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Step Out of the Ivory Tower
 

Step Out of the Ivory Tower

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Strategy often fails on execution because its genesis occurs in a disconnected space from the human performance factors of the organization....

Strategy often fails on execution because its genesis occurs in a disconnected space from the human performance factors of the organization.

This presentation discusses some of the places that we go wrong and proposes an approach to forming strategy iin a highly connected and successful way.

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  • Activity: In table groups, take 10 minutes to discuss the questions listed in the context of your organization. Compile a list of answers from your group.Be prepared to share the results of your discussion with the larger group.
  • Large group discussion
  • Why? Leaders press for better execution when they really need a sounder strategy. Or they craft a new strategy when execution is the true weak spot.
  • Exercise: 20 minutesSet Up:Put ropes on the ground in the shape of a large circle. Divide participants into 4 teams and have each team gather around one of the ropesIn each group assign 2 people the role of “Leader”, and 4 people the role of ”Manager”. The remainder will be “Performers”Tell the participants that the circular rope represents their existing strategyHave the performer group form on the ropeExplain that the new leaders are formulating a new strategy that they will now be implementingExplain that before they begin, the performers will spend 4 minutes to come up with a plan to implement the circle system, and while they are talking/planning they cannot start moving the rope – there will be penalties applied to those who pick up the rope at this time. While moving, everyone must keep both hands on the rope at all times – if they remove a hand from the rope once they are holding it, there will be a +10 sec penalty.Prepare in advance: 4 Envelopes labeled “Instructions for Managers” containing the following instructions: Managers – you will receive the new strategy from your leadership. Keeping in mind the expectations of your clients with regard to the existing circle strategy, you must direct your team to implement the new strategy. Rules: 1. You can only give you instructions once 2. Only ½ of the performers can participate at any given time, but all must participate before the activity is concluded. 3. Do not accept feedback or suggestions from the performers 4. Performers are not allowed to speak during implementation 8 Envelopes labeled “Instructions for Leaders containing the following instructions: 1. Choose a new strategy for your team from the following. The number next to each represents the potential value to the market of a successfully implementation of this strategy a. Double box 5 b. Double triangle 7 c. Star 10 d. Figure 8 4 2. Determine the justification for your strategic choice using the value and the SWOT analysis below: Strengths – talented, intelligent workforce. Deep talent reserves Weaknesses – workforce has only been trained in implementing the circle strategy Threats – customers may not respond well to new direction Opportunities – other teams are slow to adopt. Market appears ripe for a new approach. 3. Share your strategic choice with your “management team” Run the Exercise:1. Timings and Rules for the Rounds:Round 1— Managers work with performers to perfect implementation of the circle strategy and execute the strategy as many times as possible in 4 minutes. Leaders meet and discuss the strategic alternatives and select a new strategy.Round 2— Leaders communicate the new strategy to managers who in turn discuss the implementation plan with performers for 4 minutes (+10 second penalty for touching the rope while planning)Round 3—Implementation of the new strategy as many times as possible in 4 minutes (penalties of +10 seconds if there is talking on a team while moving OR if someone takes a hand off the rope)Station “observers” at each group to assign penalties if anyone talks or takes a hand off the rope during “moving” rounds, or moves during “planning/talking” rounds. Lay the rope on the ground at the end of Round 3 and examine their handiwork. Take a moment to laugh at each others’ strategies. Calculate completion time, including any penalties, subtract the market value of the strategy employed (e.g. the star strategy = -10) , and identify the group that succeeded the fastest or came closest. Debrief—5 minutes:How does this activity mirror the difficulties involved in choosing and implementing a new strategy?What are some of the factors that impacted success? (Participants may answer “Communication,” “Leadership,” “Having a process,” “Having a shared vision,” or “Managing changing situations and being flexible.”)After a short discussion, tell participants that having a shared vision, developing and testing strategies then driving implementation are the keys to successful strategy.
  • Notice that the Values are not explicitly addressed in the matrix. This is because they should inform each question asked – in essence the company values set the context for the Vision, Mission and Business Model. Therefore the unwritten part of each question is, “within the bounds of our corporate value system…”
  • Identify performance capability that does not currently exist, but if added would create opportunity
  • Using the draft strategic goals from the last activity, complete the Initiatives to Goals Worksheet
  • Complete the Goals to Capability Worksheet then discuss your result with your table partner.

Step Out of the Ivory Tower Step Out of the Ivory Tower Presentation Transcript

  • June 26-29, 2011 Las Vegas, Nevada Step Out of the Ivory Tower The Right Way to Develop a Strategic Plan Mason Holloway • June 25 SHRM 2011 Annual Conference & Exposition©SHRM 2010
  • AgendaModule 1: Where are we now?Module 2: The strategic planning frameworkModule 3: The 5 elements of effective strategic planningQ&A and Wrap-up 2 ©SHRM 2010
  • Activity - Where Are We Now? Module 1 – Where we are we now? Think about your organization: > What is the approach to strategicDISCUSSION planning in your organization? > Where is it formed? > What data is used? > How is it executed? 3 ©SHRM 2010
  • You‘re Not Alone Module 1 – Where we are we now? Which choice best describes the way important strategic decisions are made in your company?By small senior group, including CEO or equivalent 52 With formal strategic planning process 23 By business unit leaders 11 By CEO or equivalent 10 By sector leaders 2 By frontline employees 1 % respondents1 Other 1 1 All data weighted by GDP of constituent countries; respondents who answered ‗don‘t know‘ are not shown; figures sum to 100% because of rounding. Source: July/Aug 2006 McKinsey Quarterly survey of business executives 4 ©SHRM 2010
  • Discussion - What Has and Has Not Worked? Module 1 – Where we are we now? Think about your organization: > What impact/success have youDISCUSSION achieved with your strategic plans? > Did you get the results you desired? > Why/Why not? 5 ©SHRM 2010
  • Welcome to the Club: A Sobering Statistic Module 1 – Where we are we now?QUICK FACT Most companies‘ strategies deliver only 63% of their promised financial value. 6 ©SHRM 2010
  • Where Does the Performance Go? Module 1 – Where we are we now? 37% Average Performance Loss 7.5% Inadequate or unavailable resources 5.2 % Poorly communicated strategy 4.5% Actions required to execute not63% clearly defined (no clear outcomes)Average Realized 4.1% Unclear accountabilities forPerformance execution 3.7% Organizational silos and culture blocking execution 3.0% Inadequate performance monitoring 3.0% Inadequate consequences or rewards for failure or success 2.6% Poor senior leadership 1.9% Uncommitted leadership 0.7% Other obstacles (including * Harvard Business School Publishing, 2005 inadequate skills and capabilities) 7 ©SHRM 2010
  • How Important is Strategy? Module 1 – Where we are we now?The Institute for Corporate Productivity study, the Top TenCritical Human Capital Issues of 2011: 1. Leadership development 2. Succession planning 3. Strategy execution/alignment 4. Managing/coping with change 5. Talent management. 6. Innovation and creativity 7. Performance management 8. Knowledge retention 9. Engagement 10. Coaching 8 ©SHRM 2010
  • Activity – When the Strategy Went Off the Rails Module 1 – Where we are we now?Think of the development and implementation of a strategyfrom your past that failed to produce the desired results:• Document, using a scale of 1-5, where 1 is low: 1. How involved was leadership in setting the vision? 2. How involved were managers involved in setting the vision? 3. How much input did ―key performers‖ have in the strategy? 4. How closely tied was the strategy to organizational vision, mission, values and business model? 5. How well was the strategy communicated to the workforce as a whole? 6. How effectively did the organization align talent to support the strategy?• Share your story with a colleague at your table, offering your diagnostic of ―what went wrong‖ 9 ©SHRM 2010
  • The ―Ivory Tower‖ Approach Module 1 – Where we are we now?The “Ivory Tower” approach• What it includes: > Usually: • Company Mission, Vision and Values • SWOT assessment • Environmental scan > Sometimes: • ―Expert‖ input from strategist • Market analysis or feedback > Occasionally: • Past performance data relative to previous strategy • Talent assessment of current capability > Rarely: • Direct input from the line on key strategic considerations • Specific performance data from key performers (opportunities and gaps) 10 ©SHRM 2010
  • What it Says and What it Does Module 1 – Where we are we now?What it says:• ―Even though you have the most intimate contact with your part of our business – we don‘t trust or value your opinion.‖• ―Just get back to work!‖• ―If we want your opinion we‘ll ask for it, but don‘t hold your breath!‖What it does:• Breeds disengagement• Creates a division between senior leadership and the rest of the organization• Reduces the likelihood of successfully translating the strategy to execution• CREATES MASSIVE DISCONNECTS! 11 ©SHRM 2010
  • The Effect of the Disconnects Module 1 – Where we are we now? 12©SHRM 2010
  • Activity – The Circle Strategy Challenge Module 1 – Where we are we now?Scenario:• Your organization currently deploys the ―circle strategy.‖• Changes in leadership have given rise to the development of a new strategy that your organization is charged with implementing• You will take the role of ether a Leader, Manager, or Performer for this activity • Follow the instructions provided and be prepared to share your observations 13 ©SHRM 2010
  • Instructions for ActivityRoles for Activity • Everyone will be assigned a ―Role‖:• Leader: • Your mission is to first successfully implement the current 2 per group strategy, then shift as a new strategy is introduced. All activity• Manager: will be timed. BOTH HANDS MUST REMAIN ON THE ROPE. 4 per group • Round 1, 4 minutes— Managers work with performers to perfect implementation of the circle strategy. Execute the strategy as• Timer/Observer: many times as possible in 4 minutes. Leaders meet and discuss 1 per group the strategic alternatives and select a new strategy.• Performer: • Round 2, 4 minutes — Leaders communicate the new strategy to Everyone not managers who in turn discuss the implementation with assigned another performers. (+10 second penalty for touching the rope during this) role • Round 3, 4 minutes — Implementation of the new strategy as many times as possible in (penalties of +10 seconds if there is talking on a team while moving OR if someone takes a hand off the rope) 14 ©SHRM 2010
  • Questions on the Activity1. How does this activity mirror the difficulties involved in choosing and implementing a new strategy?2. What are some of the factors that impacted success? 15 ©SHRM 2010
  • What is Strategic Planning? Module 1 – Where we are we now? “Strategic planning is a clarifying activity that enables organizations toDefinition identify, align on, and to move toward desired future states. It consists of the process of crystallizing a shared vision, specifying goals and objectives then implementing plans and initiatives to reach them.” 16 ©SHRM 2010
  • Out of the Ivory Tower Module 1 – Where we are we now? The new paradigm in strategic planningOld NewTop-down, isolated creation Inclusive, holistically generatedPlan first, resource later Resources integrated planningLimited input from performers Relies on input from key performanceDisconnected from performance Leverages performance opportunitiesDifficult to translate to execution Closely linked to execution 17 ©SHRM 2010
  • The 3 by 5 Strategic Planning Framework Module 2 – The Strategic Planning Framework• Three Phases (the 3 D’s) > Develop the shared vision > Design and test the strategies > Drive the Execution• Five Elements > Visioning foundation > Human performance factors Human Visioning > Execution capability Foundation Performance Factors > The long view > Alignment Strategic Plan The Long Execution View Capability 18 ©SHRM 2010
  • The Strategic Planning Framework Module 2 – The Strategic Planning Framework Develop a Shared Vision Design and Test Strategies Drive the Execution Visioning Execution The Long Foundation Capability View Strategic Execution What we‘ve Strategic Alternative A monitoring and done before Goals evaluationInternal and External Factors Company Vision, Strategic Strategic Mission and Alternative B Plans and Values What we are What we Initiatives Performance doing well want to do factors: today next Strategic prediction and View of the Alternative C monitoring market and external Strategic expectations Decision Contingency Key Performance Criteria planning and Performer Gaps and implementation Input Opps • Reduce • Eliminate Human Performance • Innovate • Extend Factors Alignment 19 ©SHRM 2010
  • The 3 D‘s (Phases) of Strategic Planning Module 2 – The Strategic Planning Framework• Develop the shared vision > Include the right people and the right data• Design and test strategies > Use known performance factors as decision criteria• Drive the execution > Predict and plan for contingencies – monitor and evaluate progress 20 ©SHRM 2010
  • Develop the Shared Vision Module 2 – The Strategic Planning Framework• Process for developing the shared vision > First, assemble the appropriate team and contributors • Includes representatives from the business units • Includes input from Key Performers in critical business areas > Restate and align on the company‘s mission, vision and values • Values serve as the context rather than the criteria > Openly discuss perspectives on the market, the industry, and the company‘s SWOT > Assemble the perceptions into a collective view > Use the Vision Foundation Matrix to evaluate past, current and predicted performance data against the collective perspective > Select strategic goals based on the overlap of performance opportunity and market opportunity 21 ©SHRM 2010
  • Tools for the Shared Vision - SWOT Module 2 – The Strategic Planning Framework 22 ©SHRM 2010
  • Design and Test the Strategies Module 2 – The Strategic Planning Framework• Process for designing and testing the strategies > Begin by reviewing the strategic goals against the performance opportunities and gaps > Discuss and draft strategic initiatives that will drive the strategic goals > Use selection criteria to rigorously evaluate the draft initiatives: • Alignment with performance opportunities and gaps • Ability/need to reduce/eliminate/innovate/extend for the initiative to succeed • Alignment with the shared vision > Develop a business case for the best alternatives > Cascade the initiative into individual goals, measures and accountability 23 ©SHRM 2010
  • Tools for Evaluating Strategic Alternatives Module 2 – The Strategic Planning Framework 24 ©SHRM 2010
  • Drive the Execution Module 2 – The Strategic Planning Framework• Process for driving the execution > Begin by establishing the monitoring and evaluation criteria and governance • What is a failure in strategy and what is a failure in execution? > Discuss and predict with the team, specific performance factors that might impact the execution > Create contingency plans for the most likely failure points and link to the monitoring 25 ©SHRM 2010
  • Tools for Execution – Balanced Scorecard Module 2 – The Strategic Planning Framework 26 ©SHRM 2010
  • The 5 Elements of Effective Strategic Planning Module 3 – The 5 Elements of Effective Strategic Planning Visioning Human Foundation Performance Factors Strategic Plan The Long Execution View Capability 27 ©SHRM 2010
  • Module 3 – The 5 Elements of Effective Strategic Planning VisioningFoundation Visioning Foundation 28 ©SHRM 2010
  • What‘s in a Vision? Module 3 – The 5 Elements of Effective Strategic PlanningIf you don‘t know where you are going... Any road will get you there. - Lewis Carrol 29 ©SHRM 2010
  • Characteristics of the Visioning Foundation Module 3 – The 5 Elements of Effective Strategic Planning Owned by • Typically ―owned‖ by the C-suite > May include input from executive committee or key leadership Influenced by • Market and shareholder perception > External market changes > Shareholder expectations and actionsIntegrated with • And supported by the business model > Must align with the companies core principles and value proposition Informs • And drives organizational goals and goal setting 30 ©SHRM 2010
  • Vision Foundation Matrix Module 3 – The 5 Elements of Effective Strategic Planning Past Performance Current Performance Predicted PerformanceVision How has the workforce How closely does our current What will the workforce need to do in translated the vision into action execution support our vision? the future to align more closely with in the past? the vision (In performance terms)? What human performance factors Where have the disconnects prevent better alignment? Should the Vision be occurred? updated/modified to reflect future Does the vision still resonate in trends? How has the market the current market and workforce? responded?Mission How has our mission been How do our current human What effect will modifying our carried forward or been performance factors align with our mission have on the workforce? changed by our execution? mission?Business How well has our workforce How well is our workforce aligned What can (or should) be changed performed within our business to drive success within our current (either business model or workforce)Model model? business model? to drive greater success? Where are there performance gaps? Opportunities? 31 ©SHRM 2010
  • Important Considerations Module 3 – The 5 Elements of Effective Strategic Planning• Must be an inclusive process• Must address human performance factors with a rigorous methodology• Must arrive at a unified view that can be internalized by all• All initiatives must be put through the same process regardless of their origin 32 ©SHRM 2010
  • Module 3 – The 5 Elements of Effective Strategic PlanningHuman Performance Factors Human Performance 33 ©SHRM 2010
  • Characteristics - Human Performance Factors Module 3 – The 5 Elements of Effective Strategic Planning Owned by • Typically ―owned‖ by the Human Resources function > May be driven by the talent function or shared with the line Influenced by • Market demand, organizational design and talent pool > External market changes > Internal organizational design decisions > Resource allocationIntegrated with • Development and talent requirements from the line > Must align with the business drivers from the line Informs • And drives the understanding of limitations and potentials that support the Visioning Foundation 34 ©SHRM 2010
  • Human Performance Thinking Module 3 – The 5 Elements of Effective Strategic PlanningAsking THE RIGHT QUESTIONS Finding THE RIGHT SOURCES & (THEN BEING WILLING TO ACCEPT WHAT YOU HEAR) • Look for the performance opportunities to leverage • Use real performance data to inform vision and strategy • Challenge old assumptions! The Right People are the Key! 35 ©SHRM 2010
  • The Power of the Bell Curve Module 3 – The 5 Elements of Effective Strategic Planning • The most effective strategies extend performance opportunities Standard New Standard PerformersPercent of Workforce Minimal Performers Key Performers Level of Performance 36 ©SHRM 2010
  • More Than Just Knowing Module 3 – The 5 Elements of Effective Strategic Planning • Human performance factors cover a range of elements > Not just about the workforce‘s skill or knowledge > Must be viewed holistically Information, Expectations & Tools & Technology Structure & Process Feedback Selection & Motives &Skills & Knowledge Assignment Consequences 37 ©SHRM 2010
  • 3 Steps to Integrate Human Performance Module 3 – The 5 Elements of Effective Strategic PlanningIntroduce Human Performance to your Strategic Planning Process… in Just 3 Steps Identify Performance STRENGTHS that you can LeverageSTEP HOW? Identify and include key performers from high performing functions in the planning process WHAT? Get input on how their performance could support or extend Look for performance gaps that if closed would creategoals and vision. opportunities to drive toward the organizational opportunitySTEP Identify now – close later Focus on answering the question: if this performance gap were closed, what incremental or even transformational opportunities would become possible? (e.g new initiatives based on excessSTEP Identify performance capability that does not currently exist, but if added would capacity.) create opportunity ? Integrate with the Visioning Foundation! Are you Willing to Challenge ―The Status Quo‖ 38 ©SHRM 2010
  • Practice! Module 3 – The 5 Elements of Effective Strategic Planning Complete the practice worksheet in your participant materials: • Partner with someone at your table • Independently: Using the Vision Foundation Matrix (VFM) and Human Performance Factors checklist, complete the VFM Worksheet • Next, discuss your effort with your table partner and draft 3 strategic goals based on your VFM Past Performance Current Performance Predicted PerformanceVisionMissionBusinessModel 39 ©SHRM 2010
  • Module 3 – The 5 Elements of Effective Strategic Planning Execution Execution CapabilityCapability 40 ©SHRM 2010
  • The Case for Inclusion Module 3 – The 5 Elements of Effective Strategic PlanningTake away my people, but leave my factories, and soon grasswill grow on the factory floors.Take away my factories, but leave my people, and soon we willhave a new and better factory. - Andrew Carnegie 41 ©SHRM 2010
  • Characteristics – Execution Capability Module 3 – The 5 Elements of Effective Strategic Planning Owned by • Typically ―owned‖ by the business line management > May be supported by other corporate functions Influenced by • Organizational design, recruiting, development programs > Access to resources > Process design and decisions > Management structure and communicationIntegrated with • Resource planning > Must align with the business requirements from the line Informs • The translation of strategy to execution 42 ©SHRM 2010
  • The Keys to Execution Capability Module 3 – The 5 Elements of Effective Strategic PlanningDeveloping execution capability is essential to deliver onthe organization’s strategic promises…• Use the Human Performance Factors as strategic decision criteria for execution planning > Ensure that the team has the capacity to execute the assigned initiatives – fill any talent gaps > Provide for the necessary knowledge, skill, information and structure > Initiate regular feedback against clearly defined and articulated goals and objectives > Plan for incentives, motivation and consequence > Ensure that process, tools and support structures are aligned to the desired outcomes 43 ©SHRM 2010
  • Execution is Part of the Plan Module 3 – The 5 Elements of Effective Strategic Planning Turn Your Strategic Vision Based on Human Performance into Capability…in Just 3 StepsSTEP Identify Priority Plans • Consider the overall vision and strategy as well as the strategic vision or your organization. • Document the top 3 initiatives that your organization mustSTEP Move from Initiative to accomplish the strategy. achieve in order to Goal • HOW? Use a technique like Hoshin planning to connect •HOW? Determine what goals, when achieved, would strategy to initiative. naturally help you accomplish the Initiatives you identified? For each of the initiatives, identify 2 goals that, if achieved,STEP Clarify anddrive results and lead to achievement of the initiative. would Align • Ensure that yours are specific, measurable, and can be easily and clearly communicated and understood. • Align to team performance capabilities using an approach like Performance DNA to assess. 44 ©SHRM 2010
  • Activity – Initiatives to Goals Worksheet Module 3 – The 5 Elements of Effective Strategic Planning Goals That Lead to Plan How will I know if we are How will I know this (result Achievement successful? described in previous column) has occurred?Initiative #1 Goal #1 Goal # 2Initiative #2 Goal #1 Goal # 2Initiative #3 Goal #1 Goal # 2 45 ©SHRM 2010
  • Activity – Goals to Capability Worksheet Module 3 – The 5 Elements of Effective Strategic PlanningInitiative: Goal Critical Team If Yes, Key Team Capabilities Members Members to Support (Human with Right This Goal Performance) Capabilities (* indicates lead) Available? Goal #1: Yes No Goal #2 Yes No 46 ©SHRM 2010
  • Module 3 – The 5 Elements of Effective Strategic PlanningThe The Long View Long View 47 ©SHRM 2010
  • Characteristics – The Long View Module 3 – The 5 Elements of Effective Strategic Planning Owned by • Typically ―owned‖ by leadership, managers > May be supported by a communication or change management plan Influenced by • Changes in the external forces or expectations or internal performance characteristics > Predicted performance and measurementIntegrated with • Strategy evaluation and monitoring > Must be tied back in to current predictive and subsequent go-forward planning Informs • The ongoing execution and contingencies for the current strategy 48 ©SHRM 2010
  • Forgetting to Look Ahead… Module 3 – The 5 Elements of Effective Strategic Planning…is a guaranteed path to failure!• Predict and include points, trends or expectations of performance that you will constantly monitor in your strategic plan• Envision a better outcome and examine your human performance factors to evaluate the potential impact to/from the workforce• Expect execution success but include contingency options for execution failures 49 ©SHRM 2010
  • Structure and Maintain Your Long View Module 3 – The 5 Elements of Effective Strategic Planning Use a structured approach to regularly update your assumptions… • Brainstorm to encourage creativity • Group, prioritize and align with your plan and resources.Brainstorm Affinitize Prioritize Align & Assign Priority #1 Owner: Results needed: Performance resources: Measurement: Contribution to Goal: Governance 50 ©SHRM 2010
  • Module 3 – The 5 Elements of Effective Strategic Planning Alignment 51©SHRM 2010
  • Characteristics – Alignment Module 3 – The 5 Elements of Effective Strategic Planning Owned by • Typically ―owned‖ by leadership > May be driven by a strategy office if present Influenced by • Market evaluation and feedback of current strategy > Communication and execution feedbackIntegrated with • All aspects of strategy formation and execution > Must get and provide continuous feedback Informs • The spectrum of strategic activity 52 ©SHRM 2010
  • The Glue to Make it Stick… Module 3 – The 5 Elements of Effective Strategic PlanningContinuously… ASK YOURSELF Do my planning priorities reflect the top priorities of the organization?  What else can my team do to help the organization achieve its most critical goals and what performance factors are required?  Are we performing in a way that aligns with the organization‘s vision and current overall strategy? If not, what must change? As you make key decisions…  Is this a good idea given my teams capability? ASK YOURSELF  Is this a good idea for the organization? (Does it fit with our strategy and goals? Is it important to our customers? Do we have the resources? How will it impact our long term position?)  Is it a good idea for the organization now? (How does it compare to other priorities? Is it more important? Less important?) 53 ©SHRM 2010
  • Knowledge is the Key Module 3 – The 5 Elements of Effective Strategic PlanningOrganizational Vision > For the Organization Overall > For Your Unit & For Your Group > For You & Your TeamOrganizational Goals > For the Organization Overall > For Your Unit & For Your Group > For You & Your TeamOrganizational Strategy > For the Organization Overall > For Your Unit & For Your Group > For You & Your Team 54 ©SHRM 2010
  • Questions? Q&A and Wrap-up Mason Holloway, Director Beacon Performance GroupCONTACT www.beaconassociates.net mholloway@beaconassociates.net 443-995-4797 55 ©SHRM 2010