The rapid dynamics of the changes that have occurred in recent years, both in the economy and in the business system, have had a strong impact on the groups of consultants on issues of strategic management, forcing them to redouble efforts to satisfy the demand for their services.
However, the lack of methodological materials for many of the consultant's functions and the complexity of the existing ones become an obstacle to the necessary development of the consultant in the short term.
This guide aims to provide the Beginning Consultant with an ally that allows him to face the complex work of facilitating a Strategic Planning Exercise with the minimum of requirements.
Serve for those who help build today with tomorrow in mind.
strategic-planning-practical-guide-1
Is required:
- Senior Management Commitment to the Process: before beginning the Exercise, the commitment of the organization's Senior Management to the process should be verified, specifying respect for time, the presence of all managers (if the main manager is not found, it is it is recommended to suspend the work session) and the guarantee of working conditions. Consultant-Facilitator: professional with the knowledge and emotional skills necessary to facilitate a Strategic Planning exercise.
It is recommended that the exercise be facilitated by pairs of consultants.
- Working Group: group of people in the organization who, with the help of the consultant, will prepare its Strategic Planning. It is generally made up of the Board of Directors and representative staff from the different areas.
Time Controller: person who controls the time of the sessions. Rapporteur: Professional with the ability to collect all the significant information that is generated in the course of the work of the exercise (secretary for example).
- Visual means: in order to facilitate explanations and visualize the different phases of the analysis for the group, a visual means is required, such as banners and markers, blackboard and chalk or a computer (with or without a data show.
Time: work sessions that should not be less than 2 hours or more than 4, with intermediate breaks. The time invested in developing strategic planning varies significantly from one organization to another.
About the Working Algorithm
The development of any of the different phases of the Strategic Planning Exercise must begin with a warm-up or energizing exercise that allows group members to relax and align with the objective to be achieved. Subsequently, a count of what happened in the previous work sessions is made and the new phase is carried out with the following work algorithm:
During the instruction period, the fundamental elements related to the phase to be completed will be explained to the working group. It must be remembered that the members of the working group are not academic and that many times the terms used in the university environment are not their domain, that is why emphasis and explanation have been emphasized.
Once the facilitator has finished with the explanation, guide the members of the working group to individually complete the phase in question. The facilitator should supervise and guide this work.
(note: an improvement in the quality of the results must be observed as one progresses from individual work to plenary). Example: Each member must individually prepare a Mission proposal.
Once the individual work is completed, the facilitator forms teams of between 3 and 5 members who will jointly complete the phase based on the positive aspects of their individual proposals. Example: Teams 1, 2,3 will each develop a mission proposal based on the main positive elements of their individual proposals.
Once the work of the teams is concluded, a representative or spokesperson is selected to read and defend the team's proposal (understand to defend, how to argue the reasons why it was developed in this way and not in another way), the process is repeated with each one of the teams and it is then passed to the general discussion from which the final result will be obtained. Recommendation: Once each of the teams' proposals has been defended, the most complete one is taken as the basis and the final result is elaborated on this.
1 - Starting the Exercise
To begin the Strategic Exercise in an organization, it is necessary to have prior knowledge of it such as: its structure, corporate purpose, background in strategic planning, strategic planning of the entity to which it is subordinated, specificities of the organizational culture, and others that could be of interest.
The work session begins with a presentation of all group members, beginning with the facilitator.
At the beginning of the Strategic Exercise, in the first sessions, it is recommended to give a conference on change and its management, in this way the process of unfreezing the work group begins and its insertion into the work dynamics of the strategic exercise is facilitated. Importantly, strategic direction is a model for change, as it is designed to drive the organization from its current state to a desired state. Disregarding this step can cause resistances that decrease the quality of the process.
The consultant must have clarity in an important aspect: he is not the one who elaborates the planning, he only facilitates it. Hence, as the strategic exercise progresses, the self-management of the team members will increase.
Once this phase has been completed, the strategic management model is explained and the work with the mission begins.
What is the Mission?
- The Mission is the organization's reason for being, its supreme or supramaximal objective.
What characteristics does the MISSION have to have?
- It must be clear, so that all members of the organization can understand and assume it. It must not be too short to become a slogan or too long to make it tedious. It must be unique (two organizations can have the same social responsibility but not the same Mission).
It must be elaborated in the form of an objective (start with an infinitive).
It must be inspiring.
You must have a commitment to respect the environment.
What questions should you answer?
What is our role as an organization? (social order)
How do we plan to position ourselves in the market? (Strategic positioning)
What kind of clients are we designed for? (market segments) What does our organization have to fulfill its order? (competitive advantages)
How to elaborate the Mission?
According to the working algorithm described in the first part of this manual. It is convenient to represent on a board, banner, data show, the following graph that illustrates the process:
3 - The Values
What are values?
- Positive significance acquired by objects, ideas, etc. for one or a group of people, in correspondence with their needs and interests and established for the fulfillment of the objectives of a determined community.
What are the Shared Values of an Organization?
- It is the set of precepts, norms, political, moral and social patterns that characterize the organizational culture and that condition or guide the behaviors of individuals and that are shared, consciously or unconsciously by everyone in the organization in question. They are closely related to the Mission and the Vision.
How to identify them?
- Some are found in the Mission as the distinctive advantages of the organization.
To identify them you must have an "open mind". According to the described working algorithm.
Examples of Values:
Honesty.
Efficiency.
Excellence.
Honesty.
Ethics.
Professionalism.
Competition.
3.1 - Conceptualization of the values
What is the conceptualization of values?
- It is the definition of value according to the concept assumed by it by the members of the organization
Why is it important to conceptualize values?
- Each human group, and therefore organizations, assumes the meaning of values differently, so they must be conceptualized according to their significance for the organization.
How are they conceptualized?
- According to the work algorithm described, a useful question for the facilitator may be: What does this organization understand by this value?
Example:
- Training for members of two different organizations is not the same:
Organization 1 - Training: Systematic, organized, effective and dynamic educational process, aimed at the transmission of knowledge and the development of attitudes, habits, abilities and skills.
Organization 2 - Training: Process of continuous acquisition of skills and knowledge of the human component to improve performance in the organization.
3.2 -Operationalization of the Securities
What is the operationalization of securities?
It is the definition of the modes of action of the people who have assumed the values declared by the organization.
How are they identified
According to the described working algorithm.
From conceptualization. Useful question for the facilitator may be: How does the person in this organization act who has assumed this value?
Members of the working group can also be asked to complete the following expression: This value in this organization is held by those who…
Examples:
Organization: University of Matanzas
Value: Competition
Conceptualization: Possess adequate knowledge, skills, attitudes and aptitudes for the work in which it is performed.
Operationalization: It is competent at the University of Matanzas who:
- He teaches with quality. He has good research results. He has the recognition of his students and the university scientific community.
4 Key Results Areas (ARC)
What are the Key Result Areas?
They are those areas within the organization on whose performance the fulfillment of the mission depends.
How to identify them?
Many times they are related to functional areas.
They should not be more than 6 as it complicates the strategic operation of the organization.
They do not necessarily have to coincide with the departments or the structure of the organization.
The most correct thing is for the structure to be defined according to the ARC, but this is only achieved in organizations with high organizational development and strong commitment from leaders to Strategic Management.
Examples:
- ARCs must be tailored to the organization, these are just examples of some that can be defined, an ARC chief must be appointed.
5 Strategic Directions
What are the Strategic Directions?
They are those areas within the ARC that need to be highlighted for their importance for the fulfillment of the mission.
How to identify them?
It is not always necessary to define them
They are defined for ARC with multiple objectives that need to be broken down.
Examples:
The Strategic Directions must conform to the ARC of the organization, these are just examples of some of which can be defined. A head of Strategic Management must be appointed.
6 Interest Groups
What are Interest Groups?
- Interest Groups are those groups of people and institutions whose actions can positively or negatively influence the fulfillment of the Mission.
Some features:
They can be both external and internal.
It is important to keep in mind that they are ALL those who can help us or slow us down in the fulfillment of our Mission.
They should not be confused with the Key Factors.
How to identify them?
- According to the described working algorithm.
Examples:
Customers.
Providers.
Managers.
Labor union.
Competitors.
Authorities.
Organization to which it is subordinate.
Internal customer.
NGO.
6 The Key Factors
What are the Key Factors?
- They are environmental phenomena that can positively or negatively influence the fulfillment of the Mission.
What characteristics do they have?
- They are defined as variables, so they can adopt different states. For example:
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| Key factor |
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State |
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| Competition in the market |
A lot
- Their correct identification is very important because with them the scenarios are built.
How are they identified?
- With the algorithm described in the first part of this manual.
Examples of Key Factors:
Climate competition demand.
Legislations.
Policies.
Environmental pollution.
Raw material prices. Market prices.
7 Analysis of Weaknesses, Threats, Strengths and Opportunities (SWOT)
What is SWOT Analysis?
- It is an analysis for decision-making through which the main strengths, weaknesses, threats and opportunities of the organization are identified and those strengths and weaknesses that should be most influenced in order to take advantage of opportunities and defend against threats.
What are the characteristics of the SWOT Analysis?
| 1. Identification of Strengths, Weaknesses, Threats and Opportunities |
| 2. Elaboration and Crossing of the Matrix |
| 3. Interpretation of results |
It is a matrix of four inputs.
In it the internal elements intersect with the external elements of the organization. It is a Matrix for decision making.
How to make it?
a) Determination of Weaknesses, Threats, Strengths and Opportunities.
The work algorithm defined at the beginning of the guide is used, it is important to define that:
WEAKNESS: Insufficiency, difficulty, INTERNAL lack that limits the organization in the fulfillment of the Mission.
THREAT: Element, phenomenon, EXTERNAL factor that limits the organization in the fulfillment of the Mission.
STRENGTH: Advantage, ability, resource, INTERNAL that favors the organization in the fulfillment of the Mission.
OPPORTUNITY: Space, advantage, EXTERNAL that appears in the environment that favors the organization in the fulfillment of the Mission.
The maximum recommended number of Weaknesses, Threats, Strengths and Opportunities is 5 in each case. It is always better that there is the same amount of each of them. For in this way subsequent analyzes are facilitated.
Elaboration of the Matrix
The SWOT Matrix is elaborated according to figure 1.6, where Fj = Strength J, Dj = Weakness J, Oi = Opportunity I, Ai = Threat I:
The completion of the Matrix.
- The completion of the matrix is performed by giving values to each of the boxes in which the strengths and weaknesses intersect with the opportunities and threats.
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Fig. 6 SWOT matrix
What scale to use?
- There are different opinions about it. There are two important elements to take into account when selecting the scale:
- In order to make the data collected more reliable, it is important that the experts consulted know the meaning of each value on the scale. The selection must be adjusted to the objective conditions in which the exercise is carried out.
The most used scales are:
| Scale |
Basic characteristics |
Advantage |
Disadvantages |
| X - • |
Binary scale where:
X: there is influence
•: there is no incidence
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Because there are only two options for decision in group work, the time necessary for completion is shortened |
It is too drastic giving only two options, and having less rank it is very possible that different items reach the same final score making it difficult to make decisions. |
| 1-2-3 |
Three-value scale where:
1: there is no incidence
2: there is influence
3: there is a strong incidence
|
With respect to the binary scale it widens the selection range and at the same time it is relatively quick to complete. |
It is still too short, making it difficult to differentiate between one item and another. |
| From 1 to 5 |
5-value scale where:
1: there is no incidence
2: there is little incidence
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With respect to the scale of 1-3 it expands the range of |
Sometimes it is too short, making it difficult to differentiate between a |
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3: there is an incidence
4: there is a medium incidence. 5: There is a determining incidence.
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selection and at the same time it is relatively quick to complete |
item and other.
(RECOMMENDED SCALE)
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| From to 7
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one |
7-value scale where:
1: no incident
7: determining incidence
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Regarding the scale of 1-5, it widens the selection range. |
Being broader, it is often unclear to experts what each value means in addition to being slower to complete.
(RECOMMENDED SCALE)
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Scales from 1 to 9, from 1 to 10 and from 1 to 12 are also used. These scales are not recommended because they make it difficult for each expert to understand the meaning of each value and therefore decrease the reliability of the results.
After all… How to complete the Matrix?
It is done by completing each box by answering four questions depending on the quadrant to be completed (following the described work algorithm):
Quadrant I (Offensive) : Strengths - Opportunities
If Fortress F x is maximized, how much will it be possible to take advantage of Opportunity O x to fulfill the Mission?
Quadrant II (Defensive) : Strengths - Threats
If Fortress F x is maximized, how much will it be possible to mitigate the effects of Threat A x to accomplish the Mission?
Quadrant III (Adaptive) : Weaknesses - Opportunities
If Weakness D x is exceeded, how much will it be possible to take advantage of Opportunity O x to fulfill the Mission?
Quadrant IV (Survival) : Weaknesses - Threats
If Weakness D x is exceeded by how much will it be possible to mitigate the effects of Threat A x to fulfill the Mission?
Finally, the summation is made and the STRENGTHS, WEAKNESSES, OPPORTUNITIES and THREATS with the highest scores are identified:
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O 1 |
O 2 |
O 3 |
O 4 |
O 5 |
A 1 |
A 2 |
A 3 |
A 4 |
A 5 |
∑ |
| F 1 |
3 |
3 |
3 |
two |
4 |
two |
4 |
5 |
3 |
one |
30 |
| F 2 |
3 |
4 |
4 |
5 |
5 |
two |
3 |
3 |
3 |
two |
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| F 3 |
two |
5 |
5 |
5 |
two |
5 |
two |
4 |
two |
two |
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3 |
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3 |
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two |
two |
31 |
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5 |
3 |
3 |
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two |
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one |
one |
5 |
28 |
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5 |
5 |
5 |
3 |
3 |
3 |
3 |
two |
two |
4 |
35 |
| D 2 |
5 |
4 |
4 |
4 |
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two |
two |
two |
two |
one |
30 |
| D 3 |
3 |
5 |
4 |
4 |
3 |
two |
3 |
3 |
two |
5 |
3. 4 |
| D 4 |
4 |
4 |
5 |
5 |
4 |
two |
two |
4 |
4 |
4 |
38 |
| D 5 |
5 |
5 |
3 |
3 |
3 |
one |
one |
two |
two |
two |
27 |
| ∑ |
38 |
42 |
40 |
38 |
3. 4 |
24 |
25 |
29 |
2. 3 |
28 |
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7.1 The Problem and the General Strategic Solution
What is the General Strategic Problem?
- It is that problem situation that, if not resolved by the organization, can ruin the fulfillment of the Mission.
How do you define yourself?
- The main Strengths, Weaknesses, Opportunities and Threats are identified (see 1.8). It responds to the following format:
If the main weaknesses are not overcome and the main threats continue to lurk, then even by enhancing the main strengths it will not be possible to take advantage of the main opportunities for the fulfillment of the mission.
If the lack of communication and lack of motivation are not overcome and strong competition and rising raw material prices continue to lurk, then even by enhancing the strong sense of belonging and leadership, it will be possible to take advantage of the strategic alliance with local authorities. and customer loyalty for the fulfillment of the mission.
What is the General Strategic Solution?
- It is the solution to that problem situation that, if not resolved by the organization, can ruin the fulfillment of the Mission.
How do you define yourself?
- The main Strengths, Weaknesses, Opportunities and Threats are identified (see 8). It responds to the following format:
If the strong sense of belonging and leadership are enhanced, and the lack of communication and lack of motivation are overcome, then it will be possible to take advantage of the strategic alliance with local authorities and customer loyalty to mitigate the effects of strong competition and the rise. of raw material prices, for the fulfillment of the mission.
7.2 The Strategic Positioning
What is Strategic Positioning?
- It is the position that should govern the strategies to be followed by the organization.
How is it determined?
The sum of the values of each quadrant is made. Fig. 1.9 The quadrant with the highest value is selected.
|
O 1 |
O 2 |
O 3 |
O 4 |
O 5 |
∑ |
A 1 |
A 2 |
A 3 |
A 4 |
A 5 |
∑ |
| F 1 |
3 |
3 |
3 |
two |
4 |
fifteen |
two |
4 |
5 |
3 |
one |
fifteen |
| F 2 |
3 |
4 |
4 |
5 |
5 |
twenty-one |
two |
3 |
3 |
3 |
two |
13 |
| F 3 |
two |
5 |
5 |
5 |
two |
19 |
5 |
two |
4 |
two |
two |
fifteen |
| F 4 |
3 |
4 |
4 |
4 |
3 |
18 |
3 |
3 |
3 |
two |
two |
13 |
| F 5 |
5 |
3 |
3 |
3 |
3 |
17 |
two |
two |
one |
one |
5 |
eleven |
| ∑ |
16 |
19 |
19 |
19 |
17 |
90 |
14 |
14 |
16 |
eleven |
12 |
67 |
| D 1 |
5 |
5 |
5 |
3 |
3 |
twenty-one |
3 |
3 |
two |
two |
4 |
14 |
| D 2 |
5 |
4 |
4 |
4 |
4 |
twenty-one |
two |
two |
two |
two |
one |
9 |
| D 3 |
3 |
5 |
4 |
4 |
3 |
19 |
two |
3 |
3 |
two |
5 |
fifteen |
| D 4 |
4 |
4 |
5 |
5 |
4 |
22 |
two |
two |
4 |
4 |
4 |
16 |
| D 5 |
5 |
5 |
3 |
3 |
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19 |
one |
one |
two |
two |
two |
8 |
| ∑ |
22 |
2. 3 |
twenty-one |
19 |
17 |
102 |
10 |
eleven |
13 |
12 |
16 |
62 |
Fig. 9 Determination of Strategic Positioning with the SWOT Matrix.
What are the possible Strategic Positions and what does this mean?
- Offensive: If the quadrant with the highest score is the Offensive then the organization should focus on enhancing the Strengths to take advantage of the Opportunities. Defensive: If the quadrant with the highest score is Defensive, then the organization should focus on strengthening Strengths to lessen the effect of Threats. Adaptive: If the quadrant with the highest score is Adaptive, then the organization should focus on overcoming the Weaknesses to take advantage of the Opportunities. Survival: If the quadrant with the highest score is Survival, then the organization should focus on overcoming Weaknesses to mitigate the effect of Threats.
What are Scenarios?
It is the description of the possible environments in which the organization will be immersed in a certain period.
What are the characteristics of the Scenarios?
They are built from the expected behavior of the Key Factors. Three scenarios are generally built:
| Positive |
Most likely |
Negative |
| It is the possible positive behavior that the key factors may have. |
It is the most likely behavior that the key factors may have. |
It is the possible negative behavior that the key factors can have. |
How are the Scenarios built?
From the Key Factors.
The three behaviors are described: Positive, Most Likely, and Negative that each Key Factor can have.
Then the positive behaviors are integrated into a paragraph thus conforming to the Positive Scenario, the most likely behaviors are thus integrated into the Most Probable Scenario, and the negative behaviors are thus integrated into the Scenario.
Example:
| Key factor |
Positive |
Most likely |
Negative |
| Demand |
|
It increases considerably
demand in the market segments in which the
organization
|
Gradually increasing demand in the market segments in which the
organization
|
Demand decreases in the market segments in which the
organization
|
| Competition |
|
Decreases the level of activity of the competition in the market segments in which the
organization
|
It keeps
increasing the activity of the competition in the market segments in which the
organization
|
Significantly increases the activity of competitors in the market segments in which the
organization
|
| Prices of
Petroleum
|
High oil prices remain with a slight downward trend. |
Oil prices remain high with a slight upward trend. |
Oil prices rise considerably. |
Finally how are the scenarios presented?
| Positive Scenario |
Most Likely Scenario |
Negative Scenario |
| Increases
considerably the demand in the market segments in which the organization operates. Decreases the level of activity of the competition in the market segments in which the organization operates. High oil prices remain with a slight downward trend.
|
Gradually increases demand in the market segments in which the organization operates. The activity of the competition continues to increase in the market segments in which the organization operates. Oil prices remain high with a slight upward trend. |
Demand decreases in the market segments in which the organization operates. Significantly increases competition activity in the market segments in which the organization operates. Oil prices rise considerably. |
9 The Vision
What is Vision?
It is the state in which the organization is expected to be in a given scenario. It is the "Desired State".
What characteristics should the Vision have?
It must be elaborated in the present tense.
It should not be too extensive.
It must be dreamy but not impossible.
It is a photograph of the organization in the framework of the described scenario.
How is the Vision elaborated?
According to the proposed Work Algorithm.
A Vision is developed for each Key Results Area (responsibility of the ARC director).
The Visions of each Key Result Area are grouped and the Vision of the organization is formed.
It is made with "a warm heart, a cold mind and feet on the ground."
Example:
| Company Vision "Stellar" by ARC |
| ARC |
View |
| Human Component |
A human component management system has been implemented that allows man to be placed at the center of the organization. |
| Production |
There is a consolidated production system capable of maximizing effectiveness in production processes. |
| Marketing |
There is a system that allows managing market information based on the fulfillment of the Mission. |
Finally how is the Vision presented?
| Company Vision "Stellar" |
| "Estelar" is an organization that provides excellent services, with systems that allow it to put man at the center of its management, maximize the effectiveness of its production processes and manage market information based on the fulfillment of its Mission. |
Undoubtedly these are extremely simple and general examples and could correspond to almost any organization, our intention with them is only to offer a guide.
10 The Strategic Objectives
What are the Strategic Objectives?
- It is the strategy that the ARC draws up to contribute to the fulfillment of the mission and to achieving the Vision. It is the great transformation that the ARC plans to carry out in the period for which the planning is made.
What characteristics should the Strategic Objectives have?
One must be made by ARC.
They must be clear.
They must be written in infinitive.
They should not be contemplative but concrete.
They are elaborated in focused to reach the vision of the ARC.
How are they made?
- Based on the ARC Vision (responsibility of the ARC director).
Examples:
| ARC |
|
Strategic Goals |
| Human Component |
ARC Vision |
A human component management system has been implemented that allows man to be placed at the center of the organization. |
| objective
Strategic
|
Implement a human component management system that allows putting man at the center of the organization. |
| Production |
ARC Vision |
There is a consolidated production system capable of maximizing effectiveness in production processes. |
| objective
Strategic
|
Implement a consolidated production system capable of maximizing effectiveness in production processes. |
| Marketing |
ARC Vision |
There is a system that allows managing market information based on the fulfillment of the Mission. |
| objective
Strategic
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Implement a system that allows managing market information based on the fulfillment of the Mission. |
11 Measurement Criteria and Action Plans
What are the Measurement Criteria?
- They are the goals to be achieved by the ARC in a certain period of time.
What characteristics should the Measurement Criteria have?
They must be clear, precise and measurable.
They must be able to relate to indicators.
They must have the character of achievement, that is, the fulfillment of a measurement criterion is the basis for the fulfillment of the subsequent one, which guarantees that the organization moves to higher stages.
- Many times they are found in organizations as the "Objectives of the Year". These are only the Measurement Criteria for the year, they are presented in the third person. Look at annex 1
How are they made?
- They are prepared by those in charge of the ARC to which the Strategic Objective to which they are taxed belongs (responsibility of the ARC director).
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