TCIA Winter Conf - Strategic Thinking / Planning
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Transcript of TCIA Winter Conf - Strategic Thinking / Planning
TCIA WMC 2011
Achieving Business Excellence
While at a beautiful Caribbean resort… in the middle of winter… at 9 am… the morning after the Super Bowl!!!
TCIA WMC 2011
Most people are so busy working IN
their business that they do not take any time to work ON their business.
TCIA WMC 2011
…chaos brings opportunity
For those that are prepared…
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Learning Objectives:
• Understand what it takes to be an effective “Strategic Thinker.”
• Discuss common mistakes in writing strategic business plans.
• Look at all of the major elements of creating a robust strategic business plan.
• Identify guidelines on how often to review your strategy, adjust and change or be flexible.
• Provide each participant with numerous tools, ideas and skills to apply when creating a detailed and realistic strategic business plan.
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Do NOT freak out!
• I have a ton to cover and I will go pretty fast.• Please take notes and ask questions.• I am happy to answer any of your questions, offer
advice and recommend books at any time.
The slides and a full strategic planning workbook are already posted at:
www.SlideShare.net/johnspence
TCIA WMC 2011
TCIA WMC 2011
For the past 21 years…
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What does this mean to me?
How can I use this idea?
What can I do right away?
I am NOT a guru…
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Most people think of:S.W.O.T.
Competitive PositioningCustomer Intimacy / CRM
Industry trendsGlobal trends
Regulatory / Political IssuesM.E.C.E.KRA’s
Strategic ThrustsCorporate Objectives
SMART GoalsMBO
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What strategy is not…• More, better, faster is not a strategy.• Effectiveness and efficiency are
necessary… but not sufficient.• Superb execution of fundamental
business processes… is expected.• Being extremely good at what you are
supposed to be good at… gets you no extra credit at all.
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“Simplicity is the ultimate sophistication” Leonardo da Vinci
TCIA WMC 2011Do you have a clearly focused and well-communicated strategy for success?
Effective Strategy =
Valued Differentiation x Execution
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Key Point: Strategy is INTERNAL
as well as EXTERNAL
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Five Foundations of Effective Strategic Thinking
Business Acumen
Personal Experience
Pattern Recognition
Strategic Insight
Disciplined Execution 2
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The Four – I’s
• Ignorance
• Inflexibility
• Indifference
• Inconsistency2
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How to avoid the Four I’s
• Aggressive external market focus.
• Aggressive customer focus.
• Keep the “Main Things” the main things.
• Bullish on knowledge sharing and learning.
• Passion and commitment at all levels.
• Foster a healthy paranoia.
• Revel in change.2
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From the CEO of a little 182 billion dollar company…
“Look, what is strategy but resource allocation?
When you strip away all the noise, that’s what it
comes down to. Strategy means making clear-cut
choices about how to compete. You cannot be
everything to everybody, no matter what the size your
business or how deep its pockets. You have to figure
out what to say “NO” to.”Jeffrey Immelt
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To get the most from our session together…
It is absolutely critical that you be brutally honest with yourself today.
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So let's get started with
a little self-test…
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A short diatribe before we get to the business models…
• I don’t like benchmarking.• I think copying other businesses is stupid!• Typically, by the time people start benchmarking a
company five years has past since they initiated their strategies.
• There is no way to guarantee that what worked for them will work for you…
• But what I absolutely can guarantee is… you will not come up with any innovative, effective or remarkable strategies completely on your own. You must look around you to find good ideas… then take those ideas and make them better as you apply them to your specific challenges and opportunities.
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Charlie Trotter’s 4
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Lessons from seven top CEOs
• Have an outside-in perspective
• Be deeply passionate about your job
• Understand the importance of culture
• Create or adapt next generation products, processes and solutions
• Implement the best ideas regardless of origin
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From: What the Best CEOs Know by Krames
Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B
1-10
TCIA WMC 2011
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The Toyota Way• Challenging Vision
– We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.
• Kaizen– We improve our business operations continuously, always driving for
innovation and evolution.
• Genchi Genbutsu– We go to the source to find the facts to make correct decisions, build
consensus, and achieve our goals at our best speed.
• Respect, Challenge and Help your People and Suppliers– We respect others, make every effort to understand each other, take
responsibility and do our best to build mutual trust.
• Teamwork– We stimulate personal and professional growth, share the opportunities
of development, and maximize individual and team performance.
5
1-10
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In-depth study of 25 top companies renowned for building winning corporate cultures…
• GE• Dell• Wal-Mart• Toyota• Nordstrom• Starbucks
• Southwest Airlines• IBM• P&G• Whole Foods• Ritz Carlton• Intel
The pattern of six common traits for all of these firms…
From Results Rule by Randy Pennington
TCIA WMC 2011
They understand that: Results Rule!
1. Tell themselves the truth and value candor and honesty.
2. Pursue the best over the easiest in every situation.
3. Leverage the power of partnerships both internally and externally.
4. Focus the energy to make the main things the main thing.
5. Show the courage of accountability.
6. Learn, grow and improve every single day.
From Results Rule by Randy Pennington
51-10
TCIA WMC 2011Is Your Company Up To Speed?
Fast Company June 2003
Pages 6 - 7
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Good to Great:1,483 to 11400 – 700%15+ years
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Twice weekly surveys for five years of 2,000+ senior managers and executives at:
• IBM• GE• Morgan Stanley• Merck• 3M• Microsoft• CIGNA• Heineken• MasterCard
• Fidelity• Motorola• Ikon• American Express• Progressive• Bank of America• AT&T• SAP• Borders 8
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Keys to effective management…
• Communicate clearly
• Force the hard decisions
• Focus on results
• Remain flexible to change
• Prove your value to the customer
• Force collaboration
• Rigorous but not ruthless
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1 - 10
From: Think Big – Act Small by Jennings
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The Evergreen Project
10 year study of 160 top companies
40 distinct industries
200 management practices
Winners, climbers, tumblers, losers
Winners had an average Total Return to Shareholders of 945%... The
Losers only averaged a TRS of 62%
From: What (really) Works by Joyce, Nohria, Roberson 9
TCIA WMC 2011
The Four Primary Practices:1. A sharply focused, clearly communicated and
well-understood strategy for growth.
2. Flawless operational execution that consistently delivers the value proposition.
3. A performance-oriented culture that does not tolerate mediocrity.
4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work.
From: What (really) Works by Joyce, Nohria, Roberson
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TCIA WMC 2011
The Secondary Management Practices:
• Talent = find and keep the best people.
• Key leaders show commitment and enthusiasm for the business.
• Embrace strategic innovation.
• Master the power of partnerships.
From: What (really) Works by Joyce, Nohria, Roberson
Score yourself on the 1–10 scale for all eight practices on page 9
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Individual Workshop• Go back and look at all of your audits.• Where were your low scores, where were your high
scores – what is the pattern?• Look over your notes – what were the key themes?
What are the most important ideas?• Answers all the questions on pages 10 – 12.• Put in as much detail as possible.• Be very honest with yourself.• Think in terms of Actions and Outcomes.
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Thinking to Planning
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What Business Planning is Not !• Business planning does not attempt to make
future decisions.
• Business planning is not forecasting.
• Business planning is not an attempt to blueprint the future.
• Business planning is not necessarily the preparation of massive plans and reports.
• Business planning is not an effort to replace good management judgment.
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Why Planning Pays OffAsks & answers questions of importance.
Simulates the future.
Forces the setting of objectives.
Gives a framework for decisions.
Develops performance measurements.
Improves communications.
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NITB
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The Key: a VERY honest and thorough SWOT analysis
Workshop24 - 27
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83%
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What makes a winning strategy?
Unique Coherent Deliverable Evolving
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Common Problems• Putting It Off• Idea inflation• Diluted priorities• Vague goals• No execution plan!!!
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The Organizational Framework for Effective Execution
WHO WHAT HOW
Cross-FunctionalTeams
Senior Leadership
Departments
Adapted from: Six Disciplines Execution Revolution
Individuals
Planning RetreatQuarterly Workshops
GoalsTracking
Dashboard
Status ReportsStatus Meetings
Workshops
Status ReportsRegular Meetings
Coaching
IndividualsTactical PlansAction ItemsTo-do Lists
NITB
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Review of the plan?
• Twice yearly Strategic Planning Retreat – 1 to 2 days
• Monthly “quick check” meetings 2 – 3 hours
• Weekly Senior team alignment review – 1 hour or less
• Carry plan to every strategic meeting
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Assessing the Strategic Situation
Simplicity Complexity
Certainty Uncertainty
Knowing Forecasting
Proactive Adaptive
Strategic Planning
Scenario Planning
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Scenario Planning…Scenario Planning…
Is a process that stimulates imaginative and creative thinking to better prepare an organization by rehearsing for the future to avoid surprises and break
through the illusion of certainty.
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The Harvard Scenario Planning
Model:
• Key Focal Issue
• Driving Forces
• Critical Uncertainties
• Scenario Framework
• Scenarios
• Narratives
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Critical Uncertainties
• BEGIN with the top two most relevant uncertainties that impact your scenario.
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Example: Boat Company
Critical Uncertainties:
Gas Prices / Recession 36
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Scenario Framework: 2 Critical Uncertainties / 4 Scenarios
Short
Short
Long
Long
How long will gas prices stay high in US?
How long willthe US
recession last? Hold on -stay domestic -slow production
Invest in electric engine
R&D
Close factories
Focus on international
business-move production offshore
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Possible Scenarios1. Short / Short = Hold on
2. Short / Long = New engines
3. Long / Short = Close factories
4. Long / Long = Go international
Now for each you would create a Narrative Story… and remember, there may be multiple critical uncertainties that generate multiple scenarios!
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• Probability
• Impact
• Trigger Points
Then for each scenario…
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10 – 15 %
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What Inhibits Execution?National Survey of 4,000 Senior Executives
4. Inability to work together (21%)
3. Company culture (23%)
2. Economic climate (29%)
1. Holding onto the past / unwillingness to CHANGE (35%)
TCIA WMC 2011Where are we going + how will we behave on the way?
FocusDifferentiation“No”
Stakeholders + guiding collation
Vision + ValuesStrategyPlansGoals ObjectivesTactics / Actions
Procedures / ProtocolsRepeatable Process
Clear / consistent / relentless All available channels
Training +time / money /
supplies / people
Measure / TrackCommunicate
Transparency Renewal
Praise + Celebration and
Eliminate Mediocrity
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Disciplined Execution Clear Vision
Detailed Strategy
Guiding Coalition
Alignment
Systems
Communication
Support
Adjust
Reward / Punish
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1 - 10
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Summary of Key Ideas• Major elements: thinking, planning, execution, review
• Strategic thinking = study + experience + pattern recognition
• Strategy = bold bets on resource allocation.
• What you say “No” to is a big part of strategy.
• Planning is a process.
• Analysis is critical – but it is not strategy.
• More, better, faster is not a strategy.
• This is not blueprinting the future.
• Keep it simple, focused and extremely well communicated.
• A plan for execution MUST be part of the Strategic Plan.
• Alignment + support + measurement + tracking + reward / punishment
• Contingency planning = probability & impact / trigger points
TCIA WMC 2011
If you have any questions at all please do not hesitate to send a note or call. My email address is: [email protected]
My twitter address is: @awesomelysimple
Also, you might find value in the ideas I share in my blog. You can sign up for it at:
www.blog.johnspence.com
Lastly, these slides have already been uploaded to:
www.slideshare.net/johnspence