The strategic management cycle

Benedict Wauters

Six core RBM practices

• 1. Orientation of the PMO (programme management organisation) is clear

• 2. The PMO strategy is reflected in a strategic results framework

• 3. The strategy is translated into operations• 4. Performance information is collected and

supplied• 5. Performance information is used• 6. External stakeholders are involved in all

aspects

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1. Orientation of the PMO (programme management organisation) is clear

2. The PMO strategy is reflected in a strategic results framework

3. The strategy is translated into operations

4. Performance information is collected and supplied

5. Performance information is used

The strategic management cycle:mission, values and vision

Benedict Wauters

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Boundary systems

Strategy(plan)

Core values,mission, vision

Criticalperformance

variables

Strategicuncertainties

Risks to be avoided

Interactive control systems Diagnostic control systems

Belief systems

Mission and values of the entity• E.g. “We support – with EU and national resources –

organisations to initiate actions that improve the functioning of the labour market. We acquire and share knowledge to contribute to solutions for today and tomorrow.”

• E.g. “customer focus: staff have an open and caring attitude, towards project promotors as well as other stakeholders. The promotor can easily get in touch and communicate smoothly with staff. The relation with stakeholders is based on mutual respect and appreciation. Agreements and promises are kept. All interests are taken into account. All of these aspects lead to a relationship of trust.”

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Example of expanded vision

Going beyond current capabilities is crucial!

Vision can have many different aspects• the ambition can be broad, generic

e.g. drive innovation in the labour market e.g. be champions of simplification e.g.

• …or it can relate to specific thematic policy challenges high on the political agenda at a give time e.g. improve the life of Roma… e.g. tackle poverty…

• if ambition is too low or perceived to be irrelevant as it does not connect with the policy context, those who decide on its mandate may attack it

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Vision and current operations

• When current operations are a mess…• … then vision becomes a vision of survival: how

to keep the boat from sinking!• This reaffirms the importance of systems

thinking for your current operations: If daily work life is a struggle for survival…

…then senior managers coming along with wonderful statements about vision, mission and values are bound to be seen as coming from another planet

Warning!• Mission, values and vision can be actively used to drive

out critical voices, thus eradicating diversity in the organisation which is problematic for accountability as “robust, resilient and adaptive”

• The idea is to foster “a community of inquirers”: practitioners start from their own day-to-day experience of trying

to do the work, within the framework of a mission and a vision, but where the aim is to make subjective experience more objective through reflection and discussion with the manager and others

in doing so the practitioner and manager could open themselves up to different ways of working and perhaps move themselves on from stuck and less productive ways of working with peers

• This entails that what the mission and the vision “mean” at a practical level is constantly being (re)invented

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The strategic management cycle:culture

Vladimir Kvaca

There three things that influence our „mental software“ – the way we think and behave

1. Being homo sapiens• Universal, shared by all people• Inherited via DNA

2. Culture• Shared within a social group of people• Learned via socialization

3. Personality• Individual for each person• Partly inherited, partly learned

Why culture?

The way in which the members of an organization relate to:

Each other

Their work

The outside world

in comparison to other organizations.

The function of organizational culture:

There are no good or bad cultures. Cultures are functional or dysfunctional depending on who we want to be = what is our strategy.

Culture only exists by comparison. Culture has no meaning by itself

Definition of organizational culture:

Assessment of organizational culture

• To answer the question if current organizational culture fits the strategy, you need a tool for organizational culture diagnosis.

• As culture exists only by comparison, you need to use culture model that has also available database of organizations‘ scores for comparison.

• There are several models on the market, e.g.:The Hofstede Model of Organizational CultureDaniel Denison’s modelFons Trompenaars‘ model

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The Hofstede Model consists of 8 dimensions

D1: Means versus goal orientedWe identify with the “how” versus we identify with the “what” (Health risks

versus effectiveness)

D2: Internally versus externally driven We know what is best for the client or we don’t need to care about them versus

we do whatever the client wants

D3: Loose versus tight work control (Innovation and/or unpredictability versus efficiency/planning)

D4: Local versus professionalWe identify with our direct boss and/or with our work group versus we identify

with our profession and/or with the content of our work (Work life is a dangerous affair versus we love to find out what is happening in the rest of the

world)

D5: Open versus closed systemsNewcomers are welcome versus they first have to proof themselves

D6: Employee versus work orientedManagement takes co-responsibility for the welfare of their people versus

management believes that if they don’t put their people under pressure nothing will happen

D7: Degree of leadership acceptance from low to high

D8: Degree to which people identify with their organization from low to high

Please note:- The definitions define the extreme positions- The combinations of dimensions will define well known topics, e.g. D1 and D2 together define process versus result orientationAnd D1 and D5 together define open versus closed communication.

Notes to the dimensions

• Culture scores of dimensions 1, 3 and 5 tend to differ within organisation (different units can have different culture with regard to this dimensions)

• Culture scores dimensions 2, 4, 6 tend to be the same across the whole organization.

• Dimensions 7 and 8 are „semi-autonomous“.

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On-line application to explain the dimensions

• http://geert-hofstede.com/culture-and-strategy.html

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The link between national and organizational culture

Practices

National Culture6-Dimensional Model

Organizational Culture The Hofstede Model

Symbols

Heroes

Rituals

Values

While national culture has very slow dynamics (small changes between generationsl), the organizational culture can be intentionally changed in 1-4 years.

How the culture change using the Hofstede model works

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1. Culture scan (getting the data on current culture) This consists of quite simple data gathering, survey for the staff

(40 minutes) and two short surveys for the management.

2. Discussion with the management, which culture should be optimal for the organization.

3. Comparison of actual and optimal scores

4. Identification of priorities for change

5. Planning the change

6. Actions to change the culture

Example on the case of National Coordination Authority

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• Culture scan conducted at the end of July 2014.• Optimal scores presented in the example are

preliminary, still need to discuss with other managers.

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Some main conclusions

• Strengths are our profesionalism, ability to learn and identification with the organisation.

• There is a high danger of burn-out, some people are stretched over their limits

• We are „functional bureaucracy“• We don‘t care enough about our

„customers“.

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Change

• Changing people’s ways in organisation on purpose can be realised in two ways:• Directly by tell and sell

• Indirectly by changing people’s work environment to such a degree that they would be stupid not to adjust their behaviour

Readiness for change is also dependent on culture, it is connected to feelings of trust and security and

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Why to care about your (organizational) culture

• By understanding your culture, you can predict what is more likely to work in your organizations and where you can expect problems.

• You should be careful when trying to implement „best practices“ from other organizations (or even countries) – shouldn‘t you change your culture first?

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The strategic management cycle:from SWOT to strategy maps and cascading objectives

Benedict Wauters

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Example output of a SWOT exercise What are key strategic priorities? Eg what S can we use to capture O?What W must we amend? Etc.

Once, again, if current operations are mess, this

will crowd out any thinking about longer

term opportunities and threats

• A key question here is to define how you want to add value as a PMO?

• We will cover this when we discuss delivery mechanisms!

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PMO strategy = strategy concerning added value

PMO

stra

tegy

=

tech

nica

l ass

istan

ce

prio

rityOP

Priority1

OPPriority

2

OPPriority

3 PMO strategy = technical assistance priority

OPPriority

1

OPPriority

2

OPPriority

3

Added value by leveraging the technical assistance!

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Strategic results framework: recapThe results framework focuses on PMOs and what these organisations should be changing toincrease their added value to a country or region.

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The top level reflects policy challenges. But the PMO strategy will not typically

emphasise all thematic context objectives, only those that pose a real challenge to the PMO and its existing way of working, and may add other

types of expectations to/ frompolicy-makers. Expectations in different perspectives are bi-directional (toward and

from)

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Example of expanded vision

Same vision can be realised with different strategies!

Innovator strategy map vs enhancer

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WARNING: remember that the function of objectives here is to create opportunitz space as it is an interactive control sźstem while most use it as a diagnostic szstem Hence learning objectives probablz fit better here.

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Boundary systems

Strategy(plan)

Core values,mission, vision

Criticalperformance

variables

Strategicuncertainties

Risks to be avoided

Interactive control systems Diagnostic control systems

Belief systems

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BUSINESS UNIT MAP

BUSINESS UNIT MAP

Focus on core value adding processes Focus on core value adding processes

CORPORATE MAP

-Focus on synergies (coordination and cooperation )-Focus on common priorities/principles-…or fix completely BU maps (then BU maps are the same)

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Boundary systems

Strategy(plan)

Core values,mission, vision

Criticalperformance

variables

Strategicuncertainties

Risks to be avoided

Interactive control systems Diagnostic control systems

Belief systems

INTERACTIVE CASCADING

Cascading• From the business unit strategy is cascaded to operational teams within

the business unit• They should conduct a mission, vision and values exercise at their own

level, within the framework of the higher level ones, and then to look at the higher level strategy map from that perspective this may lead to requesting adjustments to the higher level map or to adjusting

mission, vision and values most frequently unit level mission, vision and values will just be helpful in

translating a higher level map into a suitable lower level one.

• The strategic outputs and outcomes on the map are arrived at in consultation with staff in the cascading process The business unit strategy may therefore be adjusted in the cascading process

• The idea is that there is a discussion where a lower level can argue for its interpretation of a higher level map and can even argue for modification of the higher level

• Contestation is very much at the core of this process and it is crucial that higher level management incites this and creates openness for it

Within operational business units, individual staff member objectives are then similarly aligned to unit objectives but be careful here

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Regulatory/Support unit alignment

• Regulatory/Support unit strategy map should have:a top level with a focus on both effectiveness (this

contains the objectives from the corporate, business and operational unit maps that the support unit can impact on) and efficiency (in terms of use of resources)

a client level that identifies who the units serve and what these clients (or client groups, e.g. staff, managers, ...) expect

an internal process levelan internal capacity level

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The strategic management cycle:strategic initiatives, improvement projects and planning operations

Benedict Wauters

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Skip for now

Strategic initiatives

• The vision relates to the next 3-10 years. Hence so does the strategy. This entails the strategy map is future oriented.

• If the vision was challenging enough (as it should be) then it would be hard to imagine that this can be realized by doing more of whatever the entity is already doing or by doing it better with whatever means it is already using.

• Rather, the entity will have to do things it does not do yet at all or acquire new capacities, competences and/or relationships it does not have yet.

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Strategic initiatives

• Strategic initiatives do not represent: business as usual or … ongoing improvement/maintenance of existing processes and outputs

• They proactively prepare the organisation for the future e.g. by addressing NEW products/services via new (types of) calls for

proposals …and/ or NEW relations, competences, expanded capacities hence there is considerable uncertainty about how to run them and what

they can achieve• E.g. a full Vanguard method based redesign

• Require coordination from many parts of the organization• As some strategic initiatives may be related (complementing each other

or feeding each other), they should be grouped under overarching themes that can be visualized in the strategy map.

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1.Select a processobjective

Quality of care: solve my health issues in a sustainable way as quickly as possible

*illustrative real example not be taken as an ideal example

*

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2. Break up the process objective into its key components

THREE MAJOR TRANSACTION POINTS OF CONTACT THAT FEED INTO EACH OTHER

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3. Break down the components into driversTo understand better what the situation is, you can engage in measurement

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4. Reflect on what the measurement tells you from a systemic point of view

Use continuous improvement with inline experimentation.

Be careful with measures: should be “systemic”.

When major redesign required with new capabilities, it is a

strategic initiative rather thanimprovement.

*illustrative real example not be taken as an ideal example

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Strategic versus operational plans

Demand plan: planned (increase of) outputs by type (ranging from simple outputs to complex calls for

proposals)

Capacity requirements + free capacity maintained (in % used of available people and facilities)

Factoring in expected process improvements

Direct operational, maintenance AND improvement costs

= OPEXCapital expenditure

(replacement/expansion of existing facilities for current business)

=CAPEXIndirect operational cost=OPEX

Strategic initiatives

STRATEX(can be

bothexpenses

orcapitalisa

tion)

PLANS

BUDGET

Operational plans (with a one year time horizon) specify which outputs will bedelivered by which parts of the entity.

Remember!

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This concerns planning and score keeping, NOT operational management (developing, improving we

do with szstems measures)!