Strategy Development and Strategic

Planning to Support a Regulator’s Mandate

JULY 2018

GHANA

• Understand strategic planning process

• Set goals

• Use tools and techniques to drive the strategic planning

process that will direct the organization from the executive to

the front line

• Complete a meaningful SWOT analysis

Use related tools, such as the strategy map and balanced

scorecard, can help them develop a strategic plan

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• Strategic Issues: Strategic issues are critical unknowns that are driving you to

embark on a strategic planning process now.

• Strategy: Consciously choosing to be clear about your company’s direction in

relation to what’s happening in the dynamic environment.

• Normann and Ramirez define strategy as the art of creating value. (intellectual

frameworks, conceptual models and governing ideas that allow a company’s

managers to identify opportunities for bringing value to customers and for

delivering that value).

• Strategic Planning: The process of an organization deciding their corporate

direction, objectives and priorities, and then aligning their resources to accomplish

the actions necessary to meeting them.

• Strategic Plan: a starting point and foundation for defining what an agency seeks to

accomplish, identifying the strategies ir will use to achieve desired results,…

Pre-Planning

Before any work can earnestly start on the Strategic Planning Process: -

• Identify strategic Planning Facilitator (s) (Internal and or External)

• Set up the Strategic Planning Team (Internal and or External)

• Establish and communicate the Strategic Planning process

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Model Example 2

The Strategist’s Toolbox has the following tools to pick from and apply IN

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Some of the Tools Described

McKinsey 7s model is a tool that analyzes firm’s organizational design by looking at 7 key

internal elements: strategy, structure, systems, shared values, style, staff and skills, in order

to identify if they are effectively aligned and allow organization to achieve its objectives.

Aligning different parts of your organization for maximum performance

PEST & PESTEL Analysis

Knowing the external factors affecting your company

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and

for identifying both the Opportunities open to you and the Threats you face. Revealing

organization's strong and weak points alongside opportunities and threats

Value Chain Analysis

Improving business value chain to strengthen its competitive advantage - Value chain

analysis is a strategy tool used to analyze internal firm activities. Its goal is to recognize,

which activities are the most valuable (i.e. are the source of cost or differentiation advantage)

to the firm and which ones could be improved to provide competitive advantage

ORGANISATION CHARTERS

Mark Schultz, writing in

Governance Today, 2016

Strategic Mindsets and Thinking

SOME KEY MESSAGES

Strategy Development – Risk Management Alignment

Prior the Strategy

Formulation

Pre-Strategy

Risks

Assessment

After the Strategy Formulation

Monitoring and

Review of

Strategic Risks

Strategic Risks

Treatment

Strategic Risks

Assessment

Prior to Strategy Development,

Risk Management should

assess Pre-Strategy Risks.

After Development of Business

Strategy and the Strategic

Objectives, Strategic Risks

MUST be assessed, Treated,

Monitored and Reviewed as

assigned

STRATEGY DEVELOPMENT

& IMPLEMENTATIO

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Using the Strategy Tools

Going into Strategic Planning proper is actually bridging this gap between the theory of how strategy tools

should be used and how practitioners actually use tools. – Balogun et al., 2007. Participants in this process

must be wide awake to do the following

• Pay close attention to tools as they are used in context,

• Determine the motivations of actors in using them,

• Determine the purposes to which tools are put, and

• Understand the potential of the tools leading to an array of sometimes unanticipated outcomes.

Participants need to probe the selection of the tools;

• Especially their application and

• the outcomes associated with their use. (Orlikowski, 2000; Orlikowski and Barley, 2001).

ALL MODELS ARE WRONG, BUT SOME ARE USEFUL, George Box, University of Wisconsin

Example - Arriving at Strategic Choices @ Transport Authority

Image Courtesy of Slide Share

Output of the

Strategic Planning Process

Types of Strategies

STRATEGIC ALTERNATIVES

Generic or grand or basic strategies

• Stability - better after sales service, modernize

plant, bulk discount, improve performance to

sustain

• Expansion -Change in customer group, function,

technology

• Retrenchment-Withdrawal -Customer group,

function, technology (unprofitable)

• Combination

•e.g. Wide variety of services to customers (stability) -

New products in product range (expansion) –

Dr.M. Thenmozhi

@Indian Institute of Technology Madras

Michael Porter is a proponent of the three generic

strategies –

• Overall cost leadership strategy –

• Differentiation strategy –

• Focus on niche market –

Strategy Selection Criteria

David Aaker asserts that strategic alternatives should be accepted if they meet the following criteria:

• They are responsive to the external environment.

• They involve a sustainable competitive advantage.

• They are consistent with other strategies in the organization.

• They provide adequate flexibility for the business and the organization.

• They are organizationally feasible.

Important Alignments -

BUDGETTING CYCLE

The Strategy Development Process must be planned such that it is to be ahead of the Budgeting Cycle

• Every Strategic Budget Cycle must be started with top management participation and especially those with

insight;

• The strategic plan 3 – 5 year plan must be included in the budgeting cycle as early as possible

HUMAN RESOURCES

The Strategic Development process outputs must always be inputs into the HR Strategy

• HR must be able to assess whether the culture is conducive to the delivery of the

strategic objectives

• HR must be able to ensure there are skills/competence to deliver the strategic objectives

RISK MANAGEMENT

A robust ERM Framework must provide relevant risk information to

reduce the possibility of selecting a mistaken strategy;

PORTFOLIO MANAGEMENT

Portfolio management has become a mainstream discipline to support investment decisions and capital allocation plans

• Portfolio Visibility - visibility of initiatives in the portfolio for business leaders to conduct operational reviews

• Portfolio Analysis - make purposeful choices about where and when to invest resources for the future.

• Strategic Prioritization - start with determining what the company’s strategies are, and then planning how to implement

these strategies through effective strategic portfolio prioritization.

How are the above applicable to Health Practitioners Regulators Considering, …

Regulators are formations of statutes –

• The incorporation legislation is specific about the function (almost reads as the

only set of activities that can be ventured into)

• The Function clarifies the Core Mandate of the Regulator

• With the Core Mandate codified, this sets strict parameters of operations

• The Legislation also removes any threat of competition

• Legislation dictate what the Regulator must do

• Why would they undertake any strategic planning?

• The Regulators have no worries about

• Direct competition

• Being unique

• Need for Growth

• (no need to be unique, no need to be worried that someone might just

“move our cheese, no need for growth, no need for differentiation)

WHAT IS THE ROLE OF THE

STRATEGIST IN THIS ENVIRONMENT

Strategic Planning and Regulators

• Strategic Planning has become orthodox practice even for Regulators and other public sector

organizations the world over

• In South Africa – National Treasury prescribes the process, the templates, the applicable periods etc

• In the United States, the Government Performance and Results Act of 1993 requires federal regulatory

agencies to produce, at the very least, five-year strategic plans with statements as to the mission,

general goals and objectives, and means to achieve those goals

It is common cause that Regulators are a creation of Statutes and with Statutes dictating almost everything

that the Regulator must and may do;

Prof. Malcolm Sparrow (2000) provides the Guidance

Sparrow argues that, “Regulators, under unprecedented pressure, face a range of demands, often contradictory

in nature:

• be less intrusive – but be more effective;

• Be kinder and gentler – but don’t let the bastards get away with anything;

• Focus your efforts – but be consistent;

• Process things quicker – and be more careful next time;

• Deal with important issues – but do not stray outside your statutory authority;

• Be more responsive to the regulated community – but do not get captured by industry.

The BIG QUESTION IS – What Strategy or Strategies do you need to employ to deliver

such paradoxes? Remember Strategic Thinking – Fit and Intent

Core Regulatory Functions of Health Professions’ Regulators

• Set standards for registrant’s education and training, professional skills, conduct, performance and

ethics;

• Keep a register of professionals who meet those standards;

• Approve programmes which professionals must complete to get on a register;

• Take action when professionals on registers do not meet set standards.

What Strategic Planning Should Mean to a Regulator

Through strategic planning: -

• Regulators can rethink the purpose of their rulemaking, enforcement, outreach, monitoring,

and other activities, trying to fit them together into a coherent program in service of goals

they may have latitude to set and refine.

When a regulator produces a strategic plan,

• that plan provides a window into what the regulator aspires to accomplish – or what its

leaders, at least implicitly, understand regulatory excellence to entail.

Insights from Finkel et al (2015)

Finkel, Walters and Corbett (2015) argues that Regulators strategic development process is or

should be driven by a need to achieve Regulatory Excellence

The Majority of highly held Regulators view regulatory excellence as characterized by following

attributes: -

• Efficiency

• Educative

• Multiplicative

• Proportional

• Vital

• Just

• Honest

Regulatory Excellence Characteristic established by Finkel et al (2015) discussed

Efficiency

Educative

Multiplicative

Proportional

Vital

Just Honest

Reduce burden on stakeholders

Didactic –disseminate rules

Strict enforcement of regulations

Worst-First Oriented Skilled and

Diverse

Attentive to Populations Vulnerable to Risks/Hazards

Forthright

Timeliness in fulfilling regulatory responsibilities

Evangelistic – change attitudes, fight misinformation

Cooperative with Government

Risk and Benefit Considering

Cutting Edge Technologically

Attentive to Populations vulnerable to Regulatory Costs

Independent

Economizing for the whole sector

Walk the Walk – Be Exemplary

Collaborative with the Regulated

Research Driven

Nimble Consulting – Intervening even-handedly and Proactively

Explanatory

Accessibility to Stakeholders

Enlisting of Citizenry

Matching of Regulatory Design to Context

Evaluative (Forwards and Backwards)

Which Tools will be relevant for the Regulator P

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The Purpose of this tool is to

identify issues that fir two key

criteria: -

• They are outside the control of

our organization.

• They will have some level of

impact on our organization.

Discussion must focus on

identifying issues and not trying

to resolve them.

Which Tools will be relevant for the Regulator S

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SWOT Analysis is central to strategic planning

The SWOT brings out the major issues to address in the

strategic plan.

These strategic issues are few in number. They are huge

in their effect on the performance of the organization.

When they become clear the planning team can devise

strategies to deal with them.

Which Tools can be relevant for the Regulator S

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A strategy map shows your organization's

strategy on a single page. It’s great for

quickly communicating big-picture

objectives to everyone in the company.

The main idea of a strategy map is that

each strategic objective in your

balanced scorecard is represented by a

shape, usually oval.

strategy maps also have arrows between

the objectives to show their cause and

effect chain. By following the arrows’

paths, you can see how the objectives in

the lower perspectives drive the success

of the higher ones.

McK

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Which Tools can be relevant for the Regulator

McKinsey 7s model is a tool that

analyzes firm’s organizational design by

looking at 7 key internal elements:

strategy, structure, systems, shared

values, style, staff and skills.

The goal of the model was to show how

the 7 elements should be aligned

together to achieve effectiveness in a

company. The key point of the model is

that all the seven areas are

interconnected and a change in one area

requires change in the rest of a firm for it

to function effectively.

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Which Tools can be relevant for the Regulator McKinsey 7s Model

Strategy –

What is the organization’s strategy seeking to

accomplish?

How does the organization plan to use its

resources and capabilities to deliver that?

What is distinct about this organization?

How does the organization compete?

How does the organization adapt to changing

market conditions?

Style –

What is management/leadership style like? How do they

behave?

How do employees respond to management/leadership?

Is there staff Competition; Collaboration or Cooperation?

Are there real teams functioning within the organization or

are they just nominal groups?

What behaviors, tasks and deliverables does

management/leadership reward?

Shared Values –

What is the mission of the organization?

What is the vision to get there? If so, what is it?

What are the ideal versus real values?

How do the values play out in daily life?

What are the founding values that the

organization was built upon?

Skills –

Skills used to deliver core products/services. Are these

skills sufficiently present and available?

Are there any skill gaps?

What is the organization known for doing well?

Do the employees have the right capabilities to do their

jobs?

How are skills monitored, assessed, and improved?

Structure –

How is the organization organized?

What are the reporting and working relationships

(hierarchical, flat, silos, etc.)?

How do the employees align themselves to the strategy?

How are decisions made? Is it based off centralization,

empowerment, decentralization or other approaches?

How is information shared (formal and informal channels)

across the organization?

Systems –

What are the primary business and technical

systems that drive the organization?

What and where are the system controls?

How is progress and evolution tracked?

What internal rules and processes does the

team utilize to maintain course?

Staff –

What is the size of the organization?

What are the staffing needs?

Are there gaps in required capabilities or

resources?

What is the plan to address those needs?

Example – Strategic Plan Template p1 SECTION # SUBJECT DESCRIBED

1 Executive Summary The Executive Summary of your strategic plan should be completed last, and this section merely

summarizes each of the other sections of your plan

2

Elevator Pitch An elevator pitch is a brief description of your business. Your elevator pitch is included in your strategic

plan since it’s key to your business’ success, and often times should be updated annually.

3

Company Mission Statement

Your company Vision, Mission and Values statement explains what your business is trying to achieve.

For internal decision-making, these statements guides employees to make right decisions; For external

parties, these statements can inspire them to take actions that are favourable to our business

4

SWOT Determine the best opportunities to pursue to achieve growth goals. It also helps you identify which

strengths to develop in the near future to improve the company.

5

Goals/ and Objectives

Setting and achieving goals is the hallmark of successful companies and is a critical element of your

strategic plan.

Firstly, identify the 5 year or long-term goals.

Next, identify 1year goals;

Then work backwards to determine goals for the next quarter and the next month.

Ideally update the strategic plan monthly to modify this section.

Example – Strategic Plan Template p2

SECTION # SUBJECT DESCRIBED

6

Key Performance Indicators

(KPIs)

Great businesses understand their metrics and KPIs. By tracking KPIs, you know exactly

how your business is performing and can adjust as needed

7 Target Customers

Identify the wants and needs of each of target customer groups. This is important in

focusing marketing efforts and getting a higher return on investment on advertising

expenditures.

8

Industry Analysis

Industry analysis doesn’t have to be a comprehensive report on what’s going on in the

market. Conduct an analysis to ensure understanding of market dynamics to help identify

new opportunities and or threats.

9:

Competitive Analysis &

Advantage

Competitive analysis doesn’t have to be a thorough report listing every detail about every

competitor. Define key competitors are, list their strengths & weaknesses. Use this

analysis to determine your current competitive advantages and ways to develop

additional advantages.

Example – Strategic Plan Template p3 SECTION # SUBJECT DESCRIBED

10

Marketing Plan Develop a comprehensive marketing plan describing how to compete for the hearts and

minds of stakeholders. Include a summary of the marketing plan in the strategic plan.

11:

Team

The team section ensures there are human resources to execute on the opportunities

identified and to achieve the goals stablished in section 5 of the plan. List current team

members and identify the types of people needed in the next year to achieve established

goals

12:

Operations Plan

Operations plan helps to transform goals and opportunities into reality. Identify each of

the individual projects that comprise the larger goals and how these projects will be

completed.

Finally, map out each of the initiatives, ideally in a Gantt chart, to be clear when each

project will start and who will lead them.

13

Financial Projections Financial projections help in multiple ways. First, use financial models to assess the

potential financial results for each opportunity considered to be pursued.

Hope is Not a Strategy

Risk Management Approach: After the Strategy Development

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IMPACT

NEGATIVE POSITIVE

1

The achievement of a strategic objective is

affected; the organization is prepared if the

risk event occurs

It contributes to the achievement of a

strategic objective; nevertheless

organizational efforts to take advantage of a

risk event are demanded

2

The achievement of the mission or future

vision is affected; nevertheless the

organization is already prepared if the risk

event occurs

It contributes to the achievement of the

mission or future vision; nevertheless

organizational efforts to take advantage of a

risk event are demanded

3

The achievement of a strategic objective is

affected; furthermore organizational efforts

are demanded in order to face the risk

consequences.

It contributes to the achievement of a

strategic objective; furthermore the

organization is already prepared if the risk

event occurs.

4

The achievement of the mission or future

vision is affected; furthermore organizational

efforts are demanded in order to face the

risk consequences

It contributes to the achievement of the

mission or future vision; furthermore the

organization is already prepared if a risk

event occurs

Post this Exercise

apply Orthodox ERM

practices to manage

all risks as per a

developed Risk

Register

Some wit on Strategy From Dilbert

END OF SESSION 2