Case Study Analysis #2

[Going to plan: Powys Mediation]

MSTM 6023: Strategic Planning

Student: Jonathan Butler

Overview of Situation Powys Mediation is a small organization with the aim of resolving disputes and conflicts in Wales. The organizational staff consists of one part time coordinator and 20 volunteers and an annual income of 18,000. Powys recently went through review and planning process after its fourth year of existence due to the lack of enthusiasm and the need to think about the future. During this planning process Powys also worked on a new mission statement and on developing in six key areas. To help with the planning process Powys applied for funding to pay for a consultant to help develop a business plan. The consultant made it easier to get differences of opinion out in the open. The planning process took about three months with different parts of the plan being parceled out between a management committee members and the plan Coordinator. Since Powys had gone through a formal planning process they were able to make clear decisions, one of which was to introduce a membership scheme and charge people small fee on a yearly basis. It was noted that without the aid of the consultant the process have been a lot longer. The consultant kept the project on task, allowed differences of opinions to be discussed in the open and emphasized the need to set deadlines eliminating the temptation to be a perfectionist. However, some issues have been left unresolved and the upcoming financial year will be a really testing time. Powys has now learned to think about planning for the future and has learned the value of being proactive rather than reactive. Powys must now make a decision based on how to proceed in the new financial year. Powys currently has three alternatives available. The first being to develop a strategic business plan on its own to eliminate the need to be reactive rather than proactive and deal with it upcoming financial year planning for and mitigating issues on its own. The second alternative involves a re-hire of the consultant to help them continue the process and the last alternative is to do nothing. Powys should now develop a strategic business plan based on premise of the Balanced Scorecard to align its organization with the new mission statement and develop in the six key areas. As stated by Kaplan & Norton (2008) Experts from Michael Porter to Michael Hammer concur: without excellent operational and governance processes, strategy-even the most visionary strategy-cannot be implemented (p.1). Incorporating a Balanced scorecard allows the organization to apply a number of metrics to the overall performance of the organization. The balance scorecard employs a management model which links strategy with operations. Problem Statement Powys mediation, an organization that has just recently went through a review and planning process is learning the value of being proactive rather than reactive. The review process, which had just recently taken place, was aided by the help of a consultant. The consultant worked extremely hard to get Powys to think about its achievements and made it easier for the differences of opinion to be displayed in the open.

Without consultation the process would have taken a lot longer and direction for Powys would not have been straight forward. Powys issue now is how to proceed into the coming year. There were still issues left unresolved and the coming financial year is expected to be a challenge. Powys must develop a strategic business plan for the coming year. The organization now has the tools and understanding within the organization it must now find a path of its own and apply the techniques required for the successful execution of a strategic plan. Alternatives There are a number of Alternatives facing Powys: 1. Develop a Strategic Plan to become more proactive rather than reactive resolving issues in the upcoming financial year 2. 3. Re-hire a consultant to help resolve issues still facing the organization in the coming financial year Do nothing

Alternative One

Pros

Cons

-Provides Powys with a way to action unresolved issues. - Able to focus the organizations activities in one direction - Strategic plan will align the organization with its new mission statement - Allows Powdys to develop competence in developing a strategic plan

- Hard to implement due to the volunteer staff and part time coordinator - Never implemented a strategic plan from start to finish

Alternative 2

Pros

Cons

- Provide Powys with a way to action unresolved issues. - Able to focus the organizations activities in one direction - Consultant will help to align the organization with its new mission statement

- The organization does not learn to function on its own - There may no longer be grant money available

Alternative 3

Pros

Cons

- Does not require any additional planning from Powys staff

- Powys issues in the coming financial year will not be resolved - No strategic plan to guide Powys into the future. - Powys will not develop a competency in strategic planning

The 3 alternatives were based on Powdys current situation and what the best suited approach will be. The first alternative considers developing a strategic business plan. This option seems to provide the greatest benefit for Powys long term. After receiving direction from the consultant Powys has learned the value of long term strategic planning and now knows to set deadlines to ensure the work gets accomplished. The second Alternative which considers hiring a consultant may help Powys achieve its goals for the upcoming financial year but they will still need to acquire this skill set on its own course to survive long term. Also, funding which was received during the initial year may not be available again. Powys received a grant for the consultant during its initial review and planning process. Re-applying for the grant may not be an option.

The last alternative considers doing nothing and staying Powys course of action. This option while appealing to some due to the voluntary nature of the work, does not benefits the organization in the long term. Powys needs to set forth a plan of action to deal with these unresolved issues in the upcoming financial year and chart a strategic course for future planning. Proposed Course of Action and Rationale The proposed course of action for Powys is to develop and execute a strategic business plan for both the short and long term. To accomplish the proposed course of action Powys needs to continue with its transition into the future by continuing to develop its strategic business plan. To develop this strategic business plan Powys should implement the balanced scorecard. As stated by Kaplan & Norton (2008) Experts from Michael Porter to Michael Hammer concur: without excellent operational and governance processes, strategy-even the most visionary strategy-cannot be implemented (p. 1). Incorporating a Balanced scorecard allows the organization to apply a number of metrics to the overall performance of the organization. The balance scorecard employs a management model which links strategy with operations. As shown by Kaplan & Norton (2008) the balance scorecard can be developed based on a six stage management system. Powys should follow this six stage management plan in the implementation and execution of the strategic business plan. The first stage comprises of developing a strategy using an array of tools such as mission values, and vision statements; external competitive, economic and environmental analyses. Powys with the aid of the consultant was developing a new mission statement. This is the first step Powys should take in developing the strategic plan. The mission statement will provide Powys with an overall target for what they plan to achieve. The second stage involves planning the strategy. This step involves using the tools developed during stage 1 to develop target and strategic initiative. As recommend by Barksdale and Lund (2006) planning the strategy is the future of the organization. Its how the organization communicates its vision, mission and strategic goals to its employees, partners, customers and stakeholders. (p. 5). Powys is currently facing several challenges in the new financial year. These challenges must be addressed during this stage. Adequate metrics and goals should to be defined to map the way ahead. At this stage Powys should target the six key areas already defined by the organization and develop metrics to measure the performance of the areas within the balanced scorecard. Stage number three aligns the organization with the strategy by implementing the goals and metrics of the Balanced Scorecard to all the organizational units. Kaplan & Norton (2008) state Aligning the employees through formal communications process, and by linking the incentives to strategic objectives (p. 2). This process is crucial and Powys should align the six key areas with its newly developed mission statement. From here the goals and metrics can be streamed through the organization.

Stage number four consists of planning operations using quality tools such as process dashboards, rolling forecasts and activity based costing. When planning operations Powys needs to consider which business processes are most critical for executing the strategy in regards to the six key areas. These critical processes can then be tracked via the balanced scorecard. Balanced Scorecard quarterly results can be posted and reviewed on a quarterly basis. Stage Five monitors and learns about the problems, barriers, and challenges. The balance scorecard when used correctly will monitor the critical processes with the aim of defining the problems, barriers and challenges within each process. When the metrics of the Balanced Scorecard are not met the question should be asked Why did this process not measure up? A solution can then be devised and corrective action implemented. Stage Six is when the strategy is tested and adapted. This stage consists of trending operational data, environmental data and any competitive data. Once this data is collected changes to the balanced scorecard can be made developing new targets/metrics for which Powys should aim to achieve. Once the new targets/objectives have been decided a new cycle of strategic planning and executions can begin for Powys. This course of action was determined after applying the seven principles of decision making (Drucker, 2008). This decision making process is based on a rational policy model to achieve a social gain or minimal social pain. The rational policy that maximizes benefits while minimizing cost is best policy for a nonprofit organization. The first principle of Druckers (2008) Elements of effective decision making is to determine whether a decision is necessary. To determine this as Drucker (2008) suggests the rules used by surgeons to make decisions can be applied (p. 296). In the case of Powys, the third rule was applied which states if the condition falls between rule #1 and Rule #2 a condition that is not degenerative and not life threatening but may not be self-correcting and quite serious. A decision must be made and Powys must take action to ensure a corrective course is maintained. The second element is to classify the problem. To do this the four basic types of executive problems must be examined (Drucker 2008). Powys currently falls within the Generic events that are unique for the organization but uncommon through-out the industry. Powys due to its current size and type (non-profit organization which consist of 20 volunteers and 1 part time coordinator) does not have the experience or full time staff without help to develop a strategic business plan. This help has been provided by the consultant in the previous financial year. Powys now understands where they should be going. The third is to define the problem and bring the question how should Powys define its current problem at hand. Powys mediation, an organization that has just recently went through a review and planning process is learning the value of being proactive rather than reactive. The review process, which had just recently taken place, was aided by the help of a consultant. Powys issue now is how to proceed into the coming

year. There were still issues left unresolved and the coming financial year is expected to be a challenge. Powys must develop business plan for the coming year without the help of an outside consultant. The fourth is to decide what is right. Powys currently has three alternatives available. The first being to develop a strategic business plan on its own to eliminate the need to be reactive rather than proactive and deal with it upcoming financial year planning for and mitigating issues on its own. The second alternative involves hiring a consultant to help them continue the process and the last alternative is to do nothing. Hiring a consultant, while initially beneficial, will not help Powys learn to plan, set and execute strategic goals. The consultant as shown in the past was very helpful in getting issues out in the open and ensuring deadlines were kept. To be successful Powys needs to learn how to deal with these things. The last alternative to do nothing should not be a option. While Powys is not in any imminent danger staying the initial course of action will eventually lead to greater problems. As described by Porter (1996) organizations often fail in rediscovering strategy due to its inability to choose (p. 17) . The correct course of action is for Powys to develop a strategic business plan and execute this plan on its own. The fifth is to get others to buy the decision. Since Powys consists of 20 volunteers and 1 part time coordinator, having a buy in form the group is the most important function. As Drucker (2008) states Unless the organization buys into the decision it is ineffectual and impotent (p.301). Since the consultant, Powys has seen the benefits of setting goals and developing a strategic plan. They now seem to understand the value of being proactive rather than reactive. However, as defined by Drucker (2008) the selling cant be done unless the decision has been made. Powys organization now understands the value of a strategic business plan and why setting future goals are important. The sixth principle is to build action into the decision. As stated by Drucker (2008) a decision is a commitment to action (p.295). Once the decision is made action is required to move the direction forward. The action in the case of Powys should come from the coordinator. Due to the nature of Powys (non profit volunteer based organization) individuals contributing to the organization need to firmly know what is expected of them. The last principle is to test the decision against actual results. Since testing the organization against actual results can only happen after a decision is made and implemented over time, Powys will need to develop a method to track its results. Past results when working with the consultant were positive which generally shows a positive outcome for the future. However, in following with Drucker (2008), an organization cannot see the future. Therefore to be successful an organization must plan for the future by developing itself today.

References Barksdale, S. & T. Lund. (2006). 10 Steps to Successful Strategic Planning. ASTD Press. 248 pp. Drucker, P. F. (2008).Management. Revised Edition, with Joseph A. Maciariello. HarperCollins. 586 pp. Michael Porter (1996) What is Strategy? Harvard Business Review. Pages 2-22 Kaplan, R.S. & Norton, D.P. (2008). Integrating strategy planning and operational execution: A six stage system. Harvard Business School. (10)3, P. (1-16)