STATE OF THE ART REPORT
REINVENTING STRATEGIC PLANNINGTO
DELIVER CUSTOMER VALUE
The Top 12 Common Mistakes
Most Organizations Make
Using“The Systems Thinking Approach®”
OD NETWORK CERTIFICATION, JUNE 2007—PART I
2
FOUNDED 1990—OFFICES IN OVER 20 COUNTRIES
THE CENTRE’S GLOBAL MAP:“We Are The World Leader in Strategic Management
Powered by Systems Thinking”
A GLOBAL ALLIANCE OF
MASTER CONSULTANTS AND TRAINERS
3
WHO IS STEVE HAINES?
STEVE HAINESFounder & CEO:
Centre for Strategic Management® Systems Thinking Press®
Founded in 1990—38 Offices—20 Countries
STEVE is a:
“CEO—Entrepreneur—Global Strategist”and
“A Facilitator—Systems Thinker—Prolific Author”
(of 12+ books) A graduate of the US NAVAL ACADEMY’s
Legendary Leadership Class of 1968
4
BACKGROUND OF THISSTATE-OF-THE-ART BEST PRACTICES
REPORT
This Report is the result of a blend of three fundamental sources:
1. The Strategic IQ Audits that the Haines Centre does
2. Our Interpretation and Translation of Others Best Practices Research (We do not do original research ourselves-rarely paid for)
3. Our consulting practices around the world in over 20 countries
What do these #s represent as the “Natural Way the World Works”?
26 13 12 10
4 3 2
THESE ARE THE UNIVERSAL ORGANIZING FRAMEWORKS OF OUR LIVES!!!
5
SIMPLICITY YOU SEE
“EVERYTHING IS SIMPLE, YOU SEEBUT
YOU JUST HAVE TO SEE IT”
KEYS:1. Ask the #1 Systems Question: Clarity of Purpose/Goal?2. One piece of paper documents3. Rule of 3
CLARITY AND SIMPLICITY = SUCCESS
6
SIMPLICITY AND COMPLEXITY
“I wouldn’t give a fig for the Simplicity this side of Complexity (Simplistic)
ButI’d give my life for the Simplicity on the far side of
Complexity” (Elegant Simplicity)--Justice Oliver Wendell Holmes
SIMPLICITY AND GENIUS“Any idiot can simplify by ignoring the complications
ButIt takes real genius to simplify by including the
complications”--John Johnson (TEC Chair)
7
GREAT LEADERS
Great leaders know how to keep it simple . . .
"Great leaders are almost always great simplifiers,who can cut through argument, debate, and doubtto offer a solution everybody can understand." - General Colin Powell
Great leaders know how to keep it simple . . .
"Great leaders are almost always great simplifiers,who can cut through argument, debate, and doubtto offer a solution everybody can understand." - General Colin Powell
8
COMMON STRENGTHS OF MOST
ORGANIZATIONS
1. Strategic Plan and Document itself
2. The focus on Goals (Different Names)
3. The Continuity of the process-year after year
4. An Annual Review and Update of the Document
5. The focus on Mission, Vision and Core Values
6. A detailed list of Annual Actions that underlie the
Goals
7. The extensive use of Measures/Metrics-especially
financial
8. A highly committed Strategic Planning staff
YET, WHY DO ABOUT 75% OF ALL MAJOR CHANGES FAIL??
These Strengths are “Necessary but not Sufficient for Success”
9
SINGLULAR PLANNING AND CHANGE EFFORTS FAIL
A SINGLE AND ONE TIME INTERVENTION
WILL NOT CHANGE MUCH OF ANYTHING
EXCEPT FOR
ANOTHER SHORT TERM FIX
REAL CHANGE REQUIRES
MULTIPLE STRATEGIES
FOCUSED
ON CLEAR OUTCOMESOD Practitioner, May 2007
10
A NEW APPROACH PLANNING & CHANGE
IS REQUIRED IN THE 21ST CENTURY
THINK DIFFERENTLY—THINK STRATEGICALLYUse The Systems Thinking Approach®
LOOK FOR SYSTEMS SOLUTIONS TO SYSTEMS PROBLEMS (Not Analytic & Piecemeal Solutions to Systems Problems)
CLARITY AND SIMPLICITY = SUCCESS(Simplicity Wins the Game Every Time)
THIS IS WHAT THIS STATE OF THE ART REPORT IS ALL ABOUT(So Do Not Take These Best Practices Separately)
NEW APPROACH
NEEDED
THE 21ST CENTURY MACRO BEST PRACTICE:
11
LEADING STRATEGIC MANAGEMENT TO DELIVER CUSTOMER VALUE
StrategicStrategic PlanningPlanning
StrategicStrategicChangeChange
Strategic Strategic ThinkingThinking VALUE
12
COMMON SENSE
“IF NOTHING ELSE WORKS, THIS MAY BE A PERFECT
OPPORTUNITY TO USE COMMON SENSE.”
13
LOGISTICS
14
STRATEGIC PLANNING DEFINED
Is it:
An event?
A process?
A change in our roles?
A change in the way we run the business day-to-day?
What's your belief? Why?
ix
15
STRATEGIC MANAGEMENT DESIRED OUTCOMES-RESULTS
WHAT ARE YOUR DESIRED OUTCOMES-RESULTS? 1. Higher Profits?_______________________________
2. Greater Revenue? ____________________________
3. Lower Costs/Decrease? _______________________
4. Enhance Market Share? ________________________
5. Drive Competitive Advantage? ___________________
6. Increase Customer Service & Satisfaction? ________
7. Deliver Better Customer Value ___________________
8. Implement New Product/Service Offerings? ________
9. Growing Community/Society Reputation___________
10. Change the Employee Culture? ___________________
11. Execute a Merger or Acquisition? _________________
12. Enhancing our Commitment to the Community______
13. Develop Strategic Alliances or Partnerships? _______
14. Turn Around an Underperforming Business? _______
15. Enhance safety? _______________________________
16. Protect and Enhance the Environment? ___________
17. Decrease Waste/Simplify your Bureaucracy? _______
CASE STUDY
16
CRITICAL ISSUES LIST
What are the 3-5 most important Critical Issues facing you today as an organization regarding Strategic Planning?
1.
2.
3.
4.
5.
If Strategic Planning & Change is going smoothly, we're doing something wrong
(unless we have infinite resources).
Challenge the Obvious
CASE STUDY
17
FAILURE OF ENTERPRISE-WIDE STRATEGIC
CHANGE
MAJOR CHANGE FAILS 75% OF THE TIME:
WHY?
18
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 1
“Begin with the end in mind”—Stephen Covey
FAILURE TO CLARIFY THE FUTURE AND YOUR
DESIRED OUTCOMES FIRST
PRACTICE#1
19
#1 KEYS TO SUCCESSFUL ORGANIZATIONAL RESULTS
#1 DAILY QUESTION:
Always ask the #1 Systems Thinking question (over and
over again):
“What are our desired results?”
“Begin with the end in mind.”
20
SYSTEMS THINKING
The Science of Living Systems
“The natural way the world works”
Backed by 50+ Years of Scientific Research
22
OUR LEVEL OF THINKING
Problems that are created by our current level of thinking can't be solved by that
same level of thinking.
—Albert Einstein
Problems that are created by our current level of thinking can't be solved by that
same level of thinking.
—Albert Einstein
So ...if we generally use analytical thinking,
we now need real “Systems Thinking ” to resolve our issues.
—Stephen G. Haines
So ...if we generally use analytical thinking,
we now need real “Systems Thinking ” to resolve our issues.
—Stephen G. Haines
23
THINK—PLAN—ACT—RESULTS
How you think
Is how you plan
Is how you act
And that
Determines the results you get in work and life
24
OUR COMPLEX WORLD TODAY!
25
COMPLEXITY – THE RUBIKS CUBE
"The Organization as a System"
From:Chaos &
Complexity
To:Elegant Simplicity
How to Start Moving:
26
GET A HIGHER AND BROADER PERSPECTIVE
Take a Helicopter View of Life!
27
A SYSTEM DEFINED
A SYSTEM :
IS A SET OF PARTS OR COMPONENTS
THAT WORK TOGETHER
FOR THE OVERALL OBJECTIVES
OF THE WHOLE
28
SYSTEMS THINKING BASICS
HOW WOULD YOU DRAW A SYSTEM—ANY SYSTEM????
29
SIMPLICITY OF SYSTEMS THINKING
Which question goes where?1. What do we do?2. What do we achieve?
Which is:The Means?The Ends?
Where should you start your thinking and planning for Change?
30
SIMPLICITY OF SYSTEMS THINKING
ENVIR
ONMEN
T
The Best, Most Holistic, Integrated, Organizing Framework There is!
31
THE SYSTEMSTHINKING APPROACH
Five Strategic Thinking Questions – In Sequence: PHASE A: Where do we want to be?
PHASE B: How will we know when we get there?
PHASE C: Where are we now?
PHASE D: How do we get there?
PHASE E: Ongoing: What will/may change in your environment in the
future?
vs. Analytic Thinking Which:1. Starts with today and the current state, issues, and problems.
2. Breaks the issues and/or problems into their smallest components.
3. Solves each component separately (i.e., maximizes the solution).
4. Has no far-reaching vision or goal (just the absence of the
problem).
32
STRATEGIC THINKING – ABCs TEMPLATE
“Clarify and Simplify Your Thinking” – About your Project___________________________________________________________________(Name of the Organization – Issue – Problem – Project – Change Effort,
etc Future Environmental Scan:What will be changing in your
future environment that will affect
us?
EE
CC DD
AASystem Throughput/Processes:How do we get there (close the gap from C A )?CC AA
___________Today’s Date
Feedback Loop/ Key Success Measurements: How will we know when we get there?
•
•
•
•
BB
Desired Outcomes- #1 System Question:Where do we want to be?
Strengths
•
•
•
•
• Threats
•
•
•
•
•
Weaknesses
•
•
•
•
• Opportunities1
• 2
•3
•4
•5
•4
•
•
•
•
•
___________Future Date•
•
•
•
•
Inputs (SWOT): CORE STRATEGIES: TOP PRIORITY ACTIONS: OUTPUTS/OUTCOMES:
Current State Assessment:Where are you now?
.
.
.
.
.
33
ORGANIZING FRAMEWORKSARE KEY
Give people the conceptual tools –
The integrated frameworks – models
to organize their evidence
– their experience – their learnings
Give people the conceptual tools –
The integrated frameworks – models
to organize their evidence
– their experience – their learnings
34
ORGANIZING FRAMEWORKS ARE KEY
Otherwise,
adults do NOT learn best
by doing things
Otherwise,
adults do NOT learn best
by doing things
35
ORGANIZING FRAMEWORKSARE KEY
The BEST conceptual, integrated ORGANIZING FRAMEWORK
that exists is
The Systems Thinking Approach®
because
“It is the natural way the world works”
– The world is composed of living/human systems
The BEST conceptual, integrated ORGANIZING FRAMEWORK
that exists is
The Systems Thinking Approach®
because
“It is the natural way the world works”
– The world is composed of living/human systems
36
SYSTEMS THINKING:50 YEARS OF SCIENTIFIC RESEARCH
FATHER OF SYSTEMS THINKING—LUDWIG von BERTALANFFY
1954-Society of General Systems Research—Three Nobel Prize Winners +LvB
Ken Boulding (Economics)—Anatol Rapoport (Math)—Ralph Gerard (Physiology)
Margaret Mead—Buckminster Fuller—James G. Miller
Abraham Maslow—Erik Erikson—Juan Piaget
Peter Drucker—Edward Deming—Russell Ackoff
Jay Forrester—Dick Beckhard—Steven Covey
Peter Senge—Margaret Wheatley—Barry Oshry—Steve Haines
37
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 2
MOS: “MORE OF THE SAME” = INSANITY
Due to lack of understanding of a
Yearly Strategic Management System and Cycle
PRACTICE#2
38
RATE OF CHANGE IN THE WORLD
“If the rate of change on the outsideexceeds
the rate of change on the inside,the end is near.”
—Jack WelchFormer Chairman and CEO
General Electric Corporation
“If the rate of change on the outsideexceeds
the rate of change on the inside,the end is near.”
—Jack WelchFormer Chairman and CEO
General Electric Corporation
39
THE ABCs OF STRATEGIC CHANGE MANAGEMENT
STRATEGIC PLANNING HAS BEEN REINVENTED:
IT IS NOW STRATEGIC CHANGE MANAGEMENT—FOUR COMPONENTS:
1. Planning
2. People
3. Leadership
4. Change
To Deliver Customer Value
SO. . . Strategic Change Management is the new way—A yearly cycle
onHow to ACHIEVE Business Excellence & Superior Results
40
THREE GOALSOF
STRATEGIC MANAGEMENT
GOAL #1: DEVELOPING STRATEGIC, BUSINESS, AND ANNUAL PLANS
(AND DOCUMENTS)
GOAL #2: ENSURING SUCCESSFUL IMPLEMENTATION
(AND ENTERPRISE-WIDE CHANGE)
GOAL #3:BUILDING & SUSTAINING HIGH PERFORMANCE
(YEAR AFTER YEAR)
THE DESIRED RESULTS: BUSINESS EXCELLENCE & SUPERIOR RESULTS
(YEAR AFTER YEAR)
41
REINVENTING STRATEGIC MANAGEMENT
• Planning • People • Leadership • Change •
1.PLAN
TO-PLAN
“BEGIN
HERE”
9. STRATEGY IMPLEMENTATION(AND ENTERPRISE-WIDE CHANGE)
CUSTOMERVALUE
10. ANNUAL STRATEGIC REVIEW(AND UPDATE)
8.PLAN-TO
IMPLEMENT
THE SYSTEMS THINKING APPROACHTM TO CREATING YOUR COMPETITIVE EDGE
C INPUTA OUTCOMES
FUTURE STATE“STRATEGIC CHANGE MANAGEMENT”
D PROCESSES
B. FEEDBACK
E
FUTURE
ENVIRONM
ENT
SCAN
2. IDEAL
FUTURE VISION
STATECURRENT
• ENV. SCAN
• VISION•MISSION•CORE VALUES•POSITIONING•RALLY CRY
• ALIGNMENT OF DELIVERY• ATTUNEMENT OF PEOPLE
3. KEY SUCCESS
MEASURES/GOALS 4. CURRENT STATE
ASSESSMENT
5. STATEGY
DEVELOPMENT
6. THREE-YEAR
BUSINESS PLANS
7. ANNUAL PLANS/
STRATEGIC BUDGETS
42
YEARLY STRATEGIC MANAGEMENT CYCLETHE SYSTEMS THINKING APPROACHTM
"Thinking Backwards to the Future"
B
C A
D
StrategicManagement
System (Yearly Cycle)
Your IdealFuture
Today
Vision, MissionAnd Values
Feedback/GoalsAnd
Measures
Strategies,Business Plansand Priorities
+++++++Actions, ChangeAnd Follow-Up
EFUTURE
ENVIRONMENT
SCAN
43
Operating ManagersMeeting (Boca)600 LeadersINITIATIVE LAUNCHCase for New InitiativeOutside Company Initiative ExperienceOne Year Search TargetsRole Model PresentationsRe-Launch of Current Initiatives
GENERAL ELECTRIC’S STRATEGIC MANAGEMENT SYSTEM
First Quarter
Second Quarter
Third QuarterFourth Quarter
January March
SeptemberOctober
February
August
April
November
June
DecemberJuly
May
• Intense Energizingof Initiatives AcrossBusinesses
Corporate Executive council:CEC at Crotonville35 Business and SeniorCorporate Leaders•Early Learning?•Customer Reaction?•Initiative Resources Sufficient?•Business Management Course (BMC) Recommendations
Anonymous OnlineCEO Survey:11,000 Employees•Do you “Feel”Initiated Yet?•Do your customers feel it?•Sufficient ResourcesTo Execute?•Messages Clear And Credible?
Leadership PerformanceReviews at BusinessLocations:All Business StaffsInitiative Leadership ReviewLevel of Commitment/Quality of Talent on InitiativesDifferentiation(20% / 70% / 10%)Promote / Reward / Remove
Corporate Executive Council:(CEC at Crotonville Locations:35 Business and SeniorCorporate LeadersInitiative Best PracticesLevel of commitment/Rev. of Initiative Leadership Customer ImpactBusiness ManagementCourse (BMC)Recommendations
Corporate Executive Council:(CEC at Crotonville)35 business and SeniorCorporate LeadersAgenda for BocaIndividual BusinessInitiative HighlightsBusiness Management(BCM) CourseRecommendations
Operating PlansPresented:All Business LeadersInitiatives Stretch TargetsIndividual BusinessOperating PlansEconomic Outlook
Corporate OfficersMeeting: (Crotonville)150 OfficersNext-Year OperatingPlan FocusRole Models PresentInitiative SuccessesExecutive DevelopmentCourse (EDC)RecommendationsAll Business Dialogues:What Have weLearned?
Corporate ExecutiveCouncil: (CEC at Crotonville)35 business and SeniorCorporate LeadersBusiness ManagementCourse (BMC)RecommendationsClear Role Models Identified Outside Company BestPractices PresentedInitiative Best Practices(All Businesses)Customer Impact of Initiatives
Informal IdeaExchanges atCorporate andBusinesses
Session 1: 3-Year StrategyEconomic / CompetitiveEnvironmentGeneral Earnings OutlookInitiatives Update/StrategyCustomer ImpactInitiative ResourceRequirements
44
ANNUAL STRATEGIC REVIEW (AND UPDATE)
START
Within a Strategic Management System and Yearly Cycle
The FlywheelAnd
The Rollercoaster
Strategic Management System
And Yearly Cycle
EE
DD
CC BB
AA
YEAR 1 YEAR 2 YEAR 3 YEAR 4
BU
SIN
ES
S E
XC
ELLEN
CE &
SU
PER
IOR
RES
ULTS
(Planning – People – Leadership – Change – Customer Value)
1
2
3
4
TIMELINE ANNUAL STRATEGIC REVIEWS
45
THE SINGAPORE CITY-STATESTRATEGIC MANAGEMENT
SYSTEMURBAN REDEVELOPMENT AUTHORITY (URA)
CONCEPTPLAN
-1971/2001
MASTER PLAN
-10 to 15 years
-
Supported by numerous Citizen involvement and Feedback
DD
DD
CCBB
AA
DEVELOPMENTIMPLEMENTATION
DEVELOPMENTCONTROL-Formal
Review 5 Years
LANDSTRATEGIC
MANAGEMENTSYSTEM
48
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 3
PHASE E: FUTURE ENVIRONMENTAL SCANNING (Versus SWOT of Today)
“SKEPTIC” FRAMEWORK IS THE NEW STANDARD
PRACTICE#3
49
SWOT FRAMEWORK
I. Internal to the Organization/department (In Here)
Strengths“Build On”
Weaknesses“Eliminate/
Cope”
II. External to the Organization/department(In the environment – Out There)
Opportunities
“Exploit”
Threats“Ease/Lower”
50
IMPORTANCE OF FUTURE ENVIRONMENTAL
SCAN
“The future is shaped
by those who see the possibilities
before they become obvious”
Straits Times
“The future is shaped
by those who see the possibilities
before they become obvious”
Straits Times
51
FUTURE ENVIRONMENTAL SCANNING (SKEPTIC)
52
FUTURE ENVIRONMENTAL SCANNING TEAMS
FORM “SKEPTIC” TEAMSScanning Area
S
K
E
E
P
T
I
C
Senior ManagementTeam Leader
Team Members(Max 6)
Goal: Quarterly one-page reports to the change leadership team by each team.
53
FUTURE ENVIRONMENTAL SCANNING / TRENDS
TODAY – IMPLICATIONS(Opportunities – Threats) SPONSOR
SKEPTIC – FUTURE SCANList the 5-10 environmental trends – projections
Facing you over the life of your plan
S S Socio-Demographics (People/Society):Socio-Demographics (People/Society):
K K Competition/Substitutes:Competition/Substitutes:
E E Economics:Economics:
E E Ecology:Ecology:
P P Political / Regulatory:Political / Regulatory:
T T Technical:Technical:
I I Industry / Supplier:Industry / Supplier:
C C Customers/Citizens:Customers/Citizens:
BACKWARDS THINKING
54
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 4
PHASE A: IDEAL FUTURE VISION PLATITUDES:(Form over Substance)
VISIONARY STATEMENT—VS. DETAILED BACK UP“Provider of Choice”“The best”“World-Class”“Best Value”“Value Added”
MISSION STATEMENT:Focus on Keeping it Short Vs. Meaningful:1. Who?2. What?3. Why?
PRACTICE#4
55
MISSION DEVELOPMENT TRIANGLE EXERCISE
2. Who We Serve(As our customers) - Geography - Segments - Names
3. What We Produce? (As outcome benefits) - Products - Services - Goods - Uses
1. Why We Exist? (If not already in vision statement) - Societal Need - Stockholder/Stakeholder Need
(Rallying Cry)
Positioning:
4. Our Driving Force
56
TIME FOR FORMALQUESTIONS AND ANSWERS
57
PRESENT LEARNINGS
1-2 MINUTES ONLY:
1-3 KEY LEARNINGS
HOW TO APPLY THEM IN YOUR CASE
CASE STUDY
58
TAKE A BREAK UNTIL NEXT WEEK
SESSION TWO NEXT WEEK
IN BETWEEN: IF YOU WANT MORE DETAIL AND FREE ARTICLES
ON ANY OF THIS, GO TO www.HainesCentre.com
THANK YOU
FOR YOUR PARTICIPATION
Stephen Haines
Founder and CEO
Haines Centre for Strategic Management
60
STATE OF THE ART REPORT
REINVENTING STRATEGIC PLANNINGTO
DELIVER CUSTOMER VALUE
The Top 12 Common Mistakes
Most Organizations Make
Using“The Systems Thinking Approach®”
OD NETWORK CERTIFICATION, JUNE 2007—PART iI
62
REVIEW OF LAST SESSION
63
A NEW APPROACH PLANNING & CHANGE
IS REQUIRED IN THE 21ST CENTURY
THINK DIFFERENTLY—THINK STRATEGICALLYUse The Systems Thinking Approach®
LOOK FOR SYSTEMS SOLUTIONS TO SYSTEMS PROBLEMS (Not Analytic & Piecemeal Solutions to Systems Problems)
CLARITY AND SIMPLICITY = SUCCESS(Simplicity Wins the Game Every Time)
THIS IS WHAT THIS STATE OF THE ART REPORT IS ALL ABOUT(So Do Not Take These Best Practices Separately)
NEW APPROACH
NEEDED
THE 21ST CENTURY MACRO BEST PRACTICE:
64
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 1
“Begin with the end in mind”—Stephen Covey
FAILURE TO CLARIFY THE FUTURE AND YOUR
DESIRED OUTCOMES FIRST
PRACTICE#1
65
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 2
MOS: “MORE OF THE SAME” = INSANITY
Due to lack of understanding of a
Yearly Strategic Management System and Cycle
PRACTICE#2
66
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 3
PHASE E: FUTURE ENVIRONMENTAL SCANNING (Versus SWOT of Today)
“SKEPTIC” FRAMEWORK IS THE NEW STANDARD
PRACTICE#3
67
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 4
PHASE A: IDEAL FUTURE VISION PLATITUDES:(Form over Substance)
VISIONARY STATEMENT FLUFF—VS. DETAILED BACK UP“Provider of Choice”“The best”“World-Class”“Best Value”“Value Added”
MISSION STATEMENT:Wrong Focus on Keeping it Short Vs. Meaningful:1. Who?2. What?3. Why?
PRACTICE#4
68
SESSION TWO BEGINS:STATE OF ART BEST PRACTICES:
STRATEGIC PLANNING # 5
MISSING AND MIS-UNDERSTOOD “MARKETPLACE POSITIONING”
(The PhD of Strategy)
POSITIONING TERMINOLOGY VS. A STANDARD DEFINITION
PRACTICE#5
69
CUSTOMER VALUE POSITIONING
POSITIONING IS CALLED MANY CONFUSING THINGS:
Driving Force Grand Strategy
Competitive Advantage
Competitive Edge
Strategic Intent Image
Reputation Brand Identity/Brand
STRATEGY USP
MEGA STRATEGY Value
Value Proposition Identity
Market Leader Value-Added
70
CUSTOMER VALUE POSITIONING
DEFINITION:
What is one thing that:
1. is unique, different and better about us
2. in the eyes of the customer
3. vs. the competition in the marketplace
4. that causes them to do business with us?
KISS: THIS IS NOT ROCKET SCIENCE
71
POSITIONING VS. THE COMPETITION
THE DILEMMA: WHERE ARE YOU ON EACH STAR POSITIONING FACTOR?
1. UNIQUE-DIFFERENT & BETTER THAN ALL THE COMPETITION(YOUR COMPETITIVE ADVANTAGE AND POSITIONING IN THE MARKETPLACE)
2. COMPETITIVE VS. THE COMPETITION (COMPETITIVE IN THE MARKETPLACE)
3. NONCOMPETITIVE VS. THE COMPETITON (UNCOMPETITIVE IN THE MARKETPLACE)
72
WORLD-CLASS STAR POSITIONING
YOUR COMPETITIVE BUSINESS EDGE - “VALUE PROPOSITION”
73
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 6
PHASE B: LINKING KEY SUCCESS MEASURES/GOALS: TO THE VISION, CORE VALUES & POSITIONING
(Vs. Enshrining Activities)
BALANCED SCORECARD OR QUADRUPTLE BOTTOM LINE
PRACTICE#6
74
KEY VS. COMPREHENSIVE MEASURES
THESE ARE:
KEY SUCCESS MEASURES (OUTCOMES/RESULTS) (STRATEGIC)
NOT
COMPREHENSIVE ACTIVITY METRICS (DATA)(OPERATIONAL)
MEASURE TEN OR LESS KEY SUCCESS RESULTS—
THEN, REDUCE THIS TO YOUR THREE MOST IMPORTANT RESULTS
(BHAG)
75
THE QUADRUPLE BOTTOM LINESM
BALANCE
The Systems Thinking ApproachSM to Key Success Measures (KSMs)
1. Employees
a. Operations
2. Customers
3. Stockholders (Owners)
4. Stakeholders (Community/Society)
Note:The popular “Balanced Scorecard” concept is not a systems approach, but it covers some of the same KSM areas that we do, especially 1,2, and 3.
76
Base Target
2006
KEY SUCCESS MEASURES CONTINUOUS IMPROVEMENT
MATRIX
KSM Overall Coordinator for Accountability is (Name/Title) _________________
(BACKWARDS THINKING)
KSM Areas (Headers)
Intermediate Targets
2007 2008 2009 2010
UltimateTarget
CompBenchmark
KSM Account
SpecificHeader:
Factors:
1.
2.
3.
Target
Goal2011
77
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 7
PHASE C: RITUALISTIC AND MEANINGLESS SWOT ANALYSIS(Vs. a Rigorous, in Depth, Best Practices Audit)
1. Future Environmental Scan —a Systems View— For OT(Implications of the Scan vs. the Scan itself)
PRACTICE#7
2. “Building on the Baldrige” —a Systems View— For SW
78
FUTURE ENVIRONMENTAL SCANNING / TRENDS
TODAY – IMPLICATIONS(Opportunities – Threats) SPONSOR
SKEPTIC – FUTURE SCANList the 5-10 environmental trends – projections
Facing you over the life of your plan
S S Socio-Demographics (People/Society):Socio-Demographics (People/Society):
K K Competition/Substitutes:Competition/Substitutes:
E E Economics:Economics:
E E Ecology:Ecology:
P P Political / Regulatory:Political / Regulatory:
T T Technical:Technical:
I I Industry / Supplier:Industry / Supplier:
C C Customers/Citizens:Customers/Citizens:
BACKWARDS THINKING
79
SWOT: STRATEGIC BUSINESS DESIGN
HOW TO CONDUCT THE STRENGTHS AND WEAKNESSES PART OF A SWOT?
80
SYSTEMS —THE INNER WORKINGS USING THE
BUSINESS EXCELLENCE ARCHITECTURETM
BEST PRACTICES:ENTERPRISE-WIDE ASSESSMENT
CREATINGTHE PEOPLE
EDGE
BUILDINGA CULTURE OFEXCELLENCE
REINVENTINGSTRATEGIC PLANNING
LEADINGENTERPRISE-
WIDE CHANGE
ACHIEVINGLEADERSHIPEXCELLENCE
BECOMINGCUSTOMERFOCUSED
ALIGNINGDELIVERY
CUSTOMERVALUE
B
C
D
E
A
BEST PRACTICESASSESSMENT
RESULTS
FUTUREENVIRONMENT
FEEDBACK LOOP
QUADRUPLE BOTTOM LINE
81
82
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 8
CONFUSION OF MEANS AND ENDS
(Regarding Goals, Objectives and Strategies)
PRACTICE#8
83
SYSTEMS THINKING ANDSTRATEGIC THINKING:
INPUTS MEANS ENDS
C D AMeans Ends
StrategiesActionsHow To
BehaviorsTasks
ActivitiesTactics
Work PlansThroughputs
Vision
Mission/Purposes
Values/Culture
What
Results
Outputs
Outcomes
Goals
Success Measures
Strategic Thinkers Focus on the relationships between means and
ends in their daily work.
“Begin with the End in Mind”
Inputs
Resources:PeopleMoney
EquipmentMaterials
TechnologyInformation
B
84
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 9
IMPORTANCE AND LACK OF SHARED CORE STRATEGIES(As Department Goals for ALL Departments/Units)
Three Shared Documents—not Two
PRACTICE#9
85
SHARED VISION AND VALUES
SHARED VISION AND VALUES ARE KEY—IN ALL MGMT. BOOKS
HOWEVER, THERE IS A THIRD “SHARED” DOCUMENT
THAT IS KEY TO:
1. STRATEGIC THINKING ON A DAILY BASIS (EAB)
2. EXECUTING AND CASCADING YOUR POSITIONING (DOWN AND ACROSS THE ENTIRE ENTERPRISE)
3. THE ONLY REASON FOR THE EXISTENCE OF YOUR ENTIREORGANIZATIONAL CHART
WHAT IS IT?
86
SHARED VISION AND SHARED VALUES —YES!
1. “The Business Glue ”—of an organization is for employee teamwork. The Shared Vision is usually too high a level. It is Shared Strategies across all departments/units that is also needed.
2. “The Social Glue ”--of an organization holds its culture together.
It is the Values that guide behavior and “How we do things around here.”
“The Glue ” is THE Decision Making Criteria:a. Social =Shared Values =How to do it?
b. Business =Shared Strategies =What to do?
IT IS SHARED STRATEGIES!!
87
GAP ANALYSIS: “BRIDGING THE GAP”
BB
DDCC AA
Means Ends!
CurrentState
AssessmentToday
IdealFuture Vision
Year xxxx
Strategies and PrioritiesThe purpose of having
strategies is
To keep yourself from being seduced
By something that is “nice to do.”
1. Core Strategies – “Bridging the Gap”
2. Strategic Action Items for Next YearPlus
Key Success Measures/Goals
Means
88
CORE STRATEGIES ARE LIKE THE WEBBING IN A CHAIR
“The Glue That Holds It All Together”
CEO
A D ECB
1. CORE STRATEGIES ARE CROSS FUNCTIONAL
2. CORE STRATEGIES
3. CORE STRATEGIES
4. CORE STRATEGIES
F u n c t i o n s - S i l o s: Business Unit Drivers
ENTERPRISE-WIDE DRIVERS:
89
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING #10
FAILURE TO CASCADE STRATEGIC PLANS DOWN(To Three- Year Business Plans for all Units/Departments)
1. Business Units (Line Organization)
2. MFAs (Major Functional Areas)
3. MPAs (Major Program Areas-public?)
PRACTICE#10
90
91
LIVING SYSTEMS WITHIN LIVING SYSTEMS ON
EARTHNested and Interdependent Systems:
Systems within Systems within Systems
Boundaries and Inter-Connectedness:
Nothing exists in isolation—
Relationships are everything!
Boundaries and Inter-Connectedness:
Nothing exists in isolation—
Relationships are everything!
92
THE CASCADE OF
PLANNING/CHANGE
“Strategic ConsistencyAnd
Operational Flexibility”
LEADING TO
ENTERPRISE-WIDE RESULTS
93
“WORK PLAN” FORMAT(FOR FUNCTIONAL/DIVISION WORK PLANS)
# : Strategy/Goals:
YearlyPriority
#
Action Items Support/Resources
Needed
Who is Responsible
Who else to
Involve
When Done
How to Measure
Status
94
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 11
FAILURE TO CASCADE PLANNING AND ACCOUNTABILITY (To ALL Employees)
Performance Management System:
And the Recognition and Rewards System
PRACTICE#11
95
SCORECARD CASCADE—LINKAGE
The Cascade-Vertical Linkages
1 of 2
96
PERFORMANCE APPRAISALS...KISS
Tied to Strategic Planning
Performance Appraisals —must be tied to support ...
#1Your organization's Core Strategies
(i.e., results)
#2Your organization's Core Values
(i.e., behaviors)
and #3Their own learning and growth
(i.e., career development)
If you are serious about your Strategic Plan Implementation
97
STATE OF ART BEST PRACTICES: STRATEGIC PLANNING # 12
LACK OF OWNERSHIP (BY Senior and Middle Management)
TWO EXTREMES:1. Private Sector—Low Involvement2. Public Sector—Too much Involvement
When does Change begin?
What is the PRIMARY job of Leaders today?
PRACTICE#12
98
THREE MAIN PREMISES
MAIN PREMISE #1 “PLANNING AND CHANGE ARE THE PRIMARYJOB OF LEADERS”
MAIN PREMISE #2“PEOPLE SUPPORT WHAT THEY HELP CREATE ”
MAIN PREMISE #3 USE SYSTEMS THINKING—FOCUS ON OUTCOMES—SERVE THE CUSTOMER!
99
PLAN-TO-PLAN DAY OVERVIEW
AM: EXECUTIVE BRIEFING:1. Educating
2. Assessing
TARGET AUDIENCE:Senior ManagementSenior Staff SupportBoard of Directors?Middle Management?Anyone is fine for AM
PM: PLAN-TO-PLAN TASKS3. Organizing
4. Tailoring
TARGET AUDIENCE:Senior Management Senior Staff Support
100
STATE OF ART BEST PRACTICES: NO #: JUST SIMPLICITY
CLARITY AND SIMPLICITY = SUCCESS
FINALBONUS
101
SIMPLICITY YOU SEE
“EVERYTHING IS SIMPLE, YOU SEEBUT
YOU JUST HAVE TO SEE IT”
KEYS:1. Ask the #1 Systems Question: Clarity of Purpose/Goal?2. One piece of paper documents3. Rule of 3
102
KEEP IT SIMPLE—IN STRATEGIC MANAGEMENT
SIMPLICITY WINS THE GAME EVERY TIME:
ONE PIECE OF PAPER DOCUMENTS:
1. ABCs of Strategic Thinking Template
2. Strategic Plan Trifold
3. Annual Plan Priorities (Cheat-Sheet—To Do List)
4. Key Success Measures Matrix (Continuous Improvement—
year/year)
5. Yearly Comprehensive Map of Implementation
SUMMARY:
THE STATE OF THE ART REPORT
104
CREATING CUSTOMER VALUEA Totally Integrated Systems
Solution"A THREE-PART STRATEGIC MANAGEMENT SYSTEM”
Part I - Goal #1: 20% Effort: Cascade of Planning
Phases E-A-B-C: Develop Plans and Documents
Step #1
•Environ Scan
•Executive Briefing
•Support Cadre Training
•Enterprise Assessmt
Steps #2-5
•Strategic Planning
•Customer- Focused
•Compet.• Strategy
•Leader. Develop. System
Steps #6-7
• 3-YearBus. Plans.• AnnualPlans &Budgets
• PersonalLdr. Plans
• HR MgmtSystem
Step #8
• EWC Game Pln
• Plan-to- Implemt.
• Capacity Building
• Blow-Out Bureauc.& Simplicity
Step #9
•CLT
• PMO
•Project Mgmt Teams
• Waves of Change
•Culture Change
Step #10
•Strategic IQ Audit
•Annual Strategic Review
• Capacity Building
• Creating Customer Value
Part II – Goal #2: 40% Effort: cascade of Change
Phase D: Ensure Successful Enterprise-Wide Change
SMART START:PLAN-TO-PLAN
STRATEGICTHINKING BUSINESS &
ANNUAL PLANS SMART START: PLAN TOIMPLEMENT
ENTERPRISEWIDE CHANGE SUSTAIN
RESULTSGoal# 3: 40% Effort: Year After YearRecycle
Phase E-A-B-C-D = Business Excellence
Superior Results
105
STRATEGIC & SYSTEMS THINKING—
A NEW WAY TO THINK
“Think Differently”
START THINKING ABOUT:
1 of 2
B
A
D
E
D
B
A
1. The Environment
2. The Outcomes
3. The Future
4. The Feedback
5. The Goals
6. The Whole Organization
7. The Relationships
(and
opportunitie
s)
(and results)
(and direction)
(and learning)
(and measures)
(and helicopters @ 5,000
feet)(and patterns)
106
STOP THINKING JUST ABOUT:
1. Issues and Problems
2. Parts and Events
3. Boxes/Silos
4. Single Activities of Change
5. Defensiveness
6. Inputs and Resources
7. Separateness
How we think ... is how we plan... is how we act
And that determines the results we get in work and life
STRATEGIC & SYSTEMS THINKING—
A NEW WAY TO THINK
107
PRESENT LEARNINGS
1-2 MINUTES ONLY:
1-3 KEY LEARNINGS
HOW TO APPLY THEM IN YOUR CASE
CASE STUDY
108
THE BOTTOM LINE
What we think,
or what we know,
or what we believe
is,
in the end,
of little consequence.
The only consequence ...
is…
what we do!
What we think,
or what we know,
or what we believe
is,
in the end,
of little consequence.
The only consequence ...
is…
what we do!
THANK YOU
FOR YOUR PARTICIPATION
Stephen Haines
Founder and CEO
Haines Centre for Strategic Management