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© Management 1: The New Managers Course Strategic and Business Planning Alan Kennedy November 2013 © 2013 Alan W. Kennedy on behalf of Schulich Executive.

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Presentation on theme: "© Management 1: The New Managers Course Strategic and Business Planning Alan Kennedy November 2013 © 2013 Alan W. Kennedy on behalf of Schulich Executive."— Presentation transcript:

1 © Management 1: The New Managers Course Strategic and Business Planning Alan Kennedy November 2013 © 2013 Alan W. Kennedy on behalf of Schulich Executive Education Centre (SEEC). All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, recording, photocopying or otherwise, without written permission of the copyright holder

2 © About the Presenter Alan has been teaching strategy for the Schulich Executive Education Centre since His principal course is Strategic Management, a three day course on Situation Analysis, Strategic Planning, and Business Planning. In addition to being a member of the faculty for Management I, Alan also teaches in the Insurance Industry Leadership Program, a one week program for insurance industry executives. Alan is a frequent speaker on matters of strategy. Alans book, The Alpha Strategies – Understanding Strategy, Risk, and Values in Any Organization was published in February is now available at all online retailers and for free in pdf format at Alan is a Honor Roll member of the Canadian Association of Management Consultants. Alan received his degrees from Dalhousie University and served as Senior Vice President & General Counsel for both Oxford Development Group and Campeau Corporation and as a member of the Board of Directors for both companies. Alan Kennedy B.A. LLB. CMC Alan is a partner with Gibson Kennedy & Company, a Toronto consulting firm offering Canadian clients strategy counsel and competitive research services since Gibson Kennedy is the authorized correspondent in Canada for Kaiser Associates Inc., a Washington-based consultancy offering global competitive research services to North American based clients. Alans practice focuses exclusively on matters of strategy, risk, and capital projects planning and communication using The Alpha Strategies model he pioneered.

3 © The Days Objectives strategic planning differs from business planning stakeholder identification & expectations analysis factor in strategy decisions a business plan implements the intent of the strategic plan

4 Your Issues / what do you want to learn more about?

5 © Module One A Brief Introduction to Strategy & its History

6 The Issues in Strategy Source: Robert F. Felton and Pamela Keenan Fritz, The View from the Boardroom McKinsey Quarterly 2005 Special Edition: Value and Performance

7 June 4, A majority of leaders (64 percent) said the biggest frustration for managers is having too many conflicting priorities. -Most executives (54 percent) said they do not believe that their companys strategy will lead to success. -Most (53 percent) could not say their strategy is understood by employees and customers. -Only a third (33 percent) said they feel the companys core capabilities fully support the companys strategy. -Only 21 percent could say all of their businesses leverage their core capabilities.

8 Strategy is a description of a chosen course of action Our long term strategy is to be around for the long term. Our short term strategy is to not do anything that would screw-up our long term strategy Stanfields, The Underwear Company Truro, Nova Scotia Strategy Definition

9 © A Competitive Researchers Perspective on Strategy - 8 strategies are common to all organizations - 1 strategy is the organizations dominant strategy - 3 types of strategy are common to all organizations

10 10 8 strategies are the source of all subsequent implementation strategy and organization design

11 Origin of The 8 Strategies

12 The 8 Strategy Definitions Business Definition / Mandate Focus on positioning the business / on interpreting the mandate parameters RiskFocus on the unacceptable and ways to manage it GrowthFocus on type and rate of growth Financial Management Focus on sourcing, allocation, and management of capital and revenues R&D / TechnologyFocus on the creation and/or use of intellectual capital / technology Organization MgmtFocus on sourcing, allocation, and management of personnel Marketing / Communications Focus on identifying and capturing customers and clients (i.e marketing through to sales) Service Delivery / Production / Manufacturing Focus on fulfilling the marketing promise of value / relevance

13 The Generic Strategies Business Definition / Mandate Business Positioning: Niche, Specialty, Commodity Mandate: Narrow Interpretation; Middle-of-the-Road; Broad Interpretation Risk Focus: Internal; External; Both Management: Accept, Avoid, Transfer, Mitigate Growth Type: Internal, External (acquisitions, partnerships, alliances, joint ventures) Rate: Bigger, Smaller, No Change Financial Management Sourcing: Capital markets, debt, equity, self-funding Allocation: Strategies; Business Units Management: Performance; Control, Both R&D / TechnologyFollower, Leader, Adapter Organization Mgmt Sourcing: Internal; External Allocation: Employee; Contract; Outsourcing Management: Entrepreneurial; Bureaucracy; Adhocracy; Centralized, Decentralized Marketing / Communications Identifying: (ie. Marketing): Product / Service; Price; Place; Promotion Capturing: (ie. Sales): Targeting; Approaching; Pitching; Overcoming Objections; Closing; Follow-Up Service Delivery / Production / Manufacturing Delivering the Promise: Needs / Requirements; Inputs; Production; Quality; Delivery; Follow-up (Warranty)

14 Management 1 Course Structure 14 The 8 Strategies Wednesday Business Definition / Mandate Risk Growth Financial Management Thursday R&D / Technology Organization Management Monday, Tuesday, Friday Marketing / Communications Tuesday Service Delivery / Production / Manufacturing

15 Understanding Current Strategy

16 © Module Two How strategic planning differs from business planning

17 3 types of strategy are common to all organizations Alpha is the one strategy which leads the organization and sets its character. e.g. Nike is Marketing Influencers are the three strategies which most closely guide and constrain implementation of the Alpha and the remaining four strategies, the Enablers Enablers are the remaining strategies

18 © Examples of Dominant Strategy WalMart, Stantec, McDonalds IBM Pepsi, Coca-Cola, Nike, The Bay, United Way CHMC, Bank of Canada, RCMP, Sun Life, OTPP, CRA Growth Business Definition (but not Mandate) Marketing / Communications Risk Organization Dominant Strategy Toyota, FedEx, Amazon, many Hospitals, much of Government Service Delivery / Production / Manufacturing Bank of Montreal, Ontario Financing AuthorityFinancial Management Google, Intel, NASA, NRCR&D / Technology Frank Gehry ArchitectsOrganization Management

19 How are your strategies organized? EnablersInfluencersAlpha

20 The AlphasBlackberry Business Definition To be the global leader in wireless data communications Risk To protect our intellectual property and to protect network security and integrity Growth To focus on expanding our customer and subscriber base through marketing efforts, strategic alliances, and acquisitions Financial Management To access capital markets through TSX / NASDAQ listings Technology To focus research on broad market applications for products derived from the existing technology base. Organization Mgmt To use the strength of market position and value proposition to enable HR pull potential employees and to leverage proximity and relationship with University of Waterloo Marketing To encourage the adoption of our platform by wireless network service providers globally and their customers, and to focus on licensing components of the BlackBerry platform to key handset and service vendors Manufacturing To deliver wireless data security and network reliability Blackberry

21 Growth Risk Business Definition Financial Management Organization Management R&D / Technology Marketing EnablersInfluencersAlpha Manufacturing Blackberry

22 The AlphasTarion Strategic Plan MandateAdministration of the ONHWP Act. Risk Use of insurance industry practices and regulatory authority to manage risks to new homebuyers GrowthRise and fall with the new home building industry cycles Financial Use of insurance industry capital reserving practices; revenues from fees from sale of warranties and from builder licensing TechnologyEnable management productivity; e.g. call center, web-based services Organization Regulator decisions are isolated from interference by the Board or the Insurance function MarketingTo educate new home buyers and home builders Service Delivery To deflect risk away from the program onto builders

23 Growth Risk Mandate Financial Management Organization Management R&D / Technology Marketing EnablersInfluencersAlpha Service Delivery

24 The 8 StrategiesStrategy Description Alpha Influencer Enabler Business Definition / Mandate How is the organization positioned? What is the mandate? - Risk How are risks identified and managed ? - Growth How does the organization grow? - Financial How are the finances managed? - R&D / Technology What is the focus of R&D / Technology ? - Organization Where are people sourced; how are responsibilities and authority delegated; what is the culture i.e. alpha? - Marketing / Communications How does the organization identify and capture customers / the perception of value? - Service Delivery / Production How are products / services are produced? - The One-Page Strategic Plan

25 Module Three How stakeholder identification & expectations analysis factor in strategy decisions

26 The Facts that Support Strategy Decisions Customers (Users) & Markets (Need Demand) Industry Dynamics Competitors Trends Best Practices Stakeholder Expectations Current Strategy

27 Stakeholder TypesActual Stakeholder Names The Authority Group Those Stakeholders who approve the plan and authorize implementation The Involve Group Stakeholders who should be involved because of the role they will play in implementation The Inform Group Stakeholders who need to be told what to do so that their actions are consistent with implementation The Consider Group Any Stakeholders not falling in any of the above categories and who could have a response to implementation Stakeholder Identification

28 © Expectations Are Widely Used for Individual Planning Exceeding Expectations Meeting Expectations Not Meeting Expectations x 28

29 Expectations in Public Sector Planning

30 Cabinet Strategy Cabinet Implementation Expectations Ministry Strategies To Satisfy Expectations Business Plan Detail

31 Boeing Goal Flowdown / Expectations Process See:

32 Canadian Military Use of Expectations Based Planning a.k.a. ExpectationsSource: See:

33 The 3 Levels of Expectations Rigid Clear & Rigid Expectations Set Across all 8 Strategies Do Your Own Thing Usually only 2 or 3 Expectations Identified Moderate Expectations not set for 3 or 4 the 8 Strategies Which level applies to you?

34 The 8 Strategies Expectations Imposed on your function / department / business unit Business Definition / Mandate What is the mandate of the function / business unit / department ? - Risk What expectations are imposed by risk? - Growth What expectations are imposed by growth? - Financial Management What expectations are imposed by financial management? - R&D / Technology What expectations are imposed by R&D / Technology? - Organization Management What are the expectations are imposed by Organization Management? - Marketing / Communications What expectations are imposed by marketing / communications? - Service Delivery / Production What expectations are imposed by service delivery / production? - Tell us about your functional area

35 © Module Four How business plans implement the intent of the strategic plan

36 Building the Business Plan You have just been made the manager of a facility within your organization. Which expectations seem to be the most important achieving success and what would be your plan to meet those expectations? The 8 StrategiesExpectations imposed on the operator Business Definition-To offer fast food services within a hospital Risk-To comply with all mandated health and safety policies and procedures Growth- To grow the per capita spend Financial -To follow mandated reporting requirements -To achieve imposed margin expectations -To make all required remittances to the VP Finance of the hospital on time Technology- To use mandated information systems Organization -To maintain a staff of 25 – 30 to be able to run the location 24/7 -To develop a customer-centric team -To hire and train employees to deliver to mandated service standards -To comply with the Collective Bargaining Agreement at all times Marketing- To follow all mandated promotions Service Delivery -To be a 24 / 7 operation -To follow all mandated processes for service delivery -To deliver to mandated quality standards -To offer all mandated products and services

37 Pros & Cons Analysis Expectation: Pros Cons Expectation: Pros Cons 37

38 Building the Action Plan – a Visual Long Term Today E A B D C F G StepsWhatHowWhoScheduleMetricsBudget 1.A to B - 2.B to C - 3.C to D - 4.D to E - 5.E to F - 6.F to G - Short Term

39 Seeing the Plan as the Big Picture Today E A B D C F G Short Term Mid Term Long Term

40 © The Days Objectives strategic planning differs from business planning stakeholder identification & expectations analysis factor in strategy decisions 3. how a business plan implements the intent of the strategic plan

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