The Direction theme has evolved like everything else in human behavior, what happens is that in recent decades, technological advances have made it possible to take leaps and bounds in a shorter period of time that surely would have had to take place at another stage hundred and hundreds of years.
This chart from Drs. Salvador García and Shimon I. Dolan, clearly illustrates the evolution of three ways of directing; let's see:
Legend:
DPI: Management by instruction, DPO: Management by objectives, DPV: Management by values.
In the work process of the Strategic Direction (DE) and the Administration By Objectives (APO) there are many useful tools that we use for the design of the mission until the systematic evaluation of the objectives, tasks, from the beginning it insists on not establishing a straitjacket in terms of work style, although it certainly imposes a certain rigor in limits, rules and order in all processes, in order to achieve the planned end.
It is possible that the experience and maturity, which is being achieved in all this work, facilitate the introduction of methodological changes, but for this it is necessary in the first instance to be well endowed with the necessary knowledge and to have accumulated the design, realization and adjustment of various strategies.
Let's look at the design of the profile that the organization must draw together with the mission statement or organizational purpose. Figure 2.
These steps that we contemplate in figure 2 facilitate strategic planning and serve us in its structure to analyze:
Resources for strategic planning:
To achieve the effectiveness of strategic planning, it is extremely important to consider the consumption of the system, both financial, material and human, the latter being the ones that require the most specialized attention from the management line since, among all, sometimes the interests do not they are common and if incongruous and with divergent goals.
Profile of the organization, entity or company:
It is the way in which it has operated until now; Being able to be a starting point to prosecute where it will go and what will be the scope or where it should go, we could ask ourselves:
What is our business or reason for being?
Who are our clients?
What do our clients want?
What should our business be?
It can be these and many more questions that serve to answer the main reason of the organization for its products or services, its competitive position, the geographical territory, the orientation and values of the top management, reasoning is important in all these aspects. grounded.
It is important that we ask ourselves these questions as a group or those that we select and prepare to give them answers, as well as those that will appear soon, as they will be an informative source in the following steps.
Geographical orientation:
Questions such as:
1. Where are our clients?
2. Where are our customers who should be, but who are not today?
Competitive situation:
1. Identification of key success factors.
2. Estimation of their relative importance.
3. Consider competitive aspects such as:
- PricesQualityCostsServicesProduct innovationDistribution system
Guidance from senior management:
The organization's profile is configured by human beings, especially by executives. These establish the organizational climate, influence the atmosphere of the organization and determine the direction of the entity. For example, management may not take advantage of opportunities in a certain business due to a conflict with the values of senior management.
Another example of the influence of values may be the management's commitment to socially responsible actions, in the belief that these activities will be beneficial to the organization in the long term.
The understanding of the past and present positions and attitudes of the organization and its policies, as well as the values of the leaders, are important factors for the development of the institution's profile, so the next step in the strategic planning process is analysis of threats, opportunities, strengths and weaknesses.
Analysis of the external environment (environment): threats and opportunities:
In the environment, a large number of different factors must be considered and both threats and opportunities group together problems such as the economic situation, energy, technological changes, political and government decisions; being able to group as in categories: economic, social, political, productive, technological factors; demographic, market, competitive factors and many more.
Analysis of the internal environment: weaknesses and strengths:
The demands and demands of the environment force the organization to diminish its weaknesses and take advantage of strengths with the maximum of audacity. Some authors classify them like this:
1. Structure and climate of administration and organization.
2. Operations.
3. Finances.
4. Other factors important to certain organizations.
Administration and Organization: Administrative talents and the entire workforce are included in this category, encompassing labor relations: personnel policies: planning, evaluation, selection, training and development of personnel, compensation and stimulation, as well as the control system within the organizational structure and climate.
The administrative style is decisive in the entire future of the organization, where the tendency towards organizational change oriented towards higher goals must be present with an adequate level of decentralization and hard work in all the sub-systems of the Human Resources Management System.
Operations:
A careful analysis must be made in terms of research development capabilities, as well as the sufficiency and productivity of the facilities available or the effectiveness in the provision of services, in order to satisfy the expected growth and the response that the society waits for us to give.
In the same way, commercial activity will be evaluated in product distribution channels, guaranteeing the protection of registered trademarks and those that are not, speeding up the formal process to register them. Guarantee competitive prices, an adequate service and a clear image of the entity.
Finance:
Carefully evaluate the strengths and weaknesses in financing, budgeting, financial planning, accounting system, solvency, liquidity and whatever economic element is useful to us. Not only to look at past and current data but also to have short and long-term financial planning that corresponds to the entity's strategy.
Strategic alternatives:
The previous analysis of weaknesses, threats, strengths and weaknesses, stimulates in the strategic design team of the entity or organization, the creative process of searching for alternatives, since it is worthless to have detected weaknesses and threats, but the smart thing is to become strong before them with strengths and opportunities.
There are strategies that tend to specialize or focus, others have the philosophy of going backwards and then forwards, others focus on diversification, others on technological innovation, there are even entities that decide to enter the career of "no change" and They agree to do nothing, that is, they follow a known path and let others make possible mistakes in innovations.
Some choose an international strategy, others decide on liquidation, which may lead to the termination of an unprofitable production line or service.
There are also those that decide to associate with national or foreign firms.
As can be seen, there is an overview of feasibilities. Within them there are many possible variations and often they are not performed purely but are combined among them, it is evident that both the evaluation and the choice of a strategy is a difficult, complex task and requires the accurate work of the entire team.. When making the strategic choice, there must be a clear awareness of the risks and if these can be determined, it is more sensible, because this way you are in better conditions to face them, there is a lot of talk about the opportune moment or just in time (JIT) and there are really decisions and actions that must be carried out at the right time, if not lose effectiveness.Obviously, the organization does not operate in a vacuum and on many occasions a new strategic action provokes a contrary reaction for which one must be prepared.
Against eventualities:
It is not easy at all to predict the future with total accuracy, so contingency plans must be prepared, supported by different conditions, as it is logical that not all can be foreseen but the most critical or crucial for the survival and success of the entity.
Effectiveness using the SWOT matrix:
In the previously described, the importance of strategic planning is appreciated, the link of the capabilities and possibilities of the organization with the environment, now we will delve into strategic planning as a management style and the possibilities of identifying and analyzing threats and opportunities in the environment, as well as the strengths and weaknesses of the organization.
The matrix that we will study here called as SWOT or situational matrix analysis, as well as its variables, are nothing new since they date back to the end of the 1960s.
Several authors refer to the importance of using strengths to take advantage of opportunities, but sometimes the significance of the challenge of overcoming weaknesses in the organization to adequately exploit opportunities is ignored. If you go deep, a weakness is the absence of strength and to overcome or overcome that real weakness, organizational development can become a positive strategy within the organization.
The SWOT matrix obliges the entity's leaders to systematically analyze the situation of their organization and therefore to plan strategies, tactics and actions to achieve the desired effectiveness.
The 7 steps of the SWOT matrix:
Let's see in figure 3 the description of the steps for the design of the SWOT matrix
Step 1
Preparation of the entity's profile.
Steps 2 and 3
They are mainly concerned with the current and future situation in relation to the external environment.
Step 4
The audit of strengths and weaknesses, concentrated on the internal resources of the organization.
Step 5 and 6
They are the activities necessary for the development of the most specific strategies, tactics and actions to achieve the entity's main purpose and objectives.
Step 7
Preparation of contingency plans. The situation can be analyzed in different ways, we could recommend:
1. Identify important problems.
2. Determine the purpose and objectives of the entity.
3. Focus on opportunities.
4. The work can be started indiscriminately with the analysis of the external environment or environment or with the internal resources of the entity. It is also feasible to work together with the environment and with the internal.
Environment environment
Threats (A) are listed, since these may have immediate importance and implication for the entity, since some or many of them can seriously affect the operation of the organization, these threats should be listed in cell (A) and in likewise, opportunities should appear in cell (O).
Threats and opportunities can be in different areas, but it is recommended to select the most common ones that can be categorized as economic, social, political and demographic factors, productive and services, technological. The analysis of these factors must be in the present and future tense.
Internal environment
The internal environment of the organization is evaluated for its strengths (F) and its weaknesses (D) and are listed in the respective cells. These factors can be found in administration, organization, operations, finance, services, production, marketing, and in other areas.
Strategies
As can be seen in Figure 3, there are four groups where different strategies, tactics and actions are concentrated depending on the chosen alternative, being interesting to know how the four interact with each other with the whole set of variables that this entails, being the aspect The strategy is essential, being able to be applied to the tactics so that they will serve to implement the strategy and likewise to the actions that more specifically will support the tactics outlined.
1. Strategy weaknesses threats (D - A) mini - mini.
The objective of the D - A strategy is to minimize weaknesses and threats. For example, an entity that has to face external threats and internal weaknesses, is logically in a critical and precarious situation; so you have to fight to survive and even decide on the liquidation option.
The D - A strategy can also be oriented in the direction that it prefers to merge or perhaps reduce certain operations and fight hard to overcome threats and weaknesses, the D - A position all insist on avoiding it.
2. Strategy weaknesses opportunities (D - O) mini - maxi.
In this case, attempts are made to minimize weaknesses and maximize opportunities.
Opportunities can be identified in an entity in the external environment, but in turn, have organizational weaknesses that prevent or disadvantage the progress of the production or services.
3. Strategy fortresses threats (F - A) maxi - mini.
The foundation of this strategy is based on the strengths of the organization that can counteract threats from the environment, so the tendency would be to maximize strengths and minimize threats.
You have to be very careful and bold, because in many cases the threats of the environment are very difficult to overcome and the strengths must be used with great care and discretion.
4. Strategy strengths and opportunities (F - O) maxi - maxi.
We would all like to be in an entity or organization where we have an increase in strengths and opportunities, being able to be leaders due to internal strengths as well as making the most of opportunities in the environment; and both weaknesses and threats will try to overcome and counter them to turn them into strengths and opportunities.
The SWOT matrix over time:
It is not sensible to think that the design of the SWOT matrix is a matter of a formal step in a single process, where once this is finished it does not return to it, no, the dynamics of this work forces us to constantly have to work with new versions and updated, so we will have matrices in the past, present, future and in turn the present updated repeatedly; let's see:
Case study: (Figure 5)
In the case shown above, we can see how, simultaneously, we develop actions for a defensive, offensive, survival and adaptive strategy; Now, it is sensible to ask ourselves, which will be the most appropriate, and the answer has a large set of variables; It is possible that only one of them is chosen by the entire team, or several are combined, that decision requires a lot of attention and restraint, it cannot be ignored that circumstances change and if an appropriate decision is made, the framework of that organization can enter In the field of achievers and by minimizing weaknesses and threats, strengths and opportunities will allow new challenges.
We see in the SWOT matrix a magnificent working tool, provided it is properly manipulated by wise hands.
Ten golden rules to succeed in using the SWOT matrix:
- Work in a team. Have change agents in the work group. Have information to have a vision of the future. Be realistic in today. Think and act with flexibility. Stimulate creativity. Have in the team with the main stakeholders. Be certain that the highest level of management is identified and involved in the theme and problem in question. Be timely and punctual in the actions. Design as many SWOT matrices as necessary.
We were once again reviewing an article by Dr. Carlos Díaz Llorca related to the Directorate for Securities that due to its importance we transcribe:
- Talking about values does not mean, far from it, that the objectives should be forgotten, both need each other. The DPV does not annul the DPO, but complements it and facilitates its implementation by giving it greater meaning. The shared essential values come to be critical elements of success around which the structuring of instrumental objectives must revolve.
If values serve to attribute meaning to action, objectives serve to translate action into specific performance and rewards.
We are able to face the challenges and thus we will be in better conditions to overcome them.
Conclusions:
As you can see the work with the tools that the SWOT provides us both within the Strategic Direction and in the Administration by Objectives, they are varied and are not used in their entirety, since in some cases only weaknesses, threats, strengths are stated and opportunities and others are used to identify whether the strategy will be offensive, defensive, contingency or survival, instead we see that its use is more versatile and broad.
Recommendations:
1. Expand dissemination and multiplication to the level where actions are carried out in the entities and organizations of the Territory in the areas of Strategic Management and Administration by Objectives.
2. Conduct workshops on specific topics in the Strategic Design groups of the municipalities.
3. Achieve more use of SWOT in strategic design in the territories.
Bibliography:
1. Weihrich Heinz, Administrative Excellence, University of San Francisco, USA, 1986.
2. García Salvador, Dolan Shimon, The Direction For Values, Spain, 1999.
3. Díaz Llorca Carlos, Workshop For Direction For Values, University of Havana, Cuba, 2000.
4. Quinn Robert E., Wisdom for change, Prentice Hall, Mexico, 1998.
5. Noer David M., Change in Organizations, Prentice Hall, Mexico, 1998.
6. Morrise George L., LONG-TERM PLANNING, Creating your own strategy, Prentice Hall, Mexico, 1998.
7. Pérez Martín Juan Fco., Human Resources Management Thesis, CCE, Cuba, 1999.
