Strategic Planning Process Overview and Talking Points
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Transcript of Strategic Planning Process Overview and Talking Points
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Overview of the Planning Process
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Structuring the Strategy Process
Strategic planning is the periodic resetting of mid-to long-term strategic direction and priorities; the process focuses on key issues and the specifi c initiatives needed to attain long-term strategic goals.
A Valued Activity
McKinsey Quarterly SurveyExecutive Responses, 2006
Very Signifi cant
44%
Somewhat Signifi cant
29%
Extremely Signifi cant
14%
Slightly Signifi cant
10%
Not at all Signifi cant
3%n = 796.
Almost 60% of executives in a recent survey confi rmed that the strategic planning process plays a highly-signifi cant role in developing strategy.
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 3
Key Components
Establishing Guidelines and Strategic Direction– Who should be involved with the process and what are our strategic aims?
Conducting External and Internal Analysis– What are our competitors doing and how do current market trends infl uence
the business?– What do our customers need and what does our current portfolio look like?
Formulating Corporate Strategy and Target Setting– What goals do we set for ourselves and how do we intend to get there?
Creating and Aligning BU Strategy– What strategies must our BUs pursue to meet corporate objectives?
Budgeting– How can we align our budget and operating plans with corporate strategy?
Communicating Strategic Plans– How can I build internal clarity and support to gain momentum for execution
of study?
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Illustrative
A Calendar-Driven ProcessAnnual Strategic Planning Process Map
Time Frame Q1 Q2 Q3 Q4
Stage
Key Outputs
Process steps for upcoming cycle
Evaluation of previous year’s performance; lessons learned
Preplanning dialogues between BU heads and center
Set of assumptions about external trends and threats
Evaluation of internal competencies
Discussion of strategic alternatives
Presentation of strategic plan to board
Planning dialogue between corporate and BU head targets communicated
BU develops individual plan in line with corporate goals
BU adjusts plans based on center’s input
Presentation of BU strategic plan to the board
Central and BU budget created
Hiring and redefi nition of employee roles/responsibilities
Companywide e-mails on strategy objectives
Dashboards created and monitored
Strategy responsibilities cascaded down the line
Establishing Process Steps and Strategy
Direction
Defi ning Corporate Strategy and Setting Targets
Budgeting
Conducting External and Internal Analysis
Formulating and Aligning BU Strategy
Communicating and Executing Strategy
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 5
Stage 1—Establishing Process Guidelines
Input
• Preview year’s workplan and strategy
• Overall and BU–specifi c fi nancial results for previous two years
Activities
• Review of previous year’s results in preparation preplanning
• Overall mission/strategic objective reviewed
Output
• Evaluation of performance against strategy, highlighting lessons learned and critical gaps
• Workplan (process steps for upcoming planning cycle)
Sample Tools and Approaches
Responsibilities ChartBusiness Strategy
ProcessComponents Strategy Organization Role
External Industry InternalAnalysis • Reality
testing• Competitive
analysis• World best
practice
• Performance analysis
• Value driver analysis
• Financial analysis
• Support SBU on demand with Fact packs for Business Strategy formulation Strategic models Management cockpit
• Advise SBU continuously on SBU Competitiveness and best practices
Design • Strategy formulation (strategic workshops)• Target setting
• Support SBU on demand with Facilitation of Business Strategy workshops SBU target setting Strategy documentation
• Advise OCE on Decisions regarding identifi ed strategic issues Functional guidance on strategy and operations improvement
Planning • Planning• Scheduling• Prioritizing• Resource allocation• Budget
• Support OCE by Ensuring SBU complies with requirements in
the planning process• Support SBU with Guidelines, templates, and relevant information
(i.e., assumptions, calendar, etc.)
• Maintain Archive of business planning documentation
Approval • Strategy presentation to OCE• Budget presentation to OCE
• Support OCE by SBU strategy and budget acceptance for
approval• Support SBU with: Guidelines, templates, and relevant information
• Maintain Archive of business planning documentation
Implementation • Execution• Quarterly Performance Review
• Support OCE by SBU strategy and budget acceptance for
approval• Support SBU with: Guidelines, templates, and relevant information
• Maintain Archive of business planning documentation
Clarifying Strategic Planning ResponsibilitiesOrganizational Requirements For Business Strategy
Process DesignBusiness
Units• BU Strategy Meeting/Workshop
• Update strategic plans and objectives
• Update key technical strategic initiatives
• BU Strategy Board presentation
• Update/review 3 tactical objectives
• Update/review 5-year fi nancial projection (if needed after annual budget is prepared)
Corporate • Kick-off planning process with business units
• Provide standard tools, templates
• Update 5-year fi nancial projection
• Partner business unit leader and facilitate strategy development
• Facilitate strategic process; provide standard strategy toolkit to simulate strategic insights
• Consolidate 5-year plan
Milestones • BU strategy meeting/workshop
• BU Strategy Board Reviews
• Publish 5-year “Run the Business” Plan
Strategy Planning Process Design“Run the Business” Strategy Development Process
Palladio Corporation
July August October NovemberMay
*
* Pseudonym.
Objective: Document lessons learned, organizational goals, planning process steps and responsibilities.
Milestones
Preplanning dialogue between BU and Center
Meeting between strategist and senior executives to discuss previous year’s performance and pitfalls to avoid
Establishing Process Guidelines
1 Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan
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Business Units
• BU Strategy Meeting/Workshop
• Update strategic plans and objectives
• Update key technical strategic initiatives
• BU Strategy Board presentation
• Update/review 3 tactical objectives
• Update/review 5-year fi nancial projection (if needed after annual budget is prepared)
Corporate • Kick-off planning process with business units
• Provide standard tools, templates
• Update 5-year fi nancial projection
• Partner business unit leader and facilitate strategy development
• Facilitate strategic process; provide standard strategy toolkit to simulate strategic insights
• Consolidate 5-year plan
Milestones • BU strategy meeting/workshop
• BU Strategy Board Reviews
• Publish 5-year “Run the Business” Plan
Strategy Planning Process Design“Run the Business” Strategy Development Process
Palladio Corporation
July August October NovemberMay
*
* Pseudonym.
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 7
Business Strategy Process
Components Strategy Organization RoleExternal Industry Internal
Analysis • Reality testing
• Competitive analysis
• World best practice
• Performance analysis
• Value driver analysis
• Financial analysis
• Support SBU on demand with Fact packs for Business Strategy formulation Strategic models Management cockpit
• Advise SBU continuously on SBU Competitiveness and best practices
Design • Strategy formulation (strategic workshops)• Target setting
• Support SBU on demand with Facilitation of Business Strategy workshops SBU target setting Strategy documentation
• Advise OCE on Decisions regarding identifi ed strategic issues Functional guidance on strategy and operations improvement
Planning • Planning• Scheduling• Prioritizing• Resource allocation• Budget
• Support OCE by Ensuring SBU complies with requirements in
the planning process• Support SBU with Guidelines, templates, and relevant information
(i.e., assumptions, calendar, etc.)
• Maintain Archive of business planning documentation
Approval • Strategy presentation to OCE• Budget presentation to OCE
• Support OCE by SBU strategy and budget acceptance for
approval• Support SBU with: Guidelines, templates, and relevant information
• Maintain Archive of business planning documentation
Implementation • Execution• Quarterly Performance Review
• Support OCE by SBU strategy and budget acceptance for
approval• Support SBU with: Guidelines, templates, and relevant information
• Maintain Archive of business planning documentation
Clarifying Strategic Planning ResponsibilitiesOrganizational Requirements For Business Strategy
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Stage 2—Internal/External Analysis
Input
• Recent Survey data
• Input from external consultants
• Industry/market analysis
Activities
• Collect and review data on industry trends
• Conduct and coordinate external market research
• Scenario planning
Output
• Preliminary list of strategic alternatives
• Set of assumptions about internal strengths and weaknesses and external trends
Driving Force Analysis
Business EnvironmentSummary
Objective: Determine external environment implications and internal competencies to create consensus on assumptions, trends, and viable strategy alternatives.
Milestones
Briefi ng book on analysis sent to senior management
Summit on business outlook
Establishing Process Guidelines
Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan 2
Driving Force Analysis
Driving Forces in the World Injectable Drugs MarketWexler Company*—U.S.-Based Global Pharmaceutical Firm
* Pseudonym, case disguised.
Strategic IssuesThreats and
Opportunities
CompetitiveCompetitor using cash fl ow from international markets to fund initiatives “in-play” in the United States
TechnologicalImpact of new orally administered treatments on existing core injectable product line
DemographicIncreased longevity, improved diagnostic capabilities, adoption of western dietary habits will increase treatment demand
EconomicPresence of treatment on third-party payer approved list determines consumer willingness to pay premium for convenience
OrganizationalPrimary decision making regarding treatment options moving away from traditional marketing channel contacts (i.e., specialists) to third-party payers and primary physicians
RegulatoryDrug approval processes becoming less antagonistic, more cooperative and more partnership-oriented
Driving Forces Defi ned
“Driving forces are the fundamental root causes of issues a company needs to address—economic, technological, organizational, demographic, competitive and regulatory factors in a company’s environment that either constitute threats or create opportunities. Clearly expressed, they make explicit the assumptions key employees have about the problems and opportunities a company faces.”
Professor Clayton M. Christensen Harvard Business School
Sample Tools and Approaches
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Driving Force Analysis
Driving Forces in the World Injectable Drugs MarketWexler Company*—U.S.-Based Global Pharmaceutical Firm
* Pseudonym, case disguised.
Strategic IssuesThreats and
Opportunities
CompetitiveCompetitor using cash fl ow from international markets to fund initiatives “in-play” in the United States
TechnologicalImpact of new orally administered treatments on existing core injectable product line
DemographicIncreased longevity, improved diagnostic capabilities, adoption of western dietary habits will increase treatment demand
EconomicPresence of treatment on third-party payer approved list determines consumer willingness to pay premium for convenience
OrganizationalPrimary decision making regarding treatment options moving away from traditional marketing channel contacts (i.e., specialists) to third-party payers and primary physicians
RegulatoryDrug approval processes becoming less antagonistic, more cooperative and more partnership-oriented
Driving Forces Defi ned
“Driving forces are the fundamental root causes of issues a company needs to address—economic, technological, organizational, demographic, competitive and regulatory factors in a company’s environment that either constitute threats or create opportunities. Clearly expressed, they make explicit the assumptions key employees have about the problems and opportunities a company faces.”
Professor Clayton M. Christensen Harvard Business School
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 11
Stage 3—Defi ning Corporate Strategy
Input
• Evaluation of performance against strategy marketplace
• Preliminary set of strategic alternatives
• Mission statement review
Activities
• Center reevaluates the company’s core competencies and examines opportunities for growth
• Center examines business portfolio
• Presentation of plan to Board of Directors
Output
• Determination of initial growth targets
• Overall strategic plan with goals
• Template and tools for BU guidance
Setting Goals
Growth Strategy Matrix
Objective: Achieve consensus on corporate goals by reviewing historical, peer, and market growth. Align specifi c targets to the appropriate strategy alternative.
Milestones
Presentation of strategic plan to the Board of Directors
Presentation to BUs of plan and discussion on ways to meet objectives
Establishing Process Guidelines
Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan 3
Growth Strategy Matrix
Core Transformation
New Business Creation
Core Value Maximization
Adjacency Extension
Existing New
Existing
New
Core Value MaximizationInvesting resources in the existing business system and industry.
Adjacency ExtensionPursuing sales opportunities in an unfamiliar industry space that leverages strengths of the existing business system.
Business System• Pricing Model• Value Chain Structure• Leveraged Technology• Applied Intellectual
Property• Brand Attributes• Employee Skill Set
Industry• Customer Base• Competitor Set• Product Offerings
Core TransformationIntroducing an unfamiliar business system that delivers more effective growth within the existing industry.
New Business CreationAdding to the core business by entering an adjacent industry space using an unfamiliar business system.
Setting GoalsMethodologies by Which Participants Set Planning Goals
General Methodology Possible Formats
Benchmarking• Benchmarking versus companies of similar size in similar industries• Benchmarking with a peer group of companies
Ambition• Ambition to reach or remain in a certain peer group of companies• Ambition to gain or retain the leading position in current markets
Analysis of markets or macroeconomic
trends
• Anticipation of major economic or market developments• Methods vary depending upon market situation and other external variables
Business line partnership or internal analysis
• Examination of business projections given current strengths• Ad-hoc discussion of long-term goals over the course of the year• Assessment of objectives necessary for the coming year or years• Negotiation with business units concerning their assessments of appropriate goals• Determination by business unit management; “Healthier businesses tend to set
bold, more creative goals”
Tradition or desire to meet predetermined goals, set by board of
directors, charter, or long-term plan
• A predisposition towards certain performance measures stemming from the corporation’s culture—essentially, an historical preference
• Certain levels of profi tability, market share, ROI or other traditional measures
Sample Tools and Approaches
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 12
Growth Strategy Matrix
Core Transformation
New Business Creation
Core Value Maximization
Adjacency Extension
Existing New
Existing
New
Core Value MaximizationInvesting resources in the existing business system and industry.
Adjacency ExtensionPursuing sales opportunities in an unfamiliar industry space that leverages strengths of the existing business system.
Business System• Pricing Model• Value Chain Structure• Leveraged Technology• Applied Intellectual
Property• Brand Attributes• Employee Skill Set
Industry• Customer Base• Competitor Set• Product Offerings
Core TransformationIntroducing an unfamiliar business system that delivers more effective growth within the existing industry.
New Business CreationAdding to the core business by entering an adjacent industry space using an unfamiliar business system.
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 13
Setting GoalsMethodologies by Which Participants Set Planning Goals
General Methodology Possible Formats
Benchmarking• Benchmarking versus companies of similar size in similar industries• Benchmarking with a peer group of companies
Ambition• Ambition to reach or remain in a certain peer group of companies• Ambition to gain or retain the leading position in current markets
Analysis of markets or macroeconomic
trends
• Anticipation of major economic or market developments• Methods vary depending upon market situation and other external variables
Business line partnership or internal analysis
• Examination of business projections given current strengths• Ad-hoc discussion of long-term goals over the course of the year• Assessment of objectives necessary for the coming year or years• Negotiation with business units concerning their assessments of appropriate goals• Determination by business unit management; “Healthier businesses tend to set
bold, more creative goals”
Tradition or desire to meet predetermined goals, set by board of
directors, charter, or long-term plan
• A predisposition towards certain performance measures stemming from the corporation’s culture—essentially, an historical preference
• Certain levels of profi tability, market share, ROI or other traditional measures
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 14
Stage 4—Formulating BU Strategy
Input
• Strategic planning tools and templates
• BU strategic and operational plans
• Center-defi ned target and goals
Activities
• Center works with individual BUs to develop BU-specifi c targets and goals
• Center compares BU plans to corporate strategy for major discrepancies and adjusts accordingly
• Presentation to the Center for approval
Output
• Individual strategic and operational BU plans
• Adjusted BU plans based on Center’s recommendations
Strategy Discussion Guidelines
Business Unit Strategy Question Template
Objective: Compose BU plan that incorporates product and customer analysis to propose growth strategy alternatives and align BU activities to corporate objectives.
Milestones
BU presentation of plan to center
Establishing Process Guidelines
Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan 4
Business Unit Strategy Building Blocks TemplateStrategy “Building Blocks”
Sample Questions and Planning Outputs
Aspirations• What are specifi c business unit aspirations in terms of market leadership, share, penetration,
customer loyalty, and brand image?• Three years from now, why are you the company of choice for your various customer groups?
Where to Play• In three years, how will your customer base change? What types of customers will you gain or lose?• In which specifi c markets will you play? In which markets will you not play?• How will the types and mix of products be different from today?• How will distribution channels differ?
How to Win• What are specifi c features of your future products? How do these differ from today?• How do your major competitors look in three years? In which areas are they dominant? Are there
“white spaces”?
Capabilities Required for Success• In which core capabilities must you excel, compared to your competitors?• What processes or functionalities are necessary in three years, but currently present to a lesser
degree, or absent altogether?
Performance Management Systems Required• How will you measure success in creating value for the customer?• What incentive programs are necessary to promote this value creation?
1
2
3
4
5
Planning Outputs• Revenue• Operating margin• Earnings growth• Industry-specifi c metrics
• Customer segments• Geographic areas• Product types• Distribution channels
• Value proposition to target customers
• Sources of competitive advantage
• Functionalities• Critical competencies• Required investments
• Metrics to judge success• Reward systems• Feedback mechanisms
Architecting a Good Strategic Conversation
• CEO and BU head• Other principal decision
makers, typically:– CFO– Group or division head– HR head– Top BU leaders
• Head of strategy as owner of process
• 6–12 total, must be capable of real discussion
Who
• Annually—timing linked to overall corporate calendar
• Half- to full-day per BU
• BU site if possibleWhere
When
• Mid- to long-term strategy• Fact-based analysis• Not
– Short-term fi nancial performance
– Annual operating planning– Budgeting or investment
decision making– All discussed elsewhere
• Intense BU-owned preparation
• Supported by strategy group; but not overly “templated”
• Mandatory prereading• Real discussion, not “dog
and pony” slide show• Constructive challenge,
not “gotcha”
How
What
May
Sample Tools and Approaches
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 15
Business Unit Strategy Building Blocks TemplateStrategy “Building Blocks”
Sample Questions and Planning Outputs
Aspirations• What are specifi c business unit aspirations in terms of market leadership, share, penetration,
customer loyalty, and brand image?• Three years from now, why are you the company of choice for your various customer groups?
Where to Play• In three years, how will your customer base change? What types of customers will you gain or lose?• In which specifi c markets will you play? In which markets will you not play?• How will the types and mix of products be different from today?• How will distribution channels differ?
How to Win• What are specifi c features of your future products? How do these differ from today?• How do your major competitors look in three years? In which areas are they dominant? Are there
“white spaces”?
Capabilities Required for Success• In which core capabilities must you excel, compared to your competitors?• What processes or functionalities are necessary in three years, but currently present to a lesser
degree, or absent altogether?
Performance Management Systems Required• How will you measure success in creating value for the customer?• What incentive programs are necessary to promote this value creation?
1
2
3
4
5
Planning Outputs• Revenue• Operating margin• Earnings growth• Industry-specifi c metrics
• Customer segments• Geographic areas• Product types• Distribution channels
• Value proposition to target customers
• Sources of competitive advantage
• Functionalities• Critical competencies• Required investments
• Metrics to judge success• Reward systems• Feedback mechanisms
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 16
Architecting a Good Strategic Conversation
• CEO and BU head• Other principal decision
makers, typically:– CFO– Group or division head– HR head– Top BU leaders
• Head of strategy as owner of process
• 6–12 total, must be capable of real discussion
Who
• Annually—timing linked to overall corporate calendar
• Half- to full-day per BU
• BU site if possibleWhere
When
• Mid- to long-term strategy• Fact-based analysis• Not
– Short-term fi nancial performance
– Annual operating planning– Budgeting or investment
decision making– All discussed elsewhere
• Intense BU-owned preparation• Supported by strategy group;
but not overly “templated”• Mandatory prereading• Real discussion, not “dog
and pony” slide show• Constructive challenge,
not “gotcha”
How
What
May
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 17
Stage 5—Budgeting
Input
• Final corporate and BU operational and strategic plans
• Previous year’s targets and budgeting plan
Activities
• Center and BU determine budgeting cycle
• Finance and Strategy interact to negotiate targets and allocations
• Center allocates total budget to BU
Output
• Central budget and BU individual operating budgets created
Budgeting Timeline Variations
Budgeting Structures
Milestones
Budget created
Establishing Process Guidelines
Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan 5
Objective: Determine Corporate and BU budgets to align resource allocation to strategic priorities.
Budgeting Timeline Variations
Hypothetical Schedule of Relationship Between Cycles
3
Jan Jun Dec
2
1Budgeting Cycle
Planning Cycle
1 Time of start depends on the following factors:• Length of cycle and anticipated time needed until
presentation to board of directors• Seasonal nature of business, and therefore the
availability of seasonal data
Length of cycle varies according to the following factors:• Number of iterations• Complexity of organization (e.g., number of SBUs)
End of cycle, typically coinciding with presentation to the board of directors
2
3
Budgeting StructuresThe three principal methods used to prepare budgets are top–down, bottom–up,
and negotiated, each determining the input and participation levels from budget holders
Attributes Budget Styles
• Budget allowance set at the top with no participation from the ultimate budget holders in the budgeting process
Sets clear and directive targets
Budgets more likely to align with long-term strategic priorities
Buy-in can become an issue if budget holders feel targets are unrealistic
Bottom–Up (“Participative Budgeting”)
Top–Down
(“Imposed Budgeting”)
Negotiated
Strengths and Weaknesses
• Combines elements of the other two more extreme styles
• Budget allowances created on the basis of negotiations between budget holders and those to whom they report
Consolidates knowledge spread across divisions
Inclusive planning process improves communication between managers
Time-consuming process
• All budget holders participate in setting their own budgets
Involvement can positively motivate budget holders
Participation facilitates cooperation, avoiding silos
Mid/junior-level budget holders lack budgeting expertise and strategic vision
Allows unmotivated budget holders to build slack into their budget allowance
Sample Tools and Approaches
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 18
Budgeting StructuresThe three principal methods used to prepare budgets are top–down, bottom–up,
and negotiated, each determining the input and participation levels from budget holders
Attributes Budget Styles
• Budget allowance set at the top with no participation from the ultimate budget holders in the budgeting process
Sets clear and directive targets
Budgets more likely to align with long-term strategic priorities
Buy-in can become an issue if budget holders feel targets are unrealistic
Bottom–Up (“Participative Budgeting”)
Top–Down
(“Imposed Budgeting”)
Negotiated
Strengths and Weaknesses
• Combines elements of the other two more extreme styles
• Budget allowances created on the basis of negotiations between budget holders and those to whom they report
Consolidates knowledge spread across divisions
Inclusive planning process improves communication between managers
Time-consuming process
• All budget holders participate in setting their own budgets
Involvement can positively motivate budget holders
Participation facilitates cooperation, avoiding silos
Mid/junior-level budget holders lack budgeting expertise and strategic vision
Allows unmotivated budget holders to build slack into their budget allowance
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 19
Budgeting Timeline Variations
Hypothetical Schedule of Relationship Between Cycles
3
Jan Jun Dec
2
1Budgeting Cycle
Planning Cycle
1 Time of start depends on the following factors:• Length of cycle and anticipated time needed until
presentation to board of directors• Seasonal nature of business, and therefore the
availability of seasonal data
Length of cycle varies according to the following factors:• Number of iterations• Complexity of organization (e.g., number of SBUs)
End of cycle, typically coinciding with presentation to the board of directors
2
3
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 20
Communicating and Executing Strategy
Stage 6—Communicating the Plan
Input
• Final corporate and BU strategic plan
• Next year’s budgets
Activities
• Strategic plans communicated to BU and staff through meetings, memos, and workshops
• Center adjusts incentives to reward employees for performance
Output
• Companywide e-mails and/or voicemails
• Strategic dashboard updated to monitor progress toward strategic and fi nancial goals
Balanced Scorecard
Strategy Communication Cascade
Objective: Increase commitment to strategic plan execution by communicating and cascading strategic objectives and responsibilities throughout the organization.
Milestones
Strategy shifts communicated
Establishing Process Guidelines
Internal/External Analysis
Defi ningCorporate Strategy
Formulating BU Strategy Budgeting Communicating
the Plan 6
Guarding Against Mixed Messages
Core Message Document 1. Become the most admired growth
company in America• Seven years of remarkable growth• Time to move to the next level• Evolution based on RadioShack’score principles, strategy
2. Realigning organization to heightenour already intensely customer-focused culture• Become a multichannel sales/service company
• Expand customer base
EVP Sales to Divisional VP
Divisional VP to Regional Sales
Managers
Regional Sales Managers to District
Sales Managers
District Sales Managers to Store
Managers
Store Manager to Frontline Staff
Illustrative Communications Documents Cascading Strategy Communication
Monitoring Strategy
Balanced Scorecard
Goals/Targets Strategic Deliverables Outcomes May June July Comments
FinancialGrow the Business Profi tably
Achieve business unit revenue targets Revenue of $X M
Deliver operations effi ciency targets Cost Reductions of $X M
Achieve earnings targets Earnings of $X M
CustomerIncrease Focus on Customer Needs
Continue to strengthen customer satisfaction
Improve Customer Satisfaction by X%
Implement strategy initiatives as planned See following page
Delivery ServiceExceed Industry Service Levels
Maintain Product X best-in-class delivery, and progress Product Y toward industry levels
Line of Business A: XX%Line of Business B: XX%
Line of Business C: XX%
EmployeeContinue to Strengthen Employee Engagement
Invest in frontline resources Expand sales force by X%, and deliver sales training to 100%
Continue to increase employee satisfaction
Improve employee satisfaction by X%
Sample Tools and Approaches
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 21
Guarding Against Mixed Messages
Core Message Document 1. Become the most admired growth
company in America• Seven years of remarkable growth• Time to move to the next level• Evolution based on RadioShack’s core principles, strategy
2. Realigning organization to heighten our already intensely customer-focused culture• Become a multichannel sales/service company
• Expand customer base
Illustrative Communications Documents Cascading Strategy Communication
EVP Sales to Divisional VP
Divisional VP to Regional Sales
Managers
Regional Sales Managers to District
Sales Managers
District Sales Managers to Store
Managers
Store Manager to Frontline Staff
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 22
Monitoring Strategy
Balanced Scorecard
Goals/Targets Strategic Deliverables Outcomes May June July Comments
FinancialGrow the Business Profi tably
Achieve business unit revenue targets Revenue of $X M
Deliver operations effi ciency targets Cost Reductions of $X M
Achieve earnings targets Earnings of $X M
CustomerIncrease Focus on Customer Needs
Continue to strengthen customer satisfaction
Improve Customer Satisfaction by X%
Implement strategy initiatives as planned See following page
Delivery ServiceExceed Industry Service Levels
Maintain Product X best-in-class delivery, and progress Product Y toward industry levels
Line of Business A: XX%Line of Business B: XX%
Line of Business C: XX%
EmployeeContinue to Strengthen Employee Engagement
Invest in frontline resources Expand sales force by X%, and deliver sales training to 100%
Continue to increase employee satisfaction
Improve employee satisfaction by X%
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 23
Lessons to Guide You
Overview of the Planning Process
Designing an Effective
Planning Process
Designing a Robust BU Planning Template
Continuous Strategic
Planning Models
Designing the Planning Process
Conducting External Analysis
Defi ning Corporate Strategy and
Setting Targets
Formulating and Aligning BU Strategy
BudgetingCommunicating and Executing
Strategy
Introduction to Scenario
Planning
Analyzing Industry
Driving Forces
Assessing Competitive Disruptions
Redefi ning the Corporate Mission
Setting BU Growth Targets
Identifying Growth Strategy
Alternatives
Defi ning the Business Model
Aligning M&A Strategy with BU Strategy
Budgeting Drivers and Concepts
Principal Budgeting Methods
Funding Growth Projects
Implementing a Strategy
Communication Workshop
Ensuring Cross Business
Alignment
Using Hoshin Kanri for
Strategic Plan Deployment
CSB19GDVQL © 2008 Corporate Executive Board. All Rights Reserved. 24
p 9: Duke Energy Corporation; Marakon Associates; Working Council for Chief Financial Offi cers research.
p.10: Christensen, Clayton M., Making Strategy: Learning by Doing, Harvard Business Review (November/December 1997): 141156; Wexler Company; Corporate Strategy Board research.
Sources
CSB19GDVQL
Corporate Executive Board
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