Weeks 3 & 4: Strategy Execution Risk

Question 1

What is the choice cascade model?

Answer 1

Senior managers (“upstream choice makers) set the context of choices for their employees downstream and empower them to use their best judgment in the scenarios they encounter

Question 2

Seven Rules for Successful Strategy Execution

Answer 2

1. Keep it simple
2. Challenge assumptions
3. Speak the same language
4. Discuss resource deployment early
5. Identify priorities
6. Continuously monitor performance
7. Develop execution ability

Question 3

Successful strategy execution levers

Answer 3

1. Ensuring information flows where it is needed
2. Clarifying decision rights

Question 4

Blue ocean strategy

Answer 4

a set of managerial actions and decisions that aim at creating a major market through their business offering in an uncontested market place

Question 5

Red ocean strategy

Answer 5

when companies try to outperform their rivals to grab a greater share of existing demand

Question 6

The value net model

Answer 6

The model helps a company identify the key players among its customers, suppliers, competitors, and complementors

Question 7

The concept of co-opetition

Answer 7

Complementors and Competitors coexisting

Question 8

Reasons for acquisition failures

Answer 8

Strategy
- Incompatible cultures
- Incompatible business models
- Synergy non-existent or overestimated

Due Diligence
- Acquirer overpaid
- Foreseeable problems were overlooked
- Aspects of the target where extreme divestiture might be required were overlooked

Implementation
- Inability to manage target
- Inability to implement change
- Clash of management styles/egos

Question 9

Acquisition failure mitigation approach

Answer 9

Due diligence should be undertaken to validate synergies (Be wary of Delusional Optimism!)

Question 10

Acquisitions are strategic decisions that elicit a ________________ from competitors

Answer 10

“strategic response”

Question 11

What is inherent within the choice-cascade model?

Answer 11

a positive reinforcement loop

Question 12

The choice makers help their employees make better choices in four specific ways

Answer 12

1. Clearly explain the choice that has been made and the rationale for it
2. Explicitly identify the next downstream choice
3. Assist in making the downstream choice as needed
4. Commit to revisiting and modifying the choice based on downstream feedback

Question 13

Strategy Execution Risk

Answer 13

A mismatch between strategy and execution

Question 14

OAS

Answer 14

Strategic Communication Tool and the vital link between strategy and execution
- Objective: What the strategy is meant to achieve
- Advantage: How the organization will achieve the Objective
- Scope: The domain (niche) in which it will operate

Question 15

Building blocks of strong execution in order of priority

Answer 15

▪ Designing information flows
▪ Clarifying decision rights
▪ Aligning motivators
▪ Suitably changing organizational structure

Question 16

What Matters Most to Strategy Execution

Answer 16

Clarifying decision rights and making sure information flows where it needs to go. If you get those right, the correct structure and motivators often become obvious.

Question 17

Blue Ocean Strategy vs. Red Ocean Strategy mottos

Answer 17

Red Ocean Strategy: Kill or Be Killed
Blue Ocean Strategy: Thrive and Let Others Exist

Question 18

Added Value (AV) equation

Answer 18

Added Value (AV) = Total Value with you - Total Value without you

Question 19

Value Net complements Porter’s Five Forces by

Answer 19

generalizing “Substitutes” to “Substitutes & Complements”

Question 20

Valuation Theory

Answer 20

A company’s worth equals the Present Value of all cash flows it will generate. An established discount rate, r (“hurdle rate”) is needed.

Question 21

Awareness – Motivation – Capability Triangle helps assess

Answer 21

retaliation threat

Question 22

M&A Expected Benefits

Answer 22

Synergies that will result in:
Cost savings (efficiencies), Growth potential, or both

Question 23

Strategy Execution Frameworks

Answer 23

▪ Blue Ocean Strategy
▪ Value Net Strategy
▪ Mergers & Acquisitions principles
▪ Awareness - Motivation - Capability Model

Question 24

Mitigation of Post Merger Integration Risks Examples

Answer 24

▪ Articulate a “Deal Thesis” to state how the merger creates value and designs the organization around it
▪ Communicate clearly and frequently
▪ Create an Integration Mgmt Office with a strong leader
▪ Keep and amplify the strengths of both parts and jettison the weak parts of both
▪ Commit to one culture, manage it actively, and be clear about what you want from the top down