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stratmgmt.ppt
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- 2. CANOE THEORY • Thinkof your organization as a long canoe • The canoe has a destination • Everyone in the canoe has a seat and paddle • Everyone is expected to paddle • Those who won’t paddle have to get out of the canoe • Those who prevent others from paddling have to re- adjust or get out of the canoe • There are no passengers in the canoe • The canoe theory understands crisis • The canoe theory says you have the right to be happy
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- 4. BUILT TO LAST Preservethe Core Stimulate Progress
- 5. GOOD TO GREAT •Level 5 Leadership • First Who…Then What • Confront the Brutal Facts • The Hedgehog Concept • A Culture of Discipline • Technology Accelerators • The Flywheel and The Doom Loop
- 6. PRIVATE VERSUS PUBLIC ORGANIZATIONS •Purpose • Goals • Financing • Decision-Making • Key Stakeholders
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- 8. FEATURES OF SUCCESSFUL STRATEGICMANAGEMENT • Has support of organization’s executive officer. • Is user friendly. • Is participatory, not left to planners. • Is flexible. • Leads to resources decisions. • Engages and motivates all staff. • Is fresh and continuous, not static and stale.
- 9. FEATURES (CONTINUED) • IsProactive • Not a Quick Fix • Part of Quality Management • Payoffs Increase over Time
- 10. LESSONS LEARNED ABOUT STRATEGICPLANNING • Plans must be tailored to organization. • No one size ‘fits’ all. • Time to complete takes longer – expect 50% more than planned. • Process needs a shepherd. • Visionaries needed at beginning and detail types thereafter.
- 11. WHY MANAGERS DON’TPLAN • Time Consuming • High Demands • Not Rewarded • Executives Don’t Support It • Too Risky
- 12. STRATEGIC MANAGEMENT MODEL •Scanning • Where are we now? • Strategy Formulation • Where do we want to be? • Strategy Implementation • How do we get there? • Measurement/Performance • How do we measure our progress?
- 13. STRATEGIC MANAGEMENT MODEL •Strategy Formulation • Where do we want to be? • Vision • Mission • Values • Goals • Objectives
- 14. VISION Vision without Actionis a Daydream Action without Vision is a Nightmare • Not Optional • Stretch – 30+ Years • 8-10 Words in length • Future State • Brief and Memorable
- 15. VISION (CONTINUED) • Inspiringand Challenging • Descriptive of the Ideal
- 16. VISION EXAMPLES • “Lightthe Fire Within” • “A Safer Future for All Communities” • “See the Mountains – Breathe Freely” • To Be the Happiest Place on Earth • To Be the World’s Best Quick Service Restaurant
- 17. VISION LEVELS OFPEOPLE • Some people never see it. (Wanderers) • Some people see it but never pursue it on their own. (Followers) • Some people see it and pursue it. (Achievers) • Some people see it and pursue it and help others see it. (Leaders) John Maxwell, Developing The Leader Within You, 1993.
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- 19. MISSION STATEMENT In theabsence of a clearly defined direction one is forced to concentrate on confusion that will ultimately consume you.
- 20. MISSION • What isour purpose? • Describes current state • Timeline is 3-5 Years • Builds on our distinctive competencies • Tends to focus on Core Business • 30-35 Words in length
- 21. MISSION EXAMPLES • “ToLead All Communities in Disaster Preparedness, Mitigation, and Recovery by Maximizing Assistance and Support.” • “Caltrans Improves Mobility Across California.” • To produce superior financial returns for our shareholders as we serve our customers with the highest quality transportation, logistics, and e-commerce.
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- 23. CORPORATE GOVERNANCE • Whatis it? • Codes of Governance • Role of the Board of Directors • Role of Top Management Team • Executive Compensation
- 24. CORPORATE GOVERNANCE • Systemby which a firm’s owners control its affairs. • Does it work?
- 25. CODES OF GOVERNANCE •The Cadbury Code: 1992 • Sarbanes-Oxley Act: 2002 • Public Company Accounting Oversight Board • “Triple bottom line” • Four major issues: • Ownership structure and influence • Fianacial Stakeholder rights and relations • Financial transparency and information disclosure • Board structure and processes (audit)
- 26. ROLE OF THEBOARD OF DIRECTORS • Monitor • Evaluate and influence • Initiate and determine • Organization of Board • Insiders versus outsiders • CEO/chair position • Committees’ Effectiveness
- 27. ROLE OF TOPMANAGEMENT TEAM • Who is the TMT? • Executive Leadership and Strategic Vision • Articulates strategic vision for corporation • Sets the model for others to identify and follow • Communicates high performance standards and builds confidence in followers’ abilities to meet standards • Managing strategic planning process
- 28. EXECUTIVE COMPENSATION • Incentivealignment • Executive Ownership • Incentive compensation • Salary • Bonus • Stock Options • LT Bonus
- 29. VALUES • Guiding Principles •Help establish Culture • Part of Preserving the Core • Core Ideology
- 30. VALUE EXAMPLES • CHPPRIDE • HP WAY • J & J Credo • “Build the Spirit of the Place”
- 31. ETHICAL AWARENESS MODEL •Organizational Ethics • Individual Ethics • Personal Values
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- 33. STRATEGIC MANAGEMENT MODEL •Scanning: • Where are we now? • Macro Analysis (STEP, PESTEL, ETC.) • Industry Analysis – Competitive Intelligence • SWOT Analysis • Internal versus External Elements
- 34. WHY SCAN? • Toknow your position in the environment • To respond effectively to constant change • To see the organization as a whole • To avoid surprises • To survive • To lay the foundation for strategic issues
- 35. SCANNING: KEY ENVIRONMENTAL VARIABLES •Macro Environment: STEP, PESTEL • Task Environment: Industry • Internal Environment: Focal Organization
- 36. SOCIO-CULTURAL VARIABLES • LifestyleChanges • Career Expectations • Regional Shifts in Population • Life Expectancies • More women in workforce • Greater concern for fitness • Postponement of family formation • Increase in temporary workers
- 37. TECHNOLOGICAL VARIABLES • TotalFederal Spending for R&D • Total Industry Spending for R&D • Focus of Technological Efforts • Patent Protection • Wireless Communications • Nanotechnology • Productivity Improvements • Genetic engineering
- 38. ECONOMIC VARIABLES • GDPTrends • Interest Rates • Money Supply • Inflation Rates • Unemployment Levels • Wage/Price Controls • Energy Availability & Cost • Disposable & Discretionary Income
- 39. POLITICAL-LEGAL VARIABLES • AntitrustRegulations • Tort Reform • Environmental Protection Laws • Taxation at local, state, federal levels • Hiring and Promotion Laws • Americans Disabilities Act of 1990 • Sarbanes-Oxley Act of 2002
- 40. DEMOGRAPHIC VARIABLES • AgingPopulation • Rising affluence • Changes in Ethnic Composition • Geographic distribution of population • Disparities in income levels
- 41. GLOBAL VARIABLES • IncreasingGlobal Trade • Currency Exchange Rates • Emergence of Indian and Chinese Economies • Trade agreements (NAFTA, EU, ASEAN) • Creation WTO
- 42. STEP EXERCISE • Socio-Cultural •Technological • Economic • Politico-Legal
- 43. INDUSTRY ANALYSIS • 6Forces Analysis • Industry Competitors • Suppliers/Vendors • Customers/Clients • Potential New Entrants • Substitutes • Other Stakeholders • Role of Complementors
- 44. NEW ENTRANTS ANDENTRY BARRIERS • Absolute cost advantages • Access to inputs • Government policy • Economies of scale • Capital requirements • Brand identity • Switching costs • Access to distribution • Proprietary products
- 45. BUYER POWER (CHANNELAND END CONSUMER) • Buyer volume and information • Brand identity • Price sensitivity • Threat of backward integration • Product differentiation • Substitutes
- 46. SUPPLIER POWER • Supplierconcentration • Differentiation of inputs • Switching costs • Threat of forward integration • Cost relative to total purchases in industry
- 47. SUBSTITUTES • Switching costs •Buyer inclination to substitute • Variety of substitutes • Price-performance tradeoff of substitutes • Necessity for product or service
- 48. DEGREE OF RIVALRY •Exit barriers • Industry concentration • Fixed costs • Industry growth • Intermittent overcapacity • Switching costs • Brand identity • Diversity of rivals • Corporate stakes
- 49. OTHER STAKEHOLDERS • Employees •Unions • Government • Trade and Professional Associations • Other Direct Influencers
- 50. ROLE OF COMPLEMENTORS •Number of complements • Relative value added • Difficulty of engaging complements • Buyer perception of complements • Complement exclusivity • Tend to increase profits by increasing demand for an industry’s products
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- 52. COMPETITIVE PROFILE ANALYSIS •Identify Key Competitive Factors • Identify key Competitors
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- 55. INTERNAL ENVIRONMENT • InternalProfile Analysis • SWOT Analysis
- 56. INTERNAL PROFILE ANALYSIS •Identify Key Core Functions • Identify Key Measures for Core Functions • Build Matrix
- 57. SWOT ANALYSIS • InternalEnvironment • Strengths • Weaknesses • External Environment • Opportunities • Threats
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- 59. STRATEGIC MANAGEMENT MODEL •Strategy Formulation • Where do we want to be? • Vision • Mission • Values • Goals • Objectives
- 60. GOAL • Supports theMission • Deals with One Issue or Item of Focus • Reflects a primary activity or strategic direction • Describes the “To Be” State • “BHAG” • Encompasses a long period, i.e. at least 3 years
- 61. GOAL EXAMPLES • Achieveexcellence in the delivery of disaster recovery and mitigation programs. • Professionally develop our employees as a reflection of DAD’s key attributes and values. • Increase the supply of housing, especially affordable housing. • Become a model for customer service. • To provide benefits in correct amounts and issued in a timely manner.
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- 64. OBJECTIVES • Add specificitybeyond Goals • Answer the questions • What is to be accomplished? • When? • Should contain the SMART Elements
- 65. OBJECTIVES: SMART MODEL •Specific • Measurable • Aggressive but Attainable • Results-Oriented • Timeframe
- 66. STRATEGIC OBJECTIVE EXAMPLES •By June 30, 2005 achieve 75% rating on the DAD service index from all stakeholders. • Increase sales growth 6-8% in the next 5 years. (P&G) • Cut corporate overhead costs by $30 million per year. (Fortune Brands) • Operate 6,000 stores by 2010 – up from 3,000 in the year 2000. (Walgreen’s) • Reduce greenhouse gases by 10 percent (from a 1990 bast) by 2010. (BP Amoco)
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- 69. STRATEGIC MANAGEMENT MODEL •Strategy Implementation • Everyone is Responsible • Few Guidelines • No Easy 10-Step Checklist to Follow
- 70. STRATEGIC MANAGEMENT MODEL •Strategy Implementation • Most open-ended part of Strategic Mgmt • People implement strategies not Organizations
- 71. STRATEGIC MANAGEMENT MODEL •Strategy Implementation • How do we get there? • Work Action Plans • GOOMs
- 72. STRATEGY IMPLEMENTATION CONSIDERATIONS • 7-SFramework – Strategic Fit • Human Resources • Patience
- 73. 7-S FRAMEWORK • SharedValues • Strategy • Structure • Systems • Skills • Style • Staff
- 74. HUMAN RESOURCE RULE •Hire Smart • Train Hard • Manage Easy
- 75. PARABLE OF THEBAMBOO It takes patience and discipline to develop and empower people; in fact, it’s like growing bamboo. Once the seed is planted, you must water it daily for four years before the tree breaks ground – then it grows 60 feet in 90 days! Executives who nurture people can get similar results…How, you ask, can such rapid growth be possible? It results from the miles of roots that develop in those first four years. Preparing people to perform is the task of leadership.
- 76. IMPLEMENTATION STRATEGIES • GOOMs •Implementation Conference • CEO involvement • Other Strategies?
- 77. GOOMS • Goals • Outcomes •Objectives • Measures
- 78. DEFINITIONS • Goal: Broad,General BHAG • Outcome: Desired end result and report performance • Objective: What and When • Measure: A quantified unit that assesses progress or achievement
- 79. GOOM EXAMPLE Goal 1:Achieve excellence in the delivery of disaster recovery and mitigation. Outcome: Increased Customer Satisfaction Objective 1.1: By June 30, 2005, achieve 75% rating on the DAD Service Index from all stakeholders. Measure: DAD Service Index (DSI)
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- 81. Work Action PlanTemplate Sponsor: Completion Date Organization: n.n Goal Outcome n.n Objective Measure Task Description Team Lead Staff Hours Completion Date Plan- Do-Check-Act
- 82. STRATEGIC MANAGEMENT MODEL •Measurement / Performance • Why do we measure our progress?
- 83. WHY MEASURE? Reactive Reasons •Government Intervention • Fewer Resources and Smaller Budgets • Increased Demand for Accountability • Mandated
- 84. WHY MEASURE? Proactive Reasons •Makes us more responsive to public needs • Provides feedback on mission accomplishment • Creates blueprint for linking budget to outcomes • Good management and good public policy
- 85. MEASUREMENT / PERFORMANCE •How do we measure our progress? • 5 Types of Measures • Input • Output • Outcome • Quality • Efficiency
- 86. INPUT MEASURE Amount ofresources needed to provide a particular product or service. Examples: • Number of FTEs or PYs • Number of eligible clients • Number of customers requesting service • Number of applications received • Number of sales orders received
- 87. OUTPUT MEASURE Amount ofproducts or services provided Examples: • Percent of highways resurfaced • Number of police reports filed • Number of vaccinations given to school-age children per year • Number of shafts produced in a single operating shift
- 88. OUTCOME MEASURE Reflect theactual results achieved and/or their impact or benefit. Examples: • Reduction in incidence of disease • Percentage of discharged patients living independently • Percent of increase in tourists • Percent of monthly programmed sales orders filled on time
- 89. QUALITY MEASURE Reflect theeffectiveness in meeting the expectations of customers and stakeholders Examples: • Number of defect reports compared to number of reports produced • Number of course ratings in highest category related to total number of course ratings
- 90. EFFICIENCY MEASURE Also knownas productivity measures. Reflect the cost of providing products or services. Examples: • Output/Input • Output/Time • Output/Cost • Outcome/Cost
- 91. KEEPING PLANS OFFTHE SHELF • All Staff Meeting • Announce Phases • Review and Assess Plans at Quarterly Sessions • Sponsors and Team Leads for Strategic Goals and Strategic Objectives • Deming Philosophy – PDCA
- 92. DEVELOPING BENCH STRENGTH •“Drill Down” Application • Sponsors, Team Leads, and Team Members • Work Action Plan • “Project” Champion • Leadership Training • Leadership Conference Presentations
- 93. ESTABLISHING ORGANIZATIONAL PERMANENCE • TrainingEmphasis • Certification • Awards & Recognitions • “Caught-Ya” • Celebrations • Walk the Walk
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