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NAWBO-LA PEAK LEADERSHIP ACADEMY

Management Systems Consulting Corporation10990 Wilshire Blvd. Suite 1420, Los Angeles, CA 90024(310) 477-0444 • www.mgtsystems.com

Session 2:Strategic Organizational Development Planning

© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved. 2


Session 2

PURPOSE:

Help you begin developing your company’s strategic plan.

Strategic Organizational Development Planning

OBJECTIVES:

1. Identify your company’s strengths and opportunities to improve.

2. Identify the extent to which your company is experiencing “Growing Pains.”

3. Develop the foundation of your company’s strategic plan.



Session 2

Strategic Planning

A Tool For Strategic Organizational Development



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What is a Strategic Plan?

A Strategic Plan is a written statement of the future direction and goals of an organization based upon an assessment of:

• its current strengths and limitations for each of its key result areas

• the current and anticipated future environment in which it will operate



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Three Aspects of Strategic Planning

• Strategic Planning Process

• Strategic Issues

• Elements of a Strategic Plan



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Strategic Planning Flow Diagram

1 ENVIRONMENTAL SCAN

Market Analysis Competitive Analysis Trend Analysis

2 ORGANIZATIONAL ASSESSMENT

Culture Management Systems Operational Systems Resources Markets and Products

3 STRATEGIC ISSUE RESOLUTION

Business Foundation Issues Strategic Organizational Development Issues

5 BUDGETING4 STRATEGIC BUSINESS PLAN

Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans

6 QUARTERLY MANAGEMENT REVIEW

Reports Meetings



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Market Analysis

• Who are my customers or clients?

• What are their needs?

• How do they purchase my services?

• What is value for them?



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Competitive Analysis

• Who are my competitors?

• What are their strengths and limitations?

• Can I develop a competitive advantage?



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Trend Analysis

• What are the relevant trends in the environment?

• What are the opportunities and threats implied by those trends?

• What goals should be set to deal with these opportunities and/or threats?



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Environmental Scan – Analysis of Results

Key FindingStrategies to Promote Success: Maximizing Opportunities and

Minimizing Threats



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Strategic Planning – Organizational Assessment








Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Goals and Objectives Action Plans


Reports Meetings



Session 2

The Organizational Assessment: What are Your Key Strengths and Limitations at Each Level in the Pyramid of

Organizational Development?

Personnel:• Hiring• Compensation

Corporate Culture

Values Beliefs Norms

Management Systems

Planning OrganizationManagementDevelopment

Perf.Mgmt.

Operational Systems

Resources Management

Products & Services

Markets

Accounting:

• Billing• Payroll

Production:

•Shipping

Marketing:

• Selling

Financial Resources

Technological and Physical Resources

Human Resources

Develop Products (Services)

Define Market Segments and Niche



Session 2

Organizational Assessment

Assessment Tools – The Growing Pains and Organizational Effectiveness Surveys



Session 2

Growing Pains Survey



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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.



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Stages of Growth (US $)

Integration $1 billion + $500 million + $333 million +

II

IV

VI

Stage

I

III

V

VII

Expansion

Consolidation

Institutionalization

Description

New Venture

Professionalization

Diversification

Decline

Resources and Operational Systems

$1 to $10 million

$500,000 to $5 million

$300,000 to $3.3. million

–Size of Organization (Sales)–

Markets and “Products”

Less than $1 million

Less than $500,000

Less than $300,000

Management Systems

$10 to $100 million

$5 million to $50 million

$3.3 million to $33 million

Corporate Culture

$100 to $500 million



Critical Development

Area

Manufacturing Distribution Service

Replication of the Cycle

$500 million to $1 billion



Revitalization Any Size Any Size Any Size



Session 2

Ten Classic Growing Pains

● People feel that there are not enough hours in the day.

● People are spending too much time “putting out fires.”

● Many people are not aware of what others are doing.

● People lack understanding of where the firm is heading.

● There are too few good managers.

● Everybody feels “I have to do it myself if I want to get it done correctly.”

● Most people feel our meetings are a waste of time.

● When plans are made, there is very little follow-up and things just don’t get done.

● Some people feel insecure about their place in the firm.

● The firm has continued to grow in sales, but not in profits.



Session 2

Growing Pains Survey

Growing Pains

Not enough hours

Putting out fires

Not aware of others

Don’t understand firm’s direction

Few Good Managers

I have to do it myself

Meetings are a waste of time

Little follow-up on plans

Insecure about place in the firm

Growth in sales not profits

To A Very

Slight Extent

To A Slight Extent

To Some Extent

To A Great Extent

To A Very Great Extent



Session 2

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



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Growing Pains by Organizational Stages Of Growth

0

5

10

15

20

25

30

35

40

45

50

0 1 2 3 4 5 6Organizational Size (Stages of Growth)

(Orange) (Orange) (Orange) (Red) (Red) (Orange)

Growing pains

High

Low



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Growing Pains Ranked by Severity for PEAK Leadership Academy

Growing Pain Rank Score

People feel that there are not enough hours in the day. 1 36.8

People are spending too much time "putting out fires." 2 30.0

There are too few "good" managers. 3 26.8

When plans are made, there is very little follow-up and things just don't get done.

4 26.2

Many people are not aware of what others are doing. 5 25.1

Everyone feels "I have to do it myself if I want to get it done correctly."

5 25.1

The company has continued to grow in sales but not in profits.

5 25.1

People have a lack of understanding of where the company is headed.

8 21.5

Some people have begun to feel insecure about their place in the company.

8 21.5

Most people feel our meetings are a waste of time. 10 18.9

Overall 25.7



Session 2

Organizational Assessment – Growing Pains Results Analysis

Infrastructure “Problems” The

Might Be Contributing to

Results

Strategies to Promote Success: Addressing Growing Pains

“Problems”



Session 2

The Management Systems Organizational Effectiveness Survey©



Session 2

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.



Session 2

Survey Scoring

• Items on this survey are scored on a 5-point Likert scale, with the following meanings:

Score Meaning

1 To a Very Slight Extent

2 To a Slight Extent

3 To Some Extent

4 To a Great Extent

5 To a Very Great Extent



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To a Very Slight ExtentPurple1.0-1.9

To a Slight ExtentRed2.0-2.9

To Some ExtentOrange3.0-3.9

To a Great ExtentYellow4.0-4.4

To a Very Great ExtentGreen4.5-5.0

InterpretationColorScore Range

OES Mean Score Interpretation



Session 2

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)



Session 2

Overall Organizational Effectivenessby Pyramid Level (Mean Scores)

3.83.6

3.03.1

3.0

3.5

2.9

3.2

0

1

2

3

4

5

Markets Products/Services

Resources OperationalSystems

ManagementSystems

Culture FinancialResults

Management

Overall



Session 2

Overall Organizational Effectivenessby Pyramid Level (% Favorable Scores)

Pyramid Level % Fav % Neutral % Unfav

Markets 63.0 24.3 12.7

Products/Services 57.4 25.0 17.6

Resources 36.3 34.0 29.6

Operational Systems 38.9 32.6 28.5

Management Systems 36.5 33.6 30.0

Culture 54.5 26.2 19.3

Financial Results Management 33.3 36.7 30.1

Overall 43.9 30.8 25.2



Session 2

Highest Rated Survey Items

# Organizational Effectiveness Item Pyramid Level Mean % Favorable

15 We do whatever is necessary to meet or exceed customer needs. M 4.5 88.1

14 Customers are satisfied with our products and/or services. P 4.2 88.1

10 We understand our customers' needs. M 4.3 86.4

38 We value quality in everything we do. C 4.3 81.4

58 We demonstrate fairness and consistency in our supervision of employees. C 4.0 74.6

25 Our "production" process gets products and services to customers on a timely basis. OS 3.9 74.6

21 We know who our competitors are. M 4.0 72.9

54 We have one or more distinctive market segments where we have true competitive advantages over other firms.

M 3.9 71.2



Session 2

Lowest Rated Survey Items

# Organizational Effectiveness Item Pyramid Level Mean %

Unfavorable

63 Our reward/recognition system effectively differentiates between outstanding, average, and below-average performance.

MS 2.5 49.2

17 We have an effective and efficient system for developing new products and/or services. OS 2.6 49.2

44 Managers spend more time doing work themselves than planning and directing the work of others. MS 2.6 48.3

18 Overall, we have an adequate number of people with the right skills to be an effective organization. R 2.5 46.6

52 Strategic plans are implemented effectively. MS 2.5 45.8

50 Our human resource management systems (recruiting, training, etc.) are effective. OS 2.6 45.8

37 We have an effective system for developing managers. MS 2.6 45.8

55 We focus more on sales than on profitability as a measure of performance. C 2.7 44.8

51 Our company has a well-developed planning process that addresses strategic (long-range) issues. MS 2.5 44.1

45 Planning and systematic execution of plans are rewarded more than "crisis management." C 2.7 44.1

*Note that items 44 and 55 are “reverse scaled.” In order to produce the “best” or most favorable response, the respondent would need to select “To a Very Slight Extent” versus “To a Very Great Extent”.



Session 2

Organizational Assessment – Organizational Effectiveness Survey Results Analysis

Most Significant Strengths

Most Significant Limitations

(Opportunities to Improve)

Strategies to Promote Success: Maximizing

Strengths and Minimizing Limitations



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Current Status: Pyramid of Organizational Development

CULTURE

MANAGEMENT SYSTEMS

OPERATIONAL SYSTEMS

RESOURCES

MARKETS

PRODUCTS/SERVICES

Strengths Opportunities to Improve



Session 2

Organizational Assessment – Planning Survey Results Analysis

Key FindingStrategies to Promote Success:

Maximizing Strengths and Minimizing Limitations



Session 2

Strategic Planning Flow Diagram








Situation Analysis Business Definition Strategic Mission Strategy Key Result Areas Objectives and Goals Action Plans


Reports Meetings



Session 2

Business Definition

A broad statement of what business the firm is in that acts as a lens through which to view future strategies.

– Who are our customers?

– What are their needs?

– How do they buy?

– What is value to them?

Addresses the Questions:



Session 2

Sample Business Definitions

• StarbucksStarbucks retail operations is in the business of providing a total, quality coffee experience to a Tier I and Tier II customer. This is accomplished through a range of innovative, flexible business concepts tailored to the given customer’s needs in terms of take-out, café, and retail.

• TechlinkTechlink is in the business of partnering with the management of Fortune 1000 and high growth companies ($100M to $10B) to build and implement information technology business solutions for sustainable business advantage.



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A broad, measurable, time-dated statement of what the organization wants to or needs to become by the end of the planning period.

Strategic Mission



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Sample: Starbucks Strategic Mission

To establish Starbucks as the leading retailer and brand of To coffee in North America by the year 2000, by creating distinctive daily coffee experiences for our customers wherever they live, work or play.

$2 Billion in revenue 2000 Stores by 2000

$2 Billion + 2000 = 2000



Session 2

Session Follow-Up and Preparation for the Next Session

• Work with your team to “finalize” your Business Foundation – Business Concept, Strategic Mission, and Core Strategy.

• Continue developing the Objectives and Goals for your plan.– Be sure to convert “Strategies to Promote Success” into

Objectives and/or Goals.

• Consider sharing your draft plan with a fellow participant to obtain feedback.

• Bring any current written job descriptions for the people on your team and any performance evaluation forms that you use in your company with you to our next session.

• Read Chapter 8 and Chapter 10 in Growing Pains.



Session 2

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 Corporation10990 Wilshire Blvd., Suite 1420

Los Angeles, CA 90024(310) 477-0444

www.mgtsystems.com

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