Strategic Planning Concepts

Some Concepts to Help the Development of a Strategic Planning April 2008 Mário Luís Tavares Ferreira Strategic Planning Goals / Objectives SWOT Analysis Strategy Implementation Measurement and Evaluation SWOT Internal Environment Strengths Weaknesses World class product Technical support Financial resources Internal processes Know-how Channels network External Environment Opportunities Threats Water & Energy crises Competitors market share Environment awareness Euro X Dollar Productivity improvement Technology development TOWS matrix Strengths Opportunitie S-O strategies s Threats S-T strategies Weaknesses W-O strategies W-T strategies S-O strategies pursue opportunities that are a good fit to the companies strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. PEST analysis  A scan of the external macro-environment in which the company wants to operate (or operates) and can be expressed in terms of the following factors:     Political Economic Social Technological Ninety ways to measure demand (6 x 5 x 3) Geographical Level World Region Country Territory Client Total sales Sector sales Product Level Company’s sales Product lines Product config Product items Short term Medium term Long term Timing Level Porter 5 Forces Value Chain Innovation Process Identification of client’s necessities Operation Process Post Sales Process Satisfaction of Client’s necessities Market products / Delivery identification products / services products and services creation services definition Services to the clients Life cycle Sales & profit Sales Profit Invest & expenses Product development growth maturity Boston matrix – Product life cycle Directional policy matrix or GE-McKinsey matrix The diameter of each pie is proportional to the Volume or Revenue accruing to each Segment, and the solid slice of each ‘pie’ represents the share of the market enjoyed by the Company. S curve Management  Management, control and evaluation Keys of Success - Facts of Failure Deployment - Plan Completing Success Failure >Assign roles and responsibilities >Establish priorities >No accountability for deployment >Too many goals, strategies, or objectives - no apparent priority >Plan in a vacuum-functional focus >Involve mid-level management as active participants >Think it through - decide how to manage implementation >Charge mid-level management with aligning lower-level plans >Make careful choices about the contents of the plan and form it will take >No overall strategy to implement >Make no attempt to link with day-to-day operations >Not being thorough-glossing over the details Keys of Success - Facts of Failure Deployment - Communicating Success Assign roles and responsibilities Failure No accountability Communicate the plan constantly and consistently Recognize the change process Never talk about the plan Ignore the emotional impact of change Help people through the change process Focus only on task accomplishment Keys of Success - Facts of Failure Implementing - I Success Assign roles and responsibilities Involve senior leaders Failure No accountability Disengagement from process Define an infrastructure Link goal groups Unmanaged activity Fragmented accomplishment of objectives leads to sub-optimization Force people to choose between implementation and daily work; too many teams No alignment of strategies Phase integration of implementation actions with workload Involve everyone within the organization Keys of Success - Facts of Failure Implementing - II Success Allocate resources for implementation Failure Focus only on short term need for resources Ignore or avoid change No measurement system Hide mistakes/lay blame; limited/no communication Manage the change process Evaluate results Share lessons learned; acknowledge successes through open and frequent communication Keys of Success - Facts of Failure Strategic Measurement - I Success Failure Assign roles and responsibilities Use measurement to understand the organization Use measurement to provide a consistent viewpoint from which to gauge performance Use measurement to provide an integrated, focused view of the future No accountability Sub-optimization: focus only on efficiencies Use measures that provide no real information on performance; use too many measures Use measurement to focus on the bottom-line only Keys of Success - Facts of Failure Strategic Measurement - II Success Use measurement to communicate policy (new strategic direction) Update the measurement system Use measurement to provide quality feedback to the strategic management process Failure Use measurement to control Never review measures Fail to use measurement to make strategic, fact-based decisions; use only for control Keys of Success - Facts of Failure Evaluation Success Assign roles and responsibilities Recognize when to update the plan Failure No accountability Poor timing and not recognizing external forces Rigid application of strategic planning process; ignore lessons learned from previous efforts Ignore impact of new leaders Modify strategic planning process to accommodate the more mature organization Incorporate new leaders into the strategic planning process Integrate measurement with strategic planning Use experienced strategic planning facilitators Don't use measurement information Shortcut the process Measurement and evaluation – BSC Measurement and evaluation – BSC Measurement and evaluation – BSC Measurement and evaluation - BSC Five disciplines – Peter Senge  Personal Mastery:   Aspiration involves formulating a coherent picture of the results people most desire to gain as individuals, alongside a realistic assessment of the current state of their lives today. Learning to cultivate the tension between vision and reality can expand people's capacity to make better choices, and to achieve more of the results that they have chosen.  Mental Models:   Reflection and inquiry skills is focused around developing awareness of the attitudes and perceptions that influence thought and interaction. By continually reflecting upon, talking about, and reconsidering these internal pictures of the world, people can gain more capability in governing their actions and decisions. Five disciplines – Peter Senge  Shared Vision:   Establishes a focus on mutual purpose. People learn to nourish a sense of commitment in a group or organization by developing shared images of the future they seek to create, and the principles and guiding practices by which they hope to get there.  Team Learning:   Group interaction. Through techniques like dialogue and skillful discussion, teams transform their collective thinking, learning to mobilize their energies and actions to achieve common goals, and drawing forth an intelligence and ability greater than the sum of individual members' talents. Five disciplines – Peter Senge  Systems Thinking:    People learn to better understand interdependency and change, and thereby to deal more effectively with the forces that shape the consequences of our actions. Systems thinking is based upon a growing body of theory about the behavior of feedback and complexity - the innate tendencies of a system that lead to growth or stability over time. To help people see how to change systems more effectively and how to act more in tune with the larger processes of the natural and economic world. Project management - processes Project management – a process Project management – Process chain Project management – risk analysis