Corporate Governance Presentation by The Writing Wizards Sarah – Jane Cole Strategic Planning.

Corporate GovernanceCorporate Governance

Presentation by The Writing Presentation by The Writing WizardsWizards

Sarah – Jane ColeSarah – Jane Cole

Strategic PlanningStrategic Planning

IntroductionIntroduction

Service - Provision of a diverse range of Service - Provision of a diverse range of mentoring and professional development mentoring and professional development services across business and human services across business and human resourcesresources

Business developmentBusiness development

Development of quality management systems Development of quality management systems Compliance auditing to 9001, DESQA and DSQS Compliance auditing to 9001, DESQA and DSQS standards (Focus Certification)standards (Focus Certification)Tender document development Tender document development Grant submissionGrant submissionBusiness and strategic plan development and facilitationBusiness and strategic plan development and facilitationBusiness mentoringBusiness mentoringCompany and project presentation developmentCompany and project presentation developmentMarket research and analysisMarket research and analysisGrammatical and structural editing of business Grammatical and structural editing of business documents documents

Presentation TodayPresentation Today

Strategic Planning Strategic Planning

PurposePurpose Provide a general understanding of the strategic Provide a general understanding of the strategic

planning processplanning process Step by step guide to strategic planningStep by step guide to strategic planning Establish and implement an appropriate planning Establish and implement an appropriate planning

processprocess Development of an action planDevelopment of an action plan Discuss facilitating the involvement of relevant Discuss facilitating the involvement of relevant

stakeholders in the processstakeholders in the process

Do organisations plan to fail in their Do organisations plan to fail in their business venture?business venture?

How many organisations fails to How many organisations fails to appropriately plan?appropriately plan?

StatisticsStatistics

No. of years No. of years after startupafter startup

% failed firms% failed firms Cumulative % Cumulative % of failed firmsof failed firms

11 3232 3232

22 1717 4949

33 1313 6262

44 77 6969

55 55 7474

DefinitionDefinition

Planning - Planning is anticipatory Planning - Planning is anticipatory decision making. It is a process of decision making. It is a process of deciding before action is required (Ackoff deciding before action is required (Ackoff 1981)1981)

PlanningPlanning

Enables a review of past effortsAnalyse the current status of the organisationProvide for systematic development of future objectives and goalsCoordinate an organisation’s effortsSharpen company focusEstablishes performance standards and measures progressEstablishes a time frame for the achievement of outcomes

More definitionsMore definitions

Business planning – Is a detailed study of the Business planning – Is a detailed study of the organisations activities, which highlights where organisations activities, which highlights where the organisation has been, where it is now and the organisation has been, where it is now and where it might get to in the future and where it might get to in the future and incorporates an action program to achieve these incorporates an action program to achieve these results. (Coulthard, Howard, Clark)results. (Coulthard, Howard, Clark)

Strategic Planning – the process by which the Strategic Planning – the process by which the guiding members of an organisation envision its guiding members of an organisation envision its future and develop the necessary procedures future and develop the necessary procedures and operations to achieve that future and operations to achieve that future (Goodstein, Nolan and Pfeiffer)(Goodstein, Nolan and Pfeiffer)

Alice: Alice: Which way should I go?Which way should I go?

Cat:Cat: That depends on where you are That depends on where you are

going.going.

Alice:Alice: I don’t know where I’m going!I don’t know where I’m going!

Cat:Cat: Then it doesn’t matter which wayThen it doesn’t matter which way

you go!you go!

Lewis Carroll 1872Lewis Carroll 1872

Through the Looking-GlassThrough the Looking-Glass

Strategic Planning = Strategic EnvisioningStrategic Planning = Strategic Envisioning

Why Strategically Plan?Why Strategically Plan?

Provides a shared:Provides a shared:

FrameworkFramework

UnderstandingUnderstanding

Values and beliefsValues and beliefs

In which decisions can be madeIn which decisions can be made

Strategic Planning ModelStrategic Planning Model

Three basic elements of any strategic Three basic elements of any strategic planning model:planning model:

Where are we going? Where are we going?

What is the environment? What is the environment?

How do we get there? How do we get there?

Strategic Planning ModelStrategic Planning Model

Planning to PlanPlanning to Plan

Who should be involvedWho should be involved

How will we involve stakeholdersHow will we involve stakeholders

How long will it takeHow long will it take

What information is needed in order to What information is needed in order to plan successfullyplan successfully

CommitmentCommitmentRequires commitment from the topRequires commitment from the top

Should not be treated as ‘secret squirrel Should not be treated as ‘secret squirrel business’ through which a strategic plan appears business’ through which a strategic plan appears as an epiphany to a select fewas an epiphany to a select few

Involvement of StakeholdersInvolvement of Stakeholders

Funding bodyFunding bodyClientsClientsIndustry peersIndustry peersConsultantsConsultants

Level of interaction:Level of interaction:Whole of process interactionWhole of process interactionSpecialist commentarySpecialist commentaryReview of outcomesReview of outcomes

Environmental MonitoringEnvironmental Monitoring

Environmental MonitoringEnvironmental Monitoring

ExternalExternal

The macro environment The macro environment

The industry environment The industry environment

The competitive environmentThe competitive environment

InternalInternal

The organisations internal environmentThe organisations internal environment

Performance AnalysisPerformance Analysis

Use of SWOT (strengths, weaknesses, Use of SWOT (strengths, weaknesses, opportunities and threats)opportunities and threats)

Purpose:Purpose:

Identification of potential strategic Identification of potential strategic alternativesalternatives

Establishes benchmark of capabilityEstablishes benchmark of capability

Vision / Mission / Org PhilosophyVision / Mission / Org Philosophy

Encapsulate the organisations focusEncapsulate the organisations focus

Can take time to establish and achieve Can take time to establish and achieve agreementagreement

Strategic Business Modelling Strategic Business Modelling

‘‘The best way to have a good idea is to have a The best way to have a good idea is to have a LOT of ideas - LOT of ideas - Linus Pauling 1958Linus Pauling 1958

Process of selecting those strategies that build on Process of selecting those strategies that build on the organisations strengths, correct its the organisations strengths, correct its weaknesses to take advantage of external weaknesses to take advantage of external opportunities whilst countering external threats.opportunities whilst countering external threats.

Strategic Business ModellingStrategic Business ModellingGENERIC STRATEGYGENERIC STRATEGY

Cost leadershipCost leadershipDifferentiationDifferentiationFocusFocus

ALTERNATIVE DIRECTIONSALTERNATIVE DIRECTIONSDo nothing – status quoDo nothing – status quoWithdrawlWithdrawlConsolidationConsolidationMarket penetrationMarket penetrationProduct /service developmentProduct /service developmentMarket developmentMarket developmentDiversification (related or unrelated)Diversification (related or unrelated)

ALTERNATIVE METHODSALTERNATIVE METHODSInternal developmentInternal developmentAcquisitionAcquisitionJoint developmentJoint development

Strategic Business ModellingStrategic Business Modelling

Strategic alternatives identified should Strategic alternatives identified should articulate:articulate:

Domain soughtDomain sought

Differential advantage in serving that Differential advantage in serving that domaindomain

Strategic thrusts necessary and their Strategic thrusts necessary and their approximate timing approximate timing

Target results expectedTarget results expected

Gap AnalysisGap Analysis

Analytical and critical analysis stageAnalytical and critical analysis stage

Application of two considerations:Application of two considerations:

Where gaps are identified need to develop Where gaps are identified need to develop strategies to close each gapstrategies to close each gap

Assessment of the probability of the Assessment of the probability of the organisation being able to implement such organisation being able to implement such gap closure strategiesgap closure strategies

Gap Analysis Of OutcomesGap Analysis Of Outcomes

Expected outcome is that the gap analysis Expected outcome is that the gap analysis of strategic plan alternatives will identify of strategic plan alternatives will identify that strategies identified have a that strategies identified have a reasonable probability of successreasonable probability of success

Looking for strategic alternatives that have Looking for strategic alternatives that have the highest organisational payoffthe highest organisational payoff

ImplementationImplementation

One of the greatest pains to human nature is the One of the greatest pains to human nature is the pain of a new ideapain of a new idea

Walter Bagelot, Physics and Politics 1867Walter Bagelot, Physics and Politics 1867

Most critical elements lies in the actual Most critical elements lies in the actual implementation of the plan as opposed to the implementation of the plan as opposed to the development of the plan itself.development of the plan itself.

ImplementationImplementation

Issues often that can inhibit implementation:Issues often that can inhibit implementation:

Time pressures to develop and maintain the planTime pressures to develop and maintain the planOver exuberant managers attempting to rush planned Over exuberant managers attempting to rush planned changeschangesContinuing commitment – maintaining the commitment to Continuing commitment – maintaining the commitment to the chosen course of action and actually implementing the chosen course of action and actually implementing the planthe planReluctance to give up the alternative goals not chosenReluctance to give up the alternative goals not chosenFear of failureFear of failure

ImplementationImplementation

Other issues:Other issues:

Difficulty in translating the finalised Difficulty in translating the finalised strategic plan document into a workable strategic plan document into a workable and actionable planning tooland actionable planning tool

OBJECTIVE ACTION RESOURCES TIMEFRAME DUE BY COST

SHORT TERM

Operational

Office Find more suitable premises

N/a 3 months Sept 2006 $2,000 to moveAdditional $5,000 p.a. expense

Marketing

Advertising campaign

TV, radio, print media and billboard

Advertising budget 4 months Oct 2006 $10,000

Seminars Venue, guest speaker, mailout lists

Seminar budget, 4 months Oct 2006 $3,000

LONG TERM

Human Resources

Sales person Advertise position Recruitment Budget

12 months July 2007 $50,000 p.a.

Marketing

Advertising Cairns and Mackay

TV, radio, and print media

Advertising budget 15 months Oct 2007 $15,000

Implementation RequirementsImplementation Requirements

Communication of the planCommunication of the plan

Filtration into other planning processesFiltration into other planning processes

Maintaining ongoing commitment of top Maintaining ongoing commitment of top level managementlevel management

Review and MonitoringReview and Monitoring

Acid test of impact on organisational Acid test of impact on organisational behaviourbehaviour

Should occur on a continual basisShould occur on a continual basis

SummarySummary