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"Strategic Compass" reading notes

This book was mentioned repeatedly by the author when reading "Talent Strategy". Because this is the same author. As a practitioner in the field of organization and talent. I believe talent, organization and strategy are inseparable.

The author asks three basic questions at the beginning:

Who am I? Where to go? How to get there?

These are the three basic threads of strategy. Once these three questions are clearly thought out, the company will have a philosophical thought.

Article 1 of Huawei’s Basic Law summarizes Huawei’s strategy in one sentence:

Huawei’s pursuit is to realize customers’ dreams in the electronic information field. (Qunar) In order to make Huawei a world-class equipment supplier (Who am I/Qunar), we will not need to enter the information services industry. (Use who I am not to answer more clearly who I am). We meet the growing needs of our customers with excellent products, reliable quality, superior lifetime cost-efficiency ratio and effective services. (How to go)

With strategy, companies can move from "attacking in ignorance" to "attacking with aim."

But there are good and bad strategies. Bad strategy is just planning, good strategy is planning. A good strategy is pragmatic rather than pragmatic. A good strategy must be "fast".

Strategy IQ by Professor John Wells of Harvard Business School:

Third-rate strategic IQ ignores changes and is often abandoned by changes;

Second-rate strategic IQ is to follow changes, be able to respond to changes and respond quickly;

First-rate strategic IQ is to create changes, and they can quickly promote strategic innovation, and these innovations are often the trends leading changes.

The author explains strategy from four dimensions:

1. Planning perspective: transforming strategic intent into a strategic map. That is to turn ideas into implementable paths. So the first thing to do is to clarify your thoughts. This may sound simple. The author here gives everyone a methodology, which is to think about strategy from the outside in. To borrow a sentence from Bezos: "Don't ask what we are good at, but ask who our consumers are? What do they need? After that, we have to find a way to meet their needs." After clarifying this thinking logic, it is Have you begun to clarify your strategic intentions?

No, you need to have a clear vision at this time. Yes, it is something that many companies will think, such as Alibaba's "making it easy to do business in the world." This vision must be shared, not personal. Even if it is personal at first, this personal vision must be truly shared by and united by people at all levels of the company. Constructing an integrated identity among a highly diverse population. Vision is the longing and imagination for the future, answering "What do we want to create? What will we become in the future?" A good vision is a goal worthy of a new pursuit, which can generate a strategic sense of direction, passion and belonging. Creating a shared vision is now a required course for all executives! If you want to build a ship, you should not just give the crew a hammer and nails to build the ship, but you should exhale their desire for the vast sea.

The question is, what is the difference between vision and strategic intent? "Strategic intention" is a further extension of vision. Compared with vision, strategic intention is more specific and clear, more competitive and purposeful, and also action-oriented. Employees may be excited when they see the vision, and know how to do it when they see the strategic intent. Vision is public, while intent can be public or private.

Good strategic intent bridges the gap between a long-term vision and achievable near-term goals. If vision is to "look up to the stars," then strategic intent is to be down-to-earth. At the same time, strategic intent, like vision, must be able to ignite the passion of all employees and make them brave and courageous. Strategic intent is to a certain extent the "combat slogan."

When formulating strategic intentions, most people will use the deep-rooted "column thinking" method, which is to look at existing resources, capabilities, past performance, etc. based on past history and existing resources. Derive future strategic plans, which are often equal to the simple sum of sales plans and financial budgets.

The habit of comparing yourself to your past is the biggest limit people set for themselves. Strategy means getting rid of the limitations of existing resources, and ambitious strategic ambitions must be asymmetrical with existing resources and capabilities. It is perfectly normal to worry about the inadequacy of existing resources and capabilities. Strategy, to a certain extent, is about getting rid of the comfort of existing resources. The strategic action to be considered is how to continuously bridge the gap between existing resources and strategic goals. This makes it difficult for us to become more creative and needs to Maximize the use and allocation of its own limited resources, maximize the accumulation and creation of resources, and maximize the borrowing and integration of external resources.

Strategy is a path from an ideal to realizing it. So when we have a vision and a strategic intention, is it OK? No, we still need to turn strategic intentions into an implementable strategic map. A strategy map is a plan that ensures that intentions can be fully implemented. It can also be understood as "strategy execution".

So how to turn it into a strategic map?

1. Storytelling, turning a good strategy into a good story, vivid and interesting, clear and logical, and reflecting dynamic pictures. Take a look at the story of Bezos’ strategy.

We realize that WWW was and is still World wide wait. Therefore, we want to provide customers with a shopping experience that they cannot get in any other way and anywhere (Why) …Our continued focus on improving the shopping experience has resulted in substantial enhancements to our bookstores, while we have also significantly lowered prices to further increase customer value (What). As a result, our website traffic will increase. As long as we become a website with a large number of visitors, we can attract more buyers such as publishers. In this case, the product types on our website will be further expanded, which will further enrich the customer experience and increase the number of website visits (How)

2. Use BSC (Balanced Scorecard) to discuss strategies story. Are you surprised that the Balanced Scorecard actually talks about strategy? Indeed, there is a book called "The Balanced Scorecard - Turning Strategy into Action" written by Dr. Robert Kaplan and Dr. David Norton, the creators of the Balanced Scorecard.

The planning perspective is a methodology for strategy formulation. It tells us the thinking dimensions of strategy formulation. It only tells us (How) how to formulate a strategy, but does not tell us (What) what kind of strategy should be formulated and what standards it meets. strategy is not a "wrong strategy". Hence the second part

2. Perspective: Obtain competitive advantage through competitive strategy

To formulate any strategy, you must first have an insight into your battlefield, as Buffett said: "Which boat you get on is far more important than how efficiently you row." Find the pain points of customers and the industry. What kind of industry can make long-term profits?

1. The degree of confrontation between existing competitors.

2. Customers’ bargaining power.

3. Bargaining power of suppliers.

4. Threats from potential entrants.

5. Threat of substitutes.

After choosing an industry based on the above, you must engage in asymmetric competition, and do not imitate others' strategies. Strategy is about creating a unique and valuable position. You need to know: Who are you competing with? Strategy is about making yourself: "without any competition."

Strategy is like war. You need to know where to fight, that is, where to compete, which refers to your business scope: customers, products and services. Clearly defined business boundaries require executives to make "trade-offs": what should they focus on, what should they give up, and what should they not do? Secondly, we must consider "how to compete?" This refers to competitive means and competitive advantages.

The essence of business competition is not a battle for products, but a battle for cognition. . Based on this, the author divides strategic positioning into two types: the first is business positioning based on industry space; the second is brand positioning based on mind space. If the two can perfectly fit together, they can create a strategic miracle.

The best positioning is first. How do you get to the top spot? First, stand on the opposite side of competitors, avoid competitors' strengths in the customer's mind space, or exploit the weaknesses contained in strengths to establish brand advantages. Second, seek a reliable credential for this positioning. Third, promote integrated marketing communications. We must "jump ahead" at any time and occupy consumers' minds. When establishing the positioning of the military brigade, you need to think about the entire industrial structure and be able to fit it in with the industrial structure. When positioning, being different is more strategic than being the best. The essence of strategy is to create differentiation.

3. Capability perspective: Build organizational capabilities to execute strategies.

Ren Zhengfei said: "We adhere to the 'principle of pressure' and allocate resources with an intensity that exceeds that of our major competitors on key success factors and selected strategic growth points. Either we don't do it, or we do it, we do it." Greatly concentrate human, material and financial resources to achieve key breakthroughs.”

After the strategic positioning is clear, we must consider how to optimize resources, how to optimize and adjust business organizations, and how to build core competitiveness. So, how to make resource allocation more specific? Using the BCG matrix, that is:

Divided into 4 categories from 2 dimensions:

1. Businesses with high market share and low growth are "cash cow" businesses;

2. "Bad dog" business with low relative market share and slow growth rate;

3. "Problematic" business with low market share and high growth rate;

4. 'Star' business with relatively high market share and high external growth rate;

Build your core competitiveness. An enterprise is not just a combination of businesses, but also a combination of capabilities. In the business portfolio Under this guidance, no business unit will independently assume the responsibility of strong and ruthless competitiveness, nor can it provide sufficient reasons and obtain the necessary investment to build some kind of world-leading core competitiveness in a diversified group. If resource allocation, technology development, key talent flow, information systems, and management compensation are all subject to the organizational boundaries of the strategic division, then its core competitiveness will inevitably be fragmented.

Core competitiveness must be something that cannot be stolen, bought, dismantled or taken away.

Cannot be stolen means that it is difficult for others to imitate;

Cannot be bought means that these resources cannot be obtained from the market;

Cannot be taken apart. It means that the company's resources and capabilities are complementary. They are not valuable separately, but they are valuable together.

Cannot be taken away means that even if several talents leave the company, they will not take away the core competitiveness.

Core competitiveness is the collective learning ability within an organization, especially the ability to coordinate various production skills and integrate multiple technologies; core competitiveness is communication, participation, and cross-organizational understanding. A deep commitment to working together with boundaries. Having the same vision, the same values, and strong martial arts skills are the core competitiveness of an enterprise.

Once a company has a core competitiveness strategy, it must also have appropriate organizational capabilities. Professor Yang Guoan said: "Success = strategy * organizational capabilities." How to cultivate a company's organizational capabilities? ---"Organizational Capability Triangular Model"

1. Employee capabilities, whether employees will demonstrate these core competitiveness.

2. Company attraction. Whether the company allows employees to demonstrate these core competencies, the company needs to clear obstacles for employees to demonstrate core competencies through various institutional processes.

3. Employee motivation, whether employees are willing to demonstrate these core competitiveness.

The company's core competitiveness is ultimately demonstrated through "people". The establishment of talent management system is closely related to strategy and extremely important. The talent management system is based on the development direction and strategic positioning of the enterprise, and systematically identifies, evaluates and trains talents through a series of means such as talent standard definition, talent evaluation, talent development planning, etc., so that talents can continue to emerge and meet the needs of the enterprise. needs for future development. The talent management system must solve three major problems:

1. Determine talent needs: Which talents are urgently needed for enterprise development? What criteria do employees meet to be called talents?

2. Evaluate existing talents: What is the company’s current talent status (quantity, quality, potential)?

3. Bridging the talent gap: What is the gap between the company’s current talent situation and its future development requirements? How can we improve the quantity and quality of talent to bridge this gap?

The construction of talent management system can play two key roles: first, from the organizational level, it can match the development of talents with the development of the enterprise, making talents the competitive advantage of the enterprise; second, from the employee level See, it can enable talents to clarify their career path and development direction. In short, through the talent management system, enterprises can find the key to solving the following problems: How to match employee abilities with job requirements? How can employees' capabilities be continuously improved to adapt to their career development? How can employee capabilities be coupled into organizational capabilities through team learning, knowledge manifestation, etc.? How to ensure a continuous supply of talent?

Management guru Gary Hamel has a wise saying: "What does a company operate? It is neither an organization of products nor a combination of services, but a combination of talents. This combination of talents essentially determines The differences between enterprises fundamentally determine the strength of each enterprise. Don't talk about talents in terms of talents, and obscure the relationship between talents and organizations. Individual professional capabilities can match the overall organizational capabilities. The employees are the talents of the enterprise. Therefore, the talent development plan should translate the company's strategy into the organization's capabilities and regard improving the system capabilities of the entire organization as the new mission of talent development.

4. Learning Perspective. Fast Strategy

The bottom layer of strategy is the mental model. Zhou Hongyi said: "Why are many companies eliminated when they face strategic turning points and changes in the industry? It's not because they don't work hard, aren't smart enough, or don't have money, it's precisely because when faced with a turning point, their existing successes often turn into their particularly ambitious ambitions, and their existing experiences may even make them comfortable with their thinking. Therefore, I say that the dead dinosaur did not die in the hands of the opponent, but in his own hands. ”

What are mental models? Mental Medels are the deep-rooted assumptions, generalizations, and even images, pictures or images that determine how we understand and behave in the world.

Two people with different mental models will make different decisions when observing the same time. Mental models will affect what we "see". To a certain extent, we are not "seeing things", but. Use our cognition to "project things"

The disruptive innovations of entrepreneurs must come from things that industry leaders dismiss, cannot see, look down upon and cannot understand, or even It is something that some giants laugh at.

Use the mental model mapper to let us "suspend assumptions", first hang our own "identification of industry rules" in front of us, and continue to ask and observe. ;What is the origin of these assumptions? Where do they come from? Do the conditions for success still exist? You cannot just defend your views and make habitual defenses.

The meaning of entrepreneurs. It lies in breaking industry rules. It is an industrial mutation process that continuously changes the economic structure internally, constantly destroys the old structure and constantly creates new structures.

Entrepreneurs' only responsibility is "disruptive innovation". They subvert the old market notification pattern and abandon old products or services. The title of entrepreneur is not eternal, it is often temporary. Maybe you can become an entrepreneur through disruptive innovation, but once you set the pace of innovation, you are no longer an entrepreneur. If you only perform daily management functions, Then it can only be a manager.

Strategy requires not only planning but also evolution. The key to an agile enterprise and rapid product iteration is proactive change. Build a biological organization so that the organization has the ability to evolve and organize itself in an uncontrolled process. Successful organizations follow these three steps to drive strategic change:

1. Forget. Forget the old business positioning, business model and core competencies, and the "mental models" associated with them, and recognize that starting a new business requires new competitive advantages.

2. Borrow. Forgetting does not mean complete isolation. You must also be good at utilizing existing resources.

3. Study. For change, learning is paramount. Learning is about bridging the gap between what you already know and what you should know.

Finally, to summarize, what is strategy? Strategy is a journey. Where to go? How to get there? When setting where to go, you need to evaluate the external environment, and you also need to be equipped with corresponding "resources" to achieve your goals. On the way to achieving your goals, you also need to make many adjustments due to some objective factors. One is to adjust the direction, and the other is to adjust the path.

The difference from traveling is. Travel can be done alone, but strategy must be realized as a team. In this team, we need a leader who is responsible for deciding where the strategy should go, pointing the direction for us, and convincing everyone to work together to pursue the vision and turn the strategy into reality. The act of thoughtfully formulating a strategy, executing it, and achieving what the strategy says becomes "strategic leadership."

A good leader can take people where they want to go; a great leader can take people where they don't want to go but should go.

Excellent leadership = (transactional leadership + charismatic leadership) * strategic leadership

Not only companies need strategies, you also need strategies to plan your life and make your own life strategy Home. For those who have no direction in their hearts, wherever they go is escape; for those who have direction, wherever they go is pursuit.