04 strategy evaluation & monitoring (updating)

Strategy Evaluation & Monitoring

Day 4

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What were the most important ideas/points discussed in Day 3?

Recap / Day 3

Day 4:


Strategy Evaluation and Monitoring

Highlighting the significance of strategy evaluation and monitoring.

Identifying the parties that should be concerned in strategy evaluation and monitoring.

Explaining the differences between cost‐benefits analysis and return on investment.

Suggesting some proactive/reactive measures to cope with changing circumstances.

Sharing some tips and advice on how to change and implement a business strategy.


“An organization’s capacity to execute its strategy depends mainly on its ‘hard infrastructure’— its organizational structure and systems—and on its ‘soft’ infrastructure—its culture and norms.”

Amar Bhide*

Quoting

*Quoted from the book “Strategy: Winning in the Market place”, 2nd Ed. Thompson, Gamble and Strickland.



HOW will your company/organization accomplish its long‐term plans and goals?

Some Commonly Asked Questions (1 of 2)

STRATEGY!



HOW plans/goals/programs will be executed in the companies/institutions/organizations?

STRATEGY!

Some Commonly Asked Questions (2 of 2)



1.What’s Your Business Strategy? (1 of 2)

Strategies are simply set of actions that enable a company to achieve its desired objectives and goals within available resources:

‐ Time ‐ People ‐ Budget ‐ Systems ‐ Tools

Since we are living in a VUCA (volatility, uncertainty, complexity and ambiguity )world, it's important to periodically review internal and external factors around and take adequate measures to better implement your strategy.

There are several definitions for strategies….but at least everyone fundamentally agrees that a STRATEGY is the answer to the following question:

"HOW plans/goals/programs will be implemented in the company?”

"Strategy is a way of comparing your organization's strengths with the changing environment in order to get an idea of how best to compete or serve client needs."



What most companies declare in their websites about their business strategy isn't really true! What they publicly declare is simply a mix of their policy, objectives, goals, or even mission. To give it a “BRAND” name, they just call it a strategy.

A TRUE strategy will always be “undeclared and kept confidential”!

The general aim of a business strategy is to provide superior value, differentiation, quality service and profits to the company.

Strategy should be linked to the company’s mission, vision and goals. It also explores the inter‐relationship between company product and service offered in the market place.

Business Strategy is a sound system that is necessary for the sustainability of a company or organization in the long run.

Strategic analysis is about how changes in the wider environment affect the entire business. SWOT analysis is the tool that we usually use in assessing the internal and external factors to ensure that the company is working well and is aware of the various changes that might affect its productivity and profitability in the medium and long term!‐

1.What’s Your Business Strategy? (2 of 2)



Professors Gerry Johnson, Kevan Scholes and Richard Whittington* presented a Model about Corporate Strategy and in which strategic options were evaluated against three main criteria:

Suitability: does it work out?Does it make sense? Would it be suitable in terms of environment and capabilities?Tools that can be used to evaluate suitability include:- ranking strategic options, decision tree, etc.

Feasibility: can it be applied and implemented within company’s resources? (e.g. funding, people, budget and time)?

Tools that can be used to evaluate feasibility include:- cost benefit/ ‐ break even‐ analysis, forecasting, workforce analysis, etc.

Acceptability: can it meet stakeholders’ expectations? Does it involve major/minor risk factors, does it increase company’s wealth, does it improve employee career and performance, does it bring better money value for clients?Tools that can be used to evaluate acceptability include:- what if analysis, risk factors, customer satisfaction, return on investment, etc.

* A book about “Exploring Corporate Strategy”, 9th Ed. by Professors Gerry Johnson, Kevan Scholes and Richard Whittington.

2.The Strategy Making



3.Level of Strategy-Making

Corporate Strategy

Two‐Way Influence

Business Strategies

Functional Strategies

Operating Strategies

Two‐Way Influence

Two‐Way Influence

Corporate Level Managers‐

Business Level‐ Managers

Functional Managers

Operating Managers

Who performs the strategic management process?

1

2

3

4



Example of Business Strategy

Develop the human resource capital.Expand the business network.Build employees’ core and technical competencies. Brainstorm on how to increase staff commitment. Aim high to achieve SMART Goals.

Nurture team spirit and promote MBO.Encourage staff initiative and exploit new technology.

Harmonize human relations and ensure a healthy climate.

Globalize and standardize the business practice.Recognize and reward the TALENTED people and super achievers. Optimize use of resources to ensure efficiency and effectiveness. Unify and consolidate staff effort to understand the ongoing change. Position the Group to gain and maintain competitive advantage.



Manage human resource capital.Expand the business projects and networks.Recognize the talented people.Capitalize on the company’s main assets.Unify and consolidate staff efforts to cope with change.Retain and reward super‐achievers.Yield and generate business profits.

Develop employee knowledge and professional expertise.Encourage staff initiatives and exploit new technology.Vitalize the Business and increase people commitment. Empower employees and motivate them achieve the desired goals. Link individual objectives with corporate strategy.Optimize use of resources and implement the concept of MBO.Position the company to gain competitive edge. Maintain quality service and client satisfaction. Ensure business efficiency and adequate operations.Nurture team spirit and promote a healthy environment.Target new businesses in Africa, Asia and Middle East.

Another Example of Business Strategy



Discussion: Southwest Airlines

Questions: How many strategies are involved in these processes? Please specify!

Southwest Airlines Co. is an American airline

established in 1967 and based in Dallas,

Texas.

Southwest is the largest airline in USA

based on domestic flights (as of June 30,

2010).

Southwest operates more than 3,100 flights a day (as of Jan. 2011)

and using a fleet of aircraft type, Boeing

737.



Evaluating an organization's capabilities include assessment of:Financial statusPrograms and plansStaff skills and capabilitiesQuality standardsManagement information systemFacilitiesEquipment ImageReputationOthers, etc.

Most companies capitalize on their strengths rather than just focus on their weaknesses. Yet some others have different perceptions and look at the processes not only to fix the things that go wrong but also to see what is right and how can we better serve people.

4.How Do You Evaluate Your Company Strategies?



A variety of work to be performed in various organizational levels.

Different ways to implement programs and activities.

Requirement of skilled people in management and leadership area.

Launching and managing different initiatives simultaneously.

Overcoming resistance to change and various challenges faced.

Difficult to integrate efforts of many different work groups.

5.Why Strategy Execution is a Tough Job? (1 of 2)



The main Components of the Strategy implementation Process* are:

*Fig. 8.1: The Eight Components of the Strategy Execution Process, Chapt.8, Strategy, McGraw‐Hill Publishers, 2008.

5.Why Strategy Execution is a Tough Job? (2 of 2)



6.How to Build an Effective/Capable Organization?

Staffing the Organization Putting together a strong management team. Recruiting and retaining talented employees.

Building Core Competencies and Competitive Capabilities Developing a set of competencies and

capabilities suited to the current strategy. Updating and revising the set of

competencies when and where need be. Training and retraining employees to

maintain skills based‐ competencies.

Matching the Organization Structure to Strategy Updating policies and procedures. Upgrading systems in the workplace. Deciding how much power and authority

you give to people

*Fig. 8.2: “How to Build a Capable Organization”, Chapt.8, Strategy, McGraw‐Hill Publishers, 2008.

A Company With

Organizational Capabilities Needed for Effective/ Successful Strategy

execution.



7.Strategy Executers

Implementing a strategy involves a company’s whole management team and all employees!

‐ Just as every part of a watch plays a role in making the watch function properly, it takes all pieces of an organization working cohesively for a strategy to be well‐executed.

‐ While top leve‐ l managers must lead the process and orchestrate major initiatives, good execution requires Middle and Lower‐level management cooperation/responsibilities.

‐ Employees must perform their roles competently on a daily basis.



Does your staff have the required competencies that are adequate to their Job? (Knowledge, skills, abilities & behavior).

Is the Job adequate to staff personal characteristics? (Aspirations, traits, values, self‐image, motive, etc).

Do employees’ performance meet your expectations? (Objectives to achieve, standards to measure, etc).

Do your employees have career growth & opportunities? (Ability to grow the Group & maximize every opportunity).

Are you able to retain your employees by being fair and objective in remuneration & rewards? (Incentive & scheme).

Do you always achieve your Mission and Objectives within the available resources (tangible & intangible)?(People, budget, time, technology, etc).

8.Reviewing Employees Work Progress



9.Some Thoughtful Questions



WHY do you exist?

)Mission(



WHERE do you want to go?

)Vision(



HOW do you want to get there?

)Business Strategies(



WHAT will hold you together?

)Shared Values & Beliefs(



25

Being open to new ideas and different perspectives

Define the Code of Ethics

Build on mutual trust & respect

Benefit from people’s knowledge and experience

Capitalize on all tangible and intangible assets

Work diligently and behave professionally

Listen actively and communicate openly

Work as one team with your customers

Understand employee needs and clarify company’s goals

Recognize & reward initiative and contribution

Offer new products and reliable service

Promote a healthy ambiance and align your goals

Continue to share knowledge

Deliver high quality service and retain your customers

Foster teamwork and cooperation

Support a balanced lifestyle

Strengthen the Business

Promote Integrity &Professionalism

Increase Commitment/Learning

Bring High Value to Customers

WHAT should be your vision, goals & strategies?

)Business Plans & Expectations(



HOW will you gain competitive edge?

)Positioning Your Business(



)Gaining a Competitive Edge(

Align business strategies with SMART goals.

Plan and recruit the talented & qualified human resources.

Upgrade staff skills through T&D programs.

Retain talents and motivate employees.

Follow‐up on customers’ needs and expectations.

Move fast among competitors by reviewing business strategies and adjusting them. Improve customer satisfaction and retention. Introduce new ideas, products improvement and services enhancement.

Develop a remarkable image of YOUR company.



HOW do you envision to implement your plans/goals/programs?

)Action Plan(



Implementation through Action Plan Project Planning Tool: PERT

Numbers = Weeks

Legend:

Event

Activity

Critical Path

F1

5

2

2

2

2

BAC

DE

Event

Activity

Critical Path Numbers = Weeks



Implementation through Action Plan Project Planning Tool: GANTT

August Sept. October Nov.PROJECT’S PHASES*Numbers of weeks required for execution

1st phase: Reviewing company’s strategy 2nd

phase: Review internal/external factors 3rd

phase: Evaluation of strategy

4th phase: Identification of resources

5th phase: Development of plan6th phase: Communication to employees

* Plots the sequential steps of successfully managing a certain project against timeline.

31 32 33 34 35 36 37 38 3940 41 42 43 44 45 46 47 48 49 50

Dec.



1. Short‐term (<1 year)2. Medium‐term (1‐3

years)3. Long term‐ (>3 years)

)SMARTER Objectives(



10 .Expected Challenges to Be Faced



IT Tools: New systems to be implemented in place

Customer Service: satisfaction & retentionFactor

#4Factor

# 5

Factor# 3

Factor# 2

Factor# 1

People: Resistance to change (anxiety, fear, threat)

Budget Allocation: New products & services, product / service modification & enhancement

Investment in Human Capital: Training & development, staff motivation & recognition schemes

Quality Services, Productivity)Outcomes ,(Performance Management

&Profit Increase

10a. Highlighting the Main Challenges Faced



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key elements to attain good results.

Goals & actionsIdentify priorities & determine a course ofaction that enable you reach the goals.

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sailing, no wind is favorable…

SUCCESS

10b. Major Facts to Bear in Mind



11 .Sharing Tips for Success

Develop your strategic thinking. Build competency model from core to technical, managerial and leadership. Establish behavioral norms and code of conduct. Develop a constructive peer feedback process. Set goals and establish scorecard. Recognize individual and team accomplishments. Conduct performance management and internal audit. Coach staff and set a career path for each employee. Conduct objectively staff performance appraisal. Monitor people’s work progress and career development. Others?



Leadership & Management

04 strategy evaluation & monitoring (updating)