MPM8107: Strategic

Management for Public

Sector Organizations
Dr. Ben Ngoye
Session 3

The strategic planning process: Looking outwards

Defining your strategic environment
(1) – the MACRO
(non-industry/sector specific factors)
 The Macro environment
 PESTEL or STEEP or…
 Political
 Economic
 Social incl. demographic trends, societal attitude and values, consumer experience and knowledge
 Technological (incl. Product) innovation
 Environmental* incl. international forces
 Legal incl. policy and regulatory influences

 Identification of Key Drivers

 High impact factors
 Scenarios as alternative views of the future
Defining your strategic environment
(2) – the industry/sector and
competitive environments
P5F – example of an
application for an NGO (McKevitt, 2000)
Syndicate exercise – P5F for XXX
national/County Dept. of XXX or XXX
NGO
The Value-Net …
(Brandenburger & Nalebuff, 1996)

addressing shortcomings of the P5F?

 Value that can be captured as defined
and constrained by other playesr in the
net
 Competitors
 Includes substitutors and potential
entrants
 Complementors
 Clients value your product more if they
have the other partners product
 Those who can influence customer or
supplier behavior
 Also brings in the idea of important
others e.g. government, regulators
Going beyond competitors and
complementors – Strategic groups
 Strategic Groups
 Similar strategic characteristics, follow similar strategies or compete on similar bases
 Differ/grouped by scope (product range, geography etc.) or resource commitment (brands, spend etc.)

 Strategic grouping based on product/service diversity +/- geography

 Organizations that offer related portfolios of programs and services
 Related programs/services: those that interact in [regular and] meaningful ways with the delivery of your programs
and services
 Include those that have an impact on the supply of resources, the production processes, and the distribution
systems
 Organizations that offer similar portfolios
 Similar programs/services are comparable/identical to what you offer, but are offered in jurisdictions not served
by your organization…meaning you do not compete, but trends affecting them will likely also affect you
 Organizations that offer substitutable programs and services
 Substitutable programs/services might be chosen over yours…these are essentially your competitors
Taking a small detour on
stakeholders and participation
 strategic decisions were not
implemented, only partially
implemented, or otherwise produced
poor results largely because decision
makers failed to attend to interests
and information held by key
stakeholders. (Nutt, 2002; Bryson,
2004)

 Tackled in Session 4 which will be self

study and an assignment on
Stakeholders and participation
Syndicate exercise…still on the
NGO/National/County Dept. you chose
earlier…
 Do:
 PESTEL
 Value Net Analysis
 Strategic Group Identification & Analysis
What next after assessing the
macro and the industry?
 Identify the disruptive trends
 Quick overview of macro and industry trends
 Synthesize into specific disruptors
 Understand the implication of the disruption

 Determine size, timing and likelihood of impact

 Effect on resources under management/surplus*, service delivery

 Develop strategic recommendations

 Build potential strategic responses – where to play and how to win* logic
Remember though the fallacy of
prediction…Predictable surprises
Causes 3 Ways to fail

 Cognitive  Recognize the threat?

 Ignore threat  Scan the environment for emerging
threats

 Organizational
 Frequently fail to take steps  Prioritize appropriately?
 Recognize threat, prioritize
appropriately
 Political
 Corrupt(ed) political system
 Mobilize effectively?
Defenses against predictable
surprises

Periodic forums Reduce vulnerability Enhance ability to adapt

Focused intelligence Don’t rely on any one thing – one Flexibility and adaptability
Synthesis method, one system, one…
Keep moving – continuous
improvement
Defining your strategic
environment (3) – the customer
 Understanding the ‘Customer’
 Market Segments
 Where are the gaps?
 The customer
 The strategic customer?
 Unmet needs? and critical success factors?
 Product features that are particularly valued by customers
 Extent to which they are addressed (by different providers) can be captured on a strategy canvas
 Willingness-to-Pay?

 Let's think together…who is the ‘Customer’ in our various public sector undertakings?
Now what? The OT in the
SWOT
 Opportunities could be
 In substitute sectors/spaces (e.g., if in
health…)
 In other strategic groups/spaces
 In targeting buyers
 In new market segments
 For complementary products and
services
 Over time
 Threats
 Refer back to the disruptive trends at
the end of the macro and industry
analysis…
MPPM strategy
Dr. Ben Ngoye