Teaching Tips @ SMS Madrid

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The Strategic Management Society always has excellent teaching sessions incorporated in their conferences. Here are some sessions to check out at the Madrid conference September 20-23, 2014:

  • Sat, 9/20 @ 13-16:00. Competitive Strategy Interest Group Teaching Workshop. Building on last year’s workshop on innovation & education, the 2014 theme is “The Impact of New Technologies on Teaching and Higher Education.” The education industry is abuzz with talk of MOOCs, distance learning, computer-based instruction, and other innovations. How are these best incorporated into the curriculum? (Co-sponsored by the Teaching Community).
  • Sun 9/21 @ 8-9:15. Teaching Corporate Strategy: Insights & Opportunities. Panelists will share experiences teaching corporate strategy topics related to their research: vertical integration, M&A, industry consolidation, and diversification.
  • Sun 9/21 @ 9:15-10:45. Researchers Hooked on Teaching / Teachers Hooked on Research. Most academics polarize teaching and research into separate worlds. Building on last year’s very popular session we bring together world-class scholars who have successfully bridged this apparent divide. This engaging session will showcase their experiences in “translating” their research into teachable moments and their teachable moments into research.
  • Sun 9/21 @ 15:45-17:00. Alternatives Takes on Teaching Strategy: Balancing the (ex)Tensions. Strategy is a complex subject with multiple teaching approaches. This interactive session will provide insights from experienced educators on the methods that work, as well as addressing moves to online content.
  • Mon 9/22 @ 11:00-12:15. Challenging the Way We Teach and Practice Strategy. This is a common ground session comprised of submissions to the teaching community track.
  • Mon 9/22 @ 14:45 – 16:00. Teaching Strategy Philosophically. Ethics applies different theories to address Socrates’s question of how we should act. The application of philosophical principles in teaching strategy has multiple advantages including a better appreciation of underlying values and motivation, and increasing tolerance of ambiguity. Join us in this highly interactive session in how great scholars teach strategy philosophically.

Contributed by Russ Coff

Technological Breakthrough: BookBook

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This excellent ad for the 2015 IKEA catalog spoofs Apple’s over-the-top spots about their new products (as well as Samsung’s “next best thing”). This will spur some additional discussion about the value of older technologies and how to sell them to customers as the “best thing you always had.” It also is a nice opener for a discussion of how IKEA leverages their capabilities (advertising and reputation). You can find more background in this Forbes article. For an even lighter take on legacy products, see this Onion post on failing newspapers.

Contributed by Russ Coff

The Moral of the Story…

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Is it good business to do good? This is an inevitable question in business strategy. Consider the contrast with economics where the assumption is that societal welfare is maximized when there is perfect competition. In this frame, competitive advantage may imply that societal welfare is sacrificed. Clearly there are examples of firms that have created value for shareholders while destroying it for other stakeholders. This discussion pushes us to consider the question of value creation … for whom? This video includes guest appearances by Jay Barney, Rajshree Agarwal, Jeff McMullen, and Peter Klein.

Contributed by Peter Klein

Vertical Integration with Style!

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Andrew Shipilov offers a nice case (with video) of Louis Vuitton’s strategy for vertical integration and alliances. He documents how Vuitton vertically integrated into distribution when the rest of the fashion industry relied only on partnerships. This allowed them to gain access to important market information (customer preferences) on a more timely basis — a source of advantage in the industry. Shipilov notes: “The more unique your assets are and the greater the control you need to exercise over the value chain to extract competitive advantage from these assets, the more vertical integration makes sense. However, the higher the uncertainty and complexity in your markets, the more you should think about partnerships.”

Contributed by Andrew Shipilov

Strategic Mgt of Job Interviews

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RecruiterQuestion-GoogleThis Onion video illustrates some … um … interesting strategies one might apply in job interviews. While the strategies portrayed are entertaining, there is a key point hidden behind the humor: Analyzing a company’s strategy might help students ask questions that set them apart from other job candidates. Here is a 6-step “listicle” by Google’s HR executive on how to prepare for an interview. Getting a job could be turned into a class exercise that helps students see how the strategy content might be useful right away (as opposed to waiting until they are CEOs). For any case, consider a range of recruiter questions that convey a deeper understanding of a company’s strategy. For example, a good question for Apple might reveal an understanding of the nature and extent of their competitive advantage as well as strategic challenges: “How does Apple’s culture of creative product design extend to less creative jobs like sales and service?” or “How does Apple create a sense of urgency among employees to respond to rivals like Samsung?” Many of the key strategy frameworks can be applied to generate such probing questions:

  • 5 forces/Industry analysis might help you understand the market position & efforts to increase buyer switching costs. This might include marketing or operations efforts to get closer to customers (customer intimacy). Probing questions along these lines convey that you understand strategic issues in the industry.
  • VRINE/Internal analysis might help identify key resources to leverage (e.g., Apple example above). If culture is a critical resource, one might ask questions about how they develop and maintain it.
  • STAR framework might help to identify levers to develop and maintain a valuable culture or, for example, coordination across units (e.g., MicroTech negotiation). Thus, one could probe into hiring, reward systems, structure, and processes to understand how they achieve these capabilities.
  • “Four C” framework might be useful if alliances are a key component of the firm’s strategy (outsourcing, R&D, etc.). How do they find partners with congruent goals? How do they managing the changing relationship over time? End game?

Contributed by Russ Coff

Secret Ingredient: Scorpion Venom

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The resource based view focuses on the firm’s “secret sauce” – a resource that rivals would like to get but can’t. One isolating mechanism is causal ambiguity – they can’t identify what they should be trying to imitate. This commercial focuses on rumors about what the secret ingredient might be and may be useful for seeding such a discussion. For a recent academic treatment of causal ambiguity, see  Adelaide Wilcox King’s AMR paper.

Contributed by Russ Coff

Executing Strategy … for a change

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organizational-change-timizzer1-1024x8181here are lots of cases, exercises, & simulations dealing with making strategic decisions, but few that deal with execution. Since implementation is a major hurdle for achieving a successful strategy, this can leave an important gap in the traditional strategy course. Bill Judge created this simulation dealing with strategy execution of an organization-wide strategic change. The product, developed in partnership with Harvard Business Publishing, is a single-player, online simulation that can be played over the internet or in the classroom. The student plays the role of a change agent trying to convince other managers to adopt the proposed green strategy. There are social networks embedded among them that are only revealed as stakeholders are interviewed (one of the 18 “levers” in the game). They, in turn, convince others based on their social ties. The simulation allows you to “play” in four scenarios that alter the change agent’s power (CEO vs. R&D director) and urgency (an opportunity to expand vs. the risk of losing the firm’s largest customer). This is a good vehicle to introduce notions of power and influence, human capital, readiness for change, leadership challenges, dynamic capabilities, balancing financial and social imperatives, and the organization and environment interface. The cost of the simulation is nominal if you are playing it within an academic institution (about the cost of 4 HBS cases). If you would like to explore this further, please click here and check it out. You can check out how it works since there is a video and preview available. If you have comments, questions, or suggestions, please email Bill Judge here.

Contributed by William Judge

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

An Apple A Day Kills Profit?

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This quick Zack King video shows what happens to profit in the healthcare industry when patients are healthy. You might talk about healthcare policy and strategy when good strategies reduce profit. Here, an important distinction might be made between industry and firm level profit. This might also trigger some interesting discussions of ethics. Here are more Zack King videos.

Contributed by Russ Coff

Money Tree Strategy?

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These two quick Zack King videos might be a nice introduction to competitive advantage. It is sort of in the spirit of Dick Rumelt’s Silver Doodle example. Would a firm have a competitive advantage if it could copy and paste money? If it owned a money tree? Consider the opportunity cost and watch heads spin… Here are more Zack King videos.

Contributed by Russ Coff

Frozen Corporate Strategy

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Disney’s Frozen is now the top grossing animated film of all time (almost $800 million in revenue so far). But that is only the box office proceeds. FrozenThe Lion King brought in over 2 billion and the box office was just a small part (see the HBS Lion King case for a breakdown). Of course, they will leverage the characters across their entertainment assets (frozen cruises, stage shows, theme parks, broadcasting, etc.). This might make one think that the bulk of the additional returns stem form their diversification strategy. In fact, most of the revenue will come from merchandise sales where the manufacturing is outsourced. Because Disney owns the rights to the characters, they have bargaining power to appropriate most of the profit — no need to vertically integrate. For a rare discussion of management policies to maximize cross-business opportunities, see the Lion King B case (The Synergy Group). Interestingly, Disney has loosened their copyright grip to allow the many spoofs that have overtaken YouTube (click here for a listing). They now see this as free advertising that pumps up the demand for merchandise. This all makes for a nice classroom discussion as well as a host of entertaining videos (like the one below).

Contributed by Russ Coff

Beaten: An Alliance Out of Tune

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Beats by Dre has a newly told story of an alliance partner that did most of the work but lost everything in the process. Monster, a father and son business (Noel and Kevin Lee) came up with the technology but was severely out negotiated by ts more experienced partner. A great cautionary tale for the study of alliances. I use the “Four C” alliance framework to teach alliances:

  • Complementarities. Monster had the engineering chops to design the path-breaking audio. Interscope and Dr. Dre had the marketing expertise and contacts to make them a fashion item. Clearly these complementary capabilities were strong.
  • Congruent goals. While they had a strong interest to cooperate, their interests diverged on the issue of who would own the intellectual property, brand, and on how the value would be split.
  • Compatibility of the Organizations. The larger and professionalized Interscope had a team of experienced lawyers. Kevin Lee had a BA in engineering. They could work together but not necessarily understand each other.
  • Change. Over the course of the alliance Interscope needed Monster less and less. Once the first products were designed and produced, they could hire other expertise to keep the products fresh (much of that was around fashion rather than new technology). This allowed Interscope to shut out Monster altogether.

Contributed by Russ Coff