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Strategic planning

This document provides an overview of the strategic planning process and the nine steps involved in developing a balanced scorecard system. It discusses each of the nine steps in the process, which are: 1) Assessment, 2) Strategy, 3) Objectives, 4) Strategy Map, 5) Performance Measures, 6) Initiatives, 7) Performance Analysis, 8) Alignment, and 9) Evaluation. For each step, it outlines the key components and outputs. It emphasizes that strategic planning is both an art and a science, requiring strategic thinking as well as change management and communication. The nine steps are presented as an integrated process for developing a strategic management system to plan, execute, and measure strategy across an organization.

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Strategic Planning
Table of contents By Omar Abisaí Coronado Mondragón 2 The development Process: general overview The art and science of developing a strategic planning Engaging people Enabling steps Program launch The nine steps Assessment Strategy Objectives Strategy map Performance measures Strategic initiatives Enabling steps System rollout The nine steps Performance analysis Alignment Evaluation Sustaining and managing the planning process and balanced scorecard
The development process: general overview By Omar Abisaí Coronado Mondragón 3 Developing a scorecard and strategic planning system includes the following essential components: • Organization assessment • Strategy formulation and selection • Strategy communication • Budget formulation • Operating planning • Executing strategy through the operating plan • Measuring and analyzing results • Evaluation and incorporating learning into successive plans This process is captured in 9 steps.
The development process: general overview By Omar Abisaí Coronado Mondragón 4 External Analysis Internal Analysis Assess the Organization Formulate Strategy Communicate Strategy Formulate Budget Develop Operating Plan Execute Strategy and Measure Results • Vision • Mission • Core values • Policies and governance • Strategic goals • Business Strategy • Risks Vision, Mission, Values and Strategy plus: • Strategic objectives and Strategy map • Performance measures and targets • Strategic iniciatives • Change managmenet • Risk management • Department and Unit plans • Resource commitments • Operational measures and targets • Program, projects, activities and tasks • Performance analysis • Benchmarking • Implement change • Continuous improvement The following flow illustrates the major components of an integrated strategic planning and management system and how they works together.
The development process: general overview By Omar Abisaí Coronado Mondragón 5 The wheel emphasizes the connection among the steps and indicates a continuous process for completing them. Assessment Strategy Objtectives Strategy map Performance measures Initiatives Performance analysis Alignment Evaluation 1 2 3 4 56 7 8 9 Programm launch System rollout Financial Customers Organizational capacity Internal porcess Misson Vision
The development process: general overview By Omar Abisaí Coronado Mondragón 6 Relationship among the nine steps and the essentials components of strategic planning and management. Components Steps Assess the organization Program launch Step 1: Assessment Formulate strategy Step 2: Strategy Step 3: Objectives Communicate strategy Step 4: Strategy map Step 5: Performance measures Step 6: Strategic initiatives Scorecard rollout Formulate budget Scorecard rollout Develop operating plans Scorecard rollout Step 8: Alignment Execute strategy Measure results Analyse results Step 7: Performace analysis Step 9: Evaluation Apply learning Repeat steps 1 through 8 as required
The development process: general overview By Omar Abisaí Coronado Mondragón 7 The following example shows an organizational strategic plan synopsis. Reduce cost Increase profitFinancial Customers Internal process Organizational capacity Increase revenue Improve customer experience Increase awareness as industry leader Improve internal efficiency Increase Acquisitions Improve product and service offerings Increase consulting knowledge Increase employee expertise Optimize technology Optimize human capital Improve throught leadership - Profit - Operating cost - Revenue - Customer experience survey score - % of customers with completed CK charter - References in media - Efficiency index - EBIT from acquisitions - % of transactions in CRM - % new products and services as % total sales - % employee development plans - % systems automated - Articles published - 15% per year - 15 M this year - 5% per year - 5% improvement in next period - 77% per period - 15 new references - 65% per period - 7% per year - 70% this year - 11% this year - 45% next period - 69% this year - 90 this year - Implement new financial systems - Marketing campaign in new markets - Develop customer knowledge CK charter - Establish acquisition integration team - Establish BPR team - Formalize new product development cycle - Redisign employee certification process - CRM system training - Formalize research expertise + Integrity + Commitment to Excellence + Customer Focused + Honesty + Teamwork Strategic objectives and Strategy map Measures Targets Initiatives Strategic theme Mission Vision + International growth + Operational excellence + Market leadership Efficiently delivery the highest standar of service providing energy products and expertise to customers Be a world-revolutionizing provider of energy products Strategic Result Increase in size and shareholder value Processes are executed in time and cost-effective manner Worldwide recognition for thought leadership and energy service expertise
Engaging people By Omar Abisaí Coronado Mondragón 8 The process of building and implementing a Balanced Scorecard system is a change initiative that affects existing organization systems, technology and people. Change management is an important component of developing the scorecard system. Effective change management involves: • Understanding and managing the impacts on affected people. • Involving the right stakeholders in planning for and implementing change. • Communicating in two-way dialogue with individuals and groups. • Supporting stakeholders with knowledge, capacity-building and reinforcement.
Engaging people By Omar Abisaí Coronado Mondragón 9 The key change management requirements by engaging a diverse group in the planning process to maximize buy-in and create a more actionable strategic plan. Instead of being pawns who need to be “change managed” employees are actively involved in the planning process and become ambassadors for the new directions. The following are key components of change: • Vision • Actionable strategy • Capabilities • Incentives (motivation and engagement) • Resources • Urgency
Engaging people By Omar Abisaí Coronado Mondragón 10 The following figure illustrates the components of change management and how a missing component can lead to confusion, false starts, anxiety, restraint and resistance, frustration or apathy. Vision Vision Lacking Vision Vision Vision Vision Vision Actionable strategy Actionable strategy Actionable strategy Lacking Actionable strategy Actionable strategy Actionable strategy Actionable strategy Capabilities Capabilities Capabilities Capabilities Lacking Capabilities Capabilities Capabilities Incentives Incentives Incentives Incentives Incentives Laking Incentives Incentives Resources Resources Resources Resources Resources Resources Lacking Resources Urgency Urgency Urgency Urgency Urgency Urgency Urgency Lacking Succes Confusion False starts Anxiety Restraint and resistance Frustration Apathy
The art and science of developing a strategic planning By Omar Abisaí Coronado Mondragón 11 Building an implementing a strategic planning and scorecard is part art and part science. The art part is the human creativity and innovation enabled by management system that´s focused on the most important things. The art par also includes communication and change management. The science part is the strategic thinking that develops and connects the necessary elements into an integrated system for planning and managing more strategically. The science part also includes the discipline applied to developing a scorecard system. There is 14 pieces called the strategic elements that comprise the strategic planning and scorecard system. Mission Vision Core values Customer needs Customer value proposition Internal and external challenges and enablers Perpectives Strategic themes and results Strategic objetives Strategy maps Performance measures, targets and thresholds Strategic initiatives Business and support unit scorecard (Tier 2) Individual and team scorecards (Tier 3)
The art and science of developing a strategic planning By Omar Abisaí Coronado Mondragón 12 Combining the 14 elements into a scorecard planning and management system, and using that to create a high-performance organization, is like building a house: the right pieces have to come together at the right moment and the right craftspeople have to assemble the pieces correctly. • High level strategic elements form the roof • Strategic results are the lintel elements supporting the roof • Strategic themes are load-bearing walls supporting the lintel • Perspectives are represented by four floors • Critical success enablers form the foundation Strategic results Engaged people – Interactive communications – Core values Mission Vision Customer value Theme: Operationalexcellence Theme: Strategicpartnering Theme: Serviceexcellence Theme: Culturechange Financial Customer Internal process Organizational capacity Perspectives
The art and science of developing a strategic planning By Omar Abisaí Coronado Mondragón 13 The strategic framework cascades throughout the organization to create alignment among people, processes and systems to connect to the high-level strategy. The are three Tiers: • Tier 1: represents the full organization; the scorecard system at this level includes mission, vision, enablers and challenges, customer value proposition, strategic themes and results, strategy map, measures and strategic initiatives for the whole organization. • Tier 2: represents business and units; the system includes strategic objectives, strategy map, measures and initiatives for each unit. • Tier 3: consist of individual employees or teams; the system includes personal objectives, measures and activities for each position. Alignment (the process is called cascading) comes from linking the components in order to communicate how value is created for customers, at the enterprise level and later, at the business units and individual employee levels.
The nine steps By Omar Abisaí Coronado Mondragón 14 The following figure shows the relationship between the 9 steps and the enabling steps. Executive sponsorship, Resourcing and program planning Program Launch Conduct organizational assessment and SWOT Create or re-evaluate strategic elements (Vision, misión, customer value, etc.) 1 Assessment Develop high-level business strategies from step 1 strategic elements 2 Strategy 3 Objectives Develop strategic objectives for business strategies developed in Step 2 6 Strategic Iniciatives 4 Strategy Map Create strategy maps for business strategies and for the Enterprise overall strategy 5 Performance measures Develop outcome and ouput performance measures for the strategic objectives on the Enterprise strategy map Identify critical projects to improve performance Develop performance measures for initiatives (Scope, Schedule, Resources, etc.) Manage the project portfolio System rollout Strategic manafgement system rollout Budget formulation and anual planning Collect, report and present performance information to decisión makers 7 Performance analysis Cascade organization-wide strategy to business and support units Cascade strategy to teams and individuals 8 Aligment Make corrections to strategy based on actual performance 9 Evaluation
Enabling steps: Program launch By Omar Abisaí Coronado Mondragón 15 In program launch, the executive management team plans the overall program. The role of senior leaders is to stay engaged during this transformative initiative and to lead by example. The quality of leadership in this period determines the success and sustainability of the scorecard system over the long term. The Program launch includes five components: • Create sponsorship and engaged leadership. • Resource the effort. • Plan the program. • Facilitate development. • Launch the change management and communication process.
The nine Steps: Assessment By Omar Abisaí Coronado Mondragón 16 Assessment is a structured way to exploring forces, trends, opportunities and threats in the external and internal environment, it conducts to review how the organization´s products and services meet the customer and other stakeholders needs. The assessment step starts with existing elements, building on what´s currently in place. This step must be owned by the senior leadership team and starts the process of engagement throughout the strategy development process. There are three components in this step: • Review existing high-level strategic elements (mission, vision, core values, customer value proposition and plans) for adequacy. • Conduct an environmental scan and market research. • Develop or re-validate high-levels strategic elements. The Assessment step outputs are the following: • Strategy gap matrix • PESTLE and SWOT analysis • Mission, Vision and Core Values statements • Strategic Management Maturity Model (SMMM) assessment • Culture assessment • Customer and stakeholder identification and analysis
The nine Steps: Strategy By Omar Abisaí Coronado Mondragón 17 It is necessary to define first the “strategy” concept: Strategy is the positioning choices (the path) and actions (the plan) to move the organization from its current state to some desirable future state. Strategy translates the mission and vision into programs, products, projects, services and activities than can be acted upon, monitored, measured and evaluated for effectiveness. The elements developed in the strategy step are formed through strategic thinking. There are many ways of getting from a current state to a desirable future state, so making choices is the essence. A strategy is developed and executed to lead to desired strategic results. A strategic result describes something that must be achieved to be successful. This step includes six components, but not every organization will use them all: • Conduct scenario planning. • Develop or change the customer value proposition. • Develop or change strategy profile. • Choose balanced scorecard perspectives. • Choose high-level strategic themes and results. • Incorporate new change management planning into strategy development.
The nine Steps: Strategy By Omar Abisaí Coronado Mondragón 18 The Strategy step outputs are the following: • Customer and stakeholder needs • Customer value proposition described • Plausible scenarios developed • Strategic risk identified • Risk management plan developed • Perspectives selected • High-level strategic themes and strategic results developed • Strategy profile developed • Change management plan tied to strategic development
The nine Steps: Objectives By Omar Abisaí Coronado Mondragón 19 The strategic objectives make strategy actionable. They are described, documented, measured and made actionable through initiatives and operational process. At the corporate or enterprise level, strategic objectives identify the key continuous improvement activities that are necessary to be successful and accomplish the vision and achieve the mission. At the business and support units level, they identify the activities necessary to achieve departmental missions and support the enterprise and hep define strategy of the unit. At the individual employee level, strategic objectives identify personal activities that create value and support the department´s mission. The strategic objectives steps includes four components: • Develop or change strategic themes. • Create enterprise-wide strategic objectives. • Describe and document the strategic objectives. • Identify objective owners, their roles and responsibilities. When strategic objectives are poorly developed, performance measures track the wrong outcomes, strategic initiatives do not close strategic performance gaps and desired alignment is not achieved through cascading and communicating strategy.
The nine Steps: Objectives By Omar Abisaí Coronado Mondragón 20 The Objective step outputs are the following: • Strategic theme with strategic objectives • Enterprise-wide strategic objectives • Strategic objective description • Strategic objectives placed in perspectives
The nine Steps: Strategy map By Omar Abisaí Coronado Mondragón 21 A Strategy map is a visual representation of how value is created for customers, owners and other stakeholders. It is formed by linking objectives in cause-effect relationship to show how strategic results are achieved. The strategy map helps: • Communicate strategic intent with clarity • Focus on the most important things • Align vision and mission to culture • Show logical connections between work and performance The strategy map includes four process components: • Understand strategy mapping logic • Build the enterprise-wide strategy map • Test the enterprise wide strategy map • Update objective description The Strategy map step outputs are the following: • Strategy theme maps with theme objectives • Tier 1 (Organization-wide) strategy map with strategic objectives • Objective description (revised)
The nine Steps: Performance measures By Omar Abisaí Coronado Mondragón 22 Performance measures are the indicators of progress toward a desirable outcome. There is two types of measures: strategic and operational. The performance measures steps includes sic components: • Describe the intended results • Understand alternative measures • Select the right measurements for each objective • Define composite indices as needed • Set targets and thresholds • Define and document selected performance measures The Performance measures step outputs are the following: • Indented results for each strategic objective • Performance measures targets • Performance measures for each strategic objective • Performance measurement data definition • Performance measure thresholds • Baseline data (where available)
The nine Steps: Initiatives By Omar Abisaí Coronado Mondragón 23 Strategic initiatives reduce performance gaps in strategic objectives and help achieve strategic results. An objective can have two or more initiatives, and a one initiative can impact two or more objectives. Six process components are used in the following order: • Identify and categorize potential initiatives • Develop selection criteria • Evaluate and select initiatives • Prioritize initiatives • Fund and manage portfolio of initiatives • Execute Candidate initiatives Prioritized funded initiatives Select Categorize Evaluate Identify Prioritize
The nine Steps: Initiatives By Omar Abisaí Coronado Mondragón 24 The Initiatives step outputs are the following: • Potential strategic initiatives • Prioritization framework • Selection criteria • List of ranked initiatives • Initiative documentation • Project plans • Project execution reports
Enabling steps: System rollout By Omar Abisaí Coronado Mondragón 25 Scorecard rollout is an enabling step that starts the process of aligning the organization around strategy. Its goal is to create more internal “fans” and build the coalition of employees that starts thinking more strategically and using the system to better inform decision making. This step includes four components: • Write the strategic plan. • Celebrate scorecard system development process. • Update the financial and operational planning with strategic information. • Maintain a strategy focus and culture of continuous improvement. Capital plan Programs Projects Services Operations support Operating plan Strategic plan Equipment Facilities Technology Inventory Budget according to Strategic planning and Scorecard Strategic initiatives
Enabling steps: System rollout By Omar Abisaí Coronado Mondragón 26 Align budget and operations with strategy Strategic results Mission Vision Customer value Theme: Operationalexcellence Theme: Strategicpartnering Theme: Serviceexcellence Theme: Culturechange Financial Customer Internal process Organizational capacity Strategic initiatives aligned by perspective ERP project Rewards program Kanban project Direct $ Cross training Indirect $ Project 1 Program A Direct $ Indirect $ Project 2 Program B Direct $ Indirect $ Project 3 Program C Direct $ Indirect $ Project 4 Program D Operational activities aligned by strategic theme
The nine Steps: Performance analysis By Omar Abisaí Coronado Mondragón 27 Performance analysis transforms data into knowledge and understanding. Effective analysis helps people make better decisions that will drive improved strategic outcomes. The performance analysis step has four components: • Select the most appropriate automation tool • Collect and monitor performance • Analyze and draw conclusions • Improve performance Improve performance •Continuously review strategy •Identify and implement improvement actions Analyze and draw conlusions • Enable data-driven discussion around performance • Report and share information • Identify underperformance Collect and monitor performance • Monitor performance trends • Describe performance Turning data into information and knowledge
The nine Steps: Performance analysis By Omar Abisaí Coronado Mondragón 28 The Performance analysis step outputs are the following: • Software selection criteria • Organizational information needs defined around reporting requirements and data characteristics • Software system evaluated and one system selected and installed • Performance shape understood and interpreted using histogram, targets and thresholds • Performance charts created to monitor variation • Performance information collected • Underperformance identified • Process improvement actions identified • Performance improvement reports developed and shared
The nine Steps: Alignment By Omar Abisaí Coronado Mondragón 29 Alignment is when organizational structures, process and systems support the strategy of the organization. An organization is aligned when all employees understand what the organization is trying to accomplish, make decisions and take actions based on that strategy. Alignment is created when high-level strategy is cascaded first to business and support units and then to individual employees. The alignment process includes four components: • Select the cascading approach • Organize cascading teams • Align business and support units • Align teams and individuals with business and support units The Alignment step outputs are the following: • Tier 2 strategic and operational objectives, description and intended results • Tier 2 unit strategy maps (optional) • Tier 2 strategic and operational initiatives • Tier 2 change management and communication plan • Tier 3 personal objectives, measures, targets and initiatives
The nine Steps: Evaluation By Omar Abisaí Coronado Mondragón 30 Evaluation is an opportunity to review and refresh. This step evaluates how well the organization´s strategy accomplish desired results and how well the strategic management system improves communications, alignment and performance. The evaluation step includes two components: • Strategy effectiveness evaluation • System effectiveness evaluation The Evaluation step outputs are the following: • Audit plan • Balanced Scorecard gap assessment • Interview forms • Manager/employee surveys • Executive survey • Update strategic elements (Tier 1, Tier 2 and Tier 3) • Update communications plans and change management plan • System performance evaluation report • System performance action plan • Strategic Management Maturity Model (SMMM) review
Sustaining and managing the planning process and balanced scorecard By Omar Abisaí Coronado Mondragón 31 Sustaining a balanced scorecard involves structure, process and change. The structure creates a framework for assigning and reinforcing clear roles and responsibility for managing and updating strategy without making the process bureaucratic. The process involves the procedures and operations that impact the balanced scorecard, and how performance information impacts the management and decision making. The change is a cultural shift in the way the organization operates, transforming into a collaborative, high-trust environment where performance information drives continuous improvement. Sustaining and managing the planning process and balanced scorecard has three components: • Institutionalize the strategic thinking process • Change the agenda's management • Cultivate a culture of continuous improvement leading to high performance

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Strategic planning

  • 1.
  • 2.
    Table of contents ByOmar Abisaí Coronado Mondragón 2 The development Process: general overview The art and science of developing a strategic planning Engaging people Enabling steps Program launch The nine steps Assessment Strategy Objectives Strategy map Performance measures Strategic initiatives Enabling steps System rollout The nine steps Performance analysis Alignment Evaluation Sustaining and managing the planning process and balanced scorecard
  • 3.
    The development process:general overview By Omar Abisaí Coronado Mondragón 3 Developing a scorecard and strategic planning system includes the following essential components: • Organization assessment • Strategy formulation and selection • Strategy communication • Budget formulation • Operating planning • Executing strategy through the operating plan • Measuring and analyzing results • Evaluation and incorporating learning into successive plans This process is captured in 9 steps.
  • 4.
    The development process:general overview By Omar Abisaí Coronado Mondragón 4 External Analysis Internal Analysis Assess the Organization Formulate Strategy Communicate Strategy Formulate Budget Develop Operating Plan Execute Strategy and Measure Results • Vision • Mission • Core values • Policies and governance • Strategic goals • Business Strategy • Risks Vision, Mission, Values and Strategy plus: • Strategic objectives and Strategy map • Performance measures and targets • Strategic iniciatives • Change managmenet • Risk management • Department and Unit plans • Resource commitments • Operational measures and targets • Program, projects, activities and tasks • Performance analysis • Benchmarking • Implement change • Continuous improvement The following flow illustrates the major components of an integrated strategic planning and management system and how they works together.
  • 5.
    The development process:general overview By Omar Abisaí Coronado Mondragón 5 The wheel emphasizes the connection among the steps and indicates a continuous process for completing them. Assessment Strategy Objtectives Strategy map Performance measures Initiatives Performance analysis Alignment Evaluation 1 2 3 4 56 7 8 9 Programm launch System rollout Financial Customers Organizational capacity Internal porcess Misson Vision
  • 6.
    The development process:general overview By Omar Abisaí Coronado Mondragón 6 Relationship among the nine steps and the essentials components of strategic planning and management. Components Steps Assess the organization Program launch Step 1: Assessment Formulate strategy Step 2: Strategy Step 3: Objectives Communicate strategy Step 4: Strategy map Step 5: Performance measures Step 6: Strategic initiatives Scorecard rollout Formulate budget Scorecard rollout Develop operating plans Scorecard rollout Step 8: Alignment Execute strategy Measure results Analyse results Step 7: Performace analysis Step 9: Evaluation Apply learning Repeat steps 1 through 8 as required
  • 7.
    The development process:general overview By Omar Abisaí Coronado Mondragón 7 The following example shows an organizational strategic plan synopsis. Reduce cost Increase profitFinancial Customers Internal process Organizational capacity Increase revenue Improve customer experience Increase awareness as industry leader Improve internal efficiency Increase Acquisitions Improve product and service offerings Increase consulting knowledge Increase employee expertise Optimize technology Optimize human capital Improve throught leadership - Profit - Operating cost - Revenue - Customer experience survey score - % of customers with completed CK charter - References in media - Efficiency index - EBIT from acquisitions - % of transactions in CRM - % new products and services as % total sales - % employee development plans - % systems automated - Articles published - 15% per year - 15 M this year - 5% per year - 5% improvement in next period - 77% per period - 15 new references - 65% per period - 7% per year - 70% this year - 11% this year - 45% next period - 69% this year - 90 this year - Implement new financial systems - Marketing campaign in new markets - Develop customer knowledge CK charter - Establish acquisition integration team - Establish BPR team - Formalize new product development cycle - Redisign employee certification process - CRM system training - Formalize research expertise + Integrity + Commitment to Excellence + Customer Focused + Honesty + Teamwork Strategic objectives and Strategy map Measures Targets Initiatives Strategic theme Mission Vision + International growth + Operational excellence + Market leadership Efficiently delivery the highest standar of service providing energy products and expertise to customers Be a world-revolutionizing provider of energy products Strategic Result Increase in size and shareholder value Processes are executed in time and cost-effective manner Worldwide recognition for thought leadership and energy service expertise
  • 8.
    Engaging people By OmarAbisaí Coronado Mondragón 8 The process of building and implementing a Balanced Scorecard system is a change initiative that affects existing organization systems, technology and people. Change management is an important component of developing the scorecard system. Effective change management involves: • Understanding and managing the impacts on affected people. • Involving the right stakeholders in planning for and implementing change. • Communicating in two-way dialogue with individuals and groups. • Supporting stakeholders with knowledge, capacity-building and reinforcement.
  • 9.
    Engaging people By OmarAbisaí Coronado Mondragón 9 The key change management requirements by engaging a diverse group in the planning process to maximize buy-in and create a more actionable strategic plan. Instead of being pawns who need to be “change managed” employees are actively involved in the planning process and become ambassadors for the new directions. The following are key components of change: • Vision • Actionable strategy • Capabilities • Incentives (motivation and engagement) • Resources • Urgency
  • 10.
    Engaging people By OmarAbisaí Coronado Mondragón 10 The following figure illustrates the components of change management and how a missing component can lead to confusion, false starts, anxiety, restraint and resistance, frustration or apathy. Vision Vision Lacking Vision Vision Vision Vision Vision Actionable strategy Actionable strategy Actionable strategy Lacking Actionable strategy Actionable strategy Actionable strategy Actionable strategy Capabilities Capabilities Capabilities Capabilities Lacking Capabilities Capabilities Capabilities Incentives Incentives Incentives Incentives Incentives Laking Incentives Incentives Resources Resources Resources Resources Resources Resources Lacking Resources Urgency Urgency Urgency Urgency Urgency Urgency Urgency Lacking Succes Confusion False starts Anxiety Restraint and resistance Frustration Apathy
  • 11.
    The art andscience of developing a strategic planning By Omar Abisaí Coronado Mondragón 11 Building an implementing a strategic planning and scorecard is part art and part science. The art part is the human creativity and innovation enabled by management system that´s focused on the most important things. The art par also includes communication and change management. The science part is the strategic thinking that develops and connects the necessary elements into an integrated system for planning and managing more strategically. The science part also includes the discipline applied to developing a scorecard system. There is 14 pieces called the strategic elements that comprise the strategic planning and scorecard system. Mission Vision Core values Customer needs Customer value proposition Internal and external challenges and enablers Perpectives Strategic themes and results Strategic objetives Strategy maps Performance measures, targets and thresholds Strategic initiatives Business and support unit scorecard (Tier 2) Individual and team scorecards (Tier 3)
  • 12.
    The art andscience of developing a strategic planning By Omar Abisaí Coronado Mondragón 12 Combining the 14 elements into a scorecard planning and management system, and using that to create a high-performance organization, is like building a house: the right pieces have to come together at the right moment and the right craftspeople have to assemble the pieces correctly. • High level strategic elements form the roof • Strategic results are the lintel elements supporting the roof • Strategic themes are load-bearing walls supporting the lintel • Perspectives are represented by four floors • Critical success enablers form the foundation Strategic results Engaged people – Interactive communications – Core values Mission Vision Customer value Theme: Operationalexcellence Theme: Strategicpartnering Theme: Serviceexcellence Theme: Culturechange Financial Customer Internal process Organizational capacity Perspectives
  • 13.
    The art andscience of developing a strategic planning By Omar Abisaí Coronado Mondragón 13 The strategic framework cascades throughout the organization to create alignment among people, processes and systems to connect to the high-level strategy. The are three Tiers: • Tier 1: represents the full organization; the scorecard system at this level includes mission, vision, enablers and challenges, customer value proposition, strategic themes and results, strategy map, measures and strategic initiatives for the whole organization. • Tier 2: represents business and units; the system includes strategic objectives, strategy map, measures and initiatives for each unit. • Tier 3: consist of individual employees or teams; the system includes personal objectives, measures and activities for each position. Alignment (the process is called cascading) comes from linking the components in order to communicate how value is created for customers, at the enterprise level and later, at the business units and individual employee levels.
  • 14.
    The nine steps ByOmar Abisaí Coronado Mondragón 14 The following figure shows the relationship between the 9 steps and the enabling steps. Executive sponsorship, Resourcing and program planning Program Launch Conduct organizational assessment and SWOT Create or re-evaluate strategic elements (Vision, misión, customer value, etc.) 1 Assessment Develop high-level business strategies from step 1 strategic elements 2 Strategy 3 Objectives Develop strategic objectives for business strategies developed in Step 2 6 Strategic Iniciatives 4 Strategy Map Create strategy maps for business strategies and for the Enterprise overall strategy 5 Performance measures Develop outcome and ouput performance measures for the strategic objectives on the Enterprise strategy map Identify critical projects to improve performance Develop performance measures for initiatives (Scope, Schedule, Resources, etc.) Manage the project portfolio System rollout Strategic manafgement system rollout Budget formulation and anual planning Collect, report and present performance information to decisión makers 7 Performance analysis Cascade organization-wide strategy to business and support units Cascade strategy to teams and individuals 8 Aligment Make corrections to strategy based on actual performance 9 Evaluation
  • 15.
    Enabling steps: Programlaunch By Omar Abisaí Coronado Mondragón 15 In program launch, the executive management team plans the overall program. The role of senior leaders is to stay engaged during this transformative initiative and to lead by example. The quality of leadership in this period determines the success and sustainability of the scorecard system over the long term. The Program launch includes five components: • Create sponsorship and engaged leadership. • Resource the effort. • Plan the program. • Facilitate development. • Launch the change management and communication process.
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    The nine Steps:Assessment By Omar Abisaí Coronado Mondragón 16 Assessment is a structured way to exploring forces, trends, opportunities and threats in the external and internal environment, it conducts to review how the organization´s products and services meet the customer and other stakeholders needs. The assessment step starts with existing elements, building on what´s currently in place. This step must be owned by the senior leadership team and starts the process of engagement throughout the strategy development process. There are three components in this step: • Review existing high-level strategic elements (mission, vision, core values, customer value proposition and plans) for adequacy. • Conduct an environmental scan and market research. • Develop or re-validate high-levels strategic elements. The Assessment step outputs are the following: • Strategy gap matrix • PESTLE and SWOT analysis • Mission, Vision and Core Values statements • Strategic Management Maturity Model (SMMM) assessment • Culture assessment • Customer and stakeholder identification and analysis
  • 17.
    The nine Steps:Strategy By Omar Abisaí Coronado Mondragón 17 It is necessary to define first the “strategy” concept: Strategy is the positioning choices (the path) and actions (the plan) to move the organization from its current state to some desirable future state. Strategy translates the mission and vision into programs, products, projects, services and activities than can be acted upon, monitored, measured and evaluated for effectiveness. The elements developed in the strategy step are formed through strategic thinking. There are many ways of getting from a current state to a desirable future state, so making choices is the essence. A strategy is developed and executed to lead to desired strategic results. A strategic result describes something that must be achieved to be successful. This step includes six components, but not every organization will use them all: • Conduct scenario planning. • Develop or change the customer value proposition. • Develop or change strategy profile. • Choose balanced scorecard perspectives. • Choose high-level strategic themes and results. • Incorporate new change management planning into strategy development.
  • 18.
    The nine Steps:Strategy By Omar Abisaí Coronado Mondragón 18 The Strategy step outputs are the following: • Customer and stakeholder needs • Customer value proposition described • Plausible scenarios developed • Strategic risk identified • Risk management plan developed • Perspectives selected • High-level strategic themes and strategic results developed • Strategy profile developed • Change management plan tied to strategic development
  • 19.
    The nine Steps:Objectives By Omar Abisaí Coronado Mondragón 19 The strategic objectives make strategy actionable. They are described, documented, measured and made actionable through initiatives and operational process. At the corporate or enterprise level, strategic objectives identify the key continuous improvement activities that are necessary to be successful and accomplish the vision and achieve the mission. At the business and support units level, they identify the activities necessary to achieve departmental missions and support the enterprise and hep define strategy of the unit. At the individual employee level, strategic objectives identify personal activities that create value and support the department´s mission. The strategic objectives steps includes four components: • Develop or change strategic themes. • Create enterprise-wide strategic objectives. • Describe and document the strategic objectives. • Identify objective owners, their roles and responsibilities. When strategic objectives are poorly developed, performance measures track the wrong outcomes, strategic initiatives do not close strategic performance gaps and desired alignment is not achieved through cascading and communicating strategy.
  • 20.
    The nine Steps:Objectives By Omar Abisaí Coronado Mondragón 20 The Objective step outputs are the following: • Strategic theme with strategic objectives • Enterprise-wide strategic objectives • Strategic objective description • Strategic objectives placed in perspectives
  • 21.
    The nine Steps:Strategy map By Omar Abisaí Coronado Mondragón 21 A Strategy map is a visual representation of how value is created for customers, owners and other stakeholders. It is formed by linking objectives in cause-effect relationship to show how strategic results are achieved. The strategy map helps: • Communicate strategic intent with clarity • Focus on the most important things • Align vision and mission to culture • Show logical connections between work and performance The strategy map includes four process components: • Understand strategy mapping logic • Build the enterprise-wide strategy map • Test the enterprise wide strategy map • Update objective description The Strategy map step outputs are the following: • Strategy theme maps with theme objectives • Tier 1 (Organization-wide) strategy map with strategic objectives • Objective description (revised)
  • 22.
    The nine Steps:Performance measures By Omar Abisaí Coronado Mondragón 22 Performance measures are the indicators of progress toward a desirable outcome. There is two types of measures: strategic and operational. The performance measures steps includes sic components: • Describe the intended results • Understand alternative measures • Select the right measurements for each objective • Define composite indices as needed • Set targets and thresholds • Define and document selected performance measures The Performance measures step outputs are the following: • Indented results for each strategic objective • Performance measures targets • Performance measures for each strategic objective • Performance measurement data definition • Performance measure thresholds • Baseline data (where available)
  • 23.
    The nine Steps:Initiatives By Omar Abisaí Coronado Mondragón 23 Strategic initiatives reduce performance gaps in strategic objectives and help achieve strategic results. An objective can have two or more initiatives, and a one initiative can impact two or more objectives. Six process components are used in the following order: • Identify and categorize potential initiatives • Develop selection criteria • Evaluate and select initiatives • Prioritize initiatives • Fund and manage portfolio of initiatives • Execute Candidate initiatives Prioritized funded initiatives Select Categorize Evaluate Identify Prioritize
  • 24.
    The nine Steps:Initiatives By Omar Abisaí Coronado Mondragón 24 The Initiatives step outputs are the following: • Potential strategic initiatives • Prioritization framework • Selection criteria • List of ranked initiatives • Initiative documentation • Project plans • Project execution reports
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    Enabling steps: Systemrollout By Omar Abisaí Coronado Mondragón 25 Scorecard rollout is an enabling step that starts the process of aligning the organization around strategy. Its goal is to create more internal “fans” and build the coalition of employees that starts thinking more strategically and using the system to better inform decision making. This step includes four components: • Write the strategic plan. • Celebrate scorecard system development process. • Update the financial and operational planning with strategic information. • Maintain a strategy focus and culture of continuous improvement. Capital plan Programs Projects Services Operations support Operating plan Strategic plan Equipment Facilities Technology Inventory Budget according to Strategic planning and Scorecard Strategic initiatives
  • 26.
    Enabling steps: Systemrollout By Omar Abisaí Coronado Mondragón 26 Align budget and operations with strategy Strategic results Mission Vision Customer value Theme: Operationalexcellence Theme: Strategicpartnering Theme: Serviceexcellence Theme: Culturechange Financial Customer Internal process Organizational capacity Strategic initiatives aligned by perspective ERP project Rewards program Kanban project Direct $ Cross training Indirect $ Project 1 Program A Direct $ Indirect $ Project 2 Program B Direct $ Indirect $ Project 3 Program C Direct $ Indirect $ Project 4 Program D Operational activities aligned by strategic theme
  • 27.
    The nine Steps:Performance analysis By Omar Abisaí Coronado Mondragón 27 Performance analysis transforms data into knowledge and understanding. Effective analysis helps people make better decisions that will drive improved strategic outcomes. The performance analysis step has four components: • Select the most appropriate automation tool • Collect and monitor performance • Analyze and draw conclusions • Improve performance Improve performance •Continuously review strategy •Identify and implement improvement actions Analyze and draw conlusions • Enable data-driven discussion around performance • Report and share information • Identify underperformance Collect and monitor performance • Monitor performance trends • Describe performance Turning data into information and knowledge
  • 28.
    The nine Steps:Performance analysis By Omar Abisaí Coronado Mondragón 28 The Performance analysis step outputs are the following: • Software selection criteria • Organizational information needs defined around reporting requirements and data characteristics • Software system evaluated and one system selected and installed • Performance shape understood and interpreted using histogram, targets and thresholds • Performance charts created to monitor variation • Performance information collected • Underperformance identified • Process improvement actions identified • Performance improvement reports developed and shared
  • 29.
    The nine Steps:Alignment By Omar Abisaí Coronado Mondragón 29 Alignment is when organizational structures, process and systems support the strategy of the organization. An organization is aligned when all employees understand what the organization is trying to accomplish, make decisions and take actions based on that strategy. Alignment is created when high-level strategy is cascaded first to business and support units and then to individual employees. The alignment process includes four components: • Select the cascading approach • Organize cascading teams • Align business and support units • Align teams and individuals with business and support units The Alignment step outputs are the following: • Tier 2 strategic and operational objectives, description and intended results • Tier 2 unit strategy maps (optional) • Tier 2 strategic and operational initiatives • Tier 2 change management and communication plan • Tier 3 personal objectives, measures, targets and initiatives
  • 30.
    The nine Steps:Evaluation By Omar Abisaí Coronado Mondragón 30 Evaluation is an opportunity to review and refresh. This step evaluates how well the organization´s strategy accomplish desired results and how well the strategic management system improves communications, alignment and performance. The evaluation step includes two components: • Strategy effectiveness evaluation • System effectiveness evaluation The Evaluation step outputs are the following: • Audit plan • Balanced Scorecard gap assessment • Interview forms • Manager/employee surveys • Executive survey • Update strategic elements (Tier 1, Tier 2 and Tier 3) • Update communications plans and change management plan • System performance evaluation report • System performance action plan • Strategic Management Maturity Model (SMMM) review
  • 31.
    Sustaining and managingthe planning process and balanced scorecard By Omar Abisaí Coronado Mondragón 31 Sustaining a balanced scorecard involves structure, process and change. The structure creates a framework for assigning and reinforcing clear roles and responsibility for managing and updating strategy without making the process bureaucratic. The process involves the procedures and operations that impact the balanced scorecard, and how performance information impacts the management and decision making. The change is a cultural shift in the way the organization operates, transforming into a collaborative, high-trust environment where performance information drives continuous improvement. Sustaining and managing the planning process and balanced scorecard has three components: • Institutionalize the strategic thinking process • Change the agenda's management • Cultivate a culture of continuous improvement leading to high performance