Strategic Planning

Strategic Planning
Strategy
Pattern of decisions that determines and reveals an
organization’s goals, policies, and plans to meet the
needs of its stakeholders.
Strategic planning
Process of envisioning the organization’s future and
developing the necessary goals, objectives, and action
plans to achieve that future.
Cargill Corn Milling
1. Where to Play
 Which customers? Which segments? Which
geographies? Which products? Where on the value
chain?
2. How to Play
 How much focus on each decision of where to play
versus the other? What degree of strategic alliance at
each step of the value chain? What value proposition to
each customer segment?
3. What resources are needed to play?
 What capabilities do we need? What processes do we
need? What is the ideal organizational structure? What
skills do we need?
4. When to play?
Key Practices for a Strategic Focus on Performance
Excellence (1 of 2)
Understand the organization’s operating
environment.
Understand the competitive environment,
success factors, organization’s core
competencies, and strategic challenges for
organizational sustainability.
Gather and analyze relevant data and information
pertaining to the organizations strengths,
weaknesses, opportunities, and threats (SWOT
Analysis).
Develop and refine a systematic approach for
conducting strategic planning and setting
strategic objectives.
Key Practices for a Strategic Focus on
Performance Excellence (1 of 2)
Derive human resource plans required to
accomplish longer-term strategic objectives and
shorter-term action plans that address potential
impacts on the workforce.
Identify key measures or indicators for tracking
progress on action plans.
Determine the organization’s core competencies,
and understand how they relate to the mission,
competitive environment, and strategic
objectives.
View the work performed within the organization
as a system of internal and external work
processes.
Quality Profile: Freese and Nichols, Inc.
Hedgehog Concept (the single thing that the
organization aims to do well): Be the very best at
client service, resulting in long-term mutually
beneficial relationships.
Comprehensive, year-long strategic planning
process to identify key focus area indicators,
critical actions, and balanced scorecard
measures.
“Catch-ball” process to cascade plans to
divisions, groups, and individuals to ensure that
resources are committed and agreed-upon
strategies are implemented.
Quality Profile: Pewaukee School District
Smallest K-12 educational system in Waukesha County,
Wisconsin
Teachers use leading indicators, benchmarks, and multiple
assessments to tailor classroom instruction to best serve the
needs of each student.
PSD’s strategic planning process relies on data to make
decisions, anticipates and responds to student and stakeholder
needs and market trends, measures progress against plans, and
develops broad ownership of its mission, vision, and values.
Despite having one of the most rigorous public school
graduation requirements in the state, PSD achieved a 97.4
percent graduation rate in 2012—2013 and had a higher
graduation rate from 2008 through 2012 than other county,
state, and nearby high-performing districts.
Strategy Development
The goal of strategy development is envisioning
the future for purposes of decision making and
resource allocation.
Effective Strategy Development
Requires a systematic process that
Involves participation by all necessary
stakeholders
Ensures that relevant and important data and
information are captured and analyzed
Addresses both short- and long-term time
horizons
Addresses key strategic challenges
Leads to innovation and sustainability
Strategic Planning Process at Eastman Chemical
Company
Strategic Planning Process at Park
Place Lexus
Mission
Defines its reason for existence; it answers the
question “Why are we in business?”
Freese and Nichols: Innovative approaches …
practical results … outstanding service
Premier, Inc.: To improve the health of
communities.
Benefits of a Mission Statement
Guides the development of strategies
Establishes the context within which daily operating
decisions are made and sets limits on available strategic
options
Governs the trade-offs among the various performance
measures and between short- and long-term goals
Inspire employees to focus their efforts toward the
overall purpose of the organization
Vision
Describes where the organization is headed and
what it intends to be; it is a statement of the
future that would not happen by itself.
A good vision statement should be brief, focused,
clear and inspirational to employees.
Premier: Premier’s Owners will be the leading health
care systems in their markets, and, with them, Premier
will be a major influence in reshaping health care.
Freese and Nichols: Be the firm of choice for clients
and employees.
Values (Guiding Principles)
Values, or guiding principles, guide the
journey to a vision by defining attitudes and
policies for all employees, which are reinforced
through conscious and subconscious behavior at
all levels of the organization.
Values/Guiding Principles - Examples
Freese and Nichols

Premier
Environmental Assessment
Assess the organization’s strengths, weaknesses,
opportunities, and threats (SWOT)
Assess early indications of major shifts in
technology, markets, customer preferences,
competition, or the regulatory environment
Assess long-term organizational sustainability
Assess the ability to execute the strategic plan
Precursor to strategic planning
SWOT Analysis Matrix
T
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Ex
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Baldrige Organizational Profile
A list of key questions that helps an organization
summarize the elements of an environmental
assessment.
Provides a frame of reference to help an
organization better understand the internal and
external factors that shape its operating
environment, and set the context for strategic
planning.
Addresses the basic characteristics of the
organization, organizational relationships, the
competitive environment, the advantages an
organization has and the challenges that it
faces, and its approach to performance
Strategic Challenges
Those pressures that exert a decisive influence
on an organization’s likelihood of future success.
Examples:
operational costs
expanding or decreasing markets
mergers or acquisitions both by the organization and by
its competitors
economic conditions
the cyclical nature of the industry
the introduction of new or substitute products or services
rapid technological changes
new competitors entering the market
Strategic Challenges at North Mississippi
Medical Center
PEOPLE—Maintain and enhance our employees’
satisfaction, skills, and engagement. Recruit and
retain skilled staff. Develop staff and physician
leaders.
SERVICE—Increase our patients’ and physicians’
satisfaction. Enhance our patient–customer
loyalty.
QUALITY—Provide high level, evidence-based,
quality care and maintain patient safety.
FINANCIAL—Generate the financial resources
necessary to support the organization in an
environment of reimbursement pressures and
increasing charity care.
Developing Strategies
Strategies
Broad statements that set the direction for the
organization to take in realizing its mission and
vision
Strategic objectives
What an organization must change or improve
to remain or become competitive.
Action plans
Things that an organization must do to achieve
its strategic objectives.
Austin Electric
Strategy: Risk Management.
Objective: Maintain Financial Integrity.
Strategy: Excellent Customer Service.
Objective: Create and Sustain Economic
Development.
Objective: Customer Satisfaction.
Objective: Exceptional System Reliability.
Strategy: Energy Resource.
Objective: Renewable Portfolio Standard and
Energy Efficiency.
Strategic Planning Process
Reason for existence Future intent Attitudes and policies

Mission Vision Guiding Principles

Environmental assessment Capabilities and risks

Strategies Broad statements of direction

Strategic Objectives Things to change or improve

Action Plans Implementation