Harvard University Extension School

Management E-5475 – Strategic Management of Growth Companies Course Syllabus – Spring 2014 November 15, 2014

Course Logistics Day and Time: Thursday, 7:40-9:40pm Location: Live Web Conference Course iSite: http://isites.harvard.edu/course/ext-23550/2014/spring Web conference link will be listed on the iSite

Instructor: Dave Power 617.694.2472 President, Power Strategy [email protected] Office Hours: Before class and by appointment

About the Course

Course Format This section of MGMT E-5475 is a web-based course utilizing the software program Blackboard Collaborate. Prior to the first class session on January 30th, participants must attend one of the three Open House “check in” sessions to ensure that computer equipment is functioning properly. We will announce the time of these sessions by email.

For information about system requirements and how to log in - please see the detailed instructions at the end of this document.

Please note that this is a live online course and students are expected to attend each session on Thursdays from 7:40pm - 9:40pm Eastern Standard Time. The link for the live course each week will be posted on the course iSite in the “Access the Web Conference Site” page (see the navigation links on left side of the iSite home page).

Course Description and Overview Growth companies are the engines of product innovation, market expansion and value creation. But sustaining the growth of these dynamic businesses -- typically with revenues of $10 to $100 million -- requires a unique set of skills, different from those required in either startups or large public companies. Many promising growth companies

______MGMT NNNN – Spring 2014 Page 1 of 15 stall as their business models mature and they outgrow the processes and teams responsible for their early success.

Using a mix of case studies, group discussions, interactive exercises, guest lectures and written assignments, this course provides a general management perspective of growth companies: strategy, execution, leadership, and capital. You first learn different growth strategies, including new market discovery, disruption of existing markets, and business model innovation. You then connect strategy with execution through market selection and positioning, “lean” development of new offers, and pipeline management. Because execution requires leadership, you explore team alignment and the role of leadership in creating a growth culture. Finally, you learn about raising growth capital, managing boards and planning for a successful exit.

Readings draw from Clay Christensen, Jim Collins, Verne Harnish, Patrick Lencioni, Alexander Osterwalder, and Steve Blank. In a final project, students select a growth company, examine its decisions about strategy, execution, team, and capital, and develop recommendations for sustaining growth.

Course Materials

This course requires students to invest a substantial amount of time in case preparation, background reading and project work. We will use case studies and articles available at reduced cost through the Harvard Business Press (HBP). Use this link to purchase these course materials: https://cb.hbsp.harvard.edu/cbmp/access/23378709

You need to register on the site to create a user name if you do not already have one. After you register, you can get to the coursepack at any time by doing the following: 1. Visit http://hbsp.harvard.edu/ and log in. 2. Click “My Coursepacks” and then click “Strategic Management (Spring 2014)” The course materials are PDF documents and you can open them with Adobe Reader. You will have access to the course materials for 6 months.

There are also required readings from two books that can be purchased from many bookstores, including the Harvard Coop, and online booksellers such as Amazon:

“Business Model Generation”, Alex Osterwalder.

“Five Dysfunctions of a Team”, Patrick Lencioni.

Finally, there is recommended reading from the following book:

“The Startup Owner’s Manual”, Steve Blank and Bob Dorf

Grading A student’s final grade in this course will be based on the following weighting:

______MGMT NNNN – Spring 2014 Page 2 of 15 20% Class Participation 45% Short Assignments 15% Quizzes 20% Final Project

Grades reflect the quality of a student’s work submitted throughout the term according to the Harvard Extension School’s grading standards (http://www.extension.harvard.edu/policies/grades/).

Coursework/Assignments This is a graduate-level course that requires active participation in class discussions and high-quality written work. Because communication is critical to managerial success, effective written and oral communication will determine a significant portion of a student’s grade. Written work should be clear, logical, grammatically correct, spell- checked, persuasive, supported by examples, and backed up by citations for any data, ideas or other content used.

Short Assignments There will be three Short Assignments due before Sessions 3, 5 and 9, each of which will account for 15% of the final grade. These assignments should address the questions in the syllabus, incorporate concepts from class lectures and assigned readings, and not exceed the guidelines for length. Each Short Assignment must be submitted electronically in the appropriate Drop Box by 7:30 PM of the due date (before the start of class).

Quiz There will be two quizzes, one during Session 7 and the other during Session 11. These quizzes will be a review of the readings, lectures and discussion during prior sessions. Please be sure to attend these sessions.

Final Project Each student will evaluate the growth strategy of a private company they will select in the first few weeks of the course. For each stage of the company’s growth they will examine company decisions about strategy, execution, leadership and capital. They will identify what the company did well and what it could have done better. And they will make recommendations on how the company can sustain profitable growth.

Students may choose (1) the company they work for, (2) a local private company or (3) a well known growth companies such as eBay, Starbucks and Apple where a great deal has been written about their early years of growth as private companies (e.g., “The Perfect Store - Inside EBay” by Adam Cohen). Students are expected to integrate appropriate frameworks and concepts from the course into a document with up to 8 pages of text (double-spaced, 12 point font, 1“ margins) plus relevant exhibits. The project is due in Session 14 and will account for 20% of the grade.

Class Participation ______MGMT NNNN – Spring 2014 Page 3 of 15 This course covers a significant amount of content and much of the learning comes from in-class exercises and discussion. Therefore, students are expected to attend all live web-based class sessions, complete all assigned readings and come prepared to participate. Attendance will be taken and participation will be evaluated at each class session. Class participation will be graded more on quality than on quantity, so contributions should be relevant, concise and aimed at moving the discussion forward and driving toward insight and understanding. You may miss two class sessions without penalty, but all other absences will result in a zero score for class participation for that session. Please notify the instructors via email prior to the start of class if you will not be in attendance. Class participation grade will also include submitting (1) a brief summary of your course objectives in Session 1, and (2) filling out student survey at the end of the course.

Academic Integrity Common sense warning: Just as ethics and integrity are important in management practice, academic integrity is important in this course. Please take the time to familiarize yourself with the Harvard’s policies on academic integrity, which can be found at http://www.extension.harvard.edu/exams-grades-policies/student-responsibilities. Other resources include, The Harvard Guide to Using Sources (http://usingsources.fas.harvard.edu/icb/icb.do). Please visit and use this site to avoid any unintentional errors. It is important to understand the standards to which you will be held; ignorance of the standards will not be considered an excuse for violating them.

The Fine Print Workload. The value you receive from this course will be commensurate with the thought, effort and reflection that you put into the endeavor. Students should expect to spend 2-8 hours outside of class each week to read the assigned materials, reflect, complete assignments, and prepare for the next class session. More time will be required to do the Final Project.

On Time. Students are expected to arrive on time and stay for the duration of the session. If you expect to be late or absent from class – or need to leave early – let the instructor and TA know prior to the start of class.

Deadlines. All assignments must be submitted to the correct assignment drop box on the course iSite (http://isites.harvard.edu/course/ext-23550/2014/spring) at the specified day and time and late submissions will not be accepted. If you experience any problems uploading your assignment to the drop box, you should email the document to the instructor. Please note that, if you email the assignment because you cannot upload it, the email and the relevant attachment must be received on or before the assignment deadline to be accepted. If you are absent the day an assignment is due, the assignment is still due at the specified day and time. True medical or family emergencies will be dealt with on a case-by-case basis.

Professional Conduct. Professional behavior is expected throughout the class. This means respectful communication both inside and outside of class. During discussions, civil discourse should be maintained at all times and comments should be aimed at moving the discussion forward. This does not mean that students must always agree ______MGMT NNNN – Spring 2014 Page 4 of 15 with others since reasoned, respectful dissention may be part of the discovery process and lead to previously unconsidered options.

______MGMT NNNN – Spring 2014 Page 5 of 15 Course Outline and Schedule

Part I: Growth Strategy

Session 1: January 30 Managing Growth Read prior to class: . Case Study: LoJack: Exploring New Business Opportunities at LoJack, BAB691-PDF-ENG

. Blog: “Why Growth Companies Stop Growing”, Power, http://wp.me/pG2EW-2L

. Harvard Business Review: “Reinvent Your Business Before It’s Too Late”, Nunes and Breene

Due before start of class: . A brief written summary (one page or less) on your objectives in taking this course . Case Preparation: What is the growth challenge for LoJack? What should they do?

Session 2: February 6 Problem Finding Read prior to class: . Case Study: Delacroix Dance Troupe (Should You Listen To The Customer?) . Harvard Business Review: “Decisions by Design, Stop Deciding, Start Designing”, Raney and Jacoby . Blog: “Have Your Customers Inspire Innovation”, Power, http://wp.me/pG2EW-6v “Why Innovation Needs Design Thinkers”, Power, http://wp.me/pG2EW-64 “Four Keys to Innovation and Growth”, Power, http://wp.me/pG2EW-5Q

Due before start of class: . Case Preparation: Please be prepared to defend your opinion on whether customers should look for innovation from customers?

Session 3: February 13 Creating New Markets Read prior to class: . Case Study: Chegg: Textbook Rental Takes Flight, 811077-PDF-ENG . Harvard Business Review: Blue Ocean Strategy, Kim and Mauborgne, R0410D-PDF-ENG Due before start of class: . Case Preparation: What growth challenges does Chegg face? What strategies should the company adopt in anticipation of the trend toward digital distribution of textbooks?

. Short Assignment #1: Design a better hotel for business travels by creating (1) a Customer Empathy Map of the business traveler, (2) a Four Actions analysis to improve on

______MGMT NNNN – Spring 2014 Page 6 of 15 current business hotel options and (3) a description of your new business hotel (1 page, double spaced, 12 point font, 1 “ margin).

______MGMT NNNN – Spring 2014 Page 7 of 15 Session 4: February 20 Disrupting Markets Read prior to class: . Case Study: Amazon Web Services, 609048-PDF-ENG . Book Chapter: “The Innovator’s Dilemma: Introduction”, Christensen, 1713BC-PDF- ENG . Blog: “Disruptive Strategy”, Power, http://wp.me/pG2EW-4s

Due before start of class: . Case Preparation: What was Amazon’s rationale for entering the cloud computing market? Who are the ‘Innovators’ in this market? How can they respond to the dilemma of Amazon as a ‘disruptor’?

Session 5: February 27 Designing Business Models Read prior to class: . Case Study: Dropbox: “It Just Works”

. Text: Business Model Generation, Alexander Osterwalder, (pages 1-119)

Due before start of class: . Short Assignment #2: Create a Business Model Canvas for Dropbox using the template at www.businessmodelgeneration.com. Describe the key elements of the business and 2 or 3 initiatives the company should consider for its future success (2 pages, double spaced, 12 font, 1“ margin).

Part II: Execution

Session 6: March 6 Creating “Lean” Products and Services Read prior to class: . Case Study: Predictive Biosciences 811015-PDF-ENG . Blog: “The Lean Growth Company”, Power, http://wp.me/pG2EW-4G . Recommended Reading: The Startup Owners Manual, Steve Blank, pp. 1 - 68

Due before start of class: . Case Preparation: What strategic decision did Predictive Biosciences need to make? Why was this a difficult decision? What decision would you recommend?

Session 7: March 13 Positioning

. We will have a 30 minute quiz at the start of class covering sessions 1 through 6

Read prior to class: . Case Study: Apple Inc in 2012, 710467-PDF-ENG . Background Note: “Design Thinking and Innovation at Apple”, 609066-PDF-ENG . Review four videos on Apple product launches: Apple iPod Launch: http://www.youtube.com/watch?v=kN0SVBCJqLs Apple iPhone Launch http://www.youtube.com/watch?v=ftf4riVJyqw&feature=related Steve Balmer on iPhone http://www.youtube.com/watch?v=eywi0h_Y5_U&feature=related

______MGMT NNNN – Spring 2014 Page 8 of 15 iPad Launch http://www.youtube.com/watch?v=WLBQVKwcIDw

Due before start of class: . Case Preparation: What were the positioning challenges Apple faced when it launched the iPhone? What audiences was Steve Jobs hoping to reach? What were Jobs’ messages for each audience? Session 8: March 27 Building the Pipeline Read prior to class: . Case Study: Online Marketing at Big Skinny 911033-PDF-ENG . Visit the Big Skinny web site: www.bigskinny.net . Background Note: “Market Segmentation, Target Market Selection, and Positioning”, Miklos Sarvary, Elberse, 506019-PDF-ENG

Due before start of class: . Case Preparation: How should Kiril prioritize marketing initiatives for Big Skinny? How would assess the current sponsored search strategy? … the social media strategy? Should Big Skinny expand its partnerships with online distributors?

Part III: Leadership

Session 9: April 3 Building Teams Read prior to class: . Case Study: MediSys Corp: The IntensCare Product Development Team 4059-PDF- ENG . Text: Five Dysfunctions of a Team, Patrick Lencioni, (pages 1-190)

Due in Drop Box before start of class: . Short Assignment #3: Please prepare a brief written summary of the Medisys case: o What factors are driving the behavior of the IntensCare Team? o What insights does Lencioni’s “Five Dysfunctions” provide”? o What should Merz do?

Session 10: April 10 Leading Read prior to class: . Case Study: Howard Shultz and Starbucks Coffee Company, 801361-PDF-ENG . Harvard Business Review: “Why Entrepreneurs Don't Scale” Hamm, R0212J-PDF-ENG . Harvard Business Review: “Building Your Company’s Vision”, Collins, Porras, 96501- PDF-ENG

Due before start of class: . Turn in a 1-page outline of your final assignment, including company, key growth issues, strategic analyses you plan to conduct . Case Preparation: What were the key ingredients to Shultz’s growth strategy? What makes Schultz an effective leader? How successful can Starbucks be without its founder at the helm?

Session 11: April 17 Implementing Change Read prior to class: ______MGMT NNNN – Spring 2014 Page 9 of 15 . Case Study: Gupta Garments, TB0259-PDF-ENG . Harvard Business Review: “Transferring Power in the Family Business”, Barnes, Hershon, 76401-PDF-ENG

Due before start of class: . Case Preparation: What alternatives should Amit consider? What cultural forces are at work? Who are the key stakeholders- what relationship should he develop with each? What plan of action would you recommend for Amit?

Part IV: Capital

Session 12: April 24 Financing Growth

. We will have a 30 minute quiz at the start of class covering sessions 7 through 11

Read prior to class: . Case Study: 1366 Technologies 810005-PDF-ENG

Due before start of class: . Case preparation: What are the financing challenges faced by capital-intensive clean tech startups? What are the trade-offs between 1366’s different business model and financing options? What business model and financing strategy would you recommend?

Session 13: May 1 Managing The Board Read prior to class: . Harvard Business Review, “How Serial Entrepreneurs Build and Manage a Board of Directors in a Venture-Backed Start Up” Roberts; Sahlman; Novakovich, 808163-PDF- ENG

Session 14: May 8 Growing Through Acquisition Read prior to class: . Case Study: eClinicalWorks: Paths to Growth 807025-PDF-EN . Harvard Business Review: “Mergers and Acquisitions: Overcoming Pitfalls, Building Synergy, and Creating Value”, Hitt, King, Krishnan, Makri, Schijven, Shimizu, BH353-PDF- ENG

Due in Drop Box before start of class: . Turn in Final Assignment . Case preparation: What factors should eCW founders consider in considering the acquisition? If they decide to move forward, how should they finance growth? What lessons should they take from the experiences of other founder-owned businesses such as Microsoft, Fidelity and Wang?

Session 15: May 15 Exiting Read prior to class: . Blog: “Marketing for M&A”, Power, http://wp.me/pG2EW-1U

______MGMT NNNN – Spring 2014 Page 10 of 15 Class Discussion: . Case preparation: Should INRIX IPO or plan for an exit? What specific actions should the company take to continue its growth and defend its position. . We will also discuss the exit strategy for Novera Software.

______MGMT NNNN – Spring 2014 Page 11 of 15 Blackboard Collaborate Version 11 Instructions

Please note: We will be using Blackboard Collaborate version 11 for our course. This software is very similar to Elluminate, which you may have used in other Division of Continuing Education (DCE) courses. However, the interface looks a bit different and you should follow the instructions below even if you are an experienced Elluminate user.

1. If you do not own an echo-cancelling headset, you should get one. You can buy them at an office supply store or online for about $30-$50.

2. About a week before the course begins, go to the Blackboard Collaborate First Time Users Page. (Also complete these steps if you use a different computer than the one you started with at the beginning of the semester.)

2a. Step 1: Checking System Requirements. When you land on this page your computer will automatically be checked to see if your operating system is compatible with Collaborate and if you have the correct version of Java to run the software. Most people sail through this step easily, but some have to prepare their computers.

If you need to download a newer version of Java, you will be walked through the steps for doing this. If you have a modern computer with a fast internet connection, this can take just 5 minutes, but if you have an old computer and/or slow internet connection, it can take about 30-40 minutes.

Occasionally users’ computers are not compatible with Collaborate and it may take some time and effort to pinpoint and troubleshoot the problem. If you run into trouble, contact student computer support, listed at the end of these instructions.

2b. Step 2: Configuring your system. Click on the v11 Configuration Room. You can test your connection, settings, and configure your audio.

2c. Step 3: Training and Resources. Watch the Online Orientation to get an overview.

3. The first time you enter the Collaborate session, plan on setting up about 10-15 minutes before the start time.

After clicking on the link, depending upon your computer, you will see some, or all of the images below:

Session Log In. Type your first and last name (every time you log in).

______MGMT NNNN – Spring 2014 Page 12 of 15 You may be asked to allow access. Click Allow.

Launching Blackboard Collaborate. If you get an error message, contact DCE student computer support.

Loading Java.

Loading Blackboard Collaborate. This may take some time.

______MGMT NNNN – Spring 2014 Page 13 of 15 Collaborate is running. If you’re waiting for Collaborate to open and you notice this icon in your task bar, click on it to maximize the Collaborate screen. If you see more than one of these, you have opened Collaborate more than once. The one farthest to the left is the first one that was opened. Close the others by clicking on them and exiting out of the session. Be sure you remain in one session!

Meeting Download. If you’re on a PC you may see this. If it seems like Collaborate has finished loading but you don’t see the purple and white arrow icon above, you may need to click this. If there are numbers after “meeting.jnlp”, it means your computer has downloaded the session several times. Just choose one download to open.

For help contact the DCE’s student computer support:

Phone: (617) 998-8571 Mondays through Fridays, 5 pm to midnight; Saturdays, 9 am to 10 pm; and Sundays, noon to 10 pm EST.

E-mail [email protected].

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