Sebastian Perrier

The bed-rocks of a winning organization:

Mission: announces exactly where you are going; shows direction into profitability. Every decision should be linked to the mission. The mission should be concrete and specific. The mission should be stated by the top management. The mission is the defining moment of the leader.

Values: describe the behaviours that will take you there, to the mission. Values should be stated by everyone in the company. Welcome debate, feel ownership.

Candor: be direct and honest – speak your mind. This is the biggest secret in business – forget about competition when your worst enemy in the way you communicate with one another internally. Gets more people into conversation, generates speed, cuts costs because it eliminates meaningless meetings. Lack of candid is selfish, because it makes your life easier to avoid conflict. Instead, to get candor, reward it, praise it, etc. Complacency can kill you.

Differentiation: companies win when their managers make a clear and meningful distinction between top and bottom performers. Cultivate a culture of strong and weak. Companies suffer when every person is treated equally. Managers have to take hard choises and live with them. 20 – 70 – 10 rule (bottom 10 has to go). For this you need to meassure performance.

Voice and Dignity: let people give the oportunity to speak out their opinion (not necessarily make a decision, but yes to speak out). And always respect people for their work, effort and individuality. GE implemented the Work-Out sessions. A 2 or 3 event days with everybody talking with a facilitator. Managers would commit to give an on-the-spot yer or no to 75% of the recommendations that came out and resolve the remaining 25% within 30 days. Manager will be present only at the beginning of the session and then disappear until the end of the session; returning only at the end to make a decision.

Nevertheless, a company is not a democracy. It is not that every idea should be put into practice; that is the managers role. But with these brain-storm sessions you get better ideas and suggestions. JW Book Quoted: “Why are you only paying your employees for their hands, when you can count on their brains too for free”. They need it and you too.

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We’re all influenced by our mindset, problems and issues. This involves a circle of things we are concerned about in our everyday life. However, there are some things we can influence and others we cannot. We shouldn’t worry about those things we cannot influence, thats the zone of DOOM. You are losing time thinking and being worried about stuff which you can not do anything about.

Therefore, outline what’s your smaller inner circle of things which you can influence and you can work out. That’s your circle of influence. Every person can also do things to change the circles, thus means become more proactive: be part of the solution, not part of the problem.

In this context, some people become “victims”, and they tend to reduce their circle of influence to the minimum, and thus think that he is a victim of other people, and the rest of the people is guilty for his current situation. But remember, every time you point a finger at someone, 3 fingers will be pointing at you!

On the other extreme you can find “owners”; these are people that are very proactive and like to find solutions. He is not a frick control, that’s different thing.

Working with this framework within a team

• everybody understand the concept of circle of influence
• everybody writes in post its the things that are accelerators and breaks in their everyday job
• then the moderator groups all breaks and accelerators in categories and trash the repeated issues
• finally, you will locate each accelerator and break post-it in the circle whether it is something you can influence or not
• summarize with the team the list of things we can not influence and are breaks; so stop spending time and worries on them…!!!

1. MISSION
2. VISION
3. The Environment (PESTEL Analysis)
4. The Industry (Porter 5 Forces Analysis + Supply Chain Analysis)
5. Business Level Strategy (Value Chain Analysis “Recourses and Capabilities” + B-C = Competitive Advantage “cost leader vs differentiation”)
6. Set-up Objectives
7. Develop Financial Projections
8. Establish Action Plan and Risk Assesments
9. Corporate Level Strategy (portfolio diversification + vertical integration (define the scope of the firm) + Geographical strategy “Global vs Multinational’)
10. Innovation

How to set goals

1. Set rules that motivate you
2. Set them in writing
3. Write SMART objectives (specific, meassurable, attainable, relevant and time-bound)
4. Make an action plan
5. Stick to it

Scheduling is a five-step process:

Changing customer tastes, technological advances and competition => Innovate!

It is risky, most new product fail -> should tolerate failures; should be measured in number of successes and lessons learned.

Invention is different from an innovation. Invention is the discovery of new ideas or methods; innovation occurs when an invention is commercialized and brought to market. Innovation is not only about products, also about business models, processes, etc. Many success stories come from doing similar things in different ways; innovation is about finding better ways of meeting customer needs, it does not necessarily require a major breakthrough in technology.

• it is expensive, time-consuming and risky
• requires a corporate culture that promotes innovation (and doesn’t punish it)
• requires support from top management
• requires team-work: specially between the marketing (providing the user perspective) and R&D Department (providing the technical know-how)

Error I – Organizational Chart changes masquerading as Strategic Change

• How has this changed the SWOT – changed strengths or removed weaknesses
• How does the customer benefit from this change
• Who benefits other than consultants

Error II – Buying rather than beating the competition (M&A but must add value)

M&A needs

a) Strategic  purpose

• Enter the right market don’t just go for geographical expansion
• Find the right company in that market, although it is usually not for sale

b) Implementation and Integration

• Identify and evaluate the synergies
• Honestly and candidly access the obstacles and risks

c) Quality of information

• Where do you get better information

Error III – Ill considered “Strategic” Alliances

• Don’t let your partner steal your customers
• Ham and Eggs – Chicken is involved but the pig is committed
• Consider as precursor or courtship to M&A

Error IV – Diversification Craziness

• Not classic portfolio diversification – the conglomerate model
• See Ansoff Opportunity Model
• Good conglomerates are only financial conglomerates (Hanson)

Error V – Imitation rather than Innovation

• Imitation can work to get into a market , e.g. Sony, China but must have exit strategy in place

Error VI – Unwarranted Global Presence

• Expansion for ego or to burn cash

Error VII – Absence of Implementation Capabilities

• Must have the following in place
• Management Structures
• Management processes
• HR
• Culture

Error VIII – Strategic Planning Traps (for further info see this post)

Error IX – Absence of Core Competencies

• CC means world class. “Nobody does it better.”

• Trap A – “Singapore syndrome”

Post WWI – what is our defence strategies for the empire’s choke points. Conclusion “Singapore can only last six weeks.” But assumed the attack was seaborne. Didn’t consider attack from Malay peninsula, where Japanese came . Singapore lasted 48 hours, not 6 weeks.Post WW2 analysis – Strategy assumed 6 weeks to justify the dissolution of the Asian fleet and to “prove” the European fleet could get there in time. E.g. Product price or market expansion figures invented to justify costs.

• Trap B – Allow a plan to gain unstoppable momentum

Head in sand – dogs in street knows it will fail. “A Bridge Too Far” syndrome. Don’t be committed to plan.

• Trap C – Know your Enemy but don’t let them dictate to you

Don’t be distracted by competitors’ strategy. Don’t be distracted by industry noise – especially when ego is in play “we will decide when to leave a market, we will not be forced out.”