Strategic Playbook: A Guide to Strategic Contribution

“You Need to be More Strategic” A playbook for being a strategic contributor at your company • • • • • [Insert: mission, vision] [Insert: strategic choices] [Insert: internal external analysis] [Insert: competitive advantage] [Insert: strategic initiatives] • • • • [Insert: organizational design] [Insert: business unit organization] [Insert: communication across units] [Insert: centralized vs decentralized] Structure Strategy Systems Hard S Soft S • • • [Insert: core competencies] [Insert: skill gaps] [Insert: employee training and education] Shared Values • • • • Skills • • • • [Insert: talent required] [Insert: insourced v. outsourced] [Insert: employees v. contractors] [Insert: performance management and hiring] [Insert: tools and technology] [Insert: management processes] [Insert: methods of production] [Insert: service delivery] Style Staff • • • • [Insert: management style] [Insert: team communication] [Insert: working hours] [Insert: attitudes and norms] -Tim Vipond “Playing to Win: How Strategy Really Works” by A.G. Lafley and Roger L. Martin 5 critical strategic choices that need to be considered in a cascading way to move ahead of competitors 1 • What is our winning GOAL? 2 • • Where will we PLAY? 3 What does winning look like to our customers? Who are we competing against? Based on people, not financials • • • How will we WIN? 4 What CAPABILITIES do we need? 5 What SYSTEMS do we need? What geographies will we compete in? What markets? What customer segments? • • • What is our strategy going to be? i.e. cost vs differentiation focus What is our competitive advantage? • • • What skills do we need on our team? What capabilities do we need? What is our people plan? • • • What processes do we need? What structures? What rules? https://hbr.org/books/playing-to-win Financial Perspective Create Enterprise Value Capital Efficiency Revenue Growth Margin Expansion Customer Perspective Price Quality Offering Brand Internal Perspective Production Marketing & Distribution Speed Cost Efficiency Reach Conversion Optimization Learning & Growth Culture Leadership Learning Creativity -Tim Vipond “The pillars build sequentially on one another, creating an integrated and transparent framework” Mission Purpose Why we exist Values What matters to us Vision What do we want to be Strategic Intent How we will get there Strategy Drivers What we focus on Enablers What frameworks, skills, people we need Targets & Initiatives What we need to achieve Execution KPIs What performance indicators we need to measure Strategy Map How we test and communicate the strategy The Strategy Pyramid was originally designed by Wendy McGuinness and the McGuinness Institute. -Tim Vipond Tim Vipond Top-Down Communication aka The Pyramid Principle Lead with your answer, recommendation, or key takeaway Support your answer or main point with key insights / arguments Main Insight or Recommendation Supporting Argument Supporting Argument Supporting Argument Supporting Data and Facts Backup your supporting arguments with data and facts The McKinsey Pyramid Principle is a structured communication framework that presents the main conclusion first, followed by key supporting arguments and detailed evidence. This top-down approach ensures clarity, logical flow, and efficiency, making it easier for decision-makers to quickly grasp and act on key insights. A Purpose & Vision Must-Win Battle Must-Win Battle Must-Win Battle B Strategic Initiative Strategic Initiative Strategic Initiative Strategic Initiative C D Enablers Foundational Support – Team, Culture, etc E A – What is our reason for being and where do we want to be in 10 years? B – Strategic choices and where we want to play and do vs not do C – Specific initiatives that help us win our battles and achieve our vision D – Capabilities we need to have in place to accomplish our strategic initiatives E – The foundation of team and culture etc. we need to support everything -Tim Vipond “What do our investors think of us?” Financial ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ Capital Expenditures Cash Flow Assets Liabilities “What do our customers think of us?” Customer ❑ ❑ ❑ Customer Satisfaction ❑ Net Promotor Score (NPS) ❑ Testimonials ❑ Refund Rate Market Share Brand Recognition “What do we need to be good at?” Process ❑ ❑ ❑ ❑ Innovation Revenue and Growth Expenses Margins Profits Inventory Orders Production Rate Resources Allocation ❑ ❑ ❑ ❑ Quality Control Supply Chain Management Procurement Sales, Marketing “How do we improve and perform better?” ❑ ❑ ❑ Employee Satisfaction ❑ Employee Retention ❑ New Product Development ❑ The Balanced Scorecard was first introduced by Robert Kaplan David Norton in a 1992 Harvard Business Review article. Process Improvement Use of Technology Education and Training -Tim Vipond High market demand, little competition, etc Size of bubble indicates revenue opportunity Moonshots High DO Project I OPPORTUNITY A C E F H D B G DON’T MAYBE Low Low Low market demand, lots of competition, etc High CAPABILITY Low internal capability and resources to execute High internal capability and resources to execute -Tim Vipond Strengths Weaknesses Internal; things good at Internal; things bad at Opportunities Threats External; thing to pursue External; things to defend against Internal External Purpose: To evaluate internal factors (strengths and weaknesses) and external factors (opportunities and threats) that impact the business -Tim Vipond Strategic projects and initiatives to meet the annual objectives KPIs and targets to track progress Annual objectives towards the long-term goals Who is responsible for what 3-5 Year Goals Use the dots to connect each goal, objective, priority, and KPI -Tim Vipond Step Review prior year and confirm current year process and strategic direction Set Corporate Strategy and set Targets Conduct strategic analysis – internal and external Review last year’s performance and lessons learned Deliverable Confirm steps and timing for the upcoming year’s strategic process Starting dialogues among business leaders Complete strategic frameworks and models Evaluate internal strengths and weaknesses Competitive and industry analysis Q4 Q3 Q2 Q1 Annual Budget Develop Department or Business Unit Level Strategies Debate strategic alternatives and tradeoffs Financial modeling of different scenarios Deliver the strategic plan to the Board Discussions between corporate and business units Business units create plans that map to corporate plan Iterate and align plans Communicat e and Implement the Strategy Create and finalize the corporate budget Create and finalize department / business unit budgets Evaluate staffing levels Establish KPIs All-company communicat ion on strategy sent out Dashboards and reporting for KPIs setup KPIs or OKRs companywi de -Tim Vipond -Tim Vipond Catastrophic Threatening company’s existence 5 Severe Significant damage to business 4 Material Meaningful impact to the business 3 Moderate Some impact to the business 2 Minor Minimal impact to the business 1 A D B J C I E H G F 1 2 3 4 5 Remote <10% Low 10-20% Medium 20-50% High 50-80% Extreme >80% Mitigation High – Regular action to address risk Medium – Occasional action to address risk Low – Little/no action to address risk Legend A – [Risk Name] F – [Risk Name] B – [Risk Name] G – [Risk Name] C – [Risk Name] H – [Risk Name] D – [Risk Name] I – [Risk Name] E – [Risk Name] J – [Risk Name] -Tim Vipond Diversification New Business Creation CORE Value Maximization Market Expansion Existing New Product/Service New Existing Industry/Market -Tim Vipond Assess Growth Capabilities Rank opportunities based on probability of smooth execution (not by business attractiveness) CAPABILITY READINESS Chances of successful execution GROWTH READINESS STAKEHOLDER READINESS RISK READINESS Proof of strong buy-in from key parties Ability to mitigate risks Determine Risk Advantage Determine Risk Advantage Anticipate and address hidden resistance to new investment priorities. Rank opportunities based on ability to mitigate risks (not by highlighting known risks) ANALYSIS Activities Inputs Outputs Team DESIGN PLAN APPROVE EXECUTE Conduct strategy workshops to define key goals and set targets. Develop plans, allocate resources, prioritize initiatives, and set budgets. Present strategies and budgets to top management, the CEO, and the Board for final approval. Execute approved strategies and provide regular feedback to the Board. Research, screening, benchmarking, and industry data. Fact-based research, strategic policies, and expert forums. Strategic goals and planning guidelines from the previous phase. Detailed strategic plans, budgets, and implementatio n frameworks. Approved strategies, budgets, and implementatio n plans. A comprehensive board deck and financial models summarizing key findings. Defined strategic aspirations, objectives, and guidelines for planning. A structured implementatio n strategy and finalized budgets. Finalized strategy and budget approvals. Reports on performance and corrective measures, if needed. The office of the CEO with support from finance, corporate development, and strategy Office of CEO, along with corporate consultants and top leadership. Office of CEO, consultants in collaboration with senior executives. Board members, executives, and CEO, supported by corporate strategy teams. Office of CEO, overseeing execution, supported by top executives. External Assess macroenvironmental trends, industry fundamentals, and stakeholder analysis Internal Conduct internal performance evaluations. Portfolio reviews and financial modeling. -Tim Vipond “Change” the “Run” the Business Business Approach Approach ❖ New vision ❖ Simplified, lower risk ❖ Continual strategy ❖ Based on existing vision development ❖ Trade-offs and strategy Timing driven by ❖ Existing processes strategic issues, not by a ❖ Timing is calendar driven calendar ❖ Set trajectory ❖ New capabilities required ❖ Incremental ❖ Use of strategy development frameworks improvements ❖ Operational efficiency Deliverables Deliverables ❖ Updated annual plan ❖ Strategic insights ❖ 5-year forecast financials ❖ Strategic plan ❖ Capabilities build up -Tim Vipond Market Share Low growth, high market share High growth, high market share Low growth, low market share High growth, low market share Growth Purpose: To evaluate the comparative strength of different products or business units -Tim Vipond Capitalizing on well known tactics in an established market Red Ocean: ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ Proven/existing demand High competition Focus on outperformance Existing and observable strategies can easily be adopted Focus on marginal improvement Lower risk (market exists) Focus on market share Competitive pricing Present and short term oriented Innovating to create a new market with little to no competition Blue Ocean: ❑ Speculative/unknown demand ❑ No competition (yet) ❑ Focus on innovation ❑ Develop new products and services ❑ Creating and capturing new value for customers ❑ Focus on R&D ❑ High risk / high reward ❑ Future and growth oriented Red Ocean and Blue Ocean were introduced by W. Chan Kim and Renée Mauborgne professors at INSEAD in 2005. -Tim Vipond Industry Attractiveness Maintain Grow Grow Harvest Maintain Grow Harvest Harvest Maintain Competitive Strength Purpose: To rank and evaluate investments in different business units, products or markets -Tim Vipond Existing 1 Customers 2 New Customers 3 New Products/Services HOW TO USE ✓ Identify where your business currently stands to determine which degrees of freedom you should focus on first ✓ Analyze the market to determine which growth opportunities are available ✓ Prioritize your initiatives by potential impact, risk, etc ✓ Develop an action plan including steps, timelines, and metrics for measuring success 4 New Value Delivery Approaches 5 New Markets & Geographies NOTE: The seven degrees of freedom are not mutually exclusive, and companies can use most of them to achieve growth. 6 Partnerships, Mergers & Acquisitions 7 New Competitive Arenas and Industries -Tim Vipond Threat of New Entrants Bargaining Power of Suppliers Industry Competition Bargaining Power of Customers Threat of Substitutes Purpose: To analyze performance gaps and look at where you are currently vs where you want to go -Tim Vipond Where will we be active? - Product categories - Geographies - Market segments - Channels What’s our sequence of moves? - Speed of development - Order of strategies - Sequencing Arenas Staging Economic Logic Differentiators How will we generate economic returns? - Low cost: scale and efficiency - Premium price: product features Vehicles How will we get there? - Internal development - Acquisitions - Partnerships - License/franchise How will we win? - Price - Brand - Performance - Speed to market Source: Adapted from Donald C. Hambrick and James W. Fredrickson, “Are You Sure You Have a Strategy?,” Academy of Management Executive 19, no. 4 (2005): 51–62. -Tim Vipond Size of bubble indicates revenue/earnings opportunity Very Familiar / Lowest Risk Project A Familiar Unfamiliar Level of Familiarity/Risk C F I H D B J G E Uncertain K L Time Horizon Least Familiar / Highest Risk Short Term Medium Term Long Term 5+ years 0-1 Years -Tim Vipond The “Ecosystem Economy” Example: How Apple’s ecosystem keeps customers locked in “A complex connected community of interacting digital/physical goods & services” Unique products and services that historically would have been in segmented industries Physical Devices: iPhone, Mac, iPad, Apple Watch, AirPods Health & Wellness: Apple Watch, Fitness+, Health app Effortless control and mastery over one’s digital life Entertainment: Apple Music, Apple TV+, Apple Arcade, iCloud, and Apple Pay Software Platform: iOS “The Ecosystem Economy: How to Lead in the New Age of Sectors Without Borders” by Venkat Atluri and Miklós Dietz Productivity & Communication: iMessage, email, calendar, phone, contacts External Products & Service: Apple App Store Customer Need is at the center of the ecosystem Tim Vipond V Valuable No Competitive Disadvantage Yes R Rare Competitive Parity No Yes I Inimitable Temporary Competitive Advantage No Yes O Organized No Unexploited Competitive Advantage Yes Sustained Competitive Advantage -Tim Vipond Framework developed by Jay Barney in 1991. Core Competencies Make outsourcing, divestment and partnering decisions Unify the company and enhance knowledge sharing across teams. Create a competitive position and strategies that leverage strengths Decide where to allocate resources WHY Core Competencies HOW Pursue alliances, acquisitions and licensing strengthen core areas Isolate key abilities and hone them into organizationwide strengths Benchmark against peers to build skills to make unique capabilities Core Competencies Criteria 1. Provide unique customer benefits 2. Be difficult to imitate 3. Enable market access Create an organizational roadmap that sets goals for competence building Tim Vipond Hypothesis Development Objective/Goal Driver Driver Strategy Formation Strategy Recomme ndation Recomme ndation Hypotheses Findings Questions Facts Gather Data Complete Analysis Top-Down Hypothesis Development: 1. Start with an objective i.e. Increase revenue 50% 2. Identify key driers i.e. Price, volume, product mix 3. Generate hypotheses i.e. If we add more features, our customers will be willing to pay more 4. List key questions to ask i.e. What features will our customers be willing to pay for? 5. Gather data i.e. Conduct customer interviews and industry analysis Bottom-Up Strategy Formation: 1. Complete analysis of data gathered i.e. Charts, graphs, frameworks 2. Identify facts i.e. Competitor x is charging $y for z feature 3. Generate findings i.e. It looks like customers are willing to pay for z 4. Create recommendations i.e. We should build feature z 5. Strategy formation i.e. Our strategy is to take both market share and wallet share by build features x, y and z, increase prices q% and increase volume r% -Tim Vipond Bain Operating Model Bridge Strategy Execution Bridge Operating Model • Mission, Vision, Values • Planning calendar • Where to play, how to • Roadmap win • Specific strategy Structure Accountabilties • Sources of growth • Customer needs behaviours • Performance elements: • Drivers of value • Reinforce key management and Governanc e Ways of Working feedback loops • Mitigate risks • Capabilities • Strategic initiatives • Market position Capabilities • Goals and KPIs Source: Bain & Company Tim Vipond 6 Pillar CEO Scorecard 1 2 3 6 5 4 Source: McKinsey 1. Vision, strategy, resource allocation 4. Composition, teamwork, rhythm 2. Relationships, capabilities, meetings 5. Purpose, interactions, crisis mgmt 3. Culture, org design, talent mgmt 6. Time/energy, leadership, perspective Tim Vipond Strategy 101 COMPETITIVE ADVANTAGE Unique strengths and capabilities that enable an organization to outperform its competitors EXECUTION Tangible actions and results, clear communication, resource allocation, and ongoing monitoring to achieve goals VISIONING Visioning sets the highlevel direction for the business. Defining the vision, mission, and corporate values GOALS Goals help specify what must be done to attain an organization's mission or vision STRATEGY IMPLEMENTATION A roadmap for executing the strategy. It outlines the specific steps necessary STRATEGIC ANALYSIS Examine, understand, codify internal & external forces that affect the business & goals STRATEGY FORMATION Deciding the best course of action to achieve goals and objectives. STRATEGIC PLANNING Define future direction and makes decisions such as resource allocation to achieve goals. Tim Vipond

Strategic Playbook: A Guide to Strategic Contribution

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