SWOT Analysis

for the changes we
need to make?

What decisions do we
have to make?

What are the Goal: Understand the Context & Create Focus on
issues/opportunities? the Key Issues/Opportunities the must be resolved
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Strategic Issue/Opportunity Analysis – Tools

Strategic
Issue Analysis
(ORIENT)

BIG QUESTION(S)
BIG questions
Options
How is customer behaviour changing?

….

….
Board
Discussions

Market
Experiments Often .. Myths, Biases need to be busted
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Synthesis - The Process

Strategy Selection
and Plan Preparation
Environmental Scan

What did we learn

SWOT
from the taskforces?
Key Issues and
What are our Opportunities
decisions?
Stakeholders/
What "guardrails" do Options/Data
we need to establish?
Decisions
and
What is the plan?
Priorities
What resources do we The
need?
Plan
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But What Is Strategic Planning REALLY All About?

• Understanding what will drive success
going forward, making decisions, mapping
out a game plan to get from ‘here to there’

• Drivers of success could be:

• Culture e.g. Microsoft
• Mandate e.g. CCC, MTO, Canada Post **
• Partnerships/Ecosystem e.g. Amazon
• Supply chain e.g. LEGO
• Customer-Centricity/Data e.g. Netflix
• Operational excellence e.g. UPS
 Microsoft – The Problem Was Culture

https://www.ted.com/talks/carol_dweck_the_power_of_believing_that_you_can_improve?language=en
Microsoft - What’s Possible With Focus?
Satya Nadella & Growth Mindset

Source: Capital.com
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What Did Nadella Do?

• Determined effort to move from “know

everything to learn everything”

• Picked a mission for Microsoft to

practice flexing the change/innovation
muscle
• Corporate Hackathon
• How might we … use a Microsoft Surface
to help ALS sufferers
• Linked up with Steve Gleason, former NFL
safety for the New Orleans Saints, to create
news muscle memory among Microsoft
employees .. And built in more organizational resilience via individual resilience
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What Happened at Lego?

• 2004 – serious
financial problems
• Strategy was sound
• Supply chain was
not
• Fixing it put an
additional $67M
onto the bottom
line
• 3 years on a ‘mini
curve’
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Let’s Use One of the Tools

• A BIG question: how is customer behaviour changing ?

• Useful tool: Customer Journey Mapping
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Customer Journey Mapping

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What Is A Customer Journey Map ?

• A customer journey map is a visual representation of the customer

journey (also called the buyer journey or user journey). It helps you
tell the story of your customers' experiences with your brand across
all touchpoints

• This exercise helps businesses step into their customer’s shoes and see
their business from the customer’s perspective. It allows you to gain
insights into common customer pain points and how to improve
those.

Source: salesforce.com/uk/blog/2016/03/customer-journey-mapping explained

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Customer Journey Map
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A Customer Journey Map Example

Source: www.edrawsoft.com
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Team Assignment – 30 minutes

• Thinking about the last time you booked leisure travel

online, create a customer journey map using the template:
• Identify the phases of your journey first and then populate the
actions, emotions, user experience