CHAPTER 4 FOCUS ON THE BIG PICTURE NOT

CHAPTER 4 FOCUS ON THE BIG PICTURE, NOT THE NUMBERS Presentation By: Robert Brinkmann, Justin Weden, Courtney Karcasinas, Stephen Gonzalez, & Adam Hall

Objectives Focusing on the Big Picture Drawing You Strategy Canvas Visualizing Strategy at the Corporate Level Overcoming the Limitations of Strategic Planning

Focus on the Big Picture, Not the Numbers Principle is key to mitigating the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves. Based on drawing a strategy canvas. Opens the companies’ eyes to Blue Oceans

Focusing on the Big Picture Strategic Profile of an Industry Strategic Profile of Competitors Strategic Profile of Company Focus, Divergence, and a Compelling Tagline

Drawing your Strategy Canvas Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication

Drawing your Strategy Canvas 1. Visualizing Awakening 2. Visual Exploration 3. Visual Strategy Fair 4. Visual Communication • Compare your business with your competitors’ by drawing your “as is” strategy canvas. • Go into the field to explore the six paths to creating blue oceans. • Draw you “to be” strategy canvas based on insights from field observations. • Distribute your before-and-after strategic profiles on one page for easy comparison. • Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers. • Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy. • See when your strategy needs to change. • Observe the distinctive advantages of alternative products and services. • See which factors you should eliminate, create, or change.

Step 1: Visual Awakening Common mistake is discussing strategy changes before resolving differing opinions Another problem; executives are often reluctant to accept change

EFS Example Divided senior managers into two teams to develop two value curves Managers had a hard time agreeing on competitive factors. Different factors were important to different managers

Both teams presented the value canvases to the rest of the group The value curves demonstrated a lack of organizational focus Curves mirrored competitors’ curves, and there were major contradictions between them.

After looking at the curves, EFS realized their top competitor was leaving the red ocean Faced with these facts EFS realized it was time for a change

The Four Steps of Visualizing Strategy 1. Visualizing Awakening 2. Visual Exploration 3. Visual Strategy Fair 4. Visual Communication • Compare your business with your competitors’ by drawing your “as is” strategy canvas. • Go into the field to explore the six paths to creating blue oceans. • Draw you “to be” strategy canvas based on insights from field observations. • Distribute your before-and-after strategic profiles on one page for easy comparison. • Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers. • Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy. • See when your strategy needs to change. • Observe the distinctive advantages of alternative products and services. • See which factors you should eliminate, create, or change.

Step 2: Visual Exploration Go into the field to explore the six paths to creating blue oceans. Observe the distinctive advantages of alternative products and services. See which factors you should eliminate, create, or change.

The Four Steps of Visualizing Strategy 1. Visualizing Awakening 2. Visual Exploration 3. Visual Strategy Fair 4. Visual Communication • Compare your business with your competitors’ by drawing your “as is” strategy canvas. • Go into the field to explore the six paths to creating blue oceans. • Draw your “to be” strategy canvas based on insights from field observations. • Distribute your before-and-after strategic profiles on one page for easy comparison. • Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers. • Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy. • See when your strategy needs to change. • Observe the distinctive advantages of alternative products and services. • See which factors you should eliminate, create, or change.

Step 3: Visual Strategy Fair Draw your “to be” strategy canvas based on insights from field observations. Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.

in g n at io ac k Tr irm ry en ta Sp ee d m on f om C et C ar k M ac y ity cu r Ac rs se of U Se T xe c. G M ea le D se Ea te or po ra C M ic e Pr nt E Ac co u ns hi p at io R el EFS: Before and After High EFS’s “After” Strategy EFS and Traditional Competitions’ “Before” Strategy Low

The “After” Strategy Eliminated highest-cost elements Relationship managers Account executives Emphasized: Ease of use Security Accuracy Speed Frees up Corporate Dealers Time Richer Market Commentary (key success factor)

Value Innovation Eliminate Raise Relationship Management Ease of Use Security Accuracy Speed Market Commentary Reduce Create Account Executives Corporate Dealers Confirmation Tracking

The Four Steps of Visualizing Strategy 1. Visualizing Awakening 2. Visual Exploration 3. Visual Strategy Fair 4. Visual Communication • Compare your business with your competitors’ by drawing your “as is” strategy canvas. • Go into the field to explore the six paths to creating blue oceans. • Draw you “to be” strategy canvas based on insights from field observations. • Distribute your before-and-after strategic profiles on one page for easy comparison. • Get feedback on alternative strategy canvases from customers, competitors'’ customers, and noncustomers. • Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy. • See when your strategy needs to change. • Observe the distinctive advantages of alternative products and services. • See which factors you should eliminate, create, or change.

Step 4: Visual Communication After determining your future strategy, it must be communicated throughout the corporation. EFS did this through distribution of a one page picture.

in g n at io ac k Tr irm ry en ta Sp ee d m on f om C et C ar k M ac y ity cu r Ac rs se of U Se T xe c. G M ea le D se Ea te or po ra C M ic e Pr nt E Ac co u ns hi p at io R el EFS: Before and After High EFS’s “After” Strategy EFS and Competitions’ “Before” Strategy Low

Eliminate-Reduce-Raise. Create: EFS Eliminate Raise Relationship Management Ease of Use Security Accuracy Speed Market Commentary Reduce Create Account Executives Corporate Dealers Confirmation Tracking

The distributed picture became a reference point for all investment decisions. Only ideas that helped move EFS from the old value curve to the new curve were given the go-ahead. � EFS IT Department example

Visualizing Strategy at the Corporate Level Visualizing Strategy can greatly inform the dialogue among individual business units and the corporate center in transforming the company from a red ocean to a blue ocean player. To do this companies can have their individual business units complete their own Strategy Canvases.

When individual business units present their strategy canvases to one another they: � Deepen their understanding of the other businesses in the corporate portfolio. � Foster the transfer of strategic practices across units.

Using the Strategy Canvas: Samsung In 1998 Samsung Electronics established the Value Innovation Program (VIP) Center Core cross-functional teams from their various business units come together to discuss their strategic projects. Typically focused on the unit’s strategy canvases. The teams assist one another in making their product and service offering decisions using the value innovation knowledge they have developed.

Since 1999, Samsung has held a annual Value Innovation Corporate Conference. Through the use of these VIP branches and conferences great value for their customers. As wells as establishing the common language and corporate culture that drives the company from red oceans to blue.

Pioneer-Migrator-Settler Map Pioneer � Offer Migrator � Offer unprecedented value improved value Settler � Offers value the same as competition

Pioneers Blue Ocean strategists Source of profitable growth Mass following of customers Value curve diverges from competition

Settlers Me-to businesses Not contribute much to growth Stuck in Red Ocean

Migrators Lie in between Pioneers and Settlers More for less � Don’t alter basic shape of value curve though Improved value, but not innovate value Strategy falls in between Red and Blue Oceans

Change Senior executives should move portfolio towards pioneers Settlers have marginal growth potential but are usually cash generators Pioneers have the most potential but use cash when expanding

Overcoming Limitations Creative component instead of being analysisdriven Motivational and invoking willing commitment Move away from bargaining-driven which produces negotiated commitment Need to still discuss numbers but that will fall in place as you go