COURSE NUMBER: EWMBA296.1
COURSE TITLE: Corporate Level Strategy: Principles and Practices
UNITS OF CREDIT: 2
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 for 10 weeks, but due to external commitments of the instructor, the ten classes will not be sequential.
The class will meet on the following Monday nights (Updated 11/6/17)
January 22
February 5
February
12
February
26
March 5
March
12
April 2
April
9
April
16
April
23
PREREQUISITE(S): Completion of the core course in strategy. Exceptions require permission of instructor.
CLASS FORMAT:
The course will be a composite of five formats, though nearly every class session will be a blend:
1) Theory & Principles will provide context on how to think about a particular strategy challenge. These will be communicated through articles, book chapters and class discussion. On several occasions, we will debate the merits of two strategy theories that contradict each other.
2) A Strategist’s Toolkit will expand your repertoire of pragmatic strategy tools, formats and processes, all of which are intended to be useful to you on the job, whether you are leading strategy work as a practitioner in, or as a consultant to, a multi-business enterprise.
3) Case Discussions will provide the opportunity to apply both the theory and tools to a wide variety of business situations. Most cases (e.g. Cargill, Eli Lilly, Dell) are discussed in a single 85-minute class session (first or second half of class). Other cases (Danaher versus Clorox, Apple versus Alphabet) are discussed as a contrasting pair over two class sessions (the key lessons are embedded in the similarities and differences between each firm’s approach to a similar strategy challenge). The class will also include a deeper dive into the four-decade strategy of GE, from Jack Welch’s tenure to the emerging strategy of GE’s new CEO: John Flannery. You are welcome, and encouraged, to form study groups to prepare for case discussions. It enriches your learning experience.
4) Role Plays will give you a chance to step into the role of the CEO, a CFO, a business unit president, a board member, a shareholder, and other players involved in the creation, execution and evaluation of strategy.
5) Practitioner Guests, most often the chief strategy officer of a large enterprise, will join some classes, and they will bring additional insights and push forward our collective thinking on the case / topic for that day.
REQUIRED READINGS: Course reader (cases, articles, and book chapters) on study.net, plus posted articles on bCourses (some of which update cases with up-to-date 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 three single-page case memos [individual assignment] – 40%
2) The quality of one 10-slide PowerPoint, Board of Directors presentation [group assignment] – 35%
3) The quality of your class participation [including a few very short pre-class polls in some classes] – 25%
The design of this course is guided by the principle of making the course experience as close as possible to the practice of strategy in a business environment. There are no exams in business, and no exams in this course.
The three single-page case memos (40%) are written in response to a specific question for that case, and everyone in the class will have the same assignment. Your role is to synthesize the information, to define at least two potential choices, and then to choose one and defend it. A specific format will be provided, the purpose of which is to help you develop the skill to synthesize complexity into a crisp and clear view that a CEO or Board member can understand quickly.
By design, there is never a single right answer to any case memo question. Your grade is based on the clarity, depth, uniqueness and strength of your presentation and your arguments. Case memos are due no later 6PM the Sunday immediately before the class in which the case will be discussed.
All case memos will be graded by both the instructor and the GSI, and you will be given reasonably detailed feedback on where you excelled and where you have an opportunities to improve. The purpose of the memos is to learn, so the first memo is only 10% of your final grade; the second and third are each 15%.
The 10-slide PowerPoint deck (35%) is a group assignment that applies the theories and tools to assess the corporate strategy of a company of your group’s choice (approved by the instructor). Your audience is the Board of Directors, and a specific format for a board presentation will be provided. You will work in teams of at least three and no more than four people, of your choosing.
Following standard board-meeting processes, your deck will be a pre-read, submitted to the instructor and the two other groups no later than 11:59PM the Wednesday before class #9. They will be your Board. They’ll study your deck in advance of your presentation, and come prepared to engage you in an active discussion in Class #9.
80% of your final project grade will be based on the quality of the pre-read deck your group creates; an evaluation of your contribution by the other members of your team will be a part of that grade. The other 20% of your final project grade will be based on your presentation and the quality of your comments and questions as a member of the Board of Directors for two of the other groups in the class.
The class participation portion of your final grade (25%) 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 thoughtfully 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 a strategy for an enterprise 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. Proctor & Gamble) to a “holding company” of more loosely related business (e.g. GE or a private equity firm). A business unit that has multiple product lines is also an enterprise for purposes of this course.
Some of the theory and tools may be applicable, but this is not a course in marketing strategy or competitive strategy, nor is it a course in strategies for start-ups. 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 multi-business parent can make smart choices about its portfolio of businesses / product lines.
2) How to maximize ways a multi-business 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 multi-business entity in a way that maximizes long-term, total-enterprise value.
This course is very cross-functional and it will build not only on the core course in strategy, but also on core courses in economics, finance, marketing, innovation, and leading people.
The overall content of the course is designed around six questions, all of them created by asking myself what I wish I had known when I first took on the role as the senior strategy leader at Clorox, having had no formal training in strategy in my prior career or in my MBA at Kellogg.
1) What is strategy? This is a deceptive simple question, but despite the fact that you dealt with this question in the core course, and Michael Porter wrote an HBR article with that title, there is actually no universal agreement on an answer. However, the way you eventually answer it for yourself will have a huge effect on the lens by which you craft and execute strategies. This course will expose you to a variety of views from GE, P&G, HBS, London Business School, McGill Professor Henry Mintzberg, BCG, McKinsey, Bain and the Ashridge Management Centre in the UK. The course will also provide a continuum of effective corporate strategies, built around two tests of good corporate strategy: the “better off” test and the “ownership” test.
2) How is strategy developed? The core course does an excellent job of grounding you in principles and practices in the development of a strategy for a single business in a single market. Some excellent Haas courses in marketing strategy, brand management and entrepreneurship dive into techniques to develop and execute a competitive strategy in those contexts. This course will expose you to a variety of process methodologies that companies and leading consulting firms use to create strategy in more complex enterprises. Among the methodologies are choice structuring, scenario planning, a pre-mortem process, and ways to identify and manage biases in a strategy development processes.
3) What role does a business model play in strategy? The Alexander Osterwalder / Yves Pigneur Business Model Canvas, popular in a number of other Haas courses, is a great tool, but it is only one way to think about business models in a strategic context. This course will broaden the view of business models to include perspectives from strategy faculty at London Business School and from Harvard’s Clay Christensen. One practitioner guest in our class will be the former VP of Strategy for Adobe, who will give you insight into Adobe’s business model transformation to a subscription service in the cloud.
4) How can a large established enterprise expand its growth options? Creating profitable growth is probably the biggest single strategic challenge for large, multi-business enterprises. This course will expose you to a wide variety of tools that companies are using to tackle that question, including the three horizons of growth (McKinsey), lessons from private equity that any company can use (Bain), Cargill’s use of boundary conditions to frame the growth challenge, the Capron/Mitchell Resource Pathways Framework (INSEAD), Eli Lilly’s alliance design and management tools, and practical ways to manage the age-old exploration versus exploitation challenge.
5) How can strategy be executed with excellence? Most business schools spend a great deal more time on strategy development than on strategy execution; the opposite is true inside businesses. Fancy schmancy strategies that are poorly executed are just as worthless as poorly conceived strategies. This course will go beyond framing and making choices in strategy development, and will also highlight some of the tools and techniques companies use to execute strategy well. Among the topics will be the governance agenda, leading in a matrix, decision rights tools, execution-integration models from McKinsey and Jay Galbraith, and a one-page execution tool used by Clorox, P&G, HP and a number of other companies.
6) What are the skills of a strategist? This course will expose you to five skills I think are key to being good at strategy, as well as three lenses to develop strategy. You will also learn, and get some practice in, two of the most critical elements in creating and getting genuine alignment to a strategy: synthesizing complexity into a crisp one-page memo, and developing a 10-slide presentation pre-read deck to sell your strategy to the Board of Directors.
Class dates and topics (subject to minor changes) are as follows:
January 22 – Course overview and the contrasting corporate strategies of Apple versus Alphabet
January 29 – No class; instructor out of town
February 5 – Strategy development tools; Danaher case
February 12 – The strategy of The Clorox Company; the Chief Operating Officer of Clorox will be our guest
February 19 – No class; President’s Day Holiday
February 26 – Strategic Intent; Cargill case
March 5 – The impact of ownership on strategy, Dell and Eli Lilly cases
March 12 – The integration of strategy and business model; the former VP of strategy from Adobe will be our guest
March 19 – No class; instructor out of town
March 26 – No class; spring break week
April 2 – Deep Dive into GE: The Welch Years
April 9 – Deep Dive into GE: The Immelt Years and the emerging strategy of new CEO John Flannery
April 16 – Group presentations
April 23 – Amgen case, class summary
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 very 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, and whether you are even focused on the right question, is often one of the tougher challenges in strategy.
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 THE COURSE FROM ITS MOST RECENT OFFERING:
Based on very helpful feedback from last year’s students and my own continuing education as a student in executive education strategy classes at HBS and London Business School, I have made four changes to last spring’s course.
1) The number of case memo assignments has been reduced from four to three, and those three will be the same for all students.
2) The weighting of the case memo assignments in your final grade remains at 40%, but in the interest of maximizing learning, the first “practice round” memo is only 10% of your final grade, with the second and third memos contributing 15%.
3) I have changed the final group project to more accurately simulate a real board review. The deck is still written as a pre-read, but groups will now present in class nine, and two other groups in the class will represent the board. They will read the deck in advance and come prepared with questions and comments.
4) The deep-dive, two-class session on GE will still begin with Jack Welch’s tenure as CEO but the second half of the second class will now be focused on evaluating the emerging strategy of new CEO/Chairman John Flannery.
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. He was a member of the Conference Board Strategic Executives Council for 15 years, twice serving as chairman, and is now the Program Director for that Council. Dan has been a contributor to the McKinsey Quarterly, the Journal of Business Strategy and Planning Review. He holds a B. S. from Northwestern University and an MBA from the Kellogg Graduate School of Management.