Case Study Description of Strategy as Improvisational Theater
This is an MIT Sloan Management Review article. In following the traditional model of strategy development, a company seeks to craft the best possible plan so that it can be handed off for a predetermined course of execution involving a predictable set of events and a specific final goal. This scripted approach resembles traditional theater: The actors speak the same lines and the action comes to the same satisfying conclusion, night after night. The model works well when business is going through a relatively stable period. The current situation, however, is not stable: Companies are still trying to navigate the technological tsunami created by the Internet. Under the circumstances, it makes much more sense for companies to follow an improvisational model -- that is, to throw out the script, bring in the audience and trust the actors to innovate on the spot. The metaphor of improvisational theater helps executives think about the way in which an entire organization can become an arena for staging experiments that can transform a company's overarching strategy. Harvard Business School professor Rosabeth Moss Kanter lays out the six elements of strategic improvisation and illustrates how companies have made use of each one to get the most out of new technologies. Senior managers who understand these elements can create an atmosphere in which improvisational theater thrives; change then becomes an organic process rather than a painful reaction to circumstances beyond the company's control. Although this approach does not advocate a big plunge into something totally new, it is anything but conservative. Companies that engage in continual improvisation through innovative projects of all sizes and shapes are much better equipped to explore highly threatening disruptive technologies and embrace quite radical changes.
Swot Analysis of "Strategy as Improvisational Theater" written by Rosabeth Moss Kanter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Improvisational Theater facing as an external strategic factors. Some of the topics covered in Strategy as Improvisational Theater case study are - Strategic Management Strategies, Knowledge management, Leadership, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Strategy as Improvisational Theater casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing commodity prices,
cloud computing is disrupting traditional business models, there is backlash against globalization, etc
Introduction to SWOT Analysis of Strategy as Improvisational Theater
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategy as Improvisational Theater case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Improvisational Theater, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Improvisational Theater 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 Strategy as Improvisational Theater can be done for the following purposes –
1. Strategic planning using facts provided in Strategy as Improvisational Theater case study
2. Improving business portfolio management of Improvisational Theater
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Improvisational Theater
Strengths Strategy as Improvisational Theater | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Improvisational Theater in Strategy as Improvisational Theater Harvard Business Review case study are -
Training and development
– Improvisational Theater has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategy as Improvisational Theater Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Improvisational Theater is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Improvisational Theater 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.
Operational resilience
– The operational resilience strategy in the Strategy as Improvisational Theater 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.
High brand equity
– Improvisational Theater has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Improvisational Theater to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Improvisational Theater is one of the leading recruiters in the industry. Managers in the Strategy as Improvisational Theater are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Improvisational Theater is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Improvisational Theater is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategy as Improvisational Theater Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Improvisational Theater has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Strategy as Improvisational Theater HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Improvisational Theater is present in almost all the verticals within the industry. This has provided firm in Strategy as Improvisational Theater case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Improvisational Theater has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Improvisational Theater 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.
Analytics focus
– Improvisational Theater is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rosabeth Moss Kanter can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Improvisational Theater in the sector have low bargaining power. Strategy as Improvisational Theater has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Improvisational Theater to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Strategy as Improvisational Theater | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategy as Improvisational Theater are -
Capital Spending Reduction
– Even during the low interest decade, Improvisational Theater 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.
Increasing silos among functional specialists
– The organizational structure of Improvisational Theater is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Improvisational Theater needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Improvisational Theater to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Improvisational Theater supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategy as Improvisational Theater, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Improvisational Theater vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Improvisational Theater has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Strategy as Improvisational Theater should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Improvisational Theater has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Improvisational Theater, firm in the HBR case study Strategy as Improvisational Theater needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategy as Improvisational Theater, it seems that the employees of Improvisational Theater 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Improvisational Theater needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Strategy as Improvisational Theater, is just above the industry average. Improvisational Theater 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategy as Improvisational Theater HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Improvisational Theater has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Improvisational Theater 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. Improvisational Theater 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.
Opportunities Strategy as Improvisational Theater | 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 Strategy as Improvisational Theater are -
Loyalty marketing
– Improvisational Theater has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Improvisational Theater can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategy as Improvisational Theater 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Improvisational Theater 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 Improvisational Theater to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Improvisational Theater can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Improvisational Theater 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 Improvisational Theater in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Improvisational Theater 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.
Developing new processes and practices
– Improvisational Theater can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Improvisational Theater has opened avenues for new revenue streams for the organization in the industry. This can help Improvisational Theater to build a more holistic ecosystem as suggested in the Strategy as Improvisational Theater case study. Improvisational Theater can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Improvisational Theater can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Improvisational Theater is facing challenges because of the dominance of functional experts in the organization. Strategy as Improvisational Theater case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Improvisational Theater 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Improvisational Theater 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. Improvisational Theater 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.
Threats Strategy as Improvisational Theater External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategy as Improvisational Theater are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Improvisational Theater with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Improvisational Theater needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Improvisational Theater can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Improvisational Theater is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Improvisational Theater 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Improvisational Theater can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Strategy as Improvisational Theater .
Regulatory challenges
– Improvisational Theater needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing wage structure of Improvisational Theater
– 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 Improvisational Theater.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Improvisational Theater in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Improvisational Theater 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.
Technology acceleration in Forth Industrial Revolution
– Improvisational Theater has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Improvisational Theater needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Improvisational Theater can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Improvisational Theater 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.
Weighted SWOT Analysis of Strategy as Improvisational Theater 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 Strategy as Improvisational Theater 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 Strategy as Improvisational Theater 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 Strategy as Improvisational Theater 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 Strategy as Improvisational Theater 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 Improvisational Theater needs to make to build a sustainable competitive advantage.
