In this session, we’ll try to demystify strategy by sharing a few experiments on how we have worked on (1) creating strategy, and, (2) making strategy happen - in a Lean/Agile/Flow context. Our starting point has been analogies from complex, competitive domains such as war and sports and inspiration from key strategy practitioners. Here's a video recording: https://vimeo.com/146078766

1. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 1
Strategy Experiments
@Ericsson 3G
@erik_schon
Lean Kanban Central Europe, November 16, 2015, #LKCE15
Ways of Working in the #NetworkedSociety:

2. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 2
Our Strategy journey 2010-2015
Strategy
specialist
Strategy feedback
loop takes years
Execution
specialists
Starting point
Continuous execution,
feedback & fine tuning
Team
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

3. Erik Schön
@erik_schon
Co-creator of conditions where
people, teams and organizations
grow @ericsson
SERVING ~200 people in cross-functional teams
in Product Development Group Radio Base Stations
Product Development Unit 2G, 3G & Multi-Standard
Development Unit Radio
Business Unit Radio
Ericsson in Stockholm, Sweden
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

4. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 4
Ericsson 3G: Facts & Figures
>40% Of all 3G traffic
in Ericsson networks
10 R&D sites
1 800 people
#1 Mobile 3G
networks
100 Teams
265networks
Our Vision: a #NetworkedSociety where every person and
every industry is empowered to reach their full potential
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

5. Why Strategy?

6. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 6
Why Strategy?
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015
Company: handle limitations - time, equipment, competence, people …
Employees: know & influence direction in order to act & decide with speed
Customers: customer delight, serving the customers’ real needs
Market: success in volatile, uncertain, complex, ambiguous environment
Competitors: sustainable competitive advantage for Ericsson

7. What is Strategy?
Discuss in pairs for 2 minutes!

8. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 8
“Strategy is a mental tapestry of changing intentions
for harmonizing and focusing our efforts
as a basis for realizing some aim or purpose
in an unfolding and
often unforeseen world
of many bewildering events
and many contending interests.“
John Boyd

9. How do you do
Strategy?

10. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 10
”In real life, strategy is actually very straightforward.
You pick a general direction
and you implement like hell.”
Jack Welsh

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“… by what method?”
W. Edwards Deming

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“The strategy is top secret,
you just do what I tell you.”

13. Experiment 2010:
Structured process
KEY LEARNINGS: Process helpful;
too much focus on implementation; forgot people, culture & experiments
Learn: situation analysis
Focus: strategic vision & choices
Align: people, culture, structure & process, measures & rewards
Execute: implement & experiment
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

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Experiment 2010:
Wanted Position 2015
Empower people
Reduce lead-time to be more responsive
Increase efficiency to enable more output
Build quality into our ways of working
x4
1/2
x10
75%
KEY LEARNINGS: Stable, balanced wanted position gives focus & clarity;
easy to show progress by quantified wanted position
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

15. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 15
Insight 2011:
Alignment + autonomy→results
Intent
What & Why
Actions
HowAutonomy
Alignment
Thoughtful, purposive action
in the right direction
by all people in the organization
to reach the desired results
KEY LEARNING: Strong alignment around intent
enables maximum autonomy to take action on all levels
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

16. Insight 2011:
Long lead-time insights→actions
Strategy
Update
Preliminary
Balanced
Scorecard
Final
Balanced
Scorecard
March-May
New Key Performance Indicators (KPIs) every year
September Q3/Q4
Targets still valid?
Focus on reporting & corrective actions
KEY LEARNINGS: Rapidly changing world
means quickly outdated targets
January
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

17. Experiment 2012:
regular Strategy retrospectives
KEY LEARNINGS: Positive reinforcement of wanted position;
strategy evolves & focus area changes
Continuous
Improvements
Long-Term Key Performance Indicators (KPIs)
Continuous
Improvements
Execution
Focus Area Focus Area
Strategy
Retrospective
Strategy
Retrospective
Business situation
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

18. Experiment 2012:
bottom-up Quarterly focus area
Radically improve the test flow - how can I and my team contribute?
KEY LEARNINGS: High engagement; 144 experiments;
hard for teams to know what to do and when “done”
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

19. Experiment 2013:
Involving “top-down” challenge
Every sprint delivered to a live network
KEY LEARNINGS: More clear expectations - helped by indicators,
still not enough movement towards challenge
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

20. experiment 2014:
Enabling structure for challenge
KEY LEARNINGS: Alignment for autonomy
needs enabling structure for larger improvements in large organization
CHALLENGE
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

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Experiment 2013:
Outside in process, make choices
Winning proposition
Where to play
How to win
Key capabilities
Enabling structures
KEY LEARNINGS: Useful metaphor on all levels -
from business to individuals via programs and teams
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

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@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

23. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 23
What We have achieved 2010-2015
X4
1/2
X10
75% Employee motivation: 67% → 72%
Faults at customers: 250 → 40 per month
Feature lead-time: 100 → 36 weeks
Value throughput: ~4
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015

24. @erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015 | Page 24
Q&A

25. Inspiration
@FuentesDeOnoro
@RogerLMartin
@flowchainsensei
@plantin66
@erik_schon @ericsson | #LKCE15 | © Ericsson AB 2015 | November 16, 2015
@hakanforss