Strategic Planning Model PGDM HR

8/8/2019 Strategic Planning Model PGDM HR

1/40

1

Strategic Planning


2/40

2

WHAT IS STRATEGIC PLANNING?

Process to establish priorities on what you willProcess to establish priorities on what you will

accomplish in the futureaccomplish in the future Forces you to make choices on what you will doForces you to make choices on what you will do

and what you will not doand what you will not do Pulls the entire organization together around aPulls the entire organization together around a

single game plan for executionsingle game plan for execution Broad outline on where resources will get allocatedBroad outline on where resources will get allocated


3/40

3

WHY DO STRATEGIC PLANNING?

If you fail to plan, then you plan to fail beIf you fail to plan, then you plan to fail be

proactive about the futureproactive about the future Strategic planning improves performanceStrategic planning improves performance

Counter excessive inward and short-term thinkingCounter excessive inward and short-term thinking Solve major issues at a macro levelSolve major issues at a macro level Communicate to everyone what is most importantCommunicate to everyone what is most important


4/40

4

WHY IS STRATEGICMANAGEMENT VITAL?

Rapid change

Increasing competition

Economic uncertainty

Increasing regulation

Globalisation


5/40

5

FUNDAMENTAL QUESTIONS TO ASK

Where are we now? (Assessment)Where are we now? (Assessment) Where do we need to be? (Gap / Future EndWhere do we need to be? (Gap / Future End

State)State)

How will we close the gap (Strategic Plan)How will we close the gap (Strategic Plan) How will we monitor our progress (BalancedHow will we monitor our progress (Balanced

Scorecard)Scorecard)


6/40

6

A GOOD STRATEGIC PLANSHOULD . . .

Address critical performance issuesAddress critical performance issues Create the right balance between what theCreate the right balance between what the

organization is capable of doing vs. what theorganization is capable of doing vs. what the

organization would like to doorganization would like to do Cover a sufficient time period to close theCover a sufficient time period to close the

performance gapperformance gap Visionary convey a desired future end stateVisionary convey a desired future end state

Flexible allow and accommodate changeFlexible allow and accommodate change Guide decision making at lower levels Guide decision making at lower levels

operational, tactical, individualoperational, tactical, individual


7/407

Ambiguous

Complex

Organisation-wide

Fundamental

Long-term

implications

Routinised

Operationally specific

Short-term

implications

STRATEGIC

MANAGEMENT

OPERATIONAL

MANAGEMENT


8/408

MAJOR COMPONENTS OF THESTRATEGIC PLAN / DOWN TO ACTION

Mission

Vision

Goals

Objectives

Measures

Why we existWhy we exist

What we want to beWhat we want to be

Indicators andIndicators and

Monitors of successMonitors of success

Desired level ofDesired level of

performance and timelinesperformance and timelines

Planned Actions toPlanned Actions toAchieve ObjectivesAchieve Objectives

O1 O2

AI1 AI2 AI3

M1 M2 M3

T1 T1 T1

Specific outcomes expressed inSpecific outcomes expressed in

measurable terms (NOT activities)measurable terms (NOT activities)

Strategic Plan

Action Plans

Evaluate Progress

Targets

Initiatives

What we must achieve to be successfulWhat we must achieve to be successful


9/409

MISSION STATEMENT

Captures the essence of why the organizationCaptures the essence of why the organization

exists Who we are, what we doexists Who we are, what we do Explains the basic needs that you fulfillExplains the basic needs that you fulfill

Expresses the core values of the organizationExpresses the core values of the organization Should be brief and to the pointShould be brief and to the point Easy to understandEasy to understand If possible, try to convey the unique nature of yourIf possible, try to convey the unique nature of your

organization and the role it plays that differentiatesorganization and the role it plays that differentiates

it from othersit from others


10/4010

EXAMPLES GOOD AND BADMISSION STATEMENTS

To Make PeopleHappy

To Explore theUniverse andSearch for Life

and to Inspirethe NextGeneration ofExplorers

NASA

Walt Disney

Does a good job of expressing

the core values of theorganization. Also conveysunique qualities about theorganization.

Too vague and and unclear.Need more descriptiveinformation about what makesthe organization special.


11/4011

VISION

How the organization wants to be perceived in theHow the organization wants to be perceived in the

future what success looks likefuture what success looks like An expression of the desired end stateAn expression of the desired end state

Challenges everyone to reach for somethingChallenges everyone to reach for somethingsignificant inspires a compelling futuresignificant inspires a compelling future

Provides a long-term focus for the entireProvides a long-term focus for the entire

organizationorganization


12/4012

EXAMPLES OF VISION DESCRIPTORS

Adept

Aggressive

Agile

Aligned

Assertive

Available

Best-in-class

Challenging

Clear

Competent

Complex Compliant

Conservative

Coordinated

Critical

Direct

Equal

Disciplined

Effective

Efficient

Enduring Expanding

Expert

Fast

Fast-paced

Financially-sound Focused

Growth

Healthy

Improving

Incentivized

Increasing

Solid

Solvent

Stable

State of the

Art

Strong

Streamlined

Sufficient

Strategic

Sustainable

Timely

Value-added

Vigilant

Visionary

World-class

Informative

Innovative

Leading

Logical

Major Nimble

Pioneering

Protected

Organized

Over-Arching Quick

Ready

Responsive

Savvy

Simple


13/40

13

LEVELS OF STRATEGY FORMULATION


14/40

14

UNITS OF STRATEGIC ANALYSIS

Corporate level strategy Level and type of diversification

Business level strategy Low cost, differentiation, niche

Variety, needs, access based Global level strategyGlobal, international, transnational, multi-

domestic


15/40

15

STRATEGIC MANAGEMENT

Disciplinediterative

processof pursuing amission,whilemanaging

therelationship ofthe firm to itsenvironment.

Environmental Scanning

Evaluation &Control

StrategyImplementatio

n

StrategyFormulationMission


16/40

16

STRATEGIC PLANNING MODELA B C D E

EnvironmentalScan

Assessment

BackgroundInformation

SituationalAnalysis

SWOT Strengths,Weaknesses,Opportunities,Threats

Situation Past,Present andFuture

SignificantIssues

Align / Fit withCapabilities

Mission &Vision

Values /GuidingPrinciples

Major Goals

SpecificObjectives

PerformanceMeasurement

Targets /Standards ofPerformance

Initiatives andProjects

Baseline Components

PerformanceManagement

Review Progress BalancedScorecard

Take CorrectiveActions

Down toSpecifics

Evaluate

Where we are Where we want to be How we will do it How are we doing

Gaps Action Plans Feedbackupstream revise plans


17/40

17

PRE-REQUISITES TO PLANNING

Senior leadership commitmentSenior leadership commitment Who will do what?Who will do what? What will each group do?What will each group do?

How will we do it?How will we do it? When is the best time?When is the best time?


18/40

18

Assessment


19/40

19

ASSESSMENT MODEL:S W O T

Assessment

External Assessment:Marketplace, competitors, socialtrends, technology, regulatoryenvironment, economic cycles .

External Assessment:Marketplace, competitors, socialtrends, technology, regulatoryenvironment, economic cycles .

Internal Assessment:Organizational assets, resources,people, culture, systems,partnerships, suppliers, . . .

Internal Assessment:Organizational assets, resources,people, culture, systems,partnerships, suppliers, . . .

Easy toUnderstand

Apply at anyorganizational

level

Needs to beAnalytical andSpecific

Be honest about

yourweaknesses

Good Points Possible Pitfalls

SWOT SWOT


20/40

20

STRENGTHS

Assessment

Strengths Those things that you do well, theStrengths Those things that you do well, the

high value or performance pointshigh value or performance points Strengths can be tangible: Loyal customers,Strengths can be tangible: Loyal customers,

efficient distribution channels, very high qualityefficient distribution channels, very high qualityproducts, excellent financial conditionproducts, excellent financial condition

Strengths can be intangible: Good leadership,Strengths can be intangible: Good leadership,

strategic insights, customer intelligence, solidstrategic insights, customer intelligence, solid

reputation, high skilled workforcereputation, high skilled workforce Often considered Core Competencies BestOften considered Core Competencies Best

leverage points for growth without draining yourleverage points for growth without draining your

resourcesresources


21/40

21

WEAKNESSES

Assessment

Weaknesses Those things that prevent you fromWeaknesses Those things that prevent you from

doing what you really need to dodoing what you really need to do Since weaknesses are internal, they are withinSince weaknesses are internal, they are within

your controlyour control Weaknesses include: Bad leadership, unskilledWeaknesses include: Bad leadership, unskilled

workforce, insufficient resources, poor productworkforce, insufficient resources, poor product

quality, slow distribution and delivery channels,quality, slow distribution and delivery channels,

outdated technologies, lack of planning, . . .outdated technologies, lack of planning, . . .


22/40

22

OPPORTUNITIES

Assessment

Opportunities Potential areas for growth andOpportunities Potential areas for growth and

higher performancehigher performance External in nature marketplace, unhappyExternal in nature marketplace, unhappy

customers with competitors, better economiccustomers with competitors, better economicconditions, more open trading policies, . .conditions, more open trading policies, . .

Internal opportunities should be classified asInternal opportunities should be classified as

StrengthsStrengths

Timing may be important for capitalizing onTiming may be important for capitalizing on

opportunitiesopportunities


23/40

23

THREATS

Assessment

Threats Challenges confronting the organization,Threats Challenges confronting the organization,

external in natureexternal in nature Threats can take a wide range bad pressThreats can take a wide range bad press

coverage, shifts in consumer behavior, substitutecoverage, shifts in consumer behavior, substituteproducts, new regulations, . . .products, new regulations, . . .

May be useful to classify or assign probabilities toMay be useful to classify or assign probabilities to

threatsthreats

The more accurate you are in identifying threats,The more accurate you are in identifying threats,

the better position you are for dealing with thethe better position you are for dealing with the

sudden ripples of changesudden ripples of change


24/40

24

ORGANIZATIONAL PROFILE1. OPERATING ENVIRONMENT

Baseline

Products and Services Suppliers, DeliveryProducts and Services Suppliers, Delivery

Channels, Contracts, Arrangements, . . .Channels, Contracts, Arrangements, . . . Organizational Culture Barriers, Leadership,Organizational Culture Barriers, Leadership,

Communication, Cohesiveness . . . .Communication, Cohesiveness . . . . Workforce Productivity Skill levels, diversity,Workforce Productivity Skill levels, diversity,

contractors, aging workforce, . . .contractors, aging workforce, . . . Infrastructure Systems, technology, facilities, . .Infrastructure Systems, technology, facilities, . .

Regulatory Product / Service Regulation, ISORegulatory Product / Service Regulation, ISO

Quality Standards, Safety, Environmental, . . .Quality Standards, Safety, Environmental, . . .


25/40

25

ORGANIZATIONAL PROFILE2. BUSINESS RELATIONSHIPS

Baseline

Organizational Structure Business Units,Organizational Structure Business Units,

Functions, Board, Management Layers, . . .Functions, Board, Management Layers, . . . Customer Relationships Requirements,Customer Relationships Requirements,

Satisfaction, Loyalty, Expectations, . . .Satisfaction, Loyalty, Expectations, . . . Value Chain Relationship between everyone inValue Chain Relationship between everyone in

the value chain . . . .the value chain . . . . Partner Relationships Alliances, long-termPartner Relationships Alliances, long-term

suppliers, customer partnerships, . . .suppliers, customer partnerships, . . .


26/40

26

ORGANIZATIONAL PROFILE3. KEY PERFORMANCE CATEGORIES

Baseline

CustomerCustomer Products and ServicesProducts and Services FinancialFinancial

Human CapitalHuman Capital OperationalOperational External (Regulatory Compliance, SocialExternal (Regulatory Compliance, Social

Responsibility, . . . )Responsibility, . . . )


27/40

27

Integrity Complete; useful; inclusive ofseveral types of measure; designed tomeasure the most important activities ofthe organization

Reliable: Consistent

Accurate - Correct

Timely Available when needed: designed touse and report data in a usable timeframe

Confidential and Secure: Free from

inappropriate release or attack

CRITERIA FOR GOOD MEASURES

Down toSpecifics


28/40

28

EXAMPLES OF MEASUREMENTSLEAD INDICATORS

Average time to initiate customer contact =>shorter time should lead to better customerservice

Average response time to incident => below

average response times should lead toincreased effectiveness in dealing with incident

Facilities that meet facility quality A1 rating =>should lead to improved operational readiness

for meeting customer needs

Down toSpecifics


29/40

29

EXAMPLES OF MEASUREMENTSLAG INDICATORS

Overall customer satisfaction rating => howwell you are doing looking back

Business Units met budgeted service hour

targets => after the fact reporting of servicedelivery volume

Number of category C safety accidents atconstruction sites => historical report of what

has already taken place

Down toSpecifics


30/40

30

TARGETS

For each measurement, you should have atleast one target

Targets should stretch the organization tohigher levels of performance

Incremental improvements over currentperformance can be used to establish yourtargets

Targets put focus on your strategy

When you reach your targets, you havesuccessfully executed your strategy

Down toSpecifics


31/40

31

EXAMPLES OF TARGETS

Average Time to Process NewEmployee Setups in DB

65 days Year2007

60 days Year2008

55 days Year2009

Utilization Rate for RentalHousing Units

90% for

Year 2007

92% for Year2008

95% for Year2009

Toxic Sites meeting in-servicecompliance 55% for Year2007 70% for Year2008 95% for Year2009

Personnel Fully Trained inSafety and Emergency

65% by 2rdQuarter

75% by 3thQuarter

90% by 4thQuarter

Open Positions Filled after 30

day promotion period

75 positions

Sept 2007

100 positions

Jan 2008

135 positions

July 2008

% Reduction in Orders FilledShort in 1st Cycle

50% by Year2008

65% by Year2009

85% by Year2010

Down toSpecifics


32/40

32

SANITY CHECK . . .

Make sure everything is linked and connectedfor a tight end-to-end model for drivingstrategic execution.

INITIATIVE

Employee

Productivity

Improvement

Program

Employee

Satisfaction

Survey

Rating

90%

favorable

overall

Measure

Target

Target Actual

90%

45%

PercentSatisfactio

n

gap

MEASURE / TARGET

OBJECTIVEImprove Employee

Satisfaction

ACTION PLAN

Identify issues per a

company wide

survey

Down toSpecifics


33/40

33

Evaluate

CONTINUOUS FEEDBACK


34/40

34

CONTINUOUS FEEDBACKTHROUGH THE BALANCEDSCORECARD

Cascade and align from the top to create aStrategic Management System. Use the Balanced Scorecard framework to

organize and report actionable components. Use the Scorecard for managing the execution

of your strategy. Scorecard forces you to look at different

perspectives and take into account cause-effect relationships (lead and lag indicators)

Improves how you communicate your strategy critical to execution.

Evaluate


35/40

35

D2-D5: Build the Balanced ScorecardD2-D5: Build the Balanced ScorecardPERFORMANCE MANAGEMENT

Establish a regular review cycle using yourbalanced scorecard. Analyze and compare trends using graphs for

rapid communication of performance. Dont be afraid to change your metrics life

cycle (inputs to outputs to outcomes) Work back upstream to revise your plans: Action

Plans > Operating Plans > Strategic Plans Planning is very dynamic must be flexible to

change. Recognize and reward good performance results Brainstorm and change take corrective action

on poor performance results.

Evaluate


36/40

36

D2-D5: Build the Balanced ScorecardD2-D5: Build the Balanced ScorecardAUTOMATING THE PROCESS

Evaluate

Low Cost Scorecard Tools1. Dialog (www.balancedscorecard2.com)

2. Ergometrics (www.ergometrics.com)

3. ExecDash (www.idashes.net)

4. Scorecard Hosting (www.scorecardhosting.com)

High End Best of Breed Tools

1. PB Views (www.pbviews.com)2. QPR (www.qpronline.com)

3. Rocket (www.rocketsoftware.com/portfolio/epm)
http://www.balancedscorecard2.com/http://www.ergometrics.com/http://www.idashes.net/http://www.scorecardhosting.com/http://www.pbviews.com/http://www.qpronline.com/http://www.rocketsoftware.com/portfolio/epmhttp://www.rocketsoftware.com/portfolio/epmhttp://www.qpronline.com/http://www.pbviews.com/http://www.scorecardhosting.com/http://www.idashes.net/http://www.ergometrics.com/http://www.balancedscorecard2.com/


37/40

37

LINK BUDGETS TO STRATEGIC PLAN

The worlds best Strategic Plan will fail if it is notadequately resourced through the budgetingprocess

Strategic Plans cannot succeed without people,time, money, and other key resources Aligning resources validates that initiatives and

action plans comprising the strategic plansupport the strategic objectives

Evaluate


38/40

38

Every Action Plan should identify the following:

The people resources needed to succeed

The time resources needed to succeed

The money resources needed to succeed

The physical resources (facilities, technology, etc.) needed to

succeed

Resource information is gathered by Objective Owners which is provided

to the Budget Coordinators for each Business Unit.

Resources identified for each Action Plan are used to establish the totalcost of the Initiative.

Cost-bundling of Initiatives at the Objective level is used by our Business

Unit Budget Coordinators to create the Operating Plan Budget

WHAT RESOURCES?HOW TO LINK?

Evaluate


39/40

39

SOME FINAL THOUGHTS

Integrate all components from the top to thebottom: Vision > Mission > Goals > Objectives >Measures > Targets > Initiatives > Action Plans >Budgets.

Get Early Wins (Quick Kills) to create somemomentum

Seek external expertise (where possible andpermissible)

Articulate your requirements to senior leadership ifthey are really serious about strategic execution


40/40

Thanks forThanks foryour participation!your participation!

Strategic Planning Model PGDM HR

Documents

Transcript of Strategic Planning Model PGDM HR