207 - Effective Strategic Planning

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  • 5 definitions: 5 PsCommonly, seen as a Plan – direction to guide the course of action into the future, or a path to get us there. This is the definition. But when people describe what they actually *did* it often differs widely from the plan – stuff happens along the way which diverts the path. This is fine. This is strategy as Pattern, which describes the consistency in a pattern of actual behaviour over time. So Plan is the *intended* strategy. Pattern is the *realised* strategy – are realised strategies always intended?Position/perspective is a way of building strategy by focussing on the organisation.Position locates products in the market. It looks DOWN to the spot where the product meets the customer, and OUT to the marketplace.Perspective describes the organisation’s fundamental way of doing things: it looks IN, inside the organisation (or the heads of the strategy consultants!) and also UP to the grand vision of the enterprise.So, that’s 4 different definitions of strategy. There is a fifth: strategy as Ploy – this is the sort of plan that leads Sainsburys to buying large tracts of land to give the impression that it plans to expand its capacity in a particular area, to discourage Tesco from building in that area.
  • This demonstrates how the world can interfere with a planned strategy, so that the pattern of delivery over the five years of implementation is rather different than you envisaged in the first place…
  • Here we see strategy as position: Egg McMuffins into the ‘niche’ breakfast market; versus strategy as perspective, altering the whole way that McDonalds do their business (heaven forbid!)So, within our five definitions, there are 10 schools (we like a nice round number!)
  • Design school is most influential. It’s the one you learn about on MBAs – even at good business schools! It seeks a fit between internal capabilities and external possibilities. “Establish fit” would be the motto of this school. Strategy formation in this school is a deliberate process of conscious thought, control of which rests with the CEO who is *the* strategist.Planning school – again has strategy building as a formal process. In a nutshell, take the SWOT, divide it into neatly delineated steps, give each step a series of checklists and techniques and make sure you have objectives at the front end, and budgets and operating plans at the back end. And *at least* one diagram!! We’ll see one of these in a minute…  There are defined steps to this process: Internal audit stage (strengths, weaknesses, distinctive competences), strategy evaluation stage (build the thing, and there are several defined and debated ways to do this); strategy operationalisation– usually requiring detailed implementation diagrams. This is often where the formalisation of the strategy breaks out into a wider and wider hierarchy of delivery plans which need to be tightly controlled; scheduling – where the steps in the process and the timetable by which they’re carried out is programmed. At this point, I’ve usually lost interest… (p.65 for fatal flaws)Positioning School – derived from economic processes, this school accepts the premises of the design and planning schools, but adds more content…it emphasised the importance of the strategy itself (as opposed to the process of building it) and created the field of strategic management. Where the planning and design schools put no limits on the strategies which are possible in any given situation, the positioning school argues that only a few key strategies – as positions in the marketplace – are desirable in any given industry (and in that sense, Universities are very much of the positioning school!). Strategies in this definition have to be defendable against existing and future competitors. If your strategy is easy to defend, you earn higher profits, and you are the winner. Accumulates strategies into generic types, and focuses strategic development on the choice and combination of generic positions rather than the development of unusual and integrated perspectives (design) or the specification of co-ordinated sets of plans (planning).
  • These schools don’t *prescribe* what strategy should be: they *describe* strategic building – that is, they try to understand the process of strategy formation as it unfolds. To some extent, these schools are talking about emergent strategies as a conscious strategic choice…The Entrepreneurial school looks as strategy as a visionary process, where the key is “the doing of new things or the doing of things that are already being done, in a new way” (Joseph Schumpeter) or, as Richard Branson puts it, you spread the risk by maximising your opportunities “There is always another deal. Deals are like London buses – there’s always another one coming along” So strategy here is dominated by the active search for new opportunities – this is land that Universities are beginning to inhabit, see the spread of overseas campuses, for instance; in an entrepreneurial organisation, power is centralised in the hands of the chief executive; strategy is characterised by dramatic leaps forward in the face of uncertainty, and growth is the dominant goal. This requires a visionary leader, and strategy formation can be almost semi conscious…Cognitive school derives from cognitive psychology and looks at what strategy creation means in the sphere of human cognition. It’s not really yet a fully defined school, but it’s a growing body of research…There is a duality in the cognitive world. One side treats strategy as an objective process, which processes and structures knowledge into a motion picture of the world. The other side treats strategy as a subjective process, some kind of interpretation of the world. For me, this school doesn’t really lead us very much further down the path of trying to understand how strategies are built and how they work – it describes some processes. If you’re interested, then Strategy Safari will give you much more detail!So, the learning school. If strategy is complex and overwhelming, and cannot be contained within the prescriptions of the design, planning and positioning schools, how do we work with it? This school suggests that we *learn* over time. According to this school, strategies emerge organically as people, sometimes individually but more often collectively, come ot learn about a situation and their organisation’s capacity for dealing with it. This is about *formation* rather than *formulation* (bees in a bottle, p. 178). Strategies in this school are incremental and form, and re-form, over time.Power school – This is all about power and politics, and describes the exercise of influence beyond the purely economic, or the exploitation of power in other than purely economic ways. This is fun, because it includes clandestine or subversive behaviours such as cartels or misdirection (see Sainsburys and Tesco example earlier). Obviously, we have power on a micro level – the play of politics inside an organisation, specifically within the process of strategic management, and on a macro level – the exploitation of power *by* the organisation. P.237 for examples.The cultural school describes the knitting of a collection of individuals into an integrated entity. This school rests on 4 premises: strategy formation is a process of social interaction, based on shared beliefs and understandings. An individual acquires these beliefs through aculturation, or socialisation – often tacit, but sometimes including formal indoctrination…so strategy takes the form of perspective, more than position, rooted in collective intentions (not necessarily articulated) and reflected in the patterns by which the organisation protects its competitive advantage. Culture and ideology often do not encourage strategic change…Environmental school – where the other schools see the environment (ie the forces outside the organisation which bear influence upon it) as a *factor*, this school sees the environment as the *actor*. In this view, the organisation is passive and reacts to external changes. At this point, this school gets into some rather silly debates about whether managers can make choices or bear influence…But essentially, the environment is the central actor in strategy making, the organisation must respond to environmental forces, the leadership is a passive element useful only for reading the environment and ensuring organisational adaptation, and organisations will cluster together in ecological niches until resources become scarce, or the environment too hostile, and then they die.Configuration school – This school says strategy formulation is all of the above. There are two ways of doing this – one describes states – of the organisation and its context – as configurations; the other describes the strategy making process – as transformation. Configuration and transformation. If an organisation adopts a state of being, then strategy making is a process of leaping from one state to another.Overall: the literature of strategic management emphasises that strategy is about *change*. But it isn’t, really. Strategy is about continuity – either as a deliberate plan to establish patterns of behaviour or as an emergent pattern by which such patterns get established. So while the process of making a strategy may set out to change the direction in which an organisation is heading, the resulting strategies stabilise that direction.
  • 207 - Effective Strategic Planning

    1. 1. Effective Strategic Planning in Higher EducationVicki StottDirector of Strategic PlanningPaul MarshallDeputy Director of Strategic Planning
    2. 2. Introduction What is a Strategy? Types of Strategy Case Studies - University of Leeds & University of Birmingham Key Success Factors Key Learning Points Group work - what is strategy development like at your institution? Conclusions
    3. 3. What is a Strategy? ‘top management’s plans to attain outcomes consistent with the organisation’s missions and goals’? [Wright et al., 1992] ‘the creation of a unique an valuable position, involving a different set of activities’ [Porter, 1996] Or… [Mintzberg, 1987] – Plan (intended) vs. Pattern (realised) – Position vs. Perspective – Ploy
    4. 4. Plan vs. Pattern
    5. 5. Position vs. Perspective
    6. 6. Types of Strategy Development(Mintzberg et al. (1998))Prescriptive Schools: Design School - process of conception Planning School - formal process Positioning School - analytical process
    7. 7. Types of Strategy Development (2)(Mintzberg et al. (1998))Descriptive Schools: Entrepreneurial School - visionary process Cognitive School - mental process Learning School - emergent process Power School - process of negotiation Cultural School - collective process Environmental School - reactive process Configuration School - process of transformation
    8. 8. How the Schools Work Together…
    9. 9. Case Studies Two Different Approaches by Two Similar Organisations – Leeds in 2005 – Birmingham in 2010
    10. 10. University of Leeds - Drivers New VC Aftermath of RAE01 and RAE08 approaching Recent move to Faculty Structure from Schools New senior leadership team HEFCE requirement
    11. 11. University of Leeds - Process Strategy Map (2004) and Balanced Scorecard (1996) development by HBS and Kaplan/Norton Structured, consultant led, prescriptive Only senior management team involved (Strategy Group) Driven by Finance Director with a desire to use it as a badge of honour‘ Senior project team of six people, plus an oversight board Notionally aligned the objectives/actions/measures triangle Tied to a single league table for the overriding measure of success Values work was a separate project
    12. 12. Stakeholders & Purpose Vision By 2015 our distinctive ability to integrate world-class research, scholarship and education will have secured us a place among the top 50 universities in the world & Values We are a research-intensive University which strives to Our values create, advance & disseminate knowledge develop outstanding graduates & scholars to make a major impact upon global society Our research sponsors expect… Students – as lifelong members of our University community expect… P3 ...to deal with a P5 ...to learn from P6 ...an education P7 ...a stimulating partners P1 ...high quality P2 ...the best P4 ...to study at a research of externally University with a first class academics at that creates environment importance to recognised reputation for University the cutting- excellent that supports society experts in their delivery and recognised for its edge of career personal field professionalism strong, enduring knowledge opportunities development reputation Enhance our international Raise our game in Inspire our students to Enhance enterprise and profile research develop their full potential knowledge transfer T1 Develop, promote and publicise T4 Deliver international excellence T7 Deliver excellent and T10 Enhance performance and our international profile in all our areas of research inspirational learning and value derived from enterprise teaching and knowledge transfer Key themes T6 Translate excellence in research and scholarship into learning opportunities for students T2 Increase recruitment and T5 Develop selected peaks that T8 Provide an exceptional T11 Contribute to the enrichment of participation of international deliver world-leading student experience society on a local to global students performance scale T3 Develop a strong international T9 Increase participation of those research culture who can benefit Improving our effectiveness E1 Build strategic E2 Provide first class E3 Create time for E4 Improve core systems E5 Manage organisational partnerships that add facilities academic development and processes performance Strategic enablers significant value Financial sustainability Valuing & developing all our staff F1 Aggressively grow research F2 Grow additional sources of S1 Develop leadership skills in a S2 Ensure effective communication income profitable income to invest in wider range of staff and ownership of values and our future strategy at all levels F3 Manage resources to deliver F4 Ensure all faculties and schools S3 Proactively attract and retain S4 Manage performance and strategic priorities are able to generate surpluses high quality staff support the development of all for re-investment staff
    13. 13. University of Leeds - Outcomes A pretty diagram covering most things Too many measures and mainly measures that could be measured Poor alignment between objectives, actions and measures Little engagement below Dean of Faculty or the odd Faculty Executive meaning a poor cascade and little direct impact at the business end Big Bang approach to initiative development - plethora of initiatives all released at once leading to confusion over priorities Little or no material progress
    14. 14. University of Birmingham - Drivers New VC Move to College Structure Aftermath of RAE08 Perception of a sleeping giant‘ New Senior Leadership Team Economic Climate - pre-Browne and CSR, but in the runes Sustainable Excellence - our academic strategy HEFCE requirement
    15. 15. University of Birmingham - Process Started with a triptych - Global, National, Civic Small steering group led by VC, three-person project team Facilitated workshops to develop headlines and proposed targets Workshops engaged range of staff and students not just leadership team Town Meetings used to consult wider community Feedback used to refine triptych into a small number of goals, actions and targets Values work integrated into process
    16. 16. University of Birmingham - OutcomesEarly days, but... Clear alignment between goals, actions/initiatives, and targets No focus on top 50 - easy to communicate Minimal and focused number of actions or initiatives, so little confusion Built on Sustainable Excellence Engaged community Clear indications that some activity is being stopped or refocused
    17. 17. Key Success Factors Engagement and trust of senior team Agile project team Limited prescriptiveness External facilitation not consultants Focus on engaging community from outset to get buy-in Integration of values into project Develop-Test-Refine
    18. 18. Exploring strategy models anddevelopment in your institutions… Which model does your institution conform to? Which would be the most appropriate for your institution? How can you apply these models in your working environment?
    19. 19. Feedback
    20. 20. Resources http://www.leeds.ac.uk/comms/strategy/ http://www.birmingham.ac.uk/university/about/2015.aspx Mintzberg et al. (1998) ‘Strategy Safari’. Kaplan & Norton (2004) ‘Strategy Maps: Converting Intangible Assets into Tangible Outcomes’. Kaplan & Norton (1996) ‘The Balanced Scorecard: Translating Strategy into Action’. JiscInfoNet Strategy Toolkithttp://www.jiscinfonet.ac.uk/infokits/strategy
    21. 21. Contact Details Vicki Stott, Director of Strategic Planning (V.Stott@bham.ac.uk) Paul Marshall, Deputy Director of Strategic Planning (P.Marshall.2@bham.ac.uk)

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