Strategy as Strategic
Decision Making, Ch. 4
Presented by:
 Nicholas Kirkwood
 Ching Ling
 Pichamon
Adulavidhaya
 Roar Bjordal
 Vegard Sandberg
Michael Dell’s
Advice to
Entrepreneurs
http://www.youtube.com/watc
h?v=bBsCZpomy24
Strategy as Strategic
Decision making
What is strategy?
Simple but powerful definition from
the “Economist”:
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“Where do you want to go?” and “How
do you want to get there?”
Yet in today’s hotly competitive
markets, these questions are
incomplete
“Competing on the edge”
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A different perspective on strategy
with the following approach:
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Combination of the questions of “where”
and “how” to create a continuing flow of
temporary and shifting competitive
advantages
Stated by successful
CEOs
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“No advantage and no success is
ever permanent. The winners are
those who keep moving”
John Browne, CEO of British
Petroleum
“The only constant in our business is
that everything is changing. We have
to be ahead of the game.”
Michael Dell, CEO of Dell
Cornerstone of effective
strategy
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The ability to make fast, widely
supported, and high-quality strategic
decisions on a frequent basis
Four approaches emerged
from studies/research on
strategy in high-velocity
markets
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Building collective intuition that enhances the
ability of a top-management team to see threats
and opportunities sooner and more accurately
Stimulating quick conflict to improve the quality
of strategic thinking without sacrificing significant
time
Maintaining a disciplined pace that drives the
decision process to a timely conclusion
Defusing political behavior that creates
unproductive conflict and wastes time.
Build collective intuition
Successful executives use their
intuition to make profitable business
decisions
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A recent study shows that 62% of CEOs rate Gut
feelings as being highly influential in their business
decisions
----- 2006, PRWeek/Burson-Marsteller CEO survey
Build collective intuition
The downside of “Gut feeling”
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Anxious people will more than likely
associate all of the bad someone or
something does and totally rule out any
positive feelings they may have because
the “bad” will outweigh the “good” in their
minds.
Build collective intuition
What makes an effective decision maker?
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Use as much as information
Hold regularly scheduled meeting
Rely on extensive, real-time information
Avoid accounting-based information and
predictions
Build collective intuition
Sharing information
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Sharing information at “must attend”
meeting is an essential part of building
collective intuition.
Result in a forum for signaling
collaborative opportunities across business
and shaping the collective strategy.
Build collective intuition
Why “real-time” information” and
“must attend” meeting matter?
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Intense interaction
- Short-term vs. Long-term
- Status quo vs. Change
Develop intuition through experience
Accelerate decision process
Build collective intuition
Intuition Generation
Emotional Intelligence
Using intuition
Stimulate quick conflict
Improve the quality of decision making
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Conflict stimulates innovation
Conflict creates a fuller understanding of
options
Conflict improves decision effectiveness
Effective strategic decision makers
accelerate it
In dynamic markets, conflict is a natural
feature of decision making
Organizational Conflict
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The Good, The Bad & The Ugly
Opportunity
Unpleasant, time-consuming
Need not be destructive
If conflict is identified and is managed
properly, it can actually benefit teams
Managing conflict effectively requires that
all parties understand the nature of
conflict in the workplace.
Source:http://www.work911.com/articles/organization.htm
Method to stimulate
conflict
Assembling diverse team
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Age
Gender
Functional background
Corporate experience
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A high-growth venture in Silicon Valley
Older executives rely on their expertise
Younger executives bring in fresh ideas
Alliance decision
Method to stimulate
conflict
Frame-breaking techniques
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Create alternatives to obvious points of
view
Scenario planning
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a strategic planning method that some
organizations use to make flexible long-term
plans.
Role-plays of competitors
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A multibusiness technology firm
Method to stimulate
conflict
Creating multiple alternatives
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Develop alternatives as quickly as
possible
Team can work with an array of
possibilities simultaneously
The power of multiple alternatives
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Speed up conflict
Provide executives the confidence
Defuse the interpersonal tension
Resolve Conflict, Boost Creativity
Consensus decisions
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At best, conflict provide improved result
At worst, conflict destroy individual
self-esteem, increase tension, decrease
participation and productivity
Company leaders as mediators
Enhance understanding
Develop constructive conflict
Source: HR Magazine
Maintain the pace
Maintain the pace
Less effective strategic decision makers:
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Believe that every strategic decision is unique
Believe that they must decide as quickly as possible
Effective strategic decision makers:
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Maintaining decision pace, not pushing decision speed
Cut off debate at the appropriate moment
Use rules of how long a decision should take
Maintain the pace
Two-step method called:
”Consensus with qualification”
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Bring decision making to a close
Managers conduct the decision process
Choice is made when consensus is
reached
Use voting if consensus does not emerge
Allowing managers to make the decision
Maintain the pace
Decision-making rhythm:
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Help managers plan their progress
Make the progress more predictable
Emphasizes that hitting decision timing is more
critical than achieve consensus
”The worst decision is no decision at all!”
Maintain the pace
Prototyping:
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Encourages managers to take action
Removes the probabilities for procrastination
Keeps the managers focused on the goal
Lowers the barriers to choice and spurs the
managers toward a conclusion
Maintain the pace
Consensus with qualification:
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Maintains the pace
Consensus will still not exist
Resolve a conflict in a way that team members perceive as
equitable
Gives managers a strong voice in decisions
”Consensus is nice, but we have to keep up with the train”
Group Activity
Politicking
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More effective strategic decision makers
take a negative view on politicking.
Politicking:
Involves managers using information to their
own advantage.
 Distorts the information base.
 Leads to poor decision making.
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Defusing Politics
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Creating common goals
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Not homogenous thinking but rather a shared
vision of where they want to be and who their
competition is.
Balanced power structure
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Each key decision maker has an area of
responsibility but in which the leader is the
most powerful decision maker.
Defusing Politics
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Humor
Relieve tension by making business fun.
 Emphasize the rush and excitement of fast
paced markets.
 Puts people in a positive mood and
strengthens the collaborative outlook.
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Less Effective Strategy
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Inward/competitive focus
Lack of teamwork
Dysfunctional power structure