Strategic ManagementStrategic Management

It is the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives.

Drafting:Mission: why we exist and what the company does to achieve its Vision.

Vision: It is a long term view, it answers the question, what we want to be.

Goals: What we must achieve to be successful.

Policy: is typically described as a principle or rule to guide decisions and achieve rational outcome(s).

Implementation:

Objectives: Specific outcomes expressed in measurable terms. (Not activities)

Initiatives: Planned actions to achieve objectives.

Evaluation:

Measures: Indicators and Monitors of success.

Targets: Desired levels of performance and timelines.

Why do Strategic plans Why do Strategic plans fail??fail??

Many organizations develop a plan but fail to reap the benefits of that plan because they focus solely on planning

According to Copyright Raven Strategic Consulting 200620% of strategic plan success refers to planning40% goes to plan implementation40% maintaining and sustaining day-to-day high performance when implementing plans

There are many reasons There are many reasons why strategic plans fail, why strategic plans fail, especially:especially:Failure to execute by overcoming the four key organizational hurdles1.Cognitive hurdle (waking employees up to the need for a strategic shift. )2.Motivational hurdle 3.Resource hurdle (limited resources-unskilled)4.Political hurdle Failure to understand the customer 1.Why do they buy 2.Is there a real need for the product 3.inadequate or incorrect marketing research

Inability to predict environmental reaction 1.What will competitors do •Fighting brands •Price wars 1.Will government intervene Over-estimation of resource competence 1.Can the staff, equipment, and processes handle the new strategy 2.Failure to develop new employee and management skills Failure to coordinate 1.Reporting and control relationships not adequate 2.Organizational structure not flexible enough

Failure to obtain senior management commitment 1.Failure to get management involved right from the start 2.Failure to obtain sufficient company resources to accomplish task Failure to obtain employee commitment 1.New strategy not well explained to employees 2.No incentives given to workers to embrace the new strategy Under-estimation of time requirements No critical path analysis done (Longest sequence of activities in a project plan which must be completed on time for the project to complete on due date.)

Failure to follow the plan 1.No follow through after initial planning 2.No tracking of progress against plan Failure to manage change 1.Inadequate understanding of the internal resistance to change 2.Lack of vision on the relationships between processes, technology and organization Poor communications 1.Insufficient information sharing among stakeholders 2.Exclusion of stakeholders and delegates

Danny Miller and ICARUS Danny Miller and ICARUS paradoxparadoxSuccessful companies and Successful companies and strategic failurestrategic failureThe paradox of Icarus was that his skill and technology, which led him to freedom, ultimately also led to his death.

Like wise;

Miller found in his research that the victories and strengths of companies can often be the cause of their future strategic failure

Successful companies often fail to succeed because:

1.overconfident .2.prone to shape strategies based on their preferences rather than what data, changing business circumstances, customers, and technological shifts dictate 3.to resent challenges to their way of thinking 4.isolated from the reality of the marketplace

Clayton M.Christen, in his Clayton M.Christen, in his book Innovator’s Dilemmabook Innovator’s DilemmaHe came up with another cause of strategic failure, which is;Disruptive Technologies

These disruptive technologies are products or processes that appear in the marketplace, but that look harmless to successful companies.

Examples of disruptive technologies are the small, off-road motorcycles that were introduced by Japanese manufacturers into the United States. Over time, they threatened the product lines of Harley-Davidson and BMW.

HP strategic failureHP strategic failureCEO Carly Fiorina positioned HP as perhaps the widest-ranging technology company in the world, with offerings from digital cameras, to printers, to supercomputers. She staked her career on HP's acquisition of Compaq in 2002, and she lost. She was fired on February 7, 2005. The acquisition had been bitterly opposed by major shareholders including Walter Hewlett.

(e.g of Failure to get management commitment)

Under Fiorina's direction, HP unsuccessfully battled IBM, Dell, Sony, EMC, and others. Today, the $80 billion HP is struggling in everything except its stellar printing business.

Why did the strategic planning based on the company vision fail? It was difficult for HP executives to rapidly understand complementary and non-complementary competencies, strategies, and synergies as well as differences in the respective cultures

(e.g of Failure to obtain employee commitment and poor communication)

From the outside, it would appear that most of the failure can be traced lack of trust and support among the players—the board members, some members of the board and Fiorina, the employees and the company, the shareholders and the board, and the shareholders and Fiorina. Also, Fiorina never had the loyalty of the employees.

One Business Week article says Fiorina broke three key rules that CEO's must follow: place the company's well-being above all else, including yourself; know your company from the inside out—some say that Fiorina did not fully comprehend the impact on operations of her vision to transform HP's structure and strategy; and hold people accountable, including yourself. Only history will tell whether HP will spin-off divisions or remain the one-stop shop that Carly Fiorina envisioned.

BSC and how to overcome BSC and how to overcome strategic plans failurestrategic plans failure

The balanced scorecard is a strategic planning and management system, that is used extensively in business, to align business activities to the vision and strategy of the organization, to improve internal and external communications, and to monitor organization performance against strategic goals.

The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis.