T H E C E O s G U I D E T O S T R A T E G I C T H I N K I N G V O L . 2 5 , N O . 2T H E C E O s G U I D E T O S T R A T E G I C T H I N K I N G V O L . 2 5 , N O . 2

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Ms. Chong Siak ChingPresident & CEOAscendas Pte. Ltd.

Driving Force:The DNA of Strategy

Economic Downturn-Surviving & Thriving

in Hard Times

Nuisance or Growth Opportunity?Why CEOs

Should Care AboutClimate Change

I N T E R V I E W

Ms. Chong Siak ChingPresident & CEOAscendas Pte. Ltd.

Dalian Ascendas IT Park, China.

Supremacy, not adequacy, is the goal of a successful strategy.Does your current business strategy put you so far ahead of your competitors that you look over your

shoulder to measure the widening distance between you and them? Or do you find yourself looking from side to side in a day-to-day battle to get ahead today, only to fall behind abetween many opportunities to enhancegrowth, profits, and shareholder value, or are you simply struggling to find them? Do your managers, board,and shareholders understand, agree with, and support your strategy? Or do you find yourself having toexplain it over and over again?

At DPI, we believe that a clearly stated, distinctive strategy will create a steady stream of unique opportunities, enabling you to continuously build value while you force competitors to play your game byyour rules. In other words, the goal of any company’s strategy should be competitive supremacy— not adequacy!

Strategic Thinking –The key to supremacy.DPI’s Strategic Thinking Process can be the catalyst to position you for supremacy in your industry,

as it has for hundreds of winning companies around the world. Strategic Thinking will help you tounlock the hidden potential in your business as you discover your company’s unique “Driving Force”— the one component of the business that is the “heartbeat” of your enterprise. Understanding that“Driving Force” will help you identify the crucial strategic capabilities that must be nurtured togain insurmountable competitive advantage. Strategic Thinking will also enable you to uncoverpotential “stealth competitors” that could enter your markets, causing unforeseen and possiblydisastrous disruption.

DPI’s Strategic Thinking Process differs dramatically from other management consulting concepts. At DPI we believe that the answers to your company’s strategic questions reside in the heads of you, as theCEO, and your key management group. We bring a focused and disciplined approach—a formal process —that will enable you to develop your own, not a consultant’s, strategy. Your management team brings the busi-ness knowledge and industry expertise. We bring you the right questions, providing the framework to debatethe issues and make the critical strategic decisions yourselves. The results? Agreement and focus on a game-changing strategic direction and total commitment to effective deployment. Discover the power of having one common vision for the future of your business.

Discover the Power of Strategic Thinking.We invite you to read this issue of The Strategist and consider beginning a relationship with DPI in

the same way that most of our clients have. Read one of our books or, better still, arrange for a DPI partner to provide a ninety-minute executive overview of our process. Let’s explore together how we mayhelp your organization define a strategy that will bring lasting supremacy over your competitors.

The Strategist is a publication by Decision Processes International,

a worldwide consulting firm and originators of the

Strategic Thinking Process

The Strategist is published by Decision ProcessesInternational, 4 Cranbrook Road, Shrewsbury, MA 01545 (508) 842-9291. Subscription information appears elsewhere in this issue. Submissions, subscriptions,address changes, and other correspondence should be sentto the above address. All reprints are published with permission, as noted. All other material is copyrightDecision Processes International © 2011, all rightsreserved. No material in The Strategist may be reprintedor reproduced in any form without written permission.

Visit DPI on the Internet at

www.dpi-asia.comD e c i s i o n P ro c e s s e s I n t e r n a t i o n a l

The Strategist

3

TheStrategistTM

4Interview:Ms. Chong Siak ChingPresident & CEO, Ascendas Pte. Ltd.

8 Driving Force:The DNA ofStrategyby Craig Bowers

12Economic Downturn- Surviving & Thrivingin Hard Timesby Rex Glanville

15Nuisance or Growth Opportunity?Why CEOs Should Care About Climate Changeby Muriel Chinoda

Dear Executive:

Welcome to The Strategist, a

publication which offers you articles by

some of today’s leading thinkers on the

subject of corporate strategy.

DPI’s core technology is our

Strategic Thinking Process which enables

corporate management to create and

implement strategy. A common sense

approach to strategy, Strategic Thinking

is making traditional strategic planning

obsolete. This process enables a compa-

ny’s management team to reason out a

strategy as a group, assuring thorough

understanding, consensus, buy-in, and

effective implementation. In the “war

rooms” of more than 1,000 companies

throughout the world, global companies

such as 3M, FedEx Custom Critical,

Caterpillar, Prudential, Lubrizol and

Motorola as well as regional companies,

such as Rand Merchant Bank, Ascendas,

SATS Group, Cancer Treatment Centers

of America, as well as hundreds of small

to medium sized emerging companies—

this methodology has been refined and

validated by DPI for more than 30 years.

We hope you enjoy this issue of

The Strategist.

Good reading,

The Strategist

4Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om

The assumption was that by addingattractive lifestyle elements such asgreen space and fitness facilities tobusiness properties, Ascendas couldtransform dull industrial and officeparks into environments that wouldhelp companies in IT and other pro-gressive industries attract and stimu-late top talent. It turned out they wereright, and by 2005 they had hit all oftheir financial targets, reaching $5 bil-lion in assets by building a series ofinnovative business/technology parkspackaging work, leisure and othertypes of space into what they call a“work, live, play” concept. Ascendashad become the clear leader in thistransformed market, and growth con-tinued. Yet management decided it wasready for a time-out to completelyassess their strategy, using DPI’sStrategic Thinking Process.“There was no fire under our feet,”

says Chong Siak Ching, “but we didn’twant to wait for that to happen beforewe reviewed and re-examined our strat-egy. We had stayed ahead of our com-petitors, but we wanted to make surewe would continue to widen the gap.”Ms. Chong is President and CEO of

Ascendas Pte. Ltd., a Singapore-basedprovider of business space, real estatefunds and investment services with

properties in Singapore, India, China,seven other countries and more than 30cities across Asia. On the tenthanniversary of its founding, Ascendascurrently has 11 billion Singapore dol-lars of assets under management, serv-ing more than 2,000 corporate cus-tomers with about 50 million squarefeet of space. Among its flagship prop-erties are Singapore Science Park, andInternational Tech Park in Bangalore,India among many others.“When we first started, industrial

space was not a very attractive sector,

not very glamorous, not like hotels orresidential developments,” says Ms.Chong. “Manufacturing space—facto-ries, warehouses—were not the mostcolorful space. So, as such, back thenthere were not many players in ourindustry, our sandbox. But over time,due in part to the efforts we had putinto making industrial workspace moreattractive and enticing, manufacturingspace had become a lot more interest-ing. We focused on a ‘total environ-ment,’ not just the workspace—fourwalls and a roof.”

When it comes to reviewing corporate strate-gy, many companies subscribe to the “if itain’t broke, don’t fix it” school of thought.However, in this interview, Ascendas CEOMs. Chong Siak Ching explains why they feltit was imperative to take a “clean-slate” lookat their strategy even though the companywas the clear leader in their business sandbox.

Copyright © 2011 Decision Processes International.All rights reserved.

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I N T E R V I E W

Ms. Chong Siak ChingPresident & CEO | ASCENDAS PTE. LTD.

Ascendas Strategy Team. CEO Chong Siak Ching, front row, fourth from left.

Asia’s business space leader Ascendas was founded in 2001 with 1 billion Singapore dollars in assets, based on a perception by its founders of unrealized potential in what they considereda lackluster market segment—industrial buildings.

5Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

The concept clicked with companiessuch as IT and software firms thatwanted to provide stimulating sur-roundings to their people, and rapidgrowth followed. But the success ofwhat Ascendas came to call its “work,play, live” concept had awakened thecompetition who were making signifi-cant gains by following the Ascendasformula. And so, while Ascendas hadbecome quite successful, the timecame to reassess and develop ways totake its concept further, putting evenmore room between the company andits competitors.“We had done very well,” says Ms.

Chong, “but at the same time the com-petitive landscape had changed. Therewere many more competitors cominginto our sandbox and they were emu-lating what we were doing. We neededto examine the fundamentals of thebusiness, review our strategy anddevelop a new strategy that would pro-pel us into the future. So we brought insomeone from the outside—AndrewSng’s team from DPI—for the firsttime. And we were prepared to startwith a clean slate.“We had done strategy reviews

internally with our own very goodstrategy people. But for this round, wewanted someone who could bring inviews from the outside, and also, moreimportantly, someone who offered astructured and comprehensiveapproach that would enable us to doour own strategic thinking. The DPIfacilitators, in addition to bringing arigorous process, also could make surewe did the process right, and to checkour thinking. And bringing an objectiveview, I think that is very important.One can get very comfortable in whatyou know, especially if you are success-ful, and the DPI people were able toalert us to our blind spots.”What most appealed to the Ascendas

team was the fact that the DPI approachdiffers from the “content consulting”method, in which consultants examine acompany and dictate the strategy. Incontrast, DPI’s process concept would

enable the Ascendas managers todevelop their own strategy through astructured critical thinking process.“The DPI process requires the orga-

nization and all of its key managers toquite extensively draw on their collectiveknowledge and expertise to formulateanswers to the challenging questionsframed by DPI,” Ms. Chong says.In 2006, in the first of two DPI

Strategic Thinking Process sessionsAscendas assembled a multi-functionalteam of managers from its headquar-ters as well as the various countryunits. Working their way through theprocess under the direction of the DPIfacilitator, the teams systematicallyexamined every aspect of the compa-ny’s products, markets, customers,capabilities and business landscape togain a common understanding of thecompany and the roots of its business.This grasp of its current strategic pro-file would form the basis of a futurebusiness concept based on the waythey believed their future businesslandscape would look.“This process ultimately helped us to

view Ascendas holistically, get clarityon our Driving Force and identify theAreas of Excellence we needed to nur-ture to support it,” says Ms. Chong.“We had to identify offensive anddefensive strategic objectives, anddevelop a book of Critical Issues wewould need to complete and implementto attain our objectives. And these arethings we had not done in our previousstrategic planning.”A crucial part of the Strategic

Thinking Process is the selection of the

Driving Force. The choice for Ascendasat first was not clear.“There was quite a lot of debate

around our Driving Force,” Ms. Chongrecalls. “Were we driven by the prod-uct, the customer or the market wewere in? We have always focused onthe product, but have also always beenvery focused on the customer. We, infact, pride ourselves on our high quali-ty customer service, and have beenvery highly rated by our customers,which range from many global Fortune500 firms and MNCs, to more local cor-porations. But ultimately we realizedthat the key to serving our customerswell, and the root of our competitiveadvantage, is through delivering asuperior product. So after a lot of dis-cussion, we settled on Product as ourDriving Force.”The DPI process helped the

Ascendas team to see clearly that theyhad always been Product-Driven,right from the company’s beginning.But how that focus had driven its deci-sions about products, customers, mar-kets, investments and resource alloca-tions had never been articulated orfully understood. What took place asa result of the DPI process was not aradical shift in direction, but the accel-eration and refocusing of the ground-breaking vector they were already on.“We realized that our mission, when

we started the company, was to createtotal business environments. We werealready clear that the driver was thatwe are not just a real estate developer.We are in the business of creating aunique differentiated product, an

“This process ultimately helped us toview Ascendas holistically, get clarityon our Driving Force and identifythe Areas of Excellence we needed

to nurture to support it.”—Ms. Chong

6D e c i s i o n P ro c e s s e s I n t e r n a t i o n a l w w w. d p i - a s i a . c o m

The Strategist

environment for the employees of ourcustomers, not just the space. So webelieve that the uniqueness of theProduct we are creating is our differ-entiator and is key to helping our cus-tomers attract and retain the topworkers, and inspire them to excel,”says Ms. Chong.

This realization enabled Ascendasmanagement to begin to envision thenext levels of product innovation. Arenewed focus on product developmentand deeper understanding of thefuture business space needs of its cus-tomers would enable them to continueto change the rules in a segment thathad become crowded with competitorswho were emulating their approach.This would lead to more complex pro-jects that incorporated more diverseenvironments and a broader range ofamenities.

“I think that it is key, particularly intoday’s very highly competitive envi-ronment, to keep changing the game,”says Ms. Chong. “Companies who arenot clear about how they compete,companies who are not differentiatedenough in their products and services

will find it harder and harder to be sus-tainable and to be profitable. I thinkwe need to be able to redefine theindustry and the way the competitorsengage each other. And sometimesthat entails changing the path or direc-tion that has been working very wellfor the organization.

“It requires some risk-taking. Andit certainly requires courage tochange course, particularly from aconcept which is comfortable, andwhich many of the other players in theindustry are taking. But when the

management team has come together,and thoroughly examined what isneeded to create differentiation, andwhat we need to do to be way ahead ofthe competition, and to do somethingwhich the rest of the competitors orthe industry itself had not done, thatis how we enable the company toachieve supremacy. And we found itwas easier to do so based on the DPImethodology because the leadershipitself had crafted the new strategy, thenew business concept. It is not a caseof the CEO telling the team that thisis what we need to do but it is the teamitself that says this is what we mustdo. And they understand why becausethey were the ones who conceived itby working through this entireprocess, and providing the inputs andcoming to these conclusions.

“So we had decisions from the DPIprocess in place which led to a list ofCritical Issues that would need to bedeveloped to make these new direc-tions a reality, initiatives that wereidentified and owned by specific peo-ple within the organization who thenhad to come up with plans to addressthem with specific goals and mile-stones.”

These efforts pushed the companyforward in terms of new concepts,capabilities and financial performance.But the biggest change came a coupleof years later in a revisiting of theStrategic Thinking Process.

“By 2009 we had made a lot ofprogress since our first DPI session,but then in this next session came therealization that we could keep ourDriving Force—Product—but stilltake the concept even further. Wewanted to create integrated communi-ties anchored by business space. Andthis change was critical for us becauseit opened up a slew of new opportuni-ties for us to offer our customers a lotof differentiated solutions, not justworkspace but ultimately greenspaces, living space, other commercialspace, hotels, retail and cultural facili-ties, and many other amenities.

“I think that it iskey, particularly in today’s very

highly competitiveenvironment, tokeep changing

the game.” —Ms. Chong

Changi Business Park, Singapore

7Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

The Ascendas teams hammered outa new Business Concept that would inmany ways revolutionize the businessspace world in Asia:

Ascendas’ strategy is to providetotal integrated solutions to ourcustomers that extend beyond business space.

1. Integrated communities: We will create and manage distinctive spaces that inspireinnovation and excellencein our customers and users within a secure and sustainableAscendas integrated communi-ty, comprising mixed-usedevelopments anchored by business space.

2. Integrated CustomerSolutions: We will create integrated solutions as abusiness partner to help ourcustomers grow their business and succeed in our space.

Says Ms. Chong, “We decided that inline with this new Business Concept,we would have to re-brand the compa-ny. So we rolled out a new brand strat-egy anchored by the theme ‘Space toBe…Free. Inspired. Energized.’“This new concept also energized

our people. It allowed them to createan even more differentiated environ-ment, a complete customer solution.On top of that, it required us to identi-fy the new Areas of Excellence we’dneed to develop to successfully roll outthis new Business Concept which wasnow crystal clear. So we would have tofocus on even deeper customer under-standing. Also, we would have todevelop our abilities to conceptualizethe work product, to conceptualizewhat our customers need. And we hadto build partnerships across differentareas. Because in building this inte-grated community we didn’t have all

of the competencies or capabilitiesnecessary for such a complex product.So, in some cases, we needed to part-ner with people who had these capa-bilities,” Ms. Chong states. “And weneeded to focus on recruiting, trainingand developing people, and being surethey had the skill sets to make thosedreams into reality.”

Of course, implementation of such a far-reaching strategic evolutionwould require rigorous managementof Critical Issues and an innate senseof mission among managers to assuresteady and unified implementation.And the company found that theStrategic Filter resulting from theprocess enabled managers to makedecisions on a daily basis that consis-tently support the company’s DrivingForce.“I think the involvement of the

whole senior management teamextending a couple of layers down intothe organization is essential,” saysMs. Chong. “We developed a futureunderstanding of the business and thecompetitive landscape. And alsobecause we run an international organization, it is critical that the HQand organizations in other countriesare better aligned with a consistentdefinition of the strategic direction.So they were all part of the develop-ment of the strategy, and they own it.And this makes it much easier to keepeveryone on track across the businesssectors and countries.“I believe that the discipline with

which we conducted the wholeStrategic Thinking Process resulted

in clarity of the business concept. And when the business strategy isclear, then everything else falls intoline. The DPI Strategic ThinkingProcess assures that the business con-cept, the people, capabilities, goals,and targets are all in alignment. It iscritical that we have that.”

The realization of the integratedcommunity concept is embodied in anumber of ambitious projects such asthe new Dalian Ascendas IT Park inChina, part of the Dalian SoftwareIndustry belt, which is currently underconstruction. When completed in fiveto eight years, the park will encompass600,000 square meters and accommo-date more than 30,000 IT profession-als. The business facilities will be integrated with dining, post offices,banks, retail outlets, fitness clubs, andextensive green space, all designed toattract and inspire top IT profession-als. Several similar projects are under-way or are planned for the future.Ascendas communities have won manyawards for architectural excellence and environmental responsibility, and suc-cessfully attract blue chip customers,partners and investors.“In the future we will continue to

differentiate ourselves from the rest ofthe competitors by developing theseintegrated communities that help ourcustomers excel,” says Ms. Chong. “I believe that we will be well-alignedand achieving our five- and ten-yeartargets. And I am quite sure we will be using the DPI process for ourStrategic Thinking.”

“The DPI Strategic Thinking Processassures that the business concept, the

people, capabilities, goals, and targets are all in alignment. It is critical that we have that.”

—Ms. Chong

o achieve competitive suprema-cy, and deliver sustainablegrowth, a company needs tohave a strategy that establishes

a significant and sustainable point ofdifferentiation — one that enables itto add unique value that competitorswill have difficulty duplicating. Ofcourse, most companies have a strate-gy of some sort. Yet few are able tocreate a clear definition of that singledifferentiating factor — if there is one— that has enabled the company to besuccessful in the past. Still fewer havelooked down the road to create a sce-

nario, or strategy, that will enablethem to be successful in the environ-ment they will face in the future.We call that defining factor the

Driving Force. It is the component ofthe business that is unique to that com-pany and is the key determinant of thechoices management makes withregard to future products, future cus-tomers, and future markets. Withoutan understanding of, and agreementupon, that Driving Force, managementwill have a difficult time creating astrategy for the future that will breedsupremacy over its competitors.

What Makes Your Strategy Tick?The best way to determine whether

a CEO and the management teamhave a strategy is to observe them inmeetings as they try to decide whetheror not to pursue an opportunity. Whenwe have sat in on such meetings, wehave noticed that management wouldput each opportunity through a hierar-chy of different filters. The ultimate fil-ter, however, was always whether therewas a fit between the products, cus-tomers, and markets that the opportu-nity brought and one key component ofthe organization. If they found a fit

Driving Force:TheDNAof Strategyby Craig Bowers —FOUNDING PARTNER, DECISION PROCESSES INTERNATIONAL

The Strategist

8Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om

What single element of your organization sets you clearly apart from—andhopefully ahead of—your competition? Many CEOs will find that if theypose this question to their senior managers, they will get as many answers asthere are managers. Lack of consensus on what we at DPI call your DrivingForce is guaranteed to waste resources and weaken your competitive position.

In this article, adapted from the ground-breaking book, The New StrategicThinking, by DPI Founder Michel Robert, the author explains the concept ofDriving Force and why it is essential to your future.

Copyright © 2011 Decision Processes International. All rights reserved.

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9Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

there, they would feel comfortablewith that opportunity, and would pro-ceed with it. If they did not find a fitthere, they would pass.Different companies, however,

looked for different kinds of fit. Somecompanies looked for a fit betweensimilar products. Others were lessconcerned about the similarity ofproducts than about a fit with the cus-tomer base. Still others were notinterested in the similarity of prod-ucts or of the customer base, butrather a fit with the technologyinvolved, or a fit with its sales andmarketing method, or its distributionsystem. Some quick examples:What fit was Daimler looking for

when it bought Chrysler? Obviously,the fit was one between similar prod-ucts. Johnson & Johnson, on the otherhand, looked for an entirely differentkind of fit when it acquiredNeutrogena creams from one compa-ny, and the clinical laboratories ofKodak, each bringing dramaticallydifferent products. J&J was lookingfor a fit between the class of cus-tomers served — doctors, nurses,patients, and mothers — the heart-beat of J&J’s strategy.

Ten Strategic AreasThe next question that came to

mind was: “What are the areas of anorganization that cause managementto decide how to allocate resources orchoose opportunities?” We discovered

that each of the more than five hundred-plus companies we hadworked with consisted of ten basiccomponents.

1. Every company offered a productor service for sale.2. Every company sold its product(s)or service(s) to a certain class of customer or end user.3. These customers or end usersalways resided in certain categoriesof markets.4. Every company employed technol-ogy in its product or service.5. Every company had a productionfacility located somewhere that had acertain amount of capacity or certainin-built capabilities in the making ofa product or service.6. Every company used certain salesor marketing methods to acquire customers for its product or service.7. Every company employed certaindistribution methods to get a productfrom its location to a customer’s location.8. Every company made use of natur-al resources to one degree or another.9. Every company monitored its sizeand growth performance.10. Every company monitored itsreturn or profit performance.

As a result of these observations,two key messages emerged. First, allten areas exist in every company.Second, and more importantly, one ofthe ten areas tends to dominate thestrategy of a company consistentlyover time. Favoring or leveraging thisone area of the business time andagain determines how managementallocates resources or chooses oppor-tunities. In other words, one compo-nent of the business is the engine ofthe strategy — that company’s so-called DNA, or Driving Force. ThisDriving Force determines the array ofproducts, customers, industries, andgeographic markets that managementchooses to emphasize more andemphasize less.

In order to explain this conceptmore clearly, one needs to look at anorganization as a body in motion.Every organization, on any one day, isan organism that has movement andmomentum and is going forward insome direction. Our contention is thatone of the ten components of a company’s operation is the strategicengine behind the decisions that management makes. Some typical examples follow.

A Strategy Driven by a SingleProduct or ServiceA company that is pursuing a prod-

uct-driven strategy has deliberatelydecided to limit its strategy to a sin-gular product and its derivatives.Therefore, all future products and the“current” product are linear, geneticextrapolations of the very first prod-uct that company ever made. In otherwords, the look, form, or function ofthe product stays constant over time.Such companies grow by offeringproduct derivatives that fragment andgrow the market. Examples are Coca-Cola (soft drinks), Boeing (airplanes),Michelin (tires), Harley-Davidson(motorcycles), and many of the auto-mobile manufacturers (GM, Toyota,Volkswagen).

Strategy Driven by a User orCustomer ClassA company that is driven by a user

or customer class has deliberatelydecided to restrict its strategy to adescribable and circumscribable classof end users or customers (people).These end users or customers are theonly ones the company serves. Thecompany then identifies a commonneed of the user or customer class andresponds with a wide array of geneti-cally unrelated products. Examplesare Johnson & Johnson (doctors, nurs-es, patients, and mothers), AARP(adults over 50), and CancerTreatment Centers of America(patients with advanced stage or complex cancers). User/customer class

Our contention isthat one of the tencomponents of a

company’s operationis the strategic

engine behind thedecisions that

management makes.

10Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om

The Strategist

companies grow by expanding the poolof users they serve and/or by expand-ing the set of needs they address.

Strategy Driven by MarketType or CategoryA company that is driven by market

category has deliberately decided tolimit its strategy to a describable mar-ketplace or market type. The companyidentifies a common need among buy-ers in that market and then respondswith a wide variety of genetically unre-lated products, adding to this stable asmarket conditions change. Examplesare Staples (supplies for offices),Disney’s concept of “wholesome enter-tainment for the family” and SingaporeTechnologies Aerospace (the largestnon-airline MRO in the world).

Strategy Driven byTechnology/Know-HowA technology-driven company is

rooted in some basic, hard technology,such as chemistry or physics, or somesoft technology, such as know-how orexpertise. The company then goeslooking for applications for its technol-ogy or expertise. Once it finds anapplication, the company develops aproduct that is infused with its tech-nology for that application, and offersthe new product to all the customersin that market with a similar applica-tion. While growing that business, thecompany goes around looking foranother application to repeat the sameprocess. Examples are DuPont (chem-istry), 3M (polymers), and Intel(microprocessor architecture).UPS is an example of a company

that transformed itself by changingits Driving Force from DistributionMethod (package delivery network) toKnow-How (logistics), opening up arange of new service opportunities.

Strategy Driven by ProductionCapability or CapacityA company driven by production

capacity has a substantial investmentin its production facility. The key

phrase heard around the company is“keep it humming” — three shifts perday, seven days per week, 365 daysper year. The strategy is to keep theproduction facility operating at a max-imum level of capacity. Examples aresteel companies, refineries, and pulpand paper companies. Service relatedcompanies, firms such as airlines andhotels, are also often “productioncapacity” driven.A company driven by production

capability has incorporated some dis-tinctive capabilities into its productionprocess that allows it to do things toits products that its competitors havedifficulty duplicating. As a result,when the company goes looking foropportunities, it restricts its searchto opportunities in which these capa-bilities can be exploited. Specialtyconverters in a variety of industries fitthis category.

Strategy Driven by Sales orMarketing MethodWhen a strategy is driven by a

sales or marketing method, the com-pany has a unique or distinctivemethod of selling to its customerssuch as Avon and Mary Kay. All theopportunities it pursues must utilizethat selling method.

Strategy Driven by DistributionMethodA company driven by a distribution

method has a unique or distinctiveapproach to moving tangible or intangible things from one place toanother, such as Wal-Mart, FedEx andNetFlix.

Strategy Driven by NaturalResourcesA company whose entire purpose

is the pursuit and exploitation of natural resources such as oil, gas, ore,gold, timber, or other resources suchas Exxon, Shell, and Newmont Gold.

Strategy Driven by Size orGrowthA company driven by size or growth

is usually a conglomerate of unrelatedbusinesses. Its sole strategic interestis growth and size for their own sake.

Strategy Driven by Return orProfitA company whose sole strategic

focus is a minimum level of return orprofit is also a conglomerate of unrelat-ed businesses. Western examples suchas Tyco, AlliedSignal, and GeneralElectric are decreasing, but due to dif-ferent market and political structures,return/profit firms remain prevalent inAsia, such as Jardine Matheson (HongKong), Keppel Group (Singapore),Fuson International (China), CP Group(Thailand) and Chaebol (Korea).

Key Strategic QuestionsWhen we take a client through our

Strategic Thinking Process, we havethe CEO and the management teamdebate three key questions to enablethem to identify the company’s cur-rent and future Driving Force.

QUESTION 1: Which compo-nent of your business is current-ly driving your strategy and hasmade you look as you look todayin terms of current products,customers, and markets?

Any strategy needs to accommodate the environment the company willencounter in thefuture, and that

environment could be very different from the one encountered in the past.

11Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

If there are ten people in the room,how many answers do you think we get?Ten, and sometimes more … the reasonis simple. Each person has a differentperception as to which component of thebusiness is the Driving Force behind thecompany’s strategy, often due to theirfunctional bias. These different inter-pretations lead to different visions ofwhere the organization is headed. Thedifficulty, while this is going on, is thateach member of the team makes deci-sions that pull the company left andright, so the company zigzags its wayforward without establishing suprema-cy in any one sandbox. The inevitableresult is that resources are wronglyemployed and growth is patchy.The methodology we bring to bear

at DPI encourages management tolook back at the history of decisionsthey have made and, by doing so, rec-ognize a pattern. Typically, most oftheir decisions were made to favorone component of the business. Thus,the management team recognizes thecurrent Driving Force behind theircurrent strategy.

QUESTION 2: Which compo-nent of the company should bethe Driving Force behind thecompany’s strategy in the future?

Future strategy should not neces-sarily be an extrapolation of the cur-rent strategy. Any strategy needs toaccommodate the environment thecompany will encounter in the future,and that environment could be verydifferent from the one encountered inthe past. This question is the basis forenvisioning “breakaway” strategiesthat explode the assumptions of thecurrent sandbox to envision a new onethat offers significantly greateropportunities to establish supremacyover competitors. Such a strategyenables the company to create, orreposition itself in, a future sandbox ina way that offers it more growth andprofitability than competitors, andcontrol of that sandbox.

Since different Driving Forces bringdifferent growth characteristics, thedesire to achieve higher growth isoften the primary rationale behind achange of Driving Force. Montblanc isan example; from product (pens) tocustomer/user class (luxury accessoryneeds of business executives).Teckwah Industrial Corporation, aDPI client based in Singapore, is a rar-ity, having successfully changed itsDriving Force twice in recent years.

QUESTION 3:What impact willthis Driving Force have on thechoices the company must makeregarding future products, futurecustomers, and future markets?

The Driving Force the companychooses as the engine of its strategywill determine the choices its man-agement makes as to the products,customers, and markets that theywill and will not emphasize in thefuture. These choices will shape theprofile of the company, and maybeeven the industry, over time. EachDriving Force will cause manage-ment to make very different choicesthat will make the company look verydifferently than the way it lookstoday. In other words, just as yourpersonal DNA determines what youlook like and why you look different-ly from other people, the same is truefor your corporate DNA. The compa-ny component you select as the DNAof its strategy will determine whatthat company will eventually look likeand what will differentiate it from itscompetitors.

The concept of Driving Force — tous at DPI — is fundamental for anysuccessful CEO to understand. It isthe recognition and understanding, byall members of the management team,of that one predominant component ofthe business — its Driving Force —that will allow the organization to for-mulate a strategy based on a distinc-tive and sustainable advantage thatcan give it long-term supremacy overits competition.The perils of failing to gain consen-

sus on the business’ Driving Force andresultant strategy can be deadly. Atwhat turned out to be the key cross-roads of its story, Digital EquipmentCorporation had three different man-agement camps that the CEO neverrationalized, leading to schizophrenicstrategic behavior. The company stag-nated before eventually beingacquired by Compaq (and that’sanother story!)Each Driving Force brings with it a

requirement to excel in a very differ-ent set of skills. No company can out-excel its competitors across the board.One cannot out-muscle every competi-tor in the market. Therefore, itbecomes important to identify thecompany’s Driving Force and the cor-responding Areas of Excellence,which are then given preferentialtreatment. These areas keep thestrategy strong and healthy and builda long-term strategic advantage overcompetitors.

Look for an article on Areas ofExcellence in an upcoming issue ofThe Strategist or in the book, TheNew Strategic Thinking.

The Driving Force the company chooses asthe engine of its strategy will

determine the choices its managementmakes as to the products, customers, and markets that they will and will

not emphasize in the future.

conomic downturn,recession, slump—terms that sendchills down the spine

of even the most robust ofbusiness leaders. In board-rooms across the world, plan-ning is underway for hardtimes ahead. There is greattemptation to cocoon whenthings get difficult—cuttingback on risk and innovation,curtailing spending, downsiz-ing and generally pullingback, hoping to come outunscathed. Worse still, CEOsmay take the “easy” route ofacross-the-board cuts thatignore strategic competen-cies, opportunities and region-al variations.Yet it is exactly these old

reflexes that kick in duringan uncertain economic out-look—cutting people andprograms—which have to berethought.The mindset that says “this is not

the time to invest in new products” isdeadly, argues DPI founder MichelRobert in his book Strategic ProductInnovation. Examining why compa-nies that were powerhouses in theirrespective territories, yet ended up

with their supremacy disintegrat-ing—together with their stockprices—Robert concludes that com-panies that disappeared did so bykilling product innovation, and stag-nating to death.Recession can actually be good for a

well-managed company. In DPI’s

view, the best time to establishsupremacy over competitorsis during a downturn. Indeed,the recent diverging fortunesof technology heavyweightsIBM and HP appear to beartestimony to this fact.For a start, says Robert, in

down markets, “consumersneed more reasons to buy andare more receptive to new-to-the-market products sincethese are distinctive and differentiated and attractnotice.” So in tough times,when competitors are hidingtheir heads in the sand, companies that concentrateproduct innovation resourceson new-to-the-market prod-ucts can breed competitivesupremacy and create newrevenue streams.“The best time for risk tak-

ing and innovation is when theeconomy is challenging,”

agrees F. Franks, President of US-based management consulting practiceFranks Consulting Group. “While mostbusinesses retrench, those that takerisks and push innovation stand outamong their competition.”To see how economically troubled

times can be used to advantage,

E

EconomicDownturn–Surviving and Thrivingin Hard Timesby Rex Glanville —CHAIRMAN, DPI AFRICA

The Strategist

12Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om

tWhat do successes such as MTV (launched in1981), the iPod (2001), Google’s Android andBurger King’s Apple Fries (both 2008) all havein common? Well, for starters they were alllaunched the midst of a recession.

In this article Rex Glanville, Chairman, DPIAfrica, explores what it takes to survive andthrive in hard times.

Copyright © 2011 Decision Processes International.All rights reserved.

13Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

The Strategist

global consultancy McKinsey studiedthe performance of 1,000 mainlyindustrial companies in the UnitedStates between 1982 and 1999.Companies that retained or gainedmarket leadership during the1990–91 Recession, the study found,refocused their spending in line withcompetitive opportunities, instead oftightening their belts on operatingexpenses.Successful companies like Sony,

3M, Canon, Microsoft, Johnson &Johnson, Caterpillar, and Schwabmaintain their control of their turfnot by introducing “me too” products, Robert points out, “butrather by focusing their resources onthe creation of new-to-the-market products.”Along with great innovative prod-

ucts, smart companies will find theresources to step up advertising andmarketing. It may be counter-intu-itive, but there is plenty of evidencethat continuing to engage in market-ing during an economic downturn cansustain business and provide a com-petitive advantage.A classic case in point: In 1933, in

the heart of the Great Depression,Procter & Gamble took a risk thatchanged the company, and advertisinghistory. Despite protests from share-holders, P&G President RichardDeupree created compelling radioserials, sponsored by Ivory Soap.This was the start of what we now call“soap operas.” By the time 1939 rolledaround, P&G was sponsoring 21 radioprograms. They doubled their radioadvertising budget every two yearsduring the Depression. The companyis today the world’s number onemaker of household products.Harvard Business School professor

John A. Quelch recently noted, “It iswell documented that brands thatincrease advertising in a recession,when competitors are cutting back,can improve market share, and returnon investment at lower cost than during good economic times.”

Spending needs to be carefullyplanned and targeted, of course. Thekey is to do more with less, and to doit creatively.Thoroughly examine your market

strategy, and revise your messages ifneed be. Research suggests thatoffering reassurance, emphasizingvalue and empowering consumerswith information is the way to go dur-ing uncertain times, as opposed togoing for aspirational, optimistic andlight-hearted messages.This is the time to reconnect with

customers, and figure out how to addvalue to their experience. Solidifyingrelationships with your customersnow means that they’ll remember youwhen times get better. “It seems thatduring a downturn in the economybusinesses of all sizes are quick to putcustomers last,” says Franks. “No!This is the time to re-evaluate whatyour business is doing to delight yourcustomers.”Along with customers, look after

employees. Job uncertainty meansweakened employee motivation,which can have serious effects on pro-ductivity. Over-hiring in good timesand quickly resorting to downsizingas a temporary fix is a common mis-take. Recognizing the warning signsof declining motivation and overallmorale can allow managers torespond quickly with interventionstrategies aimed at boosting decliningproductivity.In their book: The Performance

Power Grid: The Proven Method to

Create and Sustain SuperiorOrganizational Performance, authorsDavid F. Giannetto and AnthonyZecca point out that tough times caneven be a “momentary unifying fac-tor” where employees are able to setaside personal concerns and rallyaround a greater cause. By coachingemployees to provide exceptional ser-vice, a business can keep valuable cus-tomers and ride out the downturn.Don’t lose perspective when the

economy slumps, Charles T. Scott, aworldwide partner at Mercer, urgesbusiness leaders. “Over the past 60years, economic downturns have last-ed, on average, from 11 to 18 months,so there’s a built-in risk to any sweep-ing organizational changes—majorlayoffs, pay cuts or freezes—that pro-ceed from a short-term orientation.“Without a doubt, there are compa-

nies that will have to take a hard lookat people-related reductions. Butrather than approaching expensereduction with a broad brush – if not ablunt instrument—companies shouldconsider the areas in which any thin-ning of the talent ranks could renderthem uncompetitive when the eco-nomic climate improves.”And lastly, don’t panic. Recessions

are temporary and great companiesdon’t abandon their growth strategiesin the face of temporary setbacks.Entrepreneur and author RobertAshton notes: “Slowdown does notmean stop. Providing you can weathera storm, you’ll be fine. Don’t talk reces-sion up; it might never happen.”

This is the time to reconnect withcustomers, and figure out how to addvalue to their experience. Solidifyingrelationships with your customersnow means that they’ll remember

you when times get better.

Will your strategy put you miles ahead in your competitive arena—for years to come?

Or is a “me-too” strategy making you a permanent also-ran?

The Strategic Thinking Process described in this book

has put hundreds of companies on the road to sustained

competitive advantage, returning control of the strategy

to those who will implement it.

This common sense process has helpedhundreds of companies to:• Identify and build upon their Driving Force—the unique set of capabilities at the root of strategic advantage.

• Develop their own strategy—not a consultant’s—in a matter of days, not weeks or months

• Gain agreement on, and ownership of, the strategyamong key managers—and strong commitment toeffective implementation

• Develop distinctive, game-changing strategies thatput them far ahead of their competitors

• Create strategies that lead to sustained competitiveadvantage for decades

“DPI and its Strategic Thinking Process have been a key catalyst of our growth.”— THOMAS CHUA, CHAIRMAN, TECKWAH INDUSTRIAL CORPORATION LTD

“With limited resources and so much to do, we must be strategic in our objectives, thorough in our assessments, and targeted in our programming.DPI's Strategic Thinking Process is absolutelypriceless. Tsao Foundation has benefited tremendously from it. I highly recommend it!” — MARY ANN TSAO, EXECUTIVE DIRECTOR, TSAO FOUNDATION

*Or a FREE copy when you invite aDPI Partner in for a complimentaryExecutive Overview Session of theStrategic Thinking Concepts.

SPECIALOFFER!

only

S$55Delivery/Postage S$12 excl. GST

Contact:• Alice Goh +65 6235 1733

• email: alice.goh@dpi-asia.com

excl. GST

Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om14

15Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

tAs the global debate over climate change—whether it’s real, and if so what to do aboutit—continues, companies are being com-pelled by many forces, from public opinionto new product opportunities, to confront theissue and its implications.

In this article, the author frames the discus-sion from the standpoint of CEOs grapplingwith the growing challenges of sustainability.

Copyright © 2011 Decision Processes International.All rights reserved.

hatever your views onClimate Change’s causesand possible dangers, thestrategic pressures creat-

ed by rising environmental concernsand threats of the pledges, commit-ments, laws and regulations beingenacted around the world to curbgreenhouse gas emissions and the rising demands by consumers, make itan unavoidable input into your strate-gic process. The implications, risksand opportunities are simply too largefor a CEO to ignore.

Why should business care?Business should care because

although the subject is not new, in thewords of John Varley, the Group ChiefExecutive of Barclays, “ClimateChange is a business issue. It hasjoined the list of top risks and oppor-tunities.” The proactive engagementof business in climate change is inbusiness’ own interests he says.

Climate change, or if you prefer,Global Warming (for the purposes ofthis article we don’t distinguishbetween the two) is not new, and cer-tainly not without controversy. Thefirst musings of the subject in the sci-entific community date back to the1800’s and accelerated throughout the1900’s. Social and business awarenessof the topic is also not new, with manymedia firms, NGOs and the UnitedNations doing their bit to put the topicon the tables of parliaments, board-rooms and families alike. Al Gorefamously trumpeted it in 2006 in his“An Inconvenient Truth.” Of course,there are detractors – a Google searchof “An Inconvenient Truth Lies”returns 1.6m hits!Perhaps this goes some way to

explain why many organizations haveadopted a “wait and see” or reac-tionary stance to the topic. EvenApple, despite the famed relationshipbetween Messrs Jobs and Gore,

attracted the ire of many for being alaggard or for only doing somethingwhen pushed.

So why is now the right time forCEOs to care? Why is now the righttime for executive teams to workthrough the difficult questions that climate change brings?Despite the controversies, the tide of

Climate Change is remorselessly ris-ing and its presence will be increasing-ly felt on your business, often in waysthat aren’t immediately obvious orfully appreciated. That’s why manyCEOs are no longer looking at thetopic as an operational headache to bemanaged but as a strategic opportuni-ty to be exploited.

Climate Change is impactingyour sandbox. Now!All companies compete in a business

space. We call that space your“Sandbox”. Defining the sandbox thatyou play in and understanding the

W

Nuisance orGrowth Opportunity?

Why CEOsShould CareAbout Climate Changeby Muriel Chinoda —SENIORASSOCIATE, DPI AFRICA

The Strategist

16Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l www. d p i - a s i a . c om

rules of play are critical considerationsin any strategic exercise. Redefiningyour space, to create a new sandbox,and then establishing the rules of playare key outcomes of the DPI StrategicThinking Process.What’s interesting about our work

— and we have clients of varyingshapes and sizes from a diverse rangeof industries — is that Climate Changeis impacting every sandbox we comeacross. It impacts upstream players inyour sandbox yielding “push” factorsin your business. It is changing thebehavior of downstream players inyour sandbox generating “pull” factorsin your business. It is generatingentirely new players in your sandbox!You can’t set the rules of play withoutfully digesting these effects.Firstly, let’s explore some push

factors. To combat climate change, governments all over the world havecommitted themselves to emission tar-gets by adopting a mix of instrumentsincluding market-based policy instru-ments (carbon taxation or cap-and-trade). In addition other measures andstandards that are not based on theactual amount of emissions, such asstandards and regulations to increaseenergy efficiency (e.g. incandescentbulbs in South Africa), encouragingreuse & recycling, building efficiencystandards, incentives and duties onimported materials equipment (e.g. the European Union’s Border TaxAdjustments), standards on eco-label-ing, etc. are being introduced.Just a few weeks ago the Australian

parliament passed a new bill thatwould introduce what the BBC report-ed as a “divisive” carbon tax. This taxwhich will affect some 500 firms inAustralia got through parliamentdespite concerns over its impacts onemployment and the cost of living,implying that politicians are increas-ingly willing to take tough and unpopu-lar decisions. A relatively new phenomenon is the

rise of socially responsible screeningindices such as the FTSE4Good, the

Johannesburg Stock ExchangeSocially Responsible Investing (JOSÉSRI) and the Dow Jones SustainabilityIndex are raising the profile of theissue of climate change amonginvestors increasing the risk of share-holder activism for businesses.The behavior of institutional

investors, venture capitalists and otherupstream stakeholders is being influ-enced more heavily than ever before byclimate change considerations. It is notunknown for investors to discount thestock price of companies that are con-sidered behind the curve.

Change Brings Risk, ClimateChange Brings Huge RiskThe changes impacting your sandbox

bring myriad climate-related risks,which include: operational delay risks;supply chain; regulatory; tax; reputa-tional; insurance; and litigation risks.As already mentioned, recent

announcements by companies such asApple, GE and Wal-Mart to source onlyfrom sustainability-conscious compa-nies is a clear indication of what liesahead in the global supply chain space. The pricing of carbon through vari-

ous market mechanisms (such as car-

bon tax, cap-and-trade, border taxadjustments, etc) coupled with the riseof the cost of insurance to curb thephysical risks of climate change isincreasing the cost of doing business.For businesses in certain jurisdic-

tions and industries, energy/fuel pricefluctuations and security of supply fornatural resources are posing signifi-cant challenges and risks — a clear signal that the days where businessescould listen and watch from the side-lines are over. Access to markets due to climate

change-related legislation, such as theEuropean Union Directive on Aviationand shifts in consumer preferencestowards greener products and servicesalso pose threats to revenue, marketshare and the very existence of certainbusinesses. Managing climate changeinduced risks is a vital part of protectingshareholder value. A business’ responseand choices of responses have the poten-tial to impact the bottom line throughrisks to operations, brand and finances. In January this year the global news

agency AFP reported that “climatechange litigation is fast emerging as anew frontier of law where some believehundreds of billions of dollars are at

Managing climate change-induced risks isa vital part of protecting shareholder value.

17Dec i s i o n P ro c e s s e s I n t e r n a t i o n a l S t r a t e g i c T h i n k i n g Con s u l t a n t s

stake.” Noting that major commerciallaw firms have now established climatechange practices, AFP goes on to spec-ulate that damages paid out in relationto asbestos and tobacco would look like“pocket money” compared to climaterelated litigation claims.Reputational risks can be profound.

Yet when it comes to climate mattersthe Carbon Trust discovered that only7% of consumers believe companyclaims and the bulk (46%) prefer to usethe Internet to assess a firm’s reputa-tion. If you want to tap into the 61% ofconsumers who are more like to buyfrom a company with a good reputation,having a climate change section on yourwebsite is nowhere near sufficient.Finally, businesses are at the risk of

missing growth opportunities if they donot capitalize on the early moveradvantages.

There are myriad opportunitiesOperating in a ‘carbon-constrained

world’ has brought up issues of innova-tion and competitiveness that business-es are embracing. The window ofopportunity is open for companies thattake climate action early in order totake advantage of the opportunitiesand protect themselves from the nega-tive aspects of climate change.According to Claude Fussler,

Program Director for the Caring forClimate (C4C) section of the UnitedNations Global Compact, businessesfrom all regions and sectors havealready started their journey towardsenergy efficiency, innovation and GHG(Greenhouse Gas) emission reductions.Indeed, in many instances business-

es have embraced climate action as anopportunity to drive efficiencies, har-ness new revenue streams, invest innew opportunities thereby increasingtheir reputation, gaining market shareand significant competitive advan-tages, even in jurisdictions where gov-ernments have not yet taken conclu-sive climate change policy actions. These sentiments have been support-

ed by Tom Albanese, CEO of Rio Tinto,

who recognizes that climate change isnot only an environmental issue, butalso an economic imperative as the eco-nomic impacts can be either debilitat-ing or liberating. Consequently, somecompanies have made the connectionbetween mitigation and adaptation,putting in place long-term measures toaddress not only emissions, but alsofood and water concerns and relatednatural resource issues. In fact, this drive towards carbon

reductions, combined with a proactivemanagement of systemic climate risks,is defining a new level of environmen-tal stewardship and business competi-tiveness. New industries that werenon-existent a decade ago have beenborn and are thriving. Clean technolo-gy as a business is estimated to beworth $3 trillion globally with a pro-jected annual growth rate of 15%+. By adapting easy-to-deploy changes

and behavior modifications on theenergy efficiency front, many busi-nesses are said to be saving on average30 – 50% per annum in energy bills.Generally, businesses in nations well-endowed with resources or affordableenergy supplies have historically beenwasteful in their engineering design,processes and practices. By adoptingenergy and material efficiency stan-dards big and small businesses alikeare harvesting large savings in materi-al usage which is feeding the bottom-line with some dramatic results.New technologies in energy genera-

tion such as biomass, wave and windturbines, concentrated solar panels,combined heat and power (cogen) technologies as well as a host of othertechnologies like electric & hybrid vehi-cles, carbon capture and storage (CCS),to name a few are being proven andsuccessfully progressing through com-mercialization stages racking big profitsfor companies that have chosen torespond to climate change in this manner.Sub-sectors in financial markets such

as carbon asset trading (EuropeanUnion Emissions Trading Scheme),brokerage service (Bloomberg New

Energy Finance), clean energy venturecapitalism (such as UK’s proposedGreen Investment Bank), climateexchanges (e.g. European ClimateExchange) and carbon-trading markets(e.g. Carbon Point) are a new phenome-non. Long-term investors, asset man-agers and analysts are also beginningto integrate climate change considera-tions into investment analysis and deci-sion-making. Venture capitalists and corporate

R&D divisions are investing in “cleantechnology” of all types, includingrenewable energy such as wind.Prominent investors including BillGates, John Doerr and Vinod Khoslaare speaking about the financialprospects of energy solutions thattransition our economies away fromfossil fuels; their goal being to findthe Netscape of the clean technologymarket. “Investors Urged to BackClimate Change Awareness withAction,” reported The Guardian inSeptember 2006. In the USA, theInternational Energy Agency (IEA)estimates that around US$10 trillionmust be invested by 2030 in low-carbon technologies if we are toachieve the 450ppm CO2 stabilizationlevels mandated by the UNFCC. Theamount of capital needed to achievesuch levels is immense, but certainlynot out of reach in the long-term. Thisalso signals vast opportunities forbusiness.

Climate-smart companies areadapting quickly, employing holistic, structured methodologiesto reap remarkable results in costsavings, reducing tax bills throughclimate change levies or landfilltaxes, new revenue streams, andnew products.

Good examples are General Electricwhose Ecoimagination products havedriven countless billions in new rev-enue streams (according to somereports GE generated $17bn revenue

18D e c i s i o n P ro c e s s e s I n t e r n a t i o n a l w w w. d p i - a s i a . c o m

The Strategist

last year and has a $70bn backlog),HSBC who has taken a progressivestance and in 2005 become the firstmajor financial institution to be carbonneutral, Honda and Toyota who havebested their rivals in both fuel efficiencyand hybrid technology, and Wal-Martwho are saving billions through its 360degree sustainability initiative whichhas a focus on reducing waste and low-ering supply chain costs throughreduced packaging.

The case for a proactiveresponse – even in a downturnGiven the complexities and uncertain-

ties establishing the clarity of thoughtrequired to take effective corporateaction with respect to climate change ishard. There are many conflicting ques-tions to be addressed. To lead or be led?To embrace climate change as a com-petitive driver or go for a “green-washed” PR response? Without aprocess to resolve these issues corpo-rate procrastination is inevitable.

Yet as we’ve seen, the sandbox isalready pushing for action andleadership. Regulators, investors,customers, activists are not sittingon the sidelines doing nothing.Even if the precise nature isuncertain, the impacts, threatsand opportunities are alreadyhere. Waiting to “figure it out” isnot an option.

Even those that are convinced of theneed for decisive action on their partmay ask “What of the current down-turn?” Of course, this is a pertinentquestion. It is natural that certain dis-cretionary expenditures will bereduced in uncertain business condi-tions. However, as discussed in anotherarticle in this edition of The Strategist,“Recession Doesn’t Mean Stop”.Further, the downturn could be the besttime to exploit the opportunities cli-mate change brings. The imperatives toact won’t go away. So what will do you?

What does the future hold?What is your role in thatunfolding future?

The debates, issues and scope of cli-mate change have left many executivesasking why they should act, not tomention how. Hopefully this brief syn-opsis has aroused enough interest formore research followed by concreteaction. The “do nothing” option is notattractive given the multitude ofopportunities business stand to benefitfrom adapting and mitigating climatechange through realizing operationalefficiencies, brand impacts and earlymover competitive advantages. Itmakes a lot of business sense to preserve environmental and socialwellbeing while reaping economicrewards so that you and your childrenhave an equal chance to provide fornow and well into the future.

How to act?Taking action in response to climate

change doesn’t need to be sacrificial.With the correct mindset there areseveral ways in which you can act inthe interest of the environment whilecreating competitive advantage foryour firm. The avenue of competitiveadvantage will come from growthopportunities, cost reduction, riskadvantage and reputational leverage.Such areas can be addressed as

tactical, operational or standalone ini-tiatives, but may be easily duplicatedby your competitors or deliver relative-ly small payback. A better approach isto step back and consider the firm’sbroader strategy and/or its businessmodel.Since climate change will impact

most, if not all elements of your busi-ness model, a holistic business modelinnovation approach will be better. Aneffective process would enable man-agement to surface and resolve thecomplexities and conflicts of climatechange and rationalize them into a sus-tainable edge, by collectively askingthe right questions covering all aspectsof their businesses, industries andcompetitive arena using a structuredthinking process.

The creation of corporate strategiesto offset the risks and impacts ofclimate change and harvest thebenefits is beyond question a keystrategic imperative for businessleaders today.

My parting questions to businessexecutives are: What will the impactof on-going climate change and globalwarming be on your business? Andhow can you leverage these global trends today for your benefittomorrow?

UNITED STATESWORLD HEADQUARTERS:Decision Processes International4 Cranbrook RoadShrewsbury, MA 01545Tel: 508-842-92911-800-336-7685 within the USA

ASIA (HQ)Decision Processes International(S) Pte Ltd, 1 Sophia Road#04-16 Peace CentreSingapore 228149Tel: +65 62351733E-Mail: enquiries@dpi-asia.comInternet: www.dpi-asia.com

AFRICADecision Processes InternationalP.O. Box 488Cramerview 2060South Africa Tel: +27 (11) 706 8118

+27 (11) 706 8119Fax: +27 (11) 706 0205

DPI staff and offices are located around the world:

Engaging Us

All of our Pure & Simple™ critical thinking processes are available via a variety of means. Likethe Chinese Medicine Man who blends different ingredients to develop a specific herbal remedy foreach client, DPI Partners are skilled practitioners in unbundling our processes and their underlyingconcepts. The result: a tailored solution that exactly meets your needs. Our only “must” criteria — we must be convinced that the approach will meet the mutually agreed objectives.

Typical engagement approaches include:

• Consulting Projects: Where DPI’s role is to leverage our processes to help you and your people develop solutions to the particular concerns you face

• Application-based Workshops

• Skill-Building Programs: A hands-on approach to transfer our processes to your people

• Train-The-Trainer

• Licensing

For more information, please contact us.

Other offices within Asia are located in Bangkok, Hong Kong, Vietnam and major cities in mainland China.

A Worldwide Consulting Organization Specializing in

Critical Thinking Processes

A Partial List ofDPI Clients

In Asia:SATS LIMITEDFRASERS CENTREPOINTLEE KUM KEEABACUS INTERNATIONALLUBRIZOL CORPORATIONSINGTELPRUDENTIAL INSURANCETECKWAH CORPORATIONSLS BEARINGSMOTOROLA SOLUTIONSOCBC BANKAVAGO TECHNOLOGIESNTUC INCOMEKURNIA INSURANSADVANCED INFO SERVICESIAM CEMENTBEIERSDORFKASIKORN BANKMITR PHOLMAXTHONGSK

Worldwide:CATERPILLARFEDEX (CUSTOM CRITICAL)VOLVOSOUTH AFRICAN BREWERIESHARMONYHOWDENCOLUMBUS STAINLESSALTECHAUTOPAGESEALYALEXANDER FORBESMARLEYOLD MUTUALRAND MERCHANT BANKMETROPOLITAN LIFEORGANTEXCANANDAIGUA BRANDSVISTEONGATXCASTROLFIRSTRANDFLEXCONFIATMESTEK INC.LANDAMERICAPHELPS DODGESILICON LABORATORIESCANCER TREATMENT CENTERS

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MDecision Processes International is a worldwide consulting organizationbuilt on the belief that rational, or critical, thinking is essential to the survival and growth of every enterprise.

Our critical thinking processes are applied common sense. They weredeveloped and proven in the real-world laboratory of organizations likeyours. And they work, transforming the way our clients do business. Inhundreds of companies around the world, DPI processes are producingexceptional, measurable results every day, simply by improving people’s ability to make better strategic and operational decisions.

DPI Critical Thinking Processes

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Strategic Thinking

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In Singapore call:

+65 62351733or

Email: enquiries@dpi-asia.com