Thursday, August 17, 2017

PMP Protein: Strategic Planning, Analysis and Alignment

By Manas Das, PMP

What is Strategy?
To be successful, one organization needs to set a clear, sound strategy. Strategy is how one organization chooses to deliver its products or services to meet customers’ needs. It’s the unique way that our organization carries out its purpose and separates itself from the competition.
A good strategy consists of two major elements:
  1. The value proposition—what makes our organization’s products or services distinctive so customers want to do business with us instead of our rivals.
  2. The value chain—the combination of organizational activities that makes our unique value proposition possible.

Why is Strategy Important?
Excellent execution is not enough to remain successful. Eventually, other organizations will be able to offer customers what we provide—often better or cheaper. Our organization can set itself apart from our competitors by having a sound strategy and skillfully carrying it out. Strategy provides the information that we and managers at all levels need to define our work—and help our organization continue to thrive.

Project Manager’s Role in Strategy Planning
We, as project managers, may play a number of different roles in planning and executing our organization’s strategy.

We may be asked to analyze information that senior managers then use to develop an organization-wide strategy. Units hold tremendous knowledge about an organization and can recommend what it should be doing and where it should be going.

Strategy is usually developed through a strategic planning process which helps to ensure the followings:
  • A strategy is sound
  • All units are aligned with the strategy
  • Strategy implementation is effective

The result of the planning process is a strategic plan.
Strategic plans vary, but they usually segmented across below major contents.
  • Direction statement — a summary of the organization’s vision, mission, and values that guide the strategy.
  • Strategic objectives — goals and outcomes that represent achievement of a strategic vision. 
  • Priority issues — key issues (weaknesses to be addressed or opportunities to be seized) that the organization needs to tackle to be successful.
  • Action plans — specific steps the organization needs to take to accomplish its priority items and reach its objectives.
Your organization may use different terms for these elements of a strategic plan. However, most organizations document their strategy and, in broad terms, explain how they plan to achieve it.

Strategic Analysis 
Strategic analysis is the process of conducting research on the business environment within which an organization operates and on the organization itself, in order to formulate strategy to take advantage of the path of least resistance to achieve your goal.

Strategic Analysis involves:
  • Understanding what you currently do
  • Determining what you want to become 
  • Planning how to get there

A typical strategic planning process looks like this. 
Senior managers in an organization generally begin strategic planning by gathering data and researching the world in which the organization operates. They then narrow in on the top three or four priority issues that the organization needs to tackle to be successful in the long term. 

For each priority issue, units and teams create high-level action plans. Senior managers use these action plans to further clarify the organization’s strategic objectives. Senior managers and units go back and forth several times to examine, discuss, and refine the plan. The overall strategy then feeds into planning at different levels in the organization

Below figure depicts the various steps used in strategic analysis and subsequent strategic plan creation.

Figure: Steps in Creating Strategic Plan

1) Analyze external and internal factors

To begin with part of the strategic planning process, it’s important to look at factors that affect organization units. You also include external forces such as technology changes and internal factors such as aging business processes. 
The goal is to identify as many of these factors as possible and assess their potential impact.
By looking at the changing environment in which organizations are operating, we gain a better idea of our strategic options—and the effect those choices may have on our organization.

2) Perform SWOT analyses
Based on our exploration of external and internal factors, we perform a SWOT analysis. In a SWOT analysis, we and our unit identify strengths, weaknesses, opportunities, and threats.
We may be asked to do two SWOT analyses—one focused on the organization and another on units respectively.
  • Strengths—capabilities that enable your organization or unit to perform well. Your organization needs to leverage these. 
  • Weaknesses—characteristics that prevent your organization or unit from performing well. Your organization needs to address these. 
  • Opportunities—trends, forces, events, and ideas that affect your organization or unit. Your organization needs to capitalize on these. 
  • Threats—possible events or forces outside of your control. Your organization needs to plan for or decide how to lessen these.

3) Identify priority issues
Based on the results of the SWOT analysis, priority issues can be identified.

Priority issues generally take advantage of a short window of opportunity and have major, long-term financial impact.

For example: 
  • After conducting a SWOT analysis for the organization, you and your unit see an opportunity to expand your products into developing countries. You identify a priority issue to enter new markets. 
  • After conducting a SWOT analysis for the unit, you learn that your unit has a weakness in developing innovative products or services. You therefore make greater capacity for innovation a unit priority. 
If someone contributing to the organization’s overall strategic planning process, it’s important to present the priority issues to senior managers. The senior management team reviews priority issues submitted by units as well as ones they have generated themselves.

Senior managers typically select three or four key strategic priority issues for the organization to pursue and delegate each priority issue to one or more units or cross-functional teams.

4) Develop high-level action plans
Once units or teams are assigned priority issues (or “strategic initiatives”), they develop high-level action plans to address them. These plans list the objectives, tasks, and requirements needed to address each priority issue. Each priority issue typically generates multiple action plans. 

For example, if customer retention is a priority issue, it may lead to two action plans: one for improving customer service and another for developing a customer loyalty program.

Once the high-level action plans are completed, it’s sent to the senior management team for review and discussion. Post approval the resources and cross functional team carry out the plans which helps aligning corporate strategy with unit or team action.

5) Finalize the strategic plan
The last step in the planning process is to finalize the strategic plan. At this point the draft of overall objectives or summary intended for contributions to the strategy comes out. 

During the planning process, there might be unit-level priority issues been identified and tasks that will move unit toward fulfilling its own mission and vision.

6) Update the strategic plan
Once a strategic plan is in place, senior managers will regularly review, assess, and adjust it.
If external and internal factors remain the same, it will likely need only minor adjustments.
However, if the environment changes dramatically, then the plan will need to be reevaluated and will likely need major modifications.

Strategic Alignment
Strategic Alignment is the process of how to execute our strategic plans so we will stay on the path to success.
Highlighted below are the key steps to get the strategic alignment. 

1) Communicate strategy clearly
To put your organization’s strategy in motion, people need to know where they are going and why—and be motivated to get there. 
Managers play a key role in communicating the strategy and helping people to buy into it.
Leaders communicate the organization’s overall strategic direction to employees.
Managers translate the strategy into the work their units perform.
In communicating the strategy the reasons for it is made clear.
When people understand the benefits of executing the strategy, they are more likely to choose to do so. 

Communication can take many forms, such as: 
    • Brochures
    • Printed newsletters 
    • Emails 
    • Slideshows 
    • Town Hall
    • Focus groups 
    • Bulletin boards
    • Social media 
    • Surveys and polls
2) Encourage participation
When people gets involved in planning how to execute the strategy, motivation increases. Workshops helps people understand their role in making strategy happen.

3) Clarify decision rights
To successfully execute the action plans, people in unit need to make good decisions and implement them quickly and everyone knows which decisions and actions they’re responsible for—and which they’re not.

Once people have a clear idea of what decisions they should and should not be making, they held accountable for their choices. Avoid second-guessing, micromanaging, or looking over their shoulders—these can undermine self-confidence, prolong the decision-making process, and add confusion. Clarifying decision rights also makes tracking individual achievement easier.

Encourage higher-level managers to delegate operational decisions. Doing so, frees them to focus on the strategies needed to fulfill your organization’s mission—and lets the people doing the work decide how it gets done.

4) Make strategy everyone’s job
To help implement the organization’s strategy, people throughout the organization need timely and accurate information. Information needs to move from senior managers down through the ranks, from people in the field up to their managers, and among units.  

To make strategy everyone’s job: 
  • Help one’s direct reports understand how their day-to-day choices affect your organization’s bottom line. Schedule brown-bag lunches or other less structured gatherings for people to talk about the strategy with leaders throughout the organization.
  • Make sure important information flows quickly from your unit to the leadership team. That way, senior managers can identify new trends, intervene in problems before they spin out of control, and spread best practices throughout the organization.
  • Build networks for cross-unit collaboration critical to implementing the new strategy. Regular meetings and progress reports can foster trust among people from different functional areas.

5) Ensure alignment
  • Start with the right people - through hiring and training, right skills, attitude, and resources to do their jobs well.
  • Ensure that activities align with your strategy. Make certain that all unit actions support the organization’s strategy. 
  • Align your organization’s structure. Ensure your unit is optimally organized to achieve your goals.
  • Align culture and leadership. Model the behaviors and values you would like your direct reports to adopt.
  • Develop incentives. Design a rewards and recognition system that aligns employees’ interests with the success of the strategy.

6) Refine action plans
One may find that his action plans have lost focus or are no longer aligned with the organization’s larger strategy. 

To refine the action plans:
  • Accept that changes to your action plans are inevitable.
  • Be clear about who has final approval of changes. Establish a checks-and-balances system by ensuring that those who propose changes are not the ones who approve them.
  • Ask yourself, “Does this proposed change support our organization’s strategy and priority issues?” If not, consider setting the idea aside and addressing it in the future.
  • Clearly define all the ramifications—for both your unit and your organization—of accepting and implementing a change to your action plans. Consider how the change will impact your deadlines, overall costs, and team members’ workloads.
  • If a proposed change requires additional funding, people, or time not included in your original action plans, determine where those extra resources will come from. You may be able to redirect existing resources within your group without causing too much disruption to the rest of your plans or you may need to lobby senior management for additional resources.
  • Document all accepted changes. These records will prove valuable in the future, when you evaluate completed action plans or create new action plans to advance your organization’s strategy.

  • Harvard Manage Mentor Strategic Thinking 
  • The Fall and Rise of Strategic Planning - Harvard Business Review by H Mintzberg

Written by Manas Das: 
Manas Das has 12+ years of work experience and is playing a Project Manager role for retail portfolios for North-American geography for Enterprise Application Services at Infosys Technologies Ltd.

PMP LIVE LESSONS - Guaranteed Pass:
You may also like:

No comments:

Post a Comment

Sign- or Log-in and put your name while asking queries in comments. Any comment is welcome - comments, review or criticism. But off-topic, abusive, defamatory comments will be moderated or may be removed.