Strategic Thinking and Planning

Why think strategically?Studies indicate that: • 90% of all businesses lack a strategic plan

• Only 19% of workers say they can effectively translate the company’s top goals into the work they do

[“The Greatness Challenge,” Franklin Covey]

• Businesses that are committed to strategic thinking and planning show an increase of 12% on the bottom line and 11% on the top line, greater above those that don’t do strategic planning. (This is in addition to “business as usual” growth).

[Strategic Management Study, by M3 Planning]

• You can impact your company’s future and profitability by thinking strategically about your business

• The first rule of a successful business strategy is….

Get a business strategy ! [Robert Heller]

What is strategy, or strategic thinking?

• When you think strategically, you lift your head above your day to day work and consider the larger environment in which you are operating

• You ask questions and challenge assumptions about how things work in your company and your industry

• A company’s strategic plan is the “game plan” for positioning the company in its chosen market arena, competing successfully, satisfying customers, and achieving good business performance

• To move from where you are today to where you want to go, you have to first determine your ‘strategic position’, or where you stand today

• You use insights gained to make prudent choices and select appropriate courses of action

• Collect and effectively analyse information concerning your strategic position, and general trends that might affect your business

• The skill to gather data, analyse information, and use the information to improve business processes and efficiencies is an effective strategic thinking skill

• Identify patterns in your data that may be useful when developing your strategic plan

• Using the S.W.O.T analysis is a trusted business tool for identifying your opportunities and threats

Gather information...

S.W.O.T analysis…Conducting a S.W.O.T analysis allows you to:1. Understand your competitors’ strengths

and weaknesses2. Focus on how you compare to your

competitors3. Identify what activities you need to focus

on, and what activities are not necessary4. Identify what activities you excel at

and need to continue to support

• No organisation can successfully execute strategy without the right people, processes and technology capabilities

• You need a clear idea of what your capabilities are and where yourdeficiencies are

• Identify and assess capability gaps and the management process required to close the gaps

Does your company have the capabilities to execute its strategy...?

Vision and direction……1. Clarify your company direction

and purpose 2. Develop a sound strategic vision3. The strategic vision needs to be realistic,

keeping in mind the necessities of the enterprise and what is achievable

4. The goals should be specific and easily measurable

5. Where do you want to be in 3 to 5 years time?

Decision-making……• Use the strategic vision of the company

as a basis for all significant decisions

• When making decisions, ask the question: Does what we are considering support the company’s strategic vision and direction?

• The strategic plan is the “bridge” or road map

between where the organisation is now and where you want it to be

• There are different types of strategic plans at different levels within the organisation

Strategic Planning...

Different types of strategic planning at different levels within the organisation

External issuesCustomer perspective

Product/Service perspective

PriceQuantity

AvailabilitySelection

FunctionalityServiceBrand

Internal issues

Financial perspective

Operational structure

Learning and Growth

Productivity Strategy

Revenue Growth Stategies

OperationsCustomer managementInnovative processesRegulatory and social processes

Human capital

Information capital

Organisation capital

Learning and Growth Strategy

Human Capital>Skills

>Training>Knowledge

>Collaboration>Roles and

responsibilities to align with

company goals

Information Capital

>Systems>Databases>Networks

Organisation Capital>Skills

>Training>Knowledge>Teamwork

Operational StructureHow to improve systems and operations

Operations Management

Processes>processes

that produce and deliver

products and services

Customer Management

Processes>processes

that enhance customer

value

Innovative Processes

>processes that create

new products and services>Creativity

and innovative thinking

Regulatory and Social Processes

>processes that improve communities

and the environment

Customer/Client Management Processes

• Customer management processes cut across all your customers-current and new

• When acquiring and serving customers or clients evaluate the following:

• Selection – are you identifying the right customers whose problems you can solve?

• Acquisition-how many prospects are you turning into customers?

• How effective is your marketing strategy?

• Retention – are you able to deliver what you promised?

• Relationship – are you building on and growing your relationship with your existing customers?

Resources

..

IntangibleBrand

GoodwillIntellectual

propertyReputation

TangibleProduction facilities:

buildings, plants, machinery, capacity,

investment, IT resources

FinancialAll items available to finance or pay for your strategic

decisions

• Look at your resources – the assets that your organisation uses to bring revenue into your business

• From a strategic perspective, you need to look at what assets you have vs. what you need to

achieve your strategic plan

FinancialPerspective

Sustained shareholder value

Productivity Strategy Revenue Growth Stategies

Improved cost structure

Increased asset utilisation

Enchance customer value

Expand Revenue Opportunities

Customer Perspective price quantity availability selection

Funct-Ion-ality service

Partner-ship brand

Product/Service attributes Relationship Image

Internal Perspective

Operations Management

Customer Management

Innovative Processes

Regulatory & Social Processes

Processes that produce and deliver products and services

Processes that enhance customer value

Processes that create new products and services

Processes that improve communities and the environment

Learning & Growth Perspective

Human Capital Information Capital Organisational Capital

Skills, training, knowledge

Systems, databases, networks

Skills, training, knowledge, teamwork

An example of a Strategic Map

On-going monitoring & Implementation•Roll out specific action steps•Ensure that action plans get underway and work gets done•Establish goals and action plans on an annual basis•Management to make a solid commitment to the strategic planning process and to view the process as an “annual tune up” of the company

Accountability……

• Accountability and high visibility are needed to help drive change

• Each measure, goal, data source and initiative needs to have an owner

It’s a discipline, and an on-going process….

• Approach strategic thinking as a discipline — an ongoing process that requires you to make connections between seemingly unrelated things, to think creatively, and then to prioritise and make “trade-offs”

• It’s not a linear process, it’s circular, incorporating the driving of continual improvement, and moving the organisation forward towards its vision

Summary of the characteristics of successful strategic thinking

1. Seeing opportunity2. Having a clear vision and

direction3. Engaging in problem-solving4. Ongoing planning5. Ongoing monitoring and

implementation of the plans6. Accountability

Common mistakes• Confusing marketing with

strategy• Pursuing size above all else• Thinking that growth is a

strategy• Focusing on high growth

markets

Benefits of thinking strategically• You chart a course that aligns with the overall strategy of

your company

• You make careful long-term decisions that complement and align with decisions that others in your organisation are making

• You gain your employees' commitment to supporting your decisions

• You boost your company's performance and maximise business results

• You foster a culture that supports fresh thinking and embraces strategic initiative

“There are three types of companies – those that make things happen, those that watch things happen, and those that wonder what happened”- Anonymous

Presented by:

Name of presenter:Position in firm:

Firm name:

Disclaimer- Whilst every care has been taken in the compilation of this seminar, presentation and handouts, no responsibility of any nature whatsoever shall be accepted for any inaccuracies, errors or omissions, nor for the accuracy of any information contained in the seminar handouts.