"Telecommunications Strategic Planning I"
Telecommunications & Strategic Planning I. Richard A. Gershon, Ph.D. School of Communication Western Michigan University Western Michigan University Strategic Planning Strategic planning is the set of managerial decisions and actions that determine the long term performance of a company or organization. Western Michigan University Strategic Planning: 4 Steps Researchers Wheelen and Hunger (1998) suggest that there are four steps involved in the strategic management process. They include: 1. Environmental Scanning 2. Strategy Formulation 3. Strategy Implementation 4. Evaluation and Control Western Michigan University I. Environmental Scanning Environmental scanning is the ability to identify strategic factors (both external and internal to the organization) that can significantly impact the firm's business operations. Environmental scanning requires the ability to assess the internal strengths and weakness of the organization as well as the external opportunities and threats to the organization. Western Michigan University SWOT Model Table 1. Strengths, Weakness, Opportunities and Threats (SWOT) Model Internal 1. strengths of the organization 2. weaknesses of the organization External 3. opportunities for the organization 4. threats to the organization ___________________________________________________ Western Michigan University Triggering Event The need for strategic planning is sometimes caused by a triggering event. A triggering event can be caused by: Changes in the competitive marketplace Changes in the management structure of an organization Changes associated with internal performance and operations Western Michigan University The External Environment The external environment can include a number of different forces that can impact the performance and operations of an organization, including: 1. Competitive Factors 2. Political/Legal Factors 3. Economic Factors 4. Technological Factors 5. Sociocultural Factors Western Michigan University Competitive Factors Competitive factors are the business strategies and actions of one’s competitors. The competition may have designed a better product or service. Examples: Sony vs. Microsoft Videogame Nokia vs. Motorola Cellular Verizon vs. AT&T Telephony Western Michigan University Political/Legal Factors Political/legal factors represent changes in the political and regulatory environment that can significantly influence the business operations of a company or organization. Examples: Cable Communications Policy Act of 1984 The AT&T Divestiture (breakup), 1984 The Cable Television Act, 1992 The Telecommunications Act of 1996 Western Michigan University Economic Factors Economic factors are marketplace changes that can help or adversely affect your business operations. 1. Spiraling inflation 2. Economic recession 3. Natural calamity 4. The availability of a product substitute Western Michigan University Technological Factors Technological factors represent advancements in new technologies that can help or adversely affect one’s business. 1. Direct Broadcast Satellite 2. Apple iPhone 3. MP3 File Sharing 4. Cable Modems 5. High Definition Television Western Michigan University Sociocultural Factors Sociocultural factors are social/ cultural changes in the environment that may affect a consumer's buying habits, product usage etc. Examples: 1. Consumer reaction to animal furs, etc 2. Student attitudes about software piracy 3. Privacy and security while purchasing merchandise on the Internet. Western Michigan University Internal Factors that Can Influence Business Operations The internal environment can include a number of different forces that may affect organizational performance: 1. Core Competency 2. Organizational Decisionmaking 3. Organizational Culture 4. Management / Labor Relations 5. Operational Issues Western Michigan University Core Competency The term core competency describes something that an organization does well. The principle of core competency suggests that a highly successful company is one that possesses a specialized production process, brand recognition or ownership of talent that enables it to achieve higher revenues and market dominance when compared to its competitors. Core competency can be measured in many ways: brand identity (Disney, ESPN, CNN) technological leadership (Cisco, Intel, Microsoft) superior research and development (Sony, Philips) customer service (Dell, Amazon.com). Western Michigan University Organizational Decisionmaking To what extent does an organization and its management structure make well informed and timely decisions? Does the organization promote initiative,creative thinking and foster an entrepreneurial spirit or does it adhere to a rigid bureaucracy? Western Michigan University Organizational Culture Organizational culture (or corporate culture) refers to the collection of beliefs, expectations and values shared by an organization's members and transmitted from one generation of employees to another. Examples: 1. Sony – co-founder Akio Morita; strong commitment to high quality engineering and design products 2. Bertelsmann – founder Reinhard Mohn; strong adherence to decentralized management 3. Google – less structured environment; strong adherence to innovation and experiment Western Michigan University Organizational Culture (cont.) Organizations (even large ones) are always human constructions; that is, they are made and transformed by individuals. Culture is embedded and transmitted through both implicit and explicit messages such as formal statements, organizational philosophy, design of physical space, deliberate role modeling and teaching by leaders. The more highly successful companies are those that exhibit a strong organizational culture. There are several component parts to a strong organizational culture, including: 1) values, 2) heroes, and 3) rites and rituals Deal & Kennedy, 1982. Western Michigan University Management / Labor Relations Management / labor relations involves the working relationship between management and the people who work for the organization. There are several important considerations: Is the organization unionized? Are staff salaried or paid by the hour? What kind of benefits does the organization offer its employees? Do employees have the proper equipment in which to their jobs? Western Michigan University Operational Issues Operational issues involves developing the optimum conditions for creating and producing quality products and services in a cost effective manner. 1. Staffing levels 2. Employing talented people 3. Providing the proper equipment and support services. 4. Good internal and external communication 5. Quality Control The goal is to achieve Total Quality Management (TQM). Western Michigan University Total Quality Management Total Quality Management (TQM) represents an approach to management, whereby, the entire organization is fully engaged in delivering quality products and services to its customers. The principles of Total Quality Management date back to the 1940's to the work of American business consultants W. Edwards Deming and Joseph Juran, who were involved in helping to resurrect Japanese industry in the aftermath of WW II. There are four important elements that characterize TQM in action. They include: 1. Employee Involvement 2. Focus on the Customer 3. Benchmarking 4. Continuous Improvement Western Michigan University TQM in Action Employee Involvement TQM infuses the value of quality throughout every activity within an organization. TQM requires company wide participation in quality control. Workers must be trained, involved and empowered. Employee involvement in key decisionmaking helps promote a sense of ownership in the outcome. Focus on the Customer One of the underlying principles of TQM requires that everyone be considered a customer. Customers fall into two basic categories; external and internal. External customers are those people including suppliers and buyers who engage the organization from the outside. Internal customers are the various people and departments within an organization who depend on each for materials and logistical support. Example: Marketing Western Michigan University TQM in Action Benchmarking Benchmarking takes into consideration the idea that one can and should learn from the competition. The competition, for example, may have a superior product, service or work process. Benchmarking presupposes the ability to find out how others do things and then tries to imitate or improve upon it. Continuous Improvement TQM emphasizes the importance of continuous improvement as the basis for producing long term results. It is the counter opposite to the quick fix solution. Everyone within the organization from senior management to the worker on the floor has a responsibility to improve product and service quality. Western Michigan University Six Sigma In 1986, Bill Smith at Motorola Corporation developed a set of process improvement strategies known as Six Sigma. The term Six Sigma refers to a highly capable process designed to produce outputs within highly demanding specifications. The goal of Six Sigma is to systematically improve processes by eliminating defects. Six Sigma is first and foremost "a business process that enables companies to increase profits dramatically by streamlining operations, improving quality and eliminating defects or mistakes in everything a company does. Six Sigma's implicit goal is to improve all processes to that level of quality or better. The principles of Six Sigma are especially important to companies engaged in the manufacture of high-end computer and communications equipment. Western Michigan University GE and Six Sigma In the early 1990s, then GE CEO, Jack Welch was told was told that Six Sigma, the quality program pioneered by Motorola, could have a significant effect on improving GE’s operational performance. Although skeptical at first, Welch initiated a major strategy initiative to infuse Six Sigma thinking into every aspect of GE’s business operations. He made quality the responsibility of every employee on the shop floor. All senior managers were expected to undertake Six Sigma training. Their promotions and bonuses were directly tied to Six Sigma results within the company. Six Sigma, in Welch’s view, did more to change the DNA of how GE did business than any other program. Western Michigan University What is Six Sigma? Six Sigma is a highly disciplined process that helps a business (or organization) focus on developing and delivering near-perfect products and services. Why "Sigma"? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible. In order to realize the exacting standards of Six Sigma, a business process should not produce more than 3.4 defects per million opportunities. A “defect” is defined as a failure to deliver what the customer want. An "opportunity" is defined as a chance for nonconformance, or not meeting the required specifications. This means that an organization needs to be nearly perfect in executing its key processes Western Michigan University What is Six Sigma? cont. Central to the discussion of Six Sigma are three important elements: the customer, the process and the employee. The Customer. The customer should form the center of the universe for a business. Their expectations include, a high quality product or service, on-time delivery, competitive prices, reliability and good customer support. The Process. Achieving Six Sigma level of performance presupposes the ability to look at business process from the perspective of one’s customers. They understand better than anyone what works best and least in terms of their interaction with the company or organization. The customer’s routine feedback provides the basis for making on-going improvements as a whole. The Employee. People make the difference. One of the important goals of Six Sigma training and thinking is to empower managers and employees to make decisions on the shop floor. Quality is the responsibility of every employee. Western Michigan University What is Six Sigma? cont. Western Michigan University Walt Disney and Customer Service The Walt Disney Company is first and foremost in the business of family entertainment. Walt Disney Attractions is responsible for the operation of the company's theme parks and corresponding venues. The two primary theme parks are Disneyland in Anaheim California and Walt Disney World located in Lake Buena Vista, Florida. The Walt Disney World resort features 4 major theme parks: the Magic Kingdom Epcot Center MGM Studios Animal Kingdom Western Michigan University Team Disney Creating the Disney experience is largely dependent upon the 35,000 Walt Disney staff members. They are responsible for translating the Team Disney approach into action. The Walt Disney Company employs one of the most sophisticated employee training programs in the world. Training begins with an appreciation for the fact that appearance is everything. Disney employees are referred to as cast members. The presentation includes everything from the way in which Disney employees interact with the public to the clothes they wear. In creating the right appearance, cast members are taught to be polite. They are taught to understand that park attendees are to be treated as guests. And that helping a guest often means going the extra mile. In addition, Disney employees are expected to follow a dress code and are not permitted to eat, drink, smoke or chew gum in front of guests. At all levels, Walt Disney World is about creating an impression that the park is safe, accessible and fun. Western Michigan University