Strategic Choices & Alignment

The strategic plan is the set of decisions and actions, which lead to the development and realization of an effective strategy. Strategic decisions typically have long-term organizational implications for key success factors. These are important in terms of the actions to be taken, the resources to be committed and the precedents set.

A few questions that you might consider to drive your decision-making process might be:

  • “What are the underlying forces that are driving our industry?”
  • “What are those few things our organization must do outstandingly well to win, and to continue winning in this environment?”
  • “What are the drivers of success?”
  • “What are the critical success factors for us?”
  • “Which are the objectives that will drive our success?”
  • “How will we mobilize the organization to implement these?”

“Tomorrow always arrives. It is always different.
And even the mightiest company is in trouble if it has not worked on the future.
Being surprised by what happens is a risk that even the largest and richest
company cannot afford, and even the smallest business need not run.”

-- Peter Drucker

Considering the development of measurable objectives, the acronym SMART is often used, prudently suggesting that measurable objectives be:

Specific, Measurable, Attainable, Realistic & Time-bound

The Balanced Score Card (BSC) has been used for many years in management. It views the organization from four perspectives, and suggests developing metrics, collecting data and analyzing performance relative to each of these perspectives: Financial, Internal Processes, Customer/Shareholder, and Leadership & Growth. The BSC is an in-depth school of study. Those protégées interested in learning more are encouraged to do so. In the meantime, we’ve gleaned some tools that are both simple and practical, as a starting point.

Note: KPIs – abbreviation for Key Performance Indicators.

BSC concept Balanced Scorecard Review

It is important to link and align the organization around its strategy. Do focus on identifying measures that are the main drivers to success, and in putting weighting factors to measures. Ultimately, in business, all measures support financial growth.

Example:

Perspective Area Measurement Target Initiative Budget
 
Financial: Operating Income 20% Income Cost analysis and efficiency review xxxx
Sales vs. Last Year 12% increase Expand product accessories line xxxx
 
Customer Market Share 20% by Year 3 Add 2 distribution outlets xxxx
Customer Loyalty 5% increase Year 2 Introduce on-line incentives xxxx
 
Internal Response time Reduce by 50% Year 1 Full Process review xxxx
 
Learning & Growth Skill Development Industry Skills Training Certification: 5 staff – Year 1 SIAST Program xxxx
 

Sample measures for each perspective area might include:

Financial : Economic value added, return on capital.
Customer : Market share, satisfaction, repeat customers.
Internal : Quality, response time, delivery time, cost.
Learning & Growth :         Training hours, skill development, rotation positions, R & D%

Although the sections can be addressed as stand-alone, the next sequential step is
“Implementing Strategy & Evaluation Progress”.