COURSE NUMBER:  EWMBA296.1

COURSE TITLE:  Corporate Level Strategy: Principles and Practices

UNITS OF CREDIT:  2 Units

INSTRUCTOR:  Dan Simpson

E-MAIL ADDRESS:  dsimpson@berkeley.edu

CLASS WEB PAGE LOCATION:  bCourses

MEETING DAY(S) / TIME:  Monday evenings 6:05PM to 9:30PM.  The class will meet 10 weeks during the 15-week semester, on the following Mondays:  January 23 and 30, February 6, 13 and 27, March 6 and 20, and April 10, 17 and 24.  Note that class will not meet the weeks of March 13 or April 3.

PREREQUISITE(S):  Completion of the core strategy course.  Exceptions require permission of instructor.

CLASS FORMAT:
The course will be a composite of five in-class formats, and almost all class sessions will be a blend:

1) Theory & Principles provide context on how to think about a particular strategy challenge, and will be communicated through articles, book chapters and class discussion.  Examples include strategic intent, strategy as simple rules, strategy as a portfolio of options, strategy as a portfolio of initiatives, parenting advantage, bounded rationality and biases, misguided financial goals, and how partners shape strategy.

2) Strategist’s Toolkit will expand your repertoire of pragmatic strategy tools, formats and processes, whether you are leading strategy work as a practitioner in, or as a consultant to, a corporate enterprise.  Examples include choice structuring, the corporate strategy triangle, the P&G/Monitor strategy cascade, OKRs, Jack Welch’s five slides, portfolio management matrices, Eli Lilly’s alliance management tools, 3M’s markets of the future, Kimberly Clark’s adjacency mapping methodology, journey maps, and a one-page strategy communication/execution format.

3) Case Discussions will provide the opportunity to apply both the theory and toolkit to a wide variety of business situations.  Most cases (e.g. Cargill, Eli Lilly, Dell) are discussed in a single class session.  Other cases (Danaher versus Clorox) are discussed as a contrasting pair over two class sessions (key lessons are embedded in the similarities and differences between each firm’s approach to a similar challenge).  You are welcome / encouraged to form study groups to prepare for case discussions.  It enriches your learning experience.

4) Practitioner Guests in some classes will bring additional insights and push forward our collective thinking on the case / topic for that day.

5) Deep Dive Case – Classes 5 (February 27) and 6 (March 6) will be devoted to a deep dive into lessons from the 35-year history of corporate strategy at General Electric, under two CEOs: Jack Welch and Jeff Immelt.  Wayne Delker, former Vice President of R&D at GE, who worked under Jack and who was a colleague of Jeff’s, will co-teach those classes.

REQUIRED READINGS: Course reader (cases, articles, and book chapters), plus posted articles on bCourses (some of which update cases with current information).  There is no textbook, but this is a reading intensive course.

BASIS FOR FINAL GRADE:  Your grade will be a composite of three elements:
1) The quality of four single-page case memos [individual assignment] – 40%
2) The quality of one 10-slide PowerPoint deck [group assignment] – 35%
3) The quality of your class participation [including a few very short pre-class polls in some classes] – 25%
Guided by the design principle of making the course as close as possible to the practice of strategy in a business environment, there are no exams.

The four single-page case memos are written in response to a specific question for that case.  There is never a single right answer.  Your grade is based on the clarity, depth, uniqueness and strength of your arguments. Case memos are due no later than 11:59PM two days before the class on which the assignment is based.

There will be an option to submit a case assignment in most, though not all, classes.  You must submit four case assignments over the course of the semester – which classes you choose is your choice.  You have the option of submitting five and dropping the lowest score.

The 10-slide PowerPoint deck is a group assignment that applies the theories and tools to assess the corporate strategy of a company of your group’s choice.  Your audience is the Board of Directors.  The deck will be submitted, not presented, so it needs to stand on its own (format and some training provided). You may work in teams of up to four people.  Evaluation of your contribution by the other team members will be part of your grade.

The class participation portion of your grade will be based on the extent to which you demonstrate that you are prepared, the relevance and depth of your comments (quality, not quantity), and the degree to which you listen carefully and respond to your peers.  In making my overall assessment of class participation, the overarching criterion is “how significantly did this student’s participation contribute to our collective learning as a class?”

CAREER FIELD:  This course is designed for students whose career progression will lead to a leadership position in a multi-business enterprise, a job consulting to a multi-business enterprise, or for students who intend to sell a business to a multi-business enterprise.

ABSTRACT OF THE COURSE’S CONTENT AND OBJECTIVES:
This course is focused on the development and execution of the enterprise strategy for a firm that has multiple business units, each of them competing in their own markets or segments, and each competing for resources within the enterprise.  Such enterprises can range from a highly integrated corporation of closely related businesses (e.g. Clorox) to a “holding company” of more loosely related business (e.g. GE or a private equity firm).

Some of the theory and tools may be applicable, but this is not a course in marketing strategy or competitive strategy.  Corporate strategy is the set of choices an enterprise makes to create value through ownership, configuration and coordination of activities across multiple businesses.  Except in the market for capital, multi-business enterprises do not compete.  They don’t create value in their own right; they only create value by making superior portfolio choices and by improving the performance of the businesses in their portfolio.

Learning Objectives – To enhance your skills in:
1)  How a corporate parent can make smart choices about its portfolio of businesses.
2)  How to maximize ways a corporate parent adds value to the businesses in its portfolio, and minimize ways the parent destroys value in those businesses.
3)  How to clarify and balance different – sometimes conflicting – interests of various constituencies, both internal and external.
4)  How to organize and manage the corporate entity in a way that maximizes long-term, total-enterprise value.

The course will focus on the two key challenges in corporate strategy:

1) What is the portfolio strategy – in what businesses should the enterprise invest?
    This includes questions about buying and selling businesses, about diversifying into adjacent spaces, about entering new geographies or markets, about the degree of vertical integration, and about the level of resources (people and dollars) to commit to each of the businesses. 

2) What is the “parenting” strategy – how should the group of businesses be managed?
    What capabilities does the corporate parent add to the businesses, and what should the capability development agenda be?  How should the organization be structured, how should the parent guide each unit, how should linkages and synergies between units be managed, and how should leaders be selected and guided?  What is the role of the corporate center – how does it both add and destroy value, and how can it do more of the former than the latter?

This course is very cross-functional and it will build not only on the core course in strategy, but also on courses in economics, finance, marketing, innovation, and leading people. 

This is a highly analytical course, but it is not a quant-heavy course.  Issues are framed, tensions are identified and assessed, potential choices are illuminated, and views are formed with disciplined logic.  Sometimes analysis of data is critically important – you will definitely need to keep your quant chops honed! – but sometimes numbers just divert your attention from the real issues.  Figuring out what is signal and what is noise is often one of the tougher challenges in strategy.

Most courses are broken into discrete, bite-sized lessons, but this course is not.  A corporate strategy is an integrated set of choices around goals & aspirations, portfolio, resources, and organization.  Most sessions will dive more deeply into one element versus another, but all classes will take stock of the entire system.

You Will Probably Like This Course If:
-  You want to improve your conceptual thinking skills in framing issues and creating options that address complex challenges with broad systemic effects.
-  You want to improve your critical thinking skills in clarifying trade-offs and assessing choices that often have both positive and negative consequences simultaneously.
- You want to get more deeply grounded in the theory and principles of corporate strategy, but also expand your toolkit of formats and processes to develop and execute strategy in a multi-business enterprise.
 
This Course Is Not for You If:
-           You prefer working on problems that have clear right or wrong answers and you struggle with ambiguity.
-           You frame and solve almost every problem using numbers.
-           You want a course with a light reading load.
-           You need fairly granular instructions that define specific tasks to be completed in specific ways.

MODIFICATIONS TO COURSE FROM ITS MOST RECENT OFFERING:  Based on very helpful feedback from last year’s students, I’m making five changes to the course, three in design and two in pedagogy.
Design Changes
1)  I’m more clearly separating non-case topics into theory/principles (how to think about a subject) and toolkit (specific techniques and methods you can apply).
2)  I’m strengthening the theory and principles material, and diving more deeply into some of the more useful formats and processes.
3)  I’m reducing the number of case memo assignments from ten to four (a case memo in every class – what was I thinking?).

Pedagogy Changes
1)  I will take greater control of the classroom and be more rigorous in truncating comments that are off target, calling out fluffy answers, and probing responses more deeply.
2)  I will bring even more personal experience into the classroom.

BIOGRAPHICAL SKETCH:
Dan Simpson spent 34 years as an executive at The Clorox Company, a $6 billion manufacturer of consumer goods.  He most recently served as Vice President - Office of the Chairman, where he supported the CEO in the execution of his duties and also led work on innovation and partnership practices.  His previous role, held for 15 years, was head of corporate strategy, with responsibility for corporate strategy, strategic planning for business and functional units, and internal strategy consulting.  Prior assignments included positions in brand management, M&A, corporate finance, and new business ventures.

Dan was a founding member of the Corporate Strategy Board and the Bay Area Chief Strategy Officer Roundtable, was Chairman of the Conference Board Council of Strategic Planning Executives, and he has been a contributor to the McKinsey Quarterly.  He holds a B. S. from Northwestern University and an MBA from the Kellogg Graduate School of Management.