Strategic intent

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  • Strategic intent

    1. 1. Strategic Intent Presented by Jaswinder Singh
    2. 2. Strategic Management • Strategy Management is defined as a dynamic process of formulation, implementation, evaluation, and control of strategies to realise the organization’s strategic intent
    3. 3. Strategic Intent • It refers to purpose for what organization strives for. Organization must define “what they want to do” , “why they want to do”. • This “why they want to do” underlines the end result and in management terms it is known as strategic intent • Strategic Intent has a hierarchy: Vision, Mission, Goals and Objectives
    4. 4. Hierarchy of Strategic Intent
    5. 5. VISION• Burt Nanus a well known expert of organizational vision has defined vision as “ a realistic, credible and attractive future for an organization”. • Realistic: Vision must be based on reality to be meaningful for an organization; It should not be a merely day dreaming but a dream to be converted into reality • Credible: Vision must be believable to be relevant to the members of organization. One of the purpose of vision is to aspire those in org. to achieve a level of excellence • Attractive: Vision must be attractive as to inspire and motivate the org. members. People must want to be a part of future of org. • Future: Vision is always for future Kotter (1990) defines it as a "description of something(an organization, a corporate culture, a business, a technology, an activity) in the future"
    6. 6. Features of good vision • It should be idealistic( should be realistic) • Good vision clarifies the direction • Good vision encourages the org. members commitment from them • Good vision reflects uniqueness of org. ,its distinct competence, what it stands for and what it is able to achieve. • Good vision is consistent with org values and culture • Good vision is easily understood by those who are responsible to convert it into reality
    7. 7. Examples of vision • Infosys- To be globally respected company that provides best of breed software solutions by best-in-class people • Tata tea- to be India’s foremost tea based beverage company
    8. 8. Developing a vision Its like converting dream into reality Conducting vision audit-To asses current direction Targeting the vision- What are the boundaries and constraints to the vision? What vision must accomplish? Setting vision context: how org. should look in future Developing future scenarios Generating the alternative visions Choosing the final vision
    9. 9. Mission • Is defined a fundamental unique purpose that sets a business apart from other firms of its type and identifies its scope of its operations in product and market terms. Its is a statement which defines the role that org. plays in society Difference b/w Vision and mission • Vision is forward looking and mission states what org. is and why it exists • Vision emphasis on long term concept with very high level of achievement and mission deals with products , services offers, way these are offered.
    10. 10. Mission Statement • Is the description of org. mission. Explicit mission statement is desirable as it serves the purpose of communicating to the organization’s members about the corporate philosophy , character and image of the org. which govern their behavior in org. Following pints should be kept in mind while formulating mission statement: • It should be feasible • It should be precise • It should be clear
    11. 11. • It should be motivating • It should be distinctive • It should include major components of strategy • It should indicate how objectives are to be accomplished
    12. 12. Examples of mission statement • Infosys: To achieve our objectives in a environment of fairness, honesty and courtesy towards our clients, employess, vendors and society at large • Tata tea: o Achieve market and thought leadership for branded tea in india o Drive long term profitable growth o Co create enhanced value for stakeholders o Make tata tea a great place for work
    13. 13. Business Definition • Is clear cut statement of the business or a set of business, the org. engages in presently or wishes to pursue in future. Then it prescribes the area in which the org will play compete • Business can defined along three dimensions– product, customer and technology. • Business must reflect two features : Focus and Differentiation • Example: HUL business definition: “To meet everyday needs of people everywhere with branded products”
    14. 14. Goals and Objectives • Goals denote what an organization hopes to accomplish in a future period of time. They represent the future state or outcome of effort put in now. • Objectives are the ends that state specifically how the goals shall be achieved. They are concrete and specific in contrast to goals that are generalized • Goals and objectives are the end results which an organization strives for • There may be different ways in expressing end result like market leadership , a certain percentage increase in sales in particular year
    15. 15. Features of goals and objectives • SMART DUMB • S- Specific D-Doable(within powers) • M- Measurable U-Understandable • A- Attainable M-Manageable • R- Relevant B-Beneficial • T- Time bound
    16. 16. Role of objectives • Directions for decision making • Objectives work as motivating force • Performance standards • Defines relationship with environment
    17. 17. Characteristics of objectives • Objectives should be understandable • Objectives should be concrete and specific • Objectives should be related to a timeframe • Objectives should be measurable and controllable • Objectives should be challenging • Different objectives should correlate with each other • Objectives should be set within constraints
    18. 18. Issues in objective setting • Specificity • Multiplicity • Periodicity • Verifiability • Quality
    19. 19. Balanced Scorecard The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.
    20. 20. Balanced Scorecard Concept • Was first published in 1992 by Kaplan and Norton, a book followed in 1996. • Traditional performance measurement that only focus on external accounting data are obsolete. • The approach is to provide 'balance' to the financial perspective.
    21. 21. Why Use a Balanced Scorecard? • Improve organizational performance by measuring what matters • Increase focus on strategy and results • Align organization strategy with workers on a day-to- day basis • Focus on the drivers key to future performance • Improve communication of the organization’s Vision and Strategy • Prioritize Projects / Initiatives
    22. 22. Original Business Perspectives Adapted from The Balanced Scorecard by Kaplan & Norton  The Balanced Scorecard model suggests that we view the organization from 4 perspectives.  Then Develop metrics, collect data and analyze it relative to each of these perspectives
    23. 23. Business Perspectives Questions • Financial – What must we do to create sustainable economic value? • Internal Business Process – To satisfy our stakeholders, what must be our levels of productivity, efficiency, and quality? • Learning and Growth – How does our employee performance management system, including feedback to employees, support high performance? • Customer – What do our customers require from us and how are we doing according to those requirements?
    24. 24. Balanced Scorecard Measurements
    25. 25. Key Implementation Success Factors • Obtaining executive sponsorship and commitment • Involving a broad base of leaders, managers and employees in scorecard development • Choose the right Scorecard Champion • Beginning interactive (two-way) communication first • Viewing the scorecard as a long-term journey rather than a short-term project • Getting outside help if needed
    26. 26. Department Level Scorecard Example
    27. 27. Scorecard Criticisms • Lack of a well Defined Strategy – The balanced scorecard relies on a well defined strategy and understanding of linkages between strategic objections and metrics. Without this foundation the implementation could fail. • Too much focus on the lagging measures – Focusing on only the lagging measures may cause a lack of priority or opportunity for the leading measures. • Use of Generic Metrics – Don’t just copy metrics from another firm. Identify the measures that apply to your strategy and competitive position . • Self-serving managers – Managers whose goal is to achieve a desired result in order to obtain a bonus or other self reward.
    28. 28. Balanced Scorecard Benefits • Helps align key performance measures with strategy at all levels of an organization • The methodology facilitates communication and understanding of business goals and strategies at all levels of an organization • Strategic initiatives that follow "best practices" methodologies that cascade through the entire organization • Transforms an organization’s mission statement and strategic plan from a passive document into the "marching orders" for the organization on a daily basis. • It enables executives to truly execute their strategies by identifying what should be done and measured. To date, some form of a Balanced Scorecard is used by nearly 60% of Fortune 500 companies

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