Strategic Thinking and Planning to Sustain Successful Operations

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Transcript of Strategic Thinking and Planning to Sustain Successful Operations

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Strategic Thinking And Planning to Sustain Successful Operations

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Strategy in The 21st Century

In simplistic terms, strategy at all levels is the calculation of objectives, concepts, and resources within acceptable bounds of risk to create more favorable outcomes than might otherwise exist by chance or at the hands of others. Strategy is defined in Joint Publication 1- 02 as ?the art and science of developing and employing instruments of national power in a synchronized and integrated fashion to achieve theater, national, and/or multinational objectives.?

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Both of these definitions are useful, but neither fully conveys the role and complexity of strategic thought at the highest levels of the state. At these levels, strategy is the art and science of developing and using the political, economic, social-psychological, and military powers of the state in accordance with policy guidance to create effects that protect or advance national interests relative to other states, actors, or circumstances. Strategy seeks a synergy and symmetry of objectives, concepts, and resources to increase the probability of policy success and the favorable consequences that follow from that success. It is a process that seeks to apply a degree of rationality and linearity to circumstances that may or may not be either. Strategy accomplishes this by expressing its logic in rational, linear terms? ends, ways, and means.

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Strategy is far from simple, and understanding a theory of strategy allows us to grasp and work with its complexity by understanding its logic. A theory of strategy provides essential terminology and definitions, explanations of the underlying assumptions and premises, substantive propositions translated into testable hypotheses, and methods that can be used to test the hypotheses and modify the theory as appropriate.

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• Why study a theory of strategy? Theory?s value lies not in a prescription for success but in how it helps us expand and discipline our thinking. As Clausewitz reminds us, theory should be for study, not doctrine.

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Theory then becomes a guide to anyone who wants to learn about war from books; it will light his way, ease his progress, training his judgment, and help him to avoid pitfalls. . . . Theory exists so that one need not start afresh each time sorting out the material and plowing through it, but will find it ready to hand and in good order. It is meant to educate the mind of the future commander. . . .1

1. Carl von Clausewitz, On War, Michael Howard and Peter Paret, eds. and trans., Princeton: Princeton University Press, 1976, p. 141.

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Strategic Management Process

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What is Strategic Management?

• Application of the basic planning process at the highest levels of the company

• Top management sets goals for the performance of the company– Carefully formulating, implementing, and evaluating plans

and strategies

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What is Strategic Management?• Most important part is developing strategic plans

– Plans must remain current as changes occur inside and outside the company• Involves many levels of management

– Top level formally develops basic plans– Different departments may be asked to develop plans for their own areas– A solid plan guarantees that plans are coordinated and are supported by everyone in the company

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Defining the Mission and Setting Top-Level Goals

External Analysis of Opportunities and Threats

Internal Analysis of Strengths and Weaknesses

Selection of Appropriate Strategies

Implementation of Chosen Strategies

Strategic Planning• Rational planning by top management?

Basic Strategic Planning Model

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FIGURE 1.1

The Main Components of the Strategic Planning

Process

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Mission and Goals• Mission

– Sets out why the organization exists and what it should be doing.

• Major goals– Specify what the organization hopes

to fulfill in the medium to long term.• Secondary goals

– Are objectives to be attained that lead to superior performance.

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External Analysis• Identify strategic opportunities and threats in

the operating environment.

Macroenvironment National

Immediate (Industry)

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Internal Analysis• Identify strengths

– Quality and quantity of resources available– Distinctive competencies

• Identify weaknesses– Inadequate resources– Managerial and

organizational deficiencies

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• Strengths and Weaknesses• Opportunities and Threats

(SWOT Analysis)

Strategic ChoiceBusiness

FunctionalGlobal

Corporate

SWOT and Strategic Choice

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Business-Level Strategies• Cost leadership

– Attaining, then using the lowest total cost basis as a competitive advantage.• Differentiation

– Using product features or services to distinguish the firm’s offerings from its competitors.• Market niche focus

– Concentrating competitively on a specific market segment.

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Functional-Level Strategies• Focus is on improving the effectiveness of operations within a company.

– Manufacturing– Marketing– Materials management– Research and development– Human resources

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Global-Level Strategies

• Multidomestic• International• Global• Transnational

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Corporate-Level Strategies• Vertical integration• Diversification• Strategic alliances• Acquisitions• New ventures• Business portfolio

restructuring

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Strategy Implementation• Designing organizational structure• Designing control systems

– Market and output controls– Bureaucratic controls– Control through organizational culture– Rewards and incentives

• Matching strategy, structure, and controls– Congruence (fit) among strategy,

structure, and controls

Structure

Strategy

Controls

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Managing Strategic Change• The only constant is change.• Success requires adapting strategy and structure to a changing world.• The feedback loop in

strategic planning.

Corporate

Functional

BusinessOperational

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Strategic Managers• General managers

– Responsible for the overall (strategic) performance and health of the total organization.• Operations managers

– Responsible for specific businessfunctions or operations.

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Strategic Managers for All Levels

FIGURE 1.2

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Strategic Leadership• Vision, eloquence, and consistency

• Commitment to the vision• Being well informed

• Willingness to delegate and empower• Astute use of power

• Emotional intelligence

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Strategy as an Emergent Process• Strategy making in an unpredictable world

– Creates the necessity for flexible strategic approaches.• Strategy making by lower-level managers

– Strategy evolves through autonomous action.• Serendipity and strategy

– Accidental discoveries and happenstances can have dramatic effects on strategic direction.• Intended and emergent strategies

– Realized strategies are combinations of intended and emergent strategies.

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1-26

FIGURE 1.3

Intended and Emergent Strategies

Source: Reprinted from “Strategy Formation in an Adhocracy,” by Henry Mintzberg and Alexandra McGugh, published in Administrative Science Quarterly, Vol. 30, No. 2, June 1985, by permission of Administrative Science Quarterly.

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FIGURE 1.4

The Strategic Management Process for Intended and

Emergent Strategies

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Strategic Planning in Practice• Planning under uncertainty

– Scenario planning for dynamic environmental change• Ivory tower planning

– Lack of contact with operational realities– The importance of involving operating managers– Procedural justice in the decision-making process

• Engagement, explanation, and expectations

• Planning for the present: Strategic Intent– Recognition of the static nature of the strategic fit model– Strategic intent in focusing the organization on winning by achieving stretch goals

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Improving Strategic Decision Making• Cognitive biases systematically influence the

rationality of decision makers.

FIGURE 1.5

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Groupthink and Strategic Decisions• Pitfalls of groupthink

– Failing to question underlying assumptions.– Coalescing around a single person or policy.– Filtering out conflicting information.– Developing after-the-fact rationalizations.– Having an emotional (nonobjective)

commitment to an action.

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Techniques for Improving Decision Making

• Two decision-making processesthat counteractcognitive biases and groupthink.

FIGURE 1.6

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Strategy Formulation and Implementation

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Strategic Planning

• Strategic planning has taken on new

importance in today’s world of

globalization, deregulation, advancing

technology, and changing demographics,

and lifestyles

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Strategy Formulation and Implementation

• Strategic Management– Definition– Components– Model of Strategic Management Process– Models of Strategy Formation

• Managerial Tools to Implement Strategic Plans

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Thinking Strategically

• Answers to the following define an overall direction for the organization's grand strategy

Where is the organization now? Where does the organization want to be? What changes are among competitors? What courses of action will help us achieve our goals?

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Strategic Management• Set of decisions and actions used to implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals

• Responsibility = top managers & chief executive

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Grand Strategy: Growth• Growth can be promoted internally by investing in expansion or externally by acquiring additional business divisions

- Internal growth = can include development of new or changed products- External growth = typically involves diversification – businesses related to current product lines or into new areas

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Strategic Management

Managers ask such questions as...What changes and trends are occurring?Who are our customers?What products or services should we offer?How can we offer these products or services

most efficiently?

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Grand Strategy

• General plan of major action to achieve long-term goals

• Falls into three general categories1. Growth2. Stability3. Retrenchment

A separate grand strategy can be defined for global operations

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Grand Strategy: Stability

• Stability, sometimes called a pause strategy, means that the organization wants

– to remain the same size or

– to grow slowly and in a controlled fashion

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Grand Strategy: Retrenchment• Retrenchment = the organization goes through a period of

forced decline by either shrinking current business units or selling off or liquidating entire businesses

• Liquidation = selling off a business nit for the cash value of the assets, thus terminating its existence

• Divestiture = involves selling off of businesses that no longer seem central to the corporation

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Global Corporate Strategies

Need for National Responsiveness HighLow

Low

High Transnational Strategy• Seeks to balance global

efficiencies and local responsiveness

• Combines standardization and customization for product/advertising strategies

Globalization Strategy

• Treats world as a single global market

• Standardizes global products/advertising strategies

Multi-domestic Strategy• Handles markets

independently for each country

• Adapts product/advertising to local tastes and needs

Nee

d fo

r Glo

bal I

nteg

ratio

n

ExportStrategy

•Domestically focused•Exports a few domestically produced products to selected countries

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Global Strategy

• Globalization = product design and advertising strategies are standardized around the world

• Multi-domestic = adapt product and promotion for each country

• Transnational = combine global coordination with flexibility to meet specific needs in various countries

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Strategic Implementation“The best game plan is the world never blocked or tackled anybody.” V. Lombardi

“We would be in some form of denial if we didn’t see that execution is the true measure of success.” C. Michael Armstrong

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Strategic Implementation

“AT&T, Campbell Soup, Gillette, Eastman Kodak, Xerox. All these companies should be succeeding but aren’t. Why? Because they don’t know how to execute.”

Larry Bossidy, Chairman and former CEO of Honeywell.

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Strategic Implementation

“People think of execution as the tactical side of business, something leaders delegate while they focus on the perceived ‘bigger issues’. This idea is completely wrong. Execution has to be built into a company’s strategy, its goals, and its culture. And the leader of the organization must be deeply engaged in it.” Larry Bossidy,

The Discipline of Getting Things Done.

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Strategic Implementation“When you manage these processes in depth, you get robust results. You get answers to critical questions:Are our products positioned optimally in the marketplace?Can we identify how we are going to turn the plan into specific results for growth and productivity?Are we staffed with the right kinds of people to execute the plan?How do we make sure the operating plan has sufficient specific programs to deliver the outcome?”

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Implementation is Different

• Operation-driven rather than market-driven.• Action-oriented, make-things-happen tasks.• Strategy requires few; execution requires

everyone.

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Implementation is Tougher• Why is it tougher?

• More time consuming challenge• Wide array of managerial challenges• Many options to proceed• Demanding people-management skills• Perseverance to get initiatives moving• Number of unexpected issues• Resistance to change, misunderstandings.• Difficulties of integrating efforts across groups.

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Strategic Implementation• Most know what it is: few know how to get things done.• Three keys to keep in mind:

• Execution is a discipline, and integral to strategy.• Execution is the major job of the business leader.• Execution must be a core element of an organization’s culture.

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Strategic Implementation

• Among other things, implementation has to do with;

• Rigorously discussing ‘hows’ and ‘whats’, questioning, tenaciously following through.

• Ensuring accountability• Making assumptions about the business environment• Assessing the organization’s capabilities• Linking strategy to operations and the people who are going

to implement• Linking rewards to outcomes• Changing assumptions as the environment changes• Upgrading the company’s capabilities to meet the challenges

of an ambitious strategy.

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Strategic Implementation“The heart of execution lies in the three core processes: the people processes, the strategy processes and the operations processes.”Larry Bossidy, Execution. The Discipline of Getting Things Done.

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A Framework forExecuting Strategy.

• Entails converting the organization’s strategic plan into action and results.

• Job for the whole management team.• Affects every part of the firm.• Each manager must answer, ‘what has to be done in my

area to implement our part of the strategic plan, and what must I do to get these things accomplished?’

• All managers become strategic implementers in their areas and all employees are participants.

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A Framework for Executing Strategy

• Least charted and most open-ended area.• Based on individual company situations.• Know basics that must be covered – some more

than others, depending on changes

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A Framework for Strategy Implementation.

• Implementation should be addressed initially when the pros and cons of strategic alternatives are analyzed.

• Some strategies cannot be executed by some companies!

• Form follows function – can vary even by department.

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Implementation of Change• Over half of 93 Fortune 500 companies surveyed had execution problems:

• Took more time than planned.• Unanticipated major problems.• Ineffective coordination.• Loss of focus on implementation.• Employees incapable, inadequately trained.• Environmental factors• Inadequate leadership• Tasks poorly defined• Information systems inadequate to monitor properly.

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The ‘Big 8’ Components of Implementation.

The StrategyImplementer’sAction Agenda• what to do now vs. later?• What requires muchtime and personal attention?• What can be delegated to others.

Build an organizationwith the competencies,capabilities, and resourcestrengths needed forsuccessful strategyexecution.

Allocating ampleresources to strategy-criticalactivities.

Establishstrategy-supportivepolicies.

Instituting best practicesand pushing forcontinuous improvement.

Installing information, operatingand operating systems that enablecompany personnel to better carryout their strategic roles proficiently.

Tying rewards andincentives to theachievement of keystrategic targets.

Shaping the workenvironment andcorporate cultureto fit the strategy

Exercise the strategicleadership needed todrive implementationforward.

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Leading Strategic Implementation

• Depends on nature and degree of strategic change.

• Probing assessment of what the organization must do now – and what it must do differently and better to carry out the new strategy.

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Strategic Implementation• One make-or-break determinant is how well top management leads the process.• Middle and lower management need to push actions to the front lines and see the strategy is well executed.• The real implementation skill is being good at determining what it will take to execute the strategy proficiently.

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Strategic Implementation• Senior management communicate, communicate and then communicate some more:

• Communicate the case for change• Build consensus for how to proceed• Install strong allies in key positions• Urging and empowering to get process moving• Establish measures and deadlines• Reward those who achieve milestones• Reallocate resources• Personally preside over the strategic change process

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Strategic Implementation

• Most important leadership trait is a strong, confident sense of ‘what to do’ to achieve the desired results.

• Knowing what to do comes from understanding the circumstances of both the organization and the industry as a whole.

• This is not about ‘micromanaging’ but about assigning tasks, making sure that people understand priorities, asking incisive questions, staffing and then following up with measurement.

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Strategy Evaluation

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Organizations are most vulnerable when they are at the peak of their success

• Erroneous strategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse.

• Strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a situation becomes critical.

Strategy Evaluation

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1. Examine the underlying bases of a firm’s strategy

2. Compare expected to actual results3. Identify corrective actions to ensure that

performance conforms to plans

Strategy Review, Evaluation, & Control

3 Basic Activities

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• Complex & sensitive undertaking

• Overemphasis can be costly & counterproductive

• No evaluation can create even worse problems. • Strategy evaluation is essential to ensure that

stated objectives are being achieved.

Strategy Review, Evaluation, & Control

Strategy Evaluation

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Strategy Review, Evaluation, & Control

• Have assets increased• Increase in profitability• Increase in sales• Increase in productivity• Increased Profit margins

Some ways to evaluate of Strategic Performance

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Strategy Review, Evaluation, & Control

1. Increase in environment’s complexity2. Difficulty predicting future with accuracy3. Increasing number of variables

Difficulties in Strategy Evaluation

4. Rate of obsolescence of plans5. Domestic and global events6. Decreasing time span for planning certainty

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Strategy Review, Evaluation, & Control

• Initiate managerial questioning of evaluation and assumptions

• Trigger review of objectives & values• Stimulate creativity in generating alternatives• Managers and employees of the firm should

continually be aware of progress being made toward achieving the firm’s objectives. As critical success factors change, organizational members should be involved in determining appropriate corrective actions.

Strategy Evaluation Should --

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Strategy Review, Evaluation, & Control

• Are strengths still strengths?• Have we added additional strengths?• Are weaknesses still weaknesses?• Have we developed other weaknesses?

Monitor Strengths & Weaknesses; Opportunities & Threats

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Strategy Review, Evaluation, & Control

• Are opportunities still opportunities?• Other opportunities develop?• Are threats still threats• Other threats emerged?• Are we vulnerable to hostile takeover?

Monitor Strengths & Weaknesses; Opportunities & Threats

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See p.340 to 342 : compare EEF to new EEF …

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Evaluation FrameworkI. Review Underlying Bases

Continue present course

II. Measure Firm Performance

III.Take

Corrective Actions

Differences?

Differences?

Yes

NO

Yes

NO

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Critical thinking

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Definitions

A disciplined process of organizing and synthesizing information to evaluate and to prioritize the information appropriatelyCritical thinking system must be applied to an end, a goal, a reason for designing a response

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Exercise OneHow we use critical thinking in our lives and work

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Purpose of Critical Thinking

Our purpose of studying critical thinking is to apply critical thinking to design a superior nutritional intervention for WIC participants

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Integrating Facts

Autonomous Thinking

Observations

Informed Opinions

Active Listening

Questioning

Process of Critical Thinking

ReachInformedUnbiased

Conclusions

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Critical Thinking PathwayIdentifies and extracts pertinent

information and data from all sources

Discardirrelevant information

Know when to seek additional information

and seek it

Make decisions about participant risks

Develop counselingintervention plan

Distinguish accuraterelevant information

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Positive Nutrition Outcome

Critical Thinking Mind Map• Written material• Interview answers• Participant history• Vital statistics• Mannerisms• Observation

Information from

Participant

• Nutrition and Medical knowledge• Life Skills• Interaction ability• Critical thinking• Education and training

• Nutrition• Assumptions• Behavior• How WIC operates• What system requires for participation

Personal Knowledge

WIC Knowledge

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Purpose: Reaffirming WIC Goal Critical thinking requires a goal or purpose

This will be to discuss the goal of the WIC program.

Once we reaffirm the purpose of WIC we will address the pattern of thought which applies to WIC

counseling and assessment interventions.

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Critical Thinking - Applied to a Nutritional Counseling Situation

1. What is the purpose of meeting with this participant?2. What data or information do I need?

Evaluate what you know about the participant Past history Paper work submitted about participant Data gained from observation

The difference between what you know and what you need to know is called a “knowledge gap.”

3. How am I going to get the needed information?Create questions to gain the information needed.

4. Ask the questions you have developed.

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Critical Thinking System – (cont’d)

5. Using the responses to the questions, organize what you have learned…What conclusions or inferences can you make?

6. Consider again your main purpose. Do you have the knowledge to answer that? If not, probe deeper.

7. Ask additional questions to clarify and get more detail.8. Evaluate the information collected and known.

Use the information and identify appropriate conclusions.

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Positive Nutrition Outcome

Critical Thinking Mind Map• Written material• Interview answers• Participant history• Vital statistics• Mannerisms• Observation

Information from

Participant

• Nutrition and Medical knowledge• Life Skills• Interaction ability• Critical thinking• Education and training

• Nutrition• Assumptions• Behavior• How WIC operates• What system requires for participation

Personal Knowledge

WIC Knowledge

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Creative Solving Problems

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1. The Problem-Solving Cycle• Problem Solving

– The process of overcoming obstacles to answer a question or to achieve a goal

The problem Solving Cycle1. Problem Identification

– We have to recognize that we have a goal or that the solution we had in mind does not work

2. Problem definition and representation– We have to define and represent the problem well enough

to understand how to solve it

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1. The Problem-Solving Cycle3. Strategy formulation

– We have to plan a strategy for solving the problem which may involve

• Analysis – breaking down the whole of a complex problem into manageable elements

• Synthesis – putting together various elements to arrange them into something useful

• Divergent thinking – you try to generate a diverse assortment of possible alternative solutions to a problem

• Convergent thinking – you narrow down the multiple possibilities to converge on a single, best answer

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1. The Problem-Solving Cycle4. Organization of Information

– You have to organize the available information in a way that enables you to implement the strategy– You organize the information strategically, finding a the most suitable representation

5. Resource allocation– We have limited resources (time, money, equipment, space,…)– We have to decide how much we want to invest into the problem solving

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1. The Problem-Solving Cycle

6. Monitoring– It is necessary to monitor the process of solving the

problem to make sure that we are getting closer to the goal

– We need to reassess what we are doing to be able to compensate for possible flaws

7. Evaluation– You need to evaluate your solution after you have finished– New problems can be recognized, the problem may be

redefined, new strategies may come to light, and new resources may become available

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1. The Problem-Solving Cycle• Incubation

– Putting the problem aside for a while – Problem will be processed subconsciously– The benefits of incubation can be enhanced in two ways:

• Invest enough time in the problem initially• Allow sufficient time for incubation to permit the reorganization of information

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2. Types of Problems

1. Well-Structured Problems• Problems with clear paths to their solutions• Computer simulations of well-defined problems

– Problem space • The universe of all possible actions that can be applied

to solving a problem– Algorithms

• Sequences of operations that may be used recursively (repeated over and over again)

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2. Types of Problems

1. Well-Structured Problems• Humans use heuristics

– Informal, intuitive, speculative strategies that sometimes lead to an effective solution and sometimes do not

– If we store in long-term memory several simple heuristics that we can apply to a variety of problems, we can lessen the burden of our limited-capacity working memory

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2. Types of Problems

1. Well-Structured Problems• Heuristics

1. Means-ends analysis• Analyze the problem by viewing the end (the goal to be

sought) and then try to decrease the distance between the current position in the problem space and the end goal in that space

2. Working forward• Start at the beginning and try to solve the problem

from the start to the finish

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2. Types of Problems

1. Well-Structured Problems• Heuristics (cont.)

– Working backward• The problem-solver start at the end and tries to work

backward from there– Generate and test

• The problem-solver generates a list of alternative ways of action, not necessarily in systematic way, and then notices in turn whether each course of action will work

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2. Types of Problems

1. Well-Structured Problems• Isomorphic Problems

– Two problems are isomorphic if their formal structure is the same, and only their content differs

– E.g. games that involve constructing words from jumbled or scrambled letters

• Problems of Problem Representation– A major determinant of the relative ease of

solving a problem is how the problem is represented

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2. Types of Problems

2. Ill-Structured Problems and the Role of Insight• There is no clear, readily available path to

solution• ill-structured problems do not have well-defined

problem spaces, and problem solvers have difficulty constructing appropriate mental representations for modeling these problems and their solutions

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?Try to solve the following problems:

• A woman who lived in a small town married 20 different men in that same town. All of them are still living, and she never divorced any of them. Yet she broke no laws. How could she do this?

• You have loose black and brown socks in a drawer, mixed in a ratio of five black socks for every brown one. How many socks do you have to take out of that drawer to be assured of having a pair of the same color?

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2. Types of Problems

2. Ill-Structured Problems and the Role of Insight• Insight

– a distinctive and sometimes seemingly sudden understanding of a problem or of a strategy that aids in solving the problem

– Often, an insight involves reconceptualizing a problem or a strategy for its solution in a totally new way

– Insight can be involved in solving well-structured problems, but it is more often associated with ill-structured problems

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2. Types of Problems

2. Ill-Structured Problems and the Role of Insight• Insight

– The Early Gestaltist View• Insight problems require problem solvers to perceive

the problem as a whole– The Nothing-Special View

• Insight is merely an extension of ordinary perceiving, recognizing, learning, and conceiving

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2. Types of Problems2. Ill-Structured Problems and the Role of Insight

• Insight– The Neo-Gestaltist View

• Insightful problem solving can be distinguished from noninsightful problem solving in two ways:

– When given routine problems to solve, problem solvers show remarkable accuracy in their ability to predict their own success in solving a problem

– When given insight problems, problem solvers show poor ability to predict their own success prior to trying to solve the problems

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3. Creativity

• Creativity– The process of producing something that is both

original and worthwhile– Creative individuals show creative productivity,

producing inventions, insightful discoveries, artistic works, revolutionary paradigms

– Creative individuals usually have creative lifestyles, characterized by flexibility, nonstereotypical behaviors, and nonconforming attitudes

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3. Creativity

• It’s How Much You Produce– Creative individuals can come up with many

different ways to solve problems

• It’s What You Know– What distinguishes remarkably creative individuals

from less remarkable people is their expertise and commitment to their creative endeavor

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3. Creativity

• It’s Who You Are– Role of personality and motivation in creativity– Intrinsic motivation (enjoyment of the creative

process) is essential to creativity, whereas extrinsic motivation (fame, fortune) actually may impede creativity

• It’s Where You Are– External factors that contribute to creativity– Context (time, space, resources) of creative work

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Strategic Human Resources Management

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Human Resource Management Strategy

The Meaning of “Strategy”• A critical factor that affects Firm Performance• A factor that contributes to Competitive Advantage in

markets• Having a long-term focus• Plans that involve the top executives and/or board of

directors of the firm• A general framework that provides a perspective for

selecting specific policies and procedures

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Human Resource Management Strategy

Why is HR critical to firm performance?• 85% of all firms in the US are service firms.• Service is delivered by people.• Low quality HR leads to low quality customer

service.• In the 21st century effective knowledge

management translates into competitive advantage and profits.

• Knowledge comes from a firm’s people.

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Human Resource Management Strategy

What is unique about Human Resource Management?• HR is multidisciplinary: It applies the disciplines of

Economics (wages, markets, resources), Psychology (motivation, satisfaction), Sociology (organization structure, culture) and Law (min. wage, labor contracts, EEOC)

• HR is embedded within the work of all managers, and most individual contributors due to the need of managing people (subordinates, peers and superiors) as well as teams to get things done.

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HR Strategy: Strategic Fit

Training Rewards

Corporate Strategy

Business Strategy

HR Strategy

HR System(Performance Mgmt.)

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HR Strategy: HR System Internal Fit

Performance Management System

HR StrategyGoal Setting

Performance Measurement

Coaching

Rewards

Appeal

Performance Evaluation

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HR Strategy: Context of HR System1. The “Five Factors” Influencing the HR System

– External Environment– Social: social values, roles, trends, etc.– Political: political forces, changes. Ex. Bush presidency and its agenda for Social Security.– Legal: laws, court decisions, regulatory rules.– Economic: product, labor, capital, factor markets.

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The Nature of Leadership

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The Nature of LeadershipLeadership is a ‘process’ [focusing on what leaders actually do] and a ‘property’.

As a process, leadership is the use of non-coercive influence to shape the group’s or organization’s goals, to motivate behavior toward the achievement of those goals, and to help define group or organizational culture.

As a property, leadership is the set of characteristics attributed to individuals who are perceived to be leaders.

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The Nature of LeadershipLeaders are people who can influence the behaviors of others without having to rely on force or people whom others accept as leaders.

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Leadership and ManagementLeadership and management are related, but they are not the same.Organizations need both leadership and management if they are to be effective.Leadership is necessary to create change; management is necessary to achieve orderly results.

See Table 17.1, page 551.

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Leadership and PowerPower is the ability to affect the behavior of others.One can have power without having to use it. [football players working hard to keep their jobs]

In organizations, there are generally five [5] kinds of power:Legitimate powerReward powerCoercive powerReferent powerExpert power

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Legitimate PowerLegitimate power is granted through the organizational hierarchy.All people occupying the same position possess the same legitimate power.Legitimate power is authority. Some managers exercise authority but not leadership. [refusal of employees to do tasks not in job description]

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Reward PowerReward power is the ability to give or withhold rewards. [salary increases, bonuses, promotion recommendations, praise, recognition and interesting job assignments]

In general, the greater the number of rewards a manager controls and the more important the rewards are to subordinates, the greater is the manager’s reward power.If the subordinate is interested only in the formal organization rewards, the manager is not considered a leader.However, if the subordinate is interested in receiving the manager’s praise, gratitude and recognition, the manager is exercising leadership.

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Coercive PowerCoercive power is used to force compliance by means of psychological, emotional or physical threat.Usually limited to verbal or written reprimands, disciplinary layoffs, fines, demotion and/or termination.However, the more ‘punitive’ the elements under a manager’s control and the more important they are to subordinates, the more coercive power the manager possesses.The more a manager uses coercive power, the more likely resentment and hostility will occur and the less likely he will be seen as a leader.

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Referent Power

Referent power is personal power that comes to a person based on identification, imitation, loyalty or charisma. [famous athletes, movie stars, etc]

Power that is abstract, not concrete.Employees give this person power over them because he/she is like them in personality, background or attitudes.Employees can copy this person by wearing the same clothes, working the same hours, or believing in the same management philosophy.Referent power is more likely to be associated with leadership.

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Expert PowerExpert power is the personal power that comes to someone based on the information or expertise he/she possesses.The more important the information and the fewer people who have access to it, the greater is the degree of expert power possessed by an individual.Both leaders and managers tend to have a lot of expert power.

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Using PowerHow does a manager or leader use power?

Legitimate requestInstrumental complianceCoercionRational persuasionPersonal identificationInspirational appealInformation distortion

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Using PowerLegitimate request – the subordinate recognizes that the organization has given the manager the right to make the request. [most day-to-day requests]

Instrumental compliance – the subordinate complies to get the reward the manager controls. [agreeing to work overtime gets praise or a bonus]

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Using PowerCoercion – subordinate is told if something is not done, punishment, firing or a reprimand may result.Rational persuasion occurs when the manager can convince the subordinate that compliance is in his/her best interest. [transfer may be good for his/her career]

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Using PowerPersonal identification – a manager recognizes that he has ‘referent’ power over a subordinate and shapes the behavior by becoming a model for the subordinate to imitate.Inspirational appeal – depends in part of the persuasive powers, and referent power, of the manager. [a plea for loyalty to the organization]

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Using PowerInformation distortion – a manager distorts or withholds information from a subordinate to influence behavior. [manager withholds info about several candidates for a certain position to secure his ‘favorite’ choice is selected]

This use of power may be unethical.If subordinates find out, they may lose

confidence and trust in that manager’s leadership.

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Effective Communication

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What is Communication?• What does it mean to you?

• The process of communication is what allows us to interact with other people; without it, we would be unable to share knowledge or experiences with anything outside of ourselves. Common forms of communication include speaking, writing, gestures, touch and broadcasting.• Wikipedia definition

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Verbal vs Non Verbal

• Can we communicate without words?

• Voice attributes• What are they and how do they affect communication?

• Physical attributes• What could be considered here and how do they affect

communication?

• The power of touch• What and when is OK?

• Which is better, verbal or non verbal?

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Personal Presentation

• Does personal presentation make a difference to the way we are perceived?

• Does it matter?• What can we do about it - do we have to look

bland and boring?• What if our organisation has a dress code?

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The Communication Equation• What you hear• Tone of voice• Vocal clarity• Verbal expressiveness 40% of the message

• What you see or feel• Facial expression• Dress and grooming • Posture• Eye contact• Touch• Gesture 50% of the message

• WORDS … 10% of the message!

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Understanding Communication• We are going to consider:

• The 2-Way communication process• Effective communication skills• Barriers to effective communication

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Communication is a 2-way process

• Communication skills involve:• Listening to others (Receiving) message • Asserting/ Expressing (Sending)• Barriers to communication can lead to misunderstanding and confusion

sender

receiver

sender

receiver

values and attitudes“generation gap”

Cultural differences

language

noise

hearing

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Effective Communication Skills

Effective Communication skills

Eye contact & visible mouth

Body language

Silence

Checking for understanding

Smiling face

Summarising what has been said

Encouragement to continue

Some questions

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Barriers to Effective Communication

Barriers to effective

communication

Language NoiseTime

DistractionsOther people

Put downsToo many questions

Distance

Discomfort

with the topic

Disability

Lack of interest

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The Art of Listening• “If we were supposed to talk more than listen, we would have been given two mouths and one ear.”

• Mark Twain

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Listening Skills• Active Listening• Responding• Paraphrasing• Asking questions for clarification• Mirroring the other person’s language

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Responding• Responses to check that your perceptions are correct• Responses to encourage further communication

• See handout for further ideas

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Questioning Techniques• Open ended and Closed questions• Diverse Questioning techniques

• Participants to practise• Then try the Questioning Quiz.

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Individual Differences• What individual factors could affect the way a person “sends” or “receives” a message?

• Is gender/ age a factor?

• How can we adapt if :-• we have a problem ourselves or • the other person seems to have a problem?

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Cultural Diversity• What do we know about the communication styles of different cultures?

• Consider verbal and non verbal, including dress constraints, language difficulties, taboos.

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Emotional Intelligence

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High IQ• Critical• Condescending• Inhibited• Uncomfortable

with sensuality• Emotionally

bland

High Emotional

IQ Poised Outgoing Committed to

people and causes

Sympathetic and caring

Comfortable with themselves

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IQ contributes only about 20% to success in life

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Other forces contribute to success

• Emotional Intelligence

• Luck

• Social Class

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Emotional IQ has 5 components

• Self awareness• Managing emotions• Motivating ourselves• Empathy• Resolving conflicts/handling

relationships

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EI TEST1. You are on an airplane that suddenly hits extremely bad turbulence and begins rocking from

side to side. What do you do?A. Continue to read your book or magazine, or watch the movie, trying to pay little attention to

the turbulence.B. Become vigilant for an emergency, carefully monitoring the stewardesses and reading the

emergency instructions card.C. A little of both a and b.D. Not sure - never noticed.

2. You are in a meeting when a colleague takes credit for work that you have done. What do you do?

E. Immediately and publicly confront the colleague over the ownership of your work.F. After the meeting, take the colleague aside and tell her that you would appreciate in the

future that she credits you when speaking about your work.G. Nothing, it's not a good idea to embarrass colleagues in public.H. After the colleague speaks, publicly thank her for referencing your work and give the group

more specific detail about what you were trying to accomplish.

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3. You are a customer service representative and have just gotten an extremely angry client on the phone. What do you do?

A. Hang-up. It doesn't pay to take abuse from anyone.B. Listen to the client and rephrase what you gather he is feeling.C. Explain to the client that he is being unfair, that you are only trying to do your job,

and you would appreciate it if he wouldn't get in the way of this.D. Tell the client you understand how frustrating this must be for him, and offer a

specific thing you can do to help him get his problem resolved.

4. You are a college student who had hoped to get an A in a course that was important for your future career aspirations. You have just found out you got a C- on the midterm. What do you do?

E. Sketch out a specific plan for ways to improve your grade and resolve to follow through.

F. Decide you do not have what it takes to make it in that career.G. Tell yourself it really doesn't matter how much you do in the course, concentrate

instead on other classes where your grades are higher.H. Go see the professor and try to talk her into giving you a better grade.

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5. You are a manager in an organization that is trying to encourage respect for racial and ethnic diversity. You overhear someone telling a racist joke. What do you do?

A. Ignore it - the best way to deal with these things is not to react.B. Call the person into your office and explain that their behavior is inappropriate

and is grounds for disciplinary action if repeated.C. Speak up on the spot, saying that such jokes are inappropriate and will not be

tolerated in your organization.D. Suggest to the person telling the joke he go through a diversity training program.

6. You are an insurance salesman calling on prospective clients. You have left the last 15 clients empty-handed. What do you do?

E. Call it a day and go home early to miss rush-hour traffic.F. Try something new in the next call, and keep plugging awayG. .List your strengths and weaknesses to identify what may be undermining your

ability to sell.H. Sharpen up your resume.

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7. You are trying to calm down a colleague who has worked herself into a fury because the driver of another car has cut dangerously close in front of her. What do you do?

A. Tell her to forget about it-she's OK now and it is no big deal.B. Put on one of her favorite tapes and try to distract her.C. Join her in criticizing the other driver. D. Tell her about a time something like this happened to you, and how angry you felt,

until you saw the other driver was on the way to the hospital.

8. A discussion between you and your partner has escalated into a shouting match. You are both upset and in the heat of the argument, start making personal attacks which neither of you really mean. What is the best thing to do?

• Agree to take a 20-minute break before continuing the discussion.• Go silent, regardless of what your partner says.• Say you are sorry, and ask your partner to apologize too.• Stop for a moment, collect your thoughts, then restate your side of the case as

precisely as possible.

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9. You have been given the task of managing a team that has been unable to come up with a creative solution to a work problem. What is the first thing that you do?

A. Draw up an agenda, call a meeting and allot a specific period of time to discuss each item.

B. Organize an off-site meeting aimed specifically at encouraging the team to get to know each other better.

C. Begin by asking each person individually for ideas about how to solve the problem.

D. Start out with a brainstorming session, encouraging each person to say whatever comes to mind, no matter how wild.

10. You have recently been assigned a young manager in your team, and have noticed that he appears to be unable to make the simplest of decisions without seeking advice from you. What do you do?

E. Accept that he "does not have what it take to succeed around here" and find others in your team to take on his tasks.

F. Get an HR manager to talk to him about where he sees his future in the organization.

G. Purposely give him lots of complex decisions to make so that he will become more confident in the role.

H. Engineer an ongoing series of challenging but manageable experiences for him, and make yourself available to act as his mentor.

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Answers to Quiz1. Not D, 10 pts. for ABC2. B – 5 pts. D – 10 pts.3. B – 5 pts. D – 10 pts.4. A – 10 pts. C – 5 pts.5. B – 5 pts. C – 10 pts. D – 5 pts.6. B – 10 pts. C – 5 pts.7. C – 5 pts. D – 10 pts.8. A – 10 pts. 9. B – 10 pts. D 5 pts.10.B – 5 pts. D – 10 pts.

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Children are not born with social skills; they must learn

them.

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The Habits of Highly Effective Leaders and Managers

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What are Habits?

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Knowledge, skill and desire could be said to be the building blocks

of good habits.

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Knowledge(what to, why to)

HabitsInternalized principles & patterns of behavior

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Knowledge(what to, why to)

HabitsInternalized principles & patterns of behavior

Desire(want to)

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Knowledge(what to, why to)

Skills(how to)

HabitsInternalized principles & patterns of behavior

Desire(want to)

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Knowledge(what to, why to)

Skills(how to)

HabitsInternalized principles & patterns of behavior

HabitsDesire

(want to)

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Are we our Habits?

Habits of Effectiveness can be learned

Habits of Ineffectiveness can be unlearned

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“Excellence is an art won by training and habituation. We are what we repeatedly do. Excellence, then, is not an act, but a habit”

Aristotle

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Character Ethic (1776 – 1930)

Action based on Balance

Principles/Thoughts

Success

Slow Character

DevelopmentHabits of

Effectiveness

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Personality Ethic (1930 onwards)

Action to get what we want from

others

Manipulative Skills & Influencing Techniques

Success

QuickCareer

DevelopmentPublicImage

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Independence

Dependence

Interdependence

PUBLICVICTORY

PRIVATEVICTORY

Seek First to Understand

… Then to beUnderstood

Synergize

Think Win/Win

Put First Things First

Be Proactive

Begin with the End in Mind

Shar

pen

the S

aw

THE SEVEN HABITS PARADIGM

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Introduction

• According to Steven Covey, to achieve our objective of maturity one goes through the cycles of dependence, independence and ultimately interdependence.

• Interdependence is above independence in that you get along with other people in achieving.

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PHYSICALExercise, Nutrition,Stress Management

FOUR DIMENSIONS OF RENEWAL

MENTALReading, Visualizing,

Planning, Writing

SOCIAL/EMOTIONALService, Empathy,

Synergy, Intrinsic Security

SPIRITUALValue Clarification

& Commitment, Study& Meditation

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THE UPWARD SPIRAL

Learn

DoCommit

Learn

CommitDo

Do Learn

Commit

LearnCommit Do

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PROACTIVE MODEL

Stimulus ResponseFreedom

toChoose

Self-Awareness

Imagination Conscience

IndependentWill

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Lose/WinHi

ghLo

wWin/Win

Lose/Lose Win/LoseCONS

IDER

ATIO

N

Low HighCOURAGE

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LEVELS OF COMMUNICATION

TRUST

Synergistic (Win/Win)

COOPERATION

Respectful (Compromise)

Defensive (Win/Lose or Lose/Win)Low

High

Low High

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PARADIGM SHIFTSA BREAK FROM

TRADITIONAL WISDOMTOWARD

7 HABITS PRINCIPLES

Habit 1 We are a product of our environment and upbringing.

Habit 2 Society is the source of our values.

Habit 3 Reactive to the tyranny of the urgent. Acted upon by the environment.

Habit 4 Win-lose.One-sided benefit.

Habit 5 Fight, flight, or compromise when faced with conflict.

Habit 6 Differences are threats. Independence is the highest value. Unity means sameness.

Habit 7 Entropy.Burnout on one track - typically work.

We are a product of our choices to our environment and upbringing.Values are self-chosen and provide foundation for decision making. Values flow out of principles.Actions flow from that which is important.

Win-win.Mutual benefit.

Communication solves problems.

Differences are values and are opportunities for synergy.

Continuous self-renewal and self-improvement.

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BE PROACTIVEI can forgive, forget, and let

go of past injustices

I’m aware that I’m responsible

I’m the creative force of my life

I choose my attitude, emotions, and moods

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SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

HABIT 1

Be Proactive. Proactive people take responsibility for their own lives. They determine the agendas they will follow and choose their response to what happens around them.

Be Reactive. Reactive people don’t take responsibility for their own lives. They feel victimized, a product of circumstances, their past, and other people. They do not see as the creative force of their lives.

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Begin with the End in Mind. These people use personal vision, correct principles, and their deep sense of personal meaning to accomplish tasks in a positive and effective way. They live life based on self-chosen values and are guided by their personal mission statement.

Begin with No End in Mind. These people lack personal vision and have not developed a deep sense of personal meaning and purpose. They have not paid the price to develop a mission statement and thus live life based on society’s values instead of self-chosen values.

HABIT 2

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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Put First Things First. These people

exercise discipline, and they plan and execute according to priorities. They also “walk their talk” and spend significant time in Quadrant II.

Put Second Things First. These people are crisis managers who are unable to stay focused on high-leverage tasks because of their preoccupation with circumstances, their past, or other people. They are caught up in the “thick of thin things” and are driven by the urgent.

HABIT 3

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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Page 179: Strategic Thinking and Planning to Sustain Successful Operations

Think Win-Win. These people have an abundance mentality and the spirit of cooperation. They achieve effective communication and high trust levels in their Emotional Bank Accounts with others, resulting in rewarding relationships and greater power to influence.

Think Win-Lose or Lose-Win. These people have a scarcity mentality and see life as a zero-sum game. They have ineffective communication skills and low trust levels in their Emotional Bank Accounts with others, result-ing in a defensive mentality and adversarial feelings.

HABIT 4

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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Seek First to Understand, Then to Be Understood. Through perceptive observation and empathic listening, these non-judgmental people are intent on learning the needs, interests, and concerns of others. They are then able to courageously state their own needs and wants.

Seek First to Be Understood. These people put forth their point of view based solely on their auto-biography and motives, without attempting to understand others first. They blindly prescribe without first diagnosing the problem.

HABIT 5

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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Synergize. Effective people

know that the whole is greater than the sum of the parts. They value and benefit from differences in others, which results in creative cooperation and team-work.

Compromise, Fight, or Flight. Ineffective people believe the whole is less than the sum of the parts. They try to “clone” other people in their own image. Differences in others are looked upon as threats.

HABIT 6

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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Sharpen the Saw. Effective people are involved in self-renewal and self-improvement in the physical, mental, spiritual, and social-emotional areas, which enhance all areas off their life and nurture the other six habits.

Wear Out the Saw. Ineffective people fall back, lose their interest, and get disordered. They lack a program of self-renewal and self-improvement and eventually lose the cutting edge they once had.

HABIT 7

SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

EFFECTIVE PEOPLE INEFFECTIVE PEOPLE

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CIRCLE OF INFLUENCE

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CIRCLE OF INFLUENCE

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The End

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