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© Operational Excellence Consulting
STRATEGIC PLANNING
Eight Steps To Implementation
© Operational Excellence Consulting. All rights reserved.
© Operational Excellence Consulting
LEARNING OBJECTIVES
2
Acquire knowledge on the
key concepts and principles
of strategic planning
Define the factors for
successful strategic
planning
Describe the strategic
planning process and the
key frameworks and tools
NOTE: This is a PARTIAL PREVIEW.
To download the complete presentation, please
visit: https://www.oeconsulting.com.sg
© Operational Excellence Consulting
CONTENTS
3
KEY CONCEPTS &
PRINCIPLES OF
STRATEGIC
PLANNING
01
STRATEGIC
PLANNING PROCESS
02
STRATEGIC
PLANNING BEST
PRACTICES
04
KEY STRATEGY
FRAMEWORKS &
TOOLS
03
© Operational Excellence Consulting
“
The essence of strategy is
choosing what not to do.”
MICHAEL E. PORTER
4
© Operational Excellence Consulting
© Operational Excellence Consulting. All rights reserved.
● Most strategic planning processes
are poorly conceptualized and
poorly executed
● Process is not creative; it is tactical
rather than strategic in nature
● The strategic plan rarely impacts
the day-to-day decisions in the
organization
5
THE REALITY OF MOST STRATEGIC
PLANNING PROCESSES
© Operational Excellence Consulting 6
ALTHOUGH STRATEGIC PLANNING IS A BASIC BUSINESS PRACTICE,
MANY ORGANIZATIONS ARE STRUGGLING TO MAKE IT WORK
Source: Gartner, 2016
Strategic planning is often a disappointment
to all involved. The objective sounds simple
enough: Define the organization’s strategy
and make resource allocation decisions to
pursue it. The problem is, the results often
fail to meet expectations.
Gartner, Inc.
“
”
© Operational Excellence Consulting
WHAT IS STRATEGIC PLANNING?
7
Forecasting the future?
A reorganization plan?
A visioning workshop?
Only for top management?
Yearly weekend retreat?
Long-range planning?
A budget exercise?
Management review?
© Operational Excellence Consulting 8
DEFINITION OF STRATEGIC PLANNING
STRATEGIC PLANNING
The process by which the guiding members of an
organization envision its future and develop the necessary
procedures and operations to achieve that future.
Source: Goodstein, Nolan & Pfeiffer, “Applied
Strategic Planning,” 1992
© Operational Excellence Consulting
STRATEGIC PLANNING – THE BIG PICTURE
9
Vision
(“Where are we going?”)
Mission
(“What are we doing to get there?”)
Core Values
(“What are our beliefs, principles and philosophy?”)
Current State
(“Where are we now?”)
© Operational Excellence Consulting
STRATEGY VS. STRATEGIC PLANNING
10
STRATEGY
§ Strategy defines the long-term
direction of the enterprise
§ It articulates what the enterprise
will do to compete and succeed in
its chosen markets or, for the
public sector, what the agency will
do to achieve its mission
§ Strategic planning defines how
the enterprise will realize its
strategic ambitions in the midterm
§ A well-done strategic plan turns
an enterprise strategy into a clear
roadmap of initiatives, actions and
investments required to execute
the strategy and meet business
goals
STRATEGIC PLANNING
Source: Gartner, 2016
© Operational Excellence Consulting
STRATEGIC PLANNING – THE IMPORTANCE OF FOCUSING ON
CUSTOMER EXPERIENCE
11
“Profitable growth is
priority number one; the
key question is, how do
we attract the customer of
the future?”
“Customers’
expectations of us are
changing; how do we
keep up?”
“Technology and our
customers’ adoption of it
is changing so quickly; we
need to know how it will
affect us in the future.”
© Operational Excellence Consulting 12
A STRATEGIC PLANNING PROCESS SHOULD PROVIDE THE CRITERIA
FOR MAKING DAY-TO-DAY ORGANIZATIONAL DECISIONS
All too often, strategic planning is seen as a
top-management exercise that has little or
nothing to do with the actual running of the
organization.
© Operational Excellence Consulting
STRATEGIC PLANNING NEEDS TO TAKE INTO CONSIDERATION
ECONOMIC CHALLENGES & BUSINESS RISKS
13
Vision
(“Where are we going?”)
Mission
(“What are we doing to get there?”)
Core Values
(“What are our beliefs, principles and philosophy?”)
Current State
(“Where are we now?”)
Economic
Challenges &
Business Risks
© Operational Excellence Consulting
4 ENVIRONMENTS SHOULD BE SCANNED ON A REGULAR BASIS
14
Internal
Competitive
Industry
Macro
© Operational Excellence Consulting
THE ORGANIZATIONAL CULTURE NEEDS TO BE UNDERSTOOD AND
CONFRONTED IN THE STRATEGIC PLANNING PROCESS
15
If the values scan identifies incongruous values in
segments of the organization, these need to be
addressed as soon as they are discovered, not
held until the final implementation phase.
© Operational Excellence Consulting 16
MAKE SURE THE PLANNING PROCESS IS CONTINUOUS & ITERATIVE
Source: McKinsey & Co., 2018
Messy, fast-changing strategic uncertainties
abound in today’s business environment. The
yearly planning cycle and the linear world of
three- to five-year plans are a poor fit with
these dynamic realities. Instead, you need a
rolling plan that you can update as needed.
McKinsey & Co.
“
”
© Operational Excellence Consulting
5 CHARACTERISTICS OF AN EFFECTIVE STRATEGIC PLAN
17
A Central Vision
Your strategic plan should
communicate to every
employee and
stakeholder the big
picture and the central
vision for the business.
Clear Values
Values impact everything
that companies do. Your
strategic plan should
clearly spell out what the
company’s values are to
encourage buy-in.
Long-term Thinking
Strategic plans should
prioritize outcomes and
objectives for the long-
term rather than focusing
on the present.
Accountability
While it may not be spelt
out in the strategic plan
itself, it is still important to
dictate who is responsible
for updating and
executing the plan.
Built-in Measurement
Whether you decide to
use KPIs, Balanced
Scorecard system, or
other metrics,
measurement and
analysis are vital for
evaluating the success of
the strategic plan.
© Operational Excellence Consulting
THE COMBINATION OF SYSTEMS THINKING & DESIGN THINKING
MINDSETS IS A POWERFUL APPROACH TO STRATEGIC BUSINESS
MODELING
18
Stakeholders
management
Requirements
engineering
Interaction of
components
Integration,
verification and
validation
SYSTEMS
THINKING
DESIGN
THINKING
Radical
collaboration
Interaction with the
user and usability
Radically new
products, services
and business
models
Conception
Understanding
the problem
Analysis of
customer needs
Problem solution
Ecosystem
design
Source: Lewrick et al., 2018
© Operational Excellence Consulting
THE 8-STEP STRATEGIC PLANNING PROCESS MODEL
19
1
2
3
4
5
6
7
8
Plan the
planning
process
Define shared
values and
mission
Analyze
the current
organizational
profile
Create an
inspiring
vision
Compare
current to
envisioned
organization
Develop
strategies,
objectives and
plans
Execute
Action Plans
Monitor results
and make
improvements
Strategic
Planning
Process
© Operational Excellence Consulting
STRATEGIC PLANNING PROCESS – STEP OVERVIEW (1 TO 4)
20
1 2 3 4
Plan the planning process
Define shared values and
mission
Analyze the current
organizational profile
Create an inspiring vision
1.1 Determine organization’s
readiness for strategic
planning
1.2 CEO commitment
1.3 Identify members of
planning team
1.4 Educate planning team and
organization
1.5 Involve other stakeholders
1.6 Set clear expectations
2.1 Conduct a values scan
2.2 Shape the organizational
culture
2.3 Formulate the
organization’s mission
statement
3.1 Analyze the macro
environment
3.2 Analyze the industry
environment
3.3 Analyze the competitive
environment
3.4 Analyze the internal
environment
4.1 Envision the organization’s
future state
4.2 Innovate strategic business
model
© Operational Excellence Consulting
STRATEGIC PLANNING PROCESS – STEP OVERVIEW (5 TO 8)
21
5 6 7 8
Compare current to
envisioned organization
Develop strategies,
objectives and plans
Execute Action Plans
Monitor results and make
improvements
5.1 Assess organizational
performance
5.2 Analyze the gap
6.1 Formulate strategies and
goals
6.2 Develop annual objectives
and plans
6.3 Cascade goals throughout
the organization
6.4 Develop and integrate
action plans
6.5 Develop contingency plans
7.1 Execute the action plans
7.2 Assign accountability
7.3. Acknowledge, recognize
and celebrate
8.1 Conduct weekly or monthly
self-review
8.2 Conduct quarterly or
biannual review
8.3 Conduct annual review
© Operational Excellence Consulting 22
● For Strategic Planning to be effective, it requires a considerable expenditure of time and
energy from the organization
● The planning team needs to devote time to the actual process; others who are not directly
involved needs to be kept informed; data will need to be collected and analyzed, etc.
● Is your organization is ready for this level of activity? If not, the most sophisticated
techniques employed in the planning process are doomed to fail.
● A variety of factors need to be considered in determining planning readiness. This include
the organization’s fiscal viability, the vitality of its products and services, its culture, how
thinly its resources are spread, etc.
STEP 1 – PLAN THE PLANNING PROCESS
Step 1.1 – Determine organizational readiness for strategic planning
© Operational Excellence Consulting
“
You’ve got to think about big
things while you are doing
small things, so that all the
small things go in the right
direction.”
ALVIN TOFFLER
23
Author and futurist
© Operational Excellence Consulting
STEP 2 – DEFINE SHARED VALUES & MISSION
24
● The development of the mission statement follows the definition of the organizational
shared values. The mission statement must be congruent with the desired organizational
values of the planning team developed during the values scan.
● Develop the organization’s mission statement. The primary questions to address are:
● Why should the organization exist?
● What function should the organization perform? (What products or services should it
offer?)
● For whom should the organization perform this function?
● How should the organization go about fulfilling this function?
(see the next slide)
Step 2.3 – Formulate the organization’s mission statement
© Operational Excellence Consulting
FOUR BASIC ELEMENTS OF THE ORGANIZATIONAL MISSION
25
WHAT?
(Customers’ Needs,
Products or Services)
WHO?
(Customer or Client
Groups)
HOW?
(Activities, Technologies,
Methods of Sale)
WHY?
© Operational Excellence Consulting
THE VRIO FRAMEWORK IS A USEFUL INTERNAL ANALYSIS TOOL TO
DISCOVER SOURCES FOR SUSTAINABLE COMPETITIVE ADVANTAGE
26
VRIO Framework
Value Rarity Imitability Organization
V O
I
R
“Is the firm able to exploit
an opportunity or
neutralize an external
threat with the
resource/capability?”
“Is control of the
resource/capability in the
hands of a relative few?”
“Is it difficult to imitate,
and will there be
significant cost
disadvantage to a firm
trying to obtain, develop,
or duplicate the
resource/capability?”
“Is the firm organized,
ready, and able to exploit
the resource/capability?"
"Is the firm organized to
capture value?”
© Operational Excellence Consulting
PESTLE ANALYSIS EXAMINES THE EFFECT THAT EVENTS OR MACRO
INFLUENCES MAY HAVE ON THE PERFORMANCE OF A BUSINESS
27
P E S T L E
Political Economic Social Technological Legal Environmental
§ Government
policy
§ Political stability
§ Trade policy and
restrictions
§ Corruption
§ Fiscal policy
§ Tax policy
§ Labor laws
§ Economic growth
§ Inflation
§ Exchange rates
§ Interest rates
§ Inflation rates
§ Disposable
income
§ Unemployment
rates
§ Population growth
rate
§ Demographics
§ Age distribution
§ Career attitudes
§ Safety emphasis
§ Health
consciousness
§ Lifestyle attitudes
§ Cultural barriers
§ Technology
incentives
§ Level of
innovation
§ Automation
§ R&D activity
§ Technological
change
§ Technological
awareness
§ Discrimination
laws
§ Antitrust laws
§ Employment laws
§ Consumer
protection laws
§ Copyright and
patent laws
§ Health and safety
laws
§ Environmental
policies
§ Climate change
§ Pollution and
green house gas
emissions levels
§ Increased focus
on sustainability
§ Pressures from
NGO’s
PESTLE Analysis
© Operational Excellence Consulting
EXAMPLE – PORTER’S FIVE FORCES ANALYSIS FOR A NATIONAL
RAILWAY COMPANY
28
Porter’s Five Forces Analysis
Source: Based on van Assen et al., 2009
1. New Entrants
§ New local railway
companies on profit
segments
2. Substitutes
§ Road transportation
§ Water freight
§ Air freight
5. Existing competitors
3. Buyers
§ Interest group pressure
4. Suppliers
§ Higher fuel prices
§ Increased labor costs
© Operational Excellence Consulting
THE BCG MATRIX CAN HELP TO IDENTIFY THE PROFIT & GROWTH
POTENTIAL OF EACH BUSINESS UNIT AS A COMPANY
29
The BCG Growth/Share Matrix
Market
Growth
Divest
Market Share
Milk
Analyze Invest
High
Low
Small Large
?
Source: Adapted from BCG
© Operational Excellence Consulting
THE MCKINSEY-GE MATRIX CAN BE USED TO IDENTIFY A POTENTIAL
STRATEGIC DIRECTION FOR A PORTFOLIO OF BUSINESSES
30
Source: Adapted from McKinsey/GE
McKinsey-GE Matrix
Low Medium High
Low
Medium
High
Market
Attractiveness
Business Unit Strength
Build
Hold
Manage
Grow
Build Selectively
Protect
Build Selectively
Limited Expansion
Harvest
© Operational Excellence Consulting
THE ANSOFF GROWTH MATRIX IDENTIFIES FOUR GENERIC
COMPETITIVE STRATEGIES
31
Market
Market Penetration
Sell more of the same products and
services in existing markets. This
growth vector indicates growth
through increase of market share for
the present product-markets.
Product
Product Development
Sell new products and services into
existing markets. This growth vector
means growth by developing new
products to replace or complement
existing products.
Market Development
Sell more of the same products and
services in new markets.
Diversification
Sell new products and services into
new markets.
New
Existing
Existing New
Ansoff’s Matrix
© Operational Excellence Consulting
THE BUINSESS MODEL CANVAS IS A TOOL TO ALIGN ACTIVITIES TO
CREATE VALUE FOR CUSTOMERS
32
KP KA VP CR CS
KR CH
C$ R$
Business Model Canvas
Source: Adapted from Strategyzer
© Operational Excellence Consulting
THE 7-S FRAMEWORK CAN BEST BE USED FOR ASSESSING THE
IMPACT OF THE PROPOSED STRATEGY OF THE ORGANIZATION
Staff Skills Style
Shared
Values
Systems Structure Strategy
Strategy
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Structure
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Systems
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Shared
Values
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Style
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Skills
- - - - -
- - - - -
Staff
Example: Sammy’s
supermarket chain
Sammy’s is moving away
from its traditional middle-
of-the-road retail model
towards an upscale, fresh,
full-service, convenience-
oriented grocery and fresh
market. An initial decision
to hire specialists may
have consequences
reaching far beyond the
scope of the strategy at it
was proposed.
Need for specialists:
e.g. butcher, bread,
baker, food display
specialists
Potential conflict:
(older) specialist vs.
(younger) temporary
employees
Source: Adapted from van Assen et al., 2009
© Operational Excellence Consulting
STRATEGIC PLANNING BEST PRACTICES
34
Leadership
Commitment
The strategic planning
process should be driven
by the organization’s senior
executives, not driven by a
leader or the head of the
planning department.
Involve the Right
People
The key strategy
conversation should take
place among corporate
decision makers, business
unit leaders, and people
with expertise essential to
the discussion.
Strategic Thinking
To create a strategic plan,
your team needs time to
think big. Do whatever it
takes to allow that time for
big-picture thinking
(including taking your team
off-site).
Use a Facilitator
Hire an outside facilitator,
someone who doesn’t have
any stake in your success.
Encourage active
participation, but don’t let
any one person dominate
the session.
© Operational Excellence Consulting
STRATEGIC PLANNING BEST PRACTICES
35
Fact-based
Management
Gather data to analyze the
internal and external
environment. Fact-based
decision-making helps to
identify opportunities and
areas of improvement.
Create an Inspiring
Vision
Creating a vision that
inspires will activate the
organization. Teams and
individuals will be motivated
and energized to make the
transformation.
Environmental
Monitoring
Environmental monitoring
should be performed not
just in the situational
analysis stage but regularly
throughout the strategic
planning cycle.
Plans Must Be
Actionable
To have any chance at
implementation, the plan
must clearly articulate
goals, action steps,
responsibilities,
accountability, and specific
deadlines.
© Operational Excellence Consulting
Operational Excellence Consulting is a management
training and consulting firm that assists organizations
in improving business performance and effectiveness.
Based in Singapore, the firm’s mission is to create
business value for organizations through innovative
design and operational excellence management
training and consulting solutions. For more
information, please visit www.oeconsulting.com.sg
ABOUT OPERATIONAL EXCELLENCE CONSULTING
36

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Strategic Planning: Eight Steps To Implementation

  • 1. © Operational Excellence Consulting STRATEGIC PLANNING Eight Steps To Implementation © Operational Excellence Consulting. All rights reserved.
  • 2. © Operational Excellence Consulting LEARNING OBJECTIVES 2 Acquire knowledge on the key concepts and principles of strategic planning Define the factors for successful strategic planning Describe the strategic planning process and the key frameworks and tools NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg
  • 3. © Operational Excellence Consulting CONTENTS 3 KEY CONCEPTS & PRINCIPLES OF STRATEGIC PLANNING 01 STRATEGIC PLANNING PROCESS 02 STRATEGIC PLANNING BEST PRACTICES 04 KEY STRATEGY FRAMEWORKS & TOOLS 03
  • 4. © Operational Excellence Consulting “ The essence of strategy is choosing what not to do.” MICHAEL E. PORTER 4
  • 5. © Operational Excellence Consulting © Operational Excellence Consulting. All rights reserved. ● Most strategic planning processes are poorly conceptualized and poorly executed ● Process is not creative; it is tactical rather than strategic in nature ● The strategic plan rarely impacts the day-to-day decisions in the organization 5 THE REALITY OF MOST STRATEGIC PLANNING PROCESSES
  • 6. © Operational Excellence Consulting 6 ALTHOUGH STRATEGIC PLANNING IS A BASIC BUSINESS PRACTICE, MANY ORGANIZATIONS ARE STRUGGLING TO MAKE IT WORK Source: Gartner, 2016 Strategic planning is often a disappointment to all involved. The objective sounds simple enough: Define the organization’s strategy and make resource allocation decisions to pursue it. The problem is, the results often fail to meet expectations. Gartner, Inc. “ ”
  • 7. © Operational Excellence Consulting WHAT IS STRATEGIC PLANNING? 7 Forecasting the future? A reorganization plan? A visioning workshop? Only for top management? Yearly weekend retreat? Long-range planning? A budget exercise? Management review?
  • 8. © Operational Excellence Consulting 8 DEFINITION OF STRATEGIC PLANNING STRATEGIC PLANNING The process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future. Source: Goodstein, Nolan & Pfeiffer, “Applied Strategic Planning,” 1992
  • 9. © Operational Excellence Consulting STRATEGIC PLANNING – THE BIG PICTURE 9 Vision (“Where are we going?”) Mission (“What are we doing to get there?”) Core Values (“What are our beliefs, principles and philosophy?”) Current State (“Where are we now?”)
  • 10. © Operational Excellence Consulting STRATEGY VS. STRATEGIC PLANNING 10 STRATEGY § Strategy defines the long-term direction of the enterprise § It articulates what the enterprise will do to compete and succeed in its chosen markets or, for the public sector, what the agency will do to achieve its mission § Strategic planning defines how the enterprise will realize its strategic ambitions in the midterm § A well-done strategic plan turns an enterprise strategy into a clear roadmap of initiatives, actions and investments required to execute the strategy and meet business goals STRATEGIC PLANNING Source: Gartner, 2016
  • 11. © Operational Excellence Consulting STRATEGIC PLANNING – THE IMPORTANCE OF FOCUSING ON CUSTOMER EXPERIENCE 11 “Profitable growth is priority number one; the key question is, how do we attract the customer of the future?” “Customers’ expectations of us are changing; how do we keep up?” “Technology and our customers’ adoption of it is changing so quickly; we need to know how it will affect us in the future.”
  • 12. © Operational Excellence Consulting 12 A STRATEGIC PLANNING PROCESS SHOULD PROVIDE THE CRITERIA FOR MAKING DAY-TO-DAY ORGANIZATIONAL DECISIONS All too often, strategic planning is seen as a top-management exercise that has little or nothing to do with the actual running of the organization.
  • 13. © Operational Excellence Consulting STRATEGIC PLANNING NEEDS TO TAKE INTO CONSIDERATION ECONOMIC CHALLENGES & BUSINESS RISKS 13 Vision (“Where are we going?”) Mission (“What are we doing to get there?”) Core Values (“What are our beliefs, principles and philosophy?”) Current State (“Where are we now?”) Economic Challenges & Business Risks
  • 14. © Operational Excellence Consulting 4 ENVIRONMENTS SHOULD BE SCANNED ON A REGULAR BASIS 14 Internal Competitive Industry Macro
  • 15. © Operational Excellence Consulting THE ORGANIZATIONAL CULTURE NEEDS TO BE UNDERSTOOD AND CONFRONTED IN THE STRATEGIC PLANNING PROCESS 15 If the values scan identifies incongruous values in segments of the organization, these need to be addressed as soon as they are discovered, not held until the final implementation phase.
  • 16. © Operational Excellence Consulting 16 MAKE SURE THE PLANNING PROCESS IS CONTINUOUS & ITERATIVE Source: McKinsey & Co., 2018 Messy, fast-changing strategic uncertainties abound in today’s business environment. The yearly planning cycle and the linear world of three- to five-year plans are a poor fit with these dynamic realities. Instead, you need a rolling plan that you can update as needed. McKinsey & Co. “ ”
  • 17. © Operational Excellence Consulting 5 CHARACTERISTICS OF AN EFFECTIVE STRATEGIC PLAN 17 A Central Vision Your strategic plan should communicate to every employee and stakeholder the big picture and the central vision for the business. Clear Values Values impact everything that companies do. Your strategic plan should clearly spell out what the company’s values are to encourage buy-in. Long-term Thinking Strategic plans should prioritize outcomes and objectives for the long- term rather than focusing on the present. Accountability While it may not be spelt out in the strategic plan itself, it is still important to dictate who is responsible for updating and executing the plan. Built-in Measurement Whether you decide to use KPIs, Balanced Scorecard system, or other metrics, measurement and analysis are vital for evaluating the success of the strategic plan.
  • 18. © Operational Excellence Consulting THE COMBINATION OF SYSTEMS THINKING & DESIGN THINKING MINDSETS IS A POWERFUL APPROACH TO STRATEGIC BUSINESS MODELING 18 Stakeholders management Requirements engineering Interaction of components Integration, verification and validation SYSTEMS THINKING DESIGN THINKING Radical collaboration Interaction with the user and usability Radically new products, services and business models Conception Understanding the problem Analysis of customer needs Problem solution Ecosystem design Source: Lewrick et al., 2018
  • 19. © Operational Excellence Consulting THE 8-STEP STRATEGIC PLANNING PROCESS MODEL 19 1 2 3 4 5 6 7 8 Plan the planning process Define shared values and mission Analyze the current organizational profile Create an inspiring vision Compare current to envisioned organization Develop strategies, objectives and plans Execute Action Plans Monitor results and make improvements Strategic Planning Process
  • 20. © Operational Excellence Consulting STRATEGIC PLANNING PROCESS – STEP OVERVIEW (1 TO 4) 20 1 2 3 4 Plan the planning process Define shared values and mission Analyze the current organizational profile Create an inspiring vision 1.1 Determine organization’s readiness for strategic planning 1.2 CEO commitment 1.3 Identify members of planning team 1.4 Educate planning team and organization 1.5 Involve other stakeholders 1.6 Set clear expectations 2.1 Conduct a values scan 2.2 Shape the organizational culture 2.3 Formulate the organization’s mission statement 3.1 Analyze the macro environment 3.2 Analyze the industry environment 3.3 Analyze the competitive environment 3.4 Analyze the internal environment 4.1 Envision the organization’s future state 4.2 Innovate strategic business model
  • 21. © Operational Excellence Consulting STRATEGIC PLANNING PROCESS – STEP OVERVIEW (5 TO 8) 21 5 6 7 8 Compare current to envisioned organization Develop strategies, objectives and plans Execute Action Plans Monitor results and make improvements 5.1 Assess organizational performance 5.2 Analyze the gap 6.1 Formulate strategies and goals 6.2 Develop annual objectives and plans 6.3 Cascade goals throughout the organization 6.4 Develop and integrate action plans 6.5 Develop contingency plans 7.1 Execute the action plans 7.2 Assign accountability 7.3. Acknowledge, recognize and celebrate 8.1 Conduct weekly or monthly self-review 8.2 Conduct quarterly or biannual review 8.3 Conduct annual review
  • 22. © Operational Excellence Consulting 22 ● For Strategic Planning to be effective, it requires a considerable expenditure of time and energy from the organization ● The planning team needs to devote time to the actual process; others who are not directly involved needs to be kept informed; data will need to be collected and analyzed, etc. ● Is your organization is ready for this level of activity? If not, the most sophisticated techniques employed in the planning process are doomed to fail. ● A variety of factors need to be considered in determining planning readiness. This include the organization’s fiscal viability, the vitality of its products and services, its culture, how thinly its resources are spread, etc. STEP 1 – PLAN THE PLANNING PROCESS Step 1.1 – Determine organizational readiness for strategic planning
  • 23. © Operational Excellence Consulting “ You’ve got to think about big things while you are doing small things, so that all the small things go in the right direction.” ALVIN TOFFLER 23 Author and futurist
  • 24. © Operational Excellence Consulting STEP 2 – DEFINE SHARED VALUES & MISSION 24 ● The development of the mission statement follows the definition of the organizational shared values. The mission statement must be congruent with the desired organizational values of the planning team developed during the values scan. ● Develop the organization’s mission statement. The primary questions to address are: ● Why should the organization exist? ● What function should the organization perform? (What products or services should it offer?) ● For whom should the organization perform this function? ● How should the organization go about fulfilling this function? (see the next slide) Step 2.3 – Formulate the organization’s mission statement
  • 25. © Operational Excellence Consulting FOUR BASIC ELEMENTS OF THE ORGANIZATIONAL MISSION 25 WHAT? (Customers’ Needs, Products or Services) WHO? (Customer or Client Groups) HOW? (Activities, Technologies, Methods of Sale) WHY?
  • 26. © Operational Excellence Consulting THE VRIO FRAMEWORK IS A USEFUL INTERNAL ANALYSIS TOOL TO DISCOVER SOURCES FOR SUSTAINABLE COMPETITIVE ADVANTAGE 26 VRIO Framework Value Rarity Imitability Organization V O I R “Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?” “Is control of the resource/capability in the hands of a relative few?” “Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?” “Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value?”
  • 27. © Operational Excellence Consulting PESTLE ANALYSIS EXAMINES THE EFFECT THAT EVENTS OR MACRO INFLUENCES MAY HAVE ON THE PERFORMANCE OF A BUSINESS 27 P E S T L E Political Economic Social Technological Legal Environmental § Government policy § Political stability § Trade policy and restrictions § Corruption § Fiscal policy § Tax policy § Labor laws § Economic growth § Inflation § Exchange rates § Interest rates § Inflation rates § Disposable income § Unemployment rates § Population growth rate § Demographics § Age distribution § Career attitudes § Safety emphasis § Health consciousness § Lifestyle attitudes § Cultural barriers § Technology incentives § Level of innovation § Automation § R&D activity § Technological change § Technological awareness § Discrimination laws § Antitrust laws § Employment laws § Consumer protection laws § Copyright and patent laws § Health and safety laws § Environmental policies § Climate change § Pollution and green house gas emissions levels § Increased focus on sustainability § Pressures from NGO’s PESTLE Analysis
  • 28. © Operational Excellence Consulting EXAMPLE – PORTER’S FIVE FORCES ANALYSIS FOR A NATIONAL RAILWAY COMPANY 28 Porter’s Five Forces Analysis Source: Based on van Assen et al., 2009 1. New Entrants § New local railway companies on profit segments 2. Substitutes § Road transportation § Water freight § Air freight 5. Existing competitors 3. Buyers § Interest group pressure 4. Suppliers § Higher fuel prices § Increased labor costs
  • 29. © Operational Excellence Consulting THE BCG MATRIX CAN HELP TO IDENTIFY THE PROFIT & GROWTH POTENTIAL OF EACH BUSINESS UNIT AS A COMPANY 29 The BCG Growth/Share Matrix Market Growth Divest Market Share Milk Analyze Invest High Low Small Large ? Source: Adapted from BCG
  • 30. © Operational Excellence Consulting THE MCKINSEY-GE MATRIX CAN BE USED TO IDENTIFY A POTENTIAL STRATEGIC DIRECTION FOR A PORTFOLIO OF BUSINESSES 30 Source: Adapted from McKinsey/GE McKinsey-GE Matrix Low Medium High Low Medium High Market Attractiveness Business Unit Strength Build Hold Manage Grow Build Selectively Protect Build Selectively Limited Expansion Harvest
  • 31. © Operational Excellence Consulting THE ANSOFF GROWTH MATRIX IDENTIFIES FOUR GENERIC COMPETITIVE STRATEGIES 31 Market Market Penetration Sell more of the same products and services in existing markets. This growth vector indicates growth through increase of market share for the present product-markets. Product Product Development Sell new products and services into existing markets. This growth vector means growth by developing new products to replace or complement existing products. Market Development Sell more of the same products and services in new markets. Diversification Sell new products and services into new markets. New Existing Existing New Ansoff’s Matrix
  • 32. © Operational Excellence Consulting THE BUINSESS MODEL CANVAS IS A TOOL TO ALIGN ACTIVITIES TO CREATE VALUE FOR CUSTOMERS 32 KP KA VP CR CS KR CH C$ R$ Business Model Canvas Source: Adapted from Strategyzer
  • 33. © Operational Excellence Consulting THE 7-S FRAMEWORK CAN BEST BE USED FOR ASSESSING THE IMPACT OF THE PROPOSED STRATEGY OF THE ORGANIZATION Staff Skills Style Shared Values Systems Structure Strategy Strategy - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Structure - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Systems - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Shared Values - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Style - - - - - - - - - - - - - - - - - - - - Skills - - - - - - - - - - Staff Example: Sammy’s supermarket chain Sammy’s is moving away from its traditional middle- of-the-road retail model towards an upscale, fresh, full-service, convenience- oriented grocery and fresh market. An initial decision to hire specialists may have consequences reaching far beyond the scope of the strategy at it was proposed. Need for specialists: e.g. butcher, bread, baker, food display specialists Potential conflict: (older) specialist vs. (younger) temporary employees Source: Adapted from van Assen et al., 2009
  • 34. © Operational Excellence Consulting STRATEGIC PLANNING BEST PRACTICES 34 Leadership Commitment The strategic planning process should be driven by the organization’s senior executives, not driven by a leader or the head of the planning department. Involve the Right People The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. Strategic Thinking To create a strategic plan, your team needs time to think big. Do whatever it takes to allow that time for big-picture thinking (including taking your team off-site). Use a Facilitator Hire an outside facilitator, someone who doesn’t have any stake in your success. Encourage active participation, but don’t let any one person dominate the session.
  • 35. © Operational Excellence Consulting STRATEGIC PLANNING BEST PRACTICES 35 Fact-based Management Gather data to analyze the internal and external environment. Fact-based decision-making helps to identify opportunities and areas of improvement. Create an Inspiring Vision Creating a vision that inspires will activate the organization. Teams and individuals will be motivated and energized to make the transformation. Environmental Monitoring Environmental monitoring should be performed not just in the situational analysis stage but regularly throughout the strategic planning cycle. Plans Must Be Actionable To have any chance at implementation, the plan must clearly articulate goals, action steps, responsibilities, accountability, and specific deadlines.
  • 36. © Operational Excellence Consulting Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg ABOUT OPERATIONAL EXCELLENCE CONSULTING 36