Strategic Thinking - how can we ensure we spend more time at it, in order to improve our Vision and Execution

2. Agenda
• Introductions
– Who we are, what we do, why we are different
• PCP Management to …..
• Strategic Thinking
• Greg Bateman – Strategic CFO
• Morning Tea 10.30am
• On-Line Marketing
• 2013 for your company

3. From PCP Management to …….

10. Strategic Thinking
• Some “thoughts”
• What is it?
• How important is it?
• Are we doing enough of
it?
• How can we do more of
it?

11. A Short Test
How Different are you Thinking
(or how strategic are you thinking)

12. Thinking Style
Inspired
Seeking
Insights
Adaptive
Forming
Concepts
Decisive
Testing
Hypothesis
Considered
Confirming
Facts
Means of Data Capture SequentialRandom
MeansofCategorisingData
Reasoned
IntuitiveSay XYZ just happened……
Lets try DEF or SDP
or LAD…..
XYZ appears to be
like ABC. They are
related to DEF
If we do ABC it will
confirm what we
think has
happened
How are we sure
about what caused
XYZ to happen?

13. Conventional Wisdom
• The biggest problem in business
today?
• Execution is the missing 98% for
success in business (Tom Peters)
• Strategy is very straightforward.
You pick a general direction and
implement like hell (Jack Welch)
• Building a great company
requires 1% vision and 99%
alignment (Jim Collins)
• Software Applications for
Strategy Execution
• Execution is the KEY!

14. Henry Mintzberg
• Born Montreal 1932
• Currently Professor of
Management Studies at McGill
University, Montreal
• 150 articles and 15 books on
Strategy
• A Global leader in Strategic
Management and Strategic
Thought
• His modus operandi = assume
nothing, question the
unquestionable
• He has been described as a
“difficult academic” – because
he is so practical!!

15. Mintzberg – 1994
“The Rise and Fall of Strategic Planning”
• Strategic Planning is not working in many
organisations. Why? Because Strategic Planning is
NOT Strategic Thinking
• Strategic Planning often spoils Strategic Thinking
• The most successful strategies are visions, not plans
• Strategic Planning is often simply the articulation and
elaboration of strategies or visions that already exist
• Strategic Thinking is what the Strategy-making process
should be – capturing what the manager learns from
ALL sources, and then synthesising that learning into a
vision of the direction that the business should pursue.
It involves intuition and creativity

16. Some Research
• Wall Street Journal
(2011)
– Identified the Top 5
executive skills sought
by organisations:
1. Strategic Thinking
2. Ability to work across
Functions
3. Ability to drive results
4. General Leadership
5. Core Financial
understanding

17. More Research
• Carroll & Mui (2008)
– Studied 750 bankruptcies
of companies with at least
$500m in assets in the last
quarter before bankruptcy
– from 1981 to 2005
– Number 1 cause of
bankruptcy in almost 50%
of the cases was bad
strategy
– In most instances the
avoidable situations
resulted from poor initial
strategies and not
incompetent execution

18. …..and more
• Kaplan and Norton (HBR 2005)
– “85% of executive leadership
teams spend less than 1 hour
per month discussing
strategy, with 50% spending
no time at all
• Bruch (HBR 2002)
– 90% of managers squander
their time in all sorts of
ineffective activities
• Mankins (HBR 2004)
– 80% of top managements
time is devoted to issues that
account for less than 20% of a
company’s long term value

19. Views from the “Thought Leaders”
• Michael Porter:
“There are no substitutes for Strategic Thinking.
Improving quality is meaningless without knowing
what kind of quality is relevant in competitive terms”
• Brian Tracy:
“The ability to think and plan for the future is the most
important single skill of effective executives”
• Clayton Christensen:
“Although companies find it difficult to change
strategy for many reasons, one stands out: strategic
thinking is not a core managerial competence in most
organisations
• Peter Drucker:
“The major problem with business today (1963!) is the
confusion between effectiveness and efficiency that
stands between doing the right things and doing
things right. There is surely nothing quite so useless
as doing with great efficiency what should not be done
at all”

20. Some Definitions
• Define Strategy
• Define Strategic Thinking
• “The generation and application of business
insights on a continual basis to achieve
competitive advantage”
• Define Strategic Planning

21. Insight
• Insight is at the heart of strategic thinking
• It is the difference between taking an incremental
business-as-usual approach and pursuing game
changing initiatives that separate winners from losers
• If our business is a Ferrari, then strategy is the steering
wheel and insights are the key to the ignition
• Insights are the “bridge” between experience and
expertise
• Insight is the product of two or more bits of
information that are combined in a unique way

22. An example
• Telecom
– Started life as NZ Post Office in 1856
– Telecom was formed in 1987 and privatised in 1990
– Loads of experience (131 years) but how much expertise?
– 2004 – won the prestigious “Roger Award” for the Worst Trans
National corporation operating in New Zealand
• Vodafone NZ
– Formed in 1998 with Bell South’s 138,000 customers (28% market
share, Telecom 62%)
– By December 2003 Telecoms share had decreased to 50%, Vodafone’s
share increased to 40% (of a much larger market)
– Think about the experience versus expertise balance
– By 2011 (prior to Vodafone’s purchase of Telstra) – Vodafone had 48%
and Telecom 37%

23. Insight
Insights are the “bridge” between experience
and expertise, and strategic thinking is how we
build that bridge of insights every day we are in
business

24. Nobel Prize-winning German
Economist Reinhard Selton
“I run business decision-making
experiments both with experienced
managers and with university
students. Overall, the students do
much better. Its always the same
story – people are guided by little-
understood experience and make
the wrong generalisations. Less
experience can be advantageous
when it forces you to think harder”

25. The Four Types of Strategic Thinkers
Beach Bum
Snorkeler
Scuba Diver
Free Diver
ImpactofInsights
FrequencyofInsights
Low Low
High
High
High

26. Why?
• Strategic Thinking, and the actions taken to
follow through on it, requires an appetite for
RISK
• Most managers (67%) would rather play it safe
• Because in most organisation sins of
commission – taking a risk and failing – are
punished much more harshly than sins of
omission – not taking a risk and missing out
on a great opportunity

27. 6 Habits of True Strategic Thinkers
• Anticipate
– Look for game changing information at the edges
– Build wide external networks – scan the horizon
• Think Critically
– Question everything – especially conventional wisdom
• Interpret – seek patterns
• DECIDE!!
• Align - a measure of alignment?
• Learn
– Debrief
– Emergent
– Celebrate

28. Some Thought
• Consider your daily activities. How often do you
have the opportunity to come up with insights
that change the course of your work?
• What level of effect do these insights have on
your business?
• What type of strategic thinker are you?
• What about your colleagues?
• With reference to the 6 habits of strategic
thinkers, write down 3 things you will do in the
next week that will “improve” your strategic
thinking