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StrategyDriven Strategic Anaysis Best Practice Article

Strategic Analysis Best Practice 3 – Identify the Hidden Drivers

StrategyDriven Strategic Analysis Best PracticeOrganizational alignment to common goals suggests executive, manager, and employee motivation is largely driven by its strategic plan. However, there are likely some additional, hidden performance drivers unintentionally created by the organization's processes or embedded as an integral component of the organizations' history and culture.

 
 
 
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StrategyDriven Decision-Making Forum

For better or worse, our decisions and those of the other members of our organization define today’s realities and tomorrow’s outcomes. In a world that is becoming increasingly knowledge based, more and more members of an organization are making impactful decisions every day; thereby extending decision-making’s importance from the executive suites to the desks of the vast majority of professionals.

Decision-making can be categorized based on the time frame in which associated actions will yield observable results. Near-term decisions are often supported by predetermined guidelines to enable more rapid decision-making while long-term decisions, clouded by the ever increasing uncertainty of changing conditions, rely more heavily on broad philosophical principles and decision-maker experience. The four general decision-making categories are:

Near-Term Decisions: decisions supported by policies, procedures, schedules, and regulatory guidelines

Category One: immediate actions taken in response to emergent conditions as directed by procedure. These decisions seek to seize advantage of momentary opportunities or avoid adverse consequences associated with rapidly changing conditions. Decisions of this type should be supported by procedural guidance whenever possible to improve consistency and predictability of response; thereby minimizing the organization’s risk exposure. Examples include: buying or selling of commodities when a target price is reached and actions taken in response to changing operating system conditions.

Category Two: day-to-day choices regarding activities and resource allocations. These decisions have immediate impact on the organization and may have unrecognized or less predictable long-range impacts. Decisions in this category are frequently supported by pre-established performance standards, policies, and schedules. Examples include: daily work scheduling and task assignment and procurement choices between vendors for a one-time purchases.

Long-Term Decisions: decisions made in the absence of procedural guidance and shaped by market trends, regulatory policies, and societal norms

Category Three: intermediate range decisions made in response to more slowly evolving trends where it is believed a particular desired outcome may be achieved in the days, weeks, or months ahead if a particular course of action is pursued today. Decisions in this category may have both near- and long-term impacts on the organization. While not directly supported by policies, procedures, or regulatory guidelines, these decisions often leverage guiding principles or intent to establish a target end state. Examples include: decisions made in response to slowly degrading equipment where failure is likely, vendor selection where contracts will be entered into for annualized periods, equipment leases other than hourly or daily rentals, monthly scheduling, and hiring and termination decisions for first line management positions and below.

Category Four: long-range or strategic decisions define near- and long-term actions seeking to achieve results that will be years in the making. While influenced by the organization’s mission, vision, values and regulatory policies, these decisions are largely shaped by broader market trends. Subsequently, decisions in this category have the highest degree of uncertainty because of their long time horizon and the increasing uncertainty associated with market prediction over time. Examples include: construction of new facilities, major equipment replacements, expansion of product lines, mergers and acquisitions, and hiring and termination decisions for senior managers and executives.

Regardless of their impact time frame and the immediacy in which they are made, all decisions go through a similar process that begins with condition recognition and ends in action. Phases of decision-making include:

Identification Phase: condition evolution, condition recognition, condition reporting

Scope and Significance Identification Phase: condition scoping, condition resolution cost-benefit and risk assessment, action need determination, action response prioritization

Action Plan Development Phase: alternative development (including cost-benefit and risk assessments for each alternative), alternative selection, and communication and action plan development (for the selected alternative)

Action Plan Implementation Phase: communication and action plan implementation, follow-up condition monitoring, decision evaluation, and action plan adjustment

Organizational Capabilities and Cultural Development Phase: decision-making process training, performance expectations established and reinforced, questioning attitude developed and reinforced, decision-making self-assessment and lessons learned communication

The final phase, Organizational Capabilities and Cultural Development, is an enabler of decision-making. This phase occurs on an ongoing basis; creating an organizational mindset that enables both the recognition of decision opportunities and helps the organization learn and grow from its decision-making successes and shortfalls. Strong execution of the Organizational Capabilities and Cultural Development Phase is a hallmark of organizational excellence.

Focus of the Decision-Making Forum

Decision-making is a complex process that when done well enhances both strategic planning and tactical business execution. Materials within this forum explore the four categories of decision-making, underlying concepts, and performance best practices and warning flags. The following articles, podcasts, documents, and resources cover those topics critical to effective decision-making.

Articles

Principles

Best Practices

Warning Flags

StrategyDriven Expert Contributor Articles

StrategyDriven Podcasts

StrategyDriven Podcast – Special Edition

Documents

Whitepapers

Models

Resources

Books

Strategic Planning Best Practice 7 – Shared Accountability

Organizational silos act as barriers; hindering the performance of business units, work groups, and individuals as they strive to achieve the organization's shared goals. Nowhere in the organization are silos more destructive than if they exist within the executive team. Here, silos prevent the free flow of information and resources needed to successfully execute cross-functional initiatives with the barriers to collaboration cascading downward though the entire organization. To help prevent these silos from forming, all strategic plan goals must be shared equally by all executives.


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Strategic Planning Best Practice 6 – Focus on Strength

Time and again, organizations – like people – focus on overcoming weaknesses to improve performance. But like people, far more can often be gained by advancing the company’s strengths. Strength in this sense is not simply a corporate competency; rather, it is something the organization can consistently perform at world class levels.

Organizations focusing on their strengths realize several strategic advantages over their competitors. A focus on activities of strength implies reduced managerial attention and resource application to weaknesses; freeing these to further advance the company’s strengths. Workers feel a greater sense of accomplishment with the company’s increased success; improving employee engagement which often leads to an improved public image, both of which build on the strengths.

Focusing on strengths does not imply a lack of awareness or activities to eliminate weaknesses. In fact, it is important that weaknesses be reduced to a level that appropriately manages the risk of exploitation by competitors and minimizes their interference and distraction to the achievement of strength activities.

Additional Resources

StrategyDriven contributors recommend several resources that elaborate or compliment the Focus on Strength best practice including:

Organizational Strength

Good to Great: Why Some Companies Make the Leap… and Others Don’t
by Jim Collins

Good to Great and the Social Sectors: A Monograph to Accompany Good to Great
by Jim Collins

Jack: Straight from the Gut
by Jack Welch

Individual Strength

The Effective Executive: The Definitive Guide to Getting the Right Things Done
by Peter F. Drucker

Now, Discover Your Strengths
by Marcus Buckingham and Donald O. Clifton

Strategic Analysis Best Practice 1 – Integrity Without Excuses

For any strategic analysis to be effective, it must be done with an open, honest assessment of the facts. Organizations acting with integrity without excuses seek to identify and eliminate instances where fact-based assessment conclusions are diluted by unrelated factors or opinion-based influences. Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by: Subscribing to the Self Guided Program - It's Free!