Developing A Strategic Business Plan

Toolbox

DEVELOPING A STRATEGIC BUSINESS PLAN

Strategic Planning …is the managerial process of developing and maintaining a strategic fit between the organization's objectives and resources and its changing market opportunities.

Org Objectives

Strategic Fit Changing Environment

Resources

The Role of Strategy

Corporate Mission & Objectives

Strategy: •Corporate •Business •Functional

Operating Plans

Vision and Strategy

Sun Tze on Strategy


“Know your enemy, know yourself, and your victory will not be threatened. Know the terrain, know the weather, and your victory will be complete.”

Strategic Marketing

“Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.” John Scully

Corporate Mission Broad purposes of the organization
General criteria for assessing the long-term organizational effectiveness
Driven by heritage & environment
Mission statements are increasingly being developed at the SBU level as well


Examples of Corporate Mission SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company

Examples of Corporate Mission (cont’d) MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value

Corporate Culture The most abstract level of managerial thinking
How do you define culture?
What is the significance of culture to an organization?
How does marketing affect culture in the organization?


Corporate Objectives & Goals


An objective is a long-range purpose ◦ Not quantified and not limited to a time period ◦ E.g. increasing the return on shareholders’ equity




A goal is a measurable objective of the business ◦ Attainable at some specific future date through planned actions ◦ E.g. 10% growth in the next two years

Strategic planning

STRATEGIC PLAN DEVELOPMENT Environmental and internal assessment Industry dynamics and implications

+ Competitive assessment

• What are the major changes in industry dynamics and resulting opportunities and risks?

• What are your competitive strengths and weaknesses?

+ Internal assessment

Strategic definition and implications Strategy articulation

• What strategy will you pursue over the next 3 years?

+ Strategic initiatives

• What will be the impact of major strategic initiatives?

+ • How does your current business emphasis fit with industry opportunity and competitive + landscape? Risk/contingencies & strategic alternatives

Financial projections

• What are the expected financial returns of your strategy?

• What strategic alternatives have you considered?

The Usual Business Planning Hierarchy Vision Mission Objectives Strategies Tactics Plans

Strategic Planning – Many Sub Plans Vision

Mission

Objectives

Strategies

Tactics

Plans

Objectives

Strategies

Tactics

Plans

Objectives

Strategies

Tactics

Plans

Framework of a Successful Organisation

Business Planning and Delivery Strategic Plan New Information Feed Back

Business Plan

Regional or Industry Sales Plan

Sales & Marketing Plan State Sales Plans

Vision is a Critical Driver


To succeed in the long term, our business needs a vision of how we will change and improve in the future.




“without a vision, the people perish”




The vision of the business gives its energy. ◦ It helps motivate us. ◦ It helps set the direction of corporate and marketing strategy.

VISION Consistently followed and measured

Provides future direction

Expresses a consumer benefit

Must be fully communicated

Is motivating

Is realistic

Values underpin all we do Values form the foundation of a business’ management style.


Values provide the justification of behaviour and, therefore, exert significant influence on marketing decisions.

An example is provided by BT Group - defining its values:


BT's activities are underpinned by a set of values that all BT people are asked to respect: ◦

We put customers first

◦

We are professional

◦

We respect each other

◦

We work as one team

◦

We are committed to continuous improvement.




These are supported by our vision of a communications-rich world - a world in which everyone can benefit from the power of communication skills and technology.




A society in which individuals, organisations and communities have unlimited access to one another and to a world of knowledge, via a multiplicity of communications technologies including voice, data, mobile, internet - regardless of nationality, culture, class or education.




Our job is to facilitate effective communication, irrespective of geography, distance, time or complexity. Source: BT Group plc website

Has the Company got a strong Clear Mission?











The Business Mission is important to our sales & marketing planning It provides an outline of how the marketing plan should seek to fulfil the mission It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission? It provides an incentive to implement the marketing plan

PURPOSE – why the business exists

STRATEGY & SCOPE – what business are we in and how?

VALUES & CULTURE – what management believes in

STANDARDS & BEHAVIOUR – the rules that guide how we operate

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

Strategic Audit - ensuring that the Company resources and competencies are understood and evaluated Resource Audit

Value Chain Analysis

Core Competence Analysis

Performance Analysis

Portfolio Analysis

SWOT / PEST Analysis

Need to work within Company Resources & Constraints Financial • Existing Funds • New Funds Physical • • • • •

Production Marketing Sales R&D & Technical Information Technology

Human • Existing Staff • Future Staff Requirements • Training & Development Intangible • • • •

Goodwill Reputation Brands Intellectual Property

Objectives - Corporate & Functional • Examples might include:

Corporate These are objectives that concern the business or organisation as a whole

• We aim for a return on investment of at least 15% • We aim to achieve an operating profit of over $10 million on sales of at least $100 million • We aim to increase earnings per share by at least 10% every year for the foreseeable future

• Examples might include:

Functional Specific objectives for sales & marketing activities

• We aim to build customer database of at least 250,000 households within the next 12 months • We aim to achieve a market share of 10% • We aim to achieve 75% customer awareness of our brand in our target markets • We aim to sell $2m of xyz product into ABC market over the next 6 months

Value Chain Analysis



Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Michael Porter suggested that the activities of a business could be grouped under two headings: 1. 2.

Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities.




Value Chain Analysis is one way of identifying which activities are best undertaken by our business and which are best provided by others ("outsourced").




Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, if we wish to outperform our competitors through differentiating ourselves through higher quality then we will have to perform our value chain activities better than the opposition. But if we adopt a strategy based on seeking cost leadership this will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used.








Value Chain Innovation Process

Operation Process

Post Sales Process

Identification of client’s necessities Market products / Delivery identification products products / services and services creation services definition

Satisfaction of Client’s necessities

Services to the clients

Primary Activities Primary value chain activities include: Primary Activity

Description

Inbound logistics

All those activities concerned with receiving and storing externally sourced materials

Operations

The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)

Outbound logistics

All those activities associated with getting finished goods and services to buyers

Marketing and sales

Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.)

Service

All those activities associated with maintaining product performance after the product has been sold

Support Activities Support activities include: Secondary Activity

Description

Procurement

This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers)

Human Resource Management

Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business

Technology Development

Activities concerned with managing information processing and the development and protection of "knowledge" in a business

Infrastructure

Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

Steps in a Value Chain Analysis Break down a market / organisation into its key activities

Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage;

Determine strategies built around focusing on activities where competitive advantage can be sustained

Core competencies


Core competencies are those capabilities that are critical to a business achieving competitive advantage.




The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power.




Senior management cannot focus on all activities of a business and the competencies required to undertake them.




So the goal is for management to focus attention on competencies that really affect competitive advantage.




Core Competencies are not seen as being fixed. Core Competencies should change in response to changes in the company's environment. They are flexible and evolve over time. As a business evolves and adapts to new circumstances and opportunities, so its Core Competencies will have to adapt and change.




We need to understand what we are good and what makes us better and to hone these advantages and to develop new ones to underpin the business strategy

Identifying Core Competencies Prahalad and Hamel suggest three factors to help identify core competencies in any business:

What does the Core Competence Achieve?

Comments

Provides potential access to a wide variety of markets

The key core competencies are those that enable the creation of new products and services.

Makes a significant contribution to the perceived customer benefits of the end product

Core competencies are the skills that enable a business to deliver a fundamental customer benefit - in other words: what is it that causes customers to choose one product over another? To identify core competencies in a particular market, ask questions such as "why is the customer willing to pay more or less for one product or service than another?" "What is a customer actually paying for?

Difficult for competitors to imitate

A core competence should be "competitively unique": In many industries, most skills can be considered a prerequisite for participation and do not provide any significant competitor differentiation. To qualify as "core", a competence should be something that other competitors wish they had within their own business.

What is Competitive Advantage?


“Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match.” Philip Kotler




“If you don’t have a competitive advantage, don’t compete.” Jack Welch, GE

Four Generic Strategies Lower Cost Broad Target

Differentiation

Cost Leadership

Differentiation

Cost Focus

Differentiation Focus

Scope Narrow Target

Other Characteristics of Competitive Advantage


Substantiality ◦ Is it substantial enough to make a difference?




Sustainability ◦ Can it be neutralized by competitors quickly?




Ability to be leveraged into visible business attributes that will influence customers

(Source: Strategic Marketing Management, Aakers)

Seeking Competitive Advantages


Positions of advantage ◦ Superior customer value ◦ Lower relative total cost




Performance advantages ◦ Customer satisfaction, Loyalty, Market Share, Profit




Sources of advantages ◦ Superior skills & knowledge, Superior resources, Superior business process

WHERE TO COMPETE? Target customers and segments • Which customers are you trying to target or attract? • Which are you willing to serve, but will not spend resources to attract? • Which would you prefer not to serve?

Customers

Geographical scope of business activities • Geographic limits to the business? • Local, regional, multilocal, national, international, or global player? • If local, which localities?

Geographic markets

Channels

How does the entity reach its target customers • Which distribution channels will you use? • What customer segments can they reach?

Products

Quality and breadth of the product line • Breadth of the product line? • Quality of the product line? • Product bundles or a series of unrelated products?

Capability platform: assessment of sources of competitive advantage (1/2) Example

Privileged assets

Necessary capabilities in order to succeed in the industry

Distinctive competencies

Physical asset

• BHP’s low-cost mines

Location/"space"

• Telecomm/media company with rights radio spectrum

Distribution/sales network

• Avon’s representatives

Brand/reputation

• Coca-Cola

Patent

• Pharmaceutical company with a "wonder drug”

Relationship with "license" allocator

• "Favored nation" status with a key minister in liberalizing economy

Innovation

• 3M with new products

Cross-functional coordination

• McDonald’s with QSC&V • J&J with branded consumer health products

Market positioning Cost/efficiency management

• Emerson Electric’s Best Cost Producer program • P&G brand management program

Talent development

Extremely relevant

Capability platform: assessment of sources of competitive advantage (2/2)

Somewhat relevant Irrelevant

Segments BU Overall

A

B

C

Physical asset Location/"space" Privileged assets

Distribution/sales network Brand/reputation

Necessary capabilities in order to succeed in the industry

Patent Relationship with "license" allocator Innovation

Distinctive competencies

Cross-functional coordination Market positioning Cost/efficiency management Talent development Step 1: Ensure that these are the capabilities required to succeed in the industry. Use this list as a thought starter, add and delete as you see appropriate

Step 2: Assess your overall position relative to the capabilities required to succeed in the industry. Also, determine if these capabilities are relevant to the segments you serve

Competitor capability comparison Competitors BU Overall Physical asset

A • •

B

C

Location/"space" Privileged assets

Distribution/sales network

• •

Brand/reputation Necessary capabilities in order to succeed in the industry

Patent Relationship with "license" allocator Innovation

Distinctive competencies

Cross-functional coordination Market positioning Cost/efficiency management Talent development

Step 3: Compare the strengths and weaknesses of your competitive position vs. the necessary skills

Porter’s 5 Forces of Competitive Position Diagram New Market Entrants

Supplier Power

Competitive Rivalry

Product & Technology Development

Buyer Power

Porter 5 Forces

Porter’s 5 Forces of Competitive Position version #2

Porter’s 5 Forces of Competitive Position #3 Entry Barriers Economies of Scale Brand Identity Capital Requirements

Determinants of Supplier Power

Switching Costs Supplier Volume Impact Forward Integration

New Entrants

Industry Competitors

Suppliers Intensity of Rivalry

Buyers Determinants of Buyer Power

Buyer Concentration Buyer Volume Backward Integration

Determinants of Substitution Threat

Relative Price Performance Switching Costs

Rivalry Determinants Industry Growth Fixed Costs Product Differences Brand Identity Exit Barriers

Substitutes

Forces at work framework 1. Determinants of supplier power • Differentiation of inputs • Switching costs of suppliers and firms in the industry • Presence of substitute inputs • Supplier concentration • Importance of volume to supplier • Cost relative to total purchases in the industry • Impact of inputs on cost or differentiation • Threat of forward integration relative to threat of backward integration by firms in the industry

2. New entrants

5. Industry competitors

1. Suppliers

3. Buyers Intensity of rivalry

5. Rivalry determinants • Industry growth • Fixed (or storage) cost/value added • Intermittent overcapacity • Product differences • Brand identity • Switching costs • Concentration and balance • Informational complexity • Diversity of competitors • Corporate stakes • Exit barriers

2. Determinants of barriers to entry • Economies of scale • Proprietary product differences • Brand identity • Switching costs • Capital requirements • Access to distribution • Absolute cost advantages – Proprietary learning curve – Access to necessary inputs – Proprietary, low-cost product design • Government policy • Expected retaliation

4. Substitutes

4. Determinants of substitution threat • Relative price performance of substitutes • Switching costs • Buyer propensity to substitute

3. Determinants of buying power • Bargaining leverage – Buyer concentration vs. firm concentration – Buyer volume – Buyer switching costs relative to firm switching costs – Buyer information – Ability to backward integrate – Substitute products – Pull-through • Price sensitivity – Price/total purchases – Product differences – Brand Identity – Impact on quality perception – Buyer profits – Decision makers' incentives

Ninety ways to measure demand (6 x 5 x 3) World Region Country

Geographical Level

Territory Client Total sales Sector sales

Product Level

Company’s sales Product lines Product config Product items Short term

Medium term

Timing Level

Long term

Strategic Planning Link with Marketing Planning


Businesses that succeed do so by creating and keeping customers.




They do this by providing better value for the customer than the competition.




Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).




The main problem with this process is that the “environment” in which businesses operate is constantly changing.




So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed.




This process of adapting and decision-making is known as marketing planning.

Strategic Plan

Business Plan

Marketing Plan

Sales Plan

State Plan

Regional Plan

Industry Plan

Key Account Plan

Strategic vs. Marketing Plans


Strategic planning is concerned about the overall direction of the business. ◦ It is concerned with marketing, of course. ◦ But it also involves decision-making about production and operations, finance, human resource management and other business issues.




The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.




Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”. Sometimes this is quite a straightforward task. ◦ For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). ◦ However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. ◦ Keeping control of marketing decision-making in such a complex situation calls for well-organised marketing planning.

Key issues in strategic and marketing planning?


The following questions are key in the marketing and strategic planning process: ◦ ◦ ◦ ◦ ◦ ◦




Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course?

A marketing plan helps to: ◦ The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected ◦ Identify sources of competitive advantage ◦ Gain commitment to a strategy ◦ Get resources needed to invest in and build the business ◦ Inform stakeholders in the business ◦ Set objectives and strategies ◦ Measure performance

Situation Analysis



Internal Analysis—company; capability etc. External Analysis—customers, market




SWOT Analysis ◦ Strengths, Weaknesses, Opportunities & Threats

definition, industry structure

◦ Identify & prioritize major problems and opportunities: selection of key issues


Based on the firm’s core competencies, decide on future options

SWOT Internal Environment Strengths

Weaknesses

World class product Financial resources Know-how

Technical support Internal processes Channels network External Environment

Opportunities Water & Energy crises Environment awareness Productivity improvement

Threats Competitors market share Euro X Dollar Technology development

SWOT ANALYSIS Opportunities/Threats

NEUTRALIZE THREATS

BUILD ON STRENGTHS

YOUR BUSINESS

CONVERT OPPORTUNITIES

• How are demand and supply expected to evolve? • How do you expect the industry chain economics to evolve? • What are the potential major industry discontinuities? • What competitor actions do you expect?

Strengths/ Weaknesses • What are your BU’s assets/competencies that solidify your competitive position? • What are your BU’s assets/competencies that weaken your competitive position? Can be used as a thought starter for competitive analysis and internal assessment

ADDRESS WEAKNESSES

Surfaces potential opportunities/threats arising from factors external to the business

SWOT Analysis is still a useful Tool

TOWS matrix Strengths

Weaknesses

Opportunities

S-O strategies

W-O strategies

Threats

S-T strategies

W-T strategies

S-O strategies pursue opportunities that are a good fit to the companies strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.

PEST analysis


A scan of the external macroenvironment in which the company wants to operate (or operates) and can be expressed in terms of the following factors: ◦ ◦ ◦ ◦

Political Economic Social Technological

PEST Analysis - market, business, proposition, etc. POLITICAL

ECONOMIC

• • • • • • • • • • • •

• • • • • • • • • • • •

ecological/environmental issues current legislation home market future legislation European/international legislation regulatory bodies and processes government policies government term and change trading policies funding, grants and initiatives home market lobbying/pressure groups international pressure groups wars and conflict

home economy situation home economy trends overseas economies and trends general taxation issues taxation specific to product/services seasonality/weather issues market and trade cycles specific industry factors market routes and distribution trends customer/end-user drivers interest and exchange rates international trade/monetary issues

SOCIAL

TECHNOLOGICAL

• • • • • • • • • • • • •

• • • • • • • • • • • • •

lifestyle trends demographics consumer attitudes and opinions media views law changes affecting social factors brand, company, technology image consumer buying patterns fashion and role models major events and influences buying access and trends ethnic/religious factors advertising and publicity ethical issues

competing technology development research funding associated/dependent technologies replacement technology/solutions maturity of technology manufacturing maturity and capacity information and communications consumer buying mechanisms/technology technology legislation innovation potential technology access, licencing, patents intellectual property issues global communications

PEST or SWOT











A PEST analysis most commonly measures a market; a SWOT analysis measures a business unit, a proposition or idea. Generally speaking a SWOT analysis measures a business unit or proposition, whereas a PEST analysis measures the market potential and situation, particularly indicating growth or decline, and thereby market attractiveness, business potential, and suitability of access - market potential and 'fit' in other words. PEST analysis uses four perspectives, which give a logical structure, in this case organized by the PEST format, that helps understanding, presentation, discussion and decisionmaking. PEST analysis can be used for marketing and business development assessment and decision-making, and the PEST template encourages proactive thinking, rather than relying on habitual or instinctive reactions.

Structure-conductStructureconduct-performance (SCP) model Industry

External shocks

S

tructure

Producers

C

onduct

P

erformance

Feedback

• Technology breakthroughs

• Changes in government policy/regulations – Domestic – International

Economics of demand • Availability of substitutes • Differentiability of products • Rate of growth • Volatility/cyclicality Economics of supply • Concentration of producers • Import competition • Diversity of producers • Fixed/variable cost structure • Capacity utilization • Entry/exit barriers Industry chain economics • Bargaining power of input suppliers • Bargaining power of customers

Marketing • Pricing • Volume • Advertising/promotion • New products/R&D • Distribution Capacity change • Expansion/contraction • Entry/exit • Acquisition/merger/ divestiture Vertical integration • Forward/backward integration • Vertical joint ventures • Long-term contracts Internal efficiency • Cost control • Logistics • Process R&D • Organization effectiveness

Finance • Profitability • Value creation Technological progress Employment objectives

Definition of risks Definition

Business risk

Regulatory risk

Technology risk

Integrity risk

Macroeconomic risk

• Risk of loss due to changes in industry and competitive environment, as well as shifts in customer preferences

• Risk due to changes in regulatory environment (e.g. deregulation)

• Risk due to major changes in technology • Risk of failures due to business processes and operations or people’s behavior, either intentional (e.g. fraud) or unintentional (e.g. errors)

• Risk of loss due to changes in the political, social, or economic environments

Management




Management, control and evaluation

Five disciplines – Peter Senge


Personal Mastery: ◦ Aspiration involves formulating a coherent picture of the results people most desire to gain as individuals, alongside a realistic assessment of the current state of their lives today. ◦ Learning to cultivate the tension between vision and reality can expand people's capacity to make better choices, and to achieve more of the results that they have chosen.




Mental Models: ◦ Reflection and inquiry skills is focused around developing awareness of the attitudes and perceptions that influence thought and interaction. ◦ By continually reflecting upon, talking about, and reconsidering these internal pictures of the world, people can gain more capability in governing their actions and decisions.

Five disciplines – Peter Senge


Shared Vision: ◦ Establishes a focus on mutual purpose. ◦ People learn to nourish a sense of commitment in a group or organization by developing shared images of the future they seek to create, and the principles and guiding practices by which they hope to get there.




Team Learning: ◦ Group interaction. ◦ Through techniques like dialogue and skillful discussion, teams transform their collective thinking, learning to mobilize their energies and actions to achieve common goals, and drawing forth an intelligence and ability greater than the sum of individual members' talents.

Five disciplines – Peter Senge


Systems Thinking: ◦ People learn to better understand interdependency and change, and thereby to deal more effectively with the forces that shape the consequences of our actions. ◦ Systems thinking is based upon a growing body of theory about the behavior of feedback and complexity - the innate tendencies of a system that lead to growth or stability over time. ◦ To help people see how to change systems more effectively and how to act more in tune with the larger processes of the natural and economic world.

Project management - processes

Project management – a process

Project management – process chain

Project management – risk analysis

Success Keys - Deployment Deployment - Completing the Plan Success Failure >Assign roles and responsibilities

>No accountability for deployment

>Establish priorities

>Too many goals, strategies, or objectives - no apparent priority

>Involve mid-level management as active participants

>Plan in a vacuum-functional focus

>Think it through - decide how to manage implementation

>No overall strategy to implement

>Charge mid-level management with >Make no attempt to link with day-to-day aligning lower-level plans operations >Make careful choices about the contents of the plan and form it will take

>Not being thorough-glossing over the details

Success Keys - Communication Deployment - Communicating Success

Failure

Assign roles and responsibilities

No accountability

Communicate the plan constantly and consistently

Never talk about the plan

Recognize the change process

Ignore the emotional impact of change

Help people through the change process

Focus only on task accomplishment

Success Keys - Implementation Implementing - I Success

Failure

Assign roles and responsibilities

No accountability

Involve senior leaders

Disengagement from process

Define an infrastructure

Unmanaged activity

Link goal groups

Fragmented accomplishment of objectives leads to sub-optimization

Phase integration of implementation actions with workload

Force people to choose between implementation and daily work; too many teams

Involve everyone within the organization

No alignment of strategies

Success Keys - Implementation Implementing - II Success Allocate resources for implementation

Failure Focus only on short term need for resources Ignore or avoid change

Manage the change process No measurement system Evaluate results Share lessons learned; acknowledge successes through open and frequent communication

Hide mistakes/lay blame; limited/no communication

Success Keys - Measurement Strategic Measurement - I Success Failure Assign roles and responsibilities

No accountability

Use measurement to understand the organization

Sub-optimization: focus only on efficiencies

Use measurement to provide a consistent viewpoint from which to gauge performance

Use measures that provide no real information on performance; use too many measures

Use measurement to provide an integrated, focused view of the future

Use measurement to focus on the bottom-line only

Success Keys - Measurement Strategic Measurement - II Success

Failure

Use measurement to communicate Use measurement to control policy (new strategic direction) Update the measurement system

Never review measures

Use measurement to provide quality feedback to the strategic management process

Fail to use measurement to make strategic, fact-based decisions; use only for control

Success Keys - Evaluation Evaluation Success

Failure

Assign roles and responsibilities

No accountability

Recognize when to update the plan

Poor timing and not recognizing external forces

Modify strategic planning process to accommodate the more mature organization

Rigid application of strategic planning process; ignore lessons learned from previous efforts Ignore impact of new leaders

Incorporate new leaders into the strategic planning process Integrate measurement with strategic planning

Don't use measurement information Shortcut the process

Use experienced strategic planning facilitators

Best Companies Spend more time on Forward Planning than Historical Analysis

Achieving Agility Through a New Approach to Forecasting In today’s turbulent economy, rolling forecasts are proving to be an important new tool in changing the way budgeting and planning has traditionally been handled. Mary Brandel

Benefits of Rolling Forecasts