You are on page 1of 44

CRAFTING

AND
EXECUTIN
G
STRATEGY

3/22/17 03:06:39 AM 1
THE 5-PHASED STRATEGY-MAKING,
STRATEGY-EXECUTING PROCESS
Of where the company needs to head and what its future
DEVELOPING
A
A STRATEGIC
STRATEGIC
VISION
product/customer/market/technology focus should be.

And using them as yardsticks for measuring the companys performance and
SETTING
SETTING
OBJECTIVES
OBJECTIVES progress.

To achieve the objectives and move the company along the strategic course
CRAFTING
CRAFTING A
STRATEGY
STRATEGY
A
that management has charted.

IMPLEMENTIN The chosen strategy efficiently and effectively.


G
G AND
AND
EXECUTING

EVALUATING
EVALUATING
PERFORMANC
PERFORMANC In the companys long-term direction, objectives, strategy, or execution in light
E AND
INITIATING
INITIATING
CORRECTIVE
of actual experience, changing conditions, new ideas, and new opportunities.
ADJUSTMENT
S

3/22/17 03:06:39 AM 2
PHASE 1:
DEVELOPING A
STRATEGIC VISION

3/22/17 03:06:39 AM 3
STRATEGIC VISION?

Describes the route a company intends


to take in developing and strengthening
its business. It lays out, the companys
strategic course in preparing for the
future.

3/22/17 03:06:39 AM 4
STRATEGIC VISION (cont.)?

It delineates managements aspirations


for the business, providing a panoramic
view of where we are going.

3/22/17 03:06:39 AM 5
STRATEGIC VISION (cont.)?

A strategic vision thus points an


organization towards a particular
direction, charts a strategic path, and
molds organizational identity.

3/22/17 03:06:39 AM 6
STRATEGIC VISION (cont.)?

A clearly articulated strategic vision


communicates managements
aspirations to stakeholders and helps
steer the energies of company personnel
in a common direction.

3/22/17 03:06:39 AM 7
REQUIREMENTS INORDER THAT
STRATEGIC VISION WILL FUNCTION AS
A VALUABLE MANAGERIAL TOOL

1. It must illuminate the companys directional


path.

2. It must provide managers with a reference


point for making strategic decisions and
preparing the company for the future.

3. It must say something definitive about the


companys future
product/market/customer/technology focus.
3/22/17 03:06:39 AM 8
FACTORS TO CONSIDER IN DECIDING
ON A COMPANYS FUTURE DIRECTION

1. External considerations; and

2. Internal considerations.

3/22/17 03:06:40 AM 9
EXTERNAL CONSIDERATIONS

1. Is the outlook for the company promising if the


company sticks with its present
product/market/customer/technology focus and
strategic direction?

2. Are changes under way in the competitive


landscape acting to enhance or weaken the
companys prospects?

3. What, if any, new customer groups and/or


geographic markets should the company get in
position to serve?
3/22/17 03:06:40 AM 10
EXTERNAL CONSIDERATIONS (cont.)

4. Are there any emerging market opportunities


the company ought to pursue?

5. Should we plan to abandon any of the


markets, market segments, or customer
groups we are currently serving?

3/22/17 03:06:40 AM 11
INTERNAL CONSIDERATIONS

1. What are our ambitions for the company


what industry standing do we want the
company to have?

2. Will our present business generate sufficient


growth and profitability to please shareholder?

3. What resource strengths does the company


have that will aid its ability to add new
products/services and/or get into new
businesses?

3/22/17 03:06:40 AM 12
INTERNAL CONSIDERATIONS (cont.)

4. Is the company stretching its resources too


thin by trying to compete in too many product
categories or market arenas, some of which
are unprofitable?

5. Is the companys technological focus too broad


or too narrow?

3/22/17 03:06:40 AM 13
CHARACTERISTICS OF AN EFFECTIVELY
WORDED VISION STATEMENT
CHARACTERISTICS DESCRIPTION
Graphic Paints a picture of the kind of company that
management is trying to create and the market
position(s) the company is striving to stake out.
Directional Is forward-looking; describes the strategic course
that management has charted and the kinds of
product/market/customer/technology changes that
will help the company prepare for the future.
Focused Is specific enough to provide managers with
guidance in making decisions and allocating
resources.
Flexible Is not a once-and-for-all time statement-the
directional course that management has charted
may have to be adjusted as
product/market/customer/technology circumstances
change.

3/22/17 03:06:40 AM 14
CHARACTERISTICS OF AN EFFECTIVELY
WORDED VISION STATEMENT (cont.)

CHARACTERISTICS DESCRIPTION
Feasible Is within the realm of what the company can
reasonably expect to achieve in due time.
Desirable Indicates why the direction make good business
sense and is in the long-term interests of
stakeholders (especially shareowners, employees,
and customers.)
Easy to Communicate Is explainable in 5-10 minutes and, ideally, can be
reduced to a simple, memorable slogan (like Henry
Fords famous vision of a car in very garage).

3/22/17 03:06:40 AM 15
COMMON SHORTCOMINGS IN
COMPANY VISION STATEMENTS
SHORTCOMINGS DESCRIPTION
Vague or Incomplete Short on specifics about where the
company is headed or what the company
is doing to prepare for the future.
Not Forward-Looking Does not indicate whether or how
management intends to alter the
companys current
product/market/customer/technology
focus.
Too Broad So inclusive that the company could head
in most any direction, pursue most any
opportunity, or enter most any business.

3/22/17 03:06:40 AM 16
COMMON SHORTCOMINGS IN
COMPANY VISION STATEMENTS (cont.)
SHORTCOMINGS DESCRIPTION
Bland or uninspiring Lacks the power to motivate company
personnel or inspire shareholder confidence
about the companys direction or future
prospect.
Not Distinctive Provides no unique company identity; could
apply to companies in any of several
industries (or at least several rivals operating
in the same industry or market arena).
Too Reliant on Does not say anything specific about the
Superlatives companys strategic course beyond the pursuit
of such lofty accolades as best, most
successful, recognized leader, global or
worldwide leader, or first choice of customers.

3/22/17 03:06:40 AM 17
PAYOFFS OF A CLEAR VISION
STATEMENT

1. It crystallizes senior executives own views


about the firms long-term direction.

2. It reduces the risk of rudderless decision-


making.

3. It is a tool for winning the support of


organizational members for internal changes
that will help make the vision a reality.

3/22/17 03:06:40 AM 18
PAYOFFS OF CLEAR VISION
STATEMENT (cont.)

4. It provides a beacon for lower-level managers


in forming departmental missions, setting
departmental objectives, and crafting
functional and departmental strategies that are
in sync with the companys overall strategy.

5. It helps an organization prepare for the future.

3/22/17 03:06:41 AM 19
LINKING THE
VISION/MISSION WITH
COMPANY VALUES

3/22/17 03:06:41 AM 20
VALUES?

Otherwise known as core values.

A companys values are the beliefs,


traits, and behavioral norms that
company personnel are expected to
display in conducting and pursuing its
strategic vision and strategy.

3/22/17 03:06:41 AM 21
EXAMPLES OF COMPANY VALUES

American Express Bank

Customer commitment
Quality
Integrity
Teamwork
Respect for people

3/22/17 03:06:41 AM 22
EXAMPLES OF COMPANY VALUES (cont.)

Toyota
Respect for and development of its employees
Teamwork
Getting quality right the first time
Learning
Continuous improvement
Embracing change in its pursuit of low-cost,
top notch manufacturing excellence in motor
vehicles.

3/22/17 03:06:41 AM 23
EXAMPLES OF COMPANY VALUES (cont.)

Du Pont

Safety
Ethics
Respect for people
Environmental stewardship

3/22/17 03:06:41 AM 24
EXAMPLES OF COMPANY VALUES (cont.)

Abbott Laboratories

Pioneering
Achieving
Caring
Enduring

3/22/17 03:06:41 AM 25
EXAMPLES OF COMPANY VALUES (cont.)

Enron
Respect
Integrity
Communication
Excellence

At Enron, the values statement is merely a collection


of nice words and phrases. Which obviously, have
little discernable impact on either the behavior of the
company executives or how the company operates.

3/22/17 03:06:41 AM 26
EXAMPLES OF COMPANY VALUES (cont.)

Because some top officials of Enron


engaged in dishonest and fraudulent
maneuvers that were concealed by
creative accounting.

This malpractice resulted into the defunct


of Enron and imprisonment of some of its
top officials.

3/22/17 03:06:41 AM 27
COMMUNICATING
THE STRATEGIC
VISION

3/22/17 03:06:41 AM 28
CORE CONCEPT

An effectively communicated vision is a


valuable tool for enlisting the
commitment of employees to actions that
get the company moving in the intended
direction.

3/22/17 03:06:42 AM 29
CORE CONCEPT (cont.)

Effectively communicating the strategic


vision down the line to lower-level
managers and employees is as important
as the strategic soundness of the long-
term direction top management has
chosen.

3/22/17 03:06:42 AM 30
CORE CONCEPT (cont.)

Why?
When managers articulate a vivid and compelling
case for where the company is headed,
organization members begin to say -

This is interesting and has a lot of merit.

I want to be involved and do my part to make it


happen.
3/22/17 03:06:42 AM 31
CORE CONCEPT (cont.)

In Summary

Strategic visions become real only when


the vision statement is imprinted in the
minds of organization members and then
translated into hard objectives and
strategies.

3/22/17 03:06:42 AM 32
PHASE 2:
SETTING
OBJECTIVES

3/22/17 03:06:42 AM 33
FOOD FOR THOUGHT

You can never manage


what you cannot measure.
And what gets measured gets done

Bill Hewlett
Co-founder of Hewlett-Packard

3/22/17 03:06:42 AM 34
OBJECTIVES?

These are an organizations performance


targets the results and outcomes
management wants to achieve. They
function as yardsticks for measuring how
well the organization is doing.

3/22/17 03:06:42 AM 35
ELEMENTS OF WELL-STATED
OBJECTIVES
S PECIFIC

M EASURABLE

A TTAINABLE

R ELEVANT

T IME BOUND
3/22/17 03:06:42 AM 36
SIMPLE

You know what you want to accomplish. Vague


goals equate to vague results. Goals must be fully
furnished with detailed description of the what,
when and how.

Vague goal I will graduate;

SMART Goal I will graduate Summa Cum Laude


in one year time. I will commit myself to studying to
get a minimum 1.25 grade-point average in all my
subjects.
3/22/17 03:06:42 AM 37
MEASURABLE

You can assess your progress. Goals which can


not be measured can not be managed. Your goal is
measurable if anyone can tell you at the end of the
deadline, whether or not you have completed your
goal.

Vague goal I want to be successful;

SMART goal I want to have a savings account


with at least Php500,000 within 5 years from this
date.

3/22/17 03:06:42 AM 38
ATTAINABLE
Your goal must be within your reach in your present
situation. High goals that stretch you are okay, but
high AND realistic goals are better. Unattainable
goals can not motivate you. Easy goals on the
other hand are not challenging enough. Thus, they
do not contribute to your growth.

Vague goal I want to be rich in three months;

SMART goal I want to be rich in 8 years by


starting my own food business and attending
business and management seminars and
workshops.
3/22/17 03:06:43 AM 39
RELEVANT
Your Goals need to be parallel to your purpose in
life. Relevant goals are a sure way to direct your
efforts towards attaining something that is
concentrated to who you are as a person. Goals
are simply instruments to accomplishing ones
mission/purpose in life.

Vague goal Within a year, I will become a


politician with large sums of money at my disposal;

SMART goal By the end of the year, I will become


a leader who will fight to increase productivity and
tourism in my country.
3/22/17 03:06:43 AM 40
TIME BOUND

Goals need to have deadlines. A goal free from


time element is susceptible to procrastination.

Vague goal I will do my research paper;

SMART goal I will start doing my research paper


by 7 tonight and finish it by 7 pm on the next day.

3/22/17 03:06:43 AM 41
SETTING STRETCH OBJECTIVES

Stretch objectives spur exceptional


performance and help build a firewall
against contentment with modest gains
in organizational performance.

3/22/17 03:06:43 AM 42
OUTCOMES OF SETTING STRETCH
OBJECTIVES

Challenging company personnel to exert their best


efforts to achieve stretch gains in performance
pushes an enterprise

to be more inventive;
to exhibit more urgency in improving both its
financial performance and its business position;
and
to be more intentional and focused in its
actions.
3/22/17 03:06:43 AM 43
THANK YOU!

Prof. Bong R. De Leon

3/22/17 03:06:43 AM 44