The growing effects of globalization, the continuous changes in consumer preferences and the dynamics of societies are just some of the factors that highlight the importance of the strategic focus and refocusing as well as the alignment of the organization towards These changes charge, every day more, within the managerial skills of every entrepreneur and / or manager.
The concept of strategic alignment supported on the basis that in order to achieve the expected results, it is necessary to synchronize and adapt in an effective way the activities and efforts of the different business units, processes and departments that make up the organization is the concept on which It supports one of the analytical tools of Dirinver ACBB, the PTST Methodology, acronyms that refer to the Anglo-Saxon terms (Plans (Plans), Targets (Objectives), Strategies (Strategies), Tactics (Tactics)).
This work methodology is supported at a theoretical level in the strategic alignment processes that usually operate at two differentiated levels and at the same time complementary to each other: horizontally, in terms of interdepartmental synchronization to guarantee that the chain of processes and cutting activities The organization's internal (value chain) and external (supply chain) runs along a line of activity in accordance with the expected objectives, plans and strategies.
On the other hand, since it is necessary that all functional departments and employees participate in the objectives, plans and strategies of the organization in order to involve people towards the achievement of goals, thanks to vertical alignment it is promoted that all the levels of the organization actively participate in the mission and are involved towards the achievement of the objectives of the company of which they are involved in terms of creation.
The realization of these activities based on the vision and mission of the business is reflected in the translation of actions (strategies and tactics) to produce the expected results. We therefore enter the scope of defining the key results areas, the setting of specific objectives for each of them, the action strategies and tactics or programs in which they will materialize and the establishment of management indicators, where the latest advances especially through solutions in the field of the Balanced Scorecard (Balanced Scorecard) and Business Intelligence, have done nothing to confirm that the formulation of the future and alignment across the organization to fulfill its mission meaningless some if we do not have aagile measurement system that allows us to know if we are on the right course and direction or if it is necessary to correct possible deviations.
On this basis, more or less of a theoretical nature, the PTST methodology is articulated, an analytical structure that Dirinver ACBB has been implementing in its diagnostics and consulting projects for more than 12 years and through which every businessman or manager can verify the health of your company while analyzing possible deviations in your planning and control systems.
In operational terms, the PTST tool is structured through eight differentiated modules, its analysis being equally applicable both globally and individually (for example, at the departmental level). Regardless of this basic structure, the tool can also contemplate in its analysis strategic aspects of vital importance for the direction of the company, such as the external and internal environment of the organization itself.
Its possible application both to one or several areas of activity, allows us to have a valid analysis methodology for all types of companies regardless of their organizational configuration, markets that they supply and areas of action.
“Regardless of the planning and control systems that companies may have established, the PTST Analysis Method establishes the possibility of reasoning at the managerial level (whether at the corporate level, business unit or product or service line) about the general situation in which the company finds itself, and based on the results obtained, design and establish the foundations of what an efficient project of organizational improvement could entail ”, indicates Oscar Cubillo, Marketing Consultancy Manager of Dirinver ACBB.
Below we present a basic work scheme, regardless of its scope of reference, for the general diagnosis of an organization under the PTST methodology:
Some of the critical areas (modules) that every consultant, manager or entrepreneur should consider when making a diagnosis of these characteristics are the following:
Organization module:
Key information about the nature, purpose, role and main characteristics of the organization should be examined in the context of its socio-economic environment. The works would be based on factors and events that have shaped the history of the company and that may be the origin of deeply rooted traditions, ways and philosophies, business practices and behavior patterns.
Step by step, the level of knowledge and understanding in the management of the company will be broadened and deepened, trying to determine the relationship between the problems that have been discovered. Special attention will be paid to the profiles and management styles of key personalities and to various issues that may be covered under the term “organizational culture”.
Analysis Points:
- Activity: Sector, Products, Services, Profile (national or multinational), General and specific environment in which it operates. Complexity and sophistication of products and processes. History: Date of incorporation. Growth model. Evolution of the company (Stages). Key events (acquisitions, mergers, New product development…). Key personalities in the history of the company. Importance: Volume of activity (Market shares, Sales volume…), Resource structure (personnel, capital, fixed assets…), Market position and share in the country, sector, region, local community, internationally. Main competitors (market share and positioning). Property: Model (private, public, cooperative), Legal form (corporation, limited company,…), Distribution of ownership and control. Influences: Majority Owners, Control Centers, Role of the Board of Directors, Social and Political Influences and Pressure Groups; Collective agreements of employees and organizations of the sector. Location: Location, number and size of units, distances, communications, etc. Human resources: Labor market, Training, Technical and business capacities, Training facilities, etc. Business Infrastructure Service (Technostructure): Accounting, audit of accounts, Senior Management Consulting, Legal advice, Insurance, Banking services. Physical: Transport and production facilities. Telecommunications. Organizational culture: Values and traditions: Habits and rituals; Predominant management style; Employee participation. Interconnection: Links and interdependencies with other organizations. Managers. Key personalities. Organizational structure: Form of structure, history, departments, divisions,… Decision making (Practice applied to the main decisions). Coordination of key functions. Communications and Channels (formal and informal). Control systems: Activity and implementation plans; Budget and expenses control; Reporting; Reports.New Technologies: Uses of information technologies; Communication technology, etc.
Strategic module:
The study of business objectives, strategies, policies and projects should be the main element in this area of analysis. Strategic planning, understood as the process of developing and maintaining the fit between the organization's objectives, its resources, and changing market opportunities, would be our starting point. The objective, to analyze, model and reshape the products and businesses of the company to achieve a satisfactory combination between benefits and growth and to have a more detailed analysis of the different functions and areas of activity together with a basis for evaluating their operation.
In operational terms, the consultant or manager will develop his work through 3 key ideas:
1) Product portfolio or investment portfolio
2) Potential future profit of each business unit
3) Short, medium and long term plans developed for the assumption of the proposed objectives.
Likewise, both the general and specific objectives sought by the management and the methodology used to set them should be examined. Special attention will be paid to conflicting objectives, strategies and policies, and to “blank” areas in which it could operate without pre-established objectives or plans.
Analysis Points:
- Identification and Analysis of Strategic Business Units (UEN). Analysis of the external and internal environment (Opportunities / Threats, Strengths and Weaknesses). SWOT. Business Portfolio Evaluation. Market positioning analysis (orientation towards production, product, sale and / or marketing). Identification and Analysis of New Business Opportunities.
- Intensive Growth Opportunities: Identification and analysis of additional growth opportunities for current businesses.
Market Penetration.
- Product Development. Market Development.
- Diversification.
- Integrating Growth Opportunities: Development or acquisition of businesses related to current ones Diversifying Growth Opportunities: Incorporation of attractive businesses not related to the current businesses of the company.
- Study and analysis of Objectives, Strategies and Programs. Degree of adjustment. Deviations. Implementation: Areas involved, Coordination, Execution deadlines. Control Systems.
Financial module:
The financial section is a key area within the study, because the financial capacity and business results of organizations reflect the status and potential of almost all other areas and functions.
What basic analysis points should the financial study focus?
- Investment: Policy and plans; main projects. Image of the company: First, is the image well reflected by the numbers for the current year? Is the company producing enough profit ? How strong is it in financial terms? Is it taking or giving too much credit ? is the cash flow satisfactory ?,…
Second, check if the historical numbers correspond to a positive trend image:
- Is the company becoming more lucrative? Is it expanding too fast? Is productivity increasing or decreasing? Is liquidity improving or deteriorating?…
Both images will distinguish between two conflicting aspects of the operation of the company, profitability and solvency (one business can be extremely profitable but economically weak; another can be economically strong, but not produce enough profit).
- Financial management: Position in the corporate structure; Records and reports (periodicity, reliability, quality); Relations with banks and financial agencies Balance and income statement (profit and loss): Comparative analysis, Sources and use of funds, Sources and cost of funds, Cash flow, Financial reserves Company value (Business Appraisal) Reports of Auditors: Existence, quality; Comments made by the auditors.
Marketing module:
The consultant, entrepreneur or manager, must analyze all those aspects that are part of the Marketing Direction and Management in the company, focusing their activity on the analysis of the sector / market and the product-market strategies followed. Likewise, the effectiveness of commercial strategies and their impact on other functional areas will be examined. Various components of the Marketing function such as sales organization, storage and transport costs, procurement policy, etc. they would also be reviewed if necessary.
Analysis Points:
- Macroenvironment: demographic, economic, technological, political, legal, social and cultural environment that could affect the future of the analyzed businesses. Microenvironment: Company, Suppliers, Intermediaries, clients,… Markets (local and export): Size, Growth Rates (globally, geographically and by segment), trends, market shares, etc. Competition: Identification of competitors, description based on their size, objectives, importance, strategies, market share, product quality, competitive core definition, Benchmarking,… Clients: Size and structure of the client base, main clients, dependency, study of needs, perceptions and purchasing trends. Consumer study from the point of view of the purchase process. Segmentation. Client services. Services post-sale. Technical services (information, training). Marketing Mix:
- Offering Mix (General and according to lines / Products): Range of offer, characteristics (physical, functional and commercial), Sales levels (according to products, lines, geographical areas and other management units), cost structure, pricing policy, discounts and bonuses, profit margins, results and profitability, positioning (real and perceived), quality, packaging, etc. Distribution Mix (General and according to channels / areas): Distribution channels, number of units sold per channel, relative importance and dependency levels, stock management, storage and transport costs, promotional and advertising support to the distributor, payment conditions,… Communication / Advertising Mix (General, by Products and Campaigns): Brand Differentiation, Importance, Cost, Impact, Notoriety, Remembrance, campaign effectiveness,coordination with sales action,…
- Commercial Research and Marketing Information System (SIM). Control systems.
Sales module:
The sales activity should be considered as one of the pillars of the company, since its ability depends on being able to successfully face the permanent changes in the market, without forgetting that competitiveness is largely determined by the activity that the commercial team develops.
All the systems and means necessary to carry out the sales activity in the most profitable and beneficial way for the company will be reviewed, taking into account the need to cover its billing objectives and available resources. It will also take into account the control systems (qualitative and quantitative of the commercial action), monitoring indicators and dashboards.
To do this, it will analyze the organization and coordination of the activity of the sales force in relation to that of the services involved before and after the sale. Likewise, the implications that the commercial team positively develops in other activities of the company will be kept in mind at all times, for example, at the level of commercial research, production, prices, channels, communication, etc.
Analysis Points:
- Sales Plan and action programs. Sales Forecasts. Levels of achievement of objectives. Organization and Structure of the Commercial Team (size, organization, organization chart, remuneration system, recruitment and selection system, levels of competence, communication system, zonal distribution, plans and roadmaps, visit quotas and sales quotas, etc.).
Sales manuals. Client Portfolio: Information, ABC Classification, Monitoring Policy, renewal fees. Reporting: customer files, sales books, report of visits and claims, expense charts, activity reports, etc. Business Results Analysis (at a general, individual and aggregate level (areas, products, etc.).
- Costs, Revenues, benefits, yields, critical points, etc. Efficiency ratios of the commercial team Levels of Efficiency and Profitability of the commercial team Sales forecast and control Evaluation of the merits of the commercial team.
- Training and recycling system for the sales force. Motivation
Production module:
It is difficult to briefly describe the activities and problems that may interest the consultant or manager in a large and diversified area of production and / or operations. In essence, the analysis to simplify it, will basically concentrate on two points:
On the one hand, an analytical and exhaustive examination of the production organization and the distribution of departments involved in the production function; on the other, an examination of the key indicators of efficiency of production activities (utilization capacity, production quality, direct and indirect costs,…).
Analysis Points:
- Operations: Personnel (number, aptitude). Production units. Production capacity: Volume, use, free capacity, technology, level, sophistication,… Land and buildings: Property regime, Location, access, age, condition… Plant and machinery: Types, number of units; Antiquity, state; Special team. Production organization: Logistics and material handling. Control and support functions: Planning, Industrial engineering, Personnel capabilities. Management quality. Purchasing: Organization, Procedures, practices, Suppliers, principals, Subcontractors… Production workers: Categories, Skills, experience; Remuneration, motivation; Supervisory staff. Safety and health: Accidents; Preventive measures. Production system efficiency: Cost of main products, Labor productivity, Flexibility.
Research and development (R&D) module:
Relationships in the total Research Development - Manufacturing Marketing cycle will be examined , paying particular attention to investment in Research and Development.
Even in organizations that have little or no internal research and development, there may be some connection to external research and development, for example through the acquisition of licenses or the purchase of new production technologies bought in the form of equipment.
Analysis Points:
- Research and Development Management: Plan, Structure, Personalities. Research and Development Personnel: Qualifications, experience. Innovation potential: Product design, Laboratories, Prototype workshops, Equipment tests, pilot plant, Information and library. Collaboration with other organizations: Kinds of agreements. Partners License Agreements and the like. Use of Research and Development: Special competitive advantage. External Business Opportunities (Acquisition of third party patent rights).
Human resources module (HR):
Although this may be difficult during a short study, you should get a true picture of how and by whom decisions are made and how this affects the levels of results and motivation of the staff.
In the field of remuneration, the motivation based on the remuneration policy, profit sharing and other factors such as job security, social services will be evaluated, verifying their impact on the overall functioning of the organization.
Analysis Points:
- Human Resource Management: Concepts and Policy; Human resources department staff; Position in the corporate structure. Staff structure: age, sex, educational level, etc. Capacity, experience (by categories). Conditions of employment (permanent, temporary, seasonal). Recruitment and selection: Recruitment practices; Selection practices. Training and development: Expense structure for staff development. Remuneration and motivation: Salary and salary systems; Pay for results (Bonus); Profit sharing and similar schemes; Social advantages; Non-financial incentives.
Once the diagnosis has been made, regardless of the analysis framework, the consultant, entrepreneur or manager must relate the information obtained and structure it based on the 4 levels of analysis in which the PTST method is composed: (Plans (Plans), Targets (Objectives), Strategies (Strategies), Tactics (Tactics)).
Among others, one of the main objectives of the consultant will be to determine the alignment of plans, objectives, strategies and tactics in a vertical sense (along the structure of the organization, department / s in question, etc.), at the horizontal (mainly interdepartmental and value chain) and transversal (at the level of more or less relationships of formal and informal dependency between different areas of activity involved), determining and diagnosing the deviations and negative or positive causes that could give rise to a certain circumstance or situation (bad, improvable or good).
In summary, the PTST Methodology is a system that structures the examination of the client's resources, objectives, strategies, policies and plans, allowing the manager, entrepreneur and / or consultant to make a judgment on the total operation of the organization, evaluate if this operation has been successful or not, think about probable future trends and opportunities and indicate possible and / or necessary improvements.
With these evaluations, the entrepreneur will be able to have a more or less critical and objective opinion about the operation of his organization, evaluate critical success points and factors, think about future trends and indicate improvements at a strategic and tactical level for the alignment of the organization and your customer orientation.
