There is a big gap between where you want your company to go, and the likelihood that you’ll get there. Strategic plans provide vision and set priorities - both of which are necessary, but not sufficient to ensure achieving business success. Jeanne will discuss how you can supercharge your planning process by applying best practices in risk management. Many times, risk is managed and mitigated after the strategic plan is written – but there is a better way.
In this session you will learn how to:
• Create higher value strategic plans
• Apply risk management techniques to the planning process to help executives make better decisions faster
• Increase the probability that your strategic plan will be execute
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Risky Business: Super Charging Strategic Plans with New Risk Management Tools
1. Risky Business: Supercharge Your
Strategic Plan with New Risk
Management Tools
Association for Strategic Planning
December 13, 2012
Jeanne Bradford, Author
“Innovate Products Faster”
JBRADFORD@TCGEN.COM
@jeannebradford
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2. Better Strategic Plans Through Risk
Management
Objective:
• Learn new tools that can support you in developing strategic plans that
organizations can successfully implement.
• Hands-on learning
• Leave here today with one or more areas where you can apply these tools
Why are these tools beneficial?
• They are proven to be effective
• Straight forward, but powerful
• Does not require IT systems
• Flexible to support different types of projects
• Allows deep thinking in a short amount of time
Tools we’ll apply today
• Risk Mind Map: comprehensive overview of risks
• Risk Management Matrix: managing and preventing risks
• Attitude Influence Matrix: eliminating political risks
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3. The Strategic Framework
Strategy-Management-Execution
Organization-Process
To successfully achieve the goals of your business, organizations but
optimize all 5 areas – and it starts with Strategy
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4. The Strategy-to-Product Cycle
Strategy-Management-Execution
• Most important cycle after Order-to-Cash
• An organization that cannot effectively
optimize this cycle will never effectively
compete
Identifying, prioritizing and managing risks will shorten the
Strategy-to-Product cycle
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5. Strategy vs. Strategic Plan
Strategy: providing the vision and actionable plans in support of
corporate/organizational goals.
Strategic Plan: tangible plan that includes: 1) a roadmap, 2) a delivery
process, and 3) operational goals & key metrics
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6. Why Do Strategic Plans Fail?
Buy-in
Leadership
Focus
Understanding
Flexibility
Accountability
Resources
Over the Wall
Execution
All of these are key drivers of risk –
How do you mitigate to ensure failure is *not* an option?
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7. How These Tools Fit Together
• Risk Mind Map
– Brainstorming: comprehensive view of risk
– Cross functional: internal & external to the initiative
– Can be aggregated across initiatives to determine
corporate risk
• Risk Management Matrix
– Quantifies & prioritizes risk
– Identifies likelihood of risk and threshold for
mitigation
– Focuses on the highest risks
• Attitude Influence Matrix
– Helps you identify supporter & detractors
– Provides approach to mitigate risks
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8. Risk Mind Map
Comprehensive Overview of Major Risks
• What Is the Tool?
• The graphical diagram records a creative approach to risk assessment and
management.
• The tool is used for creative problem-solving, requirements generation, and product
idea generation.
• A map pre-populated with major risk categories can also be used to brainstorm risks for
the initiative.
• Which Business Problems Does the Tool Solve?
• Facilitates the rapid identification and prioritization of risks by allowing teams to
contribute to a comprehensive risk profile.
• Allows the management team to anticipate risks sooner and prepare prevention plans.
• Creates buy-in through out the organization for the strategic plan.
• Benefits
• The Risk Mind Map provides an efficient method to view the whole spectrum of risks
at a glance.
• It facilitates cross functional contribution.
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9. Risk Mind Map Example
Description of the tool
• Bubble in the center is the main theme or project name.
• Outer boxes are various classes of risks.
• Lists next to boxes indicate specific risks, prioritized from 1 (high) to 4 (low).
• Risks without numbers are the lowest priority.
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10. Risk Mind Map Work Session
Objective: Construct a Risk Mind Map for your project
Work Session Steps:
• Identify the initiative or risk theme
• Assemble the cross-functional team to contribute – include
functions outside the strategic planning team! Initiative
• Brainstorm the risk categories, if starting from a template,
perform an omissions check and add any category you feel is
missing
• Category by category go a level deeper, and generate specific
risks within each category
• Step back after the group senses completion, and ask, what
are we missing?
• Some of the most important risks are identified at this stage
• Prioritize by evaluating the combination of the magnitude
and the likelihood of each specific risk event (use your rough
judgment)
• Assign a score of 1 to 4 to prioritize each risk – 1 being the
highest risk, that could result in catastrophic failure, and 4
being the lowest risk causing a significant inconvenience
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11. Risk Management Matrix
Anticipating and Mitigating Risk
• What Is the Tool?
• The matrix is a way to quantify and anticipate risks.
• The tool lists various risks, their overall impact, and an action plan if risk values are
exceeded.
• Creation of the table should take place during the first 10-15% of a initiative’s duration.
• Which Business Problems Does the Tool Solve?
• Innovation brings with it additional risks which can still be managed by the team on its
own.
• Helps reduce the Strategy-to-Product cycle because it can help the team anticipate &
mitigate risks.
• Benefits
• You can identify risks before they occur
• There is a reduction of risk impact due to early detection
• You will have quantitative metrics that help clarify when to act on a risk item
• Accelerated actions will happen because of the clear thresholds and the agreement to
follow the process
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12. Anticipating and Mitigating Risk
Risk Management Matrix
Current Action
Status Risk Impact Likelihood Metric Threshold
Value
Date
Plan
Narrative 1-10 1-10 Text Defining Value with Units Value with Units Date by which Narrative
Metric you must below
target
How to apply the tool
• Risks are listed on left side – derived from Risk Mind Map, and in order of
decreasing Impact
• Impact column with score of 1 (inconvenience) to 10 (catastrophic failure)
• Likelihood column with score of 1 (zero possibility) to 10 (certainty)
• Metric column is the measurable quantity associated with the risk
• Threshold column indicates the value that if exceeded triggers action
• Date column indicates time by which the risk can be retired, or the date the target
must be achieved
• Action Plan column gives a summary description of the high-level objectives of an
action plan – if the trigger threshold is exceeded
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13. Risk Management Matrix Work Session
Objective: Construct a Risk Management Matrix for your project
Work Session Steps:
• Re-assemble the cross-functional team that created the Mind Map (if possible).
• Transfer the risk items from the Mind Map to the matrix, starting from 1 (high) to 4
(low).
• Do an omissions check. Are there any missing risks?
• Assign impact, likelihood, metric, threshold and current values for each.
• Reprioritize by order of impact/likelihood. You may wish to weight the impact
higher thank likelihood (rank=(2*Impact + likelihood)/3). However, use your
judgment.
• Define the date by which performance must equal or exceed threshold value.
• Describe the highlights of an action plan for each risk.
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14. Attitude Influence Diagram
• What is the tool?
• A tool to help identify who in the organization might block your project and help
highlight what to do about it
• A scatter plot diagram that shows the relative influence and attitudes of the key staff
members who will be involved
• A subjective assessment, but very powerful tool to quickly identify those who might
block your project
• Applied early in the process, this tool will provide you with the opportunity to
proactively manage detractors to ensure their concerns are addressed. In many
cases, applying this tool will turn your detractors into supporters
• Which Business Problems Does the Tool Solve?
• Resistance and politics can slow teams down
• This graphical technique pinpoints people and their position so that you can use your
time wisely
• Benefits
• Provides a new methodology for accelerating decisions
• Identifies supporters and detractors that will impact your probability of success
• Helps you avoid mistakes in the implementation process
• Creates a framework for managing proactive discussions and positive influence
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15. Eliminate Organizational Obstacles
How to apply the tool Challenging
• Identify key individuals (typically outside the Individuals
team) that may impact success
• Plot each individual based on their relative
influence
(hierarchy, knowledge, experience), and
attitude (support) The horizontal axis shows
how positive or negative an individual is about
the project
• The vertical axis shows the level of influence
and individual has
• The size of the bubble is a subjective indication
of the difficulty in influencing the individual
• Develop action plan for each person in the
upper left quadrant
• Determine the best way to move them to the
“right”
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16. Attitude Influence Matrix
Work Session
Objective: Draft of Attitude Influence Diagram
Work Session Steps:
• Use paper to create a Attitude Influence Diagram
• Decide on the project/initiative
• Identify 5-6 key players that could impact your project (supporters &
detractors)
• Plot each person as a point on diagram
• Use pairwise comparison to clarify positions on the diagram
• Convert the points to a circle, with the most resistant persons with larger
circles
• Create at least 1 action plan for moving a detractor to a supporter
This tool can also be downloaded at:
http://www.tcgen.com/book/tools/
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17. How To Deal with Challenging
Individuals
• Successful change at the individual level requires drive and taps your soft skills
(empathy, relationship management, communication and persuasion).
• Start first by understanding the point of view of the person that is preventing you from
being successful
– What forces are driving them?
• The best approach is to always try to work it out with the challenging person directly, in a
one on one, face to face conversation
– Lay out your interests (not position – be flexible)
– Discover their interests
– Then try to bridge the two, inventing options for mutual gain.
• Work with them open mindedly and with a win-win attitude and be flexible.
• See the book “Getting To Yes” by Fisher and Ury.
– It is one of the best $13 investments you will ever make.
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18. First Things First
Building Rapport
• Talk with the challenging person directly – often clarifying your ask will help.
• Have the team member with the highest clout, or closest relationship seek out the
obstacle and understand their point of view.
• Do the first step, wait a few days, and if no movement, escalate – start by confirming
your agreement and securing a specific time table for resolution.
• If that does not resolve the challenge, then consider further escalation or alternatives.
• If you must….. Escalate through the management chain.
– This is usually the first step taken, but it should be your last resort.
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19. Thank you!
Questions?
Jeanne Bradford
jbradford@tcgen.com
www.tcgen.com
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