Strategy often fails on execution because its genesis occurs in a disconnected space from the human performance factors of the organization. This presentation discusses some of the places that we go wrong and proposes an approach to forming strategy iin a highly connected and successful way.

1. June 26-29, 2011
Las Vegas, Nevada
Step Out of the Ivory Tower
The Right Way to Develop a Strategic Plan
Mason Holloway • June 25
SHRM 2011 Annual Conference & Exposition
©SHRM 2010

2. Agenda
Module 1: Where are we now?
Module 2: The strategic planning framework
Module 3: The 5 elements of effective strategic planning
Q&A and Wrap-up
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3. Activity - Where Are We Now?
Module 1 – Where we are we now?
Think about your organization:
> What is the approach to strategic
DISCUSSION
planning in your organization?
> Where is it formed?
> What data is used?
> How is it executed?
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4. You‘re Not Alone
Module 1 – Where we are we now?
Which choice best describes the way important strategic
decisions are made in your company?
By small senior group, including CEO or equivalent 52
With formal strategic planning process 23
By business unit leaders 11
By CEO or equivalent 10
By sector leaders 2
By frontline employees 1
% respondents1
Other 1
1 All data weighted by GDP of constituent countries; respondents who answered ‗don‘t know‘ are not shown; figures sum to
100% because of rounding.
Source: July/Aug 2006 McKinsey Quarterly survey of business executives
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5. Discussion - What Has and Has Not Worked?
Module 1 – Where we are we now?
Think about your organization:
> What impact/success have you
DISCUSSION
achieved with your strategic
plans?
> Did you get the results you
desired?
> Why/Why not?
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6. Welcome to the Club: A Sobering Statistic
Module 1 – Where we are we now?
QUICK FACT
Most companies‘ strategies deliver
only 63% of their promised financial
value.
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7. Where Does the Performance Go?
Module 1 – Where we are we now?
37% Average Performance Loss
7.5% Inadequate or unavailable
resources
5.2 % Poorly communicated strategy
4.5% Actions required to execute not
63% clearly defined (no clear outcomes)
Average Realized
4.1% Unclear accountabilities for
Performance execution
3.7% Organizational silos and culture
blocking execution
3.0% Inadequate performance
monitoring
3.0% Inadequate consequences or
rewards for failure or success
2.6% Poor senior leadership
1.9% Uncommitted leadership
0.7% Other obstacles (including
* Harvard Business School Publishing, 2005 inadequate skills and capabilities)
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8. How Important is Strategy?
Module 1 – Where we are we now?
The Institute for Corporate Productivity study, the Top Ten
Critical Human Capital Issues of 2011:
1. Leadership development
2. Succession planning
3. Strategy execution/alignment
4. Managing/coping with change
5. Talent management.
6. Innovation and creativity
7. Performance management
8. Knowledge retention
9. Engagement
10. Coaching
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9. Activity – When the Strategy Went Off the Rails
Module 1 – Where we are we now?
Think of the development and implementation of a strategy
from your past that failed to produce the desired results:
• Document, using a scale of 1-5, where 1 is low:
1. How involved was leadership in setting the vision?
2. How involved were managers involved in setting the vision?
3. How much input did ―key performers‖ have in the strategy?
4. How closely tied was the strategy to organizational vision,
mission, values and business model?
5. How well was the strategy communicated to the workforce
as a whole?
6. How effectively did the organization align talent to support
the strategy?
• Share your story with a colleague at your table, offering
your diagnostic of ―what went wrong‖
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10. The ―Ivory Tower‖ Approach
Module 1 – Where we are we now?
The “Ivory Tower” approach
• What it includes:
> Usually:
• Company Mission, Vision and Values
• SWOT assessment
• Environmental scan
> Sometimes:
• ―Expert‖ input from strategist
• Market analysis or feedback
> Occasionally:
• Past performance data relative to previous strategy
• Talent assessment of current capability
> Rarely:
• Direct input from the line on key strategic considerations
• Specific performance data from key performers
(opportunities and gaps)
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11. What it Says and What it Does
Module 1 – Where we are we now?
What it says:
• ―Even though you have the most intimate contact with your
part of our business – we don‘t trust or value your opinion.‖
• ―Just get back to work!‖
• ―If we want your opinion we‘ll ask for it, but don‘t hold your
breath!‖
What it does:
• Breeds disengagement
• Creates a division between senior leadership and the rest of
the organization
• Reduces the likelihood of successfully translating the
strategy to execution
• CREATES MASSIVE DISCONNECTS!
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12. The Effect of the Disconnects
Module 1 – Where we are we now?
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13. Activity – The Circle Strategy Challenge
Module 1 – Where we are we now?
Scenario:
• Your organization currently deploys the ―circle strategy.‖
• Changes in leadership have given rise to the development
of a new strategy that your organization is charged with
implementing
• You will take the role of ether a Leader, Manager, or
Performer for this activity
• Follow the instructions provided and
be prepared to share your
observations
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14. Instructions for Activity
Roles for Activity • Everyone will be assigned a ―Role‖:
• Leader: • Your mission is to first successfully implement the current
2 per group strategy, then shift as a new strategy is introduced. All activity
• Manager: will be timed. BOTH HANDS MUST REMAIN ON THE ROPE.
4 per group • Round 1, 4 minutes— Managers work with performers to perfect
implementation of the circle strategy. Execute the strategy as
• Timer/Observer:
many times as possible in 4 minutes. Leaders meet and discuss
1 per group
the strategic alternatives and select a new strategy.
• Performer: • Round 2, 4 minutes — Leaders communicate the new strategy to
Everyone not managers who in turn discuss the implementation with
assigned another performers. (+10 second penalty for touching the rope during this)
role
• Round 3, 4 minutes — Implementation of the new strategy as
many times as possible in (penalties of +10 seconds if there is
talking on a team while moving OR if someone takes a hand off
the rope)
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15. Questions on the Activity
1. How does this activity mirror the difficulties involved in
choosing and implementing a new strategy?
2. What are some of the factors that impacted success?
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16. What is Strategic Planning?
Module 1 – Where we are we now?
“Strategic planning is a clarifying
activity that enables organizations to
Definition
identify, align on, and to move toward
desired future states. It consists of the
process of crystallizing a shared
vision, specifying goals and objectives
then implementing plans and
initiatives to reach them.”
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17. Out of the Ivory Tower
Module 1 – Where we are we now?
The new paradigm in strategic planning
Old New
Top-down, isolated creation Inclusive, holistically generated
Plan first, resource later Resources integrated planning
Limited input from performers Relies on input from key performance
Disconnected from performance Leverages performance opportunities
Difficult to translate to execution Closely linked to execution
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18. The 3 by 5 Strategic Planning Framework
Module 2 – The Strategic Planning Framework
• Three Phases (the 3 D’s)
> Develop the shared vision
> Design and test the strategies
> Drive the Execution
• Five Elements
> Visioning foundation
> Human performance factors Human
Visioning
> Execution capability Foundation
Performance
Factors
> The long view
> Alignment
Strategic
Plan
The Long Execution
View Capability
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19. The Strategic Planning Framework
Module 2 – The Strategic Planning Framework
Develop a Shared Vision Design and Test Strategies Drive the Execution
Visioning Execution The Long
Foundation Capability View
Strategic Execution
What we‘ve Strategic Alternative A monitoring and
done before Goals
evaluation
Internal and External Factors
Company
Vision, Strategic Strategic
Mission and Alternative B Plans and
Values What we are What we Initiatives Performance
doing well want to do factors:
today next Strategic prediction and
View of the Alternative C monitoring
market and
external
Strategic
expectations
Decision Contingency
Key Performance Criteria planning and
Performer Gaps and
implementation
Input Opps • Reduce
• Eliminate
Human Performance • Innovate
• Extend
Factors
Alignment
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20. The 3 D‘s (Phases) of Strategic Planning
Module 2 – The Strategic Planning Framework
• Develop the shared vision
> Include the right people and the right data
• Design and test strategies
> Use known performance factors as decision criteria
• Drive the execution
> Predict and plan for contingencies – monitor and evaluate
progress
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21. Develop the Shared Vision
Module 2 – The Strategic Planning Framework
• Process for developing the shared vision
> First, assemble the appropriate team and contributors
• Includes representatives from the business units
• Includes input from Key Performers in critical business areas
> Restate and align on the company‘s mission, vision and values
• Values serve as the context rather than the criteria
> Openly discuss perspectives on the market, the industry, and
the company‘s SWOT
> Assemble the perceptions into a collective view
> Use the Vision Foundation Matrix to evaluate past, current and
predicted performance data against the collective perspective
> Select strategic goals based on the overlap of performance
opportunity and market opportunity
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22. Tools for the Shared Vision - SWOT
Module 2 – The Strategic Planning Framework
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23. Design and Test the Strategies
Module 2 – The Strategic Planning Framework
• Process for designing and testing the strategies
> Begin by reviewing the strategic goals against the performance
opportunities and gaps
> Discuss and draft strategic initiatives that will drive the strategic
goals
> Use selection criteria to rigorously evaluate the draft initiatives:
• Alignment with performance opportunities and gaps
• Ability/need to reduce/eliminate/innovate/extend for the initiative to
succeed
• Alignment with the shared vision
> Develop a business case for the best alternatives
> Cascade the initiative into individual goals, measures and
accountability
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24. Tools for Evaluating Strategic Alternatives
Module 2 – The Strategic Planning Framework
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25. Drive the Execution
Module 2 – The Strategic Planning Framework
• Process for driving the execution
> Begin by establishing the monitoring and evaluation criteria and
governance
• What is a failure in strategy and what is a failure in execution?
> Discuss and predict with the team, specific performance factors
that might impact the execution
> Create contingency plans for the most likely failure points and
link to the monitoring
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26. Tools for Execution – Balanced Scorecard
Module 2 – The Strategic Planning Framework
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27. The 5 Elements of Effective Strategic Planning
Module 3 – The 5 Elements of Effective Strategic Planning
Visioning Human
Foundation Performance
Factors
Strategic
Plan
The Long Execution
View Capability
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28. Module 3 – The 5 Elements of Effective Strategic Planning
Visioning
Foundation
Visioning Foundation
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29. What‘s in a Vision?
Module 3 – The 5 Elements of Effective Strategic Planning
If you don‘t know where you are going...
Any road will get you there.
- Lewis Carrol
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30. Characteristics of the Visioning Foundation
Module 3 – The 5 Elements of Effective Strategic Planning
Owned by • Typically ―owned‖ by the C-suite
> May include input from executive committee or key
leadership
Influenced by • Market and shareholder perception
> External market changes
> Shareholder expectations and actions
Integrated with • And supported by the business model
> Must align with the companies core principles and value
proposition
Informs • And drives organizational goals and goal setting
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31. Vision Foundation Matrix
Module 3 – The 5 Elements of Effective Strategic Planning
Past Performance Current Performance Predicted Performance
Vision How has the workforce How closely does our current What will the workforce need to do in
translated the vision into action execution support our vision? the future to align more closely with
in the past? the vision (In performance terms)?
What human performance factors
Where have the disconnects prevent better alignment? Should the Vision be
occurred? updated/modified to reflect future
Does the vision still resonate in trends?
How has the market the current market and workforce?
responded?
Mission How has our mission been How do our current human What effect will modifying our
carried forward or been performance factors align with our mission have on the workforce?
changed by our execution? mission?
Business How well has our workforce How well is our workforce aligned What can (or should) be changed
performed within our business to drive success within our current (either business model or workforce)
Model model? business model? to drive greater success?
Where are there performance
gaps? Opportunities?
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32. Important Considerations
Module 3 – The 5 Elements of Effective Strategic Planning
• Must be an inclusive process
• Must address human performance factors with a rigorous
methodology
• Must arrive at a unified view that can be internalized by all
• All initiatives must be put through the same process
regardless of their origin
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33. Module 3 – The 5 Elements of Effective Strategic Planning
Human
Performance
Factors
Human Performance
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34. Characteristics - Human Performance Factors
Module 3 – The 5 Elements of Effective Strategic Planning
Owned by • Typically ―owned‖ by the Human Resources function
> May be driven by the talent function or shared with the line
Influenced by • Market demand, organizational design and talent pool
> External market changes
> Internal organizational design decisions
> Resource allocation
Integrated with • Development and talent requirements from the line
> Must align with the business drivers from the line
Informs • And drives the understanding of limitations and potentials
that support the Visioning Foundation
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35. Human Performance Thinking
Module 3 – The 5 Elements of Effective Strategic Planning
Asking THE RIGHT QUESTIONS
Finding THE RIGHT SOURCES
&
(THEN BEING WILLING TO ACCEPT WHAT YOU HEAR)
• Look for the performance
opportunities to leverage
• Use real performance data to inform
vision and strategy
• Challenge old assumptions!
The Right People are
the Key!
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36. The Power of the Bell Curve
Module 3 – The 5 Elements of Effective Strategic Planning
• The most effective strategies extend performance
opportunities
Standard New Standard
Performers
Percent of Workforce
Minimal Performers
Key
Performers
Level of Performance
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37. More Than Just Knowing
Module 3 – The 5 Elements of Effective Strategic Planning
• Human performance factors cover a range of elements
> Not just about the workforce‘s skill or knowledge
> Must be viewed holistically
Information,
Expectations & Tools & Technology Structure & Process
Feedback
Selection & Motives &
Skills & Knowledge
Assignment Consequences
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38. 3 Steps to Integrate Human Performance
Module 3 – The 5 Elements of Effective Strategic Planning
Introduce Human Performance to your Strategic Planning
Process… in Just 3 Steps
Identify Performance STRENGTHS that you can Leverage
STEP
HOW? Identify and include key performers from high performing
functions in the planning process
WHAT? Get input on how their performance could support or extend
Look for performance gaps that if closed would creategoals and vision.
opportunities to drive toward the organizational opportunity
STEP Identify now – close later
Focus on answering the question: if this performance gap were
closed, what incremental or even transformational opportunities
would become possible? (e.g new initiatives based on excess
STEP Identify performance capability that does not currently exist, but if added would
capacity.)
create opportunity
?
Integrate with the Visioning Foundation!
Are you Willing to Challenge
―The Status Quo‖
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39. Practice!
Module 3 – The 5 Elements of Effective Strategic Planning
Complete the practice worksheet in your participant materials:
• Partner with someone at your table
• Independently: Using the Vision Foundation Matrix (VFM) and
Human Performance Factors checklist, complete the VFM
Worksheet
• Next, discuss your effort with your table partner and draft 3
strategic goals based on your VFM
Past Performance Current Performance Predicted Performance
Vision
Mission
Business
Model
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40. Module 3 – The 5 Elements of Effective Strategic Planning
Execution
Execution Capability
Capability
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41. The Case for Inclusion
Module 3 – The 5 Elements of Effective Strategic Planning
Take away my people, but leave my factories, and soon grass
will grow on the factory floors.
Take away my factories, but leave my people, and soon we will
have a new and better factory.
- Andrew Carnegie
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42. Characteristics – Execution Capability
Module 3 – The 5 Elements of Effective Strategic Planning
Owned by • Typically ―owned‖ by the business line management
> May be supported by other corporate functions
Influenced by • Organizational design, recruiting, development programs
> Access to resources
> Process design and decisions
> Management structure and communication
Integrated with • Resource planning
> Must align with the business requirements from the line
Informs • The translation of strategy to execution
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43. The Keys to Execution Capability
Module 3 – The 5 Elements of Effective Strategic Planning
Developing execution capability is essential to deliver on
the organization’s strategic promises…
• Use the Human Performance Factors as strategic decision
criteria for execution planning
> Ensure that the team has the capacity to execute the assigned
initiatives – fill any talent gaps
> Provide for the necessary knowledge, skill, information and
structure
> Initiate regular feedback against clearly defined and articulated
goals and objectives
> Plan for incentives, motivation and consequence
> Ensure that process, tools and support structures are aligned
to the desired outcomes
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44. Execution is Part of the Plan
Module 3 – The 5 Elements of Effective Strategic Planning
Turn Your Strategic Vision Based on Human Performance
into Capability…in Just 3 Steps
STEP Identify Priority Plans
• Consider the overall vision and strategy as well as the
strategic vision or your organization.
• Document the top 3 initiatives that your organization must
STEP Move from Initiative to accomplish the strategy.
achieve in order to Goal
• HOW? Use a technique like Hoshin planning to connect
•HOW? Determine what goals, when achieved, would
strategy to initiative.
naturally help you accomplish the Initiatives you identified?
For each of the initiatives, identify 2 goals that, if achieved,
STEP Clarify anddrive results and lead to achievement of the initiative.
would
Align
• Ensure that yours are specific, measurable, and can be
easily and clearly communicated and understood.
• Align to team performance capabilities using an approach
like Performance DNA to assess.
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45. Activity – Initiatives to Goals Worksheet
Module 3 – The 5 Elements of Effective Strategic Planning
Goals That Lead to Plan How will I know if we are How will I know this (result
Achievement successful? described in previous
column) has occurred?
Initiative #1 Goal #1
Goal # 2
Initiative #2 Goal #1
Goal # 2
Initiative #3 Goal #1
Goal # 2
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46. Activity – Goals to Capability Worksheet
Module 3 – The 5 Elements of Effective Strategic Planning
Initiative:
Goal Critical Team If Yes, Key Team
Capabilities Members Members to Support
(Human with Right This Goal
Performance) Capabilities (* indicates lead)
Available?
Goal #1: Yes No
Goal #2 Yes No
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47. Module 3 – The 5 Elements of Effective Strategic Planning
The
The Long View
Long
View
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48. Characteristics – The Long View
Module 3 – The 5 Elements of Effective Strategic Planning
Owned by • Typically ―owned‖ by leadership, managers
> May be supported by a communication or change
management plan
Influenced by • Changes in the external forces or expectations or internal
performance characteristics
> Predicted performance and measurement
Integrated with • Strategy evaluation and monitoring
> Must be tied back in to current predictive and subsequent
go-forward planning
Informs • The ongoing execution and contingencies for the current
strategy
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49. Forgetting to Look Ahead…
Module 3 – The 5 Elements of Effective Strategic Planning
…is a guaranteed path to failure!
• Predict and include points, trends or expectations of
performance that you will constantly monitor in your
strategic plan
• Envision a better outcome and examine your human
performance factors to evaluate the potential impact to/from
the workforce
• Expect execution success but include contingency options
for execution failures
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50. Structure and Maintain Your Long View
Module 3 – The 5 Elements of Effective Strategic Planning
Use a structured approach to regularly update your
assumptions…
• Brainstorm to encourage creativity
• Group, prioritize and align with your plan and resources.
Brainstorm Affinitize Prioritize Align & Assign
Priority #1
Owner:
Results needed:
Performance resources:
Measurement:
Contribution to Goal:
Governance
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51. Module 3 – The 5 Elements of Effective Strategic Planning
Alignment
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52. Characteristics – Alignment
Module 3 – The 5 Elements of Effective Strategic Planning
Owned by • Typically ―owned‖ by leadership
> May be driven by a strategy office if present
Influenced by • Market evaluation and feedback of current strategy
> Communication and execution feedback
Integrated with • All aspects of strategy formation and execution
> Must get and provide continuous feedback
Informs • The spectrum of strategic activity
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53. The Glue to Make it Stick…
Module 3 – The 5 Elements of Effective Strategic Planning
Continuously…

ASK YOURSELF
Do my planning priorities reflect the top priorities of the organization?
 What else can my team do to help the organization achieve its most critical
goals and what performance factors are required?
 Are we performing in a way that aligns with the organization‘s vision and
current overall strategy? If not, what must change?
As you make key decisions…
 Is this a good idea given my teams capability?
ASK YOURSELF
 Is this a good idea for the organization?
(Does it fit with our strategy and goals? Is it important to our customers?
Do we have the resources? How will it impact our long term position?)
 Is it a good idea for the organization now?
(How does it compare to other priorities? Is it more important? Less
important?)
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54. Knowledge is the Key
Module 3 – The 5 Elements of Effective Strategic Planning
Organizational Vision
> For the Organization Overall
> For Your Unit & For Your Group
> For You & Your Team
Organizational Goals
> For the Organization Overall
> For Your Unit & For Your Group
> For You & Your Team
Organizational Strategy
> For the Organization Overall
> For Your Unit & For Your Group
> For You & Your Team
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55. Questions?
Q&A and Wrap-up
Mason Holloway, Director
Beacon Performance Group
CONTACT
www.beaconassociates.net
mholloway@beaconassociates.net
443-995-4797
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©SHRM 2010