Strategic Planning & Implementation - Raj Manek Mentorship Program

An Analogy of Strategy

Using an entertaining analogy, a strategy and its implementation can be compared to being in cross-country competitive road car races. You’ve entered car racing passionate, and are committed to win.

You struck a Business Plan on paper, and vetted it to ensure it is a viable option. You are now behind the wheel of the car, once again, with a team at the ready. You are understandably excited, and somewhat nervous. You appreciate that your team will continue to be tested on many fronts. You are ready!

A culture for the organization has been set at the top, and filtered throughout. It is well understood by all, and supported. You walk your talk.

You led your team in developing a strategy pointedly toward the vision. You all clearly understand the mission, and the overall purpose of why you are in this race. Your values are clearly evident and integrated into both policies and action. Realistically, you appreciate that these values will be tested, and you have bestowed upon your team the respective authority and responsibility to discharge their duties within the framework of the established culture and values of the organization. They’ve earned your trust, and yours theirs as the leader.

You feel confident in the strategy, and support the implementation plan. It is simplified and practical; it can be easily understood and referenced by the team, and evaluation points have been established along the way to make important and timely changes. It informs your stakeholders to what success will mean, and how it will be measured along the way measurable objectives

Each team member understands the tactics that will be undertaken, and how each area integrates effectively into the overall plan. The risks have been identified and understood - not just the obvious external ones, but also the internal organizational ones. Your management team knows which risks are going to be accepted due to their lower impact or a low probability of occurring, and have established mitigation plans for those risks with higher impact and/or higher probability of being realized .

Chances for success are greatly enhanced. You are confident. Your team is empowered. You all know what is to be done. You will not only be efficient, you will be effective. You know you are ready to put your vehicle into gear with greater confidence of a win.

The race is underway; the results are showing. You are hitting the milestones as planned, and managing the challenges effectively. You know, however, that in order to be successful you need to understand, as clearly as possible, the changing conditions in which you will be competing (macro and micro environmental scans); finding alternate routes when unexpected road blocks occur, and to regularly monitor to ensure that you continue to have the unique and sustainable competitive advantage.

“The ability to learn faster than competitors may be the only sustainable competitive advantage.”

“-- Arie de Geus, strategist and author ”

Those occasional misses encourage an objective evaluation process; lessons are gleaned and processes tweaked. You empower and support your team to continually adapt and renew to an ever-changing environment. You are an adaptive, learning organization. You are strong.

As you have your eye clearly on the road and a focus on the race, you are maintaining a pulse on the organization; ensuring that continued relevant competencies and resources are in place, and that your stakeholders’ needs and promises are understood, and held uppermost in priority. These vitally important relationships are solid; they are mutually beneficial and meaningful.

Yes, it is a complex set of gears that you are managing, but you are passionate about the race and know that there are opportunities toward even further evolution as a company. Those that are supporting this endeavor believe in you, and your strategy. The horizon looks bright and promising.

Introduction

Succinctly, a strategy is a comprehensive, integrated plan that ensures the basic objectives of the organization are reached. Amongst academics and the savvy business community it is well documented that success is often realized in those organizations that have both strong and well-executed strategies. A well articulated, well supported, and professionally presented strategy is a valuable communication tool for shareholders, Board of Directors/Advisors, employees and community stakeholders.

Far too often, however, we see well-intentioned strategic plans shelved due to the inevitable day-to-day operational demands, improperly integrated plans, or lack of organization-wide acceptance. Unfortunately, the results are typical: increased crisis management, ineffective use of resources, and lost opportunities. It is little wonder then that the strategic planning sessions for many organizations have created the dichotomy of hope and frustration.

“You don’t get what you plan.
You get what you resource. You get what you measure. You get what you reward.”

-- David Brown, Brown Governance

Today’s rapidly changing environment suggests that an adaptive enterprise is one that has a great opportunity for success. This creates a “living” document that is particularly relevant and useful.

Source: Pietrson, Willie. Reinventing Strategy – Using Strategic Learning to Create & Sustain Breakthrough Performance. John Willey Sons Inc., New York (2002)

A successful strategic process will include the following key steps:

This section of the Raj Manek Mentorship Toolkit is presented under the assumptions that you are an active small- to medium-size business entity, with a complete business plan. If you are not, then it is recommended that you discuss your situation with your Raj Manek Mentor.

Three sections are provided for easy reference, and utilize a practical and simplified approach to strategic planning. Each section can be treated as stand-alone, but are presented sequentially for those wishing to follow a more linear approach:

Situational Analysis to Perspective
Strategic Choices & Alignment
Implementing Strategy & Evaluating Progress

Your firm has unique needs. It is, therefore, encouraged that you utilize the following as a guideline only, and that you source professional advice to customize and/or fine-tune your strategic plan.

Please note:

The terms “organization” and “firm” are used interchangeably throughout this document.
Helpful hyperlinks and web links are provided throughout the document for those wishing clarification or further insight.

Although the sections can be addressed as stand-alone, the next sequential step is “Situational Analysis to Perspective”.

Situational Analysis to Perspective

To assist you in developing a more robust strategy, let us begin with a quick introduction of two distinct types of strategies - intended and emergent. Sometimes they occur simultaneously, such as when one decides to enter an emerging market. A prudent organization will, however, recognize the environment in which one is operating and consider both, scaling the strategies accordingly.

Deliberate strategies are seen in the more traditional format. They are carefully articulated with clear goals and measurements, and widely communicated throughout the organization before being implemented.
Emergent strategies are flexible and responsive. We increasingly see these strategies used when the operating environment is unstable (consider the high tech industry, particularly in its early years), too complex, or too imposing to defy. This strategy often used to respond to an evolving reality, requiring that management make decisions before full information is known. In its most extreme form, it requires a fully dynamic, engaged and adaptive environment (consider Apple under the leadership of Steve Jobs, co-founder of Apple Inc.).

In this process, strategy:

Addresses major initiatives, considering both deliberate and emergent initiative (to be adaptive).
Involves management, and
Uses resources to enhance firm performance in competitive environments, on behalf of the organization’s owners.
Drives and determines the organizational structure, as it adapts to the environmental changes in which it operates.
Considers the environment (political, economic, social, technical, environmental and legal) in which it operates.
Positions itself inimitably, with a distinct competitive advantage.
Has identified its dynamic capabilities, which will strengthen its competitive position.
Articulates clearly how it will compete, i.e., product/service leadership, operational excellence or customer intimacy, and how it will measure its success.

“The ability to make fast, widely supported and high-quality strategic decisions on a frequent basis is the cornerstone of effective strategy.”

– Kathleen Eisenhardt

Preparing for the Strategic Session

Prior to the strategic session, it is important that the organization prepare appropriately. The following information is designed to provide an objective process by which the firm can assess where it stands within industry, as well as with its core stakeholders. Take a deep breath, be open-minded; defensiveness has no role in this exercise:

Have available and reviewed appropriately objective data from/about stakeholders i.e.,
1. Stakeholder satisfaction surveys i.e., customers, shareholders, employees, etc.
2. Firm’s performance data – financial, sales and marketing, production, etc.
3. Industry benchmarks (if available) – this will assist in comparing firm performance to industry.
4. Current and anticipated external environmental changes in: industry, politically, economically, social, technologically, legally (compliance, safety, etc.), and environmentally (See PESTLE Analysis below).
Pull forth and have at the ready your firm’s:
1. Vision
2. Mission
3. Values, and
4. Purpose : Purpose/Rally Statement for staff/team
Review at the beginning of the exercise, and then at the end of the exercise if the vision, mission, values and purpose still firmly support the position of the organization, and reflect clearly on its mandates, and those of its owners.
Invite to your strategy session, senior managers and even, perhaps, carefully selected stakeholders whom you believe will provide a meaningful contribution to the process. All guests should be prepared to sign a non-disclosure, to provide assurance of confidentiality.
1. Logistics:
  - Preferably, the meeting should be held off-site in an environment that promotes good discussion, away from the distractions and interruptions of daily business operations.
  - Participants should be comfortable (business casual is often recommended, if professional dress is usual dress code in the office).
  - Catering should offer healthy options to keep energy levels strong. Avoid sugary foods, and offer protein in the morning with healthy options for beverages.
  - Offer fresh air and stretch breaks to keep energy levels primed.
  - Room temperature should be optimal for comfort.
  - Room set-up should optimize group breakout sessions, if needed.
  - Provide flip charts, sticky notepaper and markers for feedback.
  - Consider a facilitator that is not directly involved with the organization, but can assist with facilitating insights and bridging to core observations.
  - Participants should be encouraged and feel free to openly and respectfully share and dialogue. The focus is on ensuring the best outcomes for the organization, and a sustainable and strong future.
  - Expect that this component is the beginning of the journey. Make an organizational commitment to investing concerted energy toward completion, and successful execution.

Analysis Tools

The following are selected analytical tools to encourage robust discussions toward meaningful insights. It is helpful to use some of these concurrently; returning to fill in spots as more information comes to light. Do take a moment at the end of the session to review and note if there are any new insights to garner from the overall exercise.

S.W.O.T./S.C.O.T

P.E.S.T.L.E. Analysis

Mike Porter’s Five Forces Analysis

Reaffirming the Firm’s Differentiation & Value Positioning

Competitive Advantage Through Dynamic Capabilities

Your firm will sustain competitive advantage by performing strategically important activities better than your competitors. Michael Porter’s Value Chain Framework emphasizes that competitive advantage can come from not just great products or services, but any activity along the value chain. It may be surprising, but it is not purely about money, nor is it primarily about customer value for money; it is also about the value of innovation, and the quality and culture, more generally. Simply, in order to retain a competitive advantage, the firm must be stronger than its competition in a key area of value. Today, we see competitive advantages being realized through strong core competencies, as well as dynamic capabilities of the team.

Core Competencies, which could include, but is not limited to its track record in Research & Development, the strength of its reputation, the extent of difficulties competitors have in imitating the products/services, the firm’s ability to access more readily a wide variety of markets, and its ability to influence industry to achieve its goals.
Dynamic capabilities – speaks to the mastery, process and speed by which the firm can adapt its resources to respond to changes in the marketplace, and to emerging opportunities. These could include exceptional technical know-how, intellectual property (Patents), business process know-how and speed, the quality of customer and business relationships, the strength of the organization’s culture and values, and the strength of its resources – human, assets and financial.

Developing an inventory of both, and assessing them against the SWOT/SCOT will help identify areas of risk and opportunity. Questions to ask include:

What core competencies do our firm have? (Rate against poor to strong)
What core competencies do we need, but do not have?
What core competencies do we have but will need to strengthen?
What dynamic competencies do we believe our firm has that provides us with a competitive advantage?
What do we need to do to protect/strengthen these dynamic competencies?

Strategic Choices & Alignment

The strategic plan is the set of decisions and actions, which lead to the development and realization of an effective strategy. Strategic decisions typically have long-term organizational implications for key success factors. These are important in terms of the actions to be taken, the resources to be committed and the precedents set.

A few questions that you might consider to drive your decision-making process might be:

“What are the underlying forces that are driving our industry?”
“What are those few things our organization must do outstandingly well to win, and to continue winning in this environment?”
“What are the drivers of success?”
“What are the critical success factors for us?”
“Which are the objectives that will drive our success?”
“How will we mobilize the organization to implement these?”

“Tomorrow always arrives. It is always different.
And even the mightiest company is in trouble if it has not worked on the future.
Being surprised by what happens is a risk that even the largest and richest
company cannot afford, and even the smallest business need not run.”

-- Peter Drucker

Considering the development of measurable objectives, the acronym SMART is often used, prudently suggesting that measurable objectives be:

Specific, Measurable, Attainable, Realistic & Time-bound

The Balanced Score Card (BSC) has been used for many years in management. It views the organization from four perspectives, and suggests developing metrics, collecting data and analyzing performance relative to each of these perspectives: Financial, Internal Processes, Customer/Shareholder, and Leadership & Growth. The BSC is an in-depth school of study. Those protégées interested in learning more are encouraged to do so. In the meantime, we’ve gleaned some tools that are both simple and practical, as a starting point.

Note: KPIs – abbreviation for Key Performance Indicators.

It is important to link and align the organization around its strategy. Do focus on identifying measures that are the main drivers to success, and in putting weighting factors to measures. Ultimately, in business, all measures support financial growth.

Example:

Perspective Area	Measurement	Target	Initiative	Budget

Financial:	Operating Income	20% Income	Cost analysis and efficiency review	xxxx
	Sales vs. Last Year	12% increase	Expand product accessories line	xxxx

Customer	Market Share	20% by Year 3	Add 2 distribution outlets	xxxx
	Customer Loyalty	5% increase Year 2	Introduce on-line incentives	xxxx

Internal	Response time	Reduce by 50% Year 1	Full Process review	xxxx

Learning & Growth	Skill Development	Industry Skills Training Certification: 5 staff – Year 1	SIAST Program	xxxx

Sample measures for each perspective area might include:

Financial :	Economic value added, return on capital.
Customer :	Market share, satisfaction, repeat customers.
Internal :	Quality, response time, delivery time, cost.
Learning & Growth :	Training hours, skill development, rotation positions, R & D%

Although the sections can be addressed as stand-alone, the next sequential step is
“Implementing Strategy & Evaluation Progress”.

Risk Analysis

Developing Perspective

Implementing Strategy and Evaluating Process

Cited Works & References