The strategic management cycle
Benedict Wauters
Six core RBM practices
• 1. Orientation of the PMO (programme
management organisation) is clear
• 2. The PMO strategy is reflected in a strategic
results framework
• 3. The strategy is translated into operations
• 4. Performance information is collected and
supplied
• 5. Performance information is used
• 6. External stakeholders are involved in all
aspects
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1. Orientation of the PMO
(programme management
organisation) is clear
4. Performance
information is collected
and supplied
2. The PMO strategy is
reflected in a strategic
results framework
5. Performance
information is used
3. The strategy is
translated into operations
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The strategic management cycle:
mission, values and vision
Benedict Wauters
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Belief systems
Boundary systems
Risks to
be avoided
Core values,
mission, vision
Strategy
(plan)
Strategic
uncertainties
Interactive control systems
Critical
performance
variables
Diagnostic control systems
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Mission and values of the entity
• E.g. “We support – with EU and national resources –
organisations to initiate actions that improve the
functioning of the labour market. We acquire and share
knowledge to contribute to solutions for today and
tomorrow.”
• E.g. “customer focus: staff have an open and caring
attitude, towards project promotors as well as other
stakeholders. The promotor can easily get in touch and
communicate smoothly with staff. The relation with
stakeholders is based on mutual respect and
appreciation. Agreements and promises are kept. All
interests are taken into account. All of these aspects lead
to a relationship of trust.”
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Example of
expanded vision
Going beyond
current
capabilities is
crucial!
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Vision can have many different aspects
• the ambition can be broad, generic
 e.g. drive innovation in the labour market
 e.g. be champions of simplification
 e.g.
• …or it can relate to specific thematic policy
challenges high on the political agenda at a give
time
 e.g. improve the life of Roma…
 e.g. tackle poverty…
• if ambition is too low or perceived to be irrelevant as
it does not connect with the policy context, those
who decide on its mandate may attack it
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Vision and current operations
• When current operations are a mess…
• … then vision becomes a vision of survival: how
to keep the boat from sinking!
• This reaffirms the importance of systems
thinking for your current operations:
 If daily work life is a struggle for survival…
…then senior managers coming
along with wonderful statements
about vision, mission and values
are bound to be seen as coming
from another planet
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Warning!
• Mission, values and vision can be actively used to drive
out critical voices, thus eradicating diversity in the
organisation which is problematic for accountability as
“robust, resilient and adaptive”
• The idea is to foster “a community of inquirers”:
 practitioners start from their own day-to-day experience of trying
to do the work, within the framework of a mission and a vision, but
where the aim is to make subjective experience more objective
through reflection and discussion with the manager and others
 in doing so the practitioner and manager could open themselves
up to different ways of working and perhaps move themselves
on from stuck and less productive ways of working with peers
• This entails that what the mission and the vision “mean” at
a practical level is constantly being (re)invented
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The strategic management cycle:
culture
Vladimir Kvaca
Why culture?
There three things that influence our „mental software“ – the way we
think and behave
1. Being homo sapiens
• Universal, shared by all people
• Inherited via DNA
2. Culture
• Shared within a social group of people
• Learned via socialization
3. Personality
• Individual for each person
• Partly inherited, partly learned
The function of organizational culture:
The way in which the members
of an organization relate to:
Each other
Their work
The outside world
in comparison to other organizations.
Definition of organizational culture:
There are no good or bad cultures. Cultures
are functional or dysfunctional depending on
who we want to be = what is our strategy.
Culture only exists by comparison. Culture has
no meaning by itself
Assessment of organizational culture
• To answer the question if current organizational
culture fits the strategy, you need a tool for
organizational culture diagnosis.
• As culture exists only by comparison, you need
to use culture model that has also available
database of organizations‘ scores for
comparison.
• There are several models on the market, e.g.:
 The Hofstede Model of Organizational Culture
 Daniel Denison’s model
 Fons Trompenaars‘ model
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The Hofstede Model consists of 8
dimensions
D1: Means versus goal oriented
We identify with the “how” versus we identify with the “what” (Health risks
versus effectiveness)
D2: Internally versus externally driven
We know what is best for the client or we don’t need to care about them versus
we do whatever the client wants
D3: Loose versus tight work control
(Innovation and/or unpredictability versus efficiency/planning)
D4: Local versus professional
We identify with our direct boss and/or with our work group versus we identify
with our profession and/or with the content of our work (Work life is a
dangerous affair versus we love to find out what is happening in the rest of the
world)
D5: Open versus closed systems
Newcomers are welcome versus they first have to proof themselves
D6: Employee versus work oriented
Management takes co-responsibility for the welfare of their people versus
management believes that if they don’t put their people under pressure nothing
will happen
D7: Degree of leadership acceptance
from low to high
D8: Degree to which people identify with their organization
from low to high
Please note:
- The definitions define the extreme positions
- The combinations of dimensions will define well known topics, e.g. D1 and D2
together define process versus result orientation
And D1 and D5 together define open versus closed communication.
Notes to the dimensions
• Culture scores of dimensions 1, 3 and 5
tend to differ within organisation (different
units can have different culture with regard
to this dimensions)
• Culture scores dimensions 2, 4, 6 tend to
be the same across the whole
organization.
• Dimensions 7 and 8 are „semiautonomous“.
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On-line application to explain the
dimensions
• http://geert-hofstede.com/culture-andstrategy.html
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The link between national and organizational
Organizational Culture
culture
Symbols
The Hofstede Model
While national
culture has very slow
dynamics (small
changes between
generationsl), the
organizational
culture can be
intentionally
changed in 1-4 years.
National Culture
6-Dimensional Model
Heroes
Rituals
Values
Practices
How the culture change using the
Hofstede model works
1. Culture scan (getting the data on current culture)
 This consists of quite simple data gathering, survey for the staff
(40 minutes) and two short surveys for the management.
2. Discussion with the management, which culture should
be optimal for the organization.
3. Comparison of actual and optimal scores
4. Identification of priorities for change
5. Planning the change
6. Actions to change the culture
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Example on the case of National
Coordination Authority
•
•
Culture scan conducted at the end of July 2014.
Optimal scores presented in the example are
preliminary, still need to discuss with other managers.
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Some main conclusions
• Strengths are our profesionalism, ability to
learn and identification with the
organisation.
• There is a high danger of burn-out, some
people are stretched over their limits
• We are „functional bureaucracy“
• We don‘t care enough about our
„customers“.
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Change
• Changing people’s ways in organisation
on purpose can be realised in two ways:
• Directly by tell and sell
• Indirectly by changing people’s work
environment to such a degree that they would
be stupid not to adjust their behaviour
Readiness for change is also dependent on
culture, it is connected to feelings of trust
and security and
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Why to care about your (organizational)
culture
• By understanding your culture, you can
predict what is more likely to work in your
organizations and where you can expect
problems.
• You should be careful when trying to
implement „best practices“ from other
organizations (or even countries) –
shouldn‘t you change your culture first?
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The strategic management cycle:
from SWOT to strategy maps and
cascading objectives
Benedict Wauters
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Example output of a SWOT exercise
What are key strategic priorities?
Eg what S can we use to capture O?
What W must we amend? Etc.
Once, again, if current
operations are mess, this
will crowd out any
thinking about longer
term opportunities and
threats
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• A key question here is to define how you
want to add value as a PMO?
• We will cover this when we discuss
delivery mechanisms!
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PMO strategy = strategy concerning added value
OP
Priority
1
OP
OP
Priority Priority
2
3
PMO strategy =
technical assistance
priority
Added value by
leveraging the technical
assistance!
OP
Priority
1
OP
Priority
2
OP
Priority
3
PMO strategy = technical
assistance priority
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Strategic results framework: recap
The results
framework focuses
on PMOs and what
these
organisations
should be
changing to
increase their
added value to a
country or region.
The top level reflects policy challenges.
But the PMO strategy will not typically
emphasise all thematic context
objectives, only those that pose a real
challenge to the PMO and its existing
way of working, and may add other
types of expectations to/ from
policy-makers.
Expectations in different perspectives are bi-directional (toward and
from)
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Example of
expanded vision
Same vision
can be
realised with
different
strategies!
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Innovator strategy map vs enhancer
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WARNING: remember that the function of
objectives here is to create opportunitz
space as it is an interactive control sźstem
while most use it as a diagnostic szstem
Hence learning objectives probablz fit better
here.
Belief systems
Boundary systems
Risks to
be avoided
Core values,
mission, vision
Strategy
(plan)
Strategic
uncertainties
Interactive control systems
Critical
performance
variables
Diagnostic control systems
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CORPORATE MAP
-Focus on synergies (coordination and cooperation )
-Focus on common priorities/principles
-…or fix completely BU maps (then BU maps are the same)
BUSINESS
UNIT MAP
Focus on core value adding processes
BUSINESS
UNIT MAP
Focus on core value adding processes
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INTERACTIVE CASCADING
Belief systems
Boundary systems
Risks to
be avoided
Core values,
mission, vision
Strategy
(plan)
Strategic
uncertainties
Interactive control systems
Critical
performance
variables
Diagnostic control systems
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Cascading
• From the business unit strategy is cascaded to operational teams
within the business unit
• They should conduct a mission, vision and values exercise at their
own level, within the framework of the higher level ones, and then to
look at the higher level strategy map from that perspective
 this may lead to requesting adjustments to the higher level map or to
adjusting mission, vision and values
 most frequently unit level mission, vision and values will just be helpful
in translating a higher level map into a suitable lower level one.
• The strategic outputs and outcomes on the map are arrived at in
consultation with staff in the cascading process
 The business unit strategy may therefore be adjusted in the cascading
process
• The idea is that there is a discussion where a lower level can argue for its
interpretation of a higher level map and can even argue for modification of the
higher level
• Contestation is very much at the core of this process and it is crucial that higher
level management incites this and creates openness for it
 Within operational business units, individual staff member objectives are
then similarly aligned to unit objectives but be careful here
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Regulatory/Support unit alignment
• Regulatory/Support unit strategy map should
have:
a top level with a focus on both effectiveness (this
contains the objectives from the corporate,
business and operational unit maps that the
support unit can impact on) and efficiency (in
terms of use of resources)
a client level that identifies who the units serve
and what these clients (or client groups, e.g. staff,
managers, ...) expect
an internal process level
an internal capacity level
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The strategic management cycle:
strategic initiatives, improvement
projects and planning operations
Benedict Wauters
Skip for
now
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Strategic initiatives
• The vision relates to the next 3-10 years.
Hence so does the strategy. This entails the
strategy map is future oriented.
• If the vision was challenging enough (as it
should be) then it would be hard to imagine
that this can be realized by doing more of
whatever the entity is already doing or by
doing it better with whatever means it is
already using.
• Rather, the entity will have to do things it
does not do yet at all or acquire new
capacities, competences and/or relationships
it does not have yet.
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Strategic initiatives
• Strategic initiatives do not represent:
 business as usual or …
 ongoing improvement/maintenance of existing processes and outputs
• They proactively prepare the organisation for the future
 e.g. by addressing NEW products/services via new (types of) calls for
proposals
 …and/ or NEW relations, competences, expanded capacities
 hence there is considerable uncertainty about how to run them and what
they can achieve
• E.g. a full Vanguard method based redesign
• Require coordination from many parts of the organization
• As some strategic initiatives may be related (complementing each other
or feeding each other), they should be grouped under overarching
themes that can be visualized in the strategy map.
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*
Quality of care:
solve my health
issues in a
sustainable way as
quickly as possible
1.Select a
process
objective
*illustrative real example not be taken as an ideal example
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2. Break up the process objective into its key
components
THREE MAJOR
TRANSACTION POINTS OF
CONTACT THAT FEED INTO
EACH OTHER
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3. Break down the components into drivers
To understand better what the situation is, you can engage in measurement
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4. Reflect on what the measurement tells you
from a systemic point of view
Use continuous improvement with
inline experimentation.
Be careful with measures: should
be “systemic”.
When major redesign required
with new capabilities, it is a
strategic initiative rather than
improvement.
*illustrative real example not be taken as an ideal example
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Strategic versus operational plans
P
L
A
N
S
B
U
D
G
E
T
Strategic
initiatives
Demand plan: planned (increase of) outputs by type
(ranging from simple outputs to complex calls for
proposals)
Factoring in expected process improvements
Capacity requirements + free capacity maintained
(in % used of available people and facilities)
STRATEX
(can be
both
expenses
or
capitalisa
tion)
Direct operational,
maintenance AND
improvement costs
= OPEX
Indirect operational
cost
=OPEX
Capital expenditure
(replacement/expansi
on of existing facilities
for current business)
=CAPEX
Operational
plans (with a one
year time
horizon) specify
which outputs
will be
delivered by
which parts of
the entity.
Remember!
This concerns planning and score keeping, NOT
operational management (developing, improving we
do with szstems measures)!
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