The Essence of Management Reading Notes Chapter 05 202 10306

Strategic thinking is choosing to do nothing.

The main focus that really affects the continuous success of an enterprise is not the strategic goal, technology, capital or the process of making a strategy, but the power to focus on creating value for customers.

Enterprises should have strategic thinking first, and then management thinking.

The essence of management

Chapter II The Essence of Strategy

Strategy determines how far an enterprise/company can go, and strategy is to choose what not to do.

Why do enterprises exist?

To acquire strategic capabilities, we need to firmly remember the essence of enterprise management and always know what is the real reason for the survival of enterprises. Is to create value for customers.

The main focus that really affects the continuous success of an enterprise is not the strategic goal, technology, capital or the process of making a strategy, but the power to focus on creating value for customers.

Mr. Drucker said that an enterprise has only one definition, and that is to create customers.

business model

Business model is the embodiment of enterprise strategy.

Any business model consists of three dimensions: customer value, enterprise resources and capabilities, and profit model.

A successful business model should provide unique value.

Successful business models are hard to imitate.

A successful business model is down-to-earth.

As a business model, an organization should focus on the following elements:

Value proposition adopted in competitive position;

Market segmentation of choice and abandonment;

Obtain the value chain and final cost from the activities implemented or the resources utilized;

Income model and ultimate profit potential.

Really have strategic thinking rather than competitive thinking.

The efforts made by most enterprises in China are competitive, not strategic. What these enterprises pursue is how to solve the problems in competition, which is the concept of competition, not strategic thinking.

For an enterprise, the first question is not how to compete and with whom, but which customers to serve, what to do for their own customers and what not to do.

Strategy requires enterprises not to do anything illegal or reckless, which is the first choice of strategic thinking.

If the direction of enterprise's efforts is to solve the problems it faces, then you are a person who only cares about management ideas.

Strategic thinking is choosing to do nothing.

Enterprises should have strategic thinking first, and then management thinking. If everyone tries their best to solve the problem, the proportion will inevitably allow enterprises to decide products according to their own abilities.

The basic standard to measure the success of an enterprise is to make the enterprise profitable while satisfying customers.

Business leaders should have the ability and habit to be with customers and form a customer-centered thinking.

The strategic operation is pragmatic.

A world-class enterprise has a unique feature, that is, it is managed by a constant quality model.

First-class enterprises need to understand management at a higher level: management must contribute constant quality.

The manager's new rules

1, focusing on what should be done, not who is right or wrong;

2. In troubled economic times, enterprises must reduce their own mistakes, and the competition between enterprises depends to a greater extent on how many mistakes you make less than others;

3. Behavior choices that violate customer value will have fatal consequences.

Enterprises and entrepreneurs in China need to constantly change and surpass.

Professor Chen Chunhua always likes to remind himself with a short story about Einstein. 195 1 year, Einstein taught at Princeton university. One day, he had just finished the examination for the advanced class of physics and was on his way back to the office. His teaching assistant followed, holding the student's test paper in his hand. The teaching assistant asked cautiously, "doctor, the questions you gave this class are the same as last year." How can you give the same class the same questions for two years in a row? "

Einstein's answer is very classic. He said, "The answer has changed."

Comparative inspection, today's sentiment

In the part of strategy, Professor Chen used more than 40 pages to explain. Taking Wal-Mart as a case, she studied how to save money for customers and Volvo's strategic sales of non-core technologies, and wrote a lot of her own understanding of strategic thinking and competition. The case is not specific and thorough, and it is still a bit difficult for a manager of a small and medium-sized company to read. For example, Professor Chen said that Wal-Mart's strategy of "helping customers save money" and "low price" are completely different. The former is the customer's thinking, while the latter focuses on cost. I have always been puzzled, paying attention to costs, reducing costs and lowering commodity prices. Isn't it to save money for customers?

As for how to make a strategy, I strongly recommend Richard Rumelt (a professor at the School of Management at UCLA, who is called "the strategist in strategy" by McKinsey and named as an economist "one of the 25 thinkers who have the greatest influence on management concepts and corporate behavior in the world"). This book is especially useful for small and medium-sized companies/business managers. It can be considered as a simple and informative book. It can be read in combination with the strategies written by Professor Chen Chunhua.

The following is the outline of the book Good Strategy and Bad Strategy:

First, what are bad strategies and why are they common?

Four characteristics of a bad strategy:

1. Empty talk. The so-called empty talk is just words disguised as strategic thinking without information content.

Case The strategy of a retail bank is as follows: Our basic strategy is to play a customer-centered intermediary role. The so-called "playing an intermediary role" means absorbing depositors' deposits and then lending them out. Isn't that what banks should do? A good strategy should make professional knowledge and opinions clear and easy to understand, so pretentious statement is a typical feature of a bad strategy.

2. Unable to face the challenge. In other words, the problem to be solved by the strategy is not the real problem now.

The American combine harvester company once made a bad strategy that was inconsistent with the actual problem. This strategy should increase the market share of each enterprise and reduce the cost. The problem with this strategy is that it doesn't pay attention to the problems that the company really faces. The weak performance of combine harvester company is mainly due to the very bad labor relations and the low efficiency of employees. The strategy of defining the problem accurately and then facing the challenge directly is effective.

3. Take the goal as the strategy. Many strategies only talk about the good wishes for the future in general, and there is no specific executable plan. Such a strategy is also a bad strategy.

The case author once consulted a graphic arts company. The boss of this company said that their company's strategy is simple, that is, the company's income will increase by 20% every year and the profit rate will reach 20%. In order to achieve this goal, the company will provide customers with quality services and employees should work hard. The strategy of beating chicken blood and shouting slogans like this is a failed strategy.

4. Bad strategic goals. If strategic objectives do not solve key problems, or strategic objectives conflict with each other, it is a bad strategic objective.

Case When some companies hold strategic meetings, they will put all the requirements put forward by various stakeholders into the strategic planning of the company. When it is found that there are too many strategic objectives that cannot be achieved at all, the word "long-term" should be added before the strategic objectives, because these objectives can be ignored for the time being. A good strategic goal should focus energy and resources on one or several key goals, and once this key goal is realized, it will bring a series of advantages and achievements.

Why are bad strategies still prevalent?

There are two main reasons: first, I dare not give up. To make a good strategy, we need to choose between different alternatives, choose some goals and give up others. The second is to use the so-called "strategic template" to formulate the company strategy. This stereotyped template simply doesn't take into account the specific situation of your own company.

Second, what is a good strategy? Three characteristics of a good strategy.

1. Strategic focus. The first step of strategic focus is to "give up". The really effective strategy is not to use all resources to achieve all the goals, but to choose the key goals and make way for the secondary goals.

Case 199 1 Gulf War, the US military launched the "Desert Storm" operation, adopting "frontal feint and flanking". Many people think this strategy is simple, and no one can think of it. But the difficulty of this strategy lies in high focus. This strategy gives up a lot of resources, many other goals, and suppresses all proposals that are not in line with the main strategy. This kind of abandonment and concentration is the real power of this strategy.

2. foster strengths and avoid weaknesses. Don't try to compete with the advantages of others by making up for the disadvantages, let alone attack the advantages of your opponents with your own disadvantages.

There is a story in the Bible about David's victory over Goliath. It tells the story of weak David defeating the giant Goliath. Before David went to war, everyone around him knew that David was too weak and advised him to put on heavy armor. But David knows that wearing armor is to make up for his short stature, but no matter how to make up for this disadvantage, it is impossible to be better than Goliath the giant. So what David really needs to do is to find a favorable battlefield and give full play to his advantages of flexibility, quickness and accurate projection.

3. Tactical cooperation. The most critical step in the strategy is to coordinate tactical actions. Tactics can't match strategy, and strategy becomes a slogan.

Case: A private car company, which aims at safe travel, organized an activity to tell jokes to private car drivers. This activity has achieved good communication effect. But from a strategic point of view, this activity is actually a failure. First of all, this style of play did not achieve tactical synergy. The positioning of this car company is "professional and safe car service", but the tactics of making drivers tell jokes do not match the overall strategy. Secondly, this activity did not foster strengths and avoid weaknesses. The advantage of this car company is "owning cars and professional drivers", but it is not good at telling jokes and other interesting activities.

Third, how to think like a strategist

To formulate a good strategy, we must first learn to think like a strategist. The so-called strategist is to have a strategic vision and see farther than others. They can break through their cognitive limitations and keep a calm, rational and critical attitude. Therefore, if you want to think like a strategist, you must learn to overcome cognitive limitations, overcome short-sightedness and dare to criticize your own ideas.

When thinking strategically, it is easy for people to fall into three cognitive limitations. The first pit: locked by the original idea. I came up with a good idea at first, and then I kept collecting information consciously or unconsciously to prove the correctness of this idea. The second pit: herd mentality. That is, I do what others do, regardless of the fact that these behaviors are inconsistent with the actual situation of our company. The third pit: internal perspective. It means that people often overestimate their own strength, think that their probability of success is much higher than the result, and feel that they are more talented and smarter than ordinary people.

Fourth, how to make a good strategy.

1. Investigation and analysis. There are thousands of methods of investigation and analysis, but there is only one purpose, that is, to find out what is happening at present. After determining the current situation, we can make corresponding judgments based on similar situations in history.

2. Develop guidelines. It is necessary to put forward an overall strategy. Good guidance is like a guardrail on the highway, which is used to guide and restrict people's activities. The guiding principle is not a goal or a vision, nor the ultimate idea of an ideal state, but a way to deal with problems.

3. According to the process of action, design a specific style of play to form a coherent set of actions. There should be no inherent conflict between all tactical actions, and all tactics should be selected and modified according to the guidelines and be consistent.

Fifth, avoid the interference of cognitive limitations by making lists.

Listing is not only a listing, but also a listing process. In this process, we will start to think:

What is the most important thing for the present situation?

Where should the strategic focus be?

What are your strengths?

Have you ever been biased by your opponent and neglected to foster strengths and avoid weaknesses?

Looking back at the recent tactics, is there a coordinated strategy?

Making lists is the basic way to overcome our cognitive limitations. In the process of making a list, we can prioritize things, achieve strategic priorities, define goals and improve execution.

Golden sentences worth thinking about in the book:

Strategic goals are formulated for specific things or tasks, not vague prospects. Commercial competition is not only the competition of strength and will, but also the competition of vision and ability. Therefore, we can't replace action with faith and plan with vision.

To make a good strategy, we need to choose between different alternatives, choose some goals and give up others. However, as long as the abandoned goal will involve the interests of some people, it will inevitably be opposed, especially in large organizations.

When you concentrate key resources and attack a few correct targets, you can often achieve unexpected victories. On the contrary, if you want to achieve multiple conflicting goals at the same time, you will be in a passive position, and eventually you will not be able to achieve one of them.

Strategy is not a slogan, not a meeting document, not a PPT, but a guiding principle for all actions of enterprises. A strategic decision means that all activities should be coordinated. Otherwise, the strategy without tactical cooperation will become a slogan.

Thanks for watching.