The document discusses the concept of strategy from various perspectives. It begins by noting that strategy can be viewed as both complex and nebulous or simple and clear. The reality is that there is no single definition of strategy and opinions vary. The document then examines different elements and frameworks for understanding strategy, including its key components of arena, staging, vehicles, differentiators and economic logic. It also explores the iterative nature of strategy development and challenges of implementation. Overall, the document suggests that good strategy provides a sustainable advantage, is flexible but not reactive, incorporates all key elements cohesively, and considers organizational change needs for effective execution.

1. Strategy
1, 2, 3!!
© 2011, Eugene Chang

2. Some say
strategy is…
© 2011, Eugene Chang

3. big & scary
[Too complex to get one’s head around]!
Picture from Monsters, Inc, Disney / Pixar!
© 2011, Eugene Chang

4. soft & flu!y
Others!
[Too nebulous to get one’s hands around]!
Picture from Monsters, Inc, Disney / Pixar!
© 2011, Eugene Chang

5. But the reality is…
© 2011, Eugene Chang

6. “Nobody really knows
what strategy is.”
- The Economist!
© 2011, Eugene Chang

7. 1!
© 2011, Eugene Chang
Why is Strategy
Important?

8. “Because our natural reaction to
challenges are inappropriate.”
- Osama El-Kadi!
Business Strategy & Negotiation Consultant!
“Without a strategy, time and resources are
easily wasted on
piecemeal, disparate activities…”
- Donald C. Hambrick and James W. Fredrickson!
“Are you sure you have a strategy?”, Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

9. Strategy provides a firm
advantage over its competitors.
What strategy does: it helps a firm…!
• Define its market and systematically pursue its goals!
• Figure out the best course of action to advance its
position relative to the competition!
• unify the organization behind shared objectives!
• coordinate the various activities in a coherent manner!
• stay focused and on-target!
(“what not to do” as much as “what to do”)!
• Keep the “Big Picture” in mind!
© 2011, Eugene Chang

10. We hear these statements
from CEOs all the time…
© 2011, Eugene Chang

11. “Our strategy is to be the low-cost provider.”!
“We’re pursuing a global strategy.”!
“The company’s strategy is to integrate a set of!
regional acquisitions.”!
“Our strategy is to provide unrivaled !
customer service.”!
“Our strategic intent is to always be the firstmover.”!
“Our strategy is to move from defense!
to industrial applications.”!
- Donald C. Hambrick and James W. Fredrickson!
“Are you sure you have a strategy?”, Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

12. None of these declarations is a!
STRATEGY!
Smart CEO’s know not to reveal their real strategy with the public!
(keeping the language vague and completely useless!)!
© 2011, Eugene Chang

13. Myth Busted: Best-Practice is actually!
ANTI-STRATEGY
• Operational Effectiveness is not strategy!
• Constant improvement in operational
effectiveness is necessary, but not sufficient!
• OE Competition raises the bar for everyone
but leads to relative improvement for no one!
• Strategic positioning means performing
different activities from rivals’ or performing
similar activities in a different way!
• A company can only outperform rivals only if
it can establish a difference that it can
preserve!
Michael E. Potter, “What Is Strategy?”, HBR 1996!
© 2011, Eugene Chang

14. 2!
© 2011, Eugene Chang
So what is!
STRATEGY?

15. BRAND!
BUSINESS UNIT!
MARKET ENTRY!
MILITARY!
different uses of the word!
STRATEGY More…!
OPERATIONAL!
MARKETING!
CORPORATE!
Which one?! PRODUCT!
© 2011, Eugene Chang

16. “Business” Strategy
By Hierachy!
Corporate HQ! Corporate Strategy!
(Diversified)! • Which businesses should we be in?
• How does being in these businesses create synergy and/or add
• Corporate Planning! competitive advantage to the corporation as a whole?!
• Legal + M&A!
• IT! Business Unit Strategy!
• How can we compete successfully in a particular marketplace?
(e.g. pizza, safety boots, dental services)
BUSINSS! BUSINSS!
Functional Strategy!
UNIT #1! UNIT #2!
• How can each functional department in the BU do its part to
meet the company’s objectives?
• Finance! • Finance!
• Includes marketing strategies, HR strategies, supply-chain
• HR! • HR! strategies, new product development strategies…
• Operations! • Operations!
• R&D! • R&D!
• Marketing! • Marketing!
SBU* Strategy!
• SALES! • SALES! • How can the SBU help the organization achieve its objectives?
• IT! • IT! (may include dimensions beyond the scope of a single BU – e.g.
IT Strategy)
* Strategic Business Unit – Many companies feel that a functional organizational structure is not an e"cient way to organize activities so they have reengineered according
to processes of SBUs. SBUs are treated as an internal profit center by corporate HQ, usually responsible for its own budgeting, hiring decisions, price setting, etc.
© 2011, Eugene Chang

17. A framework within which
What unique Advantage decisions are made which
can we get and sustain establish the nature and
over time.! direction of the business.!
- Michael Porter! - Tregoe and Zimmerman!
Good Definitions Describing!
STRATEGY
A systematic process
for achieving long-
term goals.!
the direction and scope of an
- Osama El-Kadi!
organization over the long-term:
which achieves advantage… through
its configuration of resources… to
meet the needs of markets and to
fulfill stakeholder expectations.!
- Johnson and Scholes!
© 2011, Eugene Chang

18. You can think of Strategy as being made up of!
FIVE ELEMENTS
(And you need all 5 for a comprehensive strategy)
Donald C. Hambrick and James W. Fredrickson, “Are you sure you have a strategy?”, !
Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

19. The Five Major A peek inside the strategy black box!
Elements of
Arena!
The most fundamental
of choices - A result of
deep analysis and
Strategy!
should not be one of
broad generalities!
Staging! Vehicles!
• Resource constraints! The means by which
• Urgency (window of opp)! arenas are
• Credibility (to attract other entered matters
stakeholders)! greatly and
• Need for early wins! should not be
viewed as a mere
Economic Logic! implementation
A clear idea of how detail or done in
profits above the afterthought!
cost of capital will
be generated!
Differentiators!
Best combination of
differentiating
dimensions from
competitors to
attract customers
(and suppliers) to
support your business!
“The key is in achieving a robust, reinforced consistency
among the elements of the strategy itself.”!
Donald C. Hambrick and James W. Fredrickson, “Are you sure you have a strategy?”, !
Academy of Management Services 2001, Vol. 15, No. 4! © 2011, Eugene Chang

20. ensure these 5 elements are!
COHERENT and
REINFORCING
The strength is in the whole and not individual choices !
Donald C. Hambrick and James W. Fredrickson, “Are you sure you have a strategy?”, !
Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

21. Putting in place the input & output of the strategy “sequence”!
Tools ≠ Strategy!
Provide diff perspectives!
“Figure 1 leaves out feedback arrows and other "! #!
indications that great strategists are iterative, loop
thinkers. The key is not in following a sequential
$! %!
process, but rather in achieving a robust, reinforced
consistency among the elements of the strategy itself.”
Goal
Branding Setting!
questions
like ‘who we
are’ and ‘why
do we exist’!
Donald C. Hambrick and James W. Fredrickson, “Are you sure you have a strategy?”, !
Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

22. Strategy is an iterative process!
Mission &
Values!
Goal!
Setting!
Industry!
Analysis!
STRATEGY
Testing the Company!
strategy! PROCESS! Analysis!
Strategy!
Diagram Adapted from Javier Gimeno and Fares Boulos, INSEAD STRATEGY Notes!
© 2011, Eugene Chang

23. Strategic plans can easily be undermined!
Experience will corroborate that even a rational, well-constructed strategic plan rarely is
realized exactly as laid out on paper. Many factors can derail the plan – from competitors
undermining what was envisioned to poor execution. Mintzberg summarized his findings
in the powerful diagram above, a reminder that real life requires strategy to be continually
worked on and interacts in real-time with the operating environment.
Mintzberg, H. (1987, July–August). Crafting strategy. Harvard Business Review, pp. 66–75.!
Diagram from Principles of Management by Carpenter, Bauer and Erdogan, Mar 2009.!
© 2011, Eugene Chang

24. 3!
What then is!
GOOD
STRATEGY?
© 2011, Eugene Chang

25. Don’t forget
the political
dimension!!
Donald C. Hambrick and James W. Fredrickson, “Are you sure you have a strategy?”, !
Academy of Management Services 2001, Vol. 15, No. 4!
© 2011, Eugene Chang

26. A simply way to view Strategy
It answers the questions “why”, “what”, “who”, “how”!
A Strategy Tree Example (HBR)!
important!
Reminder!
HBR Blog Article “Strategy on One Page” by Anthony Tjan, Jun 1, 2011. The Strategy Tree introduced to
the author by Mats Lederhausen, formerly worldwide head of strategy for McDonalds’s!
© 2011, Eugene Chang

27. Uniqueness alone is insufficient; good strategy!
has to provide a sustainable advantage.
The business environment is constantly changing
so Good Strategy !
has to be flexible, but not reactive.
Reiterating: All it five elements!
has to be cohesive and reinforcing.
Designed to meet some objectives, it should
be inherently measurable.
And for ease of communication!
be clear to describe.
© 2011, Eugene Chang

28. Good strategy [should also incorporate]!
the continuous and ongoing managing of all !
phases of the strategic process [including execution],
which ensures that the organization is responding to the
dynamic and changing needs of the business !
environment in which it operates.!
- Adapted from Stuart Sugar!
VP of Planning and Strategy at Maritz Canada Inc.!
© 2011, Eugene Chang

29. 4!
Who then is!
Responsible for
Strategy?
© 2011, Eugene Chang

30. The traditional view of strategy planning & execution!
Current State of
organization! TOP-DOWN APPROACH!
The view that strategy is formulated
by the Executive Team (or the
“planning department”) in a top-down
Strategy
fashion is generally recognized as
Formulation!
By Executive Team obsolete but still widely in practice.!
or Strategy
Planning Unit!
Benefits:!
• trained strategic thinkers at the top!
• Able to see/exploit inter-unit
synergies!
Strategic
• Easier to define and meet corporate
Implementation!
By Management objectives!
Team! • Faster to develop, easier to
coordinate!
Desired Future
State of
organization!
Diagram Adapted from
Gavriel Shaw!
© 2011, Eugene Chang

31. Other views of strategy planning & execution!
BOTTOM-UP APPROACH!
The “organic” method allows a company
to get the entire organization involved
Planning! in the strategy process. but it is time
consuming and could cause difficulty
when assembling all views into one
coherent strategy as it bubbles up to
Execution! the corporate level. May risk getting
stuck with tactical issues.!
strategy!
• Creates individual ownership and ‘buy-
in’ from employees doing the
implementation!
Blue Ocean Strategy! • Accountability and trust at all levels!
Perspective (Ch8):!
Build execution into • People in the front-lines are closest
strategy using fair to the customer and “in touch” with
process to mobilize the business!
the organization.!
Hybrid / Iterative Approach!
More effective to allow strategy to be
initiated and coordinated by the top
with ample feedback loops for every
level to participate. Engagement and
good communication are key to
ensuring fair process.!
© 2011, Eugene Chang

32. 5!
© 2011, Eugene Chang
So… how do we make Strategy
Implementable?

33. “Strategy formulation is easy. It’s the
execution that is the challenge.”
- Lawrence A. Bossidy
Former CEO, Allied Signal/Honeywell
[We’ve got to build execution into strategy!]!
© 2011, Eugene Chang

34. It doesn’t happen by itself.!
“soft” structures (like culture) and formal structures
(like HR Policies and performance rewards) are !
used as guides and signposts to help people !
execute the strategy effectively!
Enablers!
"#$%! )*+,-,%#!
&'%(! .,/01-!
&'(! &)(!
76/!
2%3451%6-!
8169+196*!
*+(!
*&(!
“Enablers” Diagram Adapted from “The Secrets To Successful Strategy Execution” by Gary L. Nielson,
Karla L. Martin and Elizabeth Powers, HBR 2008.!
© 2011, Eugene Chang

35. The best results occur when mgt acknowledges!
that the organization itself
needs to change. [at least !
a little]!
Organizational change is often necessary to support a change in strategy. If a
company is responsive to its environment and takes a continuous improvement
outlook to the strategy process, these changes will be more manageable and
less drastic. Nevertheless, if the organization is not willing to adapt to realize
the strategy, it should not waste resources trying to switch strategy.!
© 2011, Eugene Chang

36. In the case of unavoidable large shifts in strategy!
It doesn’t make sense to…
• “Dumb down” a new strategy for an organization designed
to execute the old strategy, expecting no organizational
change [often disguised as a client’s request to have a strategy tailored to
their resource constraints or made “implementable”] !
• get an organization to implement a “brilliant strategy”
that has insufficient political/financial support from key
stakeholders to make the required changes for the
strategy to succeed [often the work of an inexperienced strategist
concerned more with the elegance of the plan than the implementation of it] !
• To Force-fit or copy a strategy designed for another
organization and adopting it wholesale as the outcome will
likely differ or even be detrimental [often the work of a lazy
executive concerned more the competition than building the underlying
capabilities to transform the company’s future] !
© 2011, Eugene Chang

37. Who & Why!
Objectives, Purpose)!
What about the!
STRATEGY - TACTICS
Linkage?!
Where & Which Unique Direction! How we get there!
(Position, Resource Allocation)! (Process, Actions, Skill)!
When, What for & For How Long!
(What Timing, What returns, What Next)!
Dr. Eliyahu M. Goldratt in his book the “Theory of Constraints” defines Strategy as the answer
to ‘what for’ objectives and Tactics an answer to the question ‘How’!
© 2011, Eugene Chang

38. Cascading strategy objectives down level by level…!
ORGANIZATIONAL
STRUCTURE PLAN EXECUTE EVALUATE
(FORMAL & INFORMAL)
1 Strategic Business
Organization Plan Review
2 Implementation Department /
Department / Plan Team Review
Team
3 Performance Performance
Individual Plan Review
Each level of the organization supporting the strategic objectives of the one
above in the hierarchy. Feedback/engagement is key.!
© 2011, Eugene Chang

39. Gaining granularity wins the war.!
On how the Allies Forces achieved the impossible in WWII:!
“Despite all of the complex planning that went into the invasion of
Normandy, it was the small unit tactics and the buddies fighting
side by side on the beaches [that made the difference], !
and that is consistent throughout history.” !
-Angelo Caravaggio, !
Military Historian, CFC!
Organizational
Structure,
PLAN EXECUTE EVALUATE
I am a big part Culture, Policies
of strategy!
Performance Performance
Individual Plan Review
Translating strategic initiatives into actionable items,
monitoring performance and rewarding individual behaviors!
[assuming you have the right people in place to work with. A particular
strategy may require one to shed or bring on specific skills req.]!
© 2011, Eugene Chang

40. From passive document to “marching orders.”
The balanced score card is a useful tool to help organizations
link strategy to performance measurement !
The original BSC design (1992) moved from the simple 4-quadrant representation to a
strategy-mapping concept with a hierarchy of perspectives each informing the next level.!
Financial Perspective!
The drivers of
shareholder value!
Customer Perspective!
the differentiating
value proposition!
Internal processes
how value is created
and sustained!
Learning and growth
perspective!
Role and status of
intangible assets
defined!
Diagram attributed to the Book “Strategy Maps” by Kaplan & Norton! © 2011, Eugene Chang

41. Connecting with the Scorecard.
The Underlying Philosophy: !
"you cannot manage what you cannot measure, and you
cannot measure what you cannot describe.”!
Diagram attributed to Shree Phadnis, Master Blackbelt at KPMG (India)!
© 2011, Eugene Chang

42. Back to the Big Picture.
Strategy is just one important piece in achieving !
superior performance in the marketplace!
PERFORMANCE!
head! heart! hands!
Strategy! Culture! Operational
Planning + Conviction +
Excellence!
Execution! Motivation Beyond Best
Practice!
1 WHERE!
& WHO! 2 WHY! 3 HOW!
People are the “super glue” behind the crucial Strategy-Tactics link!
© 2011, Eugene Chang

43. Today, companies are required to compete as a !
total supply chain and/or ecosystem!
Unlike a business model (a closed
system), A business ecosystem is a
network of companies – the set of
positive sum relationships
(symbiosis) between actors who
work together.!
Once you build an ecosystem, it is
extremely difficult for someone
to disrupt it.!
Examples of powerful ecosystems:!
• Amazon!
• Apple!
• Nespresso!
• Nintendo!
• Microsoft!
- Nathalie Magniez !
Your strategy therefore has to build on the
strengths of your ecosystem partners as well
to strengthen the “platform”!
Diagram attributed to Nathalie Magniez! © 2011, Eugene Chang

44. 6!
© 2011, Eugene Chang
So… are there
ANY LIMITS?

45. Don’t just play the game, it is an invitation to!
Change the Rules.!
“Successful business strategy is about !
actively shaping the game you play, not !
just playing the game you find.”!
- Adam Brandenburger and Barry Nalebuff, !
Authors of Co-opertition!
© 2011, Eugene Chang

46. BOS: Challenge the norms…!
Go where profits and growth are – and where the competition isn’t!
“Blue Ocean
Strategy is the
simultaneous
pursuit of
differentiation
and low cost.”!
Value Innovate!
,$"%"!
:"!
-./01!
Kim and Mauborgne, www.blueoceanstrategy.com! © 2011, Eugene Chang

47. Case Example: Singapore Airlines (SIA) !
Duo-Objective
Strategy!
Singapore Airlines (SIA) successfully
executes a “dual strategy” of offering
premium service and is a cost leader.!
its service is better than rivals’ and its costs
are lower: The airline invests heavily in areas
of the business that touch the customer in
order to enhance its premium positioning.
Everything behind the scenes is subject to
rigorous cost control.!
• SIA fosters both centralized and
decentralized innovation!
• SIA is both a technology leader and
follower!
Executing a Duo Objective Strategy is
difficult and this is what makes it so
valuable. It has so far proved to be a
sustainable advantage for SIA. !
A Tough Balancing Act!
Loizos Heracleous and Jochen Wirtz, Singapore
Airlines’ Balancing Act, HBR July-August 2010! © 2011, Eugene Chang

48. I hope this Presentation has been Useful!
Thank you.
© 2011, Eugene Chang

49. This presentation was put together to summarize some of the work floating “out there” to help others who
are looking for a practical way to go about thinking and communicating strategy. As I myself have
benefitted from the cranium generosity of others, I believe sharing is the best way to learn.
Disclaimers and such: I stumbled upon a great presentation “What is Strategy?” by Marc Sniukas on Slideshare and was
inspired to extend his ideas with some of my own learning. In my research, I also liberally borrowed from the Internet (from
contributors on Wiki to LinkedIn) to supplement the gaps in my own knowledge and experience as a practicing consultant
dealing with the occasional strategy engagement. Where I could, I provided references to acknowledge the source. My
apologies if something here sounds like what you’ve come up with but were not acknowledged for it; we either came up with
the same idea independently, or I screwed up and couldn’t figure out where that thought penetrating my head originated from
– all unintentional. It was a rushed job but it did take some time. Not making any money from this so there are no guarantees
extended !!although I have made every reasonable effort to be as accurate as possible. Feel free to drop me a line on
LinkedIn. Would love to receive feedback or enter a discussion on this topic.
© 2011, Eugene Chang, eugene.chang@alumni.insead.edu Version 1.0., June 2011