Final Semester of Grad School!

Aside

I started my final semester of graduate school tonight. I will complete my MBA from The George Washington School of Business in three short months! Between now and then I need to write a complete business plan. I will also have the opportunity to enter my plan into several cash prize competitions if I decide to move forward with it.

Now I just need to figure out which idea I am going to run with.

Business Stories To Follow For Feb 2009

This week my world economics professor told the class that we should be tracking the following current business news stories:

  • GE’s Chairman and CEO Jeffrey R. Immelt’s thought that the US is already experiencing a depression
  • The current stock price of Bank of America – $4 range
  • Obama’s CEO pay cap and the “Brain Drain” argument associated with it
  • The ” Buy American” provision in the Stimulus package

PS. I respect my professors significantly more when they bring current events into the classroom.  This has not been the norm in my experience through my first year of my MBA studies.

Strategy: Dynamic Capabilities

Dynamic capabilities is a new approach to strategy that focuses on a firm’s ability to build upon and adapt existing competencies to bring value to the customer while creating a sustainable, competitive advantage for the firm.

I just read an article entitled “Dynamic Capabilities at IBM: Driving Strategy Into Action.” It was published in the Summer 2007 issue of the California Management Review and written by J. Bruce Harreld, Charles A. O’Reilly, and Michael L. Tushman .

The article stated:

While earlier approaches to strategy were largely static (e.g., develop a positional advantage and protect it), dynamic capabilities call attention to the need for organizations to change over time and compete in both emerging and mature businesses.

Strategy is important to IBM’s trajectory from a successful company to an unsuccessful firm and back again.  The authors explain that up until 1999, strategy at IBM was assigned to strategy experts–not managers–and it was an activity completed to satisfy senior management. It was “not an accurate reflection of what the business needed to do to be competitive and certainly not a blueprint for action.”

In 1999, then CEO Lou Gerstner assigned Bruce Harreld, SVP Strategy, to develop a new process to make strategy more relevant at IBM. What resulted was the “IBM Business Leadership Model.” The model encourages IBM’s general managers to analyze the perception gap between current and desired performance and attribute that to either a performance gap or an opportunity gap. The gaps are defined in terms of a business owner, financial metrics, and a specific time frame for addressing the gap.

Bruce Herrald said:

Closing the gap requires both strategic insight to assess the opportunities and threats and strategic execution to build the capabilities to deliver market results.

Strategy at IBM is now an ongoing discussion between general managers and senior management, and is no longer an annual process assigned to internal consultants.

The authors summed up three important points made by the IBM Business Leadership Model.

  1. Leadership by general managers requires both strategic insight and execution.
  2. Strategy is anchored on either a performance or opportunity gap as manifest in hard performance outcomes such as market share gain, margins, growth, or profit.
  3. Effective strategy is not simply the articulation of a strategic intent, but the linking of it to innovation, solid marketplace insight, and an appropriate business design.

How could you realign your core competencies in order to address performance issues and opportunities that you should be taking on?

Food Crisis

I am currently enrolled in a business and public policy course for my MBA studies.  I have a research project due in the middle of November, in which I am supposed to focus on The Food Crisis.  “What food crisis?” you may ask. The instructor has left the assignment wide open, and we can choose any aspect of a current food crisis in the world.

The assignment is as follows:

  • Research the full context of the problem
  • Look at the historical situations which posed similar issues and policy challenges
  • Identify all of the stakeholders and list their concerns, values, and desired solutions to the problem
  • Conduct two personal interviews with stakeholders in the situation
  • Write a policy paper, recommending a policy-making process for the federal government (or any other countries government) that incorporates the shared values of all stakeholders

I have a couple ideas for the paper, but I have not settled on any specific crisis.  If you are reading this blog post and would like to give me an idea for this paper, or point me toward a stakeholder willing to be interviewed, feel free to leave a comment.

Thanks,

Jared