Changing mindset is the key to strategic thinking

Ateneo Professor on Entrepreneurship

AGSB, Makati City Philippines | October 27 2013October 27, 2013



I was a witness to another defense of a strategic paper, the capstone of the MBA student requirements for graduation.  The defender is a finance person of a power company;  and she kept on answering that she does not know this development on external environment because she is the finance person and what is preventing her from thinking strategically is that perception and mindset that she can look at the company business from the standpoint of a finance person.  And when asked on technical matters, she would not know how to answer.

Because of this, she was not up to date on the following:  renewable energy, the state of black technology vs green technology abroad and their effect on the P n L. This looks demanding and exacting but I think a graduate student must be a this level.

I noticed also that while the business is not responsive to the environment, the senior executives of their company as well as the student just looks at the preservation of the company and not focusing on innovating and bringing it up par to world standards, making this more competitive.  They are in the survival mode.

                                 

Another case of rearview mirror strategy on a real estate development company

Ateneo Professor on Entrepreneurship



I recently got the news that a strama defense scheduled tomorrow has been postponed for some reasons, according to the chair for the subject. The strama paper covered two companies:  the holding company and the operating company and is rather confusing as to which he discusses in various parts of the paper.  That is good news because it is a bad strategy.  The student merely repeated what they did before as the first project. A clear case of rearview mirror mentality/strategy



The paper are silent on the following:

Customers  - PTM

Product, mvp and how they impact the customer

The opportunities to be seized

While the paper was profuse on data regarding the industry:   office buildings, hotels, etc and their rent, the proposed project (plan) was unclear as to what opportunity shall be seized by the company including the features that will appeal to the intended market:  price, amenities, service, etc.

What wouldbe compelling about their new project/product? Why would people buy this project instead of other projects? 

Observations/analysis of a strama defense on a FMCG multinational business unit

Ateneo Professor on Entrepreneurship

 

I was surprised that I was invited again to sit at a panel of strama defense.  For unknown reasons,  I was never invited for almost a year.  Well, some of male professors have been notorious for being critical and strict with many defenders.  And for right reasons:  we want to ensure:    the quality of the GSB, and we want the student to proudly carry the title "Master"  The school has been branded as diploma mill for GSB.

Today I am back to my element.  While I gave passing grade to the student these are my observations:

1.  He discussed a business unit,  a multinational engaged in FMCG distribution and marketing, which in reality does not have degrees of freedom to implement the strategies. I thought the paper was on a SBU? He did not even mention the legal entity of the local business unit? or the business model.    He mentioned such limitations as:

     1.  Carrot and stick system of reducing AP because of flat, declining sales

     2.  The marching orders are from the regional head/office;

     3.  He blames the corporate stock outs for this problem, and I told that for a year or two that could have been corrected;  something external is amiss?

I thought that only strategic business units are subject of strama.?

2.  The student had audicious goal of achieving x number of billions of sales as his vision/goal for the next several years, yet:

     1. He could not clearly explain why the sales was flat.  He blames corporate woes including lack of correct execution;  but that would not sufficiently explain the flat sales

    2, He portrays the competition to be medium from several quarters and yet the sales does not keep up with growth of the economy and other external factors.  He failed to mention such developments as:    cheap substitutes, other product substitutes for feminine hygiene, and other developments in health care.   His mindset has been strictly pharma:  there are many alternative medicine that it may be eating into the market share. (I informed him that I write on this topic  Cheapcures)  He and his company may not be seeing reality and these changes.

3.  Consistency in the paper:

    1.  Growth opportunities/large markets were presented as beauty care, OTC, and yet were not present in the EFE, and thus in the strategy.   Thus his plan revolves on the products that they have sold before etc., same old story, me too strategy.

    2. For the IFE he prides the company on high engagement of the people, good culture, and yet states that the internal strategic issue has been that of correct execution  which are rather inconsistent.

I hope the professor in charge has the paper corrected and rewritten.

What has that strama paper achieved for the business and economy?  Not much I guess:

1.  Since this is not an sbu, what the regional office has dictated will be followed;

2.  Since the opportunities were not properly addressed, the x billion additional sales will find difficulty in the achievement.  The competitive pressures are not like wise addressed as well as increasing cost of sales channel.

3.  For the internal strategic issues, ie  that there is a need to address cooperation and coordination  (and the student prides in saying that they have strong adherence to corporate culture) and which is not addressed strongly, the problem will persist, execution will be a problem.

4.  Nothing new was presented except incremental improvements (I was hoping I will be surprised amazed).

At the end of the day, we passed a student who knows how to use strategic tool, but who did not create something new, nor made a dent in the universe. 

He did not rock the boat

Am I a panelist or terrorist?

Advice on Strama Paper, Defense and Business.

Promoting Entrepreneurial Revolution

I have noted several invitations:

l.  To be a speaker in a gathering for their franchisee in their company from a former student;

2.  To be a consultant for a strategic meeting of a medical association;

3.  Consulted by several former students on their write up of strama paper and strama defense.

I am honored, grateful this is happening because:  I am just an adjunct professor, and I teach entrepreneurship, not strama.

xxxxx

Yesterday, Labor day, I met a fmr student in MM who did not feel confident of his Strama draft.  I was not careful not to spoon feed him.  I asked him a lot of questions, and on the things he placed in his draft asking him why he placed certain developments as relevant;  asking whether there were degrees of freedom in the changing, innovation of the present assets of the business.  And I found out that he has most of right conclusion.

What counted in the conversation were:   what would panelists ask?  What are the critical parts of the strama?  What are the dos and dont.  Guys like this are really interested to be gurus and be the best they can be.  They are the graduates, the masters we would like to have.....

Meeting wtih A Former Student on His Strama Paper.

Promoting Entrepreneurial Revolution

I met this afternoon with a former student on entrepreneurship student who is now making his final paper for his MBA graduation:   his strama paper.  I demurred on his initial request, because I am just a facilitator on entrepreneurship and not on strategic management.

However, since I had a meeting at Megamall, near his place of work, I decided to see him, and give my 5 cents worth of comment.

These were the things I told him:

l.  A strama like a business plan is all about proving;  you prove everything you say and plan of action with data and facts.  You can not make motherhood statements;  you must provide a basis for expanding into a market, or making a certain % as your growth rate.

2.  As part of critical thinking, you question the source of your data vis a vis against reality (on Execution, insist on reality).  reality, even if the source of your data is a respected think tank.  If a think tank says that the sales will grow for the next five years, and if today, you are on a 3 day work week, it is time to junk that projection, and even yours on your strama based on that think tank findings;

3.  A strategy is a collection of activities and resources to attain your objectives.  And one of that objectives is to defeat the competition, and to be UNIQUE.  Are you unique, what is your unique selling proposition?  How do you propose to achieve that?   Because of the myriad of tools under David, and the use of generic strategies:   retrenchment, liquidation, concentric diversification, product development, market development, the idea of uniqueness is missed entirely.  And the strama paper ends up of perpetuation of last year, and what the company has been doing and strategy is lost.

4.  Always remember SMART.  Although you end up with generic strategy, have a clear picture do:  the 5w, lH  (the timeline, resources, processes)  Do not end with saying that you will do more study afterwards for this strategy  (hey what are we doing , a strategy for more studies)

5.  I was not able to discuss this, discuss external environment that spells out in monetary terms what sales amount can be derived from a specific macro or micro market developments.  Make a guessitimate.  Like the Bill Gates question on how many basketball can you load on a bus this size if the size of basketball is this?  or How many pins on thimble if the diameter of the thimble is this, and the diameter of a pin is this size?  You can not obtain all the data, but you can make an intelligent guess, or projection.  Do not just guess, or be clueless on what you should do.

I hope this is useful for other strama students too.

I hope this makes sense for an entrep prof addressing strama students.  It is even more demanding for an entrepreneur to be strategic  because he must achieve outstanding results if he must survive even WITHOUT RESOURCES OR EVEN KNOWLEDGE OF PROCESSES (technology)  Can you beat that?