1
ASP Atlanta Chapter Reasons Strategic Plans Fail –
At the Intersection of Theory and Practice
Randall Rollinson President, LBL Strategies, Ltd.
2
Your Presenter
Co-Founder & President/CEO, LBL Strategies, Ltd.
35 years experience as an international educator, trainer, counselor, facilitator, author, software developer, social entrepreneur and consultant
Co-Author, Strategy in the 21st Century: A Practical Strategic Management Process
Lead Instructor, Certificate in Strategic Management Program / Offered in Conjunction with ASP Chicago / DePaul University
Co-Founder, Chicago Chapter, ASP
Bachelors in Psychology and Master degrees in Counseling – Southern Illinois University / MBA in Management, DePaul University
Randall Rollinson
©LBL Strategies, Ltd. 2012
3
STRATEGY TIMELINE
Ancient
HistoryToday
1950s-
1960s1970s 1980s 1990s 2000 2005
2300-
2500
yrs. ago
1500s 1800s1850-
19001920s 1940s
Mintzberg, Quinn, Voyer Jack Welch Rich Horwath
Sun
Tsu
Art
of W
ar
Gre
eks –
Ale
xand
er T
he G
reat
Mac
hiav
elli
The
Prin
ce
Car
l Von
Cla
usew
itz
Prin
cipl
es o
f War
Nap
oleo
n /
Wes
tPoi
nt
2nd
Indu
stri
al R
evol
utio
n
Bus
ines
s C
onte
xt E
mer
ges
e.g.
, Alfr
ed S
loan
e
Stre
ngth
s W
eakn
esse
s
Com
petit
ors
Wor
ld W
ar II
Ops
. Res
. –Li
near
Pro
gram
Gam
e Th
eory
–P
riorit
ize
Allo
cate
Pet
er D
ruck
er
MB
O
Ken
neth
And
rew
s
BC
G
Por
tfolio
Mat
rix
Mic
hael
Por
ter
5 Fo
rces
Driv
ing
Com
petit
ion
Kap
lan
& N
orto
n
Bal
ance
d S
core
card
Jim
Col
lins
Hed
geho
g
Kim
Mar
borg
ne
Blu
e O
cean
Stra
tegy
Recommend: Sun Tzu, The Art of War for Managers, Gerald Michaelson / The Daily Drucker, Peter Drucker / The Lords of Strategy, Walter Kiechel
©LBL Strategies, Ltd. 2012
4
We Think of It in Phases
Assess &
Organize Environmental
Assessment
Strategy
Formulation
Strategic
Planning
Implement
Evaluate
Control
©LBL Strategies, Ltd. 2012
8 8
5 Primary Reasons Strategic Plans Fail
Tools and Techniques to Avoid Failure
©LBL Strategies, Ltd. 2012
9
Reason 1
Failure to assess the current strategic position before launching a strategic planning effort
©LBL Strategies, Ltd. 2012
10
Assess Current Strategic Position
Assess the current strategy
Plot portfolio of offerings for performance and perceived potential
Assess the strategic management capabilities of the team
©LBL Strategies, Ltd. 2012
11
BCG Growth Matrix
H I G H L O W
Invest
Select
a few
Remainder
divested
Liquidate
G
R
O
W
T
H
R
A
T
E
L
O
W
H
I
G
H ?
$
RELATIVE POSITION (MARKET SHARE)
©LBL Strategies, Ltd. 2012
12
Design & Organize Program
Define the scope of the program
Organize the program
– Get commitment from the top
– Identify a “strategy development champion”
– Design a process and management system that fits
– Form a planning team of key players
– Get outside help if you need it
©LBL Strategies, Ltd. 2012
13
Gap Analysis – Start With What You Have*
Management System Component Developed
Partially Developed
(Needs Work)
To be Developed
Comments
Environmental Scan (External & Internal)
SWOT Analysis
Core Competencies / Competitive Advantage
Vision / Mission / Core Values
High Level Goals (Strategic Results)
Customer Value Proposition
High Level Strategies
Perspectives
Strategic Objectives
Strategy Map
Key Performance Indicators & Targets
Prioritized Strategic Initiatives / Projects
Communications & Change Management Plan
KPI Data Collection & Reporting (Automation)
Implementation & Cascading
Strategy Management and Budgeting Calendar
*Adapted from materials provided by the Balance Scorecard Institute
©LBL Strategies, Ltd. 2012
14
Reason 2
Failure to “read the tea leaves” and make the necessary changes
©LBL Strategies, Ltd. 2012
16
Key Environmental Variables
Socio-cultural Forces
Economic Forces
Technological Forces
Political/ Legal /
Regulatory Forces
Macro Environment
Stakeholders
Governments
Suppliers
Special Interest Groups
Communities
Competitors
Employees/ Labor Unions
Associations Funders
Consumers The Organization
Micro Environment
Environmental Forces
©LBL Strategies, Ltd. 2012
18
Environmental Assessment
Identification of Strategic Factors
Opportunities Threats
Market Analysis
Economic, Socio-cultural, Technological, Political/Legal Forces
Competitor Analysis Resource Analysis
Supplier Analysis Industry Analysis
Government Analysis Interest Group Analysis
©LBL Strategies, Ltd. 2012
19
Igor Ansoff’s Grid CURRENT MARKETS NEW MARKETS
CURRENT
SERVICES /
PRODUCTS
Market
Penetration
Market
Development
Service / Product
Development Diversification
NEW
SERVICES /
PRODUCTS
©LBL Strategies, Ltd. 2012
21
Reason 3
Failure to successfully engage in “team based” strategic thinking
©LBL Strategies, Ltd. 2012
22
In the end it’s about
Team Leadership
Effective Planning
Ongoing Improvement
Accurate Measurement
aka – Strategic Management
23
Strategic Thinking Framework
External Environmental
Analysis
Environmental Opportunities
& Threats
Internal Analysis
Relevant Organizational Opportunities
& Threats
Strategy Formulation
A B D E
F
C
Decision Point
Core Competencies
& Competitive Advantages
Vision Mission Core Values Policies Goal (s) Strategies
©LBL Strategies, Ltd. 2012
24
Core Competency Characteristics Prahalad and Hamel suggest three factors to help ID core competencies:
Provides access to a wide variety of markets
Difficult for competitors to imitate
Makes a significant contribution to the perceived customer benefit
Copyright 2007, LBL Strategies, Ltd.
©LBL Strategies, Ltd. 2012
25 25
Strategy Canvas – Yellow Tail Wine
Expensive
wines Yellow tail Cheap wines
Price
Use of technical wine terminology
Above-the-line marketing
Aging quality
Vineyard prestige
Wine complexity
Wine range
Easy drinkability
Ease of selection
Fun and adventure
Low
High
©LBL Strategies, Ltd. 2012
26
Environmental Assessment
Scenario 1 Scenario 2 Scenario 3
Market Analysis
Economic, Socio-cultural, Technological, Political/Legal Forces
Competitor Analysis Resource Analysis
Supplier Analysis Industry Analysis
Government Analysis Interest Group Analysis
©LBL Strategies, Ltd. 2012
29
Assess the Current State
Driving Forces Critical Uncertainties
1. *
*
2. *
*
3. *
*
4. *
*
5. *
*
©LBL Strategies, Ltd. 2012
31
Strategy Selection Process
31
Consistency with leadership perceptions •Need to change •Willingness to change •Feasibility of change
Expectations of goal achievement
Linkage / synergy / impact across functions •Acceptable risk and returns •Meets customer needs •Operationally feasible •Workforce capacity exists
©LBL Strategies, Ltd. 2012
33
Reason 4
Failure to use a balanced set of meaningful performance measures to align performance, monitor execution and make mid-course corrections
©LBL Strategies, Ltd. 2012
34
Meaningful Performance Measures
• Meaningful means strategic
– Focused on desired results
– Derived from the Objectives on the Strategy Map
• Meaningful means relevant to the user
– It tells the user what he or she needs to know to make better decisions
– Accepted as valid (measures what it intends)
34 ©2011 Strategy Professional Resource Center. All Rights Reserved. Do not copy without permission.
35
Perspective Key Question Answered Primary Focus
Strategy Has Four Perspectives
Organizational Capacity or Learning &
Growth
Customer & Stakeholder
Financial or Stewardship
Internal Process
For businesses: how do we create value for owners? For government and nonprofits: how do we maximize mission value and effectiveness?
Through the eyes of customers and stakeholders: how well are we meeting their needs?
How can we improve internal processes to deliver products & services better, faster, and cheaper?
How can we support the internal processes through improved knowledge & skills abilities, tools & technology, leadership and other capacities?
• Financial Performance
• Value • Effective Resource
Use
• Satisfaction • Retention
• Efficiency • Quality
• Human Capital • Tools • Innovation • Infrastructure • Culture
35 ©2011 Strategy Professional Resource Center. All Rights Reserved. Do not copy without permission.
36
Measures Can Roll Up and Drill Down
Performance Information System Overall Indicator (Measure) of Performance
Enterprise or organization-wide measures (indicators) may often be based on an aggregation of lower-level components (Business Units, Regions, Offices, etc.)
36 ©2011 Strategy Professional Resource Center. All Rights Reserved. Do not copy without permission.
*Provided by the Balance Scorecard Institute
38
Favorite Quotes (1)
“Execution is not only the biggest issue facing business today: it is something nobody has explained satisfactorily.” Page 6
Execution: The Discipline of Getting Things Done, Larry Bossidy and Ram Charan.
©LBL Strategies, Ltd. 2012
39
Favorite Quotes (2)
“Strategies most often fail because they aren’t executed well. Things that are supposed to happen don’t happen. Either the organizations aren’t capable of making them happen, or the leaders of the business misjudge the challenges their companies face in the business environment.”
(ibid, 15)
Execution: The Discipline of Getting Things Done, Larry Bossidy and Ram Charan.
©LBL Strategies, Ltd. 2012
40
Favorite Quotes (3)
“An organization can execute only if the leader’s heart and soul are immersed in the company… The leader is the only person in a position to achieve that understanding. And only the leader can make execution happen, through his or her deep personal involvement in the substance and even the details of execution.” (ibid, 24)
Execution: The Discipline of Getting Things Done, Larry Bossidy and Ram Charan.
©LBL Strategies, Ltd. 2012
41
From the Present to the Future
Changing the Way We Change, Jeanenne LaMarsh
The Delta The Present The Future
Movable Boundaries
©LBL Strategies, Ltd. 2012
42
Alignment Begins
•Activities & Tasks •Recognition &
Incentives •Annual Budgets • Project Measures /
Targets
• Strategic Objectives
• Strategy Deployment Map
• Strategic Initiatives / Projects
• Key Performance Indicators / Targets
• Key Result Areas • Strategies Strategic
Plan
Strategic Operating
Plan
Execution
Strategic Direction
•Vision •Mission •Values • Policies •Goals
42
Performance Measurement
©LBL Strategies, Ltd. 2012
43 43
Alignment
Strategy
Tier 1: Corporate Scorecard
Vision
My Personal Objectives
Tier 3: Team & Individual Scorecards
My Personal Objectives or Goals (e.g., SMART Goals), from my Development Plan
Corporate Objectives
Unit Objectives
Tier 2: Business & Support Unit Scorecards
My Department’s Strategic Objectives, tied
to Organization-wide Strategic Objectives
©2011 Strategy Professional Resource Center. All Rights Reserved. Do not copy without permission.
44
Cascading Objectives Tier 1 – Strategy Map
Tier 2 – Department / Business Unit
Tier 3 – Team / Individual
©LBL Strategies, Ltd. 2012
45
Culture Change Requirements
©C.M. Russsell Associates, 1999
Used and adapted with permission by LBL Strategies, Ltd. 2001
Managing Complex Change
Planning Scenario
Positive Corporate
Culture
Skills Exist
Appropriate Incentives
are in Place
Available Resources
Take Desired Action
Type of Change
Description Vision, mission, values, paradigms, assumptions, beliefs, attitudes, fears,
investments, etc.
Hard and soft
Recognition process, career path, job security, compensation, working
conditions
Materials, money, management team, systems, processes
Customer satisfaction, employee motivation, financial performance
Positive versus
negative
1
Yes
Yes
Yes
Yes
Yes
Positive Change Occurs
2
No
Yes
Yes
Yes
Yes
Confusion
3
Yes
No
Yes
Yes
Yes
Anxiety
4
Yes
Yes
No
Yes
Yes
Apathy
5
Yes
Yes
Yes
No
Yes
Frustration
©LBL Strategies, Ltd. 2012
47
End Session
LBL Strategies, Ltd. www.lblstrategies.com (Blog)
The Strategy Architects 773-774-0240
www.cpe.depaul.edu/strategic (CSM Program) www.strategyprocenter.com (ASP Certification)
©LBL Strategies, Ltd. 2012
48
CSM Course Outline
Session 1 / “Assess and Organize” Quiz
Session 2 / “Environmental Scan”
Session 3 / “OTSW Analysis” Quiz
Session 4 / “Strategic Direction”
Session 5 / “Strategy Identification & Selection” Quiz
Session 6 / “Strategic Plan”
Session 7 / “Strategic Operating Plan” Quiz
Session 8 / “Implementation Management”
Session 9 / “Ongoing Strategic Management” Exam
Session 10 / “Pathway to ASP Certification”
©LBL Strategies, Ltd. 2012