Business strategy for the aspiring project professional webinar

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2020
+44(0)7970 428 929
JON@LEADINGEDGEPROJECTS.CO.UK
WWW.JONBROOME.COM
©
Welcome to ….
Business Strategy
for aspiring project managers
presented by Dr Jon Broome

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2020
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Webinar Objective
To provide an introduction to what good
strategy looks like and how to develop it, so
that
▪ the aspiring project professional can
develop their career and contribute to an
organisation’s strategic direction,
▪ avoid having to deliver projects and
programmes which are flawed from the
outset.
+44(0)7970 428 929
E: JON@LEADINGEDGEPROJECTS.CO.UK

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Programme
1. Introduction and background
2. Definition(s) of business strategy.
3. What are we aiming for? The six sources of competitive
advantage.
4. Bad strategy: four+ common mistakes.
5. How do you lose a competitive advantage … and how do
you gain it ?
6. What good strategy looks like: process, components and a
few tools.
7. A few comments on delivery.
8. Q & A’s
+44(0)7970 428 929

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Background
❖ As a self-investor, looking for Q-GARP
companies (Quality Growth At a Reasonable Price).
❖ Quality: some sort of sustainable
competitive advantage i.e. a moat.
+44(0)7970 428 929

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Background
❖ As a trustee of APM, got increasingly
interested in strategy & its development
with the obvious twist that we are a charity.
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How this webinar came about …
says
For an individual project professional’s development,
they “need to go beyond classic technical project
management skills and build the ability to engage with,
and provide leadership to, varied project stakeholders”.
More specifically, in order for project professionals to
take a place at the top table, they need to be able to
“Shape strategy not just delivery.”
+44(0)7970 428 929

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Disclaimer alert
❖ I am not an expert, just someone who is trying to:
o sort the wheat from the chaff,
o make sense of the literature
and think about how it can be applied.
❖ I don’t intend to say anything about APM strategy.
❖ Anything I do say or can reasonably be inferred is
my personal view and does mean that it is the
view of other trustees and executives or the board
as a whole.
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My definition of strategy
(which is similar to Richard Rumelt’s)
The application of your organisation’s
relative strengths to either:
❖ your competitions’ weaknesses &/or
❖ emerging opportunities ahead of any/the
competition
to create, sustain or enhance sources of
competitive advantage.
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The six sources of sustainable
competitive advantage / moats.
❖ Intangible Assets
❖ Switching costs
❖ Network Effect
❖ Scale economies
❖ Scarce or cornered resource / efficient
scale
❖ Organisational design
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©
2020
+44(0)7970 428 929
WWW.JONBROOME.COM
Regulatory
Licenses
Intangible Assets
Brands
Intellectual
Property
‘Know-how’
Proprietary
databases
Customer
Relationships

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Switching Costs
❖ Where a product or service
becomes so embedded in
how you work, that
switching to another
supplier is too disruptive,
risky and expensive.
❖ The Apple Ecosystem is a
consumer example.
❖ Enterprise system suppliers
are a B2B example.
+44(0)7970 428 929

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Network Effect
❖ The more people who use
the service or product, the
more it is worth.
❖ E.g. a telephone network
❖ Examples include Facebook (or
any social network) and Rightmove.
❖ Can also apply to standards
e.g. Microsoft.
❖ Tends to lead to ‘first to get it
right’ leads to a ‘winner takes
all’ outcome.
+44(0)7970 428 929

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Scale Economies
❖ High capital costs and low running
costs mean have to make a large
investment to become a player.
❖ Extra units cost relatively little to
produce and distribute e.g. Unilever,
Diageo, Coca-Colas distribution
networks.
❖ Applies to IT where distribution
costs are zero so the ‘first mover
who gets it right’ can invest more
than the (current) competition to
get further ahead of the
competition.
+44(0)7970 428 929
❖ Netflix originals is a blue ocean example

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Scarce or Cornered Resource
/ Efficient Scale
❖ Where size of ‘red’
market only allows for
limited number of
profitable players.
❖ Reduces attractiveness
to new entrants.
❖ Makes any aggressive
move to increase market
share unattractive as
ultimately hurts all.
+44(0)7970 428 929

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Organisational Design
❖ May involve elements of
other moats, but …
❖ Brand, structure, systems,
culture, talent development
etc. are all so:
o tightly interwoven &
o mutually reinforcing
makes it very hard to copy
successfully.
I.e. to compete you have to
copy the lot.

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The six sources of sustainable
competitive advantage / moats.
❖ Intangible Assets: Regulatory Licences, Intellectual Property,
Brands, Proprietary Licenses, Customer Relationships & ‘Know-how’.
❖ Switching costs
❖ Network Effect
❖ Scale economies
❖ Scarce or cornered resource / efficient
scale
❖ Organisational design
+44(0)7970 428 929

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Bad strategy: 4 common mistakes
to democratise home
ownership
to be the financial
intermediary of choice
for our customers
Strategic Objectives
To increase our
loan book size
An Inspirational Leader
To be the most profitable
bank in our sector
To delight our
customers
Targets
Mission:
Vision:
Targets Targets
Targets Targets Targets
Targets Targets Targets
Targets
Values:
- Determination
- Teamwork
- Collaboration
Targets Targets
Little or no sense of how to achieve these targets or prioritision
etc etc

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❖ Inspirational leadership as a substitute for, rather than a
turbo-charger of, good strategy.
❖ Belief in positive thinking
❖ Fluff: big grandiose words
❖ Templating: e.g. VisionMissionObjectivesStrategiesTactics with a lack
of analysis = not rooted in reality.
❖ Unwillingness to focus & therefore not to do things whether
due to organizational politics, fear of upsetting people, history of company,
lack of insight/analysis etc.
❖ ’Operational effectiveness’: efficiency in a ‘me too’ sector is not
a competitive strategy. It is necessary but not sufficient condition.
Bad strategy: 4+ common mistakes
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How lose to your competitive advantages …
1. Don’t anticipate or respond to emerging
technology and other trends
2. Don’t anticipate or respond to changing
regulatory requirements
3. Mindset/biases: arrogance, head in sand, fear,
sunk cost fallacy.
4. Failure to anticipate competition.
5. Lack of consideration of efficient market
‘attractor’ state and positioning as a result.
+44(0)7970 428 929

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How to gain competitive advantages …
1. Anticipate and respond to emerging technology
and other trends e.g.
2. Anticipate and respond to changing regulatory
requirements
3. Be open to change, however much you might
not like it.
4. Respond promptly to emerging competition,
(even if it means ultimately eating your own business)
5. Sketch out the efficient market ‘attractor’ state
and start positioning early as a result.
+44(0)7970 428 929

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+44(0)7970 428 929
WWW.JONBROOME.COM
What does good strategy look like? Process
Science
Information & analysis of
existing knowledge
e.g. literature review
Hypothesis
Design experiment
Do experiment
Test & refine
Strategy
A diagnosis of the
situation
A Guiding Policy
A pathway of actions
Start implementing
Test, refine & update
Comparison has been made to good science:
STRATEGIC INSIGHT

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Some red ocean tools for the
‘diagnosis of the situation’
❖ Porters Five Forces Model
❖ Emerging trends
❖ Attractor state
❖ SWOT analysis, inc moats,
of yourself and competitors
❖ Deeper analysis of competitors: what is their
business model, policies, culture etc.
❖ Do a current state strategy canvas for the sector
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Some blue ocean questions for
‘strategic insight’
❖ What alternatives are there for customers ?
E.g. Southwest Airlines & road journeys, not other airlines
❖ Can we target a different buyer? E.g. traders
for Bloomberg versus IT managers for Reuters & Telerate
❖ What is the total customer experience?
What detracts and what could enhance that experience ?
❖ Where on the function/emotion spectrum does
the industry operate? How could you add the opposite?
E.g. full broker service vs. self-service investment platforms.
❖ What are the customer groupings? Is there a gap?
Can we eliminate the superfluous or provide an upgrade?
+44(0)7970 428 929

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A blue ocean tools for
‘strategic insight’.
❖ Current state
strategy canvas
for wine.
❖ A final state
strategy canvas
for yellowtail
What can be eliminated or reduced (that is not valued by target customer) ?
What can be raised or created (that is/will be valued by target customer)?
Source:ShortformSource:Shortform

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But how do we achieve at least one of the
six sustainable competitive advantages?
❖ There is no permanently sustainable competitive
advantage because:
o the world might change
o you have to put the effort into sustain it.
❖ Once pointed out, I saw this
pattern time & time again in the
winning examples:
the existing incumbents would
have to eat their own business to
compete, thus giving the ‘newbie’
time to build one or more moats.

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What does GREAT strategy look like?
It is anticipatory both of emerging trends and
how the competition is likely to respond.
Targeted to the organisation attractor state - a
fleshed-out vision – based on targeted niche.
It provides superior value to your targeted
customer / niche.
It differentiates you from the competition,
ideally so there isn’t any (immediate) competition.
It establishes new, or enhances existing,
moats.
+44(0)7970 428 929

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What does GREAT strategy look like?
It’s focussed: it clearly states what activities
will and won’t be done.
It’s coherent with activities that are mutually
reinforcing, so that
o it’s a hard to replicate system
o the total > sum of of the parts.
It’s actionable: what needs to be done easily
drops out.
The kernel of the strategy – diagnosis, policy,
actions - can be expressed clearly & succinctly.
+44(0)7970 428 929

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A few comments on implementation
❖ Most of the stuff on implementation sounded
like good project management to me !
E.g. programme & benefits management etc.
❖ What stood out from one article1 was:
o Need to go beyond Roles and into
Responsibilities, especially who is the decision
maker and the need for continuity.
o Communications, both informal and formal,
including access to data, is critical to make
good coherent strategic decisions.
+44(0)7970 428 929
1. Neilson G L, Martin K & Powers E, The Secrets to Successful
Strategy Execution in HBR’s 10 Must Reads: On Strategy

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