Nice example of what looks like a strategically sound business [Lufthansa] pouncing on valuable resources shaken loose when a feeble competitor [Alitalia] stumbles. The Economist reports they will be offering new services to eight other European cities from under-served Milan. (more…)
Central to the principles of strategy dynamics is knowing how quickly resources are being won and lost. This is easy enough for most - you know when you close capacity, hire or lose staff, or discontinue products - but can be surprisingly tricky with customers. You would imagine that banks or telecoms firms, for example, know exactly when a customer is lost because that’s when they close their account - not so! (more…)
My friend and colleague at Strategy Dynamics Solutions points me to this article from HBR which reports work on seeing when a business risks stalling. If we can see the patterns of how this happens, perhaps we can see the signs early next time and avoid it [see latest post on Starbucks] - better still, not get in that position in the first place.
BTW - The article includes the line ‘Senior management at Levi Strauss & Company could be forgiven for not seeing it coming. The year was 1996.’ “It” was a sudden fall in performance after some strong yers, especially a record-breaking result in ‘95. Well - no they can’t be forgiven for it - that’s what they are paid for, and it can be done !
We’ve just added some short videos explaining how strategy dynamics is useful for execs/consultants and educators. Hope you find them helpful.
I’ve fumed about the strategic errors that have got so many firms into the mess in which they now find themselves, but I guess you might like some idea how to get out of a hole? I just gave a short session on one approach to this with a class of 50 senior execs, and was reminded about a project I did to help a company dig itself out of trouble last time round, after the 2001/02 debacle. No guarantees, but this simple article on ‘Strategic Recovery‘ may be helpful - [not to be confused with the other kind of 'recovery' that the accounting firms' insolvency practices are starting to feast on!] . (more…)
I’ve blogged on Starbucks before, but just seen their results for y/e Sep08, with sales up $9.4>10.4bn but profits down $1.1>0.5bn. A pity, but what are they doing about it? (more…)
Working on the 2nd edn of the textbook, I want to link to other things folk may find if they look into this subject, and of course Wikipedia is going to be popular. Shame to find, then, that their entry on strategic management ’needs to be rewritten’ to comply with quality standards. Click on the discussion, and there’s an interesting stream of comment and explanation of why it was withdrawn as a ‘featured’ Wiki article. Amongst this debate I see quite a lot about the problem of abstract and ambiguous concepts that bedevil the field and make it hard to identify anything that could be described as a ‘professional’ perspective.
[ For newcomers to the blog - 'professional' implies that two intelligent people, adequately trained, would tackle the same problem in a recongisably similar way, using similar tools, and arrive at similar conclusions and recommendations - as you'd expect from, say, two doctors, lawyers, engineers or accountants. Of course there will be differences of detail or emphasis, and some really tough issues may challenge even the best professionals in the field. But still, most of the work of strategic management should meet basic standards of professionalism. A partner at McKinsey once boasted to me that 'Our partners are so leading-edge in their thinking that the answer a client gets depends on which partner leads the assignment. I don't think that stance is representative of the firm's view, though. ]
Just working on the first chapter of the textbook 2nd edition, and thought it needed a bit more on this question - found the only way to explain to newbies was to go through an organization’s life and track what ’strategic management’ actually does over that time-horizon. Main messages are:
So - how come the attention in all the textbooks and journals is in precisely the opposite priority? (more…)
I see strategy+business is reporting one effort to deal with this crisis - in the oil industry [The Digital Oilfield Advantage]. Here’s another sector with a tidal wave of professionals rapidly flowing towards retirement - click here for an extract from chapter 6 of Strategic Management Dynamics which discusses where this tidal wave came from [thanks to Prof Mukul Sharma of Uni of Texas for his extensive research on training and employment of petroleum engineers].
Yes ! What a result ! Some years ago UK satellite broadcaster BSkyB [aka 'Sky'] boasted they would capture 10m subscribers by 2010. In 2004, my friend Suresh Mistry thought the number looked odd and worked out the ‘physics’ of what was happening. Here’s what he did [click to download slides and the 2005 model on this - you will need the mystrategy software reader … (more…)
