Perry L. Fagan
The Ateneo Business Club led by {Prof Lulu Moguel held last Friday, Feb l0, 2012 at the AGSB ampitheater a talk by Mr. Perry L. Fagan, Harvard Business School MBA grad, a consultant of Bank of Phil Islands on Strategy.
He started by saying that his talk would cover strategy in a different way. That could be used by the listeners in their business and in a manner that they would understand. Many of his clients talk about strategy and when he observes nothing happens. It is not the way it should be.
Christmas and Strategy
Fagan compared Christmas and strategy: both are cycles done each year, there is a time frame, resources are expended; there are resolutions made and most of them are not executed.
Reality and Examples
He asked students present for the strategies in their companies. Most mentioned wannabee statements, goals and objectives: to be well known, to be the preferred supplier, to be the supplier of choice. etc.
When asked on the best business school, on how to be the best, most answered including the blogger, that we would ape the number one. Fagan said this is a mistake.
Unique Selling Proposition
The goal of strategy is have COMPARATIVE ADVANTAGE, A UNIQUENESS - a UNIQUE SELLING PROPOSITION (USP). The be the best in a category.
Examples of USP on various products:
Jollibee - Langhap sarap using westernized production methods
Cebu :Pacific = to provide fun flights to first time travellers
Viktor - to provide pair of good looking jeans so that the wearer can get laid.
Herman Miller ergo chair - an ergo chair that boosts productivity and lets everyone know that you have arrived.
Western Union - providing pt to pt access to cash for those who do not have bank accounts as if they never left home (it is unsafe to bring along currencies on travel)
USP builds competitive advantage vis a vis the PTM.
You can be good only on certain value points; but you may not rank in other value pts as in the case of Amanpulo vs. El Nido. The only point of differentiations are:
l. Departure from Pasay - the weighing scale is covered;
2. The guests eat Amanpulo cookies flown from (where else Amanpulo); those for El Nido get hungry.
3. When the guests arrive at Amanpulo:
l. No less than the manager greet them;
2. A red carpet is rolled out;
3. The guests are called by their first name.
These are the only differential advantage; Amanpulo is never ranked for snorkling, divesites, water sport; but the 3 value points are enough to command premium; to be ranked among the top in Phil resorts; to be top rank in Planet Earth and to be buzzed by A and A wannabees who want to be treated like Royalty or VIP
Universal Structure of Strategy:
A strategy contains:
l. Objective: single goal time frame
2. Scope: geography, customers, degree of integration, advantage, USP
3. Configuration: Interlink of activities vs. ROIC
They can can be expressed in 30 words +-
It is a choice. It is being unique
It is not distinct from exeution. It what you do.
It is having a set of activities and resources to be unique to the PTM
Strong Strategy
It concerns a product and involves a strong empathy with CUSTOMERS
Fatal Mistakes in strategy:
l. On being the best
2, Goal setting
3. It is innovation
4. Being all things to all
5. The boss only does it
6. A closely guarded secret in the company filed in SDB
7. Belongs to the academe.
8. Maps
9. Distinct from Execution.
l0. Measurements (KRAPI)
Fragmented Strategy
l. Ill conceived;
2. Poorly communicated. (Senior and middle managers do a poor job in these less than l hour per month is devoted to strategy.)
3. Not linking HR to strategy.
4. Incentive and pay hike unrelated.
5. Budget not related to strategy.
6. Not strategy dashboard.
7. Not innovation
8. Not internationalization;
9. Not shareholder value
l0. Not mvp
ll. Not metrics'
l2. Not continuity
l3. Not trade offs
l4. Not just vision or mission
DEFINITION OF TERMS
Vision - future picture of the business
Mission - how we do business
Values - what we treasure, what we measure
Objectives; Numeric measures of what to achieve, sales, Financials
Strategies: selection of activities and resources that are interlinked to gain differenctiation
4C interplay = strategy
It is the SWEET SPOT OF THE INTERSECTION OF CUSTOMER, COMPETITION AND COMPANY IN A CONTEXT (" Mind of Strategist" by Kenichi Ohmae.
Value Curve
This is about the ERRC (eliminate, reduce, raise, create) tool used in Blue Ocean strategy to create more space for uniqueness/competitive advantage
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