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8/8/2019 Strategic Planning Model PGDM HR
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Strategic Planning
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WHAT IS STRATEGIC PLANNING?
Process to establish priorities on what you willProcess to establish priorities on what you will
accomplish in the futureaccomplish in the future Forces you to make choices on what you will doForces you to make choices on what you will do
and what you will not doand what you will not do Pulls the entire organization together around aPulls the entire organization together around a
single game plan for executionsingle game plan for execution Broad outline on where resources will get allocatedBroad outline on where resources will get allocated
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WHY DO STRATEGIC PLANNING?
If you fail to plan, then you plan to fail beIf you fail to plan, then you plan to fail be
proactive about the futureproactive about the future Strategic planning improves performanceStrategic planning improves performance
Counter excessive inward and short-term thinkingCounter excessive inward and short-term thinking Solve major issues at a macro levelSolve major issues at a macro level Communicate to everyone what is most importantCommunicate to everyone what is most important
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WHY IS STRATEGICMANAGEMENT VITAL?
Rapid change
Increasing competition
Economic uncertainty
Increasing regulation
Globalisation
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FUNDAMENTAL QUESTIONS TO ASK
Where are we now? (Assessment)Where are we now? (Assessment) Where do we need to be? (Gap / Future EndWhere do we need to be? (Gap / Future End
State)State)
How will we close the gap (Strategic Plan)How will we close the gap (Strategic Plan) How will we monitor our progress (BalancedHow will we monitor our progress (Balanced
Scorecard)Scorecard)
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A GOOD STRATEGIC PLANSHOULD . . .
Address critical performance issuesAddress critical performance issues Create the right balance between what theCreate the right balance between what the
organization is capable of doing vs. what theorganization is capable of doing vs. what the
organization would like to doorganization would like to do Cover a sufficient time period to close theCover a sufficient time period to close the
performance gapperformance gap Visionary convey a desired future end stateVisionary convey a desired future end state
Flexible allow and accommodate changeFlexible allow and accommodate change Guide decision making at lower levels Guide decision making at lower levels
operational, tactical, individualoperational, tactical, individual
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Ambiguous
Complex
Organisation-wide
Fundamental
Long-term
implications
Routinised
Operationally specific
Short-term
implications
STRATEGIC
MANAGEMENT
OPERATIONAL
MANAGEMENT
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MAJOR COMPONENTS OF THESTRATEGIC PLAN / DOWN TO ACTION
Mission
Vision
Goals
Objectives
Measures
Why we existWhy we exist
What we want to beWhat we want to be
Indicators andIndicators and
Monitors of successMonitors of success
Desired level ofDesired level of
performance and timelinesperformance and timelines
Planned Actions toPlanned Actions toAchieve ObjectivesAchieve Objectives
O1 O2
AI1 AI2 AI3
M1 M2 M3
T1 T1 T1
Specific outcomes expressed inSpecific outcomes expressed in
measurable terms (NOT activities)measurable terms (NOT activities)
Strategic Plan
Action Plans
Evaluate Progress
Targets
Initiatives
What we must achieve to be successfulWhat we must achieve to be successful
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MISSION STATEMENT
Captures the essence of why the organizationCaptures the essence of why the organization
exists Who we are, what we doexists Who we are, what we do Explains the basic needs that you fulfillExplains the basic needs that you fulfill
Expresses the core values of the organizationExpresses the core values of the organization Should be brief and to the pointShould be brief and to the point Easy to understandEasy to understand If possible, try to convey the unique nature of yourIf possible, try to convey the unique nature of your
organization and the role it plays that differentiatesorganization and the role it plays that differentiates
it from othersit from others
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EXAMPLES GOOD AND BADMISSION STATEMENTS
To Make PeopleHappy
To Explore theUniverse andSearch for Life
and to Inspirethe NextGeneration ofExplorers
NASA
Walt Disney
Does a good job of expressing
the core values of theorganization. Also conveysunique qualities about theorganization.
Too vague and and unclear.Need more descriptiveinformation about what makesthe organization special.
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VISION
How the organization wants to be perceived in theHow the organization wants to be perceived in the
future what success looks likefuture what success looks like An expression of the desired end stateAn expression of the desired end state
Challenges everyone to reach for somethingChallenges everyone to reach for somethingsignificant inspires a compelling futuresignificant inspires a compelling future
Provides a long-term focus for the entireProvides a long-term focus for the entire
organizationorganization
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EXAMPLES OF VISION DESCRIPTORS
Adept
Aggressive
Agile
Aligned
Assertive
Available
Best-in-class
Challenging
Clear
Competent
Complex Compliant
Conservative
Coordinated
Critical
Direct
Equal
Disciplined
Effective
Efficient
Enduring Expanding
Expert
Fast
Fast-paced
Financially-sound Focused
Growth
Healthy
Improving
Incentivized
Increasing
Solid
Solvent
Stable
State of the
Art
Strong
Streamlined
Sufficient
Strategic
Sustainable
Timely
Value-added
Vigilant
Visionary
World-class
Informative
Innovative
Leading
Logical
Major Nimble
Pioneering
Protected
Organized
Over-Arching Quick
Ready
Responsive
Savvy
Simple
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LEVELS OF STRATEGY FORMULATION
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UNITS OF STRATEGIC ANALYSIS
Corporate level strategy Level and type of diversification
Business level strategy Low cost, differentiation, niche
Variety, needs, access based Global level strategyGlobal, international, transnational, multi-
domestic
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STRATEGIC MANAGEMENT
Disciplinediterative
processof pursuing amission,whilemanaging
therelationship ofthe firm to itsenvironment.
Environmental Scanning
Evaluation &Control
StrategyImplementatio
n
StrategyFormulationMission
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STRATEGIC PLANNING MODELA B C D E
EnvironmentalScan
Assessment
BackgroundInformation
SituationalAnalysis
SWOT Strengths,Weaknesses,Opportunities,Threats
Situation Past,Present andFuture
SignificantIssues
Align / Fit withCapabilities
Mission &Vision
Values /GuidingPrinciples
Major Goals
SpecificObjectives
PerformanceMeasurement
Targets /Standards ofPerformance
Initiatives andProjects
Baseline Components
PerformanceManagement
Review Progress BalancedScorecard
Take CorrectiveActions
Down toSpecifics
Evaluate
Where we are Where we want to be How we will do it How are we doing
Gaps Action Plans Feedbackupstream revise plans
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PRE-REQUISITES TO PLANNING
Senior leadership commitmentSenior leadership commitment Who will do what?Who will do what? What will each group do?What will each group do?
How will we do it?How will we do it? When is the best time?When is the best time?
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Assessment
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ASSESSMENT MODEL:S W O T
Assessment
External Assessment:Marketplace, competitors, socialtrends, technology, regulatoryenvironment, economic cycles .
External Assessment:Marketplace, competitors, socialtrends, technology, regulatoryenvironment, economic cycles .
Internal Assessment:Organizational assets, resources,people, culture, systems,partnerships, suppliers, . . .
Internal Assessment:Organizational assets, resources,people, culture, systems,partnerships, suppliers, . . .
Easy toUnderstand
Apply at anyorganizational
level
Needs to beAnalytical andSpecific
Be honest about
yourweaknesses
Good Points Possible Pitfalls
SWOT SWOT
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STRENGTHS
Assessment
Strengths Those things that you do well, theStrengths Those things that you do well, the
high value or performance pointshigh value or performance points Strengths can be tangible: Loyal customers,Strengths can be tangible: Loyal customers,
efficient distribution channels, very high qualityefficient distribution channels, very high qualityproducts, excellent financial conditionproducts, excellent financial condition
Strengths can be intangible: Good leadership,Strengths can be intangible: Good leadership,
strategic insights, customer intelligence, solidstrategic insights, customer intelligence, solid
reputation, high skilled workforcereputation, high skilled workforce Often considered Core Competencies BestOften considered Core Competencies Best
leverage points for growth without draining yourleverage points for growth without draining your
resourcesresources
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WEAKNESSES
Assessment
Weaknesses Those things that prevent you fromWeaknesses Those things that prevent you from
doing what you really need to dodoing what you really need to do Since weaknesses are internal, they are withinSince weaknesses are internal, they are within
your controlyour control Weaknesses include: Bad leadership, unskilledWeaknesses include: Bad leadership, unskilled
workforce, insufficient resources, poor productworkforce, insufficient resources, poor product
quality, slow distribution and delivery channels,quality, slow distribution and delivery channels,
outdated technologies, lack of planning, . . .outdated technologies, lack of planning, . . .
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OPPORTUNITIES
Assessment
Opportunities Potential areas for growth andOpportunities Potential areas for growth and
higher performancehigher performance External in nature marketplace, unhappyExternal in nature marketplace, unhappy
customers with competitors, better economiccustomers with competitors, better economicconditions, more open trading policies, . .conditions, more open trading policies, . .
Internal opportunities should be classified asInternal opportunities should be classified as
StrengthsStrengths
Timing may be important for capitalizing onTiming may be important for capitalizing on
opportunitiesopportunities
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THREATS
Assessment
Threats Challenges confronting the organization,Threats Challenges confronting the organization,
external in natureexternal in nature Threats can take a wide range bad pressThreats can take a wide range bad press
coverage, shifts in consumer behavior, substitutecoverage, shifts in consumer behavior, substituteproducts, new regulations, . . .products, new regulations, . . .
May be useful to classify or assign probabilities toMay be useful to classify or assign probabilities to
threatsthreats
The more accurate you are in identifying threats,The more accurate you are in identifying threats,
the better position you are for dealing with thethe better position you are for dealing with the
sudden ripples of changesudden ripples of change
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ORGANIZATIONAL PROFILE1. OPERATING ENVIRONMENT
Baseline
Products and Services Suppliers, DeliveryProducts and Services Suppliers, Delivery
Channels, Contracts, Arrangements, . . .Channels, Contracts, Arrangements, . . . Organizational Culture Barriers, Leadership,Organizational Culture Barriers, Leadership,
Communication, Cohesiveness . . . .Communication, Cohesiveness . . . . Workforce Productivity Skill levels, diversity,Workforce Productivity Skill levels, diversity,
contractors, aging workforce, . . .contractors, aging workforce, . . . Infrastructure Systems, technology, facilities, . .Infrastructure Systems, technology, facilities, . .
Regulatory Product / Service Regulation, ISORegulatory Product / Service Regulation, ISO
Quality Standards, Safety, Environmental, . . .Quality Standards, Safety, Environmental, . . .
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ORGANIZATIONAL PROFILE2. BUSINESS RELATIONSHIPS
Baseline
Organizational Structure Business Units,Organizational Structure Business Units,
Functions, Board, Management Layers, . . .Functions, Board, Management Layers, . . . Customer Relationships Requirements,Customer Relationships Requirements,
Satisfaction, Loyalty, Expectations, . . .Satisfaction, Loyalty, Expectations, . . . Value Chain Relationship between everyone inValue Chain Relationship between everyone in
the value chain . . . .the value chain . . . . Partner Relationships Alliances, long-termPartner Relationships Alliances, long-term
suppliers, customer partnerships, . . .suppliers, customer partnerships, . . .
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ORGANIZATIONAL PROFILE3. KEY PERFORMANCE CATEGORIES
Baseline
CustomerCustomer Products and ServicesProducts and Services FinancialFinancial
Human CapitalHuman Capital OperationalOperational External (Regulatory Compliance, SocialExternal (Regulatory Compliance, Social
Responsibility, . . . )Responsibility, . . . )
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Integrity Complete; useful; inclusive ofseveral types of measure; designed tomeasure the most important activities ofthe organization
Reliable: Consistent
Accurate - Correct
Timely Available when needed: designed touse and report data in a usable timeframe
Confidential and Secure: Free from
inappropriate release or attack
CRITERIA FOR GOOD MEASURES
Down toSpecifics
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EXAMPLES OF MEASUREMENTSLEAD INDICATORS
Average time to initiate customer contact =>shorter time should lead to better customerservice
Average response time to incident => below
average response times should lead toincreased effectiveness in dealing with incident
Facilities that meet facility quality A1 rating =>should lead to improved operational readiness
for meeting customer needs
Down toSpecifics
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EXAMPLES OF MEASUREMENTSLAG INDICATORS
Overall customer satisfaction rating => howwell you are doing looking back
Business Units met budgeted service hour
targets => after the fact reporting of servicedelivery volume
Number of category C safety accidents atconstruction sites => historical report of what
has already taken place
Down toSpecifics
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TARGETS
For each measurement, you should have atleast one target
Targets should stretch the organization tohigher levels of performance
Incremental improvements over currentperformance can be used to establish yourtargets
Targets put focus on your strategy
When you reach your targets, you havesuccessfully executed your strategy
Down toSpecifics
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EXAMPLES OF TARGETS
Average Time to Process NewEmployee Setups in DB
65 days Year2007
60 days Year2008
55 days Year2009
Utilization Rate for RentalHousing Units
90% for
Year 2007
92% for Year2008
95% for Year2009
Toxic Sites meeting in-servicecompliance 55% for Year2007 70% for Year2008 95% for Year2009
Personnel Fully Trained inSafety and Emergency
65% by 2rdQuarter
75% by 3thQuarter
90% by 4thQuarter
Open Positions Filled after 30
day promotion period
75 positions
Sept 2007
100 positions
Jan 2008
135 positions
July 2008
% Reduction in Orders FilledShort in 1st Cycle
50% by Year2008
65% by Year2009
85% by Year2010
Down toSpecifics
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SANITY CHECK . . .
Make sure everything is linked and connectedfor a tight end-to-end model for drivingstrategic execution.
INITIATIVE
Employee
Productivity
Improvement
Program
Employee
Satisfaction
Survey
Rating
90%
favorable
overall
Measure
Target
Target Actual
90%
45%
PercentSatisfactio
n
gap
MEASURE / TARGET
OBJECTIVEImprove Employee
Satisfaction
ACTION PLAN
Identify issues per a
company wide
survey
Down toSpecifics
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Evaluate
CONTINUOUS FEEDBACK
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CONTINUOUS FEEDBACKTHROUGH THE BALANCEDSCORECARD
Cascade and align from the top to create aStrategic Management System. Use the Balanced Scorecard framework to
organize and report actionable components. Use the Scorecard for managing the execution
of your strategy. Scorecard forces you to look at different
perspectives and take into account cause-effect relationships (lead and lag indicators)
Improves how you communicate your strategy critical to execution.
Evaluate
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D2-D5: Build the Balanced ScorecardD2-D5: Build the Balanced ScorecardPERFORMANCE MANAGEMENT
Establish a regular review cycle using yourbalanced scorecard. Analyze and compare trends using graphs for
rapid communication of performance. Dont be afraid to change your metrics life
cycle (inputs to outputs to outcomes) Work back upstream to revise your plans: Action
Plans > Operating Plans > Strategic Plans Planning is very dynamic must be flexible to
change. Recognize and reward good performance results Brainstorm and change take corrective action
on poor performance results.
Evaluate
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D2-D5: Build the Balanced ScorecardD2-D5: Build the Balanced ScorecardAUTOMATING THE PROCESS
Evaluate
Low Cost Scorecard Tools1. Dialog (www.balancedscorecard2.com)
2. Ergometrics (www.ergometrics.com)
3. ExecDash (www.idashes.net)
4. Scorecard Hosting (www.scorecardhosting.com)
High End Best of Breed Tools
1. PB Views (www.pbviews.com)2. QPR (www.qpronline.com)
3. Rocket (www.rocketsoftware.com/portfolio/epm)
http://www.balancedscorecard2.com/http://www.ergometrics.com/http://www.idashes.net/http://www.scorecardhosting.com/http://www.pbviews.com/http://www.qpronline.com/http://www.rocketsoftware.com/portfolio/epmhttp://www.rocketsoftware.com/portfolio/epmhttp://www.qpronline.com/http://www.pbviews.com/http://www.scorecardhosting.com/http://www.idashes.net/http://www.ergometrics.com/http://www.balancedscorecard2.com/8/8/2019 Strategic Planning Model PGDM HR
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LINK BUDGETS TO STRATEGIC PLAN
The worlds best Strategic Plan will fail if it is notadequately resourced through the budgetingprocess
Strategic Plans cannot succeed without people,time, money, and other key resources Aligning resources validates that initiatives and
action plans comprising the strategic plansupport the strategic objectives
Evaluate
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Every Action Plan should identify the following:
The people resources needed to succeed
The time resources needed to succeed
The money resources needed to succeed
The physical resources (facilities, technology, etc.) needed to
succeed
Resource information is gathered by Objective Owners which is provided
to the Budget Coordinators for each Business Unit.
Resources identified for each Action Plan are used to establish the totalcost of the Initiative.
Cost-bundling of Initiatives at the Objective level is used by our Business
Unit Budget Coordinators to create the Operating Plan Budget
WHAT RESOURCES?HOW TO LINK?
Evaluate
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SOME FINAL THOUGHTS
Integrate all components from the top to thebottom: Vision > Mission > Goals > Objectives >Measures > Targets > Initiatives > Action Plans >Budgets.
Get Early Wins (Quick Kills) to create somemomentum
Seek external expertise (where possible andpermissible)
Articulate your requirements to senior leadership ifthey are really serious about strategic execution
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Thanks forThanks foryour participation!your participation!