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NAWBO-LA PEAK LEADERSHIP ACADEMY
Management Systems Consulting Corporation10990 Wilshire Blvd. Suite 1420, Los Angeles, CA 90024(310) 477-0444 • www.mgtsystems.com
Session 2:Strategic Organizational Development Planning
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 2
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Session 2
PURPOSE:
Help you begin developing your company’s strategic plan.
Strategic Organizational Development Planning
OBJECTIVES:
1. Identify your company’s strengths and opportunities to improve.
2. Identify the extent to which your company is experiencing “Growing Pains.”
3. Develop the foundation of your company’s strategic plan.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 3
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Strategic Planning
A Tool For Strategic Organizational Development
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 4
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What is a Strategic Plan?
A Strategic Plan is a written statement of the future direction and goals of an organization based upon an assessment of:
• its current strengths and limitations for each of its key result areas
• the current and anticipated future environment in which it will operate
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 5
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Three Aspects of Strategic Planning
• Strategic Planning Process
• Strategic Issues
• Elements of a Strategic Plan
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 6
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Strategic Planning Flow Diagram
1 ENVIRONMENTAL SCAN
Market Analysis Competitive Analysis Trend Analysis
2 ORGANIZATIONAL ASSESSMENT
Culture Management Systems Operational Systems Resources Markets and Products
3 STRATEGIC ISSUE RESOLUTION
Business Foundation Issues Strategic Organizational Development Issues
5 BUDGETING4 STRATEGIC BUSINESS PLAN
Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans
6 QUARTERLY MANAGEMENT REVIEW
Reports Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 7
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Session 2
Market Analysis
• Who are my customers or clients?
• What are their needs?
• How do they purchase my services?
• What is value for them?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 8
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Competitive Analysis
• Who are my competitors?
• What are their strengths and limitations?
• Can I develop a competitive advantage?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 9
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Session 2
Trend Analysis
• What are the relevant trends in the environment?
• What are the opportunities and threats implied by those trends?
• What goals should be set to deal with these opportunities and/or threats?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 10
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Session 2
Environmental Scan – Analysis of Results
Key FindingStrategies to Promote Success: Maximizing Opportunities and
Minimizing Threats
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 11
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Session 2
Strategic Planning – Organizational Assessment
1 ENVIRONMENTAL SCAN
Market Analysis Competitive Analysis Trend Analysis
2 ORGANIZATIONAL ASSESSMENT
Culture Management Systems Operational Systems Resources Markets and Products
3 STRATEGIC ISSUE RESOLUTION
Business Foundation Issues Strategic Organizational Development Issues
5 BUDGETING4 STRATEGIC BUSINESS PLAN
Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans
6 QUARTERLY MANAGEMENT REVIEW
Reports Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 12
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Session 2
The Organizational Assessment: What are Your Key Strengths and Limitations at Each Level in the Pyramid of
Organizational Development?
Personnel:• Hiring• Compensation
Corporate Culture
Values Beliefs Norms
Management Systems
Planning OrganizationManagementDevelopment
Perf.Mgmt.
Operational Systems
Resources Management
Products & Services
Markets
Accounting:
• Billing• Payroll
Production:
•Shipping
Marketing:
• Selling
Financial Resources
Technological and Physical Resources
Human Resources
Develop Products (Services)
Define Market Segments and Niche
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 13
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Session 2
Organizational Assessment
Assessment Tools – The Growing Pains and Organizational Effectiveness Surveys
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 14
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Growing Pains Survey
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 15
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What Are Growing Pains?
• Problems which occur as a result of inadequate organizational development in relation to business size and complexity.
• A common set of symptoms that something has gone wrong in the process of organizational development.
• A signal of the need to make the transitions from one stage of organizational development to the next.
• A set of leading indicators of future financial performance.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 16
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Stages of Growth (US $)
Integration $1 billion + $500 million + $333 million +
II
IV
VI
Stage
I
III
V
VII
Expansion
Consolidation
Institutionalization
Description
New Venture
Professionalization
Diversification
Decline
Resources and Operational Systems
$1 to $10 million
$500,000 to $5 million
$300,000 to $3.3. million
–Size of Organization (Sales)–
Markets and “Products”
Less than $1 million
Less than $500,000
Less than $300,000
Management Systems
$10 to $100 million
$5 million to $50 million
$3.3 million to $33 million
Corporate Culture
$100 to $500 million
$50 million to $250 million
$33 million to $167 million
Critical Development
Area
Manufacturing Distribution Service
Replication of the Cycle
$500 million to $1 billion
$250 million to $500 million
$167 million to $333 million
Revitalization Any Size Any Size Any Size
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 17
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Ten Classic Growing Pains
● People feel that there are not enough hours in the day.
● People are spending too much time “putting out fires.”
● Many people are not aware of what others are doing.
● People lack understanding of where the firm is heading.
● There are too few good managers.
● Everybody feels “I have to do it myself if I want to get it done correctly.”
● Most people feel our meetings are a waste of time.
● When plans are made, there is very little follow-up and things just don’t get done.
● Some people feel insecure about their place in the firm.
● The firm has continued to grow in sales, but not in profits.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 18
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Session 2
Growing Pains Survey
Growing Pains
Not enough hours
Putting out fires
Not aware of others
Don’t understand firm’s direction
Few Good Managers
I have to do it myself
Meetings are a waste of time
Little follow-up on plans
Insecure about place in the firm
Growth in sales not profits
To A Very
Slight Extent
To A Slight Extent
To Some Extent
To A Great Extent
To A Very Great Extent
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 19
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Growing Pains Scoring Interpretation
Score Range Color Interpretation
10-14 Green Everything is “OK”
15-19 Yellow Some things to watch
20-29 Orange Some areas need attention
30-39 Red Some very significant problems
40-50 Purple A potential turnaround situation
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 20
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Growing Pains by Organizational Stages Of Growth
0
5
10
15
20
25
30
35
40
45
50
0 1 2 3 4 5 6Organizational Size (Stages of Growth)
(Orange) (Orange) (Orange) (Red) (Red) (Orange)
Growing pains
High
Low
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 21
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Growing Pains Ranked by Severity for PEAK Leadership Academy
Growing Pain Rank Score
People feel that there are not enough hours in the day. 1 36.8
People are spending too much time "putting out fires." 2 30.0
There are too few "good" managers. 3 26.8
When plans are made, there is very little follow-up and things just don't get done.
4 26.2
Many people are not aware of what others are doing. 5 25.1
Everyone feels "I have to do it myself if I want to get it done correctly."
5 25.1
The company has continued to grow in sales but not in profits.
5 25.1
People have a lack of understanding of where the company is headed.
8 21.5
Some people have begun to feel insecure about their place in the company.
8 21.5
Most people feel our meetings are a waste of time. 10 18.9
Overall 25.7
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 22
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Session 2
Organizational Assessment – Growing Pains Results Analysis
Infrastructure “Problems” The
Might Be Contributing to
Results
Strategies to Promote Success: Addressing Growing Pains
“Problems”
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 23
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The Management Systems Organizational Effectiveness Survey©
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 24
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Organizational Effectiveness Survey© (OES)
● The Management Systems Organizational Effectiveness Survey© is a validated instrument.
● The survey consists of 65 items that measure the extent to which an organization has developed the systems and structures needed to support its growth and/or stage of development.
● For an organization to have the highest probability of success over the long-term, it needs to effectively manage all six levels in the Pyramid of Organizational Development plus Financial Results, individually and as a system.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 25
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Survey Scoring
• Items on this survey are scored on a 5-point Likert scale, with the following meanings:
Score Meaning
1 To a Very Slight Extent
2 To a Slight Extent
3 To Some Extent
4 To a Great Extent
5 To a Very Great Extent
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 26
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To a Very Slight ExtentPurple1.0-1.9
To a Slight ExtentRed2.0-2.9
To Some ExtentOrange3.0-3.9
To a Great ExtentYellow4.0-4.4
To a Very Great ExtentGreen4.5-5.0
InterpretationColorScore Range
OES Mean Score Interpretation
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 27
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Scoring Interpretation
• This report presents four different types of scores:
– Mean score is a standard statistical “average” score on a 5-point (Likert) scale.
– % Favorable = (# respondents with scores of ‘4’ or ‘5’)/(Total # respondents)
– % Neutral = (# respondents with scores of ‘3’)/(Total # respondents)
– % Unfavorable = (# respondents with scores of ‘1’ or ‘2’)/(Total # respondents)
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 28
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Session 2
Overall Organizational Effectivenessby Pyramid Level (Mean Scores)
3.83.6
3.03.1
3.0
3.5
2.9
3.2
0
1
2
3
4
5
Markets Products/Services
Resources OperationalSystems
ManagementSystems
Culture FinancialResults
Management
Overall
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 29
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Session 2
Overall Organizational Effectivenessby Pyramid Level (% Favorable Scores)
Pyramid Level % Fav % Neutral % Unfav
Markets 63.0 24.3 12.7
Products/Services 57.4 25.0 17.6
Resources 36.3 34.0 29.6
Operational Systems 38.9 32.6 28.5
Management Systems 36.5 33.6 30.0
Culture 54.5 26.2 19.3
Financial Results Management 33.3 36.7 30.1
Overall 43.9 30.8 25.2
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 30
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Highest Rated Survey Items
# Organizational Effectiveness Item Pyramid Level Mean % Favorable
15 We do whatever is necessary to meet or exceed customer needs. M 4.5 88.1
14 Customers are satisfied with our products and/or services. P 4.2 88.1
10 We understand our customers' needs. M 4.3 86.4
38 We value quality in everything we do. C 4.3 81.4
58 We demonstrate fairness and consistency in our supervision of employees. C 4.0 74.6
25 Our "production" process gets products and services to customers on a timely basis. OS 3.9 74.6
21 We know who our competitors are. M 4.0 72.9
54 We have one or more distinctive market segments where we have true competitive advantages over other firms.
M 3.9 71.2
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 31
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Session 2
Lowest Rated Survey Items
# Organizational Effectiveness Item Pyramid Level Mean %
Unfavorable
63 Our reward/recognition system effectively differentiates between outstanding, average, and below-average performance.
MS 2.5 49.2
17 We have an effective and efficient system for developing new products and/or services. OS 2.6 49.2
44 Managers spend more time doing work themselves than planning and directing the work of others. MS 2.6 48.3
18 Overall, we have an adequate number of people with the right skills to be an effective organization. R 2.5 46.6
52 Strategic plans are implemented effectively. MS 2.5 45.8
50 Our human resource management systems (recruiting, training, etc.) are effective. OS 2.6 45.8
37 We have an effective system for developing managers. MS 2.6 45.8
55 We focus more on sales than on profitability as a measure of performance. C 2.7 44.8
51 Our company has a well-developed planning process that addresses strategic (long-range) issues. MS 2.5 44.1
45 Planning and systematic execution of plans are rewarded more than "crisis management." C 2.7 44.1
*Note that items 44 and 55 are “reverse scaled.” In order to produce the “best” or most favorable response, the respondent would need to select “To a Very Slight Extent” versus “To a Very Great Extent”.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 32
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Organizational Assessment – Organizational Effectiveness Survey Results Analysis
Most Significant Strengths
Most Significant Limitations
(Opportunities to Improve)
Strategies to Promote Success: Maximizing
Strengths and Minimizing Limitations
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 33
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Current Status: Pyramid of Organizational Development
CULTURE
MANAGEMENT SYSTEMS
OPERATIONAL SYSTEMS
RESOURCES
MARKETS
PRODUCTS/SERVICES
Strengths Opportunities to Improve
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 34
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Session 2
Organizational Assessment – Planning Survey Results Analysis
Key FindingStrategies to Promote Success:
Maximizing Strengths and Minimizing Limitations
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 35
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Session 2
Strategic Planning Flow Diagram
1 ENVIRONMENTAL SCAN
Market Analysis Competitive Analysis Trend Analysis
2 ORGANIZATIONAL ASSESSMENT
Culture Management Systems Operational Systems Resources Markets and Products
3 STRATEGIC ISSUE RESOLUTION
Business Foundation Issues Strategic Organizational Development Issues
5 BUDGETING4 STRATEGIC BUSINESS PLAN
Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Objectives and Goals Action Plans
6 QUARTERLY MANAGEMENT REVIEW
Reports Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 36
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Session 2
Business Definition
A broad statement of what business the firm is in that acts as a lens through which to view future strategies.
– Who are our customers?
– What are their needs?
– How do they buy?
– What is value to them?
Addresses the Questions:
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 37
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Session 2
Sample Business Definitions
• StarbucksStarbucks retail operations is in the business of providing a total, quality coffee experience to a Tier I and Tier II customer. This is accomplished through a range of innovative, flexible business concepts tailored to the given customer’s needs in terms of take-out, café, and retail.
• TechlinkTechlink is in the business of partnering with the management of Fortune 1000 and high growth companies ($100M to $10B) to build and implement information technology business solutions for sustainable business advantage.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 38
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A broad, measurable, time-dated statement of what the organization wants to or needs to become by the end of the planning period.
Strategic Mission
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 39
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Sample: Starbucks Strategic Mission
To establish Starbucks as the leading retailer and brand of To coffee in North America by the year 2000, by creating distinctive daily coffee experiences for our customers wherever they live, work or play.
$2 Billion in revenue 2000 Stores by 2000
$2 Billion + 2000 = 2000
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 40
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Session 2
Session Follow-Up and Preparation for the Next Session
• Work with your team to “finalize” your Business Foundation – Business Concept, Strategic Mission, and Core Strategy.
• Continue developing the Objectives and Goals for your plan.– Be sure to convert “Strategies to Promote Success” into
Objectives and/or Goals.
• Consider sharing your draft plan with a fellow participant to obtain feedback.
• Bring any current written job descriptions for the people on your team and any performance evaluation forms that you use in your company with you to our next session.
• Read Chapter 8 and Chapter 10 in Growing Pains.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 41
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Session 2
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Systems Consulting Corporation and may not be reproduced or otherwise distributed
without written permission.
For further information about reproduction rights for materials in this presentation, please contact:
Management Systems Consulting Corporation10990 Wilshire Blvd., Suite 1420
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www.mgtsystems.com