1. NAWBO-LA PEAK LEADERSHIP ACADEMY Management Systems Consulting Corporation 10990 Wilshire Blvd. Suite 1420, Los Angeles, CA 90024 (310) 477-0444 www.mgtsystems.com Session 2: Strategic Organizational Development Planning – Analyzing Survey Results and Creating the Foundation of Your Plan

2. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 2 PURPOSE: Help you understand how to use the “data” you’ve collected as input to your plan. Begin developing the foundation of your company’s plan. Strategic Organizational Development Planning – Analyzing Survey Results and Creating the Foundation of Your Plan OBJECTIVES: 1.Identify your company’s strengths and opportunities to improve – based on an analysis of Environmental Scan and Organizational Assessment “data.” 2.Identify the extent to which your company is experiencing “Growing Pains.” 3.Develop the foundation of your company’s strategic plan.

3. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 3 Strategic Planning A Tool For Strategic Organizational Development

4. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 4 What is a Strategic Plan? A Strategic Plan is a written statement of the future direction and goals of an organization based upon an assessment of: its current strengths and limitations for each of its key result areas the current and anticipated future environment in which it will operate

5. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 5 Three Aspects of Strategic Planning Strategic Planning Process Strategic Issues Elements of a Strategic Plan

6. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 6 Strategic Planning Flow Diagram 1 ENVIRONMENTAL SCAN  Market Analysis  Competitive Analysis  Trend Analysis 2 ORGANIZATIONAL ASSESSMENT  Culture  Management Systems  Operational Systems  Resources  Markets and Products 3 STRATEGIC ISSUE RESOLUTION Business Foundation Issues Strategic Organizational Development Issues 5BUDGETING 4 STRATEGIC BUSINESS PLAN Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans 6 QUARTERLY MANAGEMENT REVIEW  Reports  Meetings

7. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 7 Market Analysis Who are my customers or clients? What are their needs? How do they purchase my services? What is value for them?

8. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 8 Competitive Analysis Who are my competitors? What are their strengths and limitations? Can I develop a competitive advantage?

9. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 9 Trend Analysis What are the relevant trends in the environment? What are the opportunities and threats implied by those trends? What goals should be set to deal with these opportunities and/or threats?

10. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 10 Environmental Scan Workshop

11. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 11 Instructions Identify the 1-3 most significant findings from your “Environmental Scan.” These findings might relate to: oSpecific strengths or limitations possessed by your competitors oSignificant opportunities or threats presented by specific trends oSignificant opportunities or threats to your business created by your customers’ needs/changing needs and the extent to which your products/services meet these needs For each key finding, identify one or more strategies for maximizing the opportunity or minimizing the threat. Working with a Partner or Team of Three: On the worksheet that appears on page 5 of the Strategic Planning Workbook:

12. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 12 Environmental Scan – Analysis of Results Key Finding Strategies to Promote Success: Maximizing Opportunities and Minimizing Threats

13. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 13 Environmental Scan – Analysis of Results Sample Key Finding Strategies to Promote Success: Maximizing Opportunities and Minimizing Threats Technology – PowerPoint makes it easy for companies to do the work we used to do for them on their own. Make the value-add/creative aspects of what we do more “transparent.” Focus on mid- to small-companies (where few competitors focus), versus larger players. Key competitors are outsourcing work to India, thus lowering costs. Explore how we might profitability use outsourcing and maintain our quality. Sell the “ease of use.”

14. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 14 Strategic Planning – Organizational Assessment 1 ENVIRONMENTAL SCAN  Market Analysis  Competitive Analysis  Trend Analysis 2 ORGANIZATIONAL ASSESSMENT  Culture  Management Systems  Operational Systems  Resources  Markets and Products 3 STRATEGIC ISSUE RESOLUTION Business Foundation Issues Strategic Organizational Development Issues 5BUDGETING 4 STRATEGIC BUSINESS PLAN Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans 6 QUARTERLY MANAGEMENT REVIEW  Reports  Meetings

15. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 15 The Organizational Assessment: What are Your Key Strengths and Limitations at Each Level in the Pyramid of Organizational Development? Personnel: Hiring Compensation Corporate Culture Values Beliefs Norms Management Systems Planning Organization Management Development Perf. Mgmt. Operational Systems Resources Management Products & Services Markets Accounting: Billing Payroll Production: Shipping Marketing: Selling Financial Resources Technological and Physical Resources Human Resources Develop Products (Services) Define Market Segments and Niche

16. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 16 Organizational Assessment Workshop (Part I) The Growing Pains and Organizational Effectiveness Survey Results and Analysis

17. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 17 Growing Pains Survey

18. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 18 What Are Growing Pains? Problems which occur as a result of inadequate organizational development in relation to business size and complexity. A common set of symptoms that something has gone wrong in the process of organizational development. A signal of the need to make the transitions from one stage of organizational development to the next. A set of leading indicators of future financial performance.

19. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 19 Stages of Growth (US $) Integration$1 billion +$500 million +$333 million + II IV VI Stage I III V VII Expansion Consolidation Institutionalization Description New Venture Professionalization Diversification Decline Resources and Operational Systems $1 to $10 million $500,000 to $5 million $300,000 to $3.3. million – Size of Organization (Sales)– Markets and “Products” Less than $1 million Less than $500,000 Less than $300,000 Management Systems $10 to $100 million $5 million to $50 million $3.3 million to $33 million Corporate Culture $100 to $500 million $50 million to $250 million $33 million to $167 million Critical Development Area ManufacturingDistributionService Replication of the Cycle $500 million to $1 billion $250 million to $500 million $167 million to $333 million RevitalizationAny Size

20. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 20 Ten Classic Growing Pains ●People feel that there are not enough hours in the day. ●People are spending too much time “ putting out fires. ” ●Many people are not aware of what others are doing. ●People lack understanding of where the firm is heading. ●There are too few good managers. ●Everybody feels “ I have to do it myself if I want to get it done correctly. ” ●Most people feel our meetings are a waste of time. ●When plans are made, there is very little follow-up and things just don ’ t get done. ●Some people feel insecure about their place in the firm. ●The firm has continued to grow in sales, but not in profits.

21. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 21 Growing Pains Survey Growing Pains Not enough hours Putting out fires Not aware of others Don’t understand firm’s direction Few Good Managers I have to do it myself Meetings are a waste of time Little follow-up on plans Insecure about place in the firm Growth in sales not profits To A Very Slight Extent To A Slight Extent To Some Extent To A Great Extent To A Very Great Extent

22. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 22 Growing Pains Scoring Interpretation Score RangeColorInterpretation 10-14GreenEverything is “OK” 15-19YellowSome things to watch 20-29OrangeSome areas need attention 30-39RedSome very significant problems 40-50PurpleA potential turnaround situation

23. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 23 Growing Pains by Organizational Stages Of Growth 0 5 10 15 20 25 30 35 40 45 50 0123456 Organizational Size (Stages of Growth) (Orange) (Red) (Orange) Growing pains High Low

24. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 24 Instructions In the first column, identify the aspects of your company’s infrastructure that might be contributing to these results. In the second column, identify what you might do or do differently to address the issues identified in the first column and, in turn, improve your company’s effectiveness. Working with a Partner or Team of Three: On the worksheet that appears on page 11 of the Strategic Planning Workbook:

25. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 25 Organizational Assessment – Growing Pains Results Analysis Infrastructure “Problems” The Might Be Contributing to Results Strategies to Promote Success: Addressing Growing Pains “Problems”

26. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 26 The Management Systems Organizational Effectiveness Survey©

27. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 27 Organizational Effectiveness Survey © (OES) ●The Management Systems Organizational Effectiveness Survey © is a validated instrument. ●The survey consists of 65 items that measure the extent to which an organization has developed the systems and structures needed to support its growth and/or stage of development. ●For an organization to have the highest probability of success over the long-term, it needs to effectively manage all six levels in the Pyramid of Organizational Development plus Financial Results, individually and as a system.

28. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 28 Survey Scoring Items on this survey are scored on a 5-point Likert scale, with the following meanings: ScoreMeaning 1To a Very Slight Extent 2To a Slight Extent 3To Some Extent 4To a Great Extent 5To a Very Great Extent

29. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 29 To a Very Slight ExtentPurple1.0-1.9 To a Slight ExtentRed2.0-2.9 To Some ExtentOrange3.0-3.9 To a Great ExtentYellow4.0-4.4 To a Very Great ExtentGreen4.5-5.0 InterpretationColorScore Range OES Mean Score Interpretation

30. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 30 Scoring Interpretation This report presents four different types of scores: –Mean score is a standard statistical “average” score on a 5-point (Likert) scale. –% Favorable = (# respondents with scores of ‘4’ or ‘5’)/(Total # respondents) –% Neutral = (# respondents with scores of ‘3’)/(Total # respondents) –% Unfavorable = (# respondents with scores of ‘1’ or ‘2’)/(Total # respondents)

31. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 31 Instructions In the first column, identify your company’s most significant strengths, as suggested by these results. In the second column, identify you company’s most significant limitations (or opportunities to improve), as suggested by these results. In the third column, identify what you might do to maximize your company’s strengths (to create a competitive advantage) and minimize your company’s limitations to support long-term growth and success. Working with a Partner or Team of Three: On the worksheet that appears on page 12 of the Strategic Planning Workbook:

32. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 32 Organizational Assessment – Organizational Effectiveness Survey Results Analysis Most Significant Strengths Most Significant Limitations (Opportunities to Improve) Strategies to Promote Success: Maximizing Strengths and Minimizing Limitations

33. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 33 Organizational Assessment Workshop Analyzing Your Planning Survey Results

34. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 34 Instructions Identify the 1-3 most significant findings from the planning survey as they relate to your “Organizational Assessment.” Specifically, what are the key strengths and limitations (or opportunities to improve) suggested by Planning Survey results? For each key finding, identify one or more strategies for maximizing the strength or minimizing the limitation. That is, identify what you might do or do differently to promote the long-term success of your business. Working with a Partner or Team of Three: On the worksheet that appears on page 13 of the Strategic Planning Workbook:

35. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 35 Organizational Assessment – Planning Survey Results Analysis Key Finding Strategies to Promote Success: Maximizing Strengths and Minimizing Limitations

36. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 36 Organizational Assessment – Planning Survey Results Analysis Key Finding Strategies to Promote Success: Maximizing Strengths and Minimizing Limitations Not enough qualified people.Focus on recruiting. Develop more formal training plans. Client needs and products/services – the product is “me.” Develop a strategy to use others to leverage me in key clients – one that clients will buy. Accounting system does not provide timely information or information I can use. Identify and implement a system that will meet my short- and long-term needs.

37. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 37 Strategic Planning Flow Diagram 1 ENVIRONMENTAL SCAN  Market Analysis  Competitive Analysis  Trend Analysis 2 ORGANIZATIONAL ASSESSMENT  Culture  Management Systems  Operational Systems  Resources  Markets and Products 3 STRATEGIC ISSUE RESOLUTION Business Foundation Issues Strategic Organizational Development Issues 5BUDGETING 4 STRATEGIC BUSINESS PLAN Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Objectives and Goals Action Plans 6 QUARTERLY MANAGEMENT REVIEW  Reports  Meetings

38. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 38 Business Definition A broad statement of what business the firm is in that acts as a lens through which to view future strategies. – Who are our customers? – What are their needs? – How do they buy? – What is value to them? Addresses the Questions:

39. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 39 Sample Business Definitions Starbucks Starbucks retail operations is in the business of providing a total, quality coffee experience to a Tier I and Tier II customer. This is accomplished through a range of innovative, flexible business concepts tailored to the given customer’s needs in terms of take-out, café, and retail. Techlink Techlink is in the business of partnering with the management of Fortune 1000 and high growth companies ($100M to $10B) to build and implement information technology business solutions for sustainable business advantage.

40. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 40 A broad, measurable, time-dated statement of what the organization wants to or needs to become by the end of the planning period. Strategic Mission

41. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 41 Sample: Starbucks Strategic Mission To establish Starbucks as the leading retailer and brand of To coffee in North America by the year 2000, by creating distinctive daily coffee experiences for our customers wherever they live, work or play. $2 Billion in revenue 2000 Stores by 2000 $2 Billion + 2000 = 2000

42. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 42 Session Follow-Up and Preparation for the Next Session Work with other members of your team, as appropriate, to complete the analysis of your Growing Pains, Organizational Effectiveness, and Planning Survey Results. The end point of this analysis should be your list of “strategic responses.” (Strategic responses will be input to developing Objectives and Goals during our next session). “Finalize” your Business Foundation – Business Concept and Strategic Mission. Read Chapter 8 and Chapter 10 in Growing Pains.

43. NAWBO-LA PEAK LEADERSHIP ACADEMY Session 2 © Management Systems Consulting Corporation, 1989. Revised 2007. All rights reserved. 43 Please note that all of the materials in this slide presentation are the proprietary intellectual property of Management Systems Consulting Corporation and may not be reproduced or otherwise distributed without written permission. For further information about reproduction rights for materials in this presentation, please contact: Management Systems Consulting Corporation 10990 Wilshire Blvd., Suite 1420 Los Angeles, CA 90024 (310) 477-0444 www.mgtsystems.com