NAWBO-LA PEAK LEADERSHIP ACADEMY
Session 3:
Strategic Organizational
Development Planning (Part 2)
and Introduction to
Performance Management
Management Systems Consulting Corporation
10990 Wilshire Blvd. Suite 1420, Los Angeles, CA 90024
(310) 477-0444 • www.mgtsystems.com
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Organizational Development
Planning
PURPOSE:
Continue developing your company’s strategic plan and
begin the process of developing performance management
systems to support your plan.
OBJECTIVES:
1. Address any questions you have about the
“Environmental Scan” and “Organizational Assessment”
data you have collected and analyzed to date.
2. Review/refine your company’s Business Concept and
Strategic Mission.
3. Develop draft Objectives and Goals to support the
achievement of your company’s plan.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
2
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Review: Strategic Planning
Framework
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
3
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning Process
1
2
ENVIRONMENTAL SCAN
ORGANIZATIONAL ASSESSMENT





 Market Analysis
 Competitive
Analysis
 Trend Analysis
3
STRATEGIC ISSUE RESOLUTION


4
Business Foundation Issues
Strategic Organizational Development Issues
STRATEGIC BUSINESS PLAN







6
Culture
Management Systems
Operational Systems
Resources
Markets and Products
Situation Analysis
Business Definition
Strategic Mission
Strategy
Key Result Areas
Objectives and Goals
Action Plans
5
BUDGETING
QUARTERLY MANAGEMENT REVIEW


Reports
Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
4
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
What You’ve Completed to Date
Box 1
• “Collected” and analyzed information about your
environment – using the “Planning Survey” that we
gave you (in the binder) at Session 1.
Box 2
• “Collected” and analyzed information about your
organization’s capabilities – using the “Planning Survey”
that we you (in the binder) at Session 1.
• Received and analyzed Growing Pains and
Organizational Effectiveness Survey Results.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
5
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
What You’ve Completed to Date
Boxes 3 and 4
• Prepared a draft of your company’s Business Concept
and Strategic Mission – at our last session and/or as a
follow-up to our last session.
• Continued to develop your plan – using the “Planning
Workbook” we gave you at our last session.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
6
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Quick Review: Growing Pains
and Organizational
Effectiveness Survey
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
7
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
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.
8
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
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.
9
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
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.
10
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
OES Mean Score Interpretation
Score Range
Color
Interpretation
4.5-5.0
Green
To a Very Great Extent
4.0-4.4
Yellow
To a Great Extent
3.0-3.9
Orange
To Some Extent
2.0-2.9
Red
To a Slight Extent
1.0-1.9
Purple
To a Very Slight Extent
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
11
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
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.
12
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Questions About Your Survey
Results
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
13
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Most Significant Issues for My
Company
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
14
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Share With Your Team:
• The 1-3 most significant issues you feel your company
is facing at the current time
– Based on your review of the information you
collected/received (including the Planning Survey, Growing
Pains Questionnaire, and Organizational Effectiveness
Survey results).
• Note any similarities among your team.
• Develop specific action steps that might be taken to
address the issues identified.
• Flip chart your issues and strategies for resolving them.
• Be prepared to share the results of your discussion
when we reconvene.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
15
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Review: Business Foundation
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
16
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Business Definition
A broad statement of what business the
firm is in that acts as a lens through
which to view future strategies.
Addresses the Questions:
– Who are our customers?
– What are their needs?
– How do they buy?
– What is value to them?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
17
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Mission
A broad, measurable, time-dated
statement of what the organization wants
to or needs to become by the end of the
planning period.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
18
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
What is Strategy?
Conceptual Definition:
Strategy can be defined as the different, yet
integrated, courses of action that will be taken
by a firm or business unit to compete effectively
in its chosen markets in order to obtain desired
results.
Operational Definition:
 Where you Play “The Game”
 How you Play “The Game”
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
19
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Where You Play “The Game”:
Analysis of the Strategic Board
THE STRATEGIC BOARD
Vertical Market Segment
Horizontal
Market
Segment
I
TIERS OF THE MARKET
II
III
+
Quality
Service
Prestige
I
Price
II
Price
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
III
Quality
Service
Prestige
20
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Retail Industry by Tier
Quality
Service
Prestige
+
I
Saks,
Neiman
Marcus,
Barneys
Price
II
Nordstrom, Gap,
Robinsons-May, Limited
Price
III
K-Mart,Wal-Mart, JC Penney,
Discount Stores
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
Quality
Service
Prestige
21
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Automobile Industry by Tier
Quality
Service
Prestige
+
I
Price
Rolls Royce,
Ferrari, Mercedes
Benz
II
Honda Accord, Toyota Camry,
Ford Taurus, Nissan Maxima
Price
III
Geo Metro, Hyundai, Ford Escort,
Toyota Corolla,
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
Quality
Service
Prestige
22
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
The Strategic Board for the
Automobile Industry
Vertical Segments
Horizontal
Segments
Sedans
I
II
Sports
Cars
SUVs
• Lexus
• Rolls
• BMW
• Porsche
• Ferrari
• Lexus
• Range Rover
• Hummer
• Escalade
• Honda
Accord
• Toyota
Camry
• Toyota Celica
• Volkswagen
Jetta
• Ford Explorer
• Toyota Landcruiser
• GMC Blazer
• Jeep Cherokee
• Toyota
Corolla
Light Trucks
• Toyota Tacoma
• Ford Ranger
Minivans
• Toyota Sienna
• Ford Windstar
• Toyota RAV4
• Suzuki Samurai
III
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
23
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
How You Play “The Game”:
Three Levels Of Strategy:
Operational Strategies
Supporting Strategies
Markets
Core
Strategy
Operational
Systems
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
24
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Sample Core Strategies
•
Starbucks
o Redefine the nature of the coffee café and “blanket” the
U.S.
o Use our dominance in retail to become the Coca-Cola of
coffee.
•
Southwest Airlines
No frills, short-haul, high frequency discount airfare in
relatively non-competitive markets.
•
TechLink
Solutions guaranteed to go live.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
25
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning – Strategic Business Plan
1
2
ENVIRONMENTAL SCAN
ORGANIZATIONAL ASSESSMENT





 Market Analysis
 Competitive
Analysis
 Trend Analysis
3
STRATEGIC ISSUE RESOLUTION


4
Business Foundation Issues
Strategic Organizational Development Issues
STRATEGIC BUSINESS PLAN







6
Culture
Management Systems
Operational Systems
Resources
Markets and Products
Situation Analysis
Business Definition
Strategic Mission
Strategy
Key Result Areas
Objectives and Goals
Action Plans
5
BUDGETING
QUARTERLY MANAGEMENT REVIEW


Reports
Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
26
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Elements of the Strategic Plan
Business Foundation
• Business Definition
• Strategic Mission
• Core Strategy
Key Result Areas
Objectives
Goals
Action Plans
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
27
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning
Terminology
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
28
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Key Result Areas
Areas of the business where performance has a critical impact
on the achievement of the mission. Defined in one or two
words. A category, not an action.
We suggest using the 6 levels of the Pyramid of
Organizational Development + Financial Results:
- Markets
- Operational Systems
- Products
- Management Systems
- Resources
- Culture
- Financial Results
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
29
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning
Terminology
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
30
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Key Result Areas
Areas of the business where performance has a critical impact
on the achievement of the mission. Defined in one or two
words. A category, not an action.
We suggest using the 6 levels of the Pyramid of
Organizational Development + Financial Results:
- Markets
- Operational Systems
- Products
- Management Systems
- Resources
- Culture
- Financial Results
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
31
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Objectives
Overall definitions of what is to be achieved in each Key
Result Area, typically over several years. Describes a
broad outcome, not an action. Each KRA must have at
least one stated objective that is derived from the mission
statement. Most KRAs will have between three and six
objectives.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
32
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Sample Objectives
●
Develop and implement a structured corporate-wide
and branch office strategy for purchasing from
suppliers
●
Acquire profitable new products in our current market
niches that will contribute to overall growth.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
33
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Goals
Realistic, time-dated and measurable sub-objectives, the
responsibility for which is assigned to a specific individual
(usually a manager or department head). Defines scope
and timing of an outcome. Each objective should have one
or more goals.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
34
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
SMART Goals
S
Specific Outcome
M
Measurable/Quantifiable
A
Accountable/Achievable
R
Results-Oriented and Realistic
T
Time-Dated
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
35
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Sample Goals
● Develop and begin production of two new internally
generated product ideas that will result in total sales of
$4 million by 12/31/0X. [Peter]
● Earn revenues of $5 million by 12/31/0X. [Paul]
● Open new accounts with average sales of $30,000 each
by 12/31/0X. [Mary]
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
36
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Sample Plan Page
KEY RESULT AREA: 1.0 Markets and Products
Objective 1.1: Grow active buyer base at a rate consistent with overall sales growth per year.
Goals
Goal
Prty
Prty
Who
Who
When
When
1. Increase our active
buyer base by 50% from
10/1/0X to 9/30/0X
through existing
strategies.
A
BH
10/1/0X
2. Increase active buyer
base by 40% from
10/1/0X to 9/30/0X
through new strategies.
B
LM
10/31/0X
3. Identify and evaluate
vehicles for growth
beyond FY ‘0X.
A
BH
9/30/0X
4. Identify new strategies
to support FY ‘0X growth.
C
LM
6/30/0X
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
Status
YTD:
+39%
37
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning Process
1
2
ENVIRONMENTAL SCAN
ORGANIZATIONAL ASSESSMENT





 Market Analysis
 Competitive
Analysis
 Trend Analysis
3
STRATEGIC ISSUE RESOLUTION


4
Business Foundation Issues
Strategic Organizational Development Issues
STRATEGIC BUSINESS PLAN







6
Culture
Management Systems
Operational Systems
Resources
Markets and Products
Situation Analysis
Business Definition
Strategic Mission
Strategy
Key Result Areas
Objectives and Goals
Action Plans
5
BUDGETING
QUARTERLY MANAGEMENT REVIEW


Reports
Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
38
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Introduction to Performance
Management Systems
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
39
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Organizational Control/Performance
Management System
A set of mechanisms (both processes and
techniques) designed to increase the probability
that people will behave in ways that lead to the
attainment of organizational objectives.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
40
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Six Elements in an Effective
Individual Performance Management
System
•
Strategy/Role Descriptions
–
–
Key Result Areas
Objectives
•
Goals
•
Measurement System
•
Progress Review and Feedback
•
Performance Appraisal
•
Rewards
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
41
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
The Individual
Performance Management System
Strategy/
Role
Description
Individual
Goals
Behavior
Results
• KRAs
• Objectives
Progress
Review/
Feedback
Rewards
Performance
Evaluation/Appraisal
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
Measurement
System
42
Session 2
NAWBO-LA PEAK LEADERSHIP ACADEMY
Please note that all of the materials in this
slide presentation are the proprietary
intellectual property of Management
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 Corporation
10990 Wilshire Blvd., Suite 1420
Los Angeles, CA 90024
(310) 477-0444
www.mgtsystems.com
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
43