What Strategic Planning is not?

Clearly, strategic planning is no panacea. Strategic planning is simply a set of concepts, procedures, and tools designed to help leaders, managers, and planners think and act strategically. Used in wise and skillful ways by a “coalition of the willing,” strategic planning can help organizations focus on producing effective decisions and actions that further the organization’s mission, meet in mandates, and satisfy key stakeholders. But strategic planning is not a substitute for strategic thinking and acting. Only caring and committed people can do that. And when used thoughtlessly, strategic planning can actually drive out precisely the kind of strategic thought and action it is supposed to promote.

Furthermore, strategic planning is not a substitute for leadership. There is simply no substitute for leadership when it comes to using strategic planning to enhance organizational performance. At least some key decision makers and process champions must be committed to the strategic planning process, or any attempts to use it are bound to fail.

In addition, strategic planning is not synonymous with creating an organizational strategy. Organizational strategies have numerous sources, both planned and unplanned. Strategic planning is likely to result in statement of organizational intentions, but what is realized in practice will be some combination of what is intended and what emerges along the way. Strategic planning can help organizations develop and implement effective strategies, but they should also remain open to unforeseen opportunities. Too much attention to strategic planning and excessive reverence for strategic plans can build organizations to other unplanned and unexpected—yet incredibly useful—sources of information, insight, and action.

The discipline necessary for strategic planning can be of two sorts. The first harkens back to Latin root of the word “discipline,” emphasizing instruction, training, education, and learning. The second embodies later interpretations of the word, emphasizing order, control, and punishment. Emphasis should be placed on education and learning, although there clearly are occasions when imposing order, taking control, and enforcing appropriate sanctions are appropriate. Certainly, key leaders, managers, and planners can best use strategic planning as an educational and learning tool, to help them figure out what is really important and what should be done about it. Sometimes this means following a particular sequence of steps and preparing formal strategic plans, but not necessarily. The ultimate goal of strategic planning should not be a rigid adherence to a particular process or an instance on the production of plans. Instead, strategic planning should promote wise strategic thought and action on behalf of an organization and its key stakeholders. What steps to follow, in what sequence, and whether or not to prepare formal plans are subsidiary concerns.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Slide Presentation

If you’re considering using a visual aid or requesting that someone else use a visual aid as part of his or her presentation, realize that any visual aid should be used to complement the speaker’s presentation, not cause the listener or viewer to divide his attention between the two. Visuals, particularly slides, are often used as crutches. They are also habit forming. They take the place of notes, and the presenter counts on them to keep him on track. They control him rather than the other way round.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight.

Intranets

Not all Websites are available to anyone cruising the Net. Some are reserved for the private use of a single company’s employees and stakeholders. An intranet uses the same technologies as the Internet and the World Wide Web, but the information provided and the access allowed are restricted to the boundaries of a company-wide LAN or WAN. In some cases, suppliers, distribution partners, and key customers may also have access, but intranets are protected from unauthorized access through the Internet by a firewall, a special type of gateway that controls access to the local network. People on an intranet can get out to the Internet, but unauthorized people on the Internet cannot get in.

Possibly the biggest advantage of an intranet is that it eliminates the problem of employees’ using different types of computers within a company. On an Intranet, all information is available in a format compatible with Macintosh, PC, UNIX-based computers. The need to publish internal documents on paper is virtually eliminated because everyone can access the information electronically.

Besides saving paper, an intranet can save a company money in the form of employee hours. Employees can find information much faster and more easily by using a well-designed database on an intranet than by digging through a filing cabinet or card catalog. Some of the communication uses companies have for intranets include updating policy manuals, posting job openings and submitting job applications, accessing martketing and sales presentations from anywhere in the world, updating and managing employee benefits, accessing company records and databases, collaborating from anywhere in the  world to develop new products, scheduling meetings, setting up company phone directories, and publishing company newsletters. In fact, just about any information that can help employees communicate is a good candidate for an intranet. As video and audio technologies progress, you can expect to see more multimedia applications on intranets as well.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Accounting Information

Accurate cost data are required for the successful implementation of the integrated physical distribution management concept using total cost analysis, for the management and control of physical distribution operations, and to aid in setting selling prices and in justifying price differentials.

As the cost of physical distribution increases, the need for accurate accounting for the costs becomes increasingly critical. Since the physical distribution function is relatively more energy intensive and labor intensive than other areas of the firm, its ratio of costs to total company costs has been steadily increasing. Efficient and effective distribution policies cannot be determined until the costs related to separate functional areas and their interaction are made available to distribution decision makers.

The quality of the accounting data will influence management’s ability to exploit new markets, take advantage of innovative transportation systems, make changes in packaging, choose between common carriers and private trucking, increase deliveries or increase inventories, and determine to what extent the order-processing system should be automated.

The accounting system must be capable of providing information to answer the following questions:

a)        What are the impacts of physical distribution costs on contribution by product, by territory, by customer, and by salesperson?

b)        What are the costs associated with providing additional levels of customer service? What trade-offs are necessary and what are the incremental benefits or losses?

c)        What is the optimal amount of inventory? How sensitive is the inventory level to changes in warehousing patterns or to changes in customer service levels? How much does it cost to hold inventory?

d)        What mix of transportation modes and carriers should be used?

e)        How many field warehouses should be used and where should they be located?

f)          How many production set-ups are required? Which plants will be used to produce each product?

g)        To what extent should the order-processing system be automated?

To answer these and other questions requires knowledge of the costs and revenues that will change if the physical distribution system changes. That is, determination of a product’s contribution should be based on how corporate revenues, expenses, and hence profitability would change if the product line were dropped. Any costs or revenues that are unaffected by the decision are irrelevant to the problem. For example, a relevant cost woul be public warehouse handling charges associated with a product’s sales; a non-relevant cost would be the overhead costs associated with the firm’s private trucking fleet.

Implementation of this approach to deceision making is severely hampered by the lack of availability of the right accounting data or the inability to use the data when they are available. The best and most sophisticated models are only as good as the accounting input, and a number of recent studies attest to the gross inadequacies of distribution cost data.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Management Process

Management writers traditionally refer to the manager’s four basic functions:

a)        Planning: Planning is setting goals and deciding on courses of action, developing rules and procedures, developing plans (both the organization and for those who work in it), and forecasting (predicting or projecting what the future holds for the firm).

b)        Organizing: Organizing is identifying jobs to be done, hiring people to do them, establishing departments, delegating or pushing authority down to subordinates, establishing a chain of command (in other words, channels of authority and communication), and coordinating the  work of subordinates.

c)        Leading: Leading means influencing other people to get the job done, maintaining morale, molding company culture, and managing conflicts and communication.

d)        Controlling: Controlling is setting standards (such as sales quotas or quality standards), comparing actual performance with these standards, and then taking corrective action as required.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

SOSTAC Planning System

At any level, whether corporate, marketing, total communications or just advertising, strategy should flow from the simple yet logical structure of the SOSTAC planning system—which applies to any kind of plan and any kind of strategy.

S Situation, which means where are we now?

O Objectives, which means where do we want to be?

S Strategy, which summarizes how we are going to get there.

T Tactics, which are the details of strategy.

A Action or implementation – putting the plans to work.

C Control, which means measurement, monitoring, reviewing, updating, and modifying.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Learn from Operations of other Organizations

There is nothing wrong with learning from other organizations. You should search each reasonable source for ideas that you can adapt—don’t be afraid or too proud to borrow ideas from anyone. Remember that to copy from one person is plagiarism, to copy from lots of people is research. If you offer a service, you might start by looking at the operations of a highly successful service provider. You can learn a lot by walking around companies and thus see how they have tackled their decisions about location, layout, capacity, product design, process design, performance measures, logistics, stock control, technology used, staffing, pricing, amount of vertical integration, maintenance and replacement, and financing.  When you look for improvements, see how other organizations have solved similar problems, and don’t be afraid to borrow good ideas.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

HRM and Global Competitiveness

HRM is a system within other systems. The most complex of these is the international business environment. The forces which act on people management are not purely internal to an organization. They include innumerable active players in the world economy, including international agencies, governments, competitors, unions, speculators and consumers—each pursuing their own goals.

Changes in the business environment have major consequences for people managers. In essence this means that factors outside a company’s control will affect its requirements for human resources and the way they are managed. For example, unexpected changes in competitor technology or currency exchange rates may compel a business to abandon long-term human resource plans and shed staff in order to survive.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Realigning the Organization

Organization or reorganization schemes have been proposed ad nauseam as solutions to many business problems. As a general rule, organizational changes, especially those that simply reshuffle the same names into different boxes on the organization chart, don’t improve anything. This does not mean suggesting some new organization approach that is better suited for these turbulent times. However, many organizations are too top-heavy, over-structured, and over-satisfied to be responsive to market needs and too costly to be competitive. The structure and staffing of any organization must be rigorously challenged to ensure it is really geared to accomplish the fundamental objectives of the business in as cost-effective a manner as possible. An honest evaluation of the answers to the following critical questions will provide a good function for action.

a)        Is the organization structured to serve markets or simply to manage functions and sell products? Have priority markets been identified? Does someone have primary responsibility for ensuring that the product/service package is tailored to each target market? Do mechanisms exist to ensure cross-markets? Is there any kind of a market focus in the selling organization?

b)        Are there enough discrete profit centers? Do enough managers feel the burden of full profit responsibility? Is the business unit larger than its most successful smaller competitors? Are there any big cost centers that are not assigned or allocated to someone who has a profit and loss responsibility?

c)        Are there corporate group or division staff redundancies? Do the same titles exist at different levels (e.g., corporate controller, group controller, division controller, plant controller)? If so, does it make sense? Can staff position or groups show how they actively contribute to profit results? If so, do line managers agree that these functions are worth the cost?

d)        Are there too many layers? Are there more than five layers between the business unit manager and first level workers? Are there managers with assignments limited to managing one, two, three or four people? Why? Can any of these activities be combined under one manager? Why not?

e)        Is the ratio of supporters to actual results producers satisfactory? How many people actually make a direct contribution to results (e.g., first-line sales personnel, direct hourly workers, sales order engineering and order entry workers, handlers of incoming materials, and storing and shipping personnel)? How many managers, staff, and support personnel are cheering them on? If there is more than one support person for every two producers, what do they do? How do they contribute to profits?

The questions are not new, but the answers are more important now than ever. Traditional or experience-based answers are probably wrong because conditions have changed so dramatically. Moreover, it is doubtful whether existing management can or will ever come up with the right answers, because they have vested interests and the changes needed are simply too tough for them to swallow. These organization structure questions are not as serious for many small to medium-size companies since they are not as likely to be troubled with highly structured, functionally focused organizations lacking a dedicated market orientation. However, even managers in these companies must constantly fight the natural tendency to become more structured, bureaucratic, and lethargic.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Management of the Life Cycle

The traditional branching tree control structure within an organization is simply not designed to cope with the ever changing management requirements dictated by the life-cycle changes within a large project. The fact that various input and output measures vary over the project’s life suggests that project management must focus on universal project dimensions such as cost, time and performance (quality).

As an example of how interface problems vary over the life of a project, consider the two functions of R&D and production over the life-cycle of a given product. Before the introduction of the product, R&D must be closely matched with production. R&D may be doing reliability tests which will lead to engineering changes. Production will be doing production design and process planning, which may be affected seriously by engineering changes. Thus, good communication is essential to avoid wasted resources in production.

On the other hand, in the growth phase R&D is likely to be focusing on developing the next product, while production will be ramping up production and producing long runs to avoid production losses due to setups. Thus, there will be relatively little explicit conflict between R&D and production at this phase.

In the decline phase, R&D will be in the design phase on the new product and will withdraw all R&D from the declining product. Production will be heavily involved in cost control. Again there will tend to be no apparent conflict, but good managers will make sure production is adequately consulted on the new design.

It is clear from the example that a full project management structure which focuses on future products as well as current products can help R&D to interact in a more useful fashion.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight