Strategic Planning Model

Ms. Sc. Juan Mauricio Espinoza Zapata

September 5th, 2015

1
 Overview

Clearly define the complete strategic planning

process
Explain how to create and execute a strategic plan
Provide a common model that the entire organization
can follow

2
 Plan Definition

1. a set of actions that have been thought of as a way to do or

achieve something

2. something that a person intends to do

3. a detailed agreement for telephone service, medical care,

insurance, etc.

3
 Plan Definition

1. Written account of intended future course of action

(scheme) aimed at achieving specific goal(s) or objective(s)
within a specific timeframe. It explains in detail what needs
to be done, when, how, and by whom, and often includes
best case, expected case, and worst case scenarios. See
also planning.
Businessdictionary.com

4
 Planning Definition

1. A basic management function involving formulation of one

or more detailed plans to achieve optimum balance of needs
or demands with the available resources. The planning
process (1) identifies the goals or objectives to be achieved,
(2) formulates strategies to achieve them, (3) arranges or
creates the means required, and (4) implements, directs, and
monitors all steps in their proper sequence.

2. The control of development by a local authority, through

regulation and licensing for land use changes and building.
Businessdictionary.com

5
 Planning Definition

1. the act or process of making a plan to achieve or do

something.

https://youtu.be/50zBtcoScxw

6
 Strategy Definition

1. A method or plan chosen to bring about a desired

future, such as achievement of a goal or solution to
a problem.
2. The art and science of planning and marshalling
resources for their most efficient and effective use.
The term is derived from the Greek word for
generalship or leading an army. See also tactics.
Businessdictionary.com

7
 Strategy Definition

1. a careful plan or method for achieving a particular

goal usually over a long period of time

2. the skill of making or carrying out plans to achieve

a goal

8
 Strategy Definition

1. a detailed plan for achieving success in situations

such as war, politics, business, industry, or sport,
or the skill of planning.
The president held an emergency meeting to discuss military strategy with
the Pentagon yesterday.
Their marketing strategy for the product involves obtaining as
much free publicity as possible.
We're working on new strategies to improve our share of the market.

http://dictionary.cambridge.org

https://youtu.be/TD7WSLeQtVw

9
 What is Strategic Planning?

A systematic process of envisioning a desired

future, and translating this vision into broadly
defined goals or objectives and a sequence of steps
to achieve them.
In contrast to long-term planning (which begins with
the current status and lays down a path to meet
estimated future needs), strategic planning begins
with the desired-end and works backward to the
current status.
businessdictionary.com

10
 What is Strategic Planning?

a process in which a companys executives decide

what they want to achieve and the best actions and
use of resources for doing this:
The strategic planning process helped the firm decide
which businesses to concentrate on.
dictionary.cambridge.org

11
 What is Strategic Planning?

Process to establish priorities on what you will

accomplish in the future
Forces you to make choices on what you will do
and what you will not do
Pulls the entire organization together around a
single game plan for execution
Broad outline on where resources will get allocated
https://youtu.be/sU3FLxnDv_A

12
 Why do Strategic Planning?

If you fail to plan, then you plan to fail be

proactive about the future.
Strategic planning improves performance
Solve major issues at a macro level
Communicate to everyone what is most important

13
 Fundamental Questions to Ask

Where are we now? (Assessment)

Where do we need to be? (Gap / Future End State)
How will we close the gap (Strategic Plan)
How will we monitor our progress (Balanced
Scorecard)

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 A Good Strategic Plan should . . .

Address critical performance issues

Create the right balance between what the
organization is capable of doing vs. what the
organization would like to do
Cover a sufficient time period to close the
performance gap
Visionary convey a desired future end state
Flexible allow and accommodate change
Guide decision making at lower levels operational,
tactical, individual
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 Strategic Planning Model
ABCDE
Where we are Where we want to be How we will do it How are we doing

Assessment Baseline Components Down to Evaluate

Specifics

Environmental Scan Situation Past, Mission & Vision Performance Performance

Present and Future Measurement Management
Background Significant Issues Values / Guiding Targets / Standards of Review Progress
Information Principles Performance Balanced Scorecard

Situational Analysis Align / Fit with Major Goals Initiatives and Take Corrective
Capabilities Projects Actions

SWOT Strengths, Gaps Specific Objectives Action Plans Feedback upstream

Weaknesses, revise plans
Opportunities,
Threats

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 Pre-Requisites to Planning

Senior leadership commitment

Who will do what?
What will each group do?
Plan
How will we do it?
When is the best time?

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Assessment

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 Assessment Model: Assessment
SWOT

Internal Assessment: Organizational

assets, resources, people, culture,
systems, partnerships, suppliers, . . .

External Assessment: Marketplace,

competitors, social trends, technology,
regulatory environment, economic cycles .

SWOT SWOT

Good Points Possible Pitfalls

Easy to Understand Needs to be
Apply at any Analytical and
organizational level Specific
Be honest about your
weaknesses
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 Strengths Assessment

Strengths Those things that you do well, the

high value or performance points
Strengths can be tangible: Loyal customers,
efficient distribution channels, very high quality
products, excellent financial condition
Strengths can be intangible: Good leadership,
strategic insights, customer intelligence, solid
reputation, high skilled workforce
Often considered Core Competencies Best
leverage points for growth without draining your
resources
20
 Weaknesses Assessment

Weaknesses Those things that prevent you from

doing what you really need to do
Since weaknesses are internal, they are within
your control
Weaknesses include: Bad leadership, unskilled
workforce, insufficient resources, poor product
quality, slow distribution and delivery channels,
outdated technologies, lack of planning, . . .

21
 Opportunities Assessment

Opportunities Potential areas for growth and

higher performance
External in nature marketplace, unhappy
customers with competitors, better economic
conditions, more open trading policies, . .
Internal opportunities should be classified as
Strengths
Timing may be important for capitalizing on
opportunities

22
 Threats Assessment

Threats Challenges confronting the organization,

external in nature
Threats can take a wide range bad press
coverage, shifts in consumer behavior, substitute
products, new regulations, . . .
May be useful to classify or assign probabilities to
threats
The more accurate you are in identifying threats,
the better position you are for dealing with the
sudden ripples of change

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Baseline

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 Why create a baseline? Baseline

Puts everything about the organization into a

single context for comparability and planning
Descriptive about the company as well as the
overall environment
Include information about relationships
customers, suppliers, partners, . . .
Preferred format is the Organizational Profile

25
 Organizational Profile Baseline
1. Operating Environment

Products and Services Suppliers, Delivery,

Channels, Contracts, Arrangements, . . .
Organizational Culture Barriers, Leadership,
Communication, Cohesiveness . . . .
Workforce Productivity Skill levels, diversity,
contractors, aging workforce, . . .
Infrastructure Systems, technology, facilities, . .
Regulatory Product / Service Regulation, ISO,
Quality Standards, Safety, Environmental, . . .
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 Organizational Profile Baseline
2. Business Relationships

Organizational Structure Business Units,

Functions, Board, Management Layers, . . .
Customer Relationships Requirements,
Satisfaction, Loyalty, Expectations, . . .
Value Chain Relationship between everyone in
the value chain . . . .
Partner Relationships Alliances, long-term
suppliers, customer partnerships, . . .

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 Organizational Profile Baseline
3. Key Performance Categories

Customer
Products and Services
Financial
Human Capital
Operational
External (Regulatory Compliance, Social
Responsibility, . . . )

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 Gap Analysis Baseline

Baseline / Org Profile Challenges / SWOT

Gap = Basis for Long-

Term Strategic Plan
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Components

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 Major Components of the Components
Strategic Plan / Down to Action

Strategic Plan

Action Plans
Mission Why we exist
Evaluate Progress

Vision What we want to be

Goals What we must achieve to be successful

Objectives O1 O2
Specific outcomes expressed in
measurable terms (NOT activities)

Initiatives Planned Actions to

AI1 AI2 AI3 Achieve Objectives

Measures Indicators and

M1 M2 M3 Monitors of success

Targets T1 T1 T1 Desired level of

performance and
timelines
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 Mission Statement Components

Captures the essence of why the organization

exists Who we are, what we do
Explains the basic needs that you fulfill
Expresses the core values of the organization
Should be brief and to the point
Easy to understand
If possible, try to convey the unique nature of your
organization and the role it plays that differentiates
it from others
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 Example of Mission Statement

The purpose of the Police Service is to uphold the law fairly and
firmly: to prevent crime; to pursue and bring to justice those
who break the law; to keep the peace; to protect, help and
reassure the community: and to be seen to do all this with
integrity, common sense and sound judgement.

We must strive to reduce the fears of the public and, so far as

we can, to reflect their priorities in the action we take. We
must respond to well-founded criticism with a willingness to
change.

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 Examples Good and Bad Components
Mission Statements

NASA
To Explore the
Universe and Search
Does a good job of expressing the core
for Life and to
Inspire the Next
values of the organization. Also conveys
Generation of unique qualities about the organization.
Explorers

Walt Disney

Too vague and and unclear. Need more

To Make People Happy
descriptive information about what makes
the organization special.

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 Vision Components

How the organization wants to be perceived in the

future what success looks like
An expression of the desired end state
Challenges everyone to reach for something
significant inspires a compelling future
Provides a long-term focus for the entire
organization

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 Example of Vision Statement

The Police Service will be a world class agency based

upon a foundation of public trust, and dedicated to
keeping the public safe.
The department will serve as a beacon of excellence
and innovation.
We are committed to excellence developed through
pride, setting the standard, and earning a reputation
for providing effective, caring, and courteous
service.
We will capitalize on our strengths as a diverse
community and work force to make this vision a
reality.
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 Example of Vision Statement

Visin USIL: Lder en la formacin de profesionales ticos y de alta calidad,

segn estndares nacionales e internacionales.

Online Retailer: We intend to provide our customers with the best online
shopping experience from beginning to end, with a smart, searchable website,
easy-to-follow instructions, clear and secure payment methods, and fast, quality
delivery.

Hair Salon: Our salon will change the way you think about a haircut. Full
service comfort, friendly staff, a relaxing atmosphere, and the best prices in
town give you an experience that will leave you glowing both inside and out.

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 Example of Vision Statement

PepsiCo: "PepsiCo's responsibility is to continually improve all aspects of the

world in which we operate - environment, social, economic - creating a better
tomorrow than today. Our vision is put into action through programs and a focus
on environmental stewardship, activities to benefit society, and a commitment to
build shareholder value by making PepsiCo a truly sustainable company.

Amazon: "Our [Amazon's] vision is to be earth's most customer centric

company; to build a place where people can come to find and discover anything
they might want to buy online."

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 Example of Vision Statement

Microsoft A computer on every desk and in every home; all running Microsoft
software.

Nike Current: To be the number one athletic company in the world.

Wal-Mart Become a $125 billion company by the year 2000.

Ikea To create a better every day life for the many people.

Ford To become the worlds leading Consumer Company for automotive

products and services.

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 Examples of Vision Descriptors Components

Adept Equal Informative Solid

Aggressive Disciplined Innovative Solvent
Agile Effective Leading Stable
Aligned Efficient Logical State of the
Assertive Art
Enduring Major
Available Strong
Expanding Nimble
Best-in-class Streamlined
Expert Pioneering
Challenging Sufficient
Fast Protected
Clear Strategic
Fast-paced Organized
Competent
Sustainable
Complex Financially-sound Over-Arching
Timely
Compliant Focused Quick
Value-added
Conservative Growth Ready
Vigilant
Coordinated Healthy Responsive
Visionary
Critical Improving Savvy
Direct World-class
Incentivized Simple
Increasing 40
 Guiding Principles and Values Components

Every organization should be guided by a set of values and

beliefs
Provides an underlying framework for making decisions part of
the organizations culture
Values are often rooted in ethical themes, such as honesty, trust,
integrity, respect, fairness, . . . .
Values should be applicable across the entire organization
Values may be appropriate for certain best management practices
best in terms of quality, exceptional customer service, etc.

41
 Examples of Components
Guiding Principles and Values

We obey the law and do not compromise moral or ethical principles ever!
We expect to be measured by what we do, as well as what we say.

We treat everyone with respect and appreciate individual differences.

We carefully consider the impact of business decisions on our people and we
recognize exceptional contributions.

We are strategically entrepreneurial in the pursuit of excellence, encouraging original

thought and its application, and willing to take risks based on sound business
judgment.

We are committed to forging public and private partnerships that combine diverse
strengths, skills and resources.

42
 Goals Components

Describes a future end-state desired outcome that is

supportive of the mission and vision.
Shapes the way ahead in actionable terms.
Best applied where there are clear choices about the future.
Puts strategic focus into the organization specific
ownership of the goal should be assigned to someone within
the organization.
May not work well where things are changing fast goals
tend to be long-term for environments that have limited
choices about the future.
43
 Developing Goals Components

Cascade from the top of the Strategic Plan Mission,

Vision, Guiding Principles.
Look at your strategic analysis SWOT, Environmental
Scan, Past Performance, Gaps . .
Limit to a critical few such as five to eight goals.
Broad participation in the development of goals:
Consensus from above buy-in at the execution level.
Should drive higher levels of performance and close a
critical performance gap.
44
 Examples of Goals Components

Reorganize the entire organization for better responsiveness to customers

We will partner with other businesses, industry leaders, and government agencies in
order to better meet the needs of stakeholders across the entire value stream.

Manage our resources with fiscal responsibility and efficiency through a single
comprehensive process that is aligned to our strategic plan.

Improve the quality and accuracy of service support information provided to our
internal customers.

Establish a means by which our decision making process is market and customer
focus.

Maintain and enhance the physical conditions of our public facilities.

45
 Objectives Components

Relevant - directly supports the goal

Compels the organization into action
Specific enough so we can quantify and measure the results
Simple and easy to understand
Realistic and attainable
Conveys responsibility and ownership
Acceptable to those who must execute
May need several objectives to meet a goal

46
 Goals vs. Objectives Components

GOALS OBJECTIVES
Very short statement, few words Longer statement, more descriptive
Broad in scope Narrow in scope

Directly relates to the Mission

Indirectly relates to the Mission Statement
Statement

Covers long time period (such as 10 Covers short time period (such 1 year budget
years) cycle)

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 Examples of Objectives Components

Develop a customer intelligence database system to capture and analyze patterns in

purchasing behavior across our product line.

Launch at least three value stream pilot projects to kick-off our transformation to a
leaner organization.

Centralize the procurement process for improvements in enterprise-wide purchasing

power.

Consolidate payable processing through a P-Card System over the next two years.

Monitor and address employee morale issues through an annual employee satisfaction
survey across all business functions.

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Down to
Specifics

49
 Down to
What are Action Plans? Specifics

The Action Plan identifies the specific steps that will be taken to achieve the
initiatives and strategic objectives where the rubber meets the road
Each Initiative has a supporting Action Plan(s) attached to it
Action Plans are geared toward operations, procedures, and processes
They describe who does what, when it will be completed, and how the
organization knows when steps are completed
Like Initiatives, Action Plans require the monitoring of progress on Objectives,
for which measures are needed

Objectives

Initiatives

Action
Plans 50
 Down to
Characteristics of Action Plans Specifics

Assign responsibility for the successful completion of the Action Plan. Who is responsible?
What are the roles and responsibilities?
Detail all required steps to achieve the Initiative that the Action Plan is supporting. Where
will the actions be taken?
Establish a time frame for the completion each steps. When will we need to take these
actions?
Establish the resources required to complete the steps. How much will it take to execute
these actions?
Define the specific actions (steps) that must be taken to implement the initiative. Determine
the deliverables (in measurable terms) that should result from completion of individual
steps. Identify in-process measures to ensure the processes used to carry out the action
are working as intended. Define the expected results and milestones of the action plan.
Provide a brief status report on each step, whether completed or not. What
communication process will we follow? How well are we doing in executing our action plan?
Based on the above criteria, you should be able to clearly define your action plan. If you
have several action plans, you may have to prioritize.

51
 Down to
Action Plan Execution Specifics

Requires that you have answered the Who, What, How, Where,
and When questions related to the project or initiative that drives
strategic execution
Coordinate with lower level sections, administrative and operating
personnel since they will execute the Action Plan in the form of
specific work plans
Assign action responsibility and set timelines Develop working
plans and schedules that have specific action steps
Resource the project or initiative and document in the form of
detail budgets (may require reallocation prior to execution)
Monitor progress against milestones and measurements
Correct and revise action plans per comparison of actual results
against original action plan

52
 Quantify from Action Level Up Down to
in terms of Measurements Specifics

Measure your milestones short-term outcomes at the

Action Item level.
Measure the outcomes of your objectives.
Try to keep your measures one per objective.
May want to include outcome measures to depict
cause-effect relationships if you are uncertain about
driving (leading) the desired outcome.
Establish measures using a template to capture
critical data elements

53
 Down to
Measurement Template Specifics

(Insert (Insert division (Insert department Risk Frame area (Insert objective (Insert (Insert reporting
organization name) name) objective supports owner) measurement contact info)
name) owner)
Objective Description description of objective purpose, in sufficient detail for personnel not familiar with the References source documentation
objective to understand its intent. Objective descriptions are typically two or three paragraphs long. This will for objective and objective
appear in the pop-up window when you mouse over the objective in the Balanced Scorecard System. description

Comments additional information about the objective not covered in above blocks, such as recommendations for further revision, additional
organizations objective impacts, recommendations for coordination / alignment with other objectives, etc.
Measure Name - The name Measure Description description of the measure, include its Measure Formula Data Source - The
exactly as you want it to appear in intent, data source, and organization responsible for providing formula used to source of the data
the Balanced Scorecard, including measure data. This will appear in the pop-up window when calculate measure manual, data
the measure number (i.e. Percent you mouse over the measure in the Balanced Scorecard. value (if any) spreadsheet, or
Employees Satisfied, etc.) database name and
contact familiar with the
data
Measure Weight - the relative weight of the measure based on the impact it has on the overall Measure Reporter Person responsible for
objective. The total weights for all measures for an objective must add to 100 providing measure data. Include the name,
organization and email.
Target Maximum Maximum expected value for the measure. Effective Date Date Frequency How often target Units Units
the target first data will be reported of measure
becomes effective
Target Point where the measure goes from green to amber
Target Minimum Point where the measure goes from amber to red. The Scorecard Perspective Name
target minimum and target can not be the same value.

54
 Down to
Criteria for Good Measures Specifics

Integrity Complete; useful; inclusive of several types of

measure; designed to measure the most important activities of the
organization
Reliable: Consistent
Accurate - Correct
Timely Available when needed: designed to use and report data
in a usable timeframe
Confidential and Secure: Free from inappropriate release or attack

55
 Examples of Measurements Down to
Lead Indicators Specifics

Average time to initiate customer contact => shorter time

should lead to better customer service
Average response time to incident => below average
response times should lead to increased effectiveness in
dealing with incident
Facilities that meet facility quality A1 rating => should
lead to improved operational readiness for meeting
customer needs

56
 Examples of Measurements Down to
Lag Indicators Specifics

Overall customer satisfaction rating => how well you are

doing looking back
Business Units met budgeted service hour targets =>
after the fact reporting of service delivery volume
Number of category C safety accidents at construction
sites => historical report of what has already taken place

57
 Down to
Targets Specifics

For each measurement, you should have at least one

target
Targets should stretch the organization to higher levels
of performance
Incremental improvements over current performance can
be used to establish your targets
Targets put focus on your strategy
When you reach your targets, you have successfully
executed your strategy
58
 Down to
Examples of Targets Specifics

Average Time to Process New 65 days Year 60 days Year 55 days Year
Employee Setups in DB 2007 2008 2009
Utilization Rate for Rental Housing 90% for 92% for Year 95% for Year
Units Year 2007 2008 2009
Toxic Sites meeting in-service 55% for Year 70% for Year 95% for Year
compliance 2007 2008 2009
Personnel Fully Trained in Safety 65% by 2rd 75% by 3th 90% by 4th
and Emergency Quarter Quarter Quarter
Open Positions Filled after 30 day 75 positions 100 positions 135 positions
promotion period Sept 2007 Jan 2008 July 2008
% Reduction in Orders Filled Short 50% by Year 65% by Year 85% by Year
in 1st Cycle 2008 2009 2010

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 Down to
Sanity Check . . . Specifics

Make sure everything is linked and connected for a tight

end-to-end model for driving strategic execution.

OBJECTIVE
Improve Employee
Satisfaction

MEASURE / TARGET
Measure 90%
Employee
Percent Satisfaction

Satisfaction INITIATIVE
Survey
gap
ACTION PLAN
45%
Rating
Employee
Identify issues per
Productivity
Target
90% a company wide
Improvement
favorable survey
Target Actual
Program
overall

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Evaluate

61
 Continuous Feedback Evaluate
through the Balanced Scorecard

Cascade and align from the top to create a Strategic

Management System.
Use the Balanced Scorecard framework to organize and
report actionable components.
Use the Scorecard for managing the execution of your
strategy.
Scorecard forces you to look at different perspectives
and take into account cause-effect relationships (lead
and lag indicators)
Improves how you communicate your strategy critical
to execution.
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 Performance Management Evaluate

Establish a regular review cycle using your balanced scorecard.

Analyze and compare trends using graphs for rapid
communication of performance.
Dont be afraid to change your metrics life cycle (inputs to
outputs to outcomes)
Work back upstream to revise your plans: Action Plans >
Operating Plans > Strategic Plans
Planning is very dynamic must be flexible to change.
Recognize and reward good performance results
Brainstorm and change take corrective action on poor
performance results.

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 Automating the Process Evaluate

1. Active Strategy (www.activestrategy.com)

2. Corda (www.corda.com)
3. Corporater (www.corporater.com)
4. Rocket CorVu (www.corvu.com)
5. Cockpit Communicator (www.4ghi.com)
6. Biz Score (www.efmsoftware.nl)
7. Executive Dashboard (www.iexecutivedashboard.com)
8. PM Express (www.pm-express.com)
9. Strategy 2 Act (www.strategy2act.com)
10. 20 20 Software (www.cashfocus.com)
64
 Link Budgets to Strategic Plan Evaluate

The worlds best Strategic Plan will fail if it is not

adequately resourced through the budgeting process
Strategic Plans cannot succeed without people, time,
money, and other key resources
Aligning resources validates that initiatives and action
plans comprising the strategic plan support the strategic
objectives

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 What Resources? Evaluate
How to Link?

Every Action Plan should identify the following:

The people resources needed to succeed

The time resources needed to succeed
The money resources needed to succeed
The physical resources (facilities, technology, etc.) needed to
succeed

66
 Some Final Thoughts

Integrate all components from the top to the bottom:

Vision > Mission > Goals > Objectives > Measures >
Targets > Initiatives > Action Plans > Budgets.
Get Early Wins (Quick Kills) to create some momentum.
Seek external expertise (where possible and
permissible)
Articulate your requirements to senior leadership if they
are really serious about strategic execution

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