The document discusses business strategy and its importance for organizational effectiveness. It defines strategy as determining major goals and policies for achieving goals using resources. Key components of strategy include goals, objectives, tactics, and contingency plans. The document also discusses aligning strategy with an organization's value discipline like operational excellence, product leadership, or customer intimacy. Finally, it emphasizes the leadership accountability for developing strategy, communicating it, taking actions to implement it, and measuring results to ensure the strategy leads to an effective organization.

1. WHAT IS STRATEGY?

2. Do you have a Business
Strategy?

3. Business Alignment Framework
Business Environment
- Customers/Clients
- Competition
- Markets
- Core Competencies
- Technologies
- Political Environment
- Capacity to Act
Business Direction
- Strategic Intent
- Vision
- Mission
- Values
Business Strategy
- Alignment
- Priorities
- Methodology
- Resources
Operational Planning
- Cascading Goals and Plans
Communication
- Communication Goals and Plans
Processes
- Policies
- Process Flows
- Technologies
Structures
- Organization Units
- Roles
- Work Definition
- Critical Success
Factors
- Teams
People
- Staff the Structure
- Work/Role
Competencies
- Retain/Develop
- HR Systems
- Culture/Climate
Implementation
- Change 1: Select the Right Change
- Change 2: Make it Happen
Measurement and Evaluation
- Continuous Improvement

4. What is Strategy?
Strategy says what you are going to do to achieve the
Business Direction you have defined in your vision, mission
and values;
Typically each main component of the Business Direction
requires a separate strategy;
Strategies are, by nature established at a general level;
At this stage in the process, you are identifying the areas
where priority effort must be expended, and the nature
of the processes and resources that are required.

5. Essence of Strategy
In essence:
No organization can afford everything it would like to do.
Resources have to be allocated.
 The essence of strategic planning is to allocate resources to
those areas that have the greatest future potential

6. Elements of Strategy
Elements of Strategy:
Strategic Planning: The process of determining the major
goals of the organization and the
policies and strategies for obtaining
and using resources to achieve those
goals. In this definition:
- policies are broad guides to action.
- strategies determine the best way to
use the resources.
Goal: Broad, long-term accomplishments
that an organization wishes to attain.
A goal is the purpose toward which an
organization directs its endeavors, a
broad statement of intent.

7. Elements of Strategy
Elements of Strategy:
Objectives: Specific short-term tasks that must be
completed to achieve the organizational
goals. These are specific plans to meet broad
goals. Objectives are measurable statements
of intended results describing the desired end
result and the standard against which it will be
measured
Tactic: The detailed, short-term decisions about what
is done, who is to do it, and how it is to be
done. Tactics are specific plans to achieve
broad strategic plans.

8. Elements of Strategy
Elements of Strategy:
Contingency: The alternative course of action that may
be
used if the primary plans (strategies/tactics)
do not achieve the objectives of the
organization.
Strategy: A Plan of Action
Example: Strategic Plan – goal set to make product X the preferred product in a
specific market.
Tactical plan – objective to develop product X by the end of the year
so that it meets 100% of the customer’s requirements.
Contingency Plan – objective set that if product X does not meet
100% of the customer’s requirements, the organization well develop
product Y by the end of the year

9. Is your Strategy aligned to
your Value Discipline?

10. Identifying Value Disciplines
Value disciplines are strategy options:
 OPERATIONAL EXCELLENCE
 PRODUCT LEADERSHIP
 CUSTOMER/CLIENT INTIMACY

11. Operational Excellence
 Don’t emphasize product or service innovation;
 Don’t cultivate deep, one-to-one relationships with customers/clients;
 Do provide middle-of-the-market products at best price with least inconvenience;
 Do offer low price or hassle-free service, or both;
 Do deliver a combination of quality, price, ease of purchase that no ones else can match;
 Do have an operating model based on four distinct features:
- supply chains and basic services have been optimized and
streamlines to minimize costs and hassle (core processes)
- Operations are standardized, simplified, tightly controlled, and
centrally planned, leaving few decisions to the discretion of
rank-and-file employees (business structures)
- Management systems focus on integrated, reliable, high-speed
transactions and compliance to norms
- Culture abhors waste and rewards efficiency.

12. Product Leadership
 Do concentrate on offering products/services that push performance boundaries;
 Do offer the best product/service, period;
 Don’t build their positions with just one innovation;
 Don’t compete on price or service (though these are not ignored);
 Do complete on product performance;
 Do push products into the realm of the unknown, the untried, the highly desirable; must be
creative – commercialize ideas quickly – relentlessly pursue ways to leapfrog their own latest
product/service;
 Don’t plan for every possible contingency;
 Don’t spend much time on detailed analysis;
 Do react to situations as they occur;
 Do have a vested interest in protecting the entrepreneurial environment they created;
 Do complete most with themselves;
 Do have an operating model based on four features:
- Core processes focus on invention, product/service development, and market exploitation;
- Business structures are loosely knit, ad-hoc, and ever-changing to adjust to
unexplored territories;
- Management systems are results-driven, that measure and reward new product/
service success, and that don’t punish experimentation;
- Culture encourages individual imagination, accomplishment, out-of-the-box thinking,
and a mindset driven by the desire to create the future;

13. Customer/Client Intimacy
 Don’t focus on delivering what the market wants;
 Do focus on delivering what specific customers/clients want;
 Don’t pursue transactions;
 Do cultivate relationships;
 Do specialize in satisfying unique needs, through close customer/client relationships;
 Do offer the best solution, and do provide all the support needed to optimize results/value;
 Do make it their business to know the people it sells to and the products/services they need;
 Do tailor their products/services to specific customer/clients at reasonable prices, and are
adept at fiving the customer/client more than is expected;
 Do constantly upgrade offerings;
 Do have an operating model based on four features:
- Obsession with helping the customer/client understand exactly what’s needed and ensuring the
solution gets implemented properly (core processes);
- Business structures that delegates decision-making to employees who are closest to the
customer/clients;
- Management systems are geared toward creating results for carefully selected and
nurtured clients;
- Culture embraces specific rather than general solutions; thrives on deep and lasting
client relationships.

14. Which Discipline Should You Choose?
Market leaders pick one of these disciplines and then build their
organization around it in the following ways:
STRATEGIC DISCIPLINE OPTIONS
Operational Excellence Product Leadership Customer Intimacy
Core business processes
that…….
Sharpen distribution
systems and provide no
hassle service
Nurture ideas, translate
them into products and
market them skillfully
Provide solutions and help
customers run their
businesses
Structure
That…….
Has strong, central
authority and a finite level
of empowerment
Acts in an ad hoc,
organic, loosely knit and
ever-changing way
Pushes empowerment
close to customer
contact
Management systems
That…….
Maintain standard
operating processes
Reward individuals’
innovative capacity and
new product success
Measure the cost of
providing service and of
maintaining customer
loyalty
Culture that……. Acts predictably and
believes “one size fits all”
Experiments and thinks
“out-of-the-box”
Is flexible and thinks “have
it your way”

15. Critical Success Factors
 Areas of priority effort, written in general terms;
 Linked to strategic intent and to vision, mission and values;
 Usually no more than five to seven;
 Prioritized based on the greatest business benefit;
 Fully resourced [human, financial etc.]
 Fully communicated
 Begin the cascading process to identify tactics that will
achieve each strategy;
 Encourage teamwork and individual
responsibility/accountability to achieve strategies;
 Designed and implemented in partnership with
customers/clients;
 Supported and sponsored by senior management

16. Does a coordination process
exist to integrate different
strategic planning efforts?

17. Strategy Options
Once you have decided on your discipline, you will need to look at your
strategy options, covering the following:
 Goals  Philosophy
 Elements  Focus
 Competitive Performance  Management Systems
Requirements
 Organizational Skills  Culture
 Core Processes  Key Business Processes
 Information Technology  Structure
 Job Design  Employee Selection Criteria
 Goal Setting  Performance Measures
Performance Appraisal Criteria
and Input  Rewards and Compensation
 Training and Development

18. Matching Strategies to Situations
 Industry Environments
 Organization Positions/Situations
 Situational Considerations
 Market Share and Investment Options
 Strategy Options

19. Does your strategy include
tactics and actions to direct
your work?

20. Strategic Mindset
Here are some ways to think about your strategy, to be sure you have a
winning strategy:
 Change the rules of play
 Create a new approach to pricing
 Determine what the customer/client will bear to set your
costs
 Exploit technology for integration, speed and creativity;
 Keep your competitors away;
 Think outside the box
 Manage the competitor’s strategy
 Neutralize the competitor’s strength
 Be bold
 Build brand loyalty
 offer new products, services, processes, or information
for customers/clients

21. Strategy Life Cycle
Nothing Stays The Same:
If you think what exists today is permanent and forever true, you
inevitably get your head handed to you.
Faster, increasingly
Competitive responses
To your Business
Environment

22. Does your Strategy consider
Financial Goals?

23. Does your Strategy consider
Customer/Client goals?

24. Aligning Measures with Goals
FINANCIAL GOALS
- 8% productivity improvement
- Sales increase by 6% pts. over economy
- Division economic profit
CUSTOMER/CLIENT BASE
- Earn customer loyalty
- Decrease adjustments to +- 1% of orders
- 95% order fill, on time and in full, within 2 days
Suggestions for Measures
- Increase shareholder value
- Reduced loss ratio
- Long term revenue growth
- Reduced expense ratio
- Short term profit
- Profit margin
- ROI
- Economic Profit [EVA]
- Cash flow
- Stable earnings
- Reputation
- Diversified revenue base
- Customer/client satisfaction
- Improve customer/client relations
- Get new customers/clients
- Sell more to current
customers/clients
- Bigger market share
- Reputation
- Customer/client service
ratings

25. Aligning Measures with Goals
OPERATIONAL AND PROCESS GOALS
- Supply chain excellence
- Compress time from raw material to customer-
paid
- Decrease total delivery costs by 7%
- Decrease inventory levels by 50%
- Operation income less than 12%
LEARNING AND INNOVATION GOALS
- Develop 1-2 products per division to change
basis of competition and increase sales
profitability
- More than 30% sales, less than 4 year products
Suggestions for Measures
- Improve development time
- Reduce costs
- Reduce down time
- Reduce rejects; improve quality
- Improve fill rate
- Use technologies
- Broader, more attractive produce/service line
- Decrease adjustments
- Compete in global markets
- Knowledge-share
- Improve new product development rate
- New products in new areas
- Recognize leader and innovator
- More growth opportunities

26. Consequences of Poorly Developed Strategies
and Strategy Cascade
If the strategy is: Then the Consequences is: And the result is:
Unknown Overprotection of resources Maintain status quo
Disliked short-run financial criteria Drive out innovators
Unclear Politics prevail System is viewed cynically
Overwhelmed by short-run
pressures
Targets are vague Future is not invested in
Avoided because of
uncertainties
Employees are risk-averse Status quo is favored
Displaced by current
activities
Employee question is the
competence of leaders
Status quo is maintained

27. Does your strategy reflect
who in your business is
responsible and accountable
for achieving the Strategy?

28. Does everyone in your
immediate team have the
same information about your
business’s Business Strategy
that you do?

29. Your Leadership Accountability
STRATEGY AND ORGANISATIONAL EFFECTIVENESS
An effective organization is one that is designed to achieve its business goals.
Organizational Effectiveness is the job of the organizations leaders.
Organization development refers to the activities that take place to increase the
organizations effectiveness.
This is the job of the leaders and the people who support them, including the
managers, team leaders and employees of the organization, along with internal
or external consultant support.

30. Your Leadership Accountability
To fulfill this accountability in relationship to the business strategy, leaders must:
 Conduct a thorough gap analysis comparing the current situation in
your business to the desired vision;
 Take baseline measures to define the “current situation” in terms that
can be quantified;
 Identify the actions that are needed to move your organization from the
current situation to the desired vision so that the organization “wins: in its
market place and with its customers/clients;
 Prioritise those actions, focusing human energy, funding, and other
resources, on the most important priorities;
 Involve others in the organization in creating the plan of action;
 communicate the plan at the onset, and at regular intervals as action is
being taken;
 Take continuous measures to determine whether the actions being
taken are achieving the desired measures;
 Share the results with others and involve them in problem solving;
 Celebrate progress and recognize good work.

31. For more Information on how you can
Align Your Business for Success
CONTACT
Stella Molenaar
+27835617941
stella@in-search.co.za
Or visit our Website
www.in-search.co.za