Strategic Thinking & Planning SII 2014
May 06, 2015
Strategic Thinking & Planning
SII 2014
Learning Objectives:
• Address key elements of a business plan that align your firm’s critical objectives with those of your individual’s business unit’s objectives.
• Discuss common mistakes in writing strategic business plans. • Identify guidelines on how often to review your strategy,
adjust and change or be flexible. • Provide each participant with numerous tools, ideas and skills
to apply when creating a detailed and realistic strategic business plan.
Do NOT freak out!• I have a ton to cover and I will go pretty fast.• Please take notes and ask questions.• I will gladly send you a copy my strategic planning
workbook. • I am happy to answer any of your questions, offer
advice and recommend books at any time.• [email protected]
90+ since 1994
For the past 21 years…
“Simplicity is the ultimate sophistication” Leonardo da Vinci
Five Foundations of Effective Strategic Thinking
Business Acumen
Personal Experience
Pattern Recognition
Strategic Insight
Disciplined Execution
Most people think of:
Rivalry Among Existing
Competitors
Threat of New
Entrants
Bargaining Power of Buyers
Threat of Substitutes
Bargaining Power of Suppliers
Effective Strategy =
Valued Differentiation x Execution
What strategy is not…• More, better, faster is not a strategy.• Effectiveness and efficiency are
necessary… but not sufficient.• Superb execution of fundamental
business processes… is expected.• Being extremely good at what you are
supposed to be good at… gets you no extra credit at all.
The Four – I’s• Ignorance
• Inflexibility
• Indifference
• Inconsistency
How to avoid the Four I’s • Aggressive external market focus.
• Aggressive customer focus.
• Keep the “Main Things” the main things.
• Bullish on knowledge sharing and learning.
• Passion and commitment at all levels.
• Foster a healthy paranoia.
• Revel in change.
From the CEO of a little 241 billion dollar company…
Look, what is strategy but resource allocation? When you strip away all the noise, that’s what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size your business or how deep its pockets…
Jeffrey Immelt
You have to figure out what to say NO to.
Strategy is INTERNALas well as EXTERNAL
Breakthrough Strategies
GE: 1- 2 or F.S.C. Intel: memory to processors Microsoft: installed base Apple: chaos to elegance Saturn: no haggling
Southwest
1 type of planePoint-to-point
Fast turnsLow fares / no frills
Friendly staff
Dell
BTOJIT
Inventory turnsLogistics vs. Technology
VOC
100,00ELP
No FrillsLogistics
Southwest – Dell – Walmart What is the pattern?
• Extreme Efficiency
• Minimize Costs to as close to zero as possible – w/o negative impact
• All focused on delivering specific customer value
Educated Guess Focus
Resource AllocationBold not Risky
What NOT to do
What are some of the major
external / global strategies your
firm sets?
(T + C + ECF) x DE = Success
The Four Primary Practices:1. A sharply focused, clearly communicated and well-
understood strategy for growth.2. Flawless operational execution that consistently
delivers the value proposition.3. A performance-oriented culture that does not
tolerate mediocrity.4. A fast, flexible, flat organization that reduces
bureaucracy and simplifies work.
From: What (really) Works by Joyce, Nohria, Roberson
The Secondary Management Practices:
• Talent = find and keep the best people.• Key leaders show commitment and
enthusiasm for the business.• Embrace strategic innovation.• Master the power of partnerships.
From: What (really) Works by Joyce, Nohria, Roberson
Assessing the Strategic SituationSimplicity Complexity
Certainty Uncertainty
Knowing Forecasting
Proactive Adaptive
Strategic Planning
Scenario Planning
What Business Planning is Not !• Business planning does not attempt to make future
decisions.• Business planning is not forecasting.• Business planning is not an attempt to blueprint the
future.• Business planning is not necessarily the preparation of
massive plans and reports.• Business planning is not an effort to replace good
management judgment.
Why Planning Pays Off
Asks & answers questions of importance.
Simulates the future.
Forces the setting of objectives.
Gives a framework for decisions.
Develops performance measurements.
Improves communications.
It is all about finding the patternsVision - Mission - Values
Common Problems• Putting It Off• Idea inflation• Diluted priorities• Vague goals• No execution plan!!!
10 – 15 %
What Inhibits Execution?National Survey of 4,000 Senior Executives
4. Inability to work together (21%)
3. Company culture (23%)
2. Economic climate (29%)
1. Holding onto the past / unwillingness to CHANGE (35%)
Vision+
Values
Strategy
Commitment
Alignment
Systems Communication
Support
Adjust /Innovate
Reward /Punish
Where are we going + how will we behave on the way?
FocusDifferentiation“No”
Stakeholders + guiding collation
Vision + ValuesStrategyPlansGoals / ObjectivesTactics / Actions
Procedures / ProtocolsRepeatable ProcessClear / consistent / relentless
Training +time / money /
supplies / people
Measure / TrackCommunicate
Transparency Renewal
Praise + Celebration and
Eliminate Mediocrity
9 Steps forEnsuring
Effective Execution
Accountability
• 100% Clarity
• Agreement
• Tracking
• Coaching
• Reward / Punishment
Some thoughts on measurement
Less is moreResults not activityEasy / HardPost and reviewHelp not punishment
Scenario Planning
Begin with the end in mind
RISK is simply an element of
effective strategy
Quantitative & Qualitative
Take a Chance Take A Pass
Delegate Take Your Time
HIGH P
LOW P
LOW I HIGH I
Probability
Impact
LOW P
LOW I
HIGH P
HIGH I
Trigger Points
Review of the plan?
• Twice yearly Strategic Planning Retreat – 1 to 2 days
• Monthly “quick check” meetings 2 – 3 hours
• Weekly Senior team alignment review – 1 hour or less
• Carry plan to every strategic meeting
Summary of Key Ideas
• Major elements: thinking, planning, execution, review• Strategic thinking = study + experience + pattern recognition• Strategy = bold bets on resource allocation.• What you say “No” to is a big part of strategy.• Planning is a process.• Analysis is critical – but it is not strategy.• More, better, faster is not a strategy.• This is not blueprinting the future.• Keep it simple, focused and extremely well communicated.• A plan for execution MUST be part of the Strategic Plan.• Alignment + support + measurement + tracking + reward / punishment• Scenario planning = probability & impact / trigger points
If you have any questions at all please do not hesitate to send a note or call.
My email address is: [email protected]
Please connect with me on LinkedInAlso, you might find value in the ideas I share in my blog. You can sign up for it at:
www.blog.johnspence.com
Lastly, these slides and my full strategic planning workbookhave already been uploaded to:
www.slideshare.net/johnspence