All Posts Tagged With: "strategy deployment"
10 Insights into Strategic Planning
Joan Magretta wrote a guide to strategy guru Michael Porter’s work called Understanding Michael Porter. As she worked on the book, she kept a list of insights, including “that most companies think they have a strategy when they don’t,” as she noted in an article on HBR.
Here are her ten insights and how they relate to the Baldrige model:
- You gain a competitive advantage by creating unique value for customers. Customer-driven excellence is a Baldrige core value, defined as an organization’s performance and quality being judged by its customers. If customers rate your performance and quality high, you will gain a competitive advantage.
- Your strategy must also clarify what the organization will not do. The Baldrige model asks several questions about how you develop strategies that will help you prioritize your strategies.
- “Competition is about profits, not market share,” writes Magretta. You grow a company by increasing profits, not market share.
- Brilliant strategies will not lead to performance excellence unless you execute them. The Baldrige Criteria devote an entire section to strategy implementation.
- Good strategies are interconnected and build on core competencies. The Baldrige Criteria ask how your strategic objectives capitalize on your core competencies and balance short- and longer-term challenges and opportunities.
- While it’s important to be flexible,…
Baldrige Model: How do you implement your strategy?
Item 2.2 in the Baldrige Criteria asks key questions about how your organization converts strategic objectives into action plans. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Developing short- and longer-term action plans and deploying them throughout your organization and to key suppliers and partners
- Allocating financial, human, and other resources to support accomplishing the action plans
- Identifying human resource plans that support accomplishing your action plans
- Identifying key performance measures you can use to track performance on your action plans
- Modifying action plans if circumstances change and rapidly executing the new plans
Best practices to consider:
- Aligning the organization’s strategic objectives, action plans, and performance measurement system with action plans and key performance measures for divisions, departments, teams, and individual employees ensures that everyone in the organization is working on what must happen for the organization to succeed.
- The performance management process identifies annual goals and objectives for each employee that support the goals, objectives, and action plans of the organization and department.
- Business planning and strategic planning are part of one process that allocates resources to support the strategic objectives of the organization.
- Human resource plans in such areas as learning and development,…
Strategy Deployment at MEDRAD
At MEDRAD, which won the Baldrige Award for the second time in 2010, strategic planning aligns the work of each employee with the mission and philosophy of the company. The process begins with a review of the mission and philosophy and the prior year’s plan. (Learn how Baldrige Award winners develop strategies by subscribing to Baldrige.com’s free report in the purple box on the right.)
According to MEDRAD’s application summary, available here, “each business and function champion uses common planning templates and workbooks designed to ensure that blind spots are addressed, SWOT’s are analyzed, core competencies are defined, and early indications of major shifts are addressed.”
The diagram at the left shows how MEDRAD “waterfalls” its strategic plan, scorecard, and objectives throughout the company. Top 12 and Strategic Action Team objectives flow to managers, who create group objectives and plans. These objectives are refined and aligned through team meetings and discussions and used by employees to create individual objectives in the Performance Management (PM) process.
For hourly employees, objectives are team-based to help drive performance in manufacturing. In addition, all employees create written development plans that address areas to improve and the knowledge and skills they need to move into other roles.
Progress on…
13Apr2011 | Steve George | 0 comments | Continued10 Tests to Assess Your Strategies
McKinsey & Company has identified ten tests to help executives assess the strength of their strategies. The ten tests fit nicely with the first Item in the Strategic Planning category of the Baldrige Criteria, which addresses the strategy development process.
An article in McKinsey Quarterly emphasizes the importance of a rigorous strategy development process through a quote from Phil Rosenzweig, a professor at IMD in Switzerland who has devoted his career to advancing the art of strategy: “Rather than looking for the next musing, it’s probably better to be thorough about what we know is true and make sure we do that well.” (“Have you tested your strategy lately?” Chris Bradley, Martin Hirt, and Sven Smit, McKinsey Quarterly, January 2011)
According to a McKinsey Quarterly survey of 2,135 executives, few of their strategies pass more than three of these ten tests:
- Will your strategy beat the market? “Good strategies emphasize difference—versus your direct competitors, versus potential substitutes, and versus potential entrants.”
- Does your strategy tap a true source of advantage? “Competitive advantage stems from two sources of scarcity: positional advantages and special capabilities.”
- Is your strategy granular about where to compete? “…80% of the variance in revenue growth is explained by choices about where to compete.”
- Does your strategy put you ahead…
Effective Strategic Initiatives
One of the biggest problems with strategic planning is figuring out how to prioritize all of the initiatives that the process produces. Every leader and every department thinks their initiatives are critical to the success of the organization, which raises a second major problem with strategic planning: deselecting initiatives to narrow the focus to the vital few. People may not agree on which initiatives are most important, but nobody wants to see their “baby” thrown out.
In “Prioritizing and Managing Improvement Initiatives: 4 Steps That Drive Results,” (The Glue, ActiveStrategy, March 17, 2010), Jack Steele suggests ranking initiatives by a common set of criteria to remove some of the emotion and politics from the equation. The criteria could include support for your mission and vision, alignment with critical success factors, potential impact on balanced scorecard or financial metrics, and potential impact on growth. Steele notes: “When ranking, you might want to boost the score of any initiatives that cut across the organization since they will likely have a greater overall impact.”
Once you have consensus on the rank of your strategic initiatives, you’re ready to move on to the first of Steele’s four steps: Prioritize by sequencing. Which initiatives do you work on…
22Mar2010 | Steve George | 1 comment | ContinuedHow to Deploy Your Strategic Plan
Iredell-Statesville Schools won the Baldrige Award in 2008. In its application, available here (pdf), it demonstrates the alignment of its success factors, strategic goals, action plans, HR training and development, leading indicators, and results. It does this through the table shown below.
Each of the district’s 17 strategic goals is assigned an owner who is responsible for a district improvement plan that addresses the goal. Action plans that support the improvement plan are then developed within the owner’s department.
The owner reports on progress on the plan quarterly to senior leadership using the key measures listed in the table below and a rubric aligned to the factors by which Baldrige evaluates a process: approach, deployment, learning, and integration.
I-SS has more than 100 leading indicators for monitoring performance on short-term action plans that it tracks monthly. According to the application, “Each action plan is integrated with a PDSA approach, so that each plan must have three evaluation measures that measure completion and fidelity to the overall approach of the PDSA and an evaluation measure that impacts the overall goal.”
To see how all of this helps I-SS achieve its strategic goals, read its Baldrige Award-winning application summary (pdf).
