SKILLS IN ORGANIZATIONAL STRATEGY AND PERFORMANCE MANAGEMENT

  1. WHAT IS STRATEGY
    • The way (hypothetically determined) an organization seeks to achieve the vision and mission. 
    • Contains
      • Set of goals/objectives
      • Distinct method involve people (who), resource (what) and process (how) used by an organization to compete with its competitors
      • Specifies what you do and what you don't do
    • Change=[Dissatisfaction.Vision.first step of action]>Resistance
      • Change occurs when dissatisfaction, vision and first step of action exceed resistance
      • Change means to move form one state to another to become different from what it was. 
      • Dissatisfaction used as a lever
      • Change will happen when the product of D.V.F greater than R
      • Resistance transfer into productive energy
      • People get excited when they participated
  2. WHY DO ORGANIZATIONS NEED A STRATEGY?
    • External positioning
      • need to match internal resource and capabilities to the external environment to achieve sustainable competitive advantages arise from having capabilities for customers that competitors cannot offer
    • Internal alignment
      • resources are allocated to support strategic priorities and enable organizational units and employees to make decisions and implement policies that are consistent with achieving and sustain competitive advantage
  3. Johnson G & Scholes: the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration/resources within a changing environment and to fulfill stakeholder expectation
    • Objective (similar to vision statement)
      • the end of strategy is designed to achieve
      • quantitative target and time frame
    • Scope
      • domain (niche) in which the enterprise intends to operate
      • customer segment, product line breadth, technologies employed, geographic locations served/degree of vertical integration (value chain activities will perform)
    • Advantage
      • enterprise will achieve its objective
      • enterprise do differently/better/uniquely compared to competitors
      • values proposition company offer to attract customers
      • strategy canvas/values curve (blue ocean strategy)
  4. WHAT IS STRATEGY
    • broad business options and choices that have organization-wide impact. Always more than one way to achieve a vision/support a mission
    • hypothesis of the best way for the organization to achieve its vision and mission and satisfy customers and stakeholders
    • requires selection among alternative ways of doing things, focusing on few things and deferring/rejecting the rest
    • can be long term or short term
    • answer the broad questions
    • different than tactics (answer more narrow questions)
  5. Ronda-Pupo & Guerras-Martin (2011): the dynamics of the firm's relation with its environment for which the necessary actions are taken to achieve its goals and/or to increase performance by means of the rational use of resources
  6. BENEFITS OF STRATEGIZING
    • encourage forward thinking
    • provide clear direction and objective
    • facilitate allocation of resource
    • facilitate internal communication & cooperation
    • identify new opportunity for exploitation
    • prepare for threats
  7. STRATEGY FORMULATION: mental process to create broad formula for how to compete
  8. COMPETITVE STRATEGY: about being different
  9. CATEGORIES OF STRATEGIC IDENTIFY/DIFFERENTIATION
    • Cost leader-charge the same price as competitor/less but operating with lower costs (operational excellence)
    • Differentiated Value Provider: operating with same cost as competitors but earning higher revenues by being able to charge higher price than competitors for customer who value their particular form of differentiation 
    • Customer intimacy: focus on customer relationships and experience as the central themes of decision making about the product and services offering
    • Product leadership: strives to create best-in-class products, with an unbeatable combination of features, form and function
    • Disruptive innovation: creates a new category of business/attract new category of customer, change the game to new playing field
  10. THE KEY QUESTIONS STRATEGY MUST ANSWER
    • Where will we compete
      • which market segment will we compete
      • which customer will we serve
      • what will we offer our chosen customers
    • What do we want to achieve
      • what is our aim
      • what will be our measures of success
    • How will we win
      • for value creation for customer and investors
    • What will be our key priorities
      • how will we concentrate our scarce resource to achieve success
  11. STRATEGIC MANAGEMENT DEFINITION
    • the identification of the purpose of the organization and the plans and actions to achieve the purpose
    • set of managerial decision and action that determine the long term performance of business enterprise
    • involve formulate and implement strategy that will help in align the organization and its environment to achieve organizational goals
  12. IMPORTANCE OF STRATEGIC MANAGEMENT
    • give broader perspective to the employees of an organization
    • employee can better understand how their job fits into the entire organizational plan and how it co-related to other organizational member
    • employee become more trustworthy, committed and satisfied as they co-relate themselves very well with each organizational task
    • understand reaction of environmental changes on the organization and the probable response of organization with the helps of strategic management
    • employee can judge impact change of their own job and effectively face the changes. manager & employee do appropriate things in appropriate manner. need to be effective and efficient
    • major role of strategic management is to incorporate various functional areas of the organization completely to ensure functional areas harmonize and get together well
    • keep a continuous eye on the goals and objectives of the organization
  13. VISION
    • statement that outline organization's long term aspirations and desired future state.
    • should be motivating, challenging, inspiring and provide framework for decision making, goal setting and strategic planning
    • consistent with an organization's mission and core values and reflects its strengths, capabilities and competitive advantages. 
    • communicated clearly and effectively to stakeholders, employees, customers, investors, community
  14. MISSION
    • organization's purpose and reason for existence
    • brief, clear and concise statement outline goal/objective of organization
    • provide direction for decision-making, strategy and planning
    • answers questions what organization does, who serves, how it serves
    • reflect organization core values, beliefs, principles and understood by stakeholders, employees, customers, investors and community
    • flexible enough to adapt to changes in organization's environment, goals and priorities
  15. CORE VALUES
    • fundamental belief/principle deeply ingrained  and important to an individual, organization, society
    • guiding principles that helps to shape decision-making, behavior and actions
    • can be moral/ethical principles, cultural values, beliefs about what is important/valuable/personal convictions
  16. STRATEGIC MANAGEMENT PROCESS
    1. Environment assessment
      • PESTEL analysis:
        • identify and analyze external factors that impact on organization's performance and success
        • Political: taxation policies, trade restriction, political stability and government intervention
        • Economic: inflation rates, exchange rates, economic growth and unemployment rates
        • Sociocultural: demographics, lifestyle trends, consumer attitudes and social norms
        • Technological: new inventions, automation, digitalization, research, development
        • Environmental: climate change, natural disaster, pollution and sustainability concerns
        • Legal: employment laws, consumer protection laws, intellectual property laws, health and safety regulation
      • SWOT analysis
        • strategic planning tool that helps individuals and organizations identify and evaluate strengths, weaknesses, opportunities and threats
        • Strength: skills, resource, competitive advantage
        • Weakness: lack of resource, skills, expertise
        • Opportunity: market trends, emerging technologies, new partnership
        • Threats: competition, economic downturn changing regulation
      • TOWS analysis
        • suggest specific strategies that can be used to address the identified strengths, weaknesses, opportunities and threats
        • Strengths-opportunities
        • Weakness-opportunities
        • Strengths-threats
        • Weaknesses-threats
      • Identifying enabler and pains
      • Identifying stakeholder
    2. Strategy formulation
      • vision & mission
      • core values & customer value proposition
      • strategic themes/thrust & result
      • strategic objectives
      • strategy map
      • measures & targets
      • strategic initiatives
    3. Strategy implementation
    4. Strategy monitoring & controlling
    5. Assessment & strategy review
  17. 9 STEPS TO SUCCESS BUILDING & IMPLEMENTING A BALANCED SCORECARD
    1. Assessment
      • BSC development plan
      • Strategic elements
      • Communications & change management plan
    2. Evaluation
      • results
      • revised strategies
    3. Cascade
      • business & support unit scorecards
    4. Automation
      • software
      • performance reporting
      • knowledge sharing
    5. Initiatives
      • strategic projects
    6. Performance measures
      • performance measures
      • targets
      • baselines
    7. Strategic map
      • objectives linked in cause-effect relationship
    8. Objectives
      • strategy elements
    9. Strategy
      • customer needs & value
      • strategic themes
      • strategic results
  18. WHAT IS BALANCED SCORECARD
    • David P. Norton & Robert Kaplan (1992): method approach company seen in balanced way through chosen perspectives beyond financial measure 
      • Balanced:  To be able to see things from various dimensions or perspective
      • Perspectives balances: 2-max (dependent on situation)
      • Outcome: resultant effect of performance
      • Performance driver: thing/factor that affect future performance
    • improved strategic planning process
    • change initiative for visualizing and communicating an organization's long term strategic intent
    • objective: framework for breaking strategy into actionable components
    • strategic management system: align day-to-day work to an organization's vision and strategy using strategic performance measures and strategic initiatives
    • inform strategic budgeting, and allow organization to learn what works and to become more strategy focused
  19. LOGICAL MODEL COMPONENTS
    1. Input: resource used to produce output and outcome
    2. Process/activity: program does with inputs
    3. Output: products and service create/deliver
    4. Intermediate outcome: changes occurred in lives of beneficiaries/participants fallen short of significant benefits (attitudinal changes toward more civic participation)
    5. End outcome: changes occurred in lives of of beneficiaries/participants constitute significant benefits (increased civic knowledge, increased likehood to perform service)
  20. LOGIC MODEL BENEFITS
    • communicate potential value
    • clarify results trying to achieve
    • identify key program elements that must be tracked to assess program's effectiveness
    • make clear program premises and make visible stakeholder assumptions
    • improve program planning and performance by identify ways to measure program success and areas for improvement
  21. STRATEGIC PERSPECTIVES
    • Financial: results that business provide to stakeholders
    • Customer: identify customer, market segments and value propositions 
    • Learning & growth: infrastructure, people, system, procedures
    • Internal process: key internal process drive business
  22. BLUE OCEAN STRATEGY
    • WHAT IS BLUE OCEAN STRATEGY
      • reduce cost
      • raise value innovation
        • remove decrease
        • increase and establish
      • find new customer group
    • APPLICATION
      • services: increase buyer value
      • processes: increase efficiency
      • products: increase sales & profits
    • FRAMEWORK & ANALYTICAL TOOLS
      • visual awakening
        • PMS map
        • as is strategy canvas
        • BEC/BUM
      • visual exploration
        • 3 tiers of noncustomers
          • Tier 1 represents people who will soon become customers. 
          • Tier 2 represents those who are aware of your offerings but refuse to switch. 
          • Tier 3 is unexplored; these non-customers are unaware of your offerings.
        • 6 path framework
      • visual strategy creation
        • 4 actions framework
        • ERRC Grid
        • to be strategy canvas
      • visual strategy fair
        • as is strategy canvas
        • ERRC grid
        • to be strategy canvas
  23. 10 ESSENTIAL PRINCIPLES OF STRATEGY
    1. commit fully to a define objective
    2. seize the initiative and keep it
    3. economize to mass resource
    4. use strategic positioning
    5. do unexpected
    6. keep things simple
    7. prepare multiple, simultaneous alternatives
    8. take indirect route to objectives
    9. practice timing and sequencing
    10. exploit success
  24. STRATEGIC THEMES BALANCED SCORECARD
    • the main, high-level business strategies that form the basis for the organization's business model
    • serves as focal point for development specific objectives, measures, targets and initiative across areas of organization
      • customer intimacy
        • understand needs and provide tailored options
        • increase satisfaction, improve retention rates, expand customer reach
      • operational  excellence
        • improve operational efficiency, reduce cost, increase productivity
        • reduce cycle times, improve quality and optimize resource utilization
      • innovation
        • develop new products, services/process create value for customer and drive business growth
        • increase number of new product launched, improve speed of innovation, foster culture of creativity and experimentation
      • employee engagement
        • create positive work environment attract, retain and motivate top talent
        • improve employee satisfaction, reduce turnover and increase productivity
      • financial performance
        • profitability, revenue growth and cash flow
        • increase sales, reduce cost and improve margins


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