Ken Favaro

“What time frame should we have for our strategy” is the wrong question. The better question is, “What changes does our strategy need, and how much time do we need to implement them?” In other words, leaders have a five-year strategy if the changes they want to make to their strategy will take five years to implement.

Strategy Talk: What’s the Right Mix of Organic Growth and Acquisitions?

If your team is debating the right mix of organic growth and acquisitions, don’t start by asking, What’s the right mix of growing organically and by acquisition? Instead, have your team focus on three different questions: How can we stretch the definition of our target customer, add to our value proposition, and commercialize our best capabilities in new ways? You and your colleagues have to … [ Read more ]

Ken Favaro

In the 1960s and 1970s, the hot concepts were the experience curve, the growth-share matrix, and SWOT (strengths, weaknesses, opportunities, and threats) analysis. The 1980s gave us five forces, value chain strategy, scenario planning, and total quality management. In the 1990s, business process engineering, customer loyalty, competing for time, competing for the future (core competencies), and growth horizons gained traction. Those ideas were followed by … [ Read more ]

Ken Favaro, Per-Ola Karlsson, Gary L. Neilson

When a board of directors announces the departure of a CEO and the hiring of an executive search firm to identify a successor, the board members are also announcing that they have failed at succession planning.

Ken Favaro, Cass R. Sunstein, Reid Hastie

Leaders also have to understand that group decision making falls into two distinct steps, which require different approaches. In the first step — identifying solutions — divergence is necessary. The group has to be encouraged to explore boundaries, search broadly, and expand its thinking in order to find the best options for the problem at hand. But the second step, in which the group selects … [ Read more ]

Ken Favaro, Cass R. Sunstein, Reid Hastie

Because innovation in a group relies on the ability to make new connections among the diverse experiences of its members, leaders must create a climate in which individuals can free-associate and use both their total life experience and that of their fellow group members. The group’s leaders should set the tone by being inquisitive and self-silencing to let other information rise. They should continually prime … [ Read more ]

The $112 Billion CEO Succession Problem

Poor planning for changes in leadership costs companies dearly. Getting it right is worth more than you might think.

Ken Favaro

If some goals tell you little or nothing about what strategies to pursue, other goals effectively tell you too much. This happens when goals are expressed in terms of metrics, for example, to achieve a certain size, market share, growth rate, margin, or rate of return. Where do such goals come from? In the end, they are arbitrary, no matter how much they might be … [ Read more ]

Ken Favaro

Are … these modern forms of vertical integration good strategies? Yes, if two special conditions are met. The first is a “market failure” that is hurting your business; the most common are supply risk, demand risk, and profit gouging. The second is that you have the power or capabilities to fix and even exploit that market failure. Without market failure, vertical integration is just plain … [ Read more ]

Ken Favaro

Notwithstanding all the carefully plotted doctoral dissertations, countless hours of research, and contentious discussions among serious management thinkers, strategy boils down to three fundamental questions: First, how can you differentiate yourself from the competition in the way you create value? Second, what capabilities do you have that are distinct from those of your rivals and essential to your particular way of creating value? Third, what … [ Read more ]

Ken Favaro

Corporate executives often conflate strategy with vision, mission, purpose, plans, or goals. Although these elements may help to focus, inspire, mobilize, and challenge an organization, they are not substitutes for a logical, articulated strategy, and they often lead to helter-skelter corporate development.

Ken Favaro, J.-C. Spender

[…] strategy is the product of executive imagination and judgment, not just logic; the strategy process involves balancing the known, the unknown, and the unknowable. The purpose of strategic analyses, frameworks, and methods is to inspire inventiveness and inform judgment.

Ken Favaro, Sanjay Khosla, Mohanbir Sawhney

Developing strategy […] entails navigating the “opportunity landscape.” This methodology has four dimensions, each with two lenses: (1) what you offer, with brand and product lenses; (2) who you serve, with customer and partner lenses; (3) where you go to market, with channel and market lenses; and (4) how you operate, with monetization and process lenses.

Ken Favaro

Smart executives know that sustaining great companies requires both strategic consistency and reinvention. But how do you achieve each without sacrificing the other?

In my experience, the answer lies in being able to answer — and act on — two important questions: what capabilities set your company apart from everyone else? And, are there changes happening in your world that will make those capabilities obsolete or … [ Read more ]

Ken Favaro

How does a capable strategist choose the best adjacencies strategy for his or her company? I say focus intently on answering this question: What adjacency moves would best enable you to bolster the value proposition of your current business or exploit and scale the distinctive capabilities you already have? Gird yourself to resist the alluring temptation to pursue adjacencies to compensate for slowing growth in … [ Read more ]

Ken Favaro

Whereas making strategy about competitors can be highly destructive, making it about the customer encourages leaders to find ways to win without having to pay the price for their victories. Does this mean that competitors can be safely ignored when it comes to strategy? No. Understanding competitors’ value propositions is one effective way to generate new thinking on how to improve your own value propositions. … [ Read more ]

The Quantified Self Goes Corporate

How to make data your source of sustained growth.

The Thought Leader Interview: Loran Nordgren

The cofounder of unconscious thought theory explains how taking a break and distracting the mind can lead to higher-quality decision making.

The Thought Leader Interview: Cynthia Montgomery

A Harvard Business School professor observes that leaders become better strategists by engaging in conversations about the purpose of a company.