Saturday, May 29, 2010

What does Strategy mean for Non-Profit Organizations?

By Nicole Barnabé.

If strategy is the planned approach to conducting an organization's activities, it can apply to sports or armies, of course, but in our academic sense we restrict the meaning a little more closely.

However, everything I see touches on business performance. The performance of non-profit organizations (NPOs), though, ought to be included in the field as well. NPOs represent over 7% of North American GDP, and many of the fields commonly regarded as business fields are as relevant to the practices of NPOs as to the practices of for-profit organizations. HR principles are the same although pay is generally lower, marketing is in large part the same, financial accounting, budgeting, and planning are essentially the same although the objective is to use financial resources wisely rather than increase them per se (although it's always good to get more funding).

Do you think that the study of strategy ought to include the special cases of NPOs? What are appropriate performance measures? Drucker (1989) pointed out that in some ways, NPOs were better than for-profit businesses because they're much more focused on their mission. I think that the mission of an NPO is fundamentally different than the ultimate mission of a for-profit.

*Nicole Barnabé is a doctoral student at the Asper Business School, University of Manitoba, Winnipeg. Prior to starting her Ph.D., she gained broad experience in business and government and has also been an officer in the armed forces. 

Wednesday, May 26, 2010

A Strategy Lesson from the Navy: Let’s Go Have a Look

By Dr. Glenn Rowe.

My friend Suhaib Riaz and I were having lunch today and he was telling me about "Strategy and You." He asked me if I thought the website would add value to those who came to its pages to read the blogs that are posted. I responded that sometimes we just have to do it and see what happens. He mentioned that using different words, Tom Peters had suggested the same principle.

I then told Suhaib about one of the jobs I had during my 22 year career in the Canadian Navy. I was the regular force staff officer in charge of the regular force personnel that supported the naval reserve division in St. John’s, Newfoundland and Labrador. This naval reserve division is called Her Majesty’s Canadian Ship Cabot. Cabot was the proud custodian of a small ship (75 feet long) called Standoff. Standoff was a secondary search and rescue resource for the Canadian Coast Guard and could be called upon to support the Coast Guard in nasty weather.

I had the opportunity to lead the crew of Standoff as her Captain on many occasions while I served at Cabot. Some of the trips we took were in support of Sea Cadet corps around the coast of Newfoundland and Labrador. This meant that we would leave St. John’s at 2300 or so on Friday night to be at our destination by Saturday morning to work with a Sea Cadet corps. Of course, the trip from the jetty in St. John’s to the open ocean is a very short one and we were almost immediately in the open Atlantic every time we sailed.

Monday, May 17, 2010

Facebook’s Strategy Shift: Social Media Gone Wild

By Hari Bapuji.

Critics are panning the social media site, Facebook, for mishandling people’s private information using its recent Open Graph technology. As a researcher, I try to take everything I read with a pinch of salt. When people complained that Facebook is selling gifts on its pages and engaging in targeted advertising, I thought “well, somebody has to pay for their operations.” When I read that Facebook’s privacy policy is longer than the constitution of the United States, I thought “not completely odd because the number of Facebook users is much larger than the population of the US.” All this changed yesterday and made me think about Facebook a bit more closely.

I was browsing CNN yesterday morning when the site prompted me with a news story shared by Israr Qureshi, one of my friends. I was not logged into CNN, but was logged into Facebook in a different window. My Facebook activity is quite minimal and I have kept all my settings to “only friends.” I keep myself up to date on Facebook’s latest privacy settings and try to change them to limit my profile from going out. Clearly, in this case all those things did not work and CNN (courtesy Facebook and a bit of help from technology) knew that Hari Bapuji was accessing their website and promptly recommended to me a story shared by Israr. It was really creepy...! I have no problem with customization, except that I don’t want it. I believe that people learn better when they are exposed to varying and diverse pieces of information and not just what their friends are reading. Leaving my personal preferences aside, I wondered about Facebook’s strategy and if its strategy might work in the long run. 

A leading theory of strategic management research (resource-based view) suggests that a company will achieve sustainable competitive advantage, if it (i) possesses valuable, rare and inimitable resources and (ii) can leverage those resources. Does Facebook have any resources? Facebook became what it is today (in a matter of about six years) by providing a platform for users who wanted to stay connected with friends. In other words, it was an idea with a few servers. People liked the idea and joined in droves. While I am not an expert on the Facebook company, based on what I see and hear I am tempted to believe that the only resources that Facebook has are Facebook’s 400 million plus users, spanning the globe. So, if Facebook has to succeed they must find a way to leverage these resources and not alienate them.

Saturday, May 15, 2010

What is strategic management all about?

By Murli (E. Muralidharan).

I am a second year Ph.D. student majoring in strategy and international business, presently taking courses in strategic management. After having spent quite a while as a practicing manager in the area of strategy and international business, relating to a scholars view point in understanding business phenomena was initially difficult. However academic work in the specific area of strategic management appeared to be more user friendly from a practitioners point of view. Having spent close to two years now as an academic I have been able to look at a business phenomenon as a practitioner and now increasingly as an academic.

In the above context we recently debated the question: what is strategic management all about? Scholarly research has been attempting to derive a definition of the field of strategic management. Nag et al, 2007 (1) arrived at an implicit definition of the field as ‘Strategic management deals with the major intended and emergent initiatives taken by general managers on behalf of their owners involving utilization of resources to enhance the performance of firms in their external environment’.

My question here while evaluating this definition is whether strategy is an output of or an input to organizations performance. Bluntly asking, ‘does strategy drive performance or does performance drive strategy?’ - a typical chicken and egg situation.

Tuesday, May 11, 2010

Organizational Challenges in Implementing Sustainability: Insights from the Field

By Jagvir Brar. 

Going into my fourth year at University of Waterloo's Environment and Business Program, I've been exposed to many environmental issues through my academics and industry experience during co-op placements. Through working with governments and corporations, one thing that is clear is bureaucracy stands in the way of almost everything. Yes, corporations are creating new "green" positions, like Sustainability Officers and Directors of Environmental Programs - but won't this add to further bureaucracy? The Environmental Engineer probably reports to the Sustainability Officer, who reports to the VP Operations, who reports to...? Adding these new names may further complicate what organizations really should be doing - integrating sustainability into their core business.

That's why workshops on sustainability, such as the recent one at University of Guelph (reported at "Strategy and You" here) are so important. Educational leaders need to concentrate on creating CEOs, CFOs, CIOs, and all the other Chief X Officers that realize sustainability is part of the normal processes of running a business. There shouldn't have to be Chief Sustainability Officers - good environmental responsibilities should be handled without the need to create a more complicated organization that doesn't know who is responsible for what.

*Jagvir Brar is entering his fourth year at the University of Waterloo's Environment and Business program. His past co-op experiences working at Hewlett-Packard Canada, with the Ontario Government, and at the University have given him insights into how sustainability issues operate in large organizations. Jagvir's recent experience studying in England also equipped him with a broader view of sustainability issues in other parts of the world.

Friday, May 7, 2010

The Crash of 2.45 and Strategic Performance

By Dr. Suhaib Riaz.

The largest ever intra-day drop of the Dow (DJIA) has a name, "the crash of 2.45", referring to the time on May 6th 2010 when markets plunged, but has no explanation. The market players, the stock exchanges, the regulators or researchers seem to have no idea what really happened. There are two streams of thoughts developing: either the crash was an error or just a reflection of true market sentiment in the wake of the Greek debt crisis. The error theory seems to be gaining more ground, but this begs the bigger question: what kind of system allows for such an error that can wipe off $1000 billion in 20 minutes?

Stock trading exchanges are considered the heart of current free market systems. Stock markets are supposed to reward firms that do well, and in the process spur competition that adds up to a well functioning free market system. However, do stock markets today truly understand firm performance, or more specifically, firm strategic performance?

Managing for stock market value came in for much criticism from one thought to be a core proponent when Jack Welch called it "the dumbest idea in the world" in the midst of the current financial crisis in April 2009. Henry Mintzberg has been pointing to the problem for years, as summarized in his provocatively titled "How productivity killed American enterprise" (.pdf). The problem of increasing focus on short-term time horizons in capital allocation, particularly in the American institutional system, has also been pointed out (.pdf) by none other than Michael Porter. When Mintzberg and Porter agree on a point (which they don't always: Mintzberg's 'strategy as synthesis' versus Porter's 'strategy as analysis' being a major case in point), perhaps we need to pay more attention.

Wednesday, May 5, 2010

Sustainability as Strategic Imperative: Executives like "Deer in Headlights"

BP’s oil spill is having a major fallout in a climate where increasingly executives of major corporations find themselves caught as “deer in headlights” when it comes to societal or environmental (sustainability) issues. Surprising for a company that not too long ago launched a campaign to change its identity from British Petroleum to "Beyond Petroleum". While these stories unfold- educators, industry members and students came together at the University of Guelph in a workshop on how to integrate sustainability into business education for the next generation.

Frances Edmonds, Hewlett-Packard’s director of environmental programs (Canada) shared that positions with titles like the one she has are rare in business, and she had to create her own position at HP! Clearly there is a long way to go. HP’s eco solutions program creates a “closed loop plastic recycling process” for ink cartridges, helping the environment, yet hits its profitability. On how the organization deals with such tensions, she suggested that some benefits accrue towards branding and market leadership, and more tangibly, sometimes towards reusing the intellectual property developed towards other projects. It does seem though that such executives work on the hope that as society becomes more aware of these issues, long-term profitability would be positively impacted as well. Placing business education center-stage, she suggested educators need to ensure such a society comes about.

Toby Heaps and Jon-Eric Lappano from Corporate Knights, “the magazine for clean capitalism” came up with some creative ideas, perhaps radical at this stage: