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Originally Processed With FOIA(s):
FOIA Number:
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MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection: Donated Historical Materials
Collection/Office of Origin:
Frieden, Lex, Collection
Series:
Printed Materials
Subseries:
Manuals
OA/ID Number:
52105
Folder ID Number:
52105-004
Folder Title:
"Strategic Planning: A Resource Guide for Rehabilitation Facilities" [1988]
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HUMAN SERVICES ADMINISTRATION PROGRAM
ILR
CORNELL
Rehabilitation Facility Administration
Independent Living
Community and Public Service
Strategic
Planning:
A RESOURCE GUIDE FOR
REHABILITATION FACILITIES
Permission Granted to: Human Services Administration Program
Cornell University, Ithaca, New York
Acknowledgement
This resource workbook is to be used as a guide to develop
and implement the strategic planning process.
The material within this booklet has been obtained from the
University of Maryland's Center of Rehabilitation and Manpower
Services, Amherst H. Wilder Foundation, Minneapolis, Minnesota,
and Goodwill Industries of America, Inc.
Row House
Ronald B. House, Ph.D.
Director, Human Services
Administration Program
This course on Strategic Planning is sponsored through a
Region II Rehabilitation Facility Administration Grant from the
Rehabilitation Services Administration, Office of Special
Education and Rehabilitation Services, United States Office of
Education Grant #G028500020.
May 1988
-1-
I.P. PROCESS
STRATEGIC PLAN
OPERATIONAL PLAN
RESULTS MANAGEMENT
STRATEGIC PLAN PROCESS ELEMENTS
- ORGANIZATIONAL MISSION
STRATEGIC ANALYSIS
STRATEGY
LONG-TERM OBJECTIVES
INTEGRATED PROGRAMS
FINANCIAL PROJECTIONS
EXECUTIVE SUMMARY
OPERATIONAL PLAN ELEMENTS
OPERATIONAL ANALYSIS
KEY RESULTS AREAS
INDICATORS OF PERFORMANCE
SHORT-TERM OBJECTIVES
ACTION PLANS
BUDGETS
RESULTS MANAGEMENT
CONTROL SYSTEMS
MANAGEMENT REPORTS
ORGANIZATIONAL RESULTS
UNIT RESULTS
CORRECTIVE ACTION
REWARD SYSTEMS
COMPARISON OF PROCESS ELEMENTS
TRATEGIC PLAN
OPERATIONAL PLAN
RESULTS MANAGEMENT
STARTING POINT
- MIDDLE POINT
- ONGOING MECHANIS
BROAD AND CONCEPTUAL
- HIGHLY SPECIFIC
- PLAN EXECUTION
STRATEGY/L-T OBJ's.
- IMPLEMENTATION AND
- REPORTING/
RESULTS
CONTROLLING/
MODIFYING
-6-
ELEMENTS OF STRATEGIC PLAN
ORGANIZATIONAL MISSION
ADDRESSES
WHY?
STRATEGIC ANALYSIS
ADDRESSES
WHY?
STRATEGY
ADDRESSES
WHERE?
LONG-TERM OBJECTIVES
ADDRESSES
WHERE AND HOW?
INTEGRATED PROGRAMS
ADDRESSES
WHEN AND HOW?
FINANCIAL PROJECTIONS
INCORPORATES
PORTIONS OF
AND EXECUTIVE SUMMARY
ABOVE
ROLE OF STRATEGIC PLANNING
PROCESS ELEMENTS
MISSION STATEMENT: IDENTIFIES THE BASIC CONCEPT OF THE ORGANIZATION.
IDENTIFIES THE PURPOSE/REASON FOR BEING. SHOULD
CONTRIBUTE TO A COMMON VISION WITH WHICH EVERYONE
ASSOCIATED WITH THE ORGANIZATION CAN IDENTIFY.
STRATEGIC ANALYSIS: Is THE DATA BASE OF THE STRATEGIC PLAN.
ANALYZES INTERNAL AND EXTERNAL FACTORS. LEADS
TO IDENTIFICATION AND PRIORITIZATION OF CRITICAL
ISSUES.
Is MOST LENGTHY ELEMENT OF STRATEGIC PLANNING PROCESS
STRATEGY: SPECIFIES THE DIRECTION OF THE ORGANIZATION. IT SAYS WHERE
(NOT HOW) WE WILL GO INTO OUR FUTURE. POSITIONS THE
ORGANIZATION FOR THE FUTURE.
A STRATEGY STATES EITHER:
1. CONFIRMS PRESENT DIRECTION
2. ESTABLISHES NEW DIRECTION BASED UPON MISSION
AND STRATEGIC ANALYSIS
LONG-TERM OBJECTIVES:
IDENTIFIES THE STRATEGIC RESULTS REQUIRED TO
IMPLEMENT MISSION AND STRATEGY IN THE
ENVIRONMENT SPECIFIED BY THE STRATEGIC ANALYSIS.
EXPRESSES AGENCY DESIRES OFTEN IN TERMS OF :
1. GROWTH
2. PROFITABILITY
3. DIVERSIFICATION
4. NEW PRODUCTS/MARKETS
INTEGRATED PROGRAMS:
PRESENTS THE MAJOR CROSS-FUNCTIONAL ACTIONS
NEEDED TO IMPLEMENT THE STRATEGY AND ATTAIN
LONG-TERI OBJECTIVES. INDIVIDUAL ACCOUNTABILITY
IS ASSIGNED. THEY LINK THE STRATEGIC WITH THE
OPERATIONAL.
FINANCIAL PROJECTIONS: SUMMARIZES THE PLANNED FINANCIAL RESULTS
AND MEASURES OF PERFORMANCE REQUIRED BY
THE PLAN, PRESENTS ALL OF THE FINANCIAL
INFORMATION IN ONE PLACE IN THE STRATEGIC PLAN.
EXECUTIVE SUMMARY:
PERSONALIZES THE PLAN FROM THE CEO's VIEWPOINT BY:
1. PRESENTING THE ISSUES
2. TESTING THE LOGIC
3. SHARPENS THE FOCUS
What Is Strategic Planning?
Figure 1.4. Strategic Plan Framework
ORGANIZATION
MISSION.
STRATEGIC
STRATEGIC
ANALYSIS
THINKING
STRATEGY:
EXECUTIVE
SUMMARI
LONG-TERM OBJECTIVES
LONG-RANGE
INTEGRATED PROGRAMS
PLANNING
FINANCIAL PROJECTIONS
-10-
KEY ROLES/FUNCTIONS/STRUCTURES
REASONS WHY MANAGERS WITHOLD
COMMITMENT
1. WE DON'T HAVE THE TIME: IN TRUTH, BETTER PLANNING USUALLY
RESULTS IN IMPROVED TIME MANAGEMENT.
2. WE GET PAID FOR RESULTS, NOT PLANS: BETTER PLANNING INCREASES
THE PERCENTAGE OF DESIRED RESULTS,
WHILE REDUCING THE PERCENTAGE OF
UNWANTED AND DREADFUL ONES.
3, THINGS ARE CHANGING TOO FAST: THINGS CHANGE AND PLANS MUST BE
FLEXIBLE ENOUGH TO WELCOME MODIFICATION.
HO WEVER, PLANS MAKE CHANGE CLEAR BEFORE
OR WHEN IT HAPPENS - NOT LATER WHEN
CHANGE OVERTAKES IGNORANCE.
4. WHO NEEDS iT? WE'RE DOING OK: As RECENT STOCK MARKET ACTIVITY
INDICATES, SUCCESS CAN BE THE RESULT
OF FACTORS WHICH MAY CHANGE OVERNIGHT.
HOW TOP MANAGEMENT SUPPORTS
COMMITMENT
1. MAKING STRONG AND VISIBLE COMMITMENT TO PLANNING
2. SETTING CLEAR AND REALISTIC EXPECTATIONS
3. COACH/TRAINING OTHERS IN PLANNING
4. PROVIDE TOP PRIORITY ATTENTION TO STRATEGIC PLANNING
PROCESS DURING PEAK PLANNING ACTIVITY PERIODS
5. MINIMIZE THE PLANNING RELATED PAPERWORK
6. CLARIFY ROLES IN THE PLANNING PROCESS
-13-
KEY ROLES ON THE PLANNING TEAM
1. THE CEO: SHOULD BE SEEN AS THE PERSON PROVIDING DIRECT
AND ACTIVE LEADERSHIP TO PLAN DEVELOPMENT.
DUTIES INCLUDE APPROVAL/INVOLVEMENT IN:
A. DEVELOPMENT OF MISSION STATEMENT
B. I.D. AND PRIORITIZATION OF CRITICAL ISSUES
C. DEVELOPMENT OF STRATEGY
D. I.D. AND STATEMENT OF LONG-TERM OBJECTIVES
E. CREATION OF EXECUTIVE SUMMARY
2. THE SENIOR EXECUTIVE TEAM: INCLUDES 5 TO 7 KEY MANAGERS WHO
SERVE AS AN EXTENSION OF THE CEO REPRESENTING
FIRST, THE ORGANIZATION AS A WHOLE AND SECOND,
THEIR DIVISIONS, DEPARTMENTS, UNITS.
3. THE BOARD OF DIRECTORS: RETAINS THE RIGHT OF REVIEW AND
FINAL APPROVAL. AS INDIVIDUALS OR AS A GROUP
MAY OFFER ADVICE. INVOLVEMENT LIMITED TO
ESTABLISHMENT OF GENERAL GUIDELINES OF DIRECTION
AND FINANCIAL PROJECTIONS.
-14-
4.
PLANNING MANAGER: DESIGNATED WITHIN THE AGENCY TO ASSURE
THAT THE PLAN IS DEVELOPED ON TIME BY:
A. DEVELOPING AND MONITORING THE
PLANNING SCHEDULE
B. COORDINATING LOGISTICS
C. DOCUMENTATION AND RECORD DISTRIBUTION
5. FACILITATOR: ASSURES AND ORGANIZES THE PARTICIPATIVE PROCESS BY:
A. PLANNING SYSTEM DESIGN
B. CEO COACHING/COUNSELING
C. PLANNING MEETING DESIGN
D. EXECUTIVE/MANAGERIAL TRAINING
E. PLANNING MEETING FACILITATION
F. PLAN DOCUMENTATION
STEP ONE: ANALYSIS OF
MISSION/VALUES/STAKEHOLDERS
REASONS FOR A STRONG MISSION
STATEMENT
1. ENSURES CONSISTENCY AND CLARITY OF PURPOSE
2. PROVIDES POINT OF REFERENCE FOR DECISIONS
3. GAINS COMMITMENT WITHIN THE ORGANIZATION
4. GAINS UNDERSTANDING AND SUPPORT FROM WITHOUT
QUESTIONS ASSOCIATED WITH MISSION
STATEMENT REVIEW
1. WHAT BUSINESS SHOULD WE BE IN ?
- IDENTIFY YOUR AGENCY NICHE IN THE COMMUNITIES OF:
A. SERVICE RECIPIENTS
B. SERVICE PROVIDERS
C. SMALL Bus NESSES
2. WHY DO WE EXIST ?
- How AND FOR WHOM WOULD LIFE CHANGE IF WE WERE NOT ?
3, HOW ARE ARE WE UNIQUE ?
- SPECIAL PRODUCTS/SERVICE
- KEY PEOPLE/GROUPS
- CONCENTRATION OF EFFORT
- METHOD OF DISTRI BUTION
- GEOGRAPHIC LOCATION
- TYPE OF SUPPORT SERVICES
- NATURE OF MARKETS/CUSTOMERS
- LEGISLATIVE MANDATES
- UNIQUE CAPACITIES
- FRANCHISES
4. WHO ARE OUR CUSTOMERS/USERS ?
- WHO NEEDS AND WANTS WHAT WE HAVE TO OFFER ?
- WHO IS RESPONS BE FOR GETTING IT FROM US ?
- WHO PAYS FOR IT ?
5, WHAT ARE OUR PRODUCTS/SERVICES NOW AND FUTURE ?
- CREATE GROUPS OF SERVICE/PRODUCTS
-18-
6. WHAT ARE OUR MAIN MARKET SEGMENTS NOW AND FUTURE ?
- SEGMENTS ARE GROUPS OF CUSTOMERS THAT CAN EE SEGREGATED
ON THE BASIS OF FACTORS SUCH AS GEOGRAPHY, DEMOGRAPHY,
STATUS,
7. HOW ARE WE DIFFERENT FROM THE WAY WE WERE 3-5 YEARS AGO ?
- How HAS THE NATURE OF OUR BUSINESS CHANGED ?
- WHAT FACTORS ACCOUNT FOR THE CHANGE (s) ?
8. HOW ARE WE MOST LIKELY TO BE DIFFERENT 3-5 YEARS FROM NOW ?
- INEVITABLE CHANGES SUCH AS DEMOGRAPHICS
- CONTROLLA BLE CHANGES SUCH AS MARKET POSITION
9. WHAT ARE OUR MAJOR ECONOMIC CONCERNS AND HOW CAN WE MEASURE THEM ?
10. WHAT PHILOSOPHICAL ISSUES ARE IMPORTANI 10 OUR FUTURE ?
- IMAGE
- QUALITY
- LEADERSHIP POSITION
- ENVIRONMENTAL IMPACT
- PRODUCTIVITY
- MANAGEMENT APPROACH
- INNOVATION
- RISK TAKING
- CHANGE AGENTRY
11. CONCERNS FOR OUR SPECIAL STAKEHOLDERS ?
- THE BOARD
- PARENT ORGANIZATIONS
- PARENTS OF CONSUMERS
- CONSUMERS
- EMPLOYEES
- LEGISTATURES
- GOVERNMENT AGENCIES
- SUPPLIERS
- ADVOCATES/GROUPS
- BUSINESS COMMUNITY
- GENERAL PUBLIC
- ?????????????
PARTS OF THE MISSION STATEMENT
1. UMBRELLA STATEMENT (15 - 30 WORDS)
SHOULD BE SHORT ENOUGH TO BE EASY TO REMEMBER !!
IDENTIFIES THE CONCEPTUAL NATURE OF THE BUSINESS IN WHICH
THE AGENCY EXPECTS TO BE ENGAGED IN ITS FUTURE
2. DETAILED STATEMENT (1/2 TO 1 PAGE LONG)
USUALLY BEGINS:
"IN SUPPORT OF ITS MISSION, THIS ORGANIZATION IS
"
COMMITTED TO...
-20-
SAMPLE ONE
THE
IS IN THE BUSINESS OF
PROVIDING HIGH QUALITY, INEXPENSIVE COMPUTER HARDWARE AND
SOFTWARE TO WORK ORIENTED HUMAN SERVICE ORGANIZATIONS,
IN SUPPORT OF OUR MISSION, WE ARE COMMITTED TO:
-
BEING RECOGNIZED BY OUR CUSTOMERS FOR BEING RESPONSIVE
AND ORIENTED TO THEIR NEEDS
- BEING RECOGNIZED FOR THE TECHNICAL QUALITY OF BOTH
OUR HARDWAPE AND SOFTWARE
- BEING APPRECIATED BY OUR EMPLOYEES AND OUR SUPPLIERS
FOR EXCELLENCE AND INTEGRITY IN BUSINESS OPERATIONS
- PROVIDING A PLACE TO WORK SUPPORTIVE OF PERSONAL
GROWTH, EXCELLENCE AND CREATIVITY
-21-
The Executive Guide to Strategic Planning
Figure 3.1. Clarifying an Organization's Mission.
1. What business should we be in?
2. Why do we exist (what is our basic purpose)?
3. What is unique or distinctive about our organization?
4. Who are our principal customers, clients, or users?
5. What are our principal products/services, present and future?
6. What are our principal market segments, present and future?
7.
What are our principal outiers/distribution channels, present
and future?
8. What is different about our business from what it was between
three and five years ago?
9.
What is likely to be different about our business three to
years in the future?
10. What are our principal economic concerns, and how are they
measured?
-22-
STEP TWO
-23-
HE STRATEGIC ANALYSIS DATA BASE
EXTERNAL FACTORS
INTERNAL FACTORS
MARKET SEGMENTS
FINANCIAL RESOURCES
TECHNOLOGY
PRODUCTS/SERVICES
COMPETITION
INTERNAL CAPABILITIES
INDUSTRY STRUCTURE
STRATEGIC STRENGTHS
OPPORTUNITY/THREATS
STRENGTHS/LIMITATIONS
-24-
STRATEGIC ANALYSIS QUESTIONS
1. ARE WE DIGGING INTO THE REALLY CRITICAL ISSUES ?
2. DO WE HAVE ENOUGH INFORMATION TO MAKE IMPORTANT DECISIONS ?
3. ARE WE IMPLEMENTING THE HIGHEST LEVEL OF JUDGEMENT POSSIBLE ?
4. ARE WE GETTING TO THE ROOT CAUSES OF THE ISSUES ?
5. ARE OUR ANALYSES ENDING IN CONCLUSIONS ?
6. HOW DEFENSIBLE ARE OUR CONCLUSIONS ?
-25-
THE CRITICAL ISSUES APPROACH TO
STRATEGIC ANALYSIS
A CRITICAL ISSUE IS A COMPLEX SITUATION, EVENT OR TREND THAT
THAT IS LIKELY TO MAKE A DIFFERENCE BETWEEN ATTAINING AVERAGE
OR SUPERIOR ORGANIZATIONAL PERFORMANCE OVER A 3 - 5 YEAR PERIOD.
TYPES OF CRITICAL ISSUES INCLUDE:
- DEMOGRAPHICS : CUSTOMERs/PURCHASERS/COMMUNITY
- MONEY SUPPLY: GRANTs/CONTRACTS/LOANS
-
LEGISLATION: SHIFTS IN PRIORITIES/MODELs/OUTCOMES
- RESOURCES: ANPOVER/FACILITIES/EQUIPMENT/MATERIALS
- SUPPORT: CUSTOMERs/ADVOCATES/GOVERNMENT
-26-
STEPS IN A STRATEGIC ANALYSIS
STEP ONE: AGREE ON CRITICAL ISSUES
STEP TWO: DIVISION OF LABOR
STEP THREE: COMPLETE INDIVIDUAL ASSIGNMENTS
STEP FOUR: PRESENTATION OF ANALYSIS ASSIGNMENTS
STEP FIVE: AGREEMENT ON ANALYSIS AND CONCLUSIONS
-27-
AGREE ON CRITICAL ISSUES
PLANNING TEAM:
1. INDIVIDUALLY IDENTIFY ON PAPER THE CRITICAL ISSUES
DESCRIBE THE ISSUES
EXPLAIN IMPORTANCE
INDICATE POTENTIAL IMPACT
2. CORPORATELY SHARE AND DISCUSS ABOVE
3, DELETE THOSE FOUND TO BE NON-CRITICAL
-28-
RECOGNIZING A CRITICAL ISSUE
A CRITCIAL ISSUE MAY BE RECOGNIZED AS:
1. THE SIZE OF THE GAP BETWEEN HISTORIC PERFORMANCE
AND DESIRED PLANNED PERFORMANCE (MAGNITUDE OF CHANGE)
2. IMPACT ON AGENCY AND AGENCY GROWTH
3, SPECIAL REQUIREMENTS FOR ACCOMPLISHING THE
MISSION AND POTENTIAL BARRIERS
-29-
SITUATIONAL ANALYSIS WHEEL
EXTERNAL
INTERNAL
ENVIRONMENT
ENVIRONMENT
CEO Assessment
CEO Assessment
Opportunities
Strengths
Threats
Limitations
MARKET
SEGMENTS
FINANCIAL
a
COMPETITION
PRODUCTS/SERVICES
TECHNOLOGY
INTERNAL
CAPABILITIES
-30-
EXTERNAL ENVIRONMENT ELEMENTS
1. CEO ASSESSMENT OF EXTERNAL OPPORTUNITIES AND THREATS
2. MARKET SEGMENTS TREND ANALYSIS OF DEMOGRAPHICS,
GEOGRAPHIC DISPERSION, CUSTOMER GROUPS AND CHANNELS
OF DISTRIBUTION
3. INDUSTRY AND COMPETITION OF NUMBER OF TYPES OF
COMPETITORS, THEIR KNOWN AND ANTICIPATED CAPABILITIES, ETC.
4. TECHNOLOGY ANALYSIS OF PRESENT AND FUTURE IMPACTS OF
"STATE -OF -THE -ART" DEVELOPMENTS, TECHNOLOGICAL
o ESOLESCENCE, NE W APPLICATIONS, ETC.
-31-
ITERNAL ENVIRONMENT ASSESSMENT
1. CEO ASSESSMENT OF INTERNAL STRENGTHS AND WEAKNESSES OF
TECHNICAL CAPACITY, PRODUCT QUALITY, PRODUCTIVE CAPACITY,
IMAGE IN THE MARKET
2. FINANCIAL ASSESSMENT OF PAST PERFORMANCE AND ANTICIPATED
NEEDS, BOTH CAPITAL AND OPERATING AS WELL AS POSSIBE
SOURCES OF FUNDS
3. PRODUCTS/SERVICES ASSESSMENT OF PRESENT AND POSSI BLE
OFFERINGS (REMEMBERING DATA COLLECTED IN THE EXTERNAL
ASSESSMENT)
4. INTERNAL CAPACITIES IDENTIFICATION OF PRESENT AND
POTENTIAL ACTIVITIES IN AREAS SUCH AS :
- PRODUCTION OPERATIONS
- RESEARCH AND DEVELOPMENT (INNOVATION)
- MANAGEMENT CAPACITIES
- MANAGEMENT SYSTEMS (MIS)
- HUMAN RESOURCES
-32-
GENERAL ANALYSIS QUESTIONS
1. GIVEN THE MISSION, WHAT ARE THE KEY FACTORS TO BE REVIEWED ?
2. HOW MUCH INFORMATION IS AVAILABLE AND NEEDED TO DECIDE ON
THIS ISSUE/FACTOR ?
3, WHAT TRENDS HAVE WE NOTICED IN THE LAST 3 - 5 YEARS ?
4. HOW LARGE IS THE GAP BET WEEN OUR RECENT PAST PERFORMANCE AND
WHAT WE THINK WE WANT/NEED ?
5. DOES ANYTHING NEED TO BE ADDRESSED RIGHT NOW ?
-33-
STEP THREE
STEP 3: COMPLETE ANALYSIS
ASSIGNMENTS
1. BRING GROUP TOGETHER IN GENERAL PRESENTATION FORMAT. PROVIDE
ALL PARTICIPANTS THE OPPORTUNITY TO HEAR AND REACT TO THE
YORK OF OTHERS.
2. BRING IN OTHER KEY PEOPLE WHO ARE NOT ON THE "PLANNING
TEAM" TO GAIN FROM THEIR KNO WLEDGE AND CO -OPT POTENTIAL
RESISTANCE.
3. LOOK FOR "ROOT CAUSES" BEHIND THE AGREED UPON CRITICAL ISSUES.
-34-
PARTS OF THE COMPLETED ANALYSIS
1. NARRATIVE DESCRIPTION AND DISCUSSION OF EACH ISSUE,
A. NAME THE ISSUE
B. DESCRI E THE ISSUE
C. VALIDATE ITS CRITICAL IMPORTANCE
D. HIGHLIGHT DATA COLLECTED
E. DESCRI BE ORGANIZATIONAL IMPACT
2. OUTLINE ANALYSIS OF ROOT CAUSES
PROVE IT IS A ROOT CAUSE, NOT A SYMPTON.
3. SUMMARY OF BROAD CONCLUSIONS
A. RECOMMENDATIONS
B. ALTERNATIVES
-35-
PRESENTATION OF ANALYSES
EACH TEAM MAKES A FORMAL PRESENTATION OF FINDINGS AND CONCLUSIONS:
1. LIMIT WRITTEN ANAYSES TO 3 PAGES
2. STATE MAJOR CONCLUSION (S) UP FRONT
3. USE GRAPHS/CHARTS WHEN APPROPRIATE
-36-
REVIEWING ANALYSES
1. CONSISTENCY OF CONCLUSIONS/RECOMMENDATIONS ACROSS
PRESENTATIONS
2. INCONSISTENCIES BETWEEN ANALYSES
3. FACTS THAT SUPPORT ISSUES AND CONCLUSIONS
4. GAPS IN INFORMATION REQUIRING "LEAPS OF FAITH"
-37-
AGREEMENT UPON ANALYSIS
TEAM AGREEMENT IS NEEDED UPON:
1. ANALYTIC APPROACH USED IN EACH ISSUE AREA
2. CREDIBILITY OF INFORMATION PRESENTED IN EACH AREA
3. SOUNDNESS OF EACH CONCLUSION
4. AGREEMENT UPON PRIORTIZATION OF "KEY" ISSUES
-38-
CORPORATE STRATEGY
STRATEGY DETERMINES OVERALL DIRECTION
IT SAYS "WHERE WE ARE TO GO"
NOT
"HOW WE WILL GET THERE"
-39-
STEPS IN STRATEGY DEVELOPMENT
1. IDENTIFY AND DEFINE FACTORS DETERMINING DIRECTION
2. PRIORITIZE THE FACTORS IDENTIFIED
3. IDENTIFY ORGANIZATION'S DRIVING FORCE
4, IDENTIFY NEEDED CHANGES TO MOVE IN DESIRED DIRECTION
5. DEVELOP A STRATEGY STATEMENT TO ESTABLISH CLEAR DIRECTION
-40-
GENERAL STRATEGIC AREAS
1. PRODUCTS OFFERED TO CUSTOMERS DEFINED IN TERMS OF:
A. FUNCTIONS PERFORMED
B. CUSTOMER NEEDS SATISFIED
C. SIZE/FORM/QUANTITY
2. SERVICES OFFERED SUCH AS :
A. FINANCIAL
D. TRAINING
B. INFORMATION
E. HOUSING
C. MEDICAL/LEGAL
F. ADVOCACY
3. MARKET NEEDS DELINEATED EY :
A. AGE
D. INCOME
B, DISABILITY
E. INDUSTRY
C. PARTICULAR NEED
F. LEGISLATION
-41-
GENERAL STRATEGIC AREAS II
4. CUSTOMER NEEDS - OF A PREDETERMINED GROUP OF KNOWN USERS
A. ADDITION OF NEW PRODUCTS
B. PROVISION OF NEW SERVICES
5. TECHNOLOGY - INCLUDES:
A. STAFF KNOWLEDGE
B. SYSTEMS
C. EQUIPMENT
D. SUPPORT FACILITIES
6. PRODUCTION CAPABILITY INCLUDES:
A. MANUFACTURING ORGANIZATION
1. KNOWLEDGE
3. PROCESS
2. SYSTEMS
4. EQUIPMENT
B. SERVICE ORGANIZATION
1. PROCESSES
3. SKILLS
2. SUPPORTS
-42-
GENERAL STRATEGIC AREAS III
7. METHOD OF SALE: PRIMARY WAY IN WHICH ORDERS ARE OBTAINED
A. CUSTOMER
B. END USER
8. METHOD OF DISTRIBUTION: How PRODUCTS REACH CUSTOMER
S. NATURAL RESOURCES: DOES NOT INCLUDE HUMAN RESOURCES
10. SIZE/GROWTH INDIVIDUALLY AND INTERACTIVELY
11. RETURN/PROFIT AS MEASURED BY :
A. PERCENT OF SALES
B. RETURN ON EQUITY
C. COST/BENEFIT RATIO
D. UNIT OF SERVICE COST
E. QUALITY INDICES
-43-
STRATEGIC AREAS DECISION MATRIX
Formulating Strategy
4
5
7
,
10
11
12
13
14
TOTAL X's
Products Offered
1
Services Offered
2
Market Needs
3
Customer Needs
4
in
Production Capability
6
Method of Sale
7
Method of Distribution
8
Natural Resources
9
Size/Growth
18
Return/Profit
11
12
13
14
1
2
3
4
§
Vertical (spaces)
Horizontal (X's)
TOTAL
Rank Order
Inso uctions
Review list of strategic areas and eliminate any that do not apply to your orga-
nization: add any additional ones that may be propriate on the blank lines,
repearing each under the corresponding number it the top.
Evaluate #1 against #2. If more important. place x in box under #2; if less im-
portant, leave blank. Repeat with each remaining number. Continue to next
line; repeat
Total x's across for each number; enter in "Horizontal" box at bottom; total
spaces down for each number: enter in "Vertical" box at bottom: add botb for
TOTAL
Largest number under "TOTAL" will be 1 in "Rank Order": next largest will be
2, and so on. If two or more areas have same total. rank order is determined by
comparing each subjectively against others with the same total.
TCE: Copyright © George L. Morrisey, 1974.
LEVELOPING A STRATEGY STATEMENT
1. WHAT SHOULD BE OUR FUTURE DRIVING FORCE ?
2. HOW DOES IT DIFFER FROM PRESENT DRIVING FORCE ?
3. WHAT CHANGES DOES THAT REQUIRE US TO MAKE ?
4. HOW COMPATIBLE IS IT WITH OUR CURRENT MISSION ?
5. HOW IS IT COMPATIBLE WITH THE CONCLUSIONS OF OUR
STRATEGIC ANALYSIS ?
-45-
LONG TERM OBJECTIVES
DESCRIBE WHAT WE WANT TO BE 3 - 5 YEARS DOWN THE ROAD
FOCUS UPON POSITION MORE THAN SPECIFIC ACCOMPLISHMENTS
FLOW FROM MISSION, STRATEGIC ANALYSIS AND STRATEGY
-46-
SELECTING LONG-TERM OBJECTIVES
1. IDENTIFY AREAS OF STRATEGIC CONCERN
2. WITHIN CATEGORIES IDENTIFY RESULTS SUPPORTIVE
OF MISSION AND STRATEGY
3. AGREE UPON 3 - 6 LONG-TERM OBJECTIVES
-47-
TESTING LONG-TERM OBJECTIVES
1. Is IT MEASURABLE OR VERIFIABLE ?
2. Is IT ACHIEVABLE OR FEASIBLE ?
3. Is IT FLEXIBLE OR ADAPTABLE ?
4, Is IT CONSISTENT WITH EVERY THING ELSE PLANNED ?
-48-
FLAGGING ASSUMPTIONS
FOR EACH LONG-TERM OBJECTIVE, ANY AFFILIATED ASSUMPTIONS
SHOULD BE IDENTIFIED TO:
1. PROVIDE A REFERENCE FOR PERFORMANCE
2. PROVIDE A CAUTION FOR CHANGES
-49-
FINANCIAL PROJECTIONS
FINANCIAL SUMMATION OF THE PLAN IN ONE LOCATION IS
IMPORTANT TO:
1. PRESENT THE PLANNED FINANCIAL RESULTS
2. PROVIDE A FORMAT FOR FINANCIAL COMMUNICATIONS
3. ORGANIZE FINANCE -RELATED INFORMATION
-50-
CONTENT OF FINANCIAL PROJECTIONS
SECTIONS
1. FORECAST OF INCOME STATEMENT
2. FORECAST BALANCE SHEET
3, CAPITAL EXPENDITURES FORECAST
4. KEY INDICATORS OF FINANCIAL PERFORMANCE
5. FINANCIAL FINANCIAL NARRATIVE SUMMARY
-51-
The Executive Guide to Strategic Planning
Figure 8.1. Sample Income Statement
(Expressed in 000s.)
Product Lines
1
2
3
Total
Sales (current)
$5,000
$8,000
$12,000
$25,000
Sales (constant)
$4,750
$7,680
$11,520
$23,950
Sales in units
500
1,000
1,500
3,000
Cost of sales
$3,500
$5,000
$ 9,000
$17,500
Gross margin
$1,500
$3,000
$ 3,000
$ 7,500
Gross margin (%)
30.0
37.5
25.0
30.0
Operating expenses
$1,500
$2,000
$ 2,000
: 5,500
Operating expenses (%)
30.0
25.0
16.6
22.0
Net income
$
0
$1,000
$ 1,000
$ 2,000
Net income (%)
0
12.5
8.5
8.0
-52-
Figure 3.2. Sample Summary Balance Sheet.
(Expressed in 000s.)
Assets:
Cash
$ 100
Accounts receivable
150
Inventory
- Raw materials
200
- Wor!: in process
200
- Finished goods
800
Property, plant and equipment
$2,500
Less accum ated depreciation
(500)
Property, plant and equipment-Net
2,000
Total assets
$3,450
Liabilities:
Accounts payable
$ 100
Other current liabilities
600
Long-term debt
700
Equity
2,050
Total liabilities
$3,450
-53-
Figure 8.2. Sample Summary Balance Sheet.
(Expressed in 000s.)
Assets:
Cash
$ 100
Accounts receivable
150
Inventory
- Raw materials
200
- Work in process
200
- Finished goods
800
Property, plant and equipment
$2,500
Less accumulated depreciation
(500)
Property, plant and equipment Net
2.000
Total assets
$3,450
Liabilities:
Accounts payable
$ 100
Other current liabilities
600
Long-term debt
700
Equity
2,050
Total liabilities
$3,450
-54-
Figure 8.3. Sample Capital Expenditures.
(Expressed in 000s.)
Integrated
Capital
Year
Program
Expenditure
1
2
3
Amount
Engineering
Engineering
prototype lab
X
$350
Manufacturing
New product
line equip-
ment
X
$250
Distribution
Warehouse
expansion
X
$125
Total
$725
-55-
THE EXECUTIVE SUMMARY
1. SUMMARIZES THE PLAN
2. IDENTIFIES THE ISSUES
3. TESTS THE LOGIC
4. FOCUSES THE ENTIRE EFFORT
-56-
ROLE OF THE EXECUTIVE SUMMARY
1. COMMUNICATES THE VISION
2. ESTABLISHES PRIORITIES
3. DEMONSTRATES COMMITMENT
-57-
QUESTIONS ANSWERED BY THE
EXECUTIVE SUMMARY
1. HOW DOES CURRENT PERFORMANCE MATCH PREVIOUS
STRATEGIC PLANS ?
2. WHAT ARE OUR KEY FINANCIAL PROJECTIONS ?
3. WHAT ARC THE CRITICAL ISSUES WHICH WILL
AFFECT US ?
4. WHY IS THE PLANNED STRATEGY APPROPRIATE ?
5. WHAT ARE THE KEYS TO SUCCESS IN THE PLAN ?
-58-
LONCERNS IN WRITING THE SUMMARY
1. TIME
2. CONFIDENTIALITY
3. PERSONAL VULNERABILITY
-59-
OTHER USES FOR THE SUMMARY
1. CREATES AWARENESS OF ORGANIZATIONAL:
A. STRATEGIC DIRECTION
B. NEEDS
2. FOCAL POINT FOR INTERNAL COMMUNICATION
-60-
READINESS FOR STRATEGIC PLANNING
1. TIME REQUIRED
2. NUMBER AND TYPES OF MEETINGS
3. INDIVIDUAL PREPARATION EFFORT
4. ROLES OF TEAM MEMBERS
5, MIND SET OF PARTICIPANTS
-61-
Developing and Implementing Your Strategic Plan
Figure 10.1. Planning Assessment Checklist.
CURRENT STATUS ACTION (When & Whom)
O.K.
NEED
N/A
Integrated Planning Process understood
Plan to plan
Planning roles clarified
CEO
Senior executive team
Board
Coach/facilitator
Planning coordinator
- Internal planning staff
- Other managers
- Other employees
Planning team selected
STRATEGIC PLANNING
Organization mission
Strategic analysis
- External opportunities as incrate
- Market segments
- Industry & competition
- Technology
- Internal strengths & limitations
- Financial
- Products/services
- Internal capabilities
- Ana.ysis assignments
- Critical issues
- Major conclusions
Strategy statement
Long-term objectives
Integrated programs
Financial projections
Executive summary
Strategic plan implementation
-62-
The Executive Guide to Strategic Planning
Figure 10.2. Example of a Completed Planning Assessment Checklist.
CURRENT STATUS ACTION (When & Whom)
O.K.
NEED
N/A
Integrated Planning Process understood
udate and reinforce
Plan to plan
Planning roles clarified
draft by 2/1 - Doris
- CEO
-
Senior executive team
- Board
- Coach/facilitator
I will handle -next mty
candidates identified 2/1-
. Planning coordinator
From
-
Internal planning staff
- Other managers
Other employees
Planning team selected
STRATEGIC PLANNING
Organization mission
Strategic analysis
-
External opportunities a increase
I will prepare by 2/1
- Market segments
let's discuss-staff mtp- Bill
- Industry & competition
- Technology
-
Internal strengths & limitations
I will prepare by 2/1
- Financial
- Products/services
- Internal capabilities
assessment by 2/1-5am
- Analysis assignments
- Critical issues
- Major conclusions
Strategy statement
Long-term objectives
recertify - 2/21 planning, mtg.
Integrated programs
Financial projections
see plan to plan
Executive summary
I will prepare by 4/15
Strategic plan implementation
plan developed by 5/1-Sam
-63-
Table 10.1. Time Required for Strategic Planning.
Elements of
Team Meeting Time (Days)
Strategic Plan
Minimum
Maximum
Introduction to process
1/2
1
Organization mission
1/2
1
Strategic analysis
.2
3
Strategy formulation
1/2
1
Long-term objectives
1/2
1
Integrated programs
1
2
Financial projections
Executive summary
Review of plan
1
1
Total days
6
10
-64-
The Executive Guide to Strategic Planning
Table 10.2. Elements Addressed During Four Team Meetings.
Elements of
Team Meetings
Strategic Plan
1
2
3
$
In troduction to process
X
Organization mission
X
Strategic analysis
X
X
Strategy formulation
X
X
Longterm objectives
X
X
Integrated programs
X
X
Financial projections
X
X
Executive summary
X
Review of plan
Note: X indicates element(s) covered ac each meeting.
-65-
Table 10.3. Elements Addressed During Eight Team Meetings.
Fiements of
Term Moorings
Strategic Plan
1
2
3
4
5
6
7
8
Introduction to process
X
Organization mission
X
X
Strategic analysis
X
X
X
Strategy formulation
X
X
Long-term objectives
X
Integrated programs
X
X
Financial projections
X
X
Executive summary
X
Review of plan
X
Note: X indicates element(s) covered at each meeting.