Some Concepts to Develop a Strategic Planning

April 2008

Mário Luís Tavares Ferreira

Strategic planning

Goals / Objectives

SWOT Analysis

Strategy

Implementation

Measurement and Evaluation

SWOT

Internal Environment

Strengths Weaknesses

World class productFinancial resourcesKnow-how

Technical supportInternal processesChannels network

External Environment

Opportunities Threats

Water & Energy crisesEnvironment awarenessProductivity improvement

Competitors market shareEuro X DollarTechnology development

TOWS matrix

Strengths Weaknesses

Opportunities S-O strategies W-O strategies

Threats S-T strategies W-T strategies

S-O strategies pursue opportunities that are a good fit to the companies strengths.W-O strategies overcome weaknesses to pursue opportunities.S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.W-T strategies establish a defensive plan to prevent the firm's

weaknesses from making it highly susceptible to external threats.

PEST analysis

A scan of the external macro-environment in which the company wants to operate (or operates) and can be expressed in terms of the following factors:

• Political • Economic • Social • Technological

Total sales

Company’s sales

Product lines

Product config

Product items

Sector sales

ProductLevel

Territory

Region

Country

Client

WorldGeographical Level

Short term

Mediumterm

Longterm

Timing Level

Ninety ways to measure demand (6 x 5 x 3)

Porter 5 Forces

Boston matrix – Product life cycle

Directional policy matrix or GE-McKinsey matrix

The diameter of each pie is proportional to the Volume or Revenue accruing to each Segment, and the solid slice of each ‘pie’ represents the share of the market enjoyed by the Company.

Management

Management, control and evaluation

Keys of Success - Facts of Failure

Deployment - Plan Completing

Success Failure>Assign roles and responsibilities

>Establish priorities

>Involve mid-level management as active participants

>Think it through - decide how to manage implementation

>Charge mid-level management with aligning lower-level plans

>Make careful choices about the contents of the plan and form it will take

>No accountability for deployment

>Too many goals, strategies, or objectives - no apparent priority >Plan in a vacuum-functional focus

>No overall strategy to implement

>Make no attempt to link with day-to-day operations

>Not being thorough-glossing over the details

Keys of Success - Facts of Failure

Deployment - Communicating

Success FailureAssign roles and responsibilities

Communicate the plan constantlyand consistently

Recognize the change process

Help people through the changeprocess

No accountability

Never talk about the plan

Ignore the emotional impact of change

Focus only on task accomplishment

Keys of Success - Facts of Failure

Implementing - I

Success FailureAssign roles and responsibilities

Involve senior leaders

Define an infrastructure

Link goal groups

Phase integration of implementationactions with workload

Involve everyone within theorganization

No accountability

Disengagement from process

Unmanaged activity

Fragmented accomplishment ofobjectives leads to sub-optimization

Force people to choose between implementation and daily work; too many teams

No alignment of strategies

Keys of Success - Facts of Failure

Implementing - II

Success FailureAllocate resources for implementation

Manage the change process

Evaluate results

Share lessons learned; acknowledgesuccesses through open andfrequent communication

Focus only on short term need for resources

Ignore or avoid change

No measurement system

Hide mistakes/lay blame;limited/no communication

Keys of Success - Facts of Failure

Strategic Measurement - I

Success FailureAssign roles and responsibilities

Use measurement to understandthe organization

Use measurement to provide aconsistent viewpoint from which togauge performance

Use measurement to provide anintegrated, focused view of thefuture

No accountability

Sub-optimization: focus only onefficiencies

Use measures that provide no realinformation on performance; usetoo many measures

Use measurement to focus on thebottom-line only

Keys of Success - Facts of Failure

Strategic Measurement - II

Success FailureUse measurement to communicatepolicy (new strategic direction)

Update the measurement system

Use measurement to providequality feedback to the strategicmanagement process

Use measurement to control

Never review measures

Fail to use measurement to makestrategic, fact-based decisions; useonly for control

Keys of Success - Facts of Failure

Evaluation

Success FailureAssign roles and responsibilities

Recognize when to update the plan

Modify strategic planning process to accommodate the more mature organization

Incorporate new leaders into the strategic planning process

Integrate measurement with strategic planning

Use experienced strategic planning facilitators

No accountability

Poor timing and not recognizing external forces

Rigid application of strategic planning process; ignore lessons learned from previous efforts

Ignore impact of new leaders

Don't use measurement information

Shortcut the process

Measurement and evaluation – BSC

Measurement and evaluation – BSC

Measurement and evaluation – BSC

Measurement and evaluation - BSC

Five disciplines – Peter Senge

Personal Mastery: • Aspiration involves formulating a coherent picture of the results

people most desire to gain as individuals, alongside a realistic assessment of the current state of their lives today.

• Learning to cultivate the tension between vision and reality can expand people's capacity to make better choices, and to achieve more of the results that they have chosen.

Mental Models:• Reflection and inquiry skills is focused around developing

awareness of the attitudes and perceptions that influence thought and interaction.

• By continually reflecting upon, talking about, and reconsidering these internal pictures of the world, people can gain more capability in governing their actions and decisions.

Five disciplines – Peter Senge

Shared Vision: • Establishes a focus on mutual purpose.• People learn to nourish a sense of commitment in a group or

organization by developing shared images of the future they seek to create, and the principles and guiding practices by which they hope to get there.

Team Learning:• Group interaction. • Through techniques like dialogue and skillful discussion, teams

transform their collective thinking, learning to mobilize their energies and actions to achieve common goals, and drawing forth an intelligence and ability greater than the sum of individual members' talents.

Five disciplines – Peter Senge

Systems Thinking: • People learn to better understand interdependency

and change, and thereby to deal more effectively with the forces that shape the consequences of our actions.

• Systems thinking is based upon a growing body of theory about the behavior of feedback and complexity - the innate tendencies of a system that lead to growth or stability over time.

• To help people see how to change systems more effectively and how to act more in tune with the larger processes of the natural and economic world.

Project management - processes

Project management – a process

Project management – process chain

Project management – risk analysis