Design thinking
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This document provides an overview of strategic management. It begins by discussing why some firms succeed while others fail, and defines strategy as the actions a company takes to achieve superior performance through resource allocation. The strategic management process is described as how managers choose strategies to pursue the company's vision. Several frameworks for strategic analysis and assessment are then outlined, including the SWOT analysis, examining internal strengths and weaknesses as well as external opportunities and threats. The document emphasizes that strategic planning is important for performance improvement and communicating priorities. Key aspects of strategic planning like mission, vision, goals and objectives are defined. The document concludes by discussing different levels of corporate strategy including cost leadership, differentiation, and focus strategies as well as various strategic options.
Design thinking
- 1. STRATEGIC MANAGEMENT 1- 1 Prof. Harsimran Kaur (harsimrankaur318744@gmail.com)
- 2. • Why do s o m e firms succeed while others fail? – A central objective of strategic m a n a g e m e n t is to learn why this happe n s . • What is strategy? ➢ An action a company takes to attain superior performance. ➢ In this context it m e a n s allocations of resources. Resources may b e s a m e but if they are c o m b i n e d i n different ways s o m e get superior performance; s o m e get ordinary performance. ➢ Strategic Management studies the ways to m a k e superior performance. • What is the strategic m a n a g e m e n t process? ➢ The process by which managers choose a set of strategies for the enterprise to pursue its vision. Strategic Management 1-2 1- 2
- 3. What's the use of running if you are not on the right road- German proverb If you do not know where you come from, you do not know where you stand, if you do not know where you stand, you do not know where you go- Chinese Proverb To run in a right road to reach your destination is strategy. Strategic Management 1-3 1- 3
- 4. However beautiful the strategy, you should occasionally look at the results. Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances. Strategic Management 1-4 1- 4
- 5. Fundamental questions: • Where are we now? (Assessment) • Where do we need to be? (Gap / Future End State) • How will we close the gap (Strategic Plan) • How will we monitor our progress Strategic Management 1- 5
- 7. DESIGN THINKING • Design thinking has emerged over the last 60 years as a method for collecting and analyzing market and customer-level data. • Design, it seems, is now everywhere—it is no longer only the purview of just the designers. • The non-design world has come a long way since the work of Professor John E. Arnold over 60 years ago to bring the disciplines of mechanical engineering and business administration more closely together around the ideas of design thinking. • Examples now abound of corporate managers and engineers making design thinking central to their business operations, from conservative organizations hiring chief design officers to “suits” talking about personas and point-of-view statements. Strategic Management 1- 7
- 8. • However, hiring design studies graduates, sending employees to design thinking courses, and setting up cross-functional teams is not enough for an organization to become “designerly”. • To make a difference to the kinds of products and services that get routinely implemented in market, design thinking needs to be integrated into the organization’s strategy. • This is the only way that design can move from thinking to action, from lab formulation to strategic implementation across marketing, sales, and operations. Strategic Management 1- 8 DESIGN THINKING
- 9. We call the integration of design thinking into organizational strategy ‘Design-led Strategy’. • Design thinking needs to be integrated with strategy because firms struggle with the problem of product- market fit. • This problem relates to how organizations construct products that are relevant to their customers. Strategic Management 1- 9
- 10. Designing Strategy: Using Design Thinking for Business Strategy • The lifespan of multinational corporations has never been shorter. • Half of today’s top leading firms will be replaced over the next 10 years in what will be the most turbulent decade in modern history. • The caricature of senior executives isolating themselves at a strategy retreat, building a vanity deck and expecting it to land when they return feels antiquated. Strategic Management 1- 10
- 11. Designing is more than creating products and services; it can be applied to systems, procedures, protocols, and customer experiences. ➢ Design is transforming the way leading companies create value. ➢ The focus of innovation has shifted from being engineering-driven to design-driven, from product- centric to customer-centric, and from marketing-focused to user-experience-focused. ➢ For an increasing number of CEOs, design thinking is at the core of effective strategy development and organisational change. Strategic Management 1- 11
- 12. Distinctions Between Design and Design Thinking Steve Jobs famously said, “Most people make the mistake of thinking design is what it looks like. People think it’s this veneer – that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” Strategic Management 1- 12
- 13. ➢ Thinking like a designer brings together what is desirable from a human point of view with what is technologically feasible and economically viable. ➢ It also allows people who aren’t trained as designers to use creative tools to address a vast range of challenges. ➢ Design thinking draws on logic, imagination, intuition and systemic reasoning to explore the possibilities of what could be and to create desired outcomes that benefit the end user (the customer). ➢ A design mindset is not problem-focused, it’s solution- focused and action-oriented. It involves both analysis and imagination. Strategic Management 1- 13 DESIGN THINKING
- 14. IMPLEMENTING DESIGN THINKING Design Thinking is a journey of learning and discovery. It’s also a way of being. If you are strategising, you are designing. •Start at the beginning. Learn how to be a design thinker/doer from a seasoned practitioner.Look for ways to add quality/value to your offerings. •Build your creative confidence by conducting low-risk experiments, such as designing a meeting with your team. Ask questions which you don’t have answers for. •Learn how to coach and facilitate for creativity, co-creation and collaboration. This is crucial for creating a safe space for conceptual risk-taking. •Stay focused on the users’ experience. •Help teams unlock provocative insights, reframe existing problems, and generate ideas in response to your research. •Encourage multiple perspectives. Reframe constraints into opportunities and check assumptions. Strategic Management 1- 14
- 17. PHASES OF DESIGN THINKING The five phases of Design Thinking, are as follows: •Empathise – with your users •Define – your users’ needs, their problem, and your insights •Ideate – by challenging assumptions and creating ideas for innovative solutions •Prototype – to start creating solutions •Test – solutions Strategic Management 1- 17
- 19. What is Strategic Planning? • Process to establish priorities on what you will accomplish in the future • Forces you to make choices on what you will do and what you will not do • Pulls the entire organization together around a single game plan for execution • Broad outline on where resources will get allocated • It is used by community, groups, government departments, organizations and businesses to develop blueprint for action and change • The process should be community based, inclusive and participatory to allow for maximum stakeholder involvement and input. Strategic Management 1- 19
- 20. Why do Strategic Planning? If you fail to plan, then you plan to fail – be about the future proactive • Strategic planning improves performance • Counters excessive inward and short-term thinking • Solves major issues at a macro level • Communicates to everyone what is most important Strategic Management 1- 20
- 21. Benefits of Strategic Planning • Defines mission, vision & • values • Establishes realistic goals, objectives & strategies • Ensures effective use of resources Provides base to measure progress • Develops consensus on future direction • Builds strong teams • Solves major problems Strategic Management 1- 21
- 22. Major Components of the Strategic Plan / Down to Action Mission Vision Goals Objectives Measures Why we exist What we want to be Indicators and Monitors ofsuccess Desired level ofperformance and timelines Planned Actions to AchieveObjectives O1 O2 AI1 AI2 AI3 M1 M2 M3 T1 T1 T1 Specific outcomes expressed in measurable terms (NOT activities) Strategic Plan Action Plans Evaluate Progress Targets Initiatives What we must achieve to be successful Strategic Management 1- 22
- 23. Mission Statement Compone nts • Captures the essence of why the organization exists – Who we are, what we do • Explains the basic needs that you fulfill • Expresses the core values of the organization • Should be brief and to the point • Easy to understand •If possible, try to convey the unique nature of your organization and the role it plays that differentiates it from others Strategic Management 1- 23
- 24. Examples –Good and Bad Mission Statements Compone nts To Make People Happy To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers NASA Walt Disney Does a good job of expressing the core values of the organization. Also conveys unique qualities about the organization. Too vague and and unclear. Need more descriptive information about what makes the organization special. Strategic Management 1- 24
- 25. Vision Compone nts • How the organization wants to be perceived in the future – what success looks like • An expression of the desired end state • Challenges everyone to reach for something significant – inspires a compelling future • Provides a long-term focus for the entire organization Strategic Management 1- 25
- 26. Strategic Analysis/assessment – External assessment (Environmental Scan) • gathering of information that concernsthe organization’s environments – Internal assessment gathering of information that concerns the organization’s internal operational issues • analysis and interpretation of thisinformation • application of this analyzed information in decisionmaking – Summarize this analysis/assessment with the SWOT model Strategic Management 1- 26
- 27. S W O T ExternalAssessment: Marketplace,competitor’s,social trends, technology, regulatory environment, economic cycles . Internal Assessment: Organizational assets, resources, people, culture, system s, partnerships, suppliers, . . . Good Points • Easy to Understand • Apply at any organizational level Possible Pitfalls • Needs to be Analytical and Specific • Be honest about your weaknesses SWOT SWOT Strategic Management 1- 27
- 28. Strengths • What are some internal positive things about your organization? • What does the community see as your strengths? •Strength’s– Those things that you do well, the high value or performance points •Strengths can be tangible: Loyal customers, efficient distribution channels, very high quality products, excellent financial condition •Strengths can be intangible: Good leadership, strategic insights, customer intelligence, solid reputation, high skilled workforce Strategic Management 1- 28
- 29. Weaknesses •Weaknesses – Those things that prevent you from doing what you really need to do • Since weaknesses are internal, they are within your control •Weaknesses include: Bad leadership, unskilled workforce, insufficient resources, poor product quality, slow distribution and delivery channels, outdated technologies, lack of planning, . . . Strategic Management 1- 29
- 30. Opportunities • What are some opportunities in your community or region? • What are some emerging trends? •Opportunities – Potential areas for growth and higher performance •External in competitor’s, policies, . . nature – marketplace, unhappy customers with better economic conditions, more open trading Strategic Management 1- 30
- 31. Threats •Threats – Challenges confronting the organization, external in nature •Threats can take a wide range – bad press coverage, shifts in consumer behavior, substitute products, new regulations, . . . • May be useful to classify or assign probabilities to threats •The more accurate you are in identifying threats, the better position you are for dealing with the “sudden ripples” of change Strategic Management 1- 31
- 32. Strategy formulation is 10% and implementation is 90% Strategic Management 1- 32
- 35. • Cost leadership – Attaining, then using the lowest totalcost basis as a competitive advantage; Example of Intel • Differentiation – Using product features or services to distinguish the firm’s offerings from its competitors;Apple Computers • Market niche focus – Concentrating competitively on a specific market segment Strategic Management 1- 35
- 36. Focus is on improving the effectiveness of operations within a company. ◦ Manufacturing ◦ Marketing ◦ Materials m a n a ge m e n t ◦ Research and development ◦ H u m a n resources Strategic Management 1- 36
- 37. Vertical integration Diversification Strategic alliances Acquisitions New ventures Strategic Management 1- 37
- 38. • Designing organizational structure • Designing control systems – Market and output controls – Bureaucratic controls – Control through organizational culture – Rewards and incentives • Matching strategy, structure, and controls – Congruence (fit)a m o n g strategy, structure, and controls Strategic Management 1- 38
- 39. The only constant is change. Success requires adapting strategy and structure toa changing world. Strategic Management 1- 39
- 40. Five P’s of Strategy 1. Plan 2. Ploy 3. Pattern 4. Position 5. Prespective Strategic Management 1- 40
- 42. Strategic Management 1- 42 UBER ➢ Uber is another famous design thinking example. With the help of design thinking and a user-focused approach, it eliminated simple problems that had been plaguing customers in the past. ➢ It introduced features such as cashless payments, another great design thinking process example, to make transactions straightforward and reduce the chances of fraudulent activities. ➢ By providing the power to give ratings for both drivers and users, it increased the incentive for good behavior. Simple design tweaks, aided by a substantial user understanding, helped Uber pivot itself to the behemoth it has become today.
- 43. Strategic Management 1- 43 IBM ➢ When people think of IBM, the first thing that comes into their mind is technology, business, and computers. ➢ As their former CEO Thomas Watson Jr. declared, “Good design is good business”, IBM has invested heavily in design thinking. ➢ They started holding empathy map sessions and kept users in mind while designing processes and products. ➢ Consequently, they have witnessed significant ROIs with this change in approach. They have also made it openly available.