Case Study Description of Collaborating for Systemic Change
This is an MIT Sloan Management Review article. Today, as consumer choices on one side of the planet affect living conditions for people on the other side and complex supply chains span the globe, businesses are facing a host of "sustainability" problems--social and ecological imbalances created by that globalization. Beginning in the late 1990s, organizational members of the Society for Organizational Learning (SOL--including Shell, Harley-Davidson, HP, Xerox, and Nike, among others) began a series of initiatives focusing on collaborative solutions to a variety of sustainability issues. The group's goals have included the application of systems thinking, working with mental models, and fostering personal and shared vision to face these complex sustainability issues. Through its work, SOL (of which two of the authors are founding members) has learned that successful collaborative efforts embrace three interconnected types of work--conceptual, relational, and action-driven--which together build a healthy "learning ecology" for systemic change. In this article, the authors offer examples from particular projects in which learning ecology provided an important foundation for substantive progress, and they draw lessons for companies and managers regarding each of the three types of work. Ultimately, the authors conclude that conceptual, relational, and action-driven work must be systemically interwoven and that there is little real precedent for that. They offer several guidelines for how it can be accomplished, emphasizing leadership and transactional networks. Finally, they pose three questions that must be answered if systemic solutions are to be successful: (1) How can we get beyond benchmarking to building learning communities? (2) What is the right balance between specifying goals and creating space for reflection and innovation? and (3) What is the right balance between private interest and public knowledge?
Authors :: Peter M. Senge, Benyamin B. Lichtenstein, Katrin Kaeufer, Hilary Bradbury
Swot Analysis of "Collaborating for Systemic Change" written by Peter M. Senge, Benyamin B. Lichtenstein, Katrin Kaeufer, Hilary Bradbury includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Systemic Sol facing as an external strategic factors. Some of the topics covered in Collaborating for Systemic Change case study are - Strategic Management Strategies, Corporate governance, Ethics and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Collaborating for Systemic Change casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing transportation and logistics costs, geopolitical disruptions, there is backlash against globalization, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Collaborating for Systemic Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Collaborating for Systemic Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Systemic Sol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Systemic Sol operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Collaborating for Systemic Change can be done for the following purposes –
1. Strategic planning using facts provided in Collaborating for Systemic Change case study
2. Improving business portfolio management of Systemic Sol
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Systemic Sol
Strengths Collaborating for Systemic Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Systemic Sol in Collaborating for Systemic Change Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Collaborating for Systemic Change firm has clearly differentiated products in the market place. This has enabled Systemic Sol to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Systemic Sol to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Systemic Sol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Systemic Sol has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Systemic Sol are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Systemic Sol is one of the leading recruiters in the industry. Managers in the Collaborating for Systemic Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Systemic Sol in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Systemic Sol
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Systemic Sol does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Systemic Sol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Systemic Sol has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Systemic Sol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Systemic Sol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Systemic Sol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Collaborating for Systemic Change Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Strategy & Execution field
– Systemic Sol is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Systemic Sol in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Systemic Sol in the sector have low bargaining power. Collaborating for Systemic Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Systemic Sol to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Collaborating for Systemic Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Collaborating for Systemic Change are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Collaborating for Systemic Change, it seems that the employees of Systemic Sol don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Systemic Sol has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Systemic Sol even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Collaborating for Systemic Change that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Collaborating for Systemic Change can leverage the sales team experience to cultivate customer relationships as Systemic Sol is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Collaborating for Systemic Change HBR case study mentions - Systemic Sol takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Systemic Sol has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Collaborating for Systemic Change, is just above the industry average. Systemic Sol needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Systemic Sol has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Systemic Sol has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Systemic Sol, firm in the HBR case study Collaborating for Systemic Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Systemic Sol is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Systemic Sol needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Systemic Sol to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Collaborating for Systemic Change, in the dynamic environment Systemic Sol has struggled to respond to the nimble upstart competition. Systemic Sol has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Collaborating for Systemic Change | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Collaborating for Systemic Change are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Systemic Sol to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Systemic Sol to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Systemic Sol can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Systemic Sol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Systemic Sol has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Collaborating for Systemic Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Systemic Sol to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Systemic Sol to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Systemic Sol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Collaborating for Systemic Change suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Systemic Sol can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Systemic Sol in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Systemic Sol has opened avenues for new revenue streams for the organization in the industry. This can help Systemic Sol to build a more holistic ecosystem as suggested in the Collaborating for Systemic Change case study. Systemic Sol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Systemic Sol can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Systemic Sol to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Systemic Sol can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Systemic Sol can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Systemic Sol to increase its market reach. Systemic Sol will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Collaborating for Systemic Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Collaborating for Systemic Change are -
Increasing wage structure of Systemic Sol
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Systemic Sol.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Systemic Sol will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Systemic Sol demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Systemic Sol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Systemic Sol has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Systemic Sol needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Systemic Sol business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Systemic Sol in the Strategy & Execution sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Systemic Sol can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Systemic Sol.
Shortening product life cycle
– it is one of the major threat that Systemic Sol is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Collaborating for Systemic Change, Systemic Sol may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Systemic Sol high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Collaborating for Systemic Change Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Collaborating for Systemic Change needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Collaborating for Systemic Change is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Collaborating for Systemic Change is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Collaborating for Systemic Change is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Systemic Sol needs to make to build a sustainable competitive advantage.
