Contents

Preface 19

Strategic Solutions for REvolutions 19

The New Challenges 19

The Right Knowledge 21

The Right Strategy for the Great Transformation21 23

The Revolution in the Great Transformation21 24

Innovative, Intelligent and Right Solutions 25

Strategy: Navigating Effectively Through the Complexity of the Great Transformation21 26

Key Propositions 28

A Word On the Terms Used 30

Part I: Strategy for the Great Transformation21

1.What Strategy Looks Like When the Future is Unknown 37

2.The Great Transformation21 41

The Old World Ends as a New World Is Born 43

Megachange in Megasystems 44

The Current Crisis as the New World's Birth Pangs 45

It Takes More than Economics to Understand the Global Economic Crisis 46

Anglo-Saxon Corporate Governance-A Machine of Destruction 47

Complexity and Management Crisis: The Absence of Neuronal Systems 50

Third Act of the Crisis: Deflation 51

The New Way of Functioning: Mastering Complexity 53

3.When You Do Not Know What You Need to Know: The Minefield of Strategic Errors 55

Strategic Delusion by Operational Data 55

Operational and Strategic Management 60

Strategic Thinking Traps 66

Part II: Strategy as Master Control in the Wholistic Management Systems

1.Making Companies Function Well 77

Enhancing Management Impact Through Management Support Systems 77

Right and Good Management-Universally Valid 78

Management, Financial Markets, and Alpinism 81

A Practical Hint for Readers in the Know 82

What are Master Controls? 83

The Basic Management Model and Its Basic Concepts 84

Management of Institutions: The General Management Model 85

Management of People: The Standard Model of Effectiveness, or "Management Wheel" 88

The Integrated Management System-IMS 89

Integrated Strategy as a Top Cross-Divisional Function 92

2.Providing Direction Through
Corporate Policy and Business Mission 95

The Right Purpose 95

The Right Mission 100

The Right Performance 106

Part III: Mastering Complexity Through Reliable Navigation in Any Circumstance

1.Revolutionizing Strategic Navigation 113

The Malik-Gälweiler Navigation System 114

The Right Strategy for a Future Unknown 117

Putting an End to Arbitrariness in Strategy Design 117

Looking Further Into the Future-Without Forecasts 119

Time Constants and System Dead Time 119

Limitations of the Market Economy:
Why Economists Do Not See Far Enough 120

What Must Be Monitored: Variables for Control and Orientation 121

Reliable Function With Cybernetic Control Systems 122

2.Reliable Control Through Cybernetic Navigation 124

First System Level: Liquidity 124

Second System Level: Profit 129

Third System Level: Current Profit Potential (CPP) 131

Fourth System Level: Future Profit Potentials (FPPs) 136

3.Setting the Right Strategy, Irrespective of Economic Climate: The Strategy Map 143

The Solution-Invariant Customer Problem 147

Solution Technologies 154

Socioeconomic Trends 157

Market Position 159

Investments and Cost Reduction Potentials 166

Research and Development Objectives 168

Finance and Balance Sheet Variables 170

Part IV: Following the Change: Success Factors for Your Current Business

1.No More Blind Flying: PIMS-The High Art of Strategy Development 175

Strategic Leadership 176

The PIMS Revolution 178

Strategy at the Strategic Business Unit Level 179

Discovery of the "Laws of the Market Place" 179

A Brilliant Research Idea: Profits Are Driven by Structure, not the Industry 181

New Benchmarking Based on the Biological Pattern 182

The PIMS Database Suites 183

Universally Valid Factors Determine Seventy-five Percent of Profits 185

Answering Key Questions of Strategy 187

Eight Key Factors for Success 188

2.Strategic Core Knowledge: A Cornucopia of Insights 189

Market Position 189

Stability of Results Over Time 190

A Seeming Anomaly Triggers Discovery of a New Factor 191

Is Innovating a Good Thing? 192

Where Many Businesses Lose Earning Power Without Even Noticing 193

How Important Is Market Growth? 194

Systemic Interconnectedness of PIMS factors 195

PIMS and the Six Central Performance Controls (CPC) 198

The Cybernetics of PIMS Strategy Development 198

Overview: Benefits of PIMS Findings for Top Management 199

Criticism of the PIMS Program 200

What Remains Valid in Business When Everything Changes 201

3.Breaking Strategic Barriers:
Three Pioneering Models From PIMS 203

Knowing the Potential of a Business: The PIMS Par Model 203

Learning From Winners: The PIMS Look-Alike Model 206

The Customer Value Map: Using Customer Value and Competitiveness as Reliable Guiding Stars 211

Part V: Ahead of Change: Success Factors for Your New Business

1.Constants in the Currents of Change 223

The Magic of Patterns that Connect 225

We, too, Will Be Replaced: Creative Destruction 226

Symphony of S-Curves: Seeing the Future Clearly 228

Simple Growth Processes 229

From Growth to Substitution 233

When Several Systems Compete for Existence 234

Discovering the Secret Driver of Epochal Change 236

Centennial Cycles: Invention-Innovation-
Substitution-Exploitation 238

Was Kondratieff Right?
The Rhythm of Long Economic Cycles 241

Self-Destructing and Self-Creating Systems 243

2.Innovating for the Great Transformation21: How to Preprogram Success 246

From the Art to the Craft of Innovation 247

Misconceptions About Innovation 249

3.Mastering Even the Unknown: The PIMS Start-up Strategy 255

Start-ups as a Synthesis of Several Arts: The Secrets of Innovation Success 256

The Right Environment for Start-up Businesses 265

Choosing the Right Strategy in the Right Environment: Knowing, Not Guessing 267

4.Implementing Start-up Strategies:
Basic Rules for Effective Innovation 274

1. Go for the Top: Market Leadership and Distinct Changes 275

2. Make Room for New Things 275

3. Separate the Old From the New 276

4. Look for Opportunities in Problems 278

5. Ask Controllers for a Second "First Page" 279

6. Write Down Your Expectations 279

7. Determine Cut-off Points 280

8. Make Sure You Have the Best People 280

9. Run Tests 281

10. Strictly Focus on a Few Things 281

Part VI: Revolutionizing Management Methods: Strategic Approaches Without Time or Space Limits

1.Direttissima: Taking the Most Direct Path to the Right Strategy 285

2.Revolutionizing Change With the Syntegration Method 293

Epoch of New Leadership: Quantum Leap in the Social Technology of Functioning 293

Change and Innovation-Swift and Effective 294

What is the Syntegration Method and What Does it Accomplish? 295

3.The Cyber-Tools 310

SensiMod: The Sensitivity Model As the Organization's GPS 311

EKS: Dynamic Specialization 318

Management System Audit (MSA):
New Ways of Functioning and Implementing 325

Operations Room: Implementation With Real-Time Control 330

4.How Even Giants Learn to Dance: HyperSyntegration 337

Appendix

Concept and Logic of the Series "Management: Mastering Complexity" 347

The Malik Management Systems And Their Users 354

What Readers Need to Know in Order to Understand this Book Series 364

Glossary 373

Termin protected by trademark and copyright 385

About the Author 386

Selected affiliations 388

Selected awards 389

Bibliography 390

Index 393