Chapter 17

Question 1

Who is typically seen as the chief strategist in an organization?

Answer 1

Chief Executive Officer (CEO)

The CEO is responsible for setting a disciplined approach to strategy.

Question 2

What is a common issue faced by top management teams?

Answer 2

Groupthink

This occurs when team members avoid internal questioning or conflict due to similar backgrounds.

Question 3

What are the three important tasks of strategic planners?

Answer 3

• Information and analysis
• Managers of the strategy process
• Special projects

Strategic planners contribute significantly to the strategy process despite not making strategic decisions themselves.

Question 4

True or false: Middle managers are typically excluded from strategy making.

Answer 4

TRUE

Conventional management theory often reserves strategy for top management, limiting middle managers to implementation.

Question 5

What role do middle managers play in strategy adaptation?

Answer 5

Adapters as events unfold

They are involved in adapting strategies based on day-to-day responsibilities and changing circumstances.

Question 6

What are the two sets of external actors that influence strategy?

Answer 6

• Strategy consultants
• Investors

These external influences can significantly impact strategic decisions within organizations.

Question 7

What is one of the roles of external consultants in strategy?

Answer 7

Design and facilitation of client strategy processes

They also analyze options, transfer knowledge, and implement strategic changes.

Question 8

What is a common challenge faced by organizations when working with consultants?

Answer 8

Poor management of the consulting process

This can lead to failures that are often blamed on the consultants.

Question 9

Fill in the blank: The pyramid of strategy practice highlights three questions: Who to include in strategy making; how to carry out strategising activity; and what _______ to use in this strategising activity.

Answer 9

strategising methods

This framework emphasizes the importance of the strategists’ choices and skills.

Question 10

What is often blamed for failures in strategy consulting when it is actually the client’s poor management of the consulting process?

Answer 10

The value of strategy consultants

It is crucial for organizations to systematically select their consultants and provide clear project briefs.

Question 11

What should organizations do to ensure effective collaboration with external consultants?

Answer 11

• Select consultants systematically
• Provide clear initial project briefs
• Remain consistent in expectations
• Learn from projects at the end

Joint teams of external consultants and internal managers can effectively combine outside perspectives with inside knowledge.

Question 12

Who is the CEO of Blackrock, the world’s largest asset manager?

Answer 12

Larry Fink

He has emphasized the importance of CEOs laying out a strategic framework for long-term value creation.

Question 13

What do venture capitalists typically advise on during the initial entrepreneurial stage of a business?

Answer 13

Strategy and professional strategy processes

Entrepreneurs report limitations in venture capital inputs on strategy, often focusing more on financial issues.

Question 14

What is the role of private equity investors in mature companies?

Answer 14

• Change strategies or business models in about one-third of companies
• Initiate strategic acquisitions or divestments

Activist investors also seek to alter the strategies of the businesses they invest in.

Question 15

What are the main activities involved in strategising?

Answer 15

• Strategy analysis
• Issue-selling
• Decision making
• Strategy communication

These activities rarely follow a logical sequence in practice.

Question 16

What is a common risk of using SWOT analysis in strategy analysis?

Answer 16

Produces unmanageable lists of factors without prioritization

Managers may spend too long perfecting their analyses, leading to paralysis by analysis.

Question 17

What is strategic issue-selling?

Answer 17

The process of gaining attention and support for strategic issues from management and stakeholders

Issues need to be packaged effectively to gain attention.

Question 18

What are the four key considerations in issue-selling?

Answer 18

• Issue packaging
• Formal and informal channels
• Selling alone or in coalitions
• Timing

Clarity and succinctness are crucial in packaging issues.

Question 19

True or false: Strategic decision making is always rational.

Answer 19

FALSE

Cognitive biases can affect decision making, leading to irrational choices.

Question 20

What is confirmation bias?

Answer 20

The tendency to seek out data that confirm a favored course of action

Countering this bias involves considering alternative options in decision processes.

Question 21

What does anchoring bias refer to?

Answer 21

Being tied to one piece of information in decision making

Managers may rely on past trends without considering changes.

Question 22

What is the halo effect in decision making?

Answer 22

Assuming success in one area translates to success in another

It is important to check for differences between cases.

Question 23

What is affect bias?

Answer 23

When managers become too emotionally attached to a particular proposal

This can lead to exaggeration of the case in favor of the proposal.

Question 24

What is risk bias?

Answer 24

Holding distorted views of risk, often being overly optimistic or pessimistic

Managers may underestimate the risks of projects or overestimate their capabilities.

Question 25

What does Kahneman suggest to improve strategic decision making?

Answer 25

Design good decision-making processes to counter cognitive biases ## Footnote His advice is to 'think slow' and seek additional views and data.

Question 26

What is the distinction between **mercenary** and **romantic strategies**?

Answer 26

* Mercenary strategies: Economically rational but do not inspire action * Romantic strategies: Inspire and motivate people ## Footnote A blended approach may lead to effective adaptation and strategic choices.

Question 27

What is a key point about many strategies in practice?

Answer 27

Many strategies are emergent rather than consciously decided ## Footnote This highlights the complexity of strategy formulation.

Question 28

What are the potential outcomes of excessive emphasis on either **mercenary approaches** or **romantic strategies**?

Answer 28

* Demotivation and inhibited adaptation (mercenary) * Impulsive and excessive strategies with high risk (romantic) ## Footnote A blended approach may lead to good strategic choices and effective adaptation.

Question 29

True or false: Many strategies are emergent rather than consciously decided.

Answer 29

TRUE ## Footnote Organizations often slip into strategies with little explicit discussion or choice.

Question 30

What are the **three distinct branches** of strategy communication mentioned?

Answer 30

* Advocacy * Narrative * Visualisation ## Footnote Each branch serves to effectively communicate strategy to stakeholders.

Question 31

What is the purpose of **narrating strategy**?

Answer 31

To link bullet points of a strategy presentation into a coherent narrative ## Footnote A compelling story energizes players and vividly describes overcoming obstacles.

Question 32

What does **stratography** refer to in strategy communication?

Answer 32

Translating strategy into powerful graphics ## Footnote Diagrams, maps, and pictures can convey meaning memorably.

Question 33

How did Jeff Bezos communicate Amazon's strategy effectively?

Answer 33

By drawing the flywheel model on a paper napkin ## Footnote This diagram illustrated the self-reinforcing momentum of customer experience and cost structure.

Question 34

What is meant by **embodying strategy**?

Answer 34

Walking the talk of the strategy ## Footnote Leaders like Steve Jobs embodied their company's strategy through their presentation style and appearance.

Question 35

What is the significance of **continuous transparency** in strategy?

Answer 35

It emphasizes ongoing communication throughout the strategy process ## Footnote Organizations like NICE publish all strategy agendas and papers online.

Question 36

What are **strategy workshops** used for?

Answer 36

* Formulating or reconsidering strategy * Reviewing current strategy progress * Communicating strategic decisions ## Footnote Workshops can also aid in team building and personal development.

Question 37

What factors contribute to the **success of strategy workshops**?

Answer 37

* Clarity of purpose * Specialist facilitator * Visible support from workshop sponsors ## Footnote These factors help ensure focused discussions and participant engagement.

Question 38

What is the role of **strategy projects**?

Answer 38

To explore problems or opportunities and implement agreed elements of a strategy ## Footnote Projects should be managed like any other project with clear objectives and milestones.

Question 39

What is **hypothesis testing** in strategy?

Answer 39

A methodology for setting priorities in investigating issues and options ## Footnote It involves testing descriptive hypotheses with real-world data to derive prescriptive hypotheses.

Question 40

What is the goal of **Quick and Dirty Testing (QDT)**?

Answer 40

To speedily reject unpromising hypotheses ## Footnote This approach helps focus on the most promising hypotheses without wasting time.

Question 41

What does **QDT** stand for in the context of hypothesis testing?

Answer 41

Quick and Dirty Testing ## Footnote This approach relies on existing experience and data to quickly reject unpromising hypotheses.

Question 42

The **descriptive hypothesis** regarding scale might involve checking the performance of which two types of organizations?

Answer 42

* Small organizations * Large organizations ## Footnote The performance comparison helps determine the viability of the hypothesis.

Question 43

What is the focus of the **new prescriptive hypotheses** mentioned in the text?

Answer 43

* Developing technology * Buying technology ## Footnote These hypotheses guide strategic decisions regarding technology acquisition.

Question 44

What is the concept of **open strategy**?

Answer 44

Involves wider inclusion of internal and external stakeholders and greater strategic transparency ## Footnote This approach allows for more participation in strategizing activities.

Question 45

Name two methods of employee inclusion in the strategy process.

Answer 45

* Strategy workshops * Strategy projects and task forces ## Footnote These methods engage employees at various organizational levels.

Question 46

What is the **rule of three** in the context of Valve's strategy?

Answer 46

Any new project that can gather the commitment of three game designers automatically goes ahead ## Footnote If the project loses the loyalty of three designers, it is dropped.

Question 47

True or false: Greater inclusion of employees in the strategy process can improve strategy formulation.

Answer 47

TRUE ## Footnote Accessing more ideas can enhance both strategy formulation and implementation.

Question 48

What are some **cons** of including too many participants in the strategy process?

Answer 48

* Slows down the strategy process * Undermines authority of higher managers * Risk of leaking sensitive information ## Footnote These factors can complicate the strategic decision-making process.

Question 49

What should guide managers in deciding who to include in strategy making?

Answer 49

Criteria based on the nature of the issue ## Footnote Urgent issues may require small teams, while less urgent issues can benefit from broader participation.

Question 50

What are key **strategizing activities** mentioned in the text?

Answer 50

* Analyzing * Issue-selling * Decision making * Communicating ## Footnote These activities are essential for effective strategy development.

Question 51

What practical methods and tools can guide strategizing activity?

Answer 51

* Digital tools * Strategy workshops * Strategy projects * Hypothesis testing * Open strategy ## Footnote Choosing the right mix of methods depends on the specific strategy tasks.