Business Acumen & Decision Making Ufone 5/18/2014 Ufone/DesktopCompany Confidential Copyright ©...

Business Acumen & Decision Making

Ufone

5/18/2014 Ufone/Desktop Company Confidential Copyright © 2014 Gulfstone Training 1

Paper Group: “What is your most impressive achievement?”

You have 2 minutes to collect as many stickers as you can

You can collect only one sticker from each participant

At the end of 2 minutes get back into the original line.

Sticker Group:

Only give one sticker if you are impressed by an achievement

Not more than one sticker per participant

And get back into line after the 2 minutes are up

Change This the ‘revenge’ round

Your target is to get at least 10 sticker on your sheet

If you are free raise your hand with your paper or sticker sheet

There are fewer people to hand out sticker (the market has changed)


Some Thoughts About the Future

“The question that faces the strategic decision maker is not what an organization should do tomorrow. It is rather what an organization must do today to be ready for an uncertain tomorrow.”

-- Peter Drucker

What is business acumen?

Business acumen is •keenness and quickness in understanding

•dealing with a business situation

• leading to a good outcome


To achieve our best Results

What is the most important decision Ufone will soon be taking?

What is preventing us from taking that decision?

Some people get confused, some people get scared, some people can’t convince others, some people postpone. not enough info or can’t process too much info

We need to bring in other people to manage our handicaps – create brain trusts

Brain trusts help take all limitations off the table

----Hence the need for training, exploring, experimenting with Acumen & Decisions

Key Decisions Achieve scale on 3G or go for 4G?

Reduce cost-to-serve or grow aggressively?

Contain voice ARPU erosion or increase share of high value customers

Grow by integrate vertically or horizontally or secure significant share of ultra-fast broadband in densely populated areas


Business Acumen & Decision Making: Learning from the Future

Every organization must think ahead and plan!

But how? The future is complex, inherently uncertain & not in our control

Prediction is impossible

Forecasting is generally “obvious or wrong” !“The shortest distance between two mistakes is a straight line forecast” -- futurist Herman Kahn

Even most multiple forecasts are inadequate

So how do we decide what to do next?

What Do I want to Learn in this program? Begin each question with either a what,

how, where, when, which, why, or who

Include every one’s questions and don’t build consensus

Understand each question before posting it on the flip chart

Deadline: 10:20 AM


Scenario Examples

Lilly/Johns Hopkins School of Medicine Joint Scenario Project: “How will Medicine be Practiced in the U.S. in 2010?”

Three scenarios identified in 2000:

“A Surprise-Free Future”

“Consumers Pay the Bills”

“National Health Insurance”


5/19/2014Corporate Strategic Planning

ConfidentialPage 1

F.Leath

Strategic Planning Framework

Column 2Strategic

Ends

Column 3StrategicMeans

Column 4Operational

Plan

Column 1Analysis &

Givens

MarketsKey PlayersBusinessFundamentalsKey Externalities• Critical Trends• Key UncertaintiesCompetitorPositioningStrengths & WeaknessesKey Stakeholders

Mission

Vision

Strategic Intent

Core Competencies

Goals, Metrics, & Targets

Business Lines

Value Proposition

Image of the Value Cycle

Product Programs

Capabilities & Key Relationships

Organizational Architecture

Targets

Tasks

Resources

Schedules

Processes

Sites

Budgets

Other Resources

Acumen and Decisions – 4 Column Model

Possible Futures(scenario planning)

How the world works today


To make decisions we need to..

Make a decision on a specific strategic issue or question (i.e. “Should we focus now on high – end profitable customers only?”)

Define a high-level strategic agenda (i.e. “Is our current business model sustainable in light of changes in the external environment? If not, what should we do?”)

Develop strategic options(i.e. “What could we do in each scenario? What should we do?”)

Test the robustness of current strategy (i.e. “Does our strategy hold up in all of the scenarios, some of them, or only in the ‘best case’ alternative?”)


Elements of the Scenario Process

Identify the Focal Question/Issue

Brainstorm Key Factors and Environmental Forces

Rank Critical Uncertainties

Select and Label Two Scenario Axes

Use the Axes to Create a Scenario Matrix

Flesh out and Name the Scenario Quadrants

Identify Scenario Implications

Use scenarios to identify core requirements for success (optional)

Use Scenarios to Identify Strategic Options and Capability Gaps (optional)



The Focal Decision or Issue to be decided The strategic question or issue that the scenarios are to address

Types of focal questions:– Capital allocation– Diversification or divestment– Acquisitions– Long-term market strategies– Firm focused, or regional focused, or division focused

Important to get the focal question “right” – it shapes the remainder of the scenario exercise.

It’s less important precisely where you plant the stake than that you place the stake precisely!



Brainstorming and Clustering Key Factors and Environmental Forces (Scenario “Driving Forces”)

Key Factors: Issues in the micro (business) environment that influence the focal question/issue

-- market size and growth-- competitor actions-- customers

Environmental Trends/issues in the external environment Forces: that influence the focal question/issue

-- demographic trends -- legislation and regulation -- technological innovations

How will these changes affect?

Usage – changes to user consumption patterns

Services – changes in services composition

Access – device and network access technology evolution

Business model – future revenue structure and sources

Industry structure and regulation – future of industry structure

Capture the factors and forces on a list. “Empty the bucket of the obvious!” No bad ideas in brainstorming!


What have we realized?

What have we learned so far about what impacts our business?

What questions now come to mind?

How can we find answers to these questions?


Removing duplications?

Are there any overlaps or duplications in the CPEST analysis?

Are these duplications part of whole or whole of part?

Can we combine these duplications and put them only on one chart



Elements of a Scenario ProjectRanking Critical Uncertainties

Means of prioritizing the key factors and environmental forces to get to scenario axes

Distinguish between “predetermined elements” and “driving forces”

– Predetermined elements are future trends that are fairly certain and will be present in all scenarios. Example: aging of the population

– Driving forces are future trends that are uncertain. Example: economic growth or market uptake of a new product

Identify “the most important and the most uncertain” of the key factors and environmental forces


Elements of a Scenario ProjectRanking Critical Uncertainties (2)

Cluster related factors and forces under the top 5-6 scoring items

VOTE FOR THESEMost important AND most uncertain

Use voting technique to rankuncertainties. Each teammember gets 33 “votes” to allocate – maximum of sevenvotes per item.

Mostuncertain

Mostimportant

Hot list (Khi – 19.5.2014)

Law & Order (96)

Advancement in Mcomm & MFS (89)

Youth capturing (70)

Delayed decision making by Govt (37)

Better utilization of WCDMA spectrum (37)

Increase in Govet Taxes (35)

Power Gen & shortage (33)

Political corruption (22)

Trade w/ India (22)


Hot list Lahore

Law & Order (90)

Network Coverage (85)

Trending in Social Media (60)

Shift from Voice to Data (50)

Political Reforms for Economic Stability (49)

LTE becomes focal point (49)

Online, ecomm & MFS takeoff (47)

Online Research & Education (45)


Hot List Islamabad

War on Terror (116)

Energy Shortage (95)

Mobile technology is beneficial (87)

Increased use of 3G (85)

MFS (45)

DFI (40)

Law and order – local (40)


Hotlist Islamabad 9.6.14

Using cost effective alternate energy standalone or thru subsidy (132)

Law & order (120)

Rise in Education (87)

VAS (64)

Saturated subscriber base (54)

Policy for tower sharing, ROW, from city & districts (48)

Pak Credit Rating (36)



Elements of the Scenario Process Select and Label Scenario Axes

Take one of the uncertainty clusters that received the most “votes” in the previous prioritization exercise

Try to frame the cluster as a linear polarity

Label the axis and its polar extremes

Repeat for a few additional clusters that received large numbers of votes

Telecom industry InnovationHighProductivebreakthrough

LowStagnantIncremental



Getting to A Scenario Matrix Once several axes representing important uncertainties related to the focal question/issue have been identified and labeled, next step is to use the axes to create a possible scenario matrix

Idea is to combine two axes that are “orthogonal” and represent independent variables

This is probably the most challenging – and sometimes frustrating – part of any scenario exercise. The “zone of terror!”

This is an iterative process…keep trying combinations of axes!

NOT



Getting to a Scenario Matrix (2)

Test each set of axes to see:– Are one or two quadrants completely implausible – null sets?– Are the quadrants interestingly different in ways that are relevant

to the focal question/issue?– Can you find the “official future” quadrant or something close to it?

Criteria for Good Scenarios– Plausible

– Relevant

– Divergent

– Challenging



Write the Stories and Name the Scenarios

The orthogonal axes provide a “frame” for the scenarios but they must be fleshed out to provide more richness and depth

Ask the team:– What’s happening in this world?– What are the “deep causes?” (i.e. why would this scenario occur?) – Who are the winners and losers?

Think of the scenarios as stories…capture the key plot elements as bullet points

– If time permits and the project would benefit, full stories can be written about each scenario, but in most cases bullet points plus 1-2 pages of elaboration will be sufficient

Give the scenarios titles that capture the essence of their content

– Names become useful “short-hand” for referencing the scenarios and help to quickly establish the contrasts between the various alternative world created by the scenarios


Elements of the Scenario ProcessIdentify the Implications of the Scenarios

Consider how factors in the alternative scenarios would affect our industry, its key customers, and other important stakeholders. What would it mean for the industry if a scenario “came true?”

– For example, if telecom Capex is low in a future scenario, there will likely be pressures for industry consolidation, and more opportunity for companies to gain market share. Regulators might impose more stringent requirements, to ensure that competition thrives

Implications are an assessment of what the scenarios might mean for an industry or company…they are not about actions to be taken

– Example: “costs will rise in this world” NOT “re-negotiate supplier contracts”

If relevant to the focal issue/question, also consider what a successful firm or organization would look like in the different scenario worlds..what does a winner look like? (This helps with evaluation of strategic options and capability gaps)


Scenarios and Strategy

Intended strategy

Business Environment Forces

Use scenarios to test the robustness of a strategy and to explore new strategic options

?

?

?

Strategic Decisions


Best Response

Develop Strategic Options

What should the firm/region/function do in response to the conditions suggested by the scenarios and their implications?

• Take one scenario….and assume it is the future

• Review the implications of this scenario (including critical factors for success in this world)

• Brainstorm high-level options. Ask: What could we do? What should we do?

• Agree on 4-5 options

• Repeat for all other scenarios….then compare results


Scenarios and Strategy

Using Scenarios to Develop or Test Strategy

Scenarios provide a context for decision-making…they do not, in themselves, provide a strategy

Strategy is “a plan or method to achieve a specific goal” (Webster’s). It involves making clear choices given viable alternatives

Once scenarios have been developed and their implications considered, they can be used to help develop and evaluate strategic options and capability gap assessments

• Use scenarios to explore and evaluate strategic options

• Use scenarios to “windtunnel” current strategy to assess its robustness in alternative future environments

• Use scenarios to identify capability gaps that the firm faces in implementing strategic

options


Scenarios and StrategyAssess Capability Gaps

Assumes organization has done some work in identifying its current core competencies. Core competencies are:

• A complex set of skills, capabilities and expertise

• That reside in employees working collaboratively in and across skill sets

• Their development requires time and resources and cannot be easily replicated

Examine strategic options. If an option is robust across all scenarios, consider whether organization has capabilities to implement it.

If most/all key strategic options are scenario-dependent, start with scenario that you choose as your “planning future” and consider whether organization has capabilities required to implement those options. Identify key gaps and develop plans for closing them.

As time permits, repeat exercise for other scenario(s) where group has decided hedge options are appropriate

N.B. This can be done in breakout groups or as a full team



Develop Strategic Options (2) Some strategic options may work in all scenarios – these are “no brainers” and are a priority for implementation

Some strategic options will work in some scenarios – thus defining risks. Evaluate them on the basis of upside potential and “resonance” of the scenario. Further analysis needed to find leverage and flexibility to survive in “off” scenarios

A A

A A

B B

C C


Elements of the Scenario ProcessDevelop Strategic Options (3)

Many strategic options work well in only one scenario. At this point, you must decide what you believe about the future…i.e., which scenario is the most likely to occur and thus should be the basis of your planning.

It is not necessary or desirable to place all of your strategic bets on one future – for this reason it is essential to develop hedges and contingency plans to mitigate the most significant risks involved in choosing a scenario for planning purposes. It is also important to be explicit about your planning assumptions and beliefs about the future environment.

But decisions have to made…

D E

F G

Planning future

Hedgethis scenario

Contingency plans forthese scenarios

Key Decisions

Achieve scale

Reduce cost-to-serve

Contain voice ARPU erosion

Secure significant share of ultra-fast broadband in densely populated areas

Increased share of high value customers

Achieve scale

Deploy standardized processes & technology platforms for rapid & seamless M&A integration

Leverage dynamic infrastructures, global resources, “centers of excellence,” and standardized & automated processes for scale

Institutionalize processes to identify acquisition targets, conduct due diligence and close M&A transactions.

Reduce cost-to-serve

Explore selective use of network outsourcing and infrastructure sharing

Accelerate migration to converged/single core IP-based NGN

Optimize and consolidate IT infrastructure

Leverage global resources, “centers of excellence” and business process outsourcing (BPO) as necessary

Simplify & automate business processes & transition to self-service.

Contain voice ARPU erosion

Bundle basic communication services with access/value-added services

Enable access to widest range of communication tools/channels and facilitate integration of lower-cost/free alternatives with subscribed services

Acquire/partner with mobile, OTT communications, fixed or broadband provider to plug capability gap in communications portfolio

Leverage customer insights for cross-/up-sells.

Secure significant share of ultra-fast broadband in densely populated areas

Acquire/partner with incumbent local network infrastructure organizations to accelerate the deployment of ultrafast broadband access in densely populated areas

Passive infrastructure sharing, including underground ducts.

Increased share of high value customers

Leverage network insight into customer experience to deliver personalized experiences and services

Apply social network analytics to enable automated identification of group leaders for focused retention and attraction (churn management) actions

Develop end-to-end visibility of high value customers for focused retention and attraction (churn management) actions.


We don’t know the future – the what or the when - Scenario planning helps us to be clear about what we think may happen and what risks we are willing to bear

We can’t hedge all risks - Strategically we would get “caught in no-man’s land” – mediocre at best - Economically we can’t afford to “buy insurance” for every possible event

We must make clear choices and be willing to act on them - Being bold is not always right - Being first is not always right - Doing nothing is not always right - But, we must be clear about what path we’ve chosen and why

We might be wrong - Need the willingness to manage strategy as a learning process - Must be humble to change

No matter what – getting more and more productive is a good thing

Final Thoughts on Scenarios and Strategy

Summary of day 1

Idea about various dimensions of business issues

Made sense out of complexity & an uncertain future

Become aware of the top 10 critical current factors, changes and trends affection the Ufone business

Understood difference between what situations they can control and influence and what situations they cannot control or influence

Prepared the best possible strategic responses to those scenarios they cannot control or influence

Developed a link between their current job functions with the above strategic responses

Understood how actions and decisions impact key company measures and Ufone’s goals


Day 2


Test for module 1

A bat and ball together cost $1.10. The bat costs exactly one dollar more than the ball.

What is the cost of the ball?

System 1 versus System 2

Fast

Intuitive

Reflexive

Dominant

Slow

Analytical

Deliberative

Lazy

Apollo 13 – Simple DM Process

Become aware of the environment/issues

Outline your goal and outcome.

Gather data.

Develop alternatives (i.e., brainstorming)

List pros and cons of each alternative.

Make the decision.

Immediately take action to implement it.

Learn from and reflect on the decision.

Apollo 13 – An EVEN MORE Simpler Version Orientation

Conflict

Emergence

Reinforcement

Apollo 13 – The Leader’s Approach

Objectives must first be established

Objectives must be classified and placed in order of importance

Alternative actions must be developed

The alternative must be evaluated against all the objectives

The alternative that is able to achieve all the objectives is the tentative decision

The tentative decision is evaluated for more possible consequences

The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision-making) all over again

Key Learnings

What have I realized?

What do I need to be aware of in future?

What have I learnt?

What have I learnt that I need to learn?

What do I need to work on?

Application

What is stopping us from applying this?

What makes this hard?

What is the external or internal interference?

What would you lose if you did this? Or not did this?

What steps can you take? SOP? When?

What is the accountability?

Pledges “I will…..

Action (Ask, tell, confirm, review, ensure, check, question, etc…)

What? (plans, understanding strategy, roles, SOPs, accountabilities etc..)

When? (Before projects, during meetings, at the end of the day/week/project)

Where & With whom? (team, colleagues, boss, customers, suppliers etc..)

Apollo 13 – Summary of good DM practices

Take emotions out of driver’s seat

Seek wise counsel and expert advice

Be wary of raw data

Seek knowledge over information

Know your inclination and bias

Consider every angle

Do cost impact analysis (or another tool)

Prepare plan B

Sacrifice self-interest for greater interest

Characteristics of decision makers

Having a high tolerance for ambiguity.

Having a well-ordered sense of priorities.

Being a good listener.

Always building the consensus around a decision.

Avoiding stereotypes.

Remaining resilient with feedbacks.

Being comfortable with both soft and hard input.

Being realistic about cost and difficulty.

Avoiding a decision minefield.

Right Decision or High Quality?

Low Quality Decision:

No clear outcome in mind

No tracking milestones

Rely on blind trust

Trying to go alone

Unclear priorities

Ego based

Fear based

System 1 thinking

High Quality Decision

Starting with a clear goal

Clear tracking milestones

Rely on reason

Getting high quality input

Well defined priorities

Analysis based

Principle based

System 2 thinking

Low quality decisions

False hopes

Not thinking about it (ostrich)

Anchoring

Sunk –cost

Lack of reflection

Seeking confirming evidence

Strategies for Low qual. Dec. Pray for miracle

Overconfidence

Defensiveness

Excess prudence

Misrepresent

Passing buck

Committee thinking

False alternatives

High quality decisions

Timely

Consultative process

Background/experience

Diverse views

Systematic/organized approach

Challenging

Defining actions

Consider Bacck Up Plans

Summary Points

“Decidio”• Falling off• Provokes fear of falling or failing

Involves a trade off

Role of management science & Emotional maturity

Right/wrong versus quality

System 1 vs. System 2 thinking

Salary breakdown as percentage of decision making

Level 1

Level 3

Level 5

Level 2

Level 4

Level 6

© Copyright 2005, Gulfstone Training

Force Field Analysis

Write down the one change you want to happen

Identify all driving forces that will contribute to achieving this change

Identify all restraining forces working against this change

Rate these forces in order of importance to the success or hindrance in achieving this change



Draw a diagram of the forces, using the length of arrows to indicate the magnitude of the forces

Prepare a strategy for changing the situation – identify

• Action you will take to increase key driving force• Action you will take to decrease or eliminate key

restraining forces



A – High

B – Medium

C – Low


DECISION CORRIDOR

Won’t

Will



Redraw your force field and assess how feasible is your goal now

When you have a workable solution, then make a plan that shows

• Sequence of stages• Target start and finish times• Who will be responsible• What resources do you need• Review dates to check progress


OPEN BOUNDRIES

Your Journey

Forces Of external

advice and requests from other people

A

B

C

D

E

?

Who Decides?

Do I decide because I am responsible for the outcome?

Do I decide because I am responsible for others?

Do I decide because I am most qualified?

Should my boss be taking this decision?

Defensible decisions Claim• “We should invest in SAP.”

Reason• “Because it will increase our productivity by 15%

and reduce costs by 18%”

Evidence• Our research on 10 companies showed an

average prod. Inc. of 20% and cost reduction of 25%

Educated means to be a critical thinker (System 2 thinking)

Critical thinking has been identified as central to success

Determines how skillfully someone gathers, processes, and applies information to navigate complexity

What defines Action

Relationship between Critical Thinking & Action Orientation

Our behavior Patterns

Sheep: • Low Critical Thinking/Low Action

“Yes men”: • Low Critical Thinking/High Action

Alienated followers: • High Critical Thinking/Low Action

Courageous Initiators• High Critical Thinking/High Action

Key Learnings

What have I realized?

What do I need to be aware of in future?

What have I learnt?

What have I learnt that I need to learn?

What do I need to work on?

Application

What is stopping us from applying this?

What makes this hard?

What is the external or internal interference?

What would you lose if you did this? Or not did this?

What steps can you take? SOP? When?

What is the accountability?

Pledges

“I will…..

Action (Ask, tell, confirm, review, ensure, check, question, etc…)

What? (plans, understanding strategy, roles, SOPs, accountabilities etc..)

When? (Before projects, during meetings, at the end of the day/week/project)

Where & With whom? (team, colleagues, boss, customers, suppliers etc..)

Comfort Zone & Success

What is Group Think?

a group makes faulty decisions

groups ignore alternatives and take irrational actions

its members are similar in background

the group is insulated from outside opinions

there are no clear rules for decision making

Symptoms of Group Think

Illusion of invulnerability

Collective rationalization

Belief in inherent morality

Stereotyped views of out- groups

Direct pressure on dissenters

Self-censorship

Illusion of unanimity

Self-appointed ‘mind guards’

Remedies for Group Think

Avoid stating preferences and expectations at the outset

Routinely discuss groups' deliberations with a trusted associate

Multiple experts should be invited to each meeting on a staggered basis

Outside experts should challenge views of the members

A member should question assumptions and plans (devil's advocate)

The leader should survey warning signals from rivals

Paired Grid Analysis

Factors: Cost Quality Location ReliabilityPayment Options

Total

Weights: 4 5 1 2 3

Supplier 1 4 0 0 2 9 15

Supplier 2 0 15 2 4 3 24

Supplier 3 8 10 1 6 0 25

Supplier 4 8 15 3 6 0 32

Summary Comfort zone vs. Success

Panic vs. Choking

High quality Dec. vs. Lo Quality Dec.

Tacit knowledge vs. Explicit knowledge

Group Think vs. Critical Thinking

Power Triangle

Respect Versus Liked

RIVAS – Model for Self - Development

Result(s) I want

Intentions I need to focus on to achieve

Visualize a situation where you feel challenged

Actions I need to take

Support I need from others

Contacts

03008246665

Skype:ramiz281

[email protected]

Facebook: Ramiz Allawala

mailto:[email protected]

Business Acumen & Decision Making Ufone 5/18/2014 Ufone/DesktopCompany Confidential Copyright ©...

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Transcript of Business Acumen & Decision Making Ufone 5/18/2014 Ufone/DesktopCompany Confidential Copyright ©...