Non-Instructional Intervention Strategic Planning and Management Allan Wolf March 12, 2006

Definition and Description Definition Business experts define strategic planning in a variety of ways. For most of us the term strategy is the term least understood. De Kluyver and Pearce II say business strategy is about positioning an organization for sustainable competitive advantage. It involves making choices about which industries to participate in, what products and services to offer, and how to allocate corporate resources. Its primary goal is to create value for shareholders and other stakeholders by providing customer value. (2003, p.1) Thompson and Strickland define it as the game plan management has for positioning the company in its chosen market arena, competing successfully, pleasing customers, and achieving good business performance (1999, p.2). While each of these is definitive from a business perspective, an HPT perspective says it is the process by which an organization envisions its future and develops the necessary goals and procedures to achieve that vision (Van Tiem, 2004, p.99). Description Components and Process Companies devise their strategies due to two compelling needs: 1. To proactively shape how a companys business will be conducted, 2. To mold the independent decisions and actions initiated by departments, managers, and employees in a coordinated company wide game plan (Thompson & Strickland, 1999, p. 2). Need alone is not sufficient, there has to be a structure or process for effective development. In developing a strategy, strategic planning, there are three key questions used to organize the process: 1) where are we now, 2) where do we go, and 3) how do we get there (De Kluyver and Pearce II, 2003, p.6). The where are we now part of the process focuses on the assessment of the current state of the organization as a whole. It revisits the issues of the organizations mission, the long term vision, the principal stakeholders, the organizations current performance, and the relevant trends. The where do we go question should generate and explore alternatives based on outcomes of the first question. At a business level this would include such options as concentrating on growth in a few market segments, partnering with another company, or whether to use value-added or low-cost solutions for customers. At the corporate level the focus may include shaping the portfolio of businesses the company participates in, or adjusting parenting philosophies and processes. The how do we get there components focuses on how to achieve the objectives identified in the previous steps. One key issue is how to bridge the capability gap between current skills and capabilities from those needed for the new strategic plan. This step addresses the alignment of core competences, emerging market needs, and identifying key success factors. These key questions combine to form a recognizable structure/process similar to the HPT model.(see fig.1). To compliment the process of De Kluyver and Pearce II , Thompson & Strickland identify five key tasks management that must be completed for successful strategy making and implementation: 1. Forming a strategic vision of what the companys future business makeup will be and the direction of the organization, 2. Setting objectives, 3. Crafting a strategy to achieve the desired outcomes, 4. Implementing and executing the strategy efficiently and effectively, 5. Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives, strategy, or implementation based on actual conditions. (1999, p.3)

Non-Instructional Intervention Strategic Planning and Management Allan Wolf March 12, 2006

Strategic planning, although having a structure and process, comes with pitfalls and fallacies. Henry Mintzberg, writing in the Harvard Business Review (1994, pp. 107-114), identifies one such pitfall as The problem is that planning represents a calculating style of management, not a committing style (p.109). A committing style engages people as on a journey and everyone helps shape its course A calculating style fixes on the destination and what must be done without concern for the members preferences. Mitzberg (1994) also identifies one fallacy as because analysis

Figure 1 encompasses synthesis, strategic planning is strategy making (p.110). This fallacy rests on three incorrect assumptions: 1. Fallacy of prediction according to the world of strategic planning the world is supposed to stand still while a plan is being developed and implemented, 2. Fallacy of detachment work processes must be fully understood before they can be formally programmed, 3. Fallacy of formalization the belief that systems can do better than, or even nearly as well as people. A formal system cannot internalize, comprehend or synthesize the strategy. (p. 111).

Non-Instructional Intervention Strategic Planning and Management Allan Wolf March 12, 2006
HPT and Strategic Planning HPT synthesizes with both De Kluyver and Pearce II, and Thompson & Strickland. De Kluyver and Pearce II ask three questions, where we are now, where do we go, and how do we get there. Thompson & Strickland list five tasks management must complete to have a successful process. The HPT model integrates with both of these business processes in the following manner (see table 1): HPT TABLE 1 * De Kluyver and Pearce II * Thompson & Strickland 1. Forming a strategic vision of what the organizations future will be and the direction it is headed.

Performance Analysis Cause Analysis Intervention selection, design, and development Intervention implementation and change Evaluation (applied during selection, design, development, and implementation)

1. Where are we now? 2. Where do we go? 3. How do we get there? 2. Setting objectives 3. Crafting a strategy to achieve outcomes 4. Implementing chosen strategy 5. Evaluating performance in light of experience and changing conditions.

* Numbering coincides with previous numbering in text. Although HPT matches favorably with business models, it offers several advantages in its use for strategic planning: 1. It offers a holistic, systemic perspective 2. It offers managers a means to manage organizational variables 3. It deals with resources for task support, job design, incentives, and motivation. Van Tiem et.al. identifies a critical link between HPT and strategic planning when they state, Strategic management supports the organizational vision through the day-to-day implementation of the strategic plan. Successful organizational change occurs when daily operations and innovations are directly connected to the strategic plan (2004, p.99). Although HPT and organizational design, which includes strategic planning, are distinct, HPT provides a performance based, global process that facilitates effective strategic change. Case Studies Starbucks (Thomson & Strickland, http://www.starbucks.com/) Starbucks Corporation originated in 1971 when three academics opened a store called Starbucks Coffee, Tea, and Spice in the Pikes Place Market in Seattle. In 1981 Howard Schultz entered the picture

Non-Instructional Intervention Strategic Planning and Management Allan Wolf March 12, 2006
and eventually bought the organization in 1987. The acquisition included a 100 page strategic business plan used to raise the $3.8 million for the purchase. By 1992 Starbucks was composed of 161 stores. Originally the strategy was to open only company stores; franchising was avoided. In early 1990 the senior executive team developed a mission statement based on company values and beliefs and instituted a mission review system to ensure adherence to the mission statement. In 1992 they became a publicly traded company and developed a three year expansion strategy to target areas with favorable demographic profiles. To date Starbucks has 5,088 company operated stores in the U.S and 1,188 company operated and1,952 joint operated stores in 36 countries. Cannondale (Stone & Gamble, http://www.cannondale.com/bikes/index.html) Cannondale bicycles came into existence in 1971 in a loft above a pickle factory. They had consistent growth yearly and their innovation produced the first aluminum framed bicycle. Cannondale founder Joe Montgomerys vision was to make it the best cycling company in the world. From that vision ten principles were formed: 1. We care about each other, our shareholders, our customers and our vendors, 2. We produce a stream of innovative, quality products, 3.We devise flexible manufacturing processes that enable us to deliver those innovative, quality products to the market quickly and then back them with excellent customer service, 4. We limit our distribution to the best specialty retailers in the world, 5. We stay lean, remain competitive and entrepreneurial, 6. We put 90 percent of our profits back into the company to underwrite future growth; the balance we share with all of our employees, 7. We promote from within whenever possible, 8. We concentrate on detail, because the last 5 percent is often the difference between success and failure, 9. We continuously improve everything, 10. We govern our every deed by what is just and right. (Stone & Gamble, 2005, p.17) In 1998 Cannondale went outside their mission and philosophy and ventured into off road motorcycling. This proved to be disastrous and on Jan. 28, 2003 Cannondale filed for chapter 11 bankruptcy. It reached a settlement agreement with Pagasus Partners, it largest creditor, reorganized and returned to its basic mission and philosophy. Today Cannondale, with its Handmade in the USA logo, is the leading manufacture of high end bicycles with more than 80 models in over 70 countries. Contemporary Issues Due to unprecedented rapid change, unpredictable external events, and increasing demand for improved productivity organizations have had to rethink their purposes. As a result, four innovations can be identified as influencing organizations and utilizing HPT professionals: strategy design, change management, organizational learning, and knowledge management (italics mine). These four innovations will create opportunities for organizations to redefine their fundamental purposes and organizational structure (Foshay et.al, 1999, p.904). Resources Books Mintzberg, H. (1994). The fall and rise of strategic planning. New York: The Free Press. Mintzberg has written several books on strategic planning. He is a frequent contributor to the Harvard Business Review and a past president of the Strategic Management Society. Kaufman, R., Oakley-Browne, H., Watkins, R., & Leigh, D. (2003) Strategic planning for success: Aligning people, performance, and payoffs. San Francisco: Jossey-Bass/Pfeifer.

Non-Instructional Intervention Strategic Planning and Management Allan Wolf March 12, 2006
American Society for Training and Development (ASTD) http://www.astd.org/astd. ASTD has a comprehensive book listing for strategic planning http://store.astd.org/product_search.asp as well as a performance improvement page with links for various topics, http://www.astd.org/astd/resources/performance_improvement_community People Drucker, Peter F. Perhaps the most influential management thinker of the past century and author of 40 books. He spawned two huge revolutions at General Electricfirst when GE followed the radical decentralisation he preached in the 1950s, and again in the 1980s when Jack Welch rebuilt the company around Mr Drucker's belief that it should be first or second in a line of business, or else get out (The Economist, Nov. 17, 2005). Selznick, Philip Selznick introduced the idea of matching the organization's internal factors with

external environmental circumstances, which is an essential component of strategic planning. This core idea was developed into what we now call SWOT analysis which is one of the
primary tools used for strategic management. (Wikepedia) Porter, Michael Considered the most influencial strategist of the decade. One of his concepts was the 5 force analysis. (Wikepedia) References Cannondale. (2006). Company web page. Retrieved February 28, 2006 from http://www.cannondale.com/bikes/index.html De Kluyver, C., Pearce II, J. (2003). Strategy: a view from the top. Upper Saddle River, NJ: Prentice Hall Foshay, W., et.al. (1999) Research in human performance technology. In Solovitch & Keeps (Eds.), Handbook of human performance technology (pp. 895-915). San Francisco: Pfeifer. Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard Business Review, JanuaryFebrurary, 107-114. Peter Drucker: Trusting the man in the grey flannel suit. (2005). The Economist, November 17. Retrieved from http://www.economist.com/business/displayStory.cfm?story_id=5165460 Starbucks. (2006). Company web page. Retrieved February 28, 2006 from http://www.starbucks.com/ Stone, R., Gamble, J. (2000) Cannondale corporation.. In Strategic management, Leadership and strategy MOL 545 (pp.1-29). New York: McGraw-Hill. Thompson, A., Strickland III, A. (1999). Strategic management: concepts and cases. New York: McGraw-Hill. Van Tiem, D., Moseley, J., Dessinger, J. (2004). Fundamentals of performance technology: a guide to improving people, process, and performance. Silver Spring, MD: International Society for Performance Improvement. Wikepedia: Historical development of strategic management. Retrieved March, 6, 2006 from http://en.wikipedia.org/wiki/Strategic_management