Strategic Management

Strategic Analysis

Strategic Development

Strategy Implementation
Implementing and Controlling
the Strategic Plan
What is the difference between
operations

and

projects?
 Operations
• The ongoing execution of activities that
produce the same product or provide a
repetitive service

• Example: The proposed strategic direction

 Projects
• A temporary endeavour with a beginning and
an end
• Creates a unique product, service or result
• Is progressively elaborated – (progressively
detailed and improved as the project is better
understood)

• Example: A Change Project to enable the new

strategic direction.
 Project Success Issues
Research by the Standish Group shows:

31% of projects are canceled before they ever get completed.

53% of projects will cost over 189% of their original estimates

16% of projects are completed within budget and on time.

 PERSPECTIVES ON
MANAGING CHANGE

Driving
Current forces Desired
State state

A Unfreeze Change Refreeze B

Restraining
forces

Source; Lewin 1941

 WHY DO CHANGE INITIATIVES FAIL?

• Not enough sense of urgency or pressure for change

• Failing to create a sufficiently powerful support base
• Not developing a clear vision
• Under-communicating the vision
• Permitting obstacles to block the new vision
• Failing to create short-term wins
• Not aligning structures, systems, policies and skills
• Neglecting to anchor changes firmly in the
corporate culture

Source: J.Kotter,Why transformation efforts fail, HBR, March-April 1995

EIGHT STEPS TO CHANGING
YOUR ORGANISATION

1. Establishing a Sense of Urgency

– Examining contextual realities
– Identifying and discussing crises,
potential crises or major opportunities
2. Forming a Powerful Guiding Coalition
– Assembling a group with enough power
to lead the change effort
– Encouraging the group to work together
as a team
3. Creating a Vision
– Creating a vision to help direct the
change effort
EIGHT STEPS TO CHANGING
YOUR ORGANISATION
4. Communicating the vision
– Using every vehicle possible to
communicate the new vision and strategies
– Teaching new behaviors by the example of
the guiding coalition
5. Empowering Others to Act on the Vision
– Getting rid of obstacles to change (training)
– Encouraging risk taking & nontraditional
ideas, activities and actions
6. Planning for and Creating Short-Term
Wins
– Planning for visible performance
improvements
 EIGHT STEPS TO CHANGING
YOUR ORGANISATION
7. Consolidating Improvements & Producing
Still More Change
– Change systems, structures and policies that
don’t fit the vision
– Reinvigorating the process with new projects
& themes
– Hiring, promoting & developing employees
who can implement the vision
8. Institutionalizing New Approaches
– Articulating the connections between the new
behaviors and corporate success
– Developing the means to ensure leadership
Source: J. Kotter,”Why transformation efforts
development and fail”,Harvard
successionBusiness Review, March April1995
More Practical Guidelines
on Implementation

Pages 494 and 495 in the Lynch Text

 Change Categories

Exploring Strategic Change by Julia Balogun, Veronica Hope Hailey and Gerry Johnson
 Change Categories
Adaptation – change which can be accommodated within the current paradigm
(central beliefs and assumptions) and occurs incrementally through staged
initiatives aimed at realigning the way the organisation operates.

Reconstruction – change which may be rapid and could involve a good deal of
upheaval in an organisation (e.g. major structural changes or cost-cutting
programmes), but which does not fundamentally change the paradigm. They are
about making organisations more efficient, or better at what they already do.

Evolution – is transformational change implemented gradually through different

stages and interrelated initiatives. It can be planned or forced transformation but
can also occur in an emergent manner.

Revolution – is fundamental, transformational change that occurs by using

simultaneous initiatives on many fronts, and often in a relatively short space of
time. It is more likely to be a forced, reactive transformation (sometimes referred
to as ‘crisis management’).
 Basic Implementation Process
(Lynch, 2009:Page 491)

Strategy Statement of the Resource

Formulation of
Choice Main Strategy Allocation and
Specific Plans
Objectives Budgeting

Monitoring and
Control Procedures
 Strategy Choice

Strategy Agreement (Lynch, 2009; p. 566)

 Communicate and clarify with key stakeholders

 Gain agreement

 Discuss resources for allocation

 Communicate and educate regarding vision and

goals
 Statement of
Main Strategic Objectives

 Strategic Framework Analysis (VMOST)

 Determine the nature and scale of change

(establish critical gaps)

 What changes?
Value Chain – activities and linkages

Firm Infrastructure: E.g. Leadership. Systems, Finance

Human Resource Management: E.g. the management of human resources,

recruitment, retention, productivity, motivation, quality and skills, capabilities,
relationships of staff

R&D, Technology, Innovation: The extent of capabilities in R&D, technology

Procurement: E.g. skills, capabilities, relationships, vertical integration

Inbound logistics: e.g. efficiency and effectiveness

Production / Operations: e.g. efficiency and effectiveness

Outbound logistics: e.g. efficiency and effectiveness

Marketing & Sales: e.g. skills, knowledge, brands, effectiveness, cross selling
opportunities, sales force size and geography

Service & Service Quality: e.g. customer satisfaction, retention, loyalty

 What changes?
McKinsey 7S Framework

Strategy: Porter, Ansoff etc. see Strategic Options...

Structure: The balancing of product, market, geographical, customer, project tensions,

centralisation versus decentralisation tensions. The way people, tasks, responsibilities,
accountabilities are organised. Hierarchy levels.

Systems: Control, support, communication, IT, reward, KM systems, etc. Balanced

Scorecard

Staff: The people in the org. – number, age, gender, satisfaction, motivation, retention,
productivity

Skills/ Competences: The skills and experience that the org needs and possesses

Style & Leadership: e.g autocratic vs democratic or participative; Position on leadership

grid

Shared values/ culture: The guiding beliefs of the people in the organisation about why
it exists and how it should operate; Handy’s task, power or role; Goffee and Jones
sociability/solidarity
What changes?
 What changes?

Leadership and Culture

Pages 599 – 621 in Lynch (2009)
 Leadership Styles

Which style(s) is/are appropriate?

 Who is the Strategic Leader?

Close the gap with regards to his/her leadership

ability (traits, style, EQ etc.)
(Leadership Analysis would have been done in Strategic Analysis - 7S)
 CHANGE LEADERSHIP STYLES

Type of change
Incremental Transformational
change change

Collaborative/ Participative Charismatic

consultative
Style of evolution transformation
change
leadership
Directive/ Forced Dictatorial
coercive
evolution transformation

Source: Dunphy and Stace, 1993

Hersey &
Blanchard
(1977)
 What is the desired culture
for the new strategy?
(Cultural Analysis would have been done in Strategic Analysis – 7S etc.)
THE ORGANISATIONAL
CULTURAL WEB

Stories Symbols

Rituals Power
& CULTURE
Structures
routines

Control Org.
systems structures

Page 610 in
Source: Johnson & Scholes. Exploring
Corporate Strategy (2002)
Lynch (2009)
 THE CULTURAL WEB

Routines and Rituals

The routine ways in which members of the organisation behave towards each
other and towards those outside the organisation. The rituals of organisational
life are the special events through which the organisation emphasises what is
important and reinforces “the way we do things around here”. Rituals can be
formal (e.g. award ceremonies) or informal (gossiping round coffee machines).
Stories
Stories told by members of the organisation to each other and outsiders. Stories
typically have to do with successes, disasters, heroes, villains and mavericks.
They are devices for telling people what is important in the organisation
Symbols
Logos, offices, cars, job titles, and commonly used terminology are all symbols
that become a shorthand representation of the nature of the organisation
 THE CULTURAL WEB

Power Structures
The most powerful individuals or groups in the organisation. Power might be
based on seniority, or it might have another basis – such as technical
expertise
Control systems
Control, measurement and reward systems (such as bonus schemes) that
emphasise what is important in the organisation
Organisational Structure
The formal organisational structure (e.g. hierarchical or flat) and less formal
systems such as the pecking order between business units and “old boys
networks”.
ORGANISATIONAL CULTURE AND STRUCTURE

Culture Diagrammatic Structure

representation

Power or club Web

Role Greek temple

Task Net

Person or
Existential/ Star
individualism constellation

Source: Adated from Handy (1976) Understanding Organistions, Penguin

TYPOLOGY OF
ORGANISATIONALCULTURES

• The Family / Support Culture

-based on relationships and intimacy

• The Eiffel Tower / Role Culture

- based on structure and hierarchy

• The Guided Missile / Achievement Culture

- based on performance and competence

• The Incubator
-fulfilment of the individual

Source: F. Trompenaar, Riding the Waves of Culture (1993)

ANOTHER MODEL ON CULTURE AND
STRUCTURE: THE SOCIAL ARCHITECTURE

High
Networked Communal
Sociability
(friendliness-
based in the heart)

Fragmented Mercenary
Low

Low High
Solidarity (Tasks and goals – based in the head)
Source: Goffee and Jones
 CULTURE
CULTURE AND CHANGE AND CHANGE
Cultural Advantages & Disadvantages

Culture Positives Drawbacks

• Friendly, caring
• High trust • Tolerance of poor performance
• Family feeling • Long & ineffective meetings
Networked • Commitment • Excuses
• Tolerance • Poor focus on competition
• Support each other • Lack of strategic focus

• Clarity of purpose • Relentless and ruthless

• Action/Execution focus • Heartless
• Winning • Internal enemies
Mercenary • Benchmark; continuous • Over-simplification
improvement
• Change adept • Missed opportunities
• Conflict management
CULTURE AND CHANGE

Cultural Advantages & Disadvantages (cont)

Culture Positives Negatives

• Individuals make themselves
valuable • In-fighting
Fragmented • External focus • Attack all ideas
• Be the best in your profession • Subversion
• Honour ideas not individuals • Lack of direction
• Tolerate diversity • Low learning
• Encourage creativity

• Commitment to organisation • Not confronting poor

• Sense of urgency performance
• Shared values • Cliques
Communal • Open communication • Political sub-processes
• Effective teamwork • Compliance
• Sense of continuity and purpose • Group-think
 Organisational Structure

What structure would support the new strategy?



Please justify...

Functional
Weak matrix
Balanced matrix
Strong matrix
Projectized
Outsourced, hybrids etc.
 Statement of
Main Strategic Objectives

 Translate corporate objectives into SBU objectives and

initiatives (SMART)

 Establish performance parameters (CSFs, KPIs, BSC)

 Establish Reward plan (HRM)

 Establish Communications plan (ISM)

Measuring and Controlling
Performance
A: airspeed indicator, B: attitude indicator, C; altimeter, D: turn coordinator, E: heading
indicator, and F: vertical speed indicator
 Main Strategy Objectives
The Balanced Scorecard
Kaplan R S and Norton D P (1996) “Balanced Scorecard: Translating Strategy into Action”
Harvard Business School Press

4 Financial perspective - includes measures such as operating income, return on

capital employed, and economic value added.

3 Customer perspective - includes measures such as customer satisfaction, customer

retention, and market share in target segments.

2 Process perspective - includes measures such as cost, throughput, and quality.

These are for business processes such as procurement, production, and order
fulfillment.

1 Potential perspective – (Learning and growth) includes measures such as employee

satisfaction, employee retention, skill sets, etc.
BSC?
 Objectives, CSFs, KPIs and Data

nd
Bocij P., Chaffey D., Greasley A., Hickie S., (2003) Business Information Systems. Europe: Prentice Hall. 2 Edition.
th
Laudon, K. and Laudon, J., (2002) Management Information Systems: Managing the Digital Firm. New Jersey: Prentice Hall. 7 Edition.
The Balanced Scorecard and Strategy Map for Southwest
Airlines

Kaplan R S and Norton D P (1996) “Balanced Scorecard: Translating Strategy into Action” Harvard Business School Press
The Balanced Scorecard

Cascaded Scorecards...
 Anthony's Triangle (1965)
Laudon, K. and Laudon, J., (2002) Management Information Systems:
Managing the Digital Firm. New Jersey: Prentice Hall. 7th Edition.
Communications Model
Stakeholder Power/Interest Grid
 STAKEHOLDERS

Pressure
groups Government
Customers Competitors
Outer circle

Managers Partners
Inner circle International
Media
bodies
Employees Suppliers

Local
Regulatory Shareholders community
bodies
 Stakeholder Power/Interest Grid

High power, interested people: these are the people you must fully
engage and make the greatest efforts to satisfy.

High power, less interested people: put enough work in with these
people to keep them satisfied, but not so much that they become bored
with your message.

Low power, interested people: keep these people adequately

informed, and talk to them to ensure that no major issues are arising.
These people can often be very helpful with the detail of your project.

Low power, less interested people: again, monitor these people, but
do not bore them with excessive communication.
COMMUNICATIONS
strategy - STRATEGY
3

Message

• Make it clear, compelling and simple

• Link message to the organisation - linking ‘big

picture’ to ‘little picture - and to specific
behaviour targets

• Mix of ‘Rich’ & ‘Lean’ communication methods

‘Rich’ = human contact/emotional (face-to-face & video)

‘Lean’ = Rational/tech content (booklets/email)
EFFECTIVE COMMUNICATION METHODS
Routine CHANGES Complex

Face to face Overly rich

(one to one or group) communication
causes confusion
Rich communication
for complex changes
Interactive
(e.g. telephone, video
conferencing) EFFECTIVE
Type of
Media COMMUNICATION
Personal 'memoing'
(e.g. tailored memos,letters) Routine communication
for routine change

General bulletins Too little information and

(eg circulars, announcement sensitivity leads to mistrust
on notice boards) and lack of commitment

Source: Based on R.H. Lengel and R.L Daft, The Selection of Communication Media as an Effective Skill.
The Academy of Management Executive, 1988, vol.2, no. 3, pp. 225–232.
SUMMARY POINTERS TO EFFICIENT COMMUNICATION

• Communication is not about the messages

sent but received

• There are different layers of

communication
depending on the needs of the recipient

• External and internal communication

messages have to be consistent

• avoid inconsistent messages

and walk the talk
 Formulations of Specific Plans

Decomposing objectives and initiatives into:

 Tasks
 Deadlines
 Responsibilities
Formulations of Specific Plans

Use Project Management

Tools and Techniques
PMBOK Framework from PMI
 Resource Allocating and Budgeting
Allocate using New Value Chain (HR, Cost Matrix
etc.), Core Competencies, 7S etc.
(please see p. 502 in Lynch (2009))
Cost Budgeting

8. Cost Budget
7. Management reserve
6. Cost baseline
5. Contingency reserve
4. Project
3. Control account
2. Work packages
1. Activities
Monitoring and Control Procedures

Importance:

Page 506 in Lynch (2009)

Monitoring and Control Procedures
The Balanced Scorecard
Kaplan R S and Norton D P (1996) “Balanced Scorecard: Translating Strategy into Action”
Harvard Business School Press

4 Financial perspective - includes measures such as operating income, return on

capital employed, and economic value added.

3 Customer perspective - includes measures such as customer satisfaction, customer

retention, and market share in target segments.

2 Process perspective - includes measures such as cost, throughput, and quality.

These are for business processes such as procurement, production, and order
fulfillment.

1 Potential perspective – (Learning and growth) includes measures such as employee

satisfaction, employee retention, skill sets, etc.
PMBOK Framework from PMI.org
 Quality Processes
Quality Planning

• Identifying which quality standards are relevant to the project

and determining how to satisfy them.

• Joseph Juran – Quality - Fitness of Use

• Edward Deming – Quality Improvement – Plan, Do, Check and Act
• Philip Crosby – Quality – Conformance to requirements
• Grade and quality

Wild, R., (2002) Operations Management. Sixth Edition. Continuum.

 Quality Processes
Quality Assurance
• Applying planned systematic quality activities to ensure
that the project employs all processes needed to meet
requirements (Kaizen)
• TQM – Total Quality Management Philosophy
encourages companies and their employees to focus on
finding ways to continuously improve quality of their
business practices and products.
• Pareto's Rule 20/80
• Process analysis, quality audits, knowledge base
• Recommended changes
• Recommended corrective action
 Quality Processes

Quality Control

Monitoring specific results to determine whether they

comply with relevant quality standards (variances from
BSC objectives) and identifying ways to eliminate causes
of unsatisfactory performance.
 Basic Implementation Process
(Lynch, 2009:Page 491)

Strategy Statement of the Resource

Formulation of
Choice Main Strategy Allocation and
Specific Plans
Objectives Budgeting

Monitoring and
Control Procedures
 Summary of
Implementation Process
Strategy Choice
Product of SFA analysis

Statement of the Main Strategy Objectives

Are there any specific changes in the VMOST?

SMART Objectives (Objectives, CSFs, KPIs and Data) extracted from BSC elements:
Financial perspectives
Customer/Market perspectives
Process perspectives
Potential/HR perspectives

Are there any specific changes to the SBU Value Chain activities/linkages?

Are there any specific changes to the SBU McKinsey 7S activities/linkages?

Leadership and Culture
Organizational Structure

Discuss supporting reward plan and communication plan to underpin the above
objectives.
 Summary of
Implementation Process
Formulation of Specific Plans (PM aspect of the implementation process)

Define the project scope (what will and will not be done)

Tasks
Work Breakdown Structure
Decomposing deliverables into smaller more manageable components
Breakdown by phase or deliverable

Deadlines
Illustrate Milestones and Tasks using a Gantt Chart

Project Responsibilities
Who is the Change Agent or Strategic Leader?
Who are the members of the Change Action Team?
Illustrate with a Responsibility Chart (and Project Organigram)
 Summary of
Implementation Process
Resource Allocation and Budgeting
Define required resources (Grant) and Cost using Value Chain, 7S Analyses and WBS etc.

Define Cost Budget for strategy project

(was this cost budget factored into the ROI (NPV) SFA analysis?)

8. Cost Budget
7. Management reserve
6. Cost baseline
5. Contingency reserve
4. Project
3. Control account
2. Work packages
1. Activities
 Summary of
Implementation Process
Monitoring and Control Procedures

Define Project Risks and Response Plan

Developing options and determining actions to enhance opportunities and to reduce threats
to project objectives
Threats
Avoidance (Eliminate the threat posed by an adverse risk)
Mitigation (reduced complexity, using a stable supplier)
Transfer (Deflect risk using insurance, warranties etc.)
Acceptance (Accept or retain consequences)

Opportunities
Exploit (e.g. availability of better resources to fast track)
Share (allocating ownership to third party who has expertise)
Enhance (by facilitating or strengthening the cause of the opportunity, targeting its
trigger)
Acceptance (Accept or retain consequences)
 Summary of
Implementation Process
Monitoring and Control Procedures

Define the Balance Scorecard for the Project (not the Strategic Direction BSC)

Financial perspectives
Customer/Market perspectives
Process perspectives
Potential/HR perspectives

Briefly define the Project Quality Plan for the Project BSC

Planning
Assurance
Control
Monitoring and Control Procedures

Discuss possible contingencies (emergent strategies) in handling deviations

from objectives, changes etc. (The iterative implementation process).
 Assignment Progress
This is just an example format...
Executive Summary
Task One
Introduction - Organisational Overview
Organisational Framework (VMOST)
External Analysis
Internal Analysis
SWOT
Strategic Fit Analysis - EVR Congruence and Gaps
2000 Words

Task Two
Strategy Proposal and Logic
Evaluation and Justification of Selected Strategy
Brief Discussion of Rejected Options
Statement of Main Strategy Objectives (VMOST, POT etc)
Formulation of Specific Plans for Implementation
Resource Allocation and Budgeting
Monitoring and Control Processes
Conclusion
2000 Words

Word count: 4000 words

MBA Toolbox
Strategic Environment – Market Dynamics
PESTEL Analysis and Scenarios
Five Forces Analysis
Industry Life Cycle Analysis
Four Links Analysis
Key Factors for Success Analysis
Competitor Analysis
Customer Analysis
Degree of Turbulence
Resource Audit
HRM
ISM
Operations
Marketing
Value Chain
Value System
McKinsey 7S Framework
VRIO Framework
Core Competencies
Distinctive Capabilities
Portfolio Evaluation
Generic Strategies
Leadership and Culture
Financial Analysis
Strategic Options / Business Expansion Matrix
SWOT Analysis
EVR Congruence and Gaps (Strategic Fit etc.)
Strategy Proposal and Logic, Rejected Options.
Evaluation and Justification of Strategy – SFA, NPV etc.
Statement of Main Strategy Objectives
Formulation of Specific Plans for Implementation
Hard, Soft Changes
Strategic Leadership and Culture
Project Management Methodologies
Resource Allocation and Budgeting
Monitoring and Control Procedures
Knowledge Management and Continual Learning
Prescriptive and Emergent Strategic Thinking
 The Presentation
Read pages 11-12 in module guide.

Use time management observing the mark weightings as a guide.

If possible, video tape presentation for group critique prior to actual presentation.

Rehearse, rehearse, rehearse.

55% of communications is non-verbal

(it is the most important aspect of a conversation)

Paralingual: Pitch and tone of voice also helps to convey a message

Use of appropriate body language

Google for presentation tips.

Strategies are means to ends.
Thompson and Martin (2001)
End of Module.