10 Sanity Tests for Strategy Development (PowerPoint PPT Slide Deck)

STRATEGY DEVELOPMENT PPT DESCRIPTION

Explore 10 Sanity Tests for Strategy Development, crafted by ex-McKinsey & Big 4 consultants. Enhance strategic robustness with proven frameworks and templates. 10 Sanity Tests for Strategy Development is a 23-slide PPT PowerPoint presentation slide deck (PPT) available for immediate download upon purchase.

Explore Slides inside the Deck:

Evaluating Strategic Market Positioning Effectiveness Translating Strategy into Actionable Execution Steps Assessing Bias in Strategic Decision-Making

Strategy is a way of thinking. It is not a procedural exercise or a set of framework.
Our company normally does not focus on the frameworks, tools, and approaches that generate our strategies.

1. Our company develops our strategy in many different ways, often idiosyncratic to our organization, people, and market.

2. Many strategies emerge over time rather than from a process of deliberate formulation.

This presentation will introduce our company to the Ten Tests that will guide us to think strategically. The ten tests will help us assess the strength of our strategies and focus on testing the strategy itself.

These tests of a good strategy are timeless. But the need to pressure-test a strategy is timely now. A shift towards shorter planning cycles and decentralized strategic decision making are increasing the utility of a common set of test.

This deck also includes slide templates for you to use in your own business presentations.

This PPT provides a structured approach to evaluating your strategy's robustness through ten comprehensive tests. Each test is designed to challenge different facets of your strategic plan, ensuring it can withstand market pressures and internal biases. From assessing market competitiveness to examining the granularity of your strategic focus, these tests offer a rigorous framework for strategic validation.

The presentation also includes practical examples and templates to facilitate immediate application within your organization. The tests cover critical areas such as competitive advantage, trend alignment, and execution readiness. This resource is indispensable for executives aiming to refine their strategic initiatives and drive sustainable growth.

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STRATEGY DEVELOPMENT PPT SLIDES

Evaluating Strategic Market Positioning Effectiveness

This PPT slide outlines a critical evaluation framework for assessing a company's strategic positioning. The fundamental question is: "Will your strategy beat the market?" To outperform, a company must identify and leverage market imperfections as unique advantages. Markets tend to revert to mean performance, necessitating robust and adaptable strategies. As best practices become widespread, they lose effectiveness as differentiators. Distinguishing one's strategy from competitors is essential; significant advantages must withstand external pressures. The US tire industry exemplifies this, where initial competition led to consolidation, demonstrating how strategic decisions on location and technology shape market outcomes. Successful strategies must be innovative and resilient against evolving market forces. Continuous evaluation of strategic positioning is vital for actively shaping market presence.

Translating Strategy into Actionable Execution Steps

This PPT slide outlines Strategy Test 10, focusing on translating strategic plans into actionable steps. It emphasizes the need for clarity on the current and desired future states of the company’s business model, organization, and capabilities. Two critical elements for successful execution are identified: understanding the shifts required for transition, including changes in processes, structures, or resources, and pinpointing accountable executives to ensure leadership alignment. The transformation represents significant organizational change, necessitating a robust action plan and sound change management advice. A key takeaway is aligning resource allocation with strategic goals, assessing where top talent and budgetary resources are directed, and making necessary adjustments to support the strategy effectively.

Assessing Bias in Strategic Decision-Making

This PPT slide focuses on "Strategy Sanity Test 8," highlighting biases in strategic decision-making, specifically attribution error and survivorship bias. Attribution error, exemplified by the "halo effect," leads decision-makers to assume replicating successful actions guarantees similar outcomes, ignoring unique contexts. Survivorship bias distorts understanding by analyzing only successful cases, neglecting failures that offer critical insights. To mitigate these biases, the slide advocates for developing multiple hypotheses and a solid fact base to validate them, enhancing informed decision-making. Incorporating diverse perspectives fosters a culture of dissent and critical thinking, helping identify blind spots. Practical steps include specifying objective criteria and remaining open to errors, aiming to enhance strategic robustness and ground decisions in reality.

Evaluating Strategic Positioning Against Emerging Trends

This PPT slide evaluates Strategy Test 4, which assesses a company's strategic positioning in relation to emerging trends driven by regulatory changes, consumer demand shifts, and technological advancements. Key questions guide analysis of early adopters, innovative market entrants, and the impact of developing technologies. Understanding these trends and the behaviors of market leaders is essential. The slide emphasizes the need for a thorough assessment of how trends affect financial positions, advocating for flexible and adaptable strategy formulation based on outcome certainty. An example highlights the implications of an aging population, prompting analysis of changing consumer behaviors, affected product lines, and overall profit and loss impacts. This illustrates the practical application of the strategy test in aligning strategic priorities with evolving market dynamics.

Assessing Sources of Strategic Advantage

This PPT slide evaluates sources of competitive advantage within a company's strategy, focusing on positional advantages and special capabilities. Positional advantages arise from structurally attractive markets, creating asymmetries that competitors cannot easily replicate. Understanding market dynamics is essential for leveraging these advantages. Special capabilities refer to unique resources, such as innovation and stakeholder management, that provide distinct benefits, but are not easily traded or shared. These capabilities must be abundant internally, but scarce externally to maintain a competitive edge. Bundling activities can create complex advantages that are harder for competitors to imitate. An example is a discount grocery retailer that redesigned its business system, establishing significant barriers to imitation and reinforcing the need for a dynamic strategy to counteract competitive pressures.

Framework for Managing Strategic Uncertainty

This PPT slide focuses on managing uncertainty in strategic planning, outlining 4 levels of uncertainty: 1) a clear view of identifiable outcomes; 2) identifiable, but non-exhaustive outcomes; 3) probability distributions representing outcomes statistically; and 4) total ambiguity regarding possible outcomes. To navigate these uncertainties, a structured approach is proposed, comprising 4 strategic steps: listing and prioritizing influential variables, ruling out impossible outcomes, using economic analysis to identify mutually reinforcing or unlikely outcomes, and applying scenario analysis to address remaining uncertainties. This framework aids in recognizing and systematically managing uncertainties, enhancing strategic effectiveness.

Source: Best Practices in Strategy Development PowerPoint Slides: 10 Sanity Tests for Strategy Development PowerPoint (PPT) Presentation Slide Deck, LearnPPT Consulting