Southern Utah’s
Economic Summit 2016
What’s Up Down South
With Strategy & Organization Design
Thursday, January 14, 2016
@The Dixie Convention Center
Paul Gustavson
“Organizations are perfectly
designed to get the results
they are getting.”
What's Up Down
South / OPD
2
What is Strategy?
Strategy is about creating a sustainable
competitive advantage.
Sustainable advantage occurs only when you do
different activities than your competitors, or when
you do the same activities differently in order to
create value.
Operational excellence (doing the same thing the
same way as competitors) is not strategy.
What's Up Down South / OPD
From “What is Strategy?” HBR
3 Nov-Dec 1996
By Michael Porter
Strategy Principles
• There are more opportunities than
there are resources
• Hence, focused resources are more
successful at creating value and
capitalizing on opportunities than
unfocused resources
• If you don’t know what to say no to
and what tradeoffs you have chosen,
then you don’t have a strategy
What's Up Down South / OPD
4
Market Place Positioning
(Being Clear on your Space - What you say yes to & no to)
Channel Options
• Product Positioning
(Variety-based positioning)
The breadth and depth of
product/service offering
Audience Options
What's Up Down South / OPD
5
Steve Jobs 1998
6
Market Place Positioning
(Being Clear on your Space - What you say yes to & no to)
Channel Options
• Product Positioning
(Variety-based positioning)
The breadth and depth of
product/service offering
• Audience Positioning
(Needs-based positioning)
The breadth and depth of
customer groupings
Audience Options
What's Up Down South / OPD
7
Burger King
Market Place Positioning
(Being Clear on your Space - What you say yes to & no to)
Channel Options
• Product Positioning
(Variety-based positioning)
The breadth and depth of
product/service offering
• Audience Positioning
(Needs-based positioning)
The breadth and depth of
customer groupings
• Channel Positioning
(Access-based positioning)
The variety and type of
distribution channels
What's Up Down South / OPD
Audience Options
9
Amazon Prime
10
Southwest Airlines
Long-haul
Short-haul
Unique
Activities
Unique
Activities
What's Up Down South / OPD
Secondary
Airports
Primary
Airports
11
Unique Activities
• Performing different
activities than rivals
Unique Activities
Channel Options
- or –
similar activities in
different ways
is the essence of
strategy
• Performing similar
activities better is not
strategy
Audience Options
Strategy rests on unique activities
What's Up Down South / OPD
12
Southwest's Secret Sauce
One Plane Fits All
Boeing 737—Saves millions in
maintenance costs
Point-to-Point Flying
Minimizes time in crowded hubs:
on-time performance is >10% higher
Simple In-flight Service
No assigned seats, no meals.
20 min turnaround vs. 90 minutes=one
more flight per day
No Frills, No Fees
Simple fare structure, no fees, no
surcharges, no perks. Easy to manage
and understand—saves $$.
Strong Management
Top execs generate 10 times more
revenue per dollar of compensation
A Relatively Happy
Workforce
30 percent fewer employees
per aircraft;
lowest non-fuel cost per available seat
Aggressive Fuel Hedging
Saved $3.5 billion since 1999
13
What's Up Down South / OPD
What is your Market Place
Positioning & Uniqueness?
Unique Activities
Product
Options
Channel
Options
Audience Options
What's Up Down South / OPD
14
What is the Work?
Job to be Done
“What is the work of the
customer?”
“What job are they hiring
for?”
Clayton Christiansen
16
What's Up Down South / OPD
Crayola Doodle Magic
17
All Businesses have Core Processes
Strategy
Development
• Strategic Intent
• Strategic Means
• Strategic
Initiatives
• Performance
Monitoring &
Resource
Allocation
New Product
Development
• Target customer
research
• Product
Definition &
Feasibility
• Product
Development
• Implementation/L
aunch
• Measure &
Maintain
What's Up Down South / OPD
Demand Creation
Order Fulfillment
• Company Brand
Awareness
• Specific Product
Awareness
• Enroll / Trial
• Duplicate /
Repurchase
• Leadership /
Loyalty
• Demand
Forecast & Plan
• Purchasing
/Sourcing
• Manufacturing
• Delivery
18
All Businesses also have Enabling Processes
Finance
HR
IT
• Transaction
Recording
• Close & Reporting
• Commission
• Cash
Management
• Tax
• Forecasting
• Financial Plan
• Financial & Risk
Analysis
• Workforce
Planning & Talent
Acquisition
• Performance
Management &
Rewards System
• Building Individual
Capability
• Building
Organizational
Capability
• Employee
Engagement
• Benefits/Payroll
Administration
• Software/Solution
Development
• Service Delivery
What's Up Down South / OPD
19
Work Categorization
Not All Work is Created Equal
• Competitive: Work that creates sustainable competitive
advantage and
distinctiveness.
• Competitive Enabling: Work that leverages competitive
work. It directly enables the competitive process.
• Business Essential: Work that must be done; essential to the
organization.
• Compliance: Work that is done to manage legal risk to the
organization.
• Non-Essential: Work that no longer adds value to the
organization and should be eliminated.
What's Up Down South / OPD
20
Patient Hospital Experience
What's Up Down South / OPD
Knowledge is the Purest Source of
Competitive Advantage
Knowledge Capability &
the Power of Diffusion
Knowledge Capability = D x D
Discovery Diffusion
(1-10) (1-10)
14 = 7 x 2
(14%) 16 = 8 x 2
(50%) 21 = 7 x 3
(250%) 49 = 7 x 7
23
A GOLFER’S PERFORMANCE MODEL
Fairways in Regulation
What's Up Down South / OPD
Greens on Regulation
< Two Putts Per Hole
24
A Swing of Beauty
25
Gallup Employee Engagement - 2013
Report
Actively
Disengaged
18%
Engaged
30%
Disengaged
52%
Disengaged employees cost the U.S. up to
$550 billion annually in lost productivity
What's Up Down South / OPD
New Model of Work
•
•
•
•
•
•
Leadership is shared
Knowledge shared
Team does planning
and accountability
Everyone is highly
engaged, involved and
motivated
Leader allowed to do
higher level work
Much better results
What's Up Down South / OPD
Stage 1 Team
Primarily one on one interaction between the Leader and each team member
What's Up Down South / OPD
Stage 2 Team
Leader led with some interaction between team members
What's Up Down South / OPD
Stage 3 Team
Leadership
Leadership begins to be shared by some team members stepping up
What's Up Down South / OPD
Stage 4 Team
*Anyone in the line can move to the center
Leadership*
Most of the team members are providing leadership on key team activities
What's Up Down South / OPD
Stage 5 Team
*Anyone in the line can move to the center
Leadership*
All team members are stepping up another level in shared leadership
What's Up Down South / OPD
Five Stages Of Team
Development
Stage 1: Primarily one on one interaction between the
Leader and each team member
Stage I
Stage II
Stage III
Stage IV
Stage V
Primarily one on one
interaction between the leader
and each team member.
Leader led with interaction
between team members.
Leadership begins to be
shared where some team
members are stepping up and
providing leadership to key
team processes and activities
while engaging other team
member participation.
Leadership is shared where
most of the team members are
stepping up and providing
leadership on key team
processes and activities while
engaging other team member
participation.
The Team Leader plays an
important coaching role to
assist individual team
members to step up into
leadership roles.
The Team Leader plays an
important coaching role to
take the team to the next level
but has time to step up to do
higher level work.
Leadership is shared, all team
members are stepping up
another level in leadership of
processes and activities,
setting and attaining
challenging performance
targets, benchmarking and
establishing best practices
and leading and contributing
to other teams.
Stage 2: Leader led with some interaction between team
members
Stage 3: Leadership begins to be shared where some
The Team Leader’s time is
freed up to step up to do
higher level work outside the
team but is still available to the
team for counsel.
team members are stepping up and provide leadership
Stage 4: Leadership is shared where most of the team
members are stepping up and providing leadership
Stage 5: Leadership is shared, all team members are
stepping up another level in leadership
What's Up Down South / OPD
Team Assessment Activity
1.
2.
3.
What stage are we at now?
What stage would we like to be at?
How might we make that change?
1
Team Staff Meetings
Developing Team Metrics
Developing Team Budgets
Leading Team Initiatives
Developing Team
Roadmaps
Developing Performance
Models
Developing Talent Review
Plans
Evaluating Team Projects
2
3
4
5
GE World Class Example
GE Aircraft Engine Plant in
Durham, North Carolina
• One Plant Leader
• 300 Employees
• 16 Self-directed Teams
of Leaders
• Build Jet Engines
• Plant Expanding
• World Class
Performance
What’s Up Down South with
Strategy & Organization Design
•
•
•
•
Stage 5 Team
•
*Anyone in the line can move to the center
Leadership*
•
All team members are stepping up another level in shared leadership
OPD – Five Stage Team Development Model
Perfectly Designed to get
the Results …
Market Place Positioning &
Uniqueness
What’s the job being Hired
for
Not all Work is Created
Equal
Knowledge is the Purest
Source of Competitive
Advantage
Team of leaders
For further information:
www.organizationdesign.com
www.ateamofleaders.com
https://www.facebook.com/ateamofleaders
@paul_gustavson
pgustavson@organizationdesign.com
Thank you for attending!