Coursera – Strategy Implementation

class

The class explains the process and pitfalls of implementing any strategy in the organization.  Links to additional materials were particularly enlightening.

  • Around 70% of change initiatives do not deliver expected results
  • On average, acquisitions of public firms result in 5.9% losses in value

Balance Scorecard dimensions

  • Customer (Time, quality, performance, cost)
  • Internal business processes (Delivery time, time to new product introduction etc.)
  • Learning (Employee skills, data)
  • Financial (Cost reduction, revenue increase)

(example)

scorecard

Different types of organizational structure (divisional, matrix, etc.) can be beneficial for some strategies and not others.

Ambidexterity
Organization’s ability to simultaneously pursue efficiency in current operations and be adaptive to changes in the environment.

Excellent HBR article explains ambidexterity.

ambidextrous-organization

Interesting insight on the concept of “resistance to change” – technically, there is no “resistance to change” as a monolithic concept – there is resistance to negative consequences of an initiative, and they need to be addressed as specific problems rather than a problem of “change.”

If the anticipated change will result in the loss of status by some employees, then the field must research and develop strategies for dealing with the loss of status. Likewise, if the change will result in the loss of jobs, that issue must be dealt with. Labeling these difficult problems as resistance to change only impedes the change effort.

Interesting (as I read before): strong culture is not helpful for innovation, as it prevents the organization from challenging established conventions.

Netflis Culture presentation – very distinct approach, which makes sense

 

Interesting perspective on the informal networks of the organization, which can solve non-standard problems for which formal infrastructure may not be sufficient.

If the formal organization is the skeleton of a company, the informal is the central nervous system driving the collective thought processes, actions, and reactions of its business units. Designed to facilitate standard modes of production, the formal organization is set up to handle easily anticipated problems. But when unexpected problems arise, the informal organization kicks in. Its complex webs of social ties form every time colleagues communicate and solidify over time into surprisingly stable networks. Highly adaptive, informal networks move diagonally and elliptically, skipping entire functions to get work done.  HBR

Advertisements

Book – Brain and Culture

brain-and-cultureThis book was recommended in one of international management texts, and it does give an excellent understanding of the biological origin of humans’ cultural perceptions.  We are “excused” from not seeing intricacies of another culture as a kitten, who was raised to look at light moving left to right has less capability seeing light moving right to left.  This is a part of human condition we need to consider in business and politics.

An interesting point of the book: a person’s internal perception of the world is less flexible after puberty, and the person would be trying to “adjust” the outside world to be consistent with this internal perception.  The dissonance is uncomfortable.

Familiarity with a particular object or pattern results in a feeling that the person “likes” the object or pattern more than other similar ones.  An experiment exposing students to words written in an unknown language showed that even if the students could not tell if they have seen this particular word before, they were generally accurate stating that they “liked” the previously seen words better than the words to which they were not exposed.

When faced with representatives of different cultures, people tend to “perceive the different human beings in a way that is consistent with fundamental beliefs of the perceiver, rather than changing those established beliefs.  In many cases, however, the foreign culture is too broadly different to be accommodated by such efforts…  …then the effort becomes elimination of the offending perception.

Book – Losing the Signal

BBThe book gives an insightful overview of BlackBerry history, beginning of RIM, successes and struggles of the company, stories of its founders, and shifts in the industry.

It was interesting to trace the spectacular success of BlackBerry as an initially single-use device that solved a very clear problem, and RIM’s reaction on advent of iPhone and eventually iPad. As iPhone was revealed, Google stopped its plans in development of a competing device and turned to licensing of its operating system.  RIM tried to create the device, and did not succeed.

The most insightful (from my perspective), was a strategy RIM used to introduce BlackBerry to the enterprise.  The company realized that CIOs would not be very enthusiastic to introduce another device they needed to support, and would require a year of research to consider the new office tool acceptable.  However, CIOs would not object if CEO would want to device.  RIM targeted CEOs and provided devices to their immediate circle first.  As BlackBerry did not make sense without connection to company’s email, RIM created a free software that allowed connection of the device without IT support (and knowledge).  This approach educated executive about a new tool, “BlackBerry addicted” executives wanted the same level of accessibility for their staff, and cautious CIOs had to support the new trend.

Coursera – Strategy Formulation

marcus

The course concentrates on the variety of aspects that need to be taken into consideration during the process of strategy formulation.

Industry Analysis one of the consideration – the concept of “attractiveness” of a specific industry was interesting.  My guess, it can also apply to a supplier company looking for a “beach head” as a specialist in a specific industry – the industry needs to be selected carefully to assure that it has the resources for the offered product.

industry

A very interesting point on off-shoring was discussed with a Lego case study.  Lego outsourced its operations to lower-cost location at one point, and then, reversed its decision.  Though the decision made sense at the time when it was made, the additional knowledge gained by the company with the experience of outsourcing suggested that it was not a good approach for Lego.

A rather eye-opening article The Hidden Costs of Offshore Outsourcing gives an excellent overview of additional costs that need to be considered.

  • The cost of selecting a vendor
  • The cost of transition
  • The cost of layoffs
  • biasesThe cultural cost

On average, IT organizations going offshore will experience a 20 percent decline in application development efficiency during the first two years of a contract as a result of such differences… lags in productivity can add as much as 20 percent in additional costs to the offshore contract.

Bottom line: Expect to spend an extra 3 percent to 27 percent on productivity lags.

  • The cost of ramping up
  • The cost of managing an offshore contract

A nice link from the course materials to an infographic of 20 cognitive biases with cute images and examples worth saving for…  future decisions of any kind 🙂

As all strategic decisions are made by boundedly rational humans in the situation of incomplete information, the image from the course below describes the situation perfectly.  The good news?  Everybody experiencing the same problem 🙂

wave

BMA – Data Insights for Marketers

bookYes, it was a very insightful event, and Theresa Kushner is an incredibly engaging presenter.  Who said that “data” was a “dry” field?  🙂   We even discussed “data lake” – what was a new concept (for me).

I already bought the book B2B Data-Driven Marketing and looking forward to read it when it arrives.

Though I came to the event with the hope to learn how to find a way to the “data nirvana” every marketer craves, the main “aha” moment was the definition of the “data nirvana.”  Theresa emphasized several times during her presentation the need to understand what data company needs before trying to obtain and evaluate the data.  And the most important data will depends on the company and its unique objectives.

Interesting points:

  • Sisco discovered that many people were coming to the web site after they made a decision…  trying to verify that the decision was the right one
  • babyMarketing databases are similar to children…  do not create one unless you are willing to feed, buy clothes, and send to college 😉
  • Transaction data and decision data are very different…
  • Some of the data we can get is not what we need
  • “Job function” data needs to be relevant to your company
  • Before you go to data vendors, or invest into any data-related efforts, know what you want

Fundamental approach:

  • What data do you need?
  • Evaluate what is the most important
  • What environment do you need (databases)
  • How do you extract insights?

Strategic data acquisition:

  • What data do you need?
  • Append elements available from third-party suppliers
  • Fill in gaps with “data discovery”
  • Focus on 20% of accounts that provide 80% of revenue

Data Warehouse vs. Data Lake

lake

Theresa also mentioned Forbs article You’re Doing It Wrong: Demand Generation, which she considered important for marketers to understand.  The article is worth reading  (maybe even a couple of times… I did 🙂 ).

As we, marketers, concentrate on conversion of the individual leads, customers of b-to-b products usually do not act alone.  As the number of people in the “buying center” increases, the probability of a speedy sales “falls off two cliffs…”

groups

Groups get involved into the purchase on a relatively early stage, before the potential buyer speaks with the sales person.

conflict.png

This should have your attention. The punchline is, if your commercial approach isn’t tuned to group buying dynamics, you’re in trouble.

The suggested solution is “Consensus Marketing.”

consensus

About half of your purchase stakeholders fear losing respect and credibility by speaking up and advocating a point-of-view in front of a buying group.

risk

Interesting…  This approach is probably beneficial for ABM (Account Based Marketing), and it gives specific examples to consider to encourage “consensus” among all participants of the buying center.

Coursera – Strategic Management

school

The course describes the history of Strategic Management and the theories that dominated business world at different time.  Some of the theories were overly simplistic, and some relied on detailed process too much.  The interesting point of the course is the same mistake that generations of managers make in their approach to strategy decisions – over reliance on their understanding of the external environment and the future.

The course also mentioned “emergent” strategy, which I encountered earlier in management literature – a strategy retaining flexibility and testing which markets and directions can emerge.  Though it is a specific approach, we will probably see many companies lacking strategy claim that this is exactly what they are trying to do. 🙂

The class included a very interesting case study:

In the 90s and early 00s, Novell, a software company once dominant in the networking space, saw its market share decline steadily, as its proprietary “Netware” software was replaced by freely available Internet based software.

But in 2003, Novell execs took bold action. They acquired Ximian and SuSe Linux, two companies that offered free alternatives to Micrsoft’s Office (Word, Excel, Powerpoint) and Windows, respectively.

buffledNovell intended to continue to give away the already free Ximian Desktop software, and the already free SuSe Linux alternative to Windows. They would make money, not by charging for the software, but by charging only for support of the software.Software companies had historically made 75% of their revenues from selling software, and only 25% from selling support for their software. In essence, Novell was deciding to give up the 75%, and seek only the 25%.

This might seem like a bad idea, but there was a careful calculation embedded in this strategy. Novell had not been able to sell very much of its own proprietary software for a long time, so it had, as their CEO, Jack Messman put it, “been living on that 25% piece for ten years.” The absence of that 75% of revenues from selling new software was already reflected in Novell’s stock price.

But Microsoft’s stock price still reflected handsome revenues from selling software. Novell could give away the Ximian and SuSe software without affecting it’s stock price, but if Microsoft tried to give away Office and Windows — or if they even significantly reduced their prices — sales would decline and the stock price would fall, or even collapse.

So, ironically, Novell’s historical decline in sales of new software made it able to do something Microsoft could not afford to do. Novell could give away software. Microsoft could not — not without angering its investors. Novell reasoned that companies would find free software more attractive than expensive software, and move over to Novell’s desktop from Microsoft’s.

Coursera – International Marketing in Asia

classVery insightful class – it looks into marketing in general with Asian specifics.  The class indicates that though Asia itself might be considered as one region, marketing in Asia might be significantly different from Europe.  And – each of the countries in Asia will have unique aspects.  Though some high-end consumer categories (such as Golden Misses) might be somewhat similar in different countries, the significant difference exists in lower-income area.

The class also illustrated the change in Asian markets and Asian marketing.  Change could include luxury brands (migration from global brands to local luxury brands, which show more individuality) and also marketing techniques.

Very interesting – marketing in Asia becomes more and more important because of the significant growth of Asian middle class (ah – the North America on the chart is not quite moving in the right direction.. 😉 )

middle-class-Asia

Asian market for luxury goods already surpassed European market, what was beyond analysts’ expectations.

Marketing from Asia

  • Though country of origin is a generalized representation of quality, brands ultimately override country of origin.
  • The same country of origin perception may be different in different industries.
  • Should a country adopt a Pan-Asian identity rather than associate itself with a specific country?  Possibly, if the association within that specific industry and country are not positive, but it might reduce flexibility for future branding efforts.

Marketing to Asia

  • Avoid template mentality; Asian countries are different from Europe and North America, and different between themselves.
  • Walmart was successful in China, but not in Korea (Korea already had a low-cost competitor; low car ownership hurt access, and consumers expected smaller packages and fresh items (curious: shelf height was too high for the local consumers 😉 )
  • Product created specifically for Asian countries by an Asian company (LG)
    • Company created an air-conditioner, which also protects the room from mosquitoes (important in Malaysia and India).  The company found a local spokesperson, who lost a child to a mosquito-transmitted disease.  Though the air-conditioner cost was more than a regular device, the market adopted the product (particularly parents of small children).  Interesting: a local marketer who had the original idea has to “jump through hoops” to convince the organization that the product should be created.

Approach to Marketing:

  • Etic: culture-free understanding (marketing is marketing)
  • Emic: culture-bound and context specific (each market is unique!)

Countries within the region might be quite different

country-difference

(Familiar source http://geert-hofstede.com/)

B-to-B Marketing in Asia

  • Buying Center needs to be matched by the Selling Center to target different people in the buying center at different time (good parallel to Account Based Marketing)
  • Access to decision makers in Asia can be more difficult because of cultural hierarchy and more prominent gatekeepers
  • Vendor needs to be become involved early in the process.  Excellent examples:
    • Steel manufacturer worked with an automobile producer to make automobiles lighter
    • Steel manufacturer worked with OEMs in excavation industry to optimize design and reduce processing costs

Market selection process in Asia

  • Decide if a company should move abroad (a firm should have economic or non-economic reason)
  • Find first market (many select Singapore as a beach head in Asia; the market represents ethnic variety and located close to other larger markets)
  • Curious recommendation: have a plan A and a plan B (for example, for luxury cosmetics, targeting women over 25 can be a good plan A, and targeting teenagers can be a plan B)
  • Positioning within the company also important (do not hire yes-people 😉  )