Strategic Planning

One of our most original management thinkers, Henry Mintzberg concludes that the term is an oxymoron -- that strategy cannot be planned because planning is about analysis and strategy is about synthesis. That is why, he asserts, the process has failed so often and so dramatically. Mintzberg traces the origins and history of strategic planning through its prominence and subsequent fall. He argues that we must reconceive the process by which strategies are created -- by emphasizing informal learning and personal vision -- and the roles that can be played by planners.

This is the cover of the comprehensive plan for the Confederated Tribes of the Warm Spring reservation. It was written with a 20 year time horizon in mind. The 58 page document is replete with images and art that serve to make a visceral connection with the reader. This is one of the finest examples I have seen of a powerful, motivational and applicable strategic plan.

A quick study of the History of Strategy provides a blinding flash of the obvious:  Successful strategy-making is most often an "emergent" process.  Employing the emergent approach, the strategist maintains an open mind as to the future direction of the organization, and seizes the moment when opportunity mathches organizational capability. 

For this reason, we devote a full half of any strategic planning session to matters related to building the capability of strategic decision-making.  Only then do we turn to the somewhat more traditional approach of identifying mission and long-term goals and objectives.  

Step One of the Strategic Planning Process:  Build Capability for Strategic Decision-Making

Several studies have shown that 70% of new strategic initiatives never achieve the results expected. The common thread?  Excellent plans go awry because of failure to implement. Useful plans that yield results have the following characteristics:

• All members of the organization must “buy-in” to the Implementation plan.
• The plan must list the all high level activities and subtasks.
• Deliverables related metrics for each activity and subtask must be clearly stated.
• Accountabilities, roles and responsibilities must be clearly laid out for each potential risk and deliverable, and people must have a very clear understanding of the part they will play.
• A detailed plan for identifying and mitigating risk should be woven into the plan.
• Implementation plans must be achievable and people must believe that they are achievable.
• Define the Key Tasks, Timelines, and Accountabilities.

An annual self-assessment and planning process should identify the top 4 - 6 initiatives, which must be the focus of the coming year in order to achieve the desired Market Position. 

• What steps should be taken in order to affect the chosen strategy?
• Who should be involved?
• What resources should be invested toward the fruition of the chosen strategy?
• What milestones will market progress toward fruition of the chosen strategy?
• In addition, the organization needs to align its Operational or Business Plan to its Performance Management processes.

This includes a review current performance development plan, ensuring linkage between Strategic Initiatives, Operational Plan, employee capabilities and succession planning. Strategic Team members will insure that direct reports understand the parameters which need to be captured in performance plans for following year.  All employees should have a direct connection to the tribe’s strategic direction.

Once appropriate strategy is articulated, clients must articulate and communicate strategy, and insist on the following:

• Expected outcomes for the tribal implementation and mobilization phase: 
• Evaluation of Financial Performance
• Top four to six strategic initiatives to achieve Market Position
• Goals that are simple, consistent, and long term.
• Well defined action plans
• High level objectives as input into Performance Management
• Understanding of the Risks that inhibit implementation
• Employee engagement (buy in)
• Prioritization of resources

Key questions that should be addressed include:

• What are the keys tasks?
• In a world of limited resources, which of these tasks should be prioritized over the other?
• When will it be complete?
• What are the critical milestones and target dates?
• How will we measure our progress?
• Who is accountable for the task?
• What skill sets will be required to implement the task?

Step Two of the Strategic Planning Process:  Aligning Long Term Goals and Objectives with Organizational Mission, Vision and Values

Goals are set during this phase. It is important to define the long-term goals that are aligned with and will drive the desired behaviors.   These should be specific, measurable, and attainable.  They often include the elements of a balanced scorecard.  They should define the organizations priorities and be simple, easily remembered, and energizing.

• Linked directly to environmental demands, particularly to customer needs
• Be congruent, both horizontally and vertically, throughout the organization
• Drive breakthrough improvements in addition to incremental improvements
• Define the organization’s priorities
• Be attainable

Characteristics of Effective Strategic Plans

An effective strategic plan is deeply understood and shared by the organization.

An effective strategic plan is properly framed, and answers the right questions.

An effective strategic plan allows flexibility so that the strategy can be adapted to changing circumstances.

An effective strategic plan provides a picture of the desired long term future.

An effective strategic plan results from varied input from a diverse group of thinkers, unafraid to state contrary opinions.

An effective strategic plan follows a thorough and deep analysis of the external environment.

An effective strategic plan contains a realistic assessment of internal capabilities.

An effective strategic plan is clearly articulated internally, selectively shared externally.

An effective strategic plan is based assumptions underlying the strategy. These assumptions are clear and kept in the foreground, so that the accuracy of assumptions can be tested with time.

An effective strategic plan is stated in a manner such that strategic, operational and tactical planning can follow suit.

Mission

• What is the mission and purpose of the organization ?

• What is the key strategic or competitive work of the organization?

• What are the desired outcomes of the organization?  How are these outcomes to be measured?

• What work is designated as strategic/competitive enabling?  Business essential work?  Compliance work?

Environment
It is important to determine what is known -- what we believe to be the facts surrounding the current situation.  We do so by listing a set of assumptions that will provide the under-girding of our economic strategy.

Understanding the Industry

• What economic trends may affect our industry and our business?

• What are the societal trends affecting the nature and future of our business and industry?

• What are the relevant trends in government and politics that currently or may potentially affect the nature of our business and industry?

• What are the major technological trends that could affect our future?

• What dynamics are affecting our suppliers and vendors?

• What types of product are gaining/losing favor in the marketplace?  Why?

• What types of value added service are gaining/losing favor in the marketplace?  Why?

• Who are our complementors?  [A player is a complementor if customers value your product more when they have that player’s product than when they have your product alone.]  How do other players align with complementary companies across the value chain?

• What are the most significant uncertainties in the external environment that could affect the future of our company and of the industry?

Competitive Domains

• What is the best way to divide our industry into subunits or domains?  What is attractive, unattractive about each domain? Who are the major players in each domain? 

• What is the strategy of each competitor?  How does each competitor seek to acquire and lock-in customers and channels?

• How are the competitors placed in a competitive map depicting the key dimensions of value?

Compeitive Analysis

• How does each competitor stand on the key product and service attributes?

• What competitive advantages does each competitor enjoy?  For each competitive advantage listed, what is the degree of barrier to entry?  How vulnerable are each competitor’s advantages?  [Note:  Barriers to entry may include established brand identity, access to capital, switching costs to consumers or producers, economies of scale, and captive or loyal channels.]

• What does each competitor do differently from other competitors?

 

• Who is the cost leader in our industry (i.e. who best minimizes cost of sales)? How has this been accomplished?

• Which competitors have made the strongest case for differentiating themselves from the other players?  How do these companies create a clear point-of-difference?

• Which competitors are the most nimble in responding to change in customer requirements or to strategic moves by other players?  Why?

• Who are the potential entrants to this industry?  That is, who does not play in this space, but could?  What competitive advantages might these potential entrants bring?

 

• Aside from competitors’ products, what substitute products and services might threaten our current position?

• What types of strategic alliances are cropping up in our industry, and how is this affecting competition?

• Which competitors use technology to gain competitive advantage? How is this different from what others are doing?

• Which competitors use nontraditional channels to gain advantage?  How so?

Customer Analysis  (For a great methodology , see Tools, Customer Value Analysis)

• Who are the customers?  What segments best represent the differences among types of producers How do these different types of customers vary in terms of the cost and return to our business?  How is their profile changing?

• Which segments of customers are served, un-served by our company and by each competitor?

• What are the touch-points between customers and producers?

• What drives customers’ choices?  What attributes of our products and services are the most important as predictors of producers’ overall satisfaction?

• What attributes of our products and services are the most important as predictors of producers’ repurchase behaviors?

• Describe the business model of a customer.  What are the keys to their success?

• What market trends are changing customer needs?

• Which competitors are most highly rated by producers?  Why?

Access

• What channels are available to reach customers?

• What segments best represent the differences among types of channels?  How do these different types of Channels vary in terms of the cost and return of working with them?  How is their profile changing?

• What are the touch-points between customers and channels?

• What are considered best practices in among channels?  Who exemplifies these?

• What competitors are most highly rated by channeling partners?  Why?

  
Opportunities and Threats
Once the assumptions are considered, a strategic plan should turn to the Opportunities and Threats currently facing the organization.   Opportunities represent situations that may be leveraged to the advantage of the Southern Ute.  Examples of opportunities include calls for grant proposals, business challenges toward which the company may apply its competitive advantage, and customer needs that the organization can fulfill.

Threats are situations that may portend negative consequences to the organization.  Examples of threats include pending legislation hostile to native American interests and competitors entering markets currently served by the Southern Ute.


Uncertainties  (See Tools:  Scenario Planning)

• What key unknowns or uncertainties surround our economic situation?  That is, what are the factors which could break one way or another, causing differential effects on the economic well-being of the Southern Ute people.

• What are the discrete poles along these dimensions?

• What scenarios may occur in the future, given the outcome of these contingencies?

• What trigger points can be recognized that would portend the onset of each scenario?

Assets

• What real assets are owned or controlled by the organization?

• What are the core competencies?

• What are the strategic advantages held by the organization?

• What organizational capabilities does the Nation have that can be brought to bear in this arena?

• How can Knowledge Management techniques be used to improve deployment of national assets toward economic development?

• What individuals hold related skill, knowledge and competency?

 
Core Competence

• C.K. Prahalad and Gary Hamel coined the term core competence in 1990.

• A core competence is the is the collective learning and coordination skills behind a firm’s product lines.

• To Prahalad & Hamel, core competencies are the source of competitive advantage.

• Provides potential access to a wide variety of markets.

• Should make a significant contribution to the perceived customer benefits of the end product(s), and

• A core competence should be difficult for competitors to imitate.

Strategy
What important considerations are left out of this strategy?
What theoretical model should be used to assure completeness of the stated strategy
How should this strategy be communicated internally and externally?
What kind of organizational culture is necessary to achieve this strategy?


Strategic Plan
 
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
 
Sun Tzu

• What steps should be taken in order to affect the chosen strategy?
• Who should be involved in making this strategy happen?
• What resources should be invested toward the fruition of the chosen strategy?
• What milestones will mark progress toward fruition of the chosen strategy?
• How should one year strategic plans and budgets reflect the chosen strategy?