How to build your strategic plan in 7 steps

STRATEGY & CORPORATE GOVERNANCE - © Prof. L. Bouty 2013
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Build your strategic
plan in 7 steps

© dullhunk @ Flickr
Rule # 1 - Think!
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Rule # 2 - Try!
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Rule # 3 - Each case is unique
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It’s stormy outside...

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Can I help you?

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WHAT IS STRATEGY?

The Economist
“Nobody really
knows what
strategy is.”
source: © Marc Sniukas
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Costas Markides, Professor London Business School
“Nobody really
knows what a
strategy is or how
to develop a good
one.”
source: © Marc Sniukas
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Strategy has its roots in history…
source: Business History Review 76 (Spring 2002): 37–74. © 2002 by The President and Fellows of Harvard College

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Strategy
is a term that can be traced
back to the ancient Greeks,
for whom it meant a chief
magistrate or a military
commander in chief.

All men can see the
tactics by which I
conquer, but what none
can see is the strategy out
of which great victory is
evolved
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SunTzu,The Art of War, 400 BC

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In USA, the building of the railroads after 1850 led to the
development of mass markets for the ﬁrst time.

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By the late nineteenth century, a new type of firm began to
emerge: the vertically integrated, multidivisional (or “M-form”)
corporation which needed formal approach to corporate strategy
Right: Alfred Sloan (chief executive of General Motors from 1923 to 1946)

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The organizational challenges involved in World War II
were a vital stimulus to strategic thinking.

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Elite business schools were founded end of 19th century
promoting the idea that managers should be trained to think
strategically and not just to act as functional administrators

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“Management is not just
passive, adaptive behavior;
it means taking action to
make the desired results
come to pass.”
Pr. Peter Drucker

Good strategies grow out of ideas that have been kicking around
the company, and initiatives that have been taken by all sorts of
people in the company.
Prof. Henry Mintzberg
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Asking a management theorist to deﬁne
strategy is rather like asking a philosopher
to deﬁne truth.
But strategy is basically about two things:
deciding where you want your
company to go, and then how you
want to take it there.
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Four simple, timeless questions that every business
strategy must answer:
‣Where should I choose to compete?
‣Where should my core customers be?
‣How should I differentiate myself
competitively?
‣How should I discourage competitive
investment?
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K.Ohmae, The Mind of the Strategist
In business as on the battleﬁeld, the object of strategy
is to bring about the conditions most favorable to one's
own side, judging precisely the right moment to
attack or withdraw and always assessing the
limits of compromise correctly.

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What is strategic depends
where you sit!
One person’s strategies are another’s tactics

STRATEGY SAFARI
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A GUIDED TOUR THROUGH THE WILDS
OF STRATEGIC MANAGEMENT
Prescriptive and Descriptive Schools by Henry Mintzberg

STRATEGY & CORPORATE GOVERNANCE - © Prof. L. Bouty 2013Picasa - Yotofuji Tanaki photos
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THINK“Look before you leap”
Design School
Strategy as a process of conception, achieving
the essential ﬁt between
internal strengths & weaknesses and, external
opportunities & threats
Prescriptive, P. Selznick, '60s

STRATEGY & CORPORATE GOVERNANCE - © Prof. L. Bouty 2013Picasa - Hui M photos
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Planning School
Strategy as a formal process, takes
on most of the design schools
assumptions
Process: Formal, Decomposable,
Steps, supported by checklists and
formal techniques
Prescriptive, Igor Ansoff, mid '70s
PROGRAM“A stitch in time saves nine”

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CALCULATE“Nothing but the facts, madam”
Positioning School
Strategy as an analytical process, generic
positions selected through formalized
analyses of industry situations.
Prescriptive, Michael Porter, '80s

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CENTRALIZE“Take us to your leader”
Entrepreneurial School
Strategy as a visionary process,
based on intuition
The leader is central
Descriptive, Schumpeter,‘40s

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Cognitive School
Strategy formation as a mental process, and
analyzes how people perceive patterns and
process information
H.A Simon,‘50s
WORRY“I’ll see it when I believe it”

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Learning School
Strategy formation as an emergent process, where the management of an
organization pays close attention to what works and doesn't work over time,
and incorporates these 'lessons learned' into their overall plan of action.
Lindblom, Hamel, Pralahad,‘70s
PLAY“If ﬁrst you don’t succeed, try, try again”

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Power School
Strategy development is seen to be a process of
negotiation between power holders within the company,
and/or between the company and external stakeholders.
Descriptive, Alison,‘80s
HOARD“Look out for number one”

Cultural School
Strategy formation as a collective process
involving various groups and departments
within the company; strategy as a reﬂection
of the corporate culture of the
organization.
Descriptive,‘80s
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PERPETUATE“An apple never falls far from the tree”

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Environmental School
Strategy formation is seen to be a
reactive process: a response to the
challenges imposed by the external
environment.
Descriptive, Hannan & Freeman,
‘80s
CAPITULATE“It all depends”

Conﬁguration School
Strategy formation is seen as a process of transforming
the organization from one type of decision-making
structure into another.
Descriptive and Prescriptive, Chandler,‘70s
Picasa – Catherine S. Todd
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LUMP“To everything there is a season...”

Many deﬁnitions,
Many concepts,
Many schools!
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Intended Strategy
Deliberate StrategyUnrealized Strategy
Realized Strategy
Strategy is a plan: they are made in advance of the
actions to which they apply and they are developed
consciously and purposefully
Em
ergentStrategy
Source: Mintzberg H., The strategy concept I: Five Ps for Strategy, California Management Review 1987
Strategy is a pattern: the
successful approaches merge into a
pattern of action that becomes our
strategy.

Strategic Process Proposal
1. Start with an intended strategy (but keep your intuition)
2. Understand who you are? (Most probably you are not alone)
3. Understand where you are? (Your environment deserves attention)
4. Imagine where you can go? (Look for number one)
5. Deﬁne what you should do to go there? (Be a leader)
6. Set control points (Program your journey)
7. Monitor your journey & correct the trajectory if
necessary (Learn from your mistakes)
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Our

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WHY STRATEGY?

…. at the end it is all about ShareholderValue Creation
Remember…
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ShareholderValue Creation is about the
fundamental equation:
PROFIT=PRICE - COST
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Good analysis ties the details
of strategy to the ﬁnancial
implications
Source: Barwise, P., Marsh, P., & Wensley, R. (1989). Must ﬁnance and strategy clash.
Harvard Business Review, (September-October), 85.

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What can make
a successful
plan ?Failing

Did you know that companies
loose up to
60%of their strategy during
implementation?

Companies need to wake up and ﬁx their
initiative management
Most leaders are poor strategy
communicators
Everybody agrees that skills are crucial to
performance but few are able to build an
adequate development platform
The Strategy Execution process often fails
source:The strategy execution research report

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6 SILENT KILLERS
FOR STRATEGY EXECUTION
•Top-down or laissez-faire senior
management style (9 of 12 cases)
•Unclear strategy and conﬂicting
priorities (9 of 12 cases)
•An ineffective senior management team
(12 of 12 cases)
•Poor vertical communication (10 of 12
cases)
•Poor coordination across functions,
businesses or borders (9 of 12 cases)
•Inadequate down-the-line leadership
skills and development (8 of 12 cases)
Source:The six silent killers of strategy implementation and learning,
Michael Beer, Sloan Management Review Summer 2000

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Photo: Flickr - Some rights reserved by Ametxa
Insights from the best-in-class
Strategy execution is a discipline of its own
Source: Jeroen De Flander

49 Photo: Flickr - Some rights reserved by Dino ahmad ali
Strategy execution is a vast area with blurred borders

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Photo: Flickr - Some rights reserved by Dino ahmad ali
Strategy execution is on its way to maturity

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Strategy execution requires a great strategy

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Photo: Flickr - Some rights reserved by probe.ch
Strategy execution requires your attention from the start

53 Photo: Flickr - Some rights reserved by kamera.obskura
Strategy execution has a strong timing sequence

54 Photo: Flickr - Some rights reserved by ordinaryfool
Strategy execution requests an integration between organizational
and individual performance

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Strategy execution demands clear responsibilities & requires
horizontal alignment

Strategy execution asks for measurement

Strategy execution is a resident
Photo: Le Corbusier Seat

Strategy execution needs heroes
Photo:“The incredibles”, Pixar @ Disney

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Enjoy your journey!!
Strategic

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on Facebook and Google+

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Thank you for your time

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How to build your strategic plan in 7 steps

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How to build your strategic plan in 7 steps