Wednesday, March 29, 2017

How Proper Strategic Planning Could Have Improved My Heinz Group Project

In a Management Consulting course at Heinz College, I worked on a team of 4 students to find a business solution for a local client. My team worked with TandemLife, a locally based medical device company. After reading The Real Value of Strategic Planning by Sarah Kaplan and Eric D. Beinhocker, I realized that the planning strategies my team employed did not add value to the project. Proper strategic planning would have produced a higher quality product and would have prepared our team for the unexpected.

Our team was assigned a project manager who scheduled a planning meeting. We met on a Saturday at Heinz to assign responsibilities. The team preferred to jump into working on the project to reduce time spent on a weekend to plan. Some members questioned the value of planning all together. Kaplan and Beinhocker acknowledge this as a common sentiment when planning is not done properly, but prescribe methods to add significant value to a strategic plan. They assert that strategy is made in real time but that strategic planning is meant to prepare the team for uncertainties ahead. The key, and what I believe was not done properly, was getting the central elements of planning correct.

The first element to adding value to planning is creating prepared minds. Participants must learn from and challenge one another. This was something my team was excellent at. The subject of the engagement was to design and recommend a digital learning management system to eliminate high product training costs. I do not have a technical background but every time we met, I would leave feeling like I was much better informed on the process. A mistake we made was holding the meeting at Heinz. Team members would get distracted with passers-by and it was too easy for the team to break and depart. The article recommended that the meeting be at the client location to signal the importance of the project and reduce school related distractions.

The most significant aspect of the planning meeting, ‘What should be discussed? And how much preparation is necessary?’ was missed. The meeting needed to address the time horizon, challenges, opportunities. Also, preparation is the key making a strategy pay off so team members must come prepared. In my team’s case, my arrived and wanted to dive into every subject as quickly as possible as to get done quicker. This is an unwise strategy. What we could have done was created an agenda for the meeting and assigned areas of expertise. That way, when we arrive to the meeting the team has a place to start and members have done their preparation on the key points.

Like most academic group projects, issues arose every week that challenged our poorly planned strategy. I tie this trend back to a poorly executed planning meeting. My team did not consider the key elements of strategic planning and as a result, the meeting did not add value to our project. If I could go back, I would have insisted that each member come prepared. This would have ensured that as issues arose over time, the team had a strategy on how to approach the problem.



KaBOOM! - showcasing "Core Ideology" to forming partnerships



Collins and Porras describe the core values and core purpose (together called the core ideology) of a company as the principles that will govern the company's direction and strategy for as long as the company is to exist [1]. From the case study conducted by Austin and Porraz, I find that KaBOOM!'s core ideology consists of more than just building parks for children. I would define it as "To improve the overall welfare of children and communities", since KaBOOM! is also responsible for community-building, raising awareness, and coordinating resources between different organizations, in addition to the creation of recreational facilities for children. The company's core strategy of "lead, educate, and advocate (in that order)" also reflects this core ideology [2].

It is important to note that the company did not plan confine itself to simply building parks. The management behind KaBOOM! was smart to understand the importance of communicating the core ideology of the company to like-minded firms and organizations, and this, in my opinion, is what led to the company's many successful partnerships. Moreover, it is highly likely that a large number of partners and managers were drawn to KaBOOM! mainly because they share the company's core ideology - note that almost all of the staff and board members listed in Exhibits 5 and 6 have fond memories of playing in parks as children and are therefore likely to share and support the ideas behind KaBOOM! Companies also likely partnered up with KaBOOM! to improve their own public image - since KaBOOM!'s core ideology is readily apparent to the public from its actions, partner companies that were not previously engaged in community improvement understood that they could improve their apparent "niceness" in the public eye.

Thus, by displaying their core strategy of "lead, advocate, educate (in that order)" KaBOOM! was able to showcase its "nice" core ideology to the public. This could have been part of the "shaping" strategy that allowed the company to succeed [3]. I call KaBOOM!'s strategy a "shaping" strategy because it is evident from Exhibit 1 and the "History" section of the case study that the market for non-profits engaging in volunteer restoration and construction was hardly predictable when KaBOOM! began approaching partners and volunteers (late 1990s, early 2000s) - in 1998 and 1999, the company simply did not understand how to use all the resources it had acquired, consequently lost partners as a result. Later, only by communicating and popularizing the core ideology of the company, I believe that KaBOOM! was able to attract strong partnerships and widespread support from like-minded firms and organizations.

[1] Collins, J., Porras, J. Building Your Company's Vision. Harvard Business Review, Sept.-Oct. 1996

[2] Austin, J., Porras, J. KaBOOM! - case study. Harvard Business Review, Sept. 2002

[3]  Reeves, J., Love, C., Tillmanns, P. Your Strategy Needs a Strategy. Harvard Business Review, Sept. 2012

KaBOOM! : The impact of "Core Ideology" in partnerships



Collins and Porras describe the core values and core purpose (together called the core ideology) of a company as the principles that will govern the company's direction and strategy for as long as the company is to exist [1]. From the case study conducted by Austin and Porraz, I find that KaBOOM!'s core ideology consists of more than just building parks for children. I would define it as "To improve the overall welfare of children and communities", since KaBOOM! is also responsible for community-building, raising awareness, and coordinating resources between different organizations, in addition to the creation of recreational facilities for children. The company's core strategy of "lead, educate, and advocate (in that order)" also reflects this core ideology [2].

It is important to note that the company did not plan confine itself to simply building parks. The management behind KaBOOM! was smart to understand the importance of communicating the core ideology of the company to like-minded firms and organizations, and this, in my opinion, is what led to the company's many successful partnerships. Moreover, it is highly likely that a large number of partners and managers were drawn to KaBOOM! mainly because they share the company's core ideology - note that almost all of the staff and board members listed in Exhibits 5 and 6 have fond memories of playing in parks as children and are therefore likely to share and support the ideas behind KaBOOM! Companies also likely partnered up with KaBOOM! to improve their own public image - since KaBOOM!'s core ideology is readily apparent to the public from its actions, partner companies that were not previously engaged in community improvement understood that they could improve their apparent "niceness" in the public eye.

Thus, by displaying their core strategy of "lead, advocate, educate (in that order)" KaBOOM! was able to showcase its "nice" core ideology to the public. This could have been part of the "shaping" strategy that allowed the company to succeed [3]. I call KaBOOM!'s strategy a "shaping" strategy because it is evident from Exhibit 1 and the "History" section of the case study that the market for non-profits engaging in volunteer restoration and construction was hardly predictable when KaBOOM! began approaching partners and volunteers (late 1990s, early 2000s) - in 1998 and 1999, the company simply did not understand how to use all the resources it had acquired, consequently lost partners as a result. Later, only by communicating and popularizing the core ideology of the company, I believe that KaBOOM! was able to attract strong partnerships and widespread support from like-minded firms and organizations.

[1] Collins, J., Porras, J. Building Your Company's Vision. Harvard Business Review, Sept.-Oct. 1996

[2] Austin, J., Porras, J. KaBOOM! - case study. Harvard Business Review, Sept. 2002

[3]  Reeves, J., Love, C., Tillmanns, P. Your Strategy Needs a Strategy. Harvard Business Review, Sept. 2012

Data-Driven Strategy Decisions in an Uncertain and Fast-Changing Environment


Data-Driven Strategy Decisions in an Uncertain and Fast-Changing Environment

Combining thoughts from the “Balanced scorecard” and “Your strategy needs a strategy”, I’d like to discuss the effect of data-driven decisions in an adaptive or in a shaping environment. These environments share the characteristic that they are relatively unpredictable in their development in the future. They therefore demand of participating companies to employ strategies that are flexible to change in the industry environment. In the current age of information, with terms like big data and cloud computing, more and more (strategic) decisions are being based on data analysis and interpretation. These analyses take up time however, especially when performed for the first time, or when data is incomplete. I therefore believe that data-driven decisions in a fastmoving and changing environment, like companies in an adaptive or shaping environment, can be counterproductive. It is highly possible that by the time the analysis models have been created, ran and recommendations translated from the results, that these results are no longer valid, due to the changing environment. Take the example of “your strategy needs a strategy” on an adaptive industry like fashion. There have been multiple accounts of the fashion standard changing overnight, because some celebrity wore a piece of clothing that nobody else has ever worn before. Even a relatively fast, week long data analysis would become almost useless due to this switch.  


Thinking about a way of dealing with the discussed problems by use of ‘data-driven decisions in highly uncertain environments’, I propose to prioritize that data is collected and updated on a very regular basis, for instance daily, and that the data-analysis models are dynamic. Dynamic means in this case that the results of the models are directly updated based on the new input, whenever a shift in the industry environment takes place. Management will then be able to adjust their (short term) strategy accordingly, giving them a headstart in comparison to non-dynamic model using companies. 
Companies that have most to benefit from this approach include companies that have no or very limited amount of inventory stockpiles, can adjust their products rapidly and have no or short production times. Some examples include consumer services, like on demand delivery like with Postmates or privately owned residence rentals like AirBnB. 

The added benefit of this approach, against non-data-driven decision making is clear. There is objectivity in data, causing it to be a more trustworthy foundation for decisions than mere observations and intuition. I would like to stress the importance of the word foundation in this previous sentence, as data analysis still requires interpretation, which depends strongly on skills, intuition and experience of employees and management.  


The Importance of a Vision


After reading the “Building your Company’s Vision” article, I was forced to reevaluate my definition of vision. Prior to reading the article, I thought of vision as a company’s ability to look towards the future, and the process they would use to achieve their goals. However, I was persuaded in my way of thinking as the article laid out the basic tenants of what consists of a good vision for a company. The article described core ideology and an envisioned future as the two pieces to a company’s vision, and gave a thorough analysis about why these are needed.  

As an exercise, I looked back towards my own experiences working. Such as my internship over the summer of 2016 at a non-profit organization, which specialized in advocating for veterans’ rights.  Even though I was there for a short time, I asked myself did I know the core values of the organization? Core purpose? Do they have a BHAG? Or a vivid description? The answer was yes.

In the realm of core ideology, the organization’s core values and purpose came through all the work the organization was doing both on the ground and inside their office. As the articles states, the core ideology of an organization does not need to be a singular statement or written document, but is an essence to be captured. The organization’s purpose was to empower post 9/11 veterans. This core purpose could really be seen in all of their programs, such as veteran advocacy or education.  One of their core values that could be immediately detected was being a community-based organization, as the events and programs created were by community members and the community had a large impact on the decisions made in the organization. 

As for envisioning the future, I found there to be a little difference from what is described in the article, and wondered if it fully matched what happened in the organization I interned with. BHAG’s in the organization were hampered by budgetary constraints. I felt that the organization held back in setting their future goals because they were unsure if they would have the money or even exists in the same capacity in 10-30 years due to funds. I think the fear of having a reduction in donations, impeded their ability to make the best BHAG for the organization. The one target BHAG discussed during my time there was to become a bigger influencer in government lobbying than there competitors.  This was evident in their push to have more money and staff in their D.C. offices.  Vivid description was not a problem, as the organization’s CEO was charismatic and took a very active role in all matters detailing their vision.


I thought the article was fascinating because I had not thought about if all organizations, especially non-profits, have a vision planned out in the way described.  But going through my experiences, I found that if an organization has a good vision laid out at its inception, anyone who comes into contact can pick out their core ideology and envisioned future.

Strategic Planning - A Comparison

Studying through the various articles this week, made me realize the importance of the various processes, meetings, training, and talks that I experienced working for Deloitte and a start-up company. The articles made it evident that strategies play a huge role in how a company functions, and also shapes the core culture and beliefs of a company. Since I worked in both these scenarios, I would like to reflect on my experiences and draw a few comparisons on how strategies are planned.

As a new graduate and a campus hire, Deloitte gave the right platform to experience challenging information technology problems in an environment that fostered integrity and commitment to the team and the clients. These values were supported by the belief that workplace diversity is a core strategy for success. I believe, Deloitte has a strategy to solve complex problems for their clients using the concept of multidimensional thinking which stems from people of different cultures and thinking styles. That being said, Deloitte being a company of huge proportions cannot involve every employee in its strategic discussions. The organization model plays a very important role in defining how the employees are engaged when it comes to building a company strategy. Being majorly in the technology services, I noticed that strategy was planned and executed by a core team of strategy experts in close conjunction with partners and directors. This kind of a planning exercise cannot be strictly classified into any of the “Strategic Styles” mentioned in the article by Martin Reeves, Claire Love, and Philipp Tillmanns - Your Strategy Needs a Strategy. It has flavors of both a “Classical” and “Adaptive” styles. In the IT services space, predictability is quite high owing to the many legacy systems for which services have to be provided. But, the malleability factor is quite low as major over-hauling of such systems take time. These factors decided the strategic planning exercises.

On the other hand, I experienced a radical change in culture and processes in the start-up. As a company which aimed to disrupt the pharmacy retail business, the strategy planning and decision making were very different. Strategy planning process was taken seriously and its importance was reinforced when we had to explain to our investors — “why we are doing what we are doing ?” The pharmacy retail space was very difficult to predict and since the competition was very high, new players could come and disrupt heath care industry. In retrospect, our strategy plan did loosely resemble the “Shaping” style. The entry barriers were low which required our strategy to account for having a high rate of innovation. I could notice a drastic difference when we had short, continuous planning cycles for adapting and shaping new strategies. We had flexible plans to account for the change in the market, investor requirements and legal requirements. 

The real challenge was in the hands-on approach with regard to strategy scope and process. Unlike Deloitte, which had a wide base of interests in technology services, a product based start-up required us to plan for basic questions of new uses for technology, customer interaction, and competitor analysis. Investors also had a say with the kind of strategy we planned for. The strategy we finally adopted - “A Cockroach” (versus the “Unicorn”) gave us good results with better customer retention and high growth figures.

The Versatility of Value-Driven Strategies

            Reading the KaBOOM! case reopened a question I had been asking my girlfriend for months. How does Reading is Fundamental(RIF), a not-for-profit that gives free books to kids, convince corporate partners to continuously give their money to this cause. For that matter, how do any not-for-profits convince corporate sponsors to contribute. Her answer painted the non-profits to be bleeding heart enterprise that had to work hard to convince donors to keep giving by making them feel bad for the children in need. KaBOOM has given me another (much better) framework to this phenomena by showing me how it tapped into vision sharing, a fundamental process in company development.  

In Integrated Product Development we are taught to find our audience, figure out a need that they have, and fill that gap by understanding the values of the customer. KaBOOM’s market driven approach to non profit development is directly in line with that thought process. Collins and Porras wrote that in order to create a company vision you must have a strong core made of your ideology, values, and purpose. At that level many companies can find overlap in what they are trying to accomplish for the world (or their communities) without finding competition in offerings. For example; Home depot said in the case ”Supporting the building and restoration of community playgrounds represents very accurately what The Home Depot is all about”. I think that the market driven approach added to the longevity of the partnerships because there were tangible effects that allowed them to use the other strategically. Home Depot could utilize KaBOOM in the growth of its brand image by leveraging its product offerings and core competency (DIY/Commercial Construction) and focus it on the community without having to develop a whole new system within its company. KaBOOM got donations of Home Depot’s core products, thus making the procurement of materials hassle-free.

Looking at a company like RIF what kind of strategic value-driven relationships could they build to increase decrease their dependence on charity funding. One way that came instantly to mind is their current relationship with the children’s museum(CM). Though the children’s museum is offering them office space it offers little else in terms of partnership. RIF has a lot the CM could use to attract more customers. For instance they go into schools for reading celebrations, yet they have rarely(if ever) brought the reading celebrations to the children’s museums. Therein lies a missed opportunity for marketing and building love for the CM by taking a part in it’s activities.

Strategic partnerships are an important part of any company and one question I hope continue to answer in this course is, How do I build the right connections for my company.
  

The formation of strategies

The formation of strategies

For this week, I choose the article named: “Your strategy needs a strategy” (Martin Reeves, Claire Love, and Philipp Timmanns) to my first reading material of Strategy Development course. I remember last year, I played a business strategies competition game in Hyundai company and this is the first time I realize how the strategies playing a powerful role and showing infinite potential effects within a business case. For our daily life, strategies are everywhere. When we buy a coffee in Starbucks or eat food in MacDonald, the companies carefully marshal their own brand culture and set a unique supply chain from raw materials, transportation systems, distribution flow, testing processes to finished goods to maximise the efficiency. When we use social media such as Instagram or Facebook, the business strategies always play a big role in the operation process. By creating inspiration news and make a sense of immediacy, these new media attract massive users and its market is continuing to grow. In 2015, it was the fastest growing social network, and it shows no signs of slowing down, with 2016 growths estimated at 15% (and another 11% in 2017). [1] Thus, strategy will become more and more important with the development of enterprises and will change a lot with predictable and operable ways.
This paper gives two very critical factors: predictability and malleability and put them into a matrix which divided into four parts labelled with classical, adaptive, shaping and visionary. This matrix gives a clear structure of how to identify a right strategic style for different environments. This matrix is the key takeaway for my blog.
The Classical circumstance happened when the environment is predictable but you can not change it such as Oil & Gas industry and Automobile companies. It named with classical because it fixes the one everyone learned in business school and the strategy is set a logical goal, hit the market position and enhance it by executing sequential planning, use the analytical and statistical method to predict the future market. Compared with classical, adaptive environment is unpredictable because the market demand and operation feedback loops change a lot. Thus, in this kind of environment, strategies must be updated with the market and long-term plans are useless. From my perspective, computer hardware industries need to adapt a flexible strategy by subtly capturing market changes and reduce the time lag of internal reaction time to fit new environment perfectly. Additionally, no matter whether companies can predict the future market or not and the industrial fragments are not monopolized by a few incumbents, we can call these shaping and visionary. In the end, the writers emphasise that a company needs to apply more than one strategy to fit different parts of the company even managers should change strategy style within the different stage of operation lifecycle. Personally, I think the actual operation environment is much more complex than these four categories. This article doesn’t talk about how we can coordinate these four situations within one company.
Above all, executives should identify the environment for each part and sections within their company by its functions and market type. Multi-strategies and rapid response mechanisms to adapt volatile environment is the future trends.

Reference:1.            "Instagram Marketing Strategy for 2016." ShortStack. N.p., 25 Jan. 2016. Web. 28 Mar. 2017.

Strategic styles at a startup - An insider's perspective

For most part of 2015, I worked as a business analyst for an Accel Partners portfolio startup. It was an e-commerce startup for selling premium goods online, and included premium electronics as well as luxury goods. The description of strategic approaches in Your Strategy Needs a Strategy by Martin Reeves, Claire Love and Philipp Tillmanns elucidated my observations while at the company from a lower level since decisions were usually made by the investors and the CEO. The startup was not doing well during the time that I left them, which through my understanding of the article I can now attribute to the mismatch in choice of strategy to the competitive circumstances.

The startup could be considered an analog to the internet software vendors the authors talk about. This alludes to the surrounding economic weather being high-growth, with low barriers to entry, high innovation rates, and most importantly the relative positions of competitors being in flux. This seemingly necessitated a Shaping strategy, and would’ve from my understanding avoided the impending doom now facing the startup. What really happened was that the company, armed with a hefty seed investment set out with a Visionary strategy.

 This included leveraging a high-seas supply model, in all senses new to the specific market at that point in time. But as it turned out, this could not be leveraged to make the startup a super-successful one. The reason the Visionary strategy failed to be successful was because of failure to understand the unpredictable nature of the market. As it transpired, the main weapon for the company vis-á-vis the high-seas model, was also being evaluated and employed by the competition, and even though they did not have the same levels of expertise, it cut down most of the company’s leverage. There was also a similar luxury line launched by the bigger incumbents, which wasn’t expected as per strategy. Thus, completely invalidating the visionary approach. A knee-jerk result of this was a shift to Adaptive strategy, which meant that there was a strategy which responded to whatever cards the market was dealing out, as opposed to the dictating terms model initially envisioned.

What I believe would’ve been ideal instead is a Shaping strategy which used the high-seas model as the ‘innovative move’ to cause a radical shift in the market, instead of using it as a build-and-they-will-come strategy, since there clearly wasn’t enough evidence to suggest it was worthy of such a bold strategy. This failure could’ve been avoided if the decision makers had asked themselves the two critical questions to evaluate predictability and malleability, and where they would come short. If this was done along with a sound Shaping strategy to rally an ecosystem of high-seas suppliers, the startup would have charted a clear path to success. This as opposed to the Survival strategy they’ve currently employed, as I recently heard, by replacing higher level management and trimming down the product portfolio.

How Much Do We Think About “Core Ideology” When We Choose Our School or Job?

The article “Building Your Company’s Vision” argues that creating a durable vision, consisting of the core ideology and envisioned future, is the pivotal first step in building a visionary organization. Using a number of different companies as examples, this article explains why it’s important for an organization to articulate its vision to achieve a long-term success. What especially stood out to me from the article was the statement that a core ideology needs to be “meaningful and inspirational” to those within the organization as they will be the ones committed and invested to the organization in the long run. In addition, it is argued that a core ideology cannot be imposed on people and that it is instead something people are predisposed to.

Whether we are attending school or working for a company, we will be putting in a significant amount of effort and dedication to the organization that we belong to. Because of this big investment, it would be ideal for us to belong to an organization with a “deeper sense of purpose” that inspires us to study or work. This idea motivated me to ask the following question: how much do we actually think about the core ideology of an organization we choose to join? Is it something that we often neglect as school/job applicants?

Having recently been a job applicant myself, I saw myself filtering companies I want to apply for simply by salary and name value of the company. Core values or purpose of a company was never brought up in conversation during the interview process, and I was only exposed to specific, short-term goals of a company. Even when I was choosing among offers, it never crossed my mind to think about my compatibility with the companies’ core ideologies. Although a company’s core ideology may be one of the key factors what will drive us to go to work and enjoy being a part of the organization, I think we often do not take it into consideration.

Such negligence can have significant, negative impacts on us personally as well as on the organizations. As an example, I attended a Christian high school with religious core values and the purpose of nurturing “truth-seeking leaders”. This core ideology of the school transcended a number of changes the school went through, including new headmasters and school relocation. When my school was competing with other schools to hire excellent teachers, it did not pursue applicants who did not align perfectly in terms of the school’s core ideology, even if this meant a competitive disadvantage. Thus, the organization did its part in holding onto its core ideology, but some students failed to evaluate their compatibility with the organization. Many students applied to the school for the great education and location, but those who did not share the religious background and thus the core values of the school often suffered in terms of performance and satisfaction, as the rules, curriculum, etc. revolved around the school’s ideology. Such struggle of an individual may have also negatively affected the organization as a whole in terms of culture and school-wide performance.

As incompatibility in the core ideology may decrease the organization’s performance and more importantly the individual’s performance and happiness, shouldn’t we at least give a brief thought on the core ideology of the organization we consider joining?