Shared Value: America's Impending Identity Crisis

Much has been said recently in politics about the kinds of breaks and hindrances that corporation’s face in the US government. As much as a corporation may feel that the government is inhibiting their growth potential, as a consumer, regulation and checks make me feel safer from the Enrons of the world. It would take a huge shift in the political and commercial landscape for me to trust that a corporation is capable of acting in the best interest of the American people in the long term.

I started reading “Creating Shared Value” with this apprehension but also that it would encourage for-profit entities to take on non-profit ideals.  The idea of shared value, however, is bigger than these opportunities or dangers faced by non-profits. If anything, these ideas support a better eco-system for non-profits that looks at an entire industry from supply to consumer. A healthier eco-system is likely to encourage a healthier community, which is good for everyone involved. If I could, I would ask the author however, if their suggestion is still capitalism? Yes, profit is still the point and it’s much more sustainable than what capitalism has become, but it does create opportunities that require industries to play fair in order for it to work optimally. For instance, the current competitors could decide to implement the technological advancements needed to reduce the carbon footprint, but a new player could do a smash and grab take up as big a part of the market as they can, with short term profit & success in mind. This could severely undermine one of the incumbents, even if it isn’t forever, financial damage could be done.

It creates a prisoner’s dilemma [1]: if all of the players involved move towards the optimal outcome, then greater value is created and supported. But it just takes one organization to undercut and take advantage of for everyone to begin only working in their best interest (short-term) to go back to the sub-optimal area that the economy is currently in.

 The other theory that came to mind while reading this article was Pierre Bourdieu’s Field of Cultural Production [2]. Bourdieu basically lays out the need to evaluate the cultural sector on cultural and social impacts as well as economic impacts. If we were to only consider an orchestra successful if they sold enough tickets to make a profit, then orchestras would only exist if they played pop music. We’d lose our ability to access the high-quality art of Mozart or Shostakovich. We’d lose this access, however, not because it isn’t important to the community, but because it’s not financially important to the community. There are other benefits for a community aside from direct ticket sales. This is why it’s critical to look at the whole eco-system to see the worth of a cultural institution.

It’s curious to me that the authors also take a similar view in promoting this same eco-system overview to identify the value of a for-profit entity. I think the sentiment is good, and that it could substantially benefit America’s economy. I still struggle to see, however, that this is still capitalism.

[1] “Prisoner’s Dilemma.” Investopedia. Accessed April 30,2018. https://www.investopedia.com/terms/p/prisoners-dilemma.asp.

[2] “The Field of Cultural Production.” Columbia University Press. Accessed April 30, 2018. https://cup.columbia.edu/book/the-field-of-cultural-production/9780231082877.

Shared Value at the Forefront?

Reflection on “Creating Shared Value” by Michael E. Porter and Mark R. Kramer

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In “Creating Shared Value,” the authors argue that for too long, there has been an incorrect belief that the success of a company must necessarily come at the expense of the workers and nearby residents. The authors further posit that if companies, and the people and institutions that they are made up of, adopt new approaches to development, incorporating ideas of creating shared value, both society and people can benefit from the economic success and growth of companies.

The authors support these claims with numerous examples of companies who have created shared value, however, the question is left of whether the ultimate impact of these companies creates shared value. For example, Wal-Mart is used as an example of a company that, by reducing packaging, has not only saved money in transportation and waste disposal costs, but has also reduced its environmental impact by lowering carbon emissions and usage of natural resources. This example is uplifting and seemingly “reveals that the congruence between societal progress and productivity in the value chain is far greater than traditionally believed.” But what happens when we take a step back and reflect on the throwaway or convenience culture that Walmart encourages? What is the impact of a company that encourages one-time use of products that previously would have been repaired when broken or treated with care given higher prices paid by consumers? While Walmart has attempted to address this through sustainability initiatives (https://corporate.walmart.com/2016grr/enhancing-sustainability/moving-toward-a-zero-waste-future), these initiatives are mainly targeted towards company operations and supplier packaging practices. Once they reach the level of customer behavior, they seem nothing more than PR or marketing campaigns.

Other examples mentioned (Coca Cola, Nestle, Unilever, etc.) raise this same question: are these companies truly trying to create shared value or are they simply reducing costs with the help of new technologies that allow them to better monitor and adapt their supply chains? There is a big difference between lowering usage of water or electricity to save on costs and creating shared value by allocating significant investments towards initiatives that create hard-won additional revenues in the way that ITC does in the case. One reduces impact to increase profits while the other attempts to do so by creating a change in the larger society that improves people’s lives beyond the company’s walls.

At the end of the article, the authors briefly, but importantly, mention “Most business schools still teach the narrow view of capitalism, even though more and more of their graduates hunger for a greater sense of purpose and a growing number are drawn to social entrepreneurship.” I looked at one of the top social entrepreneurship programs in the U.S. at Duke University to see if they were furthering the idea of shared value. Interestingly, the program defines social innovation as “value created...primarily to society as a whole rather than private individuals.” (https://entrepreneurship.duke.edu/social-entrepreneurship/about/) It suggests that the idea that authors posit, that social good and economic profits can go hand in hand, may be further afield than hoped.

Shared value creation triumphs over corporate social responsibility

 In modern days, corporate offices are increasingly getting aware of the societies around them and a common notion of giving back to the society has gained immense popularity among the organizations. This trend among the corporate offices came from the realization that a successful society acts as a precursor to the success of an organization. This is truly a welcoming step. However, in most of the cases, the execution lacks the ingenuity, leading to inefficacy of the movement. The so called Corporate Social Responsibility, CSR, remains just another fancy word of bourgeois. The parochial process saps the efficacy of the innovative idea.

In my personal experience, when used to work in Deloitte, I saw the firm used to spend millions of dollars and thousands of man-hours in the name of Impact Day: a fancy version of CSR. During the Impact Day, all practitioners of Deloitte worldwide have to go to some urban or sub-urban places and involve in some social work. The social work can be in the form of painting a school house for under privileged children, teaching, planting trees etc. The initiative lacked it intended purpose of doing any social good. To me it was just a social gimmick in which a firm spends a huge amount of money and achieve nothing. Spending one day, albeit the man-hours count, does not make any sustainable difference to a society. For a greater good, the effort and money could have been channeled, via some NGOs, in a yearlong time for a sustainable change or as the article describes as shared value. Although, it is true that education, proper nutrition, and good health are building blocks of a strong nation, all these factors cannot be achieved overnight. A steady and constant effort is required for sustainable change.

On the other hand, we can see, Amul, a cooperative dairy venture, in a small village named Anand of an Indian state Gujrat has made wonders by concentrating on the creation of a shared value [1]. Back in 1946, most of the poor milkmen of the small village were subjected to exploitation by the rich middle men, leading to a life full of misery. With the help of local government, the milkmen formed cooperative named Amul to foster cooperation and eradicate exploitation. Amul is a success story in which poor milkmen fought against middlemen and shared their hard-earned profit among themselves, leading to a better life. Amul saw an organic growth in the follow decades when more and more milkmen joined the venture. Here we can see, how an organization puts societal value creation as its mission statement and in turn managed to make a strong footprint. The shared value creation brought wonders for Amul.

In conclusion, we can see that both in value creation and efficacy shared value triumphs over CSR. A strong society fosters a strong organization growth and for a strong and sustainable societal structure, corporate houses must plan for a continuous shared value creation approache.

        

[1] About Us - The Amul Model: http://www.amul.com/m/about-us

Adapting the scientific method to business strategy

The premise of this blog post is that “conventional strategic planning is not actually scientific”. Strategic planning lacks development of new hypothesis and testing out those hypothesis. In this post, we will talk about the 7 steps to adapt the scientific method to the needs of the business strategy. 

The first step talks about moving from issues to choice. Large organization must not get themselves into the loop of investigating data related to the issues. Instead, a majority of that portion of time is better spent on analyzing and testing out possible solutions.

The second step is on generating strategic possibilities. Now, that the organization has pivoted itself to choices rather than issues, managers should start considering the wide array of possibilities. Genuinely new strategic possibilities are hard to create. A combination of imagination, clear thinking and well-grounded team are required to come up with such creative options. 

After all the possibilities have been generated, the third step is to specify prior conditions which must be true for each possibility to be a terrific choice. Therefore this step is mainly about assessing the validity of a strategic option. Consideration of evidence at this point would be premature. The discussion must center around what must be true rather than what is true. At the end , if all the listed conditions were true then the team must advocate for that choice.  

The fourth step is to identifying barriers.The team must determine which of the multiple conditions from step three are least likely to hold true. This is the step which focuses on what is likely to be true rather than “if it were true”.  

The fifth step is to actually design the tests. For each key barrier in step fur , the team must devise a valid and sufficient test to generate commitment. The most skeptical person(s) in the room for each barrier must design the particular test. The reasoning is that if the person or group of persons are satisfied by the test then everyone should be as well ,since they will have the highest standard of proof. The test might involve creating surverys, number crunching or anything at all. Its most important that the entire group believe that the test is valid and can form the basis for rejecting the possibility or generating commitment to it.  

The penultimate step is to now conduct the tests designed in step five. Least confident tests must be done first as compared to more confident ones. If they are indeed weak to hold up to tests then the least likely ones will be eliminated sooner rather than later.   

The seventh and the final step is review the key conditions in light of our test results to reach a final decision. After reviewing the test results, the possibility with the least barriers must be chosen.   

Applying creativity to a scientifically rigorous process enables team to generate novel strategies and to pinpoint the one most likely to succeed. This approach requires fundamental mind shifts from “what should we do” to “what might we do”, from “what do I believe” to “what would I have to believe” and finally from “what is the right answer” to “what are the right questions”. A team’s ability to inquire is a key to being successful in this possibilities based approach. 

The Strategy of Streaming

In the HBR article, “Bringing Science to the Art of Strategy,” they give 7 steps to strategy making [1]. The third in that set is to “specify conditions for success.” While this step seems obvious, this is an area that causes problems. First, this step is often overlooked because it seems obvious. Success is more money or an increase in patrons or the ability to hire talent. While this is true, success is more complicated than that. Each strategic initiative weaves into the fabric of the overall corporation, working together like cogs in a machine.

The most compelling example of this is the systems project that is currently working with the Pittsburgh Symphony Orchestra (PSO). The systems team was tasked with looking into the possibility of live streaming PSO performances. This is an incredibly complex undertaking because musicians are unionized, so there are complex contracts for all symphony performances and then additional contracts of how to handle compensation for live streaming. It’s not as simple as getting the hall set up to capture both professionally mixed sound as well as a couple of camera angles, the musicians also require additional compensation, which for the PSO would equal hundreds of thousands of dollars per streamed concert. 

Other streaming models are being credited with increasing concert attendance up to 90%, which is quite high [2]. Most performing arts organizations look for an average of 80% or higher, depending on the size of their concert hall. Many orchestras are looking to reproduce this apparent success, but they’re thinking about it in a way that corresponds to direct issues and not in a way that explores all of the possible scenarios.

For example, in an interview with the COO of the PSO, the systems team were told that the only result they cared about was increasing attendance. They cleanly stated that they will only use the team’s suggestions if they can prove this to be true. While increased attendance is a common goal, it does not get to the root of the problem because it doesn’t look at the big picture. Does the PSO want more revenue? Do they want to increase their standing with their immediate community? Do they want to increase their access to their international community? These are all strategic questions that relate to attendance but have much bigger implications than mere attendance.

Take for instance increasing revenue. To increase revenue, the PSO should look at increasing ticket sales, but financial health also comes from donations and how connected patrons feel to the symphony. If revenue is the aim, there should be an articulation of a strategic scenario that encompasses all departments within the orchestra.

This siloing of departments and confusion over what is most important, is why specifying conditions for success is so critical in the strategic process. Putting a band-aid on issues like low attendance will not solve the issue, but a clear and well thought through strategy that is organization-wide has a chance of success.

[1] Lafley, A. G., Roger L. Martin, Jan W. Rivkin, and Nicolaj Siggelkow. “Bringing Science to The Art of Strategy.” Harvard Business Review. September 2012. Accessed April 25, 2018. https://hbr.org/2012/09/bringing-science-to-the-art-of-strategy.

[2] Fleming, John. “How the Detroit Symphony Live-streamed Its Way to Success.” Musical America Worldwide. June 2, 2015. Accessed April 25, 2018. https://www.musicalamerica.com/news/newsstory.cfm?archived=0&storyid=34007.

Can you say what your strategy is?

The article tries to find a parallel between how well a company implements its strategy and how well the executives and employees can state it concisely. Collis and Rukstad try to explain this by making an example out of the St. Louis-based brokerage firm Edward Jones who were able to generate huge success just by making sure all their employees adhere to a clear and concise strategy statement.

The basic elements of a strategy statement are Objective, Scope, and Advantage where objective is the goal that the strategy intends to achieve, scope defines the boundaries within which the company domain lies and most importantly the advantage which defines the value proposition that explains why the targeted customer should buy your product.

Although the breakdown looks simple, it is not. Defining the objective, scope and advantage involve identifying the trade-offs and it is often difficult to be specific about these. Often times the major difference between a successful company and the others' is in identifying and making a strategy around these trade-offs. For example, a company that chooses to pursue growth over profitability today might not be successful today, but in the future, it might prove to be fruitful.

Lastly, the most important step in positioning the company in the strategic sweet spot is by understanding the industry landscape. This is a crucial juncture where the company meets its customers' needs in a way that its rivals cannot. This is done by segmenting customers and identifying unique ways of value proposition. It involves quite some thought as the company needs to find this niche that it will be able to maintain for a good foreseeable future without the rival being able to easily mimic and compete.

Methodological Frameworks for Strategy Devlopment and Messaging

This week’s readings provided an opportunity to examine two critical elements of the strategy development process: building a framework for strategy development that relies on a consistent methodological processes, and developing consistent and concise strategy statement that can be used to articulate the organization’s strategy. These two processes/frameworks complement one another, both in terms of their logical consistency and the way that the two functions are supportive of one another, specifically in terms of the way that that they both lead to improved viability and more successful implementations.

Applying a methodological framework to strategy development helps organizations balance competing needs for both innovative ideas and solutions that are practical and achievable. The core of the process lies in the response to a specific challenge or opportunity, so the goal must be tangible solutions that are based on the development of clearly-articulated hypothesis that define opportunities. By grounding the process towards opportunity, rather than the traditional reactive process that looks to correct error, the organization is better positioned to deliver innovative and sustainable strategies that support its position in an evolving future state. When generating these future-state possibilities, an organization must think specifically in terms of its role in the market and how it can win in that space. The emphasis should be on generating possibilities that are verifiable and meet clearly articulated conditions for success, including all possible barriers to success, as well as those barriers that represent the most vulnerability for a given possibility.

By using a scientifically-grounded design process during strategy development, organizations are able to deliver solutions that capture their market advantages by capitalizing on forward-looking opportunities. Likewise, it is important that those organizations employ a consistent methodology for developing strategy statements that are easily understood and communicated at all levels of the organization. To be successful, this statement must be more than a corporate artifact: it must be a clear statement of the value proposition that your firm offers to its customers. In addition, the strategy statement must be unique to the organization and address several components: the objective (the ends that the organization will achieve), the scope (the domain in which the organization works), and the organization’s advantage (the means by which it will succeed). This must be applied to a single goal, which forces organizations to choose between competing priorities such as growth and profit, and be “specific, measureable, and time bound” so that the timeframe to completion and relevant measures of success are understood in the context of the objective.

By applying consistent methodological frameworks to the development of strategy, and to the summary statement that will be used to drive messaging and implementation, organizations are able to deliver specific objectives that address key objectives in a sustainable and inclusive way, while ensuring that the organization’s strengths, advantages, and differentiating factors are clearly understood throughout the enterprise. In this way, consistent methodological frameworks ensure that strategy development proactively and meaningfully engages with the core possibilities and opportunities of the organization.  

Science to strategy: fake news or not?

I'll talk about my change of mind when I read the article, from "fake news" to "this might work".

Coming from a engineering background, Honestly I'm triggered when I read the first several pages. How can these decision process be called science? From my understanding, science means based on the data, you make some assumptions and build a model. With the model, you can then predict the future using mathematical formulas. However, this is not the case with this article. The article mainly describes a structure to make a strategy based on discussion. I see this a "probability based" method. Does it use Bayesian graph model? Does it uses a Hidden Markov Model? How does it define posterior probability and prior probability? Speaking of science method of making decision, since making decision from a large spreadsheet is hard, why not use a neural network with Softmax as activation function in the output layer?

But the business world has been using similar techniques to make strategies for a long time, there's little possibility that I'm so smart that I find a method no one ever figured out. So I read the article again, and I figured out something I did not realize in the first place. I thought science means math. However, ensemble people's idea together, and make a decision that everyone agrees is even harder science. Dealing with numbers is easy, dealing with people is hard. What if you tell your college: my software tells me we should do this, so let's do it. Your college probably won't be happy since he is not convinced. Social and business cases are so complicated that you can't just state: everything can be abstracted to math so just do it. The world is never that easy.

Speaking about the content of the article, it does provide a very good way, so that everyone can express there idea and concern. Every strategy is binded with some hypothesis, or precondition. By testing the preconditions the best hypothesis can be picked. There's still some point not covered though. For example, for every strategy only the precondition is taken into account. However, the potential result should also be considered. How do you decide between some unlikely precondition but huge profit, and likely precondition but little profit?

Ben & Jerry's and Bob Holland's Dilema

Reflecting on Ben & Jerry’s Homemade Ice Cream Inc.: A Period of Transition, Bob Holland took over as CEO from Ben Cohen at a very crucial juncture. Ben & Jerry’s had grown from an ice cream shop in a converted gas station in the 1980’s to a medium sized company with sales of $150 million. Ben & Jerry’s had just posted a quarterly loss for the first time in it’s history as competition was rising and the ‘superpremium’ segment, which was Ben & Jerry’s mainstay, was beginning to slow down. Holland was tasked developing a strategy that addressed the issues faced by Ben & Jerry’s in the ice cream market, but also had to be in line with the company’s mission and background. According to me there are multiple changes in strategy that could be implemented.

The company used no formal market research or test market procedures, relying instead on the founders’ own ideas and tastes. They launched a number of different flavors and lines of products like frozen yogurt and ‘Smooth, no chunks.’ This expansion in the product portfolio along with strict new regulations and difficulties in manufacturing ice cream with large chunks greatly increased the complexity of the business. They had difficulty in forecasting demand of products and flavors which resulted in production efficiency falling. They had to throw away overstocked products and were faced with shortages for certain products which hit their profits. Holland must introduce thorough research methodologies to understand consumer needs. This will enable them to narrow down and focus upon what flavors and product lines to pursue, resulting increased efficiency and as a result- profit.

The company refrained from spending vast amounts of money on traditional forms of advertising, though they were forced to release TV commercials in 1994 due to increased competition. They were very successful with their unconventional methods of garnering media attention. Their annual meetings were highly publicized events where they promoted various social causes. The factory tour became a popular tourist attraction. They also gained a lot of traction through TV shows like The Larry King Show and NBCs The Today Show. Holland should continue with such innovative marketing methods. The strategy to build a franchisee model where in the shops were located in high profile areas with high potential should be continued with. Since they did not spend large amounts on advertisement, these locations with high traffic can be the key to maintaining the profile and brand reputation/image they had built for themselves over the years.

The biggest challenge he faced was how to transition the strategy where the original founders initially did not intend to build a substantial profit-making corporation. They were inclined towards social causes. A New York bakery run by the homeless supplied brownies while nuts were sourced from people from a Brazilian forest. They developed a mission statement which layed out an objective that the company’s success will be measured by both financial as well as social performance. But Holland was an MBA graduate, from a purely business background having worked at McKinsey and Co. in the past. His strategy had to not only make sure it pulled the company out of the mire it was in but at the same time align with the company’s mission and background which the owners felt strongly about. He could build his strategy to maximize growth and profits, which one could argue could increase the available resources for the social causes the company believed in working towards.

The Art and Science of Strategy at Ben and Jerry's

Elaine Zhang
94811 Strategy Development
Prof. Tim Zak
Blog Post #6

In "Bringing Science to the Art of Strategy", the authors point out that the ongoing conflict between the scientific and intuitive nature of strategy. Whereas conventionally CEOs and other leaders of corporations are used to making decisions based on experience and intuition, modern data analytics have made the process more certain and big companies are spending big bucks on data insights to aid in their decision-making. However, all organizations are resistant to change. Despite all the hype, lots of companies are still fairly insulated from a more "rational" and data-driven approach and defer to authority and hunches to formulate strategy.

A good example of this is Ben and Jerry's. As an emerging rival to Haagen Datz in the super-premium ice cream market, they would have benefited a lot from market research. Counterintuitively, the company did no such thing. They did no market research or test market procedures. Instead, they simply relied on the founders' own tastes and ideas and came up with new flavors. As a result, their new chocolate fudge brownie and rainforest crunch contributed to a volume increase of 24% for the company.

This made me think of another article we read last week, "The Coherence Premium", about not succumbing to market pressures because the market's most pressing needs may not be the best option for a specific company. In Ben and Jerry's case, looking outward before inward could lead them to be very reactionary, for instance, playing their strategies against Haagen Datz. They could unconsciously limit themselves to Haagen Datz's paradigms and unable to break free from them. And they would not be able to come up with the quirky, unique flavors that have a rich personal touch and makes them stand out compared to their competitors.

I believe that the authors of "Bringing Science to the Art of Strategy" would take the Ben and Jerry case as a compelling example that there is an undeniable art to crafting strategy. But they would also note that their strategy was not without consideration of the market. Research showed that ice cream cared more about quality than price, thus Ben and Jerry's creativity regarding flavors was not without a market-oriented direction. They had to know what to apply their creativity to before launching into brainstorming sessions. They did a great job combining the art and science of strategy and their success was proof that both were needed.

Adapting the Scientific Method to Strategy Development

Lafley, Martin, Rivkin, and Siggelkow set out to bring the scientific method to the art of strategy in the Harvard Business Review article titled “Bringing Science to the Art of Strategy.” They put forth a seven-step approach aimed at taking conventional strategic planning from a process that merely places a special “emphasis on data and number crunching” to scientific process by incorporating “the creation of novel hypotheses and the careful generation of custom-tailored tests of those hypotheses--two elements that conventional strategic planning typically lacks.” The authors contend that the addition of hypothesis testing transforms the process from static, inflexible, and narrow to dynamic, flexible, and forward thinking. However, the question still remains, does this seven-step approach push strategy development out of the realm of art and into the realm of science or does the approach remain in the domain of art but with the cold veneer of science?

What would scientific strategy development look like? Business does not occur in a vacuum - so to speak - so the application of the scientific method to strategy would necessarily be in service of business objectives. Strategy development that employs scientific methodology would need to utilize deductive reasoning as opposed to inductive reasoning. This problem is usually illustrated using the white swan example. It goes something like this:  a person notices a white swan. The person states “at least one swan is white.” From there the person concludes, “all swans are white.” The obvious flaw is that person has no knowledge of black swans. The author’s seven steps embody this approach.

First, the company identified the major issue and then developed potential options for In step 1, the authors argue sound strategy should avoid “fall[ing] into the trap of investigating data related to the issues rather than exploring and testing possible solutions” - this is another application of falsification aimed at illuminating context-specific concerns. In step 2, businesses should generate strategic possibilities in order to ascertain how the business might reach a desired output. Together, steps 1 and 2 act as the foundation for series of feasibility studies. Steps 3 and 4 are intended to help identify the appropriate context for success by identifying both the conditions necessary for success and the barriers to implementing specific choices. Steps 5 through 7 round out the feasibility study as businesses should design, implement, and revisit a number of tests in order to make sure the resulting strategy encompasses the best performing possibility and has been subjected to rigorous analysis under this framework.

7 Steps to Make Scientific Strategy

The article Bring Science to the art of strategy introduces us 7 steps to make scientific strategy . The author calls it possibilities-based approach.

The first step is to move from issues to choice. Strategists need to try to explore and test possible solutions rather than focusing on the issues to be addressed.

The second step is to generate full range of strategic possibilities. Desired output, the people, the rules are critical factors in the process of generating possibilities. Desired output does not need data to prove. However, it should be specified in detail the advantage to achieve, the scope and the activities instead of just an idea or motto in the high level. Normally, three to five possibilities will be considered in depth. The team that takes the responsibility of figuring out strategic possibilities should represent a diversity of backgrounds.

The third step is to specify the conditions for each possibility to be a terrific choice. The author gives a framework to generate the necessary conditions. The framework contains competitor analysis, industry analysis , customer-value analysis and business model analysis. After all kinds of conditions are generated in the list, the list should be reviewed, and all must-have conditions should be maintained.

The fourth step is to identify the barriers to choice. Those conditions that are least likely to hold true can be regarded as the barriers to that possibility. And ordered list of barriers to each possibility can be written down.

The fifth step is to design tests for those barrier conditions. Each condition should be tested to see whether it holds true. The member who is most skeptical about a given condition should be selected to conduct the test.

The six step is to conduct the tests. The author suggests ‘the lazy man’s approach to choose’, which means that the condition that is least like to hold up should be test first. This is a clever approach since it can save enormous time and money. Depth instead of breath is necessary for the analysis. Since tests cannot eliminate all the uncertainty, it is important to compare the risk of the best option and risk of the status quo before making the choice.

The last step is to choose the strategy. Possibilities-based approach makes the decision easy since the decision-maker only needs to review the analytical test results and choose the possibility that faces the fewest barriers.

 The author uses P&G case to illustrate the core arguments. Here, I want to apply the approach to the Ben &Jerry’s Homemade Ice Cream Case. Instead of focusing on the issue of addressing Ben & Jerry’s current competitive difficulties, the decision-maker at Ben & Jerry’s needs to figure out how many possibilities they are facing. It has several options. First, it can produce new-flavors of ice-cream especially ice-cream with low fat to meet the needs of consumers. Secondly, it can acquire other small producers of ice-cream in the market that meet the low-fat trend of the market to expand its production line. Thirdly, individual customization. In their franchised retail stores known as scoop shops, the company can let customers to choose to add flavor and ingredients in their ice-cream by themselves.

After listing all the possibilities, they can generate the list of conditions and figure out must-have conditions and barriers. The conditions include the prediction of competitors’ reaction, their financial capabilities, customer’s preferences and their unique social mission.

Humble Leadership at Ben and Jerry's

It’s an unusual move to see a CEO-level executive step down and personally cite the reason for their departure as not having the right skills for the job.

But Ben Cohen was correct. In a largely competitive marketplace with increasingly complex supply chains and operations, folksy and homespun methods were more likely to hurt Ben and Jerry’s and in addition to its employees and employee. While I think write-down of the factory was a large contributor to the struggles, it also serves as a better representation on how managing and strategic decision making involving such a complex operation was over the founder’s head. Strategic decision making seemed largely absent in the company as evidenced by the increasing number of flavors (and thus complexities), outsourcing production to one of their main competitors, and really just reacting to perceived market trends such as low-fat ice cream.The company had a mission and values statement, but lacks a vision or a strategy to enact their mission.While it is clear what type of company Ben and Jerry’s strives to be, it is lacking a strategy for it’s product.

Rather than set the course based on financial and production indicators, Bob Holland would work to form a guiding strategy based on the value and mission statement the founders created. In reality, Ben and Jerry’s strong socially conscious mission statement is a competitive strength and sets the brand apart in the crowded marketspace, especially in the increasingly socially conscience 90’s and Gen Xers who ‘vote with their dollars’. Even though the production process is a bottleneck for the organization and needs attention, Holland should work with his new team and focus in on what type of product Ben and Jerry’s wishes to produce. By determining type of product they wish to produce, and how, the organization will determine what they wish to focus their efforts towards which in turn will help alleviate a lot of the issues with their production facilities.

If Holland follows the methodology of ‘Bringing Science to the Art of Strategy’, he will pose the options of what types of products to produce as a choice for the company to make. However, he will not do this alone. Holland is potentially walking into another advantage of the organization - an organization that values its employees. I imagine an organization that values employees to the level that Ben and Jerry’s does has a strong base and culture to generate useful employee input to help generate strategic possibilities. Especially since many of the ground and middle level employees have likely been with the organization for a while, their understanding and knowledge will be crucial in determining what is possible for Ben and Jerry’s. Once ideas and options have been generated, that’s when Holland can start applying some of his ‘MBA skills’ and perform deeper analysis, not simply of the feasibility of the ideas, but what conditions are needed for success.

There are much worse situations than Ben and Jerry’s in the mid-90s to walk into as incoming CEO. It’s strong employee culture is an asset if used correctly. The sought-after business and operations knowledge won’t be enough to ensure success for the organization. Rather, the CEO must also be able to utilize soft skills in order to develop a strategy to help Ben and Jerry’s ensure long-term success.

Bringing Science to the Art of Strategy

The key take-away of the article, Bringing Science to the Art of Strategy, is that companies can and should have specific metrics to determining what strategies they should follow. It is no longer enough to say, “we want to be the best.” Companies also sometimes fall into the trap of thinking what is wrong rather than what we can do to fix the problem. This article reminds me of another one that we read about what it means to be successful. Some companies think that success comes from increasing profits alone, but we have seen time and time again that doesn’t necessarily mean that a company is successful. Strategies should be tailored to what ultimate goal is and in order to do that the goal needs to be specified. For me, my goal when I start working is to promote artist. In this case profits alone aren’t a great measurement of success. This is because for the music industry we are looking to make sustained profits and that always fluctuates with it comes to popular songs.  I have saved this article to be read for a later time when I actually begin working in the music industry because I believe there are some things I may need in the future.

Bringing Science to the Art of Strategy also outlines a methodical way of outline strategy. I understand that the process outline focused more on product marketing and expansion strategies. I am wondering if the same process would work if you were to apply it to managing an artist. For me personally I am looking to go into the music business. I can see how some of the steps of strategizing would apply to the music industry. However, I think it would be much more difficult to follow all these steps when you have a deadline and the field is constantly changing. For example, if an artist is looking to expand its brand or get his/her name out there. The marketing and management team would first outline what possibly they could take in order to expand an artist’s reach. Then they would list out the “must haves” and “want to haves” like we must have accounts on all social media platforms. We want to have our song be play listed on a streaming site like Spotify. It would be much for difficult to see if our efforts are actually paying off because we may see an increase of notability early on but it may not be sustained. Overall I enjoyed the article and will look for ways to apply it more in my career.