Saturday, July 27, 2019
Strategic Thinking vs. Strategic Planning
In the view of F. Graetz, strategic thinking and planning
are “distinct, but interrelated and complementary thought processes” that must
sustain and support one another for effective strategic management. Graetz's
model holds that the role of strategic thinking is "to seek innovation and
imagine new and very different futures that may lead the company to redefine
its core strategies and even its industry". Strategic planning's role is
"to realise and to support strategies developed through the strategic
thinking process and to integrate these back into the business".
Henry Mintzberg wrote in 1994 that strategic thinking is
more about synthesis (i.e., "connecting the dots") than analysis
(i.e., "finding the dots"). It is about "capturing what the
manager learns from all sources (both the soft insights from his or her
personal experiences and the experiences of others throughout the organization and
the hard data from market research and the like) and then synthesizing that
learning into a vision of the direction that the business should pursue."
Mintzberg argued that strategic thinking cannot be
systematized and is the critical part of strategy formation, as opposed to
strategic planning exercises. In his view, strategic planning happens around
the strategy formation or strategic thinking activity, by providing inputs for
the strategist to consider and providing plans for controlling the
implementation of the strategy after it is formed.
According to Jeanne Liedtka, strategic thinking differs from
strategic planning along the following dimensions of strategic management:
Strategic Thinking Competencies
Liedtka observed five “major attributes of strategic
thinking in practice” that resemble competencies:
Systems perspective, refers to being able to understand
implications of strategic actions. "A strategic thinker has a mental model
of the complete end-to-end system of value creation, his or her role within it,
and an understanding of the competencies it contains."
Intent focused which means more determined and less
distractible than rivals in the marketplace. Crediting Hamel and Prahalad with
popularising the concept, Liedtka describes strategic intent as "the focus
that allows individuals within an organization to marshal and leverage their
energy, to focus attention, to resist distraction, and to concentrate for as
long as it takes to achieve a goal."
Thinking in time means being able to hold past, present and
future in mind at the same time to create better decision making and speed
implementation. "Strategy is not driven by future intent alone. It is the
gap between today’s reality and intent for the future that is critical." Scenario
planning is a practical application for incorporating "thinking in
time" into strategy making.
Hypothesis driven, ensuring that both creative and critical
thinking are incorporated into strategy making. This competency explicitly
incorporates the scientific method into strategic thinking.
Intelligent opportunism, which means being responsive to
good opportunities. "The dilemma involved in using a well-articulated
strategy to channel organisational efforts effectively and efficiently must
always be balanced against the risks of losing sight of alternative strategies
better suited to a changing environment."
What is Strategic Thinking?
Strategic thinking is defined as a mental or thinking
process applied by an individual in the context of achieving a goal or set of
goals in a game or other endeavor. As a cognitive activity, it produces
thought.
When applied in an organizational strategic management
process, strategic thinking involves the generation and application of unique
business insights and opportunities intended to create competitive advantage
for a firm or organization. It can be done individually, as well as
collaboratively among key people who can positively alter an organization's
future. Group strategic thinking may create more value by enabling a proactive
and creative dialogue, where individuals gain other people's perspectives on
critical and complex issues. This is regarded as a benefit in highly
competitive and fast-changing business landscapes.
Strategic thinking includes finding and developing a
strategic foresight capacity for an organization, by exploring all possible
organizational futures, and challenging conventional thinking to foster
decision making today. Recent strategic thought points ever more clearly
towards the conclusion that the critical strategic question is not the
conventional "What?", but "Why?" or "How?". The
work of Henry Mintzberg and other authors, further support the conclusion; and
also draw a clear distinction between strategic thinking and strategic
planning, another important strategic management thought process.
General Andre Beaufre wrote in 1963 that strategic thinking
"is a mental process, at once abstract and rational, which must be capable
of synthesizing both psychological and material data. The strategist must have
a great capacity for both analysis and synthesis; analysis is necessary to
assemble the data on which he makes his diagnosis, synthesis in order to
produce from these data the diagnosis itself—and the diagnosis in fact amounts
to a choice between alternative courses of action."
There is no generally accepted definition for strategic
thinking, no common agreement as to its role or importance, and no standardised
list of key competencies of strategic thinkers. There is also no consensus on
whether strategic thinking is an uncommon ideal or a common and observable
property of strategy. Most agree that traditional models of strategy making,
which are primarily based on strategic planning, are not working. Strategy in
today's competitive business landscape is moving away from the basic ‘strategic
planning’ to more of ‘strategic thinking’ in order to remain competitive.
However, both thought processes must work hand-in-hand in
order to reap maximum benefit. It has been argued that the real heart of
strategy is the 'strategist'; and for a better strategy execution requires a
strategic thinker who can discover novel, imaginative strategies which can
re-write the rules of the competitive game; and set in motion the chain of
events that will shape and "define the future".
There are many tools and techniques to promote and
discipline strategic thinking. The flowchart to the right provides a process
for classifying a phenomenon as a scenario in the intuitive logics tradition,
and how it differs from a number of other planning approaches.
What is Strategic Management? (Part 4 of 4)
3 Who Are the Strategy Managers
It goes without saying that an organization’s CEO (chief
executive officer) and COO (chief operating officer) are strategy managers with
ultimate authority and responsibility for formulating and implementing the
strategic plans of the organization as a whole. But... those who implement the
plan must make the plan! The strategic management function directly involves all
managers with line authority at the corporate, line-of-business, functional area
and major operating department levels.
4 Why Strategic Management Matters
The advantages of first-rate strategic thinking and a deep
commitment to the strategic management process include:
1. the guidance it provides to the entire management
hierarchy in making clear just “what it is we are trying to do and to achieve”
2. the contribution it makes to recognizing and responding
to the winds of change, new opportunities, and threatening developments
3. the rationale it provides for management in evaluating
competing requests for investment capital and new staff
4. the coordination it adds to all the strategy-related
decision making done by managers across the organization
5. the proactive instead of the reactive posture that it
gives to the organization.
What is Strategic Management? (Part 3 of 4)
2.4 Strategy Implementation and Execution
Putting the strategy into place and getting individuals and organizational
subunits to go all out in executing their tasks is the next step. The
leadership challenge is to so stimulate the enthusiasm, pride and commitment of
managers and employees that an organization wide crusade emerges to carry out
the chosen strategy and to achieve the targeted results.
2.5 Evaluating Strategic Performance and Making Corrective
Adjustments
Neither strategy formulation nor strategy implementation is
a once-forall-time task. Corrective adjustments may be necessary under
particular circumstances. Testing out new ideas and learning what works and
what doesn’t through trial and error is common. Thus, it is always incumbent upon
management to monitor both how well the chosen strategy is working and how well
implementation is proceeding, making corrective adjustments whenever better
ways of doing things cand be supported.
2.6 The Process of Strategic Management
Because each component of strategic management entails
judging whether to continue with things as they are or to make changes, the
task of managing strategy is a dynamic process - all strategic decisions are
subject to future modifications.
2.6.1 Characteristics of the Process
• managers do not necessarily go through the sequence in
rigorous lockstep fashion.
• the tasks involved in strategic management are never
isolated from everything else that falls within a manager’s purview
• the demands that strategy management puts on the manager’s
time are irregular
• formulating and implementing strategy must be regarded as
something that is ongoing and that evolves
The strategy implementation is the product of incremental
improvements, internal fine-tuning, the pooling effect of many administrative
decisions and gradual adjustments in the actions and behavior of both
managerial subordinates and employees.
What is Strategic Management? (Part 2 of 4)
2 The Components of Strategic Management
• defining the organization’s business and developing a
strategic mission
• establishing strategic objectives and performance targets
• formulating a strategy to achieve the objectives
• implementing an executing the chosen strategic plan
• evaluating strategic performance and making corrective
adjustments
2.1 Defining the Business
“What is our business and what will it be?” is the
fundamental directionsetting question facing the senior managers of any
enterprise. Addressing this question thoughtfully compels executives:
• to think through the scope and mix of organizational
activities,
• to reflect on what kind of organization they are presently
trying to create,
• to consider what markets they believe the organization
should be in, and
• to be specific about which needs of which buyers to serve The
management’s view of what the organization seeks to do and to become over the
long-term is the organization’s strategic mission.
2.2 Establishing Strategic Objectives
Specific performance targets are needed in all areas affecting
the survival and success of an enterprise and at all levels of management from
the corporate level on down deep into the organization’s structure.
The act of establishing formal objectives not only converts
the direction an organization is headed into specific performance targets to be
achieved but also guards against drift, aimless activity, confusion over what
to accomplish, and loss of purpose.
What is establishing formal objectives?
• conversion of the target direction into specific
performance targets to be achieved
• guard against
– drift,
– aimless activity,
– confusion over what to accomplish, and
– loss of purpose
Both short-run and long-run objectives are necessary. The
strategic objectives for the organization should at minimum specify:
• the market position and competitive standing the
organization aims to achieve
• annual profitability targets
• key financial and operating results to be achieved through
the chosen activities
• any other milestones by which strategic success will be
measured
2.3 Formulating Strategy
This component of strategic management reveals how the
targeted results will be accomplished (a detailed action plan is necessary to
achieve both short-run and long-run results). Objectives are the “ends” and
strategy is the “means” of achieving them.
Strategy is a blueprint of all the important
entrepreneurial, competitive and functional area actions that are to be taken
in pursuing organizational objectives and positioning the organization for
sustained success.
General Electric opinion on the issue is: “a statement of
how what resources are going to be used to take advantage of which
opportunities to minimize which threats to produce a desired result”:
How to respond to changing conditions
• what to do about shifting customer needs and emerging
industry trends
• which new opportunities to pursue
• how to defend against competitive pressures and other
externally imposed threats
• how to strengthen the mix of the firm’s activities by
doing more of some things and less of others
How to allocate resources
• over the organization’s various business units, divisions,
and functional departments
• making decisions that steer capital investment and human
resources in behind the chosen strategic plan
How to compete
• how to develop customer appeal
• how to position the firm against rivals
• to emphasize some products and de-emphasize others
• meet specific competitive threats
What actions and approaches to take in each of the major
functional areas and operating departments to create a unified and more
powerful strategic effort throughout the business unit.
The issue of strategy goes up and down the managerial
hierarchy (it is not just something that only top management wrestles with).
Strategy formation is largely an exercise in entrepreneurship reflecting the
long-term direction of the organization.
Analysis (situational analysis) and judgement are always
factors. The right choice and strategy for one organization need not be right
for another organization. One of the special values and contributions of
managers is an ability to develop customized solutions that fit the unique
features of an organization’s situation.
What is Strategic Management? (Part 1 of 4)
1 Definition of Strategic Management
Strategic management is the process where managers establish
an organization’s long-term direction, set the specific performance objectives,
develop strategies to achieve these objectives in the light of all the relevant
internal and external circumstances, and undertake to execute the chosen action
plans.
Strategic management steps:
• specifying an organization’s objectives,
• developing policies and plans to achieve these objectives,
• allocating resources to implement the policies
Therefore, we can see that strategic management is a
combination of strategy formulation and strategy implementation. It is the
highest level of managerial activity, usually performed by an organization’s
Chief Executive Officer (CEO) and executive team. Strategic management provides
overall direction to the enterprise.
Strategy formulation involves:
• doing a situation analysis: both internal and external;
both microenvironmental and macro-environmental.
• concurrent with this assessment, objectives are set. This
involves crafting vision statements (long term view of a possible future),
mission statements (the role that the organization gives itself in society), overall
corporate objectives (both financial and strategic), strategic business unit
objectives (both financial and strategic), and tactical objectives.
• these objectives should, in the light of the situation
analysis, suggest a strategic plan. The plan provides the details of how to
achieve these objectives.
This three-step strategy formulation process is sometimes
referred to as :
1. determining where you are now,
2. determining where you want to go, and then
3. determining how to get there.
These three questions are the essence of strategic planning.
1 Strategy implementation involves:
• allocation of sufficient resources (financial, personnel,
time, technology support)
• establishing a chain of command or some alternative
structure (such as cross functional teams)
• assigning responsibility of specific tasks or processes to
specific individuals or groups
• it also involves managing the process. This includes
monitoring results, comparing to benchmarks and best practices, evaluating the
efficacy and efficiency of the process, controlling for variances, and making adjustments
to the process as necessary.
• when implementing specific programs, this involves
acquiring the requisite resources, developing the process, training, process
testing, documentation, and integration with (and/or conversion from) legacy
processes.
Leadership and Management Training & Consultancy (LMTC)
Baru-baru ini, dua jabatan di ILSAS telah bergabung menjadi satu jabatan yang diberi nama Leadership and Management Training & Consultancy (LMTC). Nama product LMTC ialah Leadership and Management Solutions (LMS). Rangkakerja LMS ialah seperti dibawah.
Kenapa rangkakerja LMS digambarkan begini? Sebab dalam
memantap urus-tadbir satu-satu organisasi itu agar mampu memberi perkhidmatan
terbaik kepada pelanggan, inilah cabang-cabang ilmu yang perlu diambilkira.
Rangkakerja LMS ini juga bolehlah dipanggil sebagai 'body of knowledge' bila
kita bercakap tentang soal leadership dan management.
Walaubagaimanapun, bagi menangani sebarang cabaran mahupun
masalah sebarang organisasi itu, LMTC akan 'mengadun' cabang-cabang ilmu ini
bagi membentuk 'resepi' untuk menangani cabaran dan masalah organisasi
tersebut.
Kami yakin dengan inisiatif penggabungan dan rebranding
produk ini dapat memberi servis yang lebih baik kepada sebarang organisasi
dalam menangani cabaran dan masalah yang dihadapi.
Saturday, July 20, 2019
Has your organisational culture evolved or have you cultivated it?
The problem surrounding culture in a lot of organisations is
that senior leaders set the culture and define the organisation’s values, these
often end up on a wall for everyone to see and it is assumed the culture and
values are implemented. However, the
reality can sometimes be that the shared beliefs, behaviours and assumptions of
what the culture and values really mean are different in the eyes of employees.
Over the next few weeks we are going to pose a few questions
to unpack why this occurs. These will
include
1. Do you
(senior managers) understand the true culture and the lived values?
2. Have you
or your organisation identified the culture that you really want (Have you
asked yourself “where do we really want your organisational culture to be”?)
3. Have you
considered how to build a sustainable organisational culture (processes)
4. What is
the best way to monitor and review your culture to ensure you maintain where
you want to be.
So why do organisations get this so wrong? To start with, let’s look at what
organisational culture is.
Organisational culture can be defined as a unique set of
shared beliefs, assumptions, values and norms that shape the socialisations,
representations, language and practices of a group of people. This is the mantra that employees use to
guide behaviour and actions. Culture is
therefore refined and conveyed by employees, consciously and unconsciously now
and into the future.
Elements of culture can be typified using this Iceberg
model. What you can see every day is
classified as the artefacts or tangible elements such as physical structures,
the language the organisation uses to function and sell its services, the
rituals such as the way it positions itself and how its customers recognise
it. These are the vision, mission,
purpose, goals and strategic objectives of the organisation.
However, it’s the intangible elements below the waterline
that represent the reality of your organisations culture. Things like shared values and shared
assumptions, do they match what is above the line when leaders are not around,
or does it change into something less desirable. Other areas that sit below the waterline
include office politics and old ways of doing things that all have an impact on
the intended organisations culture.
The challenge for leaders is to work towards a match between
the intended culture above the water line and what happens day to day under the
waterline. And this is what we will be
looking at in more detail over the next few weeks.
Ask yourself these questions, do you understand the reality
of your organisation’s culture and its lived values and is it a true
representation of your business?
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