The document provides an overview of strategic management concepts including the canoe theory, built to last principles, good to great frameworks, differences between private and public organizations, scanning the external environment, industry analysis using Porter's five forces, developing vision, mission, values and goals, and implementing and measuring strategies. It discusses models for strategic management and formulation, highlights reasons why measurement is important, and provides tips for keeping plans from sitting on shelves and developing organizational permanence around strategic management. The key takeaways are frameworks and considerations for analyzing the environment, formulating strategies, implementing plans, and measuring performance in organizations.
2. CANOE THEORY
• Think of your organization as a long canoe
• The canoe has a destination
• Everyone in the canoe has a seat and paddle
• Everyone is expected to paddle
• Those who won’t paddle have to get out of the canoe
• Those who prevent others from paddling have to re-
adjust or get out of the canoe
• There are no passengers in the canoe
• The canoe theory understands crisis
• The canoe theory says you have the right to be happy
5. GOOD TO GREAT
• Level 5 Leadership
• First Who…Then What
• Confront the Brutal Facts
• The Hedgehog Concept
• A Culture of Discipline
• Technology Accelerators
• The Flywheel and The Doom Loop
8. FEATURES OF SUCCESSFUL
STRATEGIC MANAGEMENT
• Has support of organization’s executive
officer.
• Is user friendly.
• Is participatory, not left to planners.
• Is flexible.
• Leads to resources decisions.
• Engages and motivates all staff.
• Is fresh and continuous, not static and stale.
9. FEATURES (CONTINUED)
• Is Proactive
• Not a Quick Fix
• Part of Quality Management
• Payoffs Increase over Time
10. LESSONS LEARNED ABOUT
STRATEGIC PLANNING
• Plans must be tailored to organization.
• No one size ‘fits’ all.
• Time to complete takes longer – expect 50% more
than planned.
• Process needs a shepherd.
• Visionaries needed at beginning and detail types
thereafter.
11. WHY MANAGERS DON’T PLAN
• Time Consuming
• High Demands
• Not Rewarded
• Executives Don’t Support It
• Too Risky
12. STRATEGIC MANAGEMENT MODEL
• Scanning
• Where are we now?
• Strategy Formulation
• Where do we want to be?
• Strategy Implementation
• How do we get there?
• Measurement/Performance
• How do we measure our progress?
13. STRATEGIC MANAGEMENT MODEL
• Strategy Formulation
• Where do we want to be?
• Vision
• Mission
• Values
• Goals
• Objectives
14. VISION
Vision without Action is a Daydream
Action without Vision is a Nightmare
• Not Optional
• Stretch – 30+ Years
• 8-10 Words in length
• Future State
• Brief and Memorable
16. VISION EXAMPLES
• “Light the Fire Within”
• “A Safer Future for All Communities”
• “See the Mountains – Breathe Freely”
• To Be the Happiest Place on Earth
• To Be the World’s Best Quick Service Restaurant
17. VISION LEVELS OF PEOPLE
• Some people never see it. (Wanderers)
• Some people see it but never pursue it on
their own. (Followers)
• Some people see it and pursue it.
(Achievers)
• Some people see it and pursue it and
help others see it. (Leaders)
John Maxwell, Developing The Leader
Within You, 1993.
19. MISSION STATEMENT
In the absence of a clearly defined direction one is
forced to concentrate on confusion that will ultimately
consume you.
20. MISSION
• What is our purpose?
• Describes current state
• Timeline is 3-5 Years
• Builds on our distinctive competencies
• Tends to focus on Core Business
• 30-35 Words in length
21. MISSION EXAMPLES
• “To Lead All Communities in Disaster
Preparedness, Mitigation, and Recovery by
Maximizing Assistance and Support.”
• “Caltrans Improves Mobility Across
California.”
• To produce superior financial returns for our
shareholders as we serve our customers with
the highest quality transportation, logistics,
and e-commerce.
25. CODES OF GOVERNANCE
• The Cadbury Code: 1992
• Sarbanes-Oxley Act: 2002
• Public Company Accounting Oversight
Board
• “Triple bottom line”
• Four major issues:
• Ownership structure and influence
• Fianacial Stakeholder rights and relations
• Financial transparency and information
disclosure
• Board structure and processes (audit)
26. ROLE OF THE BOARD OF
DIRECTORS
• Monitor
• Evaluate and influence
• Initiate and determine
• Organization of Board
• Insiders versus outsiders
• CEO/chair position
• Committees’ Effectiveness
27. ROLE OF TOP MANAGEMENT
TEAM
• Who is the TMT?
• Executive Leadership and Strategic Vision
• Articulates strategic vision for corporation
• Sets the model for others to identify and
follow
• Communicates high performance standards
and builds confidence in followers’ abilities to
meet standards
• Managing strategic planning process
33. STRATEGIC MANAGEMENT MODEL
• Scanning:
• Where are we now?
• Macro Analysis (STEP, PESTEL, ETC.)
• Industry Analysis – Competitive Intelligence
• SWOT Analysis
• Internal versus
External Elements
34. WHY SCAN?
• To know your position in the environment
• To respond effectively to constant change
• To see the organization as a whole
• To avoid surprises
• To survive
• To lay the foundation for strategic issues
36. SOCIO-CULTURAL VARIABLES
• Lifestyle Changes
• Career Expectations
• Regional Shifts in Population
• Life Expectancies
• More women in workforce
• Greater concern for fitness
• Postponement of family formation
• Increase in temporary workers
37. TECHNOLOGICAL VARIABLES
• Total Federal Spending for R&D
• Total Industry Spending for R&D
• Focus of Technological Efforts
• Patent Protection
• Wireless Communications
• Nanotechnology
• Productivity Improvements
• Genetic engineering
39. POLITICAL-LEGAL VARIABLES
• Antitrust Regulations
• Tort Reform
• Environmental Protection Laws
• Taxation at local, state, federal levels
• Hiring and Promotion Laws
• Americans Disabilities Act of 1990
• Sarbanes-Oxley Act of 2002
40. DEMOGRAPHIC VARIABLES
• Aging Population
• Rising affluence
• Changes in Ethnic Composition
• Geographic distribution of population
• Disparities in income levels
41. GLOBAL VARIABLES
• Increasing Global Trade
• Currency Exchange Rates
• Emergence of Indian and Chinese Economies
• Trade agreements (NAFTA, EU, ASEAN)
• Creation WTO
43. INDUSTRY ANALYSIS
• 6 Forces Analysis
• Industry Competitors
• Suppliers/Vendors
• Customers/Clients
• Potential New Entrants
• Substitutes
• Other Stakeholders
• Role of Complementors
44. NEW ENTRANTS AND ENTRY
BARRIERS
• Absolute cost advantages
• Access to inputs
• Government policy
• Economies of scale
• Capital requirements
• Brand identity
• Switching costs
• Access to distribution
• Proprietary products
45. BUYER POWER (CHANNEL AND
END CONSUMER)
• Buyer volume and information
• Brand identity
• Price sensitivity
• Threat of backward integration
• Product differentiation
• Substitutes
46. SUPPLIER POWER
• Supplier concentration
• Differentiation of inputs
• Switching costs
• Threat of forward integration
• Cost relative to total purchases in industry
47. SUBSTITUTES
• Switching costs
• Buyer inclination to substitute
• Variety of substitutes
• Price-performance tradeoff of substitutes
• Necessity for product or service
48. DEGREE OF RIVALRY
• Exit barriers
• Industry concentration
• Fixed costs
• Industry growth
• Intermittent overcapacity
• Switching costs
• Brand identity
• Diversity of rivals
• Corporate stakes
50. ROLE OF COMPLEMENTORS
• Number of complements
• Relative value added
• Difficulty of engaging complements
• Buyer perception of complements
• Complement exclusivity
• Tend to increase profits by increasing demand for an
industry’s products
59. STRATEGIC MANAGEMENT MODEL
• Strategy Formulation
• Where do we want to be?
• Vision
• Mission
• Values
• Goals
• Objectives
60. GOAL
• Supports the Mission
• Deals with One Issue or Item of Focus
• Reflects a primary activity or strategic direction
• Describes the “To Be” State
• “BHAG”
• Encompasses a long period, i.e. at least 3 years
61. GOAL EXAMPLES
• Achieve excellence in the delivery of
disaster recovery and mitigation
programs.
• Professionally develop our employees as
a reflection of DAD’s key attributes and
values.
• Increase the supply of housing, especially
affordable housing.
• Become a model for customer service.
• To provide benefits in correct amounts
and issued in a timely manner.
64. OBJECTIVES
• Add specificity beyond Goals
• Answer the questions
• What is to be accomplished?
• When?
• Should contain the SMART Elements
65. OBJECTIVES: SMART MODEL
• Specific
• Measurable
• Aggressive but Attainable
• Results-Oriented
• Timeframe
66. STRATEGIC OBJECTIVE EXAMPLES
• By June 30, 2005 achieve 75% rating on
the DAD service index from all
stakeholders.
• Increase sales growth 6-8% in the next 5
years. (P&G)
• Cut corporate overhead costs by $30
million per year. (Fortune Brands)
• Operate 6,000 stores by 2010 – up from
3,000 in the year 2000. (Walgreen’s)
• Reduce greenhouse gases by 10 percent
(from a 1990 bast) by 2010. (BP Amoco)
75. PARABLE OF THE BAMBOO
It takes patience and discipline to develop
and empower people; in fact, it’s like
growing bamboo. Once the seed is
planted, you must water it daily for four
years before the tree breaks ground –
then it grows 60 feet in 90 days!
Executives who nurture people can get
similar results…How, you ask, can such
rapid growth be possible? It results from
the miles of roots that develop in those
first four years. Preparing people to
perform is the task of leadership.
78. DEFINITIONS
• Goal: Broad, General BHAG
• Outcome: Desired end result and report
performance
• Objective: What and When
• Measure: A quantified unit that
assesses progress or achievement
79. GOOM EXAMPLE
Goal 1: Achieve excellence in the delivery of
disaster recovery and mitigation.
Outcome: Increased Customer Satisfaction
Objective 1.1: By June 30, 2005, achieve 75%
rating on the DAD Service Index from all
stakeholders.
Measure: DAD Service Index (DSI)
81. Work Action Plan Template
Sponsor: Completion Date
Organization:
n.n Goal
Outcome
n.n Objective
Measure
Task Description Team Lead Staff Hours Completion
Date
Plan-
Do-Check-Act
83. WHY MEASURE?
Reactive Reasons
• Government Intervention
• Fewer Resources and Smaller Budgets
• Increased Demand for Accountability
• Mandated
84. WHY MEASURE?
Proactive Reasons
• Makes us more responsive to public needs
• Provides feedback on mission
accomplishment
• Creates blueprint for linking budget to
outcomes
• Good management and good public
policy
85. MEASUREMENT / PERFORMANCE
• How do we measure our progress?
• 5 Types of Measures
• Input
• Output
• Outcome
• Quality
• Efficiency
86. INPUT MEASURE
Amount of resources needed to provide a
particular product or service.
Examples:
• Number of FTEs or PYs
• Number of eligible clients
• Number of customers requesting service
• Number of applications received
• Number of sales orders received
87. OUTPUT MEASURE
Amount of products or services provided
Examples:
• Percent of highways resurfaced
• Number of police reports filed
• Number of vaccinations given to school-age
children per year
• Number of shafts produced in a single operating
shift
88. OUTCOME MEASURE
Reflect the actual results achieved and/or
their impact or benefit.
Examples:
• Reduction in incidence of disease
• Percentage of discharged patients living
independently
• Percent of increase in tourists
• Percent of monthly programmed sales
orders filled on time
89. QUALITY MEASURE
Reflect the effectiveness in meeting the
expectations of customers and
stakeholders
Examples:
• Number of defect reports compared to
number of reports produced
• Number of course ratings in highest
category related to total number of
course ratings
90. EFFICIENCY MEASURE
Also known as productivity measures. Reflect the cost of
providing products or services.
Examples:
• Output/Input
• Output/Time
• Output/Cost
• Outcome/Cost
91. KEEPING PLANS OFF THE SHELF
• All Staff Meeting
• Announce Phases
• Review and Assess Plans at Quarterly Sessions
• Sponsors and Team Leads for Strategic Goals and
Strategic Objectives
• Deming Philosophy – PDCA
92. DEVELOPING BENCH STRENGTH
• “Drill Down” Application
• Sponsors, Team Leads, and Team Members
• Work Action Plan
• “Project” Champion
• Leadership Training
• Leadership Conference Presentations