Turning Up Each Day Is Not Enough You Need A Strategic Plan!!

Transcription

1 Turning Up Each Day Is Not Enough You Need A Strategic Plan!! Michael Riley, Project Manager: Strategic Property Waitakere City Council

2 How many people have been involved in preparing a strategy of some kind? So who would like to explain what the word strategy means? (You can t use the word plan, otherwise you couldn t have a strategic plan )

3 The word Strategy comes from the Greek Strategos, which means The Art of Generals. Knowing this gives us a better understanding of what a strategy really is

4 The Art of Generals is to develop a sequence of actions 1. To get us to there ; while/and 2. Achieving some defined objective; and while 3. Dealing with environmental impacts. [My definition]

5 Many Strategic Plans are prepared for a specific purpose, and need to be produced to a tailored format. Today, however, we will learn some of the popular strategic planning tools and, in the process, better understand what we are doing when we prepare A Strategic Plan

6 First, it is important to understand that there are often many different strategic choices. Not only are we seeking a way forward, we are seeking the way forward that best meets our objectives. We call the range of choices the Strategy Landscape.

7 Whether you are developing a Military Strategy, a Business Plan or planning a Strategic Property Project, the questions are the same 1> Who are we/how did we get where we are today?

8 Whether you are developing a Military Strategy, a Business Plan or planning a Strategic Property Project, the questions are the same 1> Who are we/how did we get where we are today? 2> Where are we now?

9 Whether you are developing a Military Strategy, a Business Plan or planning a Strategic Property Project, the questions are the same 1> Who are we/how did we get where we are today? 2> Where are we now? 3> Where do we want to be?

10 Whether you are developing a Military Strategy, a Business Plan or planning a Strategic Property Project, the questions are the same 1> Who are we/how did we get where we are today? 2> Where are we now? 3> Where do we want to be? and 4> How do we get there?

11 Sometimes, we want to answer these questions by including information about what our competitors are doing and planning knowing that they will be learning about us, too

12 But enough of Dads Army, and on to the tools we can use in Strategic Planning

13 Part One of our plan is Where Did We Come From?

14 This section of our strategic plan is a precis of how we got to where we are now To answer the first question - Who Are We? - we simply need to document key milestones of our history, either in prose or bullet-point form. It is essential, however, that by doing so, we understand where we came from. For example, when setting up a roadside fruit stand, we could be: A> The owner of a successful fruit orchard who wants to sell some of the products from it for extra cash; or B> Someone who has just been laid-off from an office position and has no other income. Strategic Plans developed from the two different perspectives will result in very different goals & action plans.

15 Part Two of our analysis is Where Are We Now? We have a variety of tools at our disposal. We will look at four of the most common: 1. Governance/Constitutional Analysis. 2. PESTLE Analysis, which leads to: 3. SWOT Analysis. 4. Porter s Five Forces Analysis. The important thing is to conclude this part of the strategic plan with an understanding of the environment in which we operate and our place in that environment.

16 Governance/Constitutional Analysis You won t find this one in the textbooks. I began to include it after realising that governance structures and strategy are intertwined. Formal or informal, highvalue or low-margin; the way we control ourselves now has major implications for our future destiny. But how do we carry out such analysis?

17 Governance/Constitutional Analysis Here s an example: Two women each marry one of a set of twins. The twins are physically and emotionally identical. Based on what you can see, which bride has chosen well?

18 Governance/Constitutional Analysis Now, let s consider the thinking/governance you can t see: Twin A loves the finer things in life. His governance policy is live now, pay later. He maxed-out the credit card for the wedding and has no assets. Twin B s governance policy is careful spending. He paid cash for his wedding; it s frugal because everything he owns is tied-up in property investments. Understanding governance can change our perception of the reality.

19 Governance/Constitutional Analysis This is a Social Network Diagram. It plots the connectivity between people and entities. You can do something similar to help you understand how governance is carried out in organisations or projects. In the organisational chart, Bill could be the CE and the holder of authority, but the Social Network Diagram shows Bob with more influence

20 Governance/Constitutional Analysis You can also learn a lot about governance by analysing the founding documents of the organisation (or country). What do they tell you about objectives? What things are revered by the founders?

21 Next, the PESTLE analysis tool PESTLE is an acronym for Political, Economic, Societal, Technological, Legal and Environmental. What impacts are there from each of these areas? When we have a comprehensive list of the impacts, we are much better able to carry out the next step the SWOT analysis.

22 We use the PESTLE data for SWOT analysis SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. It is arguably the most well-known analysis tool for strategists, however it is often misused. SWOT is designed to give us an understanding of how we presently respond to our environment, and what we can do to change that...

23 Strengths and Weaknesses are INTERNAL Strengths are those things we do well that our (potential) competitors do not do so well... Weaknesses are those things we do less well than our (potential) competitors...

24 Opportunities and Threats are EXTERNAL Opportunities are potential positive occurrences that could benefit ANYONE IN THE SAME INDUSTRY OR ENVIRONMENT... Threats are potential negative occurrences that could detrimentally affect ANYONE IN THE SAME INDUSTRY OR ENVIRONMENT...

25 Finally, the Porter s Five Forces analysis tool In the late 1980 s, Professor Michael Porter developed a theory of forces acting against organisations. At first, it was widely lauded. Later, critics said it was too simplistic. It is simplistic, but given its purpose of simplifying a very complex network of market forces, it shouldn t be over-judged.

26 Porter s Five Forces Analysis Simply, for any given organisation or entity, the following forces will be acting in some way: 1. Threat of New Entrants (potential competition); 2. Threat of Substitutes (that might eliminate or reduce the need for your service); 3. Bargaining Power of Suppliers (who may use that power to take more than their share of your profits); 4. Bargaining Power of Purchasers (who may use that power to hold back some of your fair income); 5. The Rivalry that already exists within the existing industry. We need to consider our ability to build or maintain a strong position against these market forces. With lateral thought, you can find a variation of these forces in many types of strategic analysis.

27 Part Three of our plan is Where Do We Want To Be?

28 This section of our strategic plan will reveal the gap between where we are and where we would like to be

29 Most of our research has already been done. We still need to do a Stakeholder Assessment Again, many people carry out a Stakeholder Assessment without really understanding why. Not only do we need to know WHO has an interest in what we are doing, but, more importantly, WHY they do.

30 Stakeholders are people (or entities) that will affect, or could be affected by what we do. Let s go back to our beggar in the opening slide. Even he has stakeholders. His stakeholder analysis could look like this... STAKEHOLDER RELATIONSHIP TO ME Local Council Gives me permission to beg Police Allow me to beg Protect me while I beg Public Provide me with sympathy Provide me with an income

31 Stakeholders are people (or entities) that will affect, or could be affected by what we do. Let s go back to our beggar in the opening slide. Even he has stakeholders. His stakeholder analysis could look like this... STAKEHOLDER RELATIONSHIP TO ME Local Council Gives me permission to beg Police Allow me to beg Protect me while I beg Public Provide me with sympathy Provide me with an income

32 Now we have enough information to decide the best strategic direction for us to take. We know about our industry, competition/alternatives, and who/what has an interest in what we are doing. We have enough information to prepare: A Vision Statement; and a Mission Statement.

33 A Vision Statement describes what you want to achieve as an end goal. A Mission Statement describes what you intend to do to help you achieve your Vision.

34 Good examples of the subtle difference between these two are the third-world charities, like TEAR Fund. Their Missions typically relate to providing food and healthcare to impoverished refugees. Their Visions, however, are to eliminate the need to do so.

35 Some people believe that developing Vision and Mission Statements is not worth the effort, but if you cannot describe your goal, how will you ever achieve it?

36 Part Four of our plan is How will we get there? We know: Where we came from; Who we are and the sector we operate within; Our ultimate goal(s) and medium-term objectives. Now we need a list of actions to get us there.

37 Critical Success Factors Critical Success Factors are those things that we must do to reach our goals. There is no easy way to develop a list of them other than consensus decision-making. One way is to list all of the things that could happen to stop you reaching your goals then list the things you would do to ensure those things don t happen.

38 The Critical Success Factors for our beggar might look like this CSF TABLE Attract the sympathy of others. Find a good place where lots of people congregate. Make myself visible. Make it easy for people to give me their money.

39 Action Plan In order to achieve our Critical Success Factors, we develop a list of actions. Again, this is best achieved by consensus decisionmaking, and (which we have achieved by now) our in-depth understanding of our goals and the environment we are working in. We take our list of Critical Success Factors, and develop actions for each one.

40 For our beggar, it may look like this CSF TABLE Attract the sympathy of others. ACTIONS Look poor and hungry Find a cause that will appeal to people's sympathy Find a good place where lots of people congregate. 8am to 10am, then 4pm to 6pm, stand outside the transport centre. 10am to 4pm, stand outside the supermarket. Make myself visible. Get a brighter beanie, without looking happy. Get a brighter coat, without looking happy. Use contrasting colours on my sign. Make it easy for people to give me their money. Get a bigger donation box (bucket?) Periodically go to the bank, so I never look too rich.

41 We now have a Strategic Plan We have followed a process of learning about who we are, how we got to where we are, where we want to be, and developed a list of specific actions to take us there. In time, we will have trained our minds to think differently, and we will no longer need to follow a formal process it will come naturally. The process we have learned is very flexible; it can be used to develop a formal strategy, it can be used in problem-solving, or even in project planning.

42 And for those who still prefer not to plan a quote from Sir John Harvey Jones the famous Troubleshooter Planning is an unnatural process. It is much more fun just to do things. And the really good thing about not planning is that failure comes as a complete surprise, and is not preceded by prolonged periods of worry and depression.

43 So, Now You Know: Turning Up Each Day Is Not Enough You Need A Strategic Plan!! Thank You.