strategy development and strategic planning to...
TRANSCRIPT
Strategy Development and Strategic
Planning to Support a Regulator’s Mandate
JULY 2018
GHANA
• Understand strategic planning process
• Set goals
• Use tools and techniques to drive the strategic planning
process that will direct the organization from the executive to
the front line
• Complete a meaningful SWOT analysis
Use related tools, such as the strategy map and balanced
scorecard, can help them develop a strategic plan
SE
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FIN
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• Strategic Issues: Strategic issues are critical unknowns that are driving you to
embark on a strategic planning process now.
• Strategy: Consciously choosing to be clear about your company’s direction in
relation to what’s happening in the dynamic environment.
• Normann and Ramirez define strategy as the art of creating value. (intellectual
frameworks, conceptual models and governing ideas that allow a company’s
managers to identify opportunities for bringing value to customers and for
delivering that value).
• Strategic Planning: The process of an organization deciding their corporate
direction, objectives and priorities, and then aligning their resources to accomplish
the actions necessary to meeting them.
• Strategic Plan: a starting point and foundation for defining what an agency seeks to
accomplish, identifying the strategies ir will use to achieve desired results,…
Pre-Planning
Before any work can earnestly start on the Strategic Planning Process: -
• Identify strategic Planning Facilitator (s) (Internal and or External)
• Set up the Strategic Planning Team (Internal and or External)
• Establish and communicate the Strategic Planning process
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Mo
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Model Example 2
The Strategist’s Toolbox has the following tools to pick from and apply IN
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Some of the Tools Described
McKinsey 7s model is a tool that analyzes firm’s organizational design by looking at 7 key
internal elements: strategy, structure, systems, shared values, style, staff and skills, in order
to identify if they are effectively aligned and allow organization to achieve its objectives.
Aligning different parts of your organization for maximum performance
PEST & PESTEL Analysis
Knowing the external factors affecting your company
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the Threats you face. Revealing
organization's strong and weak points alongside opportunities and threats
Value Chain Analysis
Improving business value chain to strengthen its competitive advantage - Value chain
analysis is a strategy tool used to analyze internal firm activities. Its goal is to recognize,
which activities are the most valuable (i.e. are the source of cost or differentiation advantage)
to the firm and which ones could be improved to provide competitive advantage
ORGANISATION CHARTERS
Mark Schultz, writing in
Governance Today, 2016
Strategic Mindsets and Thinking
SOME KEY MESSAGES
Strategy Development – Risk Management Alignment
Prior the Strategy
Formulation
Pre-Strategy
Risks
Assessment
After the Strategy Formulation
Monitoring and
Review of
Strategic Risks
Strategic Risks
Treatment
Strategic Risks
Assessment
Prior to Strategy Development,
Risk Management should
assess Pre-Strategy Risks.
After Development of Business
Strategy and the Strategic
Objectives, Strategic Risks
MUST be assessed, Treated,
Monitored and Reviewed as
assigned
STRATEGY DEVELOPMENT
& IMPLEMENTATIO
N
Using the Strategy Tools
Going into Strategic Planning proper is actually bridging this gap between the theory of how strategy tools
should be used and how practitioners actually use tools. – Balogun et al., 2007. Participants in this process
must be wide awake to do the following
• Pay close attention to tools as they are used in context,
• Determine the motivations of actors in using them,
• Determine the purposes to which tools are put, and
• Understand the potential of the tools leading to an array of sometimes unanticipated outcomes.
Participants need to probe the selection of the tools;
• Especially their application and
• the outcomes associated with their use. (Orlikowski, 2000; Orlikowski and Barley, 2001).
ALL MODELS ARE WRONG, BUT SOME ARE USEFUL, George Box, University of Wisconsin
Example - Arriving at Strategic Choices @ Transport Authority
Image Courtesy of Slide Share
Output of the
Strategic Planning Process
Types of Strategies
STRATEGIC ALTERNATIVES
Generic or grand or basic strategies
• Stability - better after sales service, modernize
plant, bulk discount, improve performance to
sustain
• Expansion -Change in customer group, function,
technology
• Retrenchment-Withdrawal -Customer group,
function, technology (unprofitable)
• Combination
•e.g. Wide variety of services to customers (stability) -
New products in product range (expansion) –
Dr.M. Thenmozhi
@Indian Institute of Technology Madras
Michael Porter is a proponent of the three generic
strategies –
• Overall cost leadership strategy –
• Differentiation strategy –
• Focus on niche market –
Strategy Selection Criteria
David Aaker asserts that strategic alternatives should be accepted if they meet the following criteria:
• They are responsive to the external environment.
• They involve a sustainable competitive advantage.
• They are consistent with other strategies in the organization.
• They provide adequate flexibility for the business and the organization.
• They are organizationally feasible.
Important Alignments -
BUDGETTING CYCLE
The Strategy Development Process must be planned such that it is to be ahead of the Budgeting Cycle
• Every Strategic Budget Cycle must be started with top management participation and especially those with
insight;
• The strategic plan 3 – 5 year plan must be included in the budgeting cycle as early as possible
HUMAN RESOURCES
The Strategic Development process outputs must always be inputs into the HR Strategy
• HR must be able to assess whether the culture is conducive to the delivery of the
strategic objectives
• HR must be able to ensure there are skills/competence to deliver the strategic objectives
RISK MANAGEMENT
A robust ERM Framework must provide relevant risk information to
reduce the possibility of selecting a mistaken strategy;
PORTFOLIO MANAGEMENT
Portfolio management has become a mainstream discipline to support investment decisions and capital allocation plans
• Portfolio Visibility - visibility of initiatives in the portfolio for business leaders to conduct operational reviews
• Portfolio Analysis - make purposeful choices about where and when to invest resources for the future.
• Strategic Prioritization - start with determining what the company’s strategies are, and then planning how to implement
these strategies through effective strategic portfolio prioritization.
How are the above applicable to Health Practitioners Regulators Considering, …
Regulators are formations of statutes –
• The incorporation legislation is specific about the function (almost reads as the
only set of activities that can be ventured into)
• The Function clarifies the Core Mandate of the Regulator
• With the Core Mandate codified, this sets strict parameters of operations
• The Legislation also removes any threat of competition
• Legislation dictate what the Regulator must do
• Why would they undertake any strategic planning?
• The Regulators have no worries about
• Direct competition
• Being unique
• Need for Growth
• (no need to be unique, no need to be worried that someone might just
“move our cheese, no need for growth, no need for differentiation)
WHAT IS THE ROLE OF THE
STRATEGIST IN THIS ENVIRONMENT
Strategic Planning and Regulators
• Strategic Planning has become orthodox practice even for Regulators and other public sector
organizations the world over
• In South Africa – National Treasury prescribes the process, the templates, the applicable periods etc
• In the United States, the Government Performance and Results Act of 1993 requires federal regulatory
agencies to produce, at the very least, five-year strategic plans with statements as to the mission,
general goals and objectives, and means to achieve those goals
It is common cause that Regulators are a creation of Statutes and with Statutes dictating almost everything
that the Regulator must and may do;
Prof. Malcolm Sparrow (2000) provides the Guidance
Sparrow argues that, “Regulators, under unprecedented pressure, face a range of demands, often contradictory
in nature:
• be less intrusive – but be more effective;
• Be kinder and gentler – but don’t let the bastards get away with anything;
• Focus your efforts – but be consistent;
• Process things quicker – and be more careful next time;
• Deal with important issues – but do not stray outside your statutory authority;
• Be more responsive to the regulated community – but do not get captured by industry.
The BIG QUESTION IS – What Strategy or Strategies do you need to employ to deliver
such paradoxes? Remember Strategic Thinking – Fit and Intent
Core Regulatory Functions of Health Professions’ Regulators
• Set standards for registrant’s education and training, professional skills, conduct, performance and
ethics;
• Keep a register of professionals who meet those standards;
• Approve programmes which professionals must complete to get on a register;
• Take action when professionals on registers do not meet set standards.
What Strategic Planning Should Mean to a Regulator
Through strategic planning: -
• Regulators can rethink the purpose of their rulemaking, enforcement, outreach, monitoring,
and other activities, trying to fit them together into a coherent program in service of goals
they may have latitude to set and refine.
When a regulator produces a strategic plan,
• that plan provides a window into what the regulator aspires to accomplish – or what its
leaders, at least implicitly, understand regulatory excellence to entail.
Insights from Finkel et al (2015)
Finkel, Walters and Corbett (2015) argues that Regulators strategic development process is or
should be driven by a need to achieve Regulatory Excellence
The Majority of highly held Regulators view regulatory excellence as characterized by following
attributes: -
• Efficiency
• Educative
• Multiplicative
• Proportional
• Vital
• Just
• Honest
Regulatory Excellence Characteristic established by Finkel et al (2015) discussed
Efficiency
Educative
Multiplicative
Proportional
Vital
Just Honest
Reduce burden on stakeholders
Didactic –disseminate rules
Strict enforcement of regulations
Worst-First Oriented Skilled and
Diverse
Attentive to Populations Vulnerable to Risks/Hazards
Forthright
Timeliness in fulfilling regulatory responsibilities
Evangelistic – change attitudes, fight misinformation
Cooperative with Government
Risk and Benefit Considering
Cutting Edge Technologically
Attentive to Populations vulnerable to Regulatory Costs
Independent
Economizing for the whole sector
Walk the Walk – Be Exemplary
Collaborative with the Regulated
Research Driven
Nimble Consulting – Intervening even-handedly and Proactively
Explanatory
Accessibility to Stakeholders
Enlisting of Citizenry
Matching of Regulatory Design to Context
Evaluative (Forwards and Backwards)
Which Tools will be relevant for the Regulator P
ES
TE
L A
NA
LY
SIS
The Purpose of this tool is to
identify issues that fir two key
criteria: -
• They are outside the control of
our organization.
• They will have some level of
impact on our organization.
Discussion must focus on
identifying issues and not trying
to resolve them.
Which Tools will be relevant for the Regulator S
WO
T /T
OW
S A
NA
LY
SIS
SWOT Analysis is central to strategic planning
The SWOT brings out the major issues to address in the
strategic plan.
These strategic issues are few in number. They are huge
in their effect on the performance of the organization.
When they become clear the planning team can devise
strategies to deal with them.
Which Tools can be relevant for the Regulator S
tra
teg
y M
ap
A strategy map shows your organization's
strategy on a single page. It’s great for
quickly communicating big-picture
objectives to everyone in the company.
The main idea of a strategy map is that
each strategic objective in your
balanced scorecard is represented by a
shape, usually oval.
strategy maps also have arrows between
the objectives to show their cause and
effect chain. By following the arrows’
paths, you can see how the objectives in
the lower perspectives drive the success
of the higher ones.
McK
inse
y 7
s M
od
el
Which Tools can be relevant for the Regulator
McKinsey 7s model is a tool that
analyzes firm’s organizational design by
looking at 7 key internal elements:
strategy, structure, systems, shared
values, style, staff and skills.
The goal of the model was to show how
the 7 elements should be aligned
together to achieve effectiveness in a
company. The key point of the model is
that all the seven areas are
interconnected and a change in one area
requires change in the rest of a firm for it
to function effectively.
McK
inse
y 7
s M
od
el D
Iscu
ssio
n
Which Tools can be relevant for the Regulator McKinsey 7s Model
Strategy –
What is the organization’s strategy seeking to
accomplish?
How does the organization plan to use its
resources and capabilities to deliver that?
What is distinct about this organization?
How does the organization compete?
How does the organization adapt to changing
market conditions?
Style –
What is management/leadership style like? How do they
behave?
How do employees respond to management/leadership?
Is there staff Competition; Collaboration or Cooperation?
Are there real teams functioning within the organization or
are they just nominal groups?
What behaviors, tasks and deliverables does
management/leadership reward?
Shared Values –
What is the mission of the organization?
What is the vision to get there? If so, what is it?
What are the ideal versus real values?
How do the values play out in daily life?
What are the founding values that the
organization was built upon?
Skills –
Skills used to deliver core products/services. Are these
skills sufficiently present and available?
Are there any skill gaps?
What is the organization known for doing well?
Do the employees have the right capabilities to do their
jobs?
How are skills monitored, assessed, and improved?
Structure –
How is the organization organized?
What are the reporting and working relationships
(hierarchical, flat, silos, etc.)?
How do the employees align themselves to the strategy?
How are decisions made? Is it based off centralization,
empowerment, decentralization or other approaches?
How is information shared (formal and informal channels)
across the organization?
Systems –
What are the primary business and technical
systems that drive the organization?
What and where are the system controls?
How is progress and evolution tracked?
What internal rules and processes does the
team utilize to maintain course?
Staff –
What is the size of the organization?
What are the staffing needs?
Are there gaps in required capabilities or
resources?
What is the plan to address those needs?
Example – Strategic Plan Template p1 SECTION # SUBJECT DESCRIBED
1 Executive Summary The Executive Summary of your strategic plan should be completed last, and this section merely
summarizes each of the other sections of your plan
2
Elevator Pitch An elevator pitch is a brief description of your business. Your elevator pitch is included in your strategic
plan since it’s key to your business’ success, and often times should be updated annually.
3
Company Mission Statement
Your company Vision, Mission and Values statement explains what your business is trying to achieve.
For internal decision-making, these statements guides employees to make right decisions; For external
parties, these statements can inspire them to take actions that are favourable to our business
4
SWOT Determine the best opportunities to pursue to achieve growth goals. It also helps you identify which
strengths to develop in the near future to improve the company.
5
Goals/ and Objectives
Setting and achieving goals is the hallmark of successful companies and is a critical element of your
strategic plan.
Firstly, identify the 5 year or long-term goals.
Next, identify 1year goals;
Then work backwards to determine goals for the next quarter and the next month.
Ideally update the strategic plan monthly to modify this section.
Example – Strategic Plan Template p2
SECTION # SUBJECT DESCRIBED
6
Key Performance Indicators
(KPIs)
Great businesses understand their metrics and KPIs. By tracking KPIs, you know exactly
how your business is performing and can adjust as needed
7 Target Customers
Identify the wants and needs of each of target customer groups. This is important in
focusing marketing efforts and getting a higher return on investment on advertising
expenditures.
8
Industry Analysis
Industry analysis doesn’t have to be a comprehensive report on what’s going on in the
market. Conduct an analysis to ensure understanding of market dynamics to help identify
new opportunities and or threats.
9:
Competitive Analysis &
Advantage
Competitive analysis doesn’t have to be a thorough report listing every detail about every
competitor. Define key competitors are, list their strengths & weaknesses. Use this
analysis to determine your current competitive advantages and ways to develop
additional advantages.
Example – Strategic Plan Template p3 SECTION # SUBJECT DESCRIBED
10
Marketing Plan Develop a comprehensive marketing plan describing how to compete for the hearts and
minds of stakeholders. Include a summary of the marketing plan in the strategic plan.
11:
Team
The team section ensures there are human resources to execute on the opportunities
identified and to achieve the goals stablished in section 5 of the plan. List current team
members and identify the types of people needed in the next year to achieve established
goals
12:
Operations Plan
Operations plan helps to transform goals and opportunities into reality. Identify each of
the individual projects that comprise the larger goals and how these projects will be
completed.
Finally, map out each of the initiatives, ideally in a Gantt chart, to be clear when each
project will start and who will lead them.
13
Financial Projections Financial projections help in multiple ways. First, use financial models to assess the
potential financial results for each opportunity considered to be pursued.
Hope is Not a Strategy
Risk Management Approach: After the Strategy Development
LE
VE
L
IMPACT
NEGATIVE POSITIVE
1
The achievement of a strategic objective is
affected; the organization is prepared if the
risk event occurs
It contributes to the achievement of a
strategic objective; nevertheless
organizational efforts to take advantage of a
risk event are demanded
2
The achievement of the mission or future
vision is affected; nevertheless the
organization is already prepared if the risk
event occurs
It contributes to the achievement of the
mission or future vision; nevertheless
organizational efforts to take advantage of a
risk event are demanded
3
The achievement of a strategic objective is
affected; furthermore organizational efforts
are demanded in order to face the risk
consequences.
It contributes to the achievement of a
strategic objective; furthermore the
organization is already prepared if the risk
event occurs.
4
The achievement of the mission or future
vision is affected; furthermore organizational
efforts are demanded in order to face the
risk consequences
It contributes to the achievement of the
mission or future vision; furthermore the
organization is already prepared if a risk
event occurs
Post this Exercise
apply Orthodox ERM
practices to manage
all risks as per a
developed Risk
Register
Some wit on Strategy From Dilbert
END OF SESSION 2