STRATEGIC ALIGNMENT:  APPLICATIONS OF THE INTEGRATED STRATEGIC CHANGE MODEL Dr. Walter Ross  Foster Mobley The Foster Mobl...
ISC Strategy Implementation Model © Current Strategy (S 1 ) New Strategy (S 2 ) Current Organization (O 1) Strategically A...
AGENDA <ul><li>Introductions </li></ul><ul><li>The case for the “Integrated Strategic Change Model” </li></ul><ul><li>How ...
INTRODUCTIONS <ul><li>Name </li></ul><ul><li>Organization </li></ul><ul><li>Role </li></ul><ul><li>Background in OD/ Chang...
The Case for ISC <ul><li>Most execs unhappy with strategy execution </li></ul><ul><li>Most execs unhappy with change initi...
The Challenge in Strategic Management Is Not: <ul><li>Strategic Analysis  </li></ul><ul><li>Business Planning </li></ul>
The Challenge in Strategic Management Is: <ul><li>IMPLEMENTATION!   </li></ul>
Why Strategies Fail <ul><li>Incomplete data from the strategic assessment </li></ul><ul><li>FIT with organizational capabi...
Shortcomings of Traditional Strategic Planning Models <ul><li>Strategic assessment  does not take into account:  </li></ul...
Shortcomings of Traditional Strategic Planning Models <ul><li>The  strategic plan  does not take into account:  </li></ul>...
<ul><li>While business outcomes are tracked: </li></ul><ul><li>The  capability  to achieve those outcomes goes unmonitored...
Strategically-Focused OD <ul><li>How do we ensure strategic fit? </li></ul><ul><li>How do we ensure ownership and accounta...
What We’ve Learned <ul><li>Leaders get it! </li></ul><ul><li>Strategy implementation = CHANGE!  </li></ul><ul><li>ISC prom...
The Model
ISC Strategy Implementation Model © Current Strategy (S 1 ) New Strategy (S 2 ) Current Organization (O 1) Strategically A...
The ISC Model <ul><li>Strategic Business Analysis </li></ul><ul><li>Strategic assessment of current organizational capabil...
Strategic Capability Assessment <ul><li>Critical Success Factors – What will we have to do really well to achieve the new ...
Strategic Change Plan <ul><li>Change Objectives </li></ul><ul><li>Change Strategy </li></ul><ul><li>Change Methodologies a...
ISC Change Strategy <ul><li>Enterprise-wide ownership and alignment of purpose & direction </li></ul><ul><li>Cross-functio...
The Pacific Microchip, Inc. Case
Integration of OD, Strategic Planning and Strategy Implementation
An Interactive Case Study –  Healthcare System Merger Using ISC
Key Facts <ul><li>Merger among historical competitors in medium-sized community </li></ul><ul><li>Disparate sizes, levels ...
Our Beliefs About Successful Change <ul><li>The most effective change is enacted from the top </li></ul><ul><li>Leaders em...
Cascading Process for Change  Engagement Executive Leadership Senior Management Directors Managers Supervisors Staff Keys ...
R e c e n t E x a m p l e o f &quot; C a s c a d i n g &quot; C E O o f f e r s &quot; o p t o u t &quot; o p t i o n a t ...
1st Phase Non-Negotiables <ul><li>Engaged, knowledgeable, active leaders </li></ul><ul><li>Simple, clear, compelling and r...
Organizational Alignment Model Building Shared Commitment •  Clarity •  Alignment •  Passion (1) (2)  (3) Aligning Actions...
Engaging the  Organization High Performance Team Development Education/Development of the Leaders How the Senior Team Sets...
Leadership Effort Organizational Involvement Low High High Results Critical Mass Danger Zone
Sample:  Tasks of the Strategy Team (Detailed View) Senior  Management  Middle Management Supervisor Staff Leadership Team...
Three Dimensions of Business Culture (adapted from Kotter and Heskett) <ul><li>Strength of Culture </li></ul><ul><ul><li>=...
Leaders’ Role in Embedding Culture Through their actions, stories, stories told about them and what they pay attention to:...
Important Notes on Culture: <ul><li>There is a significant difference between a company’s  espoused values  (hanging on th...
Issues for Further Exploration with ISC <ul><li>Is ISC appropriate for emergent change? </li></ul><ul><li>Must ISC always ...
Group Exploration of Issues re:  Strategic Alignment Using the World Café Group Process Technology
World Café (adapted from Juanita Brown)   <ul><li>A group process technology for quickly sharing and collecting ideas and ...
Report Out – Strategy Stream <ul><li>See .jpg file sent under separate cover </li></ul>
Report Out – Organizational Stream <ul><li>See .jpg file sent under separate cover </li></ul>
Report Out – Culture Stream <ul><li>See .jpg file sent under separate cover </li></ul>
INTEGRATED STRATEGIC CHANGE © Current Strategy (S 1 ) New Strategy (S 2 ) Future Strategies Create Integrative Strategies ...
References <ul><li>Brown, Juanita,  The World Café  (Book and Workbook) </li></ul><ul><li>Bunker, Barbara Benedict and Alb...
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  1. 1. STRATEGIC ALIGNMENT: APPLICATIONS OF THE INTEGRATED STRATEGIC CHANGE MODEL Dr. Walter Ross Foster Mobley The Foster Mobley Group, Inc. OD NETWORK - 2005
  2. 2. ISC Strategy Implementation Model © Current Strategy (S 1 ) New Strategy (S 2 ) Current Organization (O 1) Strategically Aligned Organization (O 2) Strategic Business Plan Strategic Analysis Strategy Implementation Strategy Formulation Strategic Fit Marketplace © Dr. Walter Ross Strategic Change Plan
  3. 3. AGENDA <ul><li>Introductions </li></ul><ul><li>The case for the “Integrated Strategic Change Model” </li></ul><ul><li>How ISC integrates OD, Strategic Planning and Strategy Implementation </li></ul><ul><li>Issues in OD and Strategy </li></ul><ul><li>Explorations and Insights </li></ul>
  4. 4. INTRODUCTIONS <ul><li>Name </li></ul><ul><li>Organization </li></ul><ul><li>Role </li></ul><ul><li>Background in OD/ Change </li></ul><ul><li>Reason for attending ODN </li></ul><ul><li>Reason for enrolling in this session </li></ul>
  5. 5. The Case for ISC <ul><li>Most execs unhappy with strategy execution </li></ul><ul><li>Most execs unhappy with change initiatives </li></ul><ul><li>Half life of small systems OD interventions </li></ul><ul><li>Failure of strategic planning processes </li></ul><ul><li>Integration of “inside out” / “outside in” interventions </li></ul><ul><li>Dick Beckhard – “Integrated Strategic Change: How OD Builds Competitive Advantage” (AW) </li></ul>
  6. 6. The Challenge in Strategic Management Is Not: <ul><li>Strategic Analysis </li></ul><ul><li>Business Planning </li></ul>
  7. 7. The Challenge in Strategic Management Is: <ul><li>IMPLEMENTATION! </li></ul>
  8. 8. Why Strategies Fail <ul><li>Incomplete data from the strategic assessment </li></ul><ul><li>FIT with organizational capabilities </li></ul><ul><li>Organizational culture </li></ul><ul><li>Lack of organizational alignment </li></ul><ul><li>Lack of wide-spread ownership and accountability </li></ul><ul><li>Lack of Implementation Plan </li></ul><ul><li>Failure to develop strategic capabilities </li></ul><ul><li>Inability to change/ adapt/ cope with change </li></ul>
  9. 9. Shortcomings of Traditional Strategic Planning Models <ul><li>Strategic assessment does not take into account: </li></ul><ul><li>The true capabilities of the current organization </li></ul><ul><li>The capabilities that will be required to implement and achieve the new strategy </li></ul>
  10. 10. Shortcomings of Traditional Strategic Planning Models <ul><li>The strategic plan does not take into account: </li></ul><ul><li>How the plan will be implemented </li></ul><ul><li>The changes that will need to be achieved to implement the plan </li></ul><ul><li>The organizational integration that will be needed to implement the plan </li></ul>
  11. 11. <ul><li>While business outcomes are tracked: </li></ul><ul><li>The capability to achieve those outcomes goes unmonitored </li></ul><ul><li>Signals about organizational Health & Vitality are ignored </li></ul><ul><li>People are measured and rewarded for short-term results , not strategic results </li></ul><ul><li>Ineffective systems and processes are tolerated </li></ul><ul><li>Organizational resources are misaligned and not focused on strategic outcomes </li></ul>Shortcomings of Strategy Implementation
  12. 12. Strategically-Focused OD <ul><li>How do we ensure strategic fit? </li></ul><ul><li>How do we ensure ownership and accountability? </li></ul><ul><li>How do we develop the organizational capabilities needed to achieve the Strategic Plan? </li></ul><ul><li>How do we create the organizational integration needed to implement the plan? </li></ul>
  13. 13. What We’ve Learned <ul><li>Leaders get it! </li></ul><ul><li>Strategy implementation = CHANGE! </li></ul><ul><li>ISC promotes the adaptation and sustained effort needed to achieve the strategic plan </li></ul><ul><li>The ISC process builds organizational muscle </li></ul><ul><li>ISC creates enterprise-wide alignment </li></ul><ul><li>ISC creates laser focus on key strategic outcomes </li></ul>
  14. 14. The Model
  15. 15. ISC Strategy Implementation Model © Current Strategy (S 1 ) New Strategy (S 2 ) Current Organization (O 1) Strategically Aligned Organization (O 2) Strategic Business Plan Strategic Analysis Strategy Implementation Strategy Formulation Strategic Fit Marketplace © Dr. Walter Ross Strategic Change Plan
  16. 16. The ISC Model <ul><li>Strategic Business Analysis </li></ul><ul><li>Strategic assessment of current organizational capability and the capability needed to achieve the new strategic plan </li></ul><ul><li>Strategic Business Plan </li></ul><ul><li>Strategic Change Plan </li></ul>
  17. 17. Strategic Capability Assessment <ul><li>Critical Success Factors – What will we have to do really well to achieve the new strategy? </li></ul><ul><li>What are we currently doing well? </li></ul><ul><li>Level of stress/effort to achieve current performance? </li></ul><ul><li>Current organizational weaknesses/limits? </li></ul><ul><li>How effective will the current organization be in achieving the new strategy? </li></ul><ul><li>What changes need to occur to achieve the new strategy? </li></ul><ul><li>What is the organization’s ability to change ? </li></ul>
  18. 18. Strategic Change Plan <ul><li>Change Objectives </li></ul><ul><li>Change Strategy </li></ul><ul><li>Change Methodologies and schedule </li></ul><ul><li>Change Metrics (based on Critical Success Factors) </li></ul>
  19. 19. ISC Change Strategy <ul><li>Enterprise-wide ownership and alignment of purpose & direction </li></ul><ul><li>Cross-functional partnerships focused on achievement of strategic outcomes </li></ul><ul><li>Focus on stewardship and leadership </li></ul><ul><li>Individual and team control over their own accountabilities </li></ul><ul><li>Goal setting and performance measurement Critical Success Factors </li></ul><ul><li>Focused development of the organization’s capabilities to achieve strategic results. </li></ul>
  20. 20. The Pacific Microchip, Inc. Case
  21. 21. Integration of OD, Strategic Planning and Strategy Implementation
  22. 22. An Interactive Case Study – Healthcare System Merger Using ISC
  23. 23. Key Facts <ul><li>Merger among historical competitors in medium-sized community </li></ul><ul><li>Disparate sizes, levels of sophistication, commitment to leader-led change </li></ul><ul><li>The leaders of the smaller of the two spent the previous 1 ½ years in a comprehensive change </li></ul><ul><li>New combined CEO didn’t get it, want to get it, or even acknowledge he needed to get it…however, he tolerated the effort by those on his team </li></ul><ul><ul><li>No history of democracy, involvement or engagement </li></ul></ul>
  24. 24. Our Beliefs About Successful Change <ul><li>The most effective change is enacted from the top </li></ul><ul><li>Leaders embed culture, systems reinforce it </li></ul><ul><li>For behavior change to become embedded, it must be led and lived by the leaders (not delegated) </li></ul><ul><li>Decisions informed by many, made by fewer </li></ul><ul><li>If you aren’t committed, it’s not going anywhere! </li></ul><ul><li>Alignment is EVERYTHING! </li></ul>
  25. 25. Cascading Process for Change Engagement Executive Leadership Senior Management Directors Managers Supervisors Staff Keys to Approach: One layer at a time – starts at top One layer engages next layer Each layer accountable for next Scenarios aid preparation Cross-organizational groups for discussion at each level Values, strategy and/or balanced scorecard frame discussions
  26. 26. R e c e n t E x a m p l e o f &quot; C a s c a d i n g &quot; C E O o f f e r s &quot; o p t o u t &quot; o p t i o n a t s t a r t o f p r o c e s s C E O o f f e r s &quot; o p t o u t &quot; o p t i o n a t e n d o f Y e a r # 1 Y e a r # 1 T h e m e : O r g a n i z a t i o n a l V a l u e s Y e a r s # 2 - 4 T h e m e s : S t r a t e g y a n d A c c o u n t a b i l i t y W o r k i s d o n e a t e x e c u t i v e l e v e l t o c l a r i f y v a l u e s S c e n a r i o s ( m u l t i p l e r e p r e s e n t a t i o n s ) a r e c r e a t e d t o e n g e n d e r d i a l o g u e a n d u n d e r s t a n d i n g E x e c u t i v e s a r e c o a c h e d o n p r e s e n t a t i o n a n d e n g a g e m e n t W i t h s t r o n g a n d c o m m i t t e d l e a d e r s h i p , t h e &quot; t o p d e c k &quot; g o t c l e a r i n s i x m o n t h s O n c e c l e a r , t h e &quot; t o p d e c k &quot; a l i g n e d t h e n e x t t w o l e v e l s i n 9 0 d a y s Y e a r # 2 Y e a r # 3 Y e a r # 4 S t r a t e g i c F o r u m – V a l u e s S t r a t e g i c F o r u m – N e w P e r f o r m a n c e A p p r a i s a l S t r a t e g i c F o r u m – F u t u r e C o m p e t e n c i e s
  27. 27. 1st Phase Non-Negotiables <ul><li>Engaged, knowledgeable, active leaders </li></ul><ul><li>Simple, clear, compelling and repetitive messages </li></ul><ul><li>A reason to engage (strategic imperative) </li></ul><ul><li>Practical examples of behavior changes </li></ul><ul><li>Measurement system reflective of desired culture </li></ul><ul><li>Tangible communication aids </li></ul><ul><li>Clear commitment to ongoing action </li></ul>
  28. 28. Organizational Alignment Model Building Shared Commitment • Clarity • Alignment • Passion (1) (2) (3) Aligning Actions • Match Words and Actions Engaging the Organization
  29. 29. Engaging the Organization High Performance Team Development Education/Development of the Leaders How the Senior Team Sets New Direction and Builds New Organizational Capability Building Shared Commitment Aligned Actions Time Engagement Intensity June – December 2003 January – December 2004 January 2004 - Ongoing
  30. 30. Leadership Effort Organizational Involvement Low High High Results Critical Mass Danger Zone
  31. 31. Sample: Tasks of the Strategy Team (Detailed View) Senior Management Middle Management Supervisor Staff Leadership Team Development Leadership Development Building Shared Commitment Aligning Actions Engaging the Organization Time Assessments – Strategic Capability and Organizational Culture Work Process Redesign Setting Direction/Vision Alignment Engagement Planning Redesign Measurement Systems (Individual) Cascaded Introduction Process Staff Development Recruitment and Orientation Supervisory Development Redesign Measurement Systems(Organization) Strategy Forums Executive Coaching Communications/ Feedback Strategy Team Others
  32. 32. Three Dimensions of Business Culture (adapted from Kotter and Heskett) <ul><li>Strength of Culture </li></ul><ul><ul><li>= the consistency/uniformity of accepted values and behaviors </li></ul></ul><ul><li>Strategic Appropriateness </li></ul><ul><ul><li>= the match of cultural characteristics with strategic requirements </li></ul></ul><ul><li>Adaptability </li></ul><ul><ul><li>= the flexibility of the cultural characteristics, allowing change </li></ul></ul>What is your theory about the importance of each of these?
  33. 33. Leaders’ Role in Embedding Culture Through their actions, stories, stories told about them and what they pay attention to: Leaders Embed Culture Systems Reinforce Systems Reinforce
  34. 34. Important Notes on Culture: <ul><li>There is a significant difference between a company’s espoused values (hanging on the wall) and the actual values held in the hearts and minds of its citizens. </li></ul><ul><li>The study of a society’s actual values and beliefs, that can provide insight into why people behave the way they do takes time, keen powers of observation and minds that are open. </li></ul><ul><li>Leaders embed culture, systems merely reinforce it; that is, all the programs and systems, no matter how well intentioned, will not establish or change cultural norms. Leaders, through story telling, reinforcing and demonstrating what’s really important directly influence culture. </li></ul><ul><li>The bottom line: nobody is so smart they can shortcut an attentiveness to culture , and nobody is so foolish as to ignore it and think they can achieve the desired performance and organizational change. </li></ul>
  35. 35. Issues for Further Exploration with ISC <ul><li>Is ISC appropriate for emergent change? </li></ul><ul><li>Must ISC always be driven from the top? </li></ul><ul><li>Can ISC work in ambidextrous organizations? </li></ul><ul><li>What determines the sufficient level of alignment during a strategic change? </li></ul>
  36. 36. Group Exploration of Issues re: Strategic Alignment Using the World Café Group Process Technology
  37. 37. World Café (adapted from Juanita Brown) <ul><li>A group process technology for quickly sharing and collecting ideas and knowledge </li></ul><ul><li>How we’ll use it: </li></ul><ul><ul><li>Three tables, each representing a single “stream” in ISC model (i.e., strategy, organization, culture) </li></ul></ul><ul><ul><li>Group divides into three parts, populates tables </li></ul></ul><ul><ul><li>Each table collects: </li></ul></ul><ul><ul><ul><li>Forms that stream could contain </li></ul></ul></ul><ul><ul><ul><li>Your experiences with, and/or ideas for leading/facilitating change </li></ul></ul></ul><ul><ul><li>Three rounds of 10 minutes each; rotate to each table </li></ul></ul><ul><li>Final stage is report out of forms, experiences and ideas </li></ul>
  38. 38. Report Out – Strategy Stream <ul><li>See .jpg file sent under separate cover </li></ul>
  39. 39. Report Out – Organizational Stream <ul><li>See .jpg file sent under separate cover </li></ul>
  40. 40. Report Out – Culture Stream <ul><li>See .jpg file sent under separate cover </li></ul>
  41. 41. INTEGRATED STRATEGIC CHANGE © Current Strategy (S 1 ) New Strategy (S 2 ) Future Strategies Create Integrative Strategies Create Integrative Strategies Current Organization (O 1 ) New Organization (O 1 ) Future Organization Build Organizational Capability Build Organizational Capability . . . . Strategies That Work . . . . . . . . Leadership . Culture . Strategic Thinking . Adaptability . . . . External Environment
  42. 42. References <ul><li>Brown, Juanita, The World Café (Book and Workbook) </li></ul><ul><li>Bunker, Barbara Benedict and Alban, Billie T., Large Group Interventions: Engaging the Whole System for Rapid Change . 1997, Jossey Bass. </li></ul><ul><li>Hammonds, Sue Annis, The Thin Book of Appreciative Inquiry . Thin Books, 1998. </li></ul><ul><li>Kotter, John P. and Heskett, James L. Corporate Culture and Performance . Free Press, 1992. </li></ul><ul><li>Owen, Harrison, Open Space (Various Articles) </li></ul><ul><li>Tichy, Noel M. and Sherman, Stratford, Control Your Destiny or Someone Else Will: Lessons in Mastering Change . First HarperBusiness, 1994. </li></ul><ul><li>Torbert, William R., Action Inquiry: The Secret of Timely and Transforming Leadership . Berrett-Koehler, 2004. </li></ul><ul><li>Worley, Christopher G., Hitchin, David E., and Ross, Walter L., Integrated Strategic Change: How OD Builds Competitive Advantage . Addison-Wesley, 1992. </li></ul>
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