SII 2011 Strategic Thinking / Palnning


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John Spence's presentation on Strategic Thinking / Planning for the 2011 Securities Industry Institute at the Wharton School.

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SII 2011 Strategic Thinking / Palnning

  1. 1. Strategic Thinking & Planning
  2. 2. … chaos brings opportunity For those that are prepared…
  3. 3. Learning Objectives: <ul><li>Address key elements of a business plan that align your firm’s critical objectives with those of your individual’s business unit’s objectives. </li></ul><ul><li>Discuss common mistakes in writing strategic business plans. </li></ul><ul><li>Identify guidelines on how often to review your strategy, adjust and change or be flexible. </li></ul><ul><li>Provide each participant with numerous tools, ideas and skills to apply when creating a detailed and realistic strategic business plan. </li></ul>
  4. 4. Do NOT freak out! <ul><li>I have a ton to cover and I will go pretty fast. </li></ul><ul><li>Please take notes and ask questions. </li></ul><ul><li>I am happy to answer any of your questions, offer advice and recommend books at any time. </li></ul><ul><li>The slides and a full strategic planning workbook are already posted at: </li></ul><ul><li> </li></ul>
  5. 6. Most people think of:
  6. 8. What strategy is not… <ul><li>More, better, faster is not a strategy. </li></ul><ul><li>Effectiveness and efficiency are necessary… but not sufficient. </li></ul><ul><li>Superb execution of fundamental business processes… is expected. </li></ul><ul><li>Being extremely good at what you are supposed to be good at… gets you no extra credit at all. </li></ul>
  7. 9. Do you have a clearly focused and well-communicated strategy for success? Effective Strategy = Valued Differentiation x Execution
  8. 10. Key Point: Strategy is INTERNAL as well as EXTERNAL
  9. 11. Five Foundations of Effective Strategic Thinking <ul><ul><li>Business Acumen </li></ul></ul><ul><ul><li>Personal Experience </li></ul></ul><ul><ul><li>Pattern Recognition </li></ul></ul><ul><ul><li>Strategic Insight </li></ul></ul><ul><ul><li>Disciplined Execution </li></ul></ul>
  10. 12. The Four – I’s <ul><li>Ignorance </li></ul><ul><li>Inflexibility </li></ul><ul><li>Indifference </li></ul><ul><li>Inconsistency </li></ul>
  11. 13. How to avoid the Four I’s <ul><li>Aggressive external market focus. </li></ul><ul><li>Aggressive customer focus. </li></ul><ul><li>Keep the “Main Things” the main things. </li></ul><ul><li>Bullish on knowledge sharing and learning. </li></ul><ul><li>Passion and commitment at all levels. </li></ul><ul><li>Foster a healthy paranoia. </li></ul><ul><li>Revel in change. </li></ul>
  12. 14. From the CEO of a little 182 billion dollar company… “ L ook, what is strategy but resource allocation? When you strip away all the noise, that’s what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size your business or how deep its pockets. You have to figure out what to say “ NO ” to.” Jeffrey Immelt
  13. 15. “ Simplicity is the ultimate sophistication” Leonardo da Vinci
  14. 16. Breakthrough Strategies <ul><li>GE: 1- 2 or F.S.C. </li></ul><ul><li>Intel: memory to processors </li></ul><ul><li>Microsoft: installed base </li></ul><ul><li>Apple: chaos to elegance </li></ul>
  15. 17. Southwest 1 type of plane Point-to-point Fast turns Low fares / no frills Friendly staff
  16. 18. Dell BTO JIT Inventory turns Logistics vs. Technology VOC
  17. 19. 100,00 ELP No Frills Logistics
  18. 20. Southwest – Dell – Walmart What is the pattern? <ul><li>Extreme efficiency. </li></ul><ul><li>Minimize costs to as close to zero as possible – without negative impact. </li></ul><ul><li>All focused on delivering customer value – as defined by the customer. </li></ul>
  19. 21. Educated Guess Focus Resource Allocation Bold not Risky What NOT to do
  20. 22. Thinking to Planning
  21. 25. What Business Planning is Not ! <ul><li>Business planning does not attempt to make future decisions. </li></ul><ul><li>Business planning is not forecasting. </li></ul><ul><li>Business planning is not an attempt to blueprint the future. </li></ul><ul><li>Business planning is not necessarily the preparation of massive plans and reports. </li></ul><ul><li>Business planning is not an effort to replace good management judgment. </li></ul>
  22. 26. Why Planning Pays Off <ul><li>Asks & answers questions of importance. </li></ul><ul><li>Simulates the future. </li></ul><ul><li>Forces the setting of objectives. </li></ul><ul><li>Gives a framework for decisions. </li></ul><ul><li>Develops performance measurements. </li></ul><ul><li>Improves communications. </li></ul>
  23. 28. The Organizational Framework for Effective Execution WHO WHAT HOW Cross-Functional Teams Senior Leadership Departments Adapted from: Six Disciplines Execution Revolution Individuals Planning Retreat Quarterly Workshops Goals Tracking Dashboard Status Reports Status Meetings Workshops Status Reports Regular Meetings Coaching Individuals Tactical Plans Action Items To-do Lists
  24. 29. 83 %
  25. 30. What makes a winning strategy? Unique Coherent Deliverable Evolving 32
  26. 31. Common Problems <ul><li>Putting It Off </li></ul><ul><li>Idea inflation </li></ul><ul><li>Diluted priorities </li></ul><ul><li>Vague goals </li></ul><ul><li>No execution plan!!! </li></ul>
  27. 32. 10 – 15 %
  28. 33. What Inhibits Execution? National Survey of 4,000 Senior Executives <ul><li>4. Inability to work together (21%) </li></ul><ul><li>3. Company culture (23%) </li></ul><ul><li>2. Economic climate (29%) </li></ul><ul><li>1. Holding onto the past / unwillingness to CHANGE (35%) </li></ul>
  29. 34. Where are we going + how will we behave on the way? Focus Differentiation “ No” Stakeholders + guiding collation Vision + Values Strategy Plans Goals Objectives Tactics / Actions Procedures / Protocols Repeatable Process Clear / consistent / relentless All available channels Training + time / money / supplies / people Measure / Track Communicate Transparency Renewal Praise + Celebration and Eliminate Mediocrity
  30. 35. Some thoughts on measurement <ul><li>Less is more </li></ul><ul><li>Results not activity </li></ul><ul><li>Easy / Hard </li></ul><ul><li>Post and review </li></ul><ul><li>Help not punishment </li></ul>
  31. 36. Assessing the Strategic Situation Simplicity Complexity Certainty Uncertainty Knowing Forecasting Proactive Adaptive Strategic Planning Scenario Planning
  32. 37. Scenario Planning… <ul><li>Is a process that stimulates imaginative and creative thinking to better prepare an organization by rehearsing for the future to avoid surprises and break through the illusion of certainty . </li></ul><ul><li> </li></ul><ul><li>Probability / Impact ---- Trigger Points </li></ul>
  33. 38. Review of the plan? <ul><li>Twice yearly Strategic Planning Retreat – 1 to 2 days </li></ul><ul><li>Monthly “quick check” meetings 2 – 3 hours </li></ul><ul><li>Weekly Senior team alignment review – 1 hour or less </li></ul><ul><li>Carry plan to every strategic meeting </li></ul>
  34. 39. Summary of Key Ideas <ul><li>Major elements: thinking, planning, execution, review </li></ul><ul><li>Strategic thinking = study + experience + pattern recognition </li></ul><ul><li>Strategy = bold bets on resource allocation. </li></ul><ul><li>What you say “No” to is a big part of strategy. </li></ul><ul><li>Planning is a process. </li></ul><ul><li>Analysis is critical – but it is not strategy. </li></ul><ul><li>More, better, faster is not a strategy. </li></ul><ul><li>This is not blueprinting the future. </li></ul><ul><li>Keep it simple, focused and extremely well communicated. </li></ul><ul><li>A plan for execution MUST be part of the strategic plan. </li></ul><ul><li>Alignment + support + measurement + tracking + reward / punishment </li></ul><ul><li>Contingency planning = probability & impact / trigger points </li></ul>
  35. 40. T HANK Y OU I f you have any questions at all please do not hesitate to send a note or call. My email address is: Also, you might find value in the ideas I share in my blog. You can sign up for it at: These slides and the workbook have already been uploaded to: