Monthly Archives: July 2014

Fail to Pivot: Battleship v. Lighthouse

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Sometimes no matter how strong your resources are, you still can’t win. In those cases, it’s critical to avoid conflict so you can fight another day. This classic video depicts a battleship demanding that a rival change course to avoid collision. This might be useful for competitive dynamics (game theory), entrepreneurship (failure to pivot) or strategy process (cognition & stubbornness) where it may be critical to know when to change course. Guoli Chen, Crossland, & Luo’s recent SMJ article on CEO overconfidence is a nice academic complement to this. Of course there is a large literature on escalation of commitment that is also relevant.

Contributed by Russ Coff

Mission (Out of) Control

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After a year of (painful?) meetings, Stanford Business School concluded that their mission was “to be the leading academic school of management in the world in terms of its impact on management theory, thinking, practice and performance.” Prior to that effort, we had no idea what they were about. Glad to have that cleared up. Years later, mission statements are still a key focus in the practice of strategy despite being almost ignored in the academic literature. One could ignore this in teaching strategy (many do) or one might discuss when mission statements are a grand waste of time and when they may prove to be useful. Automated mission statement generators help to make this point. While there are several good ones, this Mission Statement Generator is my favorite. With a single click, you can get profound statements like “It is our mission to continue to assertively operationalize principle-centered intellectual capital as well as endeavor to globally morph multimedia based solutions to meet our customer’s needs.” Of course, there is no shortage of Dilbert cartoons on the topic of mission statements. Now, Weird Al has gotten into the game with a new song that could have been written entirely from a mission statement generator. I think he deserves an honorary MBA for the strategic management anthem.

Contributed by Russ Coff

Power & Alliances: Dog’s Best Friend?

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This short clip is probably self explanatory. Not all alliances work out in the end for all parties. Nearly all alliances involve contexts where power is unevenly distributed. What are the management challenges for both the favored and unfavored partners? This follows a similar pattern as the classic dog and bird alliance featured in this commercial (similar to Tom and Jerry). Click here for more posts on alliances.

Contributed by Russ Coff

Stuck in the Middle Blues

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Samsung’s profits are down by a whopping 25% and they put the blame firmly on Chinese competitors entering with cheaper smartphones (see this NYT article). Companies like Xiaomi and Huawei have increased market share in China over the last year as they sell good products at break-even prices. Now, they have turned their sights on western markets that eat into Samsung’s bread and butter. Pressure on Samsung to respond with lower prices? Perhaps but Apple continues to compete effectively at the high end. It’s proprietary operating system keeps rivals from fully imitating many of the most important product attributes. For now, Samsung is signalling that it will accelerate efforts to differentiate their products — an innovation war more than a price war. The real winner may be Google which gains as Android dominates growth in this market. As you can see, this “live” case allows one to explore the complexities of how different strategies play out in the market. It also pushes us to explore how a sequence of strategies might unfold leading to a longer term competitive advantage. This case might go nicely with the HBS case on Samsung’s dual (cost/differentiation) advantage in memory chips and the threat of Chinese rivals. Of course, in the race for new features, one wonders what they will think of next…

Heard Through Michael Leiblein

Team Shirk: Sustained dysfunction

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Team building is one of the largest and fastest growing segments of management consulting but, as recent NPR story illustrates, the consequences are not always functional teams (click <Here> for the NPR audio). Trainers may promise that a workshop or two will transform a low performing team into a winner. However, the many team building “fails” suggest that it is often more difficult than that. A class discussion may focus on the factors that make teamwork difficult to achieve. Undergraduates often assume that employees naturally cooperate since they are “all on the same team.” It is quite important to help them understand what real organizations are like and why teamwork may be rare and, accordingly, a source of competitive advantage. Bob Sutton’s discussion of dysfunctional competition within Sears might help bring this to light. Of course, there are many other resources here for teamwork and strategy – while they won’t transform every dysfunctional team, they will help to highlight the issues. Of course, this discussion isn’t complete without an engineer’s description of team building:

Contributed by Russ Coff

Art & Craft of Management

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Henry Mintzberg suggests that MBA programs overemphasize the science of management while ignoring its art and craft. The art of management refers to insights or gut feel that may lie at the core of critical strategic decisions – especially when made under great uncertainty. For example, one might ask whether a given advantageous decision resulted from tacit insights or serendipity. The craft is experience that managers draw on in such contexts. For example, recent research on analogizing explores how managers extrapolate from experience to new situations. Certainly most management education focuses on analysis (the science). The following video (of Mintzberg) may open up an interesting, and perhaps counterintuitive, discussion of strategy process.

Contributed by Aya Chacar

Strategy on the High Road

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The recent legalization of marijuana in Colorado and Washington State offer an unusual view of industry emergence. In anticipation of pent up demand, entrepreneurs scramble to assemble resources. Scarce resources get bid up — one example in Washington is licenses to grow and sell. The second video in the sequence below features an entrepreneur seeking to sell his business to cash in on the license he has. Markets for complementary products and services are booming as well (from tourism to private security and ways to store cash that cannot be deposited into federally regulated banks). Who will win out in the scramble to exploit the opportunity? The results so far in Colorado suggest that many in the state will benefit from the boom — $11M in taxes were raised in just the first 4 months of business. The setting is bound to get students’ attention and it is a nice context to examine entrepreneurship, resource scarcity, ethics, and industry structure (among other things).

Contributed by Russ Coff

Keeping Your Cool in Alliances

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Quirky is a company that collects ideas on innovative products from it’s “community members.” It is governed somewhere between crowdsourcing and a holacracy (see the posts on Zappos and Valve). They have formed an alliance with the much more established and traditional, General Electric (GE). The two companies have very different strengths which can be the basis of complementarities that drive value creation in alliances. Together, they have produced Aros, a connected air conditioner that, for example, uses one’s Phone location to tell the system when to turn on and cool one’s house. This is a nice opportunity to apply the frameworks for achieving a network advantage (see Greve, Rowley, & Shipilov’s new book). For example, Shipilov describes the Alliance Radar framework which allows you to see if an alliance portfolio is balanced and identify what kinds of alliances will create the most value. Below is a video review of the resulting product. See also Henrich Greve’s blog post on the alliance for a discussion of how it has worked. While GE handled the product design, manufacturing and sales, the core idea came from Quirky.

Contributed by Aya Chacar

French Connection (in Mexico)

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Daimler and Renault-Nissan have entered into a new alliance to open a new joint plant in Mexico. As the video below indicates, they intend to achieve economies of scale that neither partner could accomplish on their own while maximizing differentiation between the two brands. What are the tradeoffs in trying to achieve these competing goals? How will consumers perceive the arrangement? This could spur some nice discussion on alliance management — an opportunity, perhaps to apply the “Four C” alliance framework or the Resource Pathways framework to assess the opportunities and risks. If you are looking for a complementary exercise, this case would go nicely with the Global Alliance Game.

Contributed by Aya Chacar