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Shifting the Paradigm: Strategic Planning: Issues and Resolution

March 6, 2012
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This blog builds upon my previous blog, Shifting the Paradigm: Enterprise-Process Goal Setting. Business leaders must have a strategy to meet their objectives. Without a strategy, time and resources can be wasted on piecemeal, disparate activities. Without a strategy, mid-level managers will fill the void with their interpretation of what the business should be doing, typically resulting in a disjointed set of activities. 

However, "strategy has become a catchall term used to mean whatever one wants it to mean,” say Hambrick, D. C. and J. W. Fredrickson in 2001’s "Are you sure you have a strategy?" from the Academy of Management Executive (1). “ Executives now talk about their 'service strategy,' their 'branding strategy,' their 'acquisition strategy,' "or whatever kind of strategy that is on their mind at a particular moment.”

Consider the strategy below, posted online by an organization that, for the purposes of this blog, will remain unnamed. The wording of this strategy is not unlike that of other companies' strategies, where much time can be devoted to creating such a listing of desires; however, manager of functions in the business can often have difficulty interpreting what they should specifically do relative to address the passed-down strategy.

According to the company: “Our company's objective is to maintain its position as one of the leading manufacturers of connectors, PC enclosures, and other precision components, and to successfully develop products and market its products for use in network communication and consumer electronic products. A number of strategies have been developed to attain this objective:

Develop strategic relationship with industry leaders--By working closely with top-tier PC and IC companies, our company is able to predict market trends accurately and introduce new products ahead of its competitors.

Focus on the development of global logistic capabilities--This enables our company to respond quickly and efficiently to the customer's requirements around the world.

Expansion of production capacity-- Our company currently has production facilities in Asia, Europe, and the United States. Expanding its existing production capacity increases economics of scale.

Achieve further vertical integration--Further integration of the production process allows our company to exercise better control over the quality of its products.

Maintain technologically advanced and flexible production capabilities--This increases our company's competitiveness relative to its peers and allows it to stay one step ahead of the opposition.

New products--Our company will leverage off its manufacturing expertise and continue to move tirelessly into new areas of related business.”



In addition, what data analyses were conducted ahead of time which influenced the creation of the corporate strategy? Even if there were good pre-strategy-build data analyses, can the direction of the entire company rest on a few statements, which can change when there is leadership change?

To this question, one might respond "no"; however, this is what businesses are doing. For example, with hoshin planning and the balanced scorecard, measurements and their goals are being aligned to strategies that can have much of their basis on the gut of a few. Without a structured blending of analytics within this overall decision- making process, a company can end up with untargeted strategic statements that often do not get implemented or can even lead to activities that are not in the best interest of the enterprise as a whole.

Figure 1 describes an alternative approach where create strategies is step 5, not step 1, of the overall business process. This Integrated Enterprise Excellence (IEE) business system leads to specific actionable, goal-based objectives that are in alignment with predictive scorecard improvement needs for the enterprise as a whole. My next blog will illustrate a drill-down from organization goals through strategies to specific actionable projects.



References:

1. Hambrick, D. C., and J. W. Fredrickson, 2001. "Are you sure you have a strategy?" Academy of Management Executive 15(4). Breyfogle, F. W., 2008.

2. Integrated Enterprise Excellence Volume II – Business Deployment: A Leader’s Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard .

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