CORPORATE STRATEGY FOR A TURBULENT WORLD

Paul BrackenMarch 17, 2015

Blumetti Classroom 2200

You work at Pennsylvania Railroad, it’s 1950…

You work at Maxwell House, it’s 1990…

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WHAT DO THEY USE?

• Apple going into TV / video streaming

• Uber/Lyft expanding into Europe

• PwC, KPMG, etc. in Russia, China

• Marriott Hotels (Moxy brand) competing against Airbnb

• U.S. Oil company in Angola fighting charges of foreign corrupt practices from U.S. SEC and Dept. of Justice

TODAY: strategy tools for amore turbulent world

• Environmental scanning• Scenarios• Red team• Multiframing

Assessment: too narrow environmental scan. Get out of the office, especially getout of headquarters!

MULTIFOLD TREND

• A collection of those trends that interact with each other to shape corporate advantage

• Individual trends may or may not be related to each other. But the confluence has a big impact

• Megatrends -- single overarching trends like “globalization” or “IT” -- are too broad, they apply to everything

1. Money pervades U.S. college basketball2. …but… players don’t get any of it, until they play for NBA3. Respect for NCAA, Conferences ↓

A Multifold Trend for US College Basketball

First, write down your multifold trend

Second, find strategies that fit this trend

Third, test if you can executethese new strategies

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The main strategy to do a fast fashion business is the ability to respond very quickly to the fast changing needs of customers, identify the trends in advance, and meet the market requirements in a rapid speed. -- H&M, and Zara, Forever 21, and Primark are examples.

ZARA AND “FAST FASHION”

Sir Ronald Cohen,The Second Bounce ofthe Ball, Turning Riskinto Opportunity (2008)

SCENARIOS DEFINED• A hypothetical plot outline of events that could

plausibly lead to the situation envisaged

• Built around an important decision

• to force you to deal with details and dynamics they might easily avoid treating if restricted to abstract considerations

• Show interaction of psychological, social, economic, cultural, political, and other factors

HOW DID JFK FRAME THE PROBLEM?

THREE SCENARIO FRAMES CUBA ‘62

1. Soviets are trying to build a nuclear base in western hemisphere

2. Soviet leader’s high risk scheme -- he hasn’t told Politburo about it

3. Soviet military power grab for more bases and budget is behind the

Cuban adventure

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“I DON’T KNOW WHO DISCOVERED WATER…BUT I KNOW IT WASN’T A FISH”

Marshall McLuhan

A frame is a mental window through which we view a problem, situation, or opportunity

“multiframing” = looking at a practical problem from various viewpoints

Play the ExistingGame Better

Start a NewGame

product innovation quality

efficiency

on time, on budget

benchmarking

“best practices”

demand innovation

new concepts

focus on services, solutions

exploit technological shifts

“next practices”

Two Generic Frames

Frame 1: Frame 2:

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“The CIA used a process called "red teaming" on the collected intelligence to independently review the circumstantial evidence and available facts of their case that bin Laden was living at the Abbottabad compound.” An administration official stated, "We conducted red-team exercises and other forms of alternative analysis to check our work. No other candidate fit the bill as well as bin Laden did.“

RED TEAMSRed teaming has its origins in the Cold War when US

officers played Russians to test US war plans and vulnerabilities.

The red team “thinks like the adversary” by learning Russian, reading their journals, and studying their methods and history.

The red team also may offer alternatives to current plans, operations, processes, and assumptions.

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Red Teaming

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Red Teaming in Business

• Big 4 Accounting Firms After Enron• Insurance company hires plaintiff’s lawyers to

write contracts• UK Dept. of Public Works and Pensions• Companies for hacking vulnerabilities• “Free” Red Teaming -- courtesy of Elliot

Spitzer, SEC, DoJ