The STR Divison’s Teaching Committee asked outstanding strategy teachers to share some of their innovative teaching practices and materials. This post features Professor Michael Braun (link to webpage), interviewed on behalf of the Division’s Teaching Committee by Assistant Professor Hakan Ener (link).
Michael Braun is the Poe Family Distinguished Fellow in Entrepreneurship at the University of Montana’s College of Business. He has created and successfully taught an interesting MBA course on strategy formulation and implementation in the context of a corporate turnaround. He recently described the course in an interview. You can access some of the course materials, along with other teaching resources that Prof. Braun makes available for instructors at the “Mastering Strategy” website: http://www.mastering-strategy.com/teachingsupport
What and how do student learn about strategy in the context of corporate turnarounds?
Prof. Braun’s course, titled “Advanced Strategy Seminar” fills an important gap in the MBA curriculum because other strategy courses rarely focus on organizations that face the prospect of bankruptcy. In his course, students learn how to diagnose the causes of organizational decline, and how to deal with strategy formulation and implementation issues that arise when leading a turnaround.
The case studies that students examine typically deal with companies that have gradually lost touch with their customers (e.g. the “Jamba Juice” case, see link), or confronted external shocks threatening their viability, including economic recessions and disruptive technologies (e.g. the “Disruption in Detroit” case about car manufacturing vs. mobility-as-a-service, see link).
The course involves individual and team-based assignments. The individual assignments begin by asking students to figure out why the organization experienced decline in the way that it did, create a map of strategic priorities / initiatives, and craft the “CEO’s Memo” in order to move people to action (remember the “Burning platform” memo from Nokia’s past CEO Stephen Elop?)
In teams, the students work on the “Predictive Strategy Project” which is their semester-long “live case” dealing with a real-time turnaround situation taking place at a publicly-traded company. Prof. Braun asks his students to focus on a “matched pair” of two rival companies with similar positioning in their industry, explain their relative success over the last several years, and “predict” whether the companies have been taking adequate measures to weather the next downturn. A recent example might be to compare how two hotel owners / operators – say La Quinta and Choice Hotels – fared since the last recession. Students comb through public information from annual reports, SEC filings, and analyst calls in order to make sense of how the companies said they would respond to the recession, and what they actually did since then. Whether it’s launching more services, doing financial re-engineering, or mergers and acquisitions, the students try to find out whether these actions moved the needle on cash flows, profitability, and other indicators of performance. As the students observe the different actions and results that the companies obtained since then, they begin to understand what made one of the companies more resilient in order to overcome the last recession’s effects (also in light of all the material they learn throughout the course.) Then, looking at their competitive positioning today, the students evaluate whether the strategy, the business model, the value proposition, and the financial position of the companies signal their readiness for the next economic downturn. The students then formulate recommendations to enhance their readiness.
What can other faculty members do about teaching strategy in turnaround situations?
Prof. Braun’s course is extremely valuable for getting strategy students to think about what it takes to regain competitive advantage after losing it. While many strategy professors explain to their students that exceptional companies such as IBM and Ford managed to turn around their businesses, Prof. Braun’s course makes it clear that being involved in a turnaround is not such an exceptional situation. In every recession, a large number of managers (as well as management consultants) find themselves in that position, and the insights coming out of Prof. Braun’s course serve them well. For faculty members interested in expanding their strategy teaching portfolio, Prof. Braun’s approach is worth learning about and experimenting with. Assignments such as the “CEO’s Memo” and the “Predictive Strategy Project” are very novel, and go beyond what most strategy courses ask students to accomplish.
Another way in which faculty members can do more about teaching strategy in turnaround situations is to feature guest speakers who have had that type of experience. Prof. Braun’s course does this, and it’s important for a couple of reasons. First, while case studies may describe the strategic issues facing a manager at the early stages of a turnaround, there are many tactical decisions that need to be made as well (Renegotiate debts? With whom first? Etc.) Guest speakers can fill in these details that may be left out of strategy-level case discussions. Second, it may be very useful for the students to know managers who have dealt with turnaround situations (and not only in case studies). As turnaround managers will tell you, it feels difficult and sometimes lonely when dealing with these situations, and having access to a potential mentoring relationship with more experienced managers may alleviate some of the pressures. Strategy faculty can facilitate these connections.