Dimensional Strategy. A Leader s Guide to Building a Strategic Plan. Philip H. Eastman II

Transcription

1 O V E R V I E W Dimensional Strategy n Pla al ensiongy DimStr ate AL ea de r s G uid et ob uil din g as tra te gic Dim Straension teg al y Philip H. Eastman II

2 O V E R V I E W Dimensional Strategy Copyright 2012 by Leadership Advisors, Inc. All rights reserved. Written permission must be secured from the publisher to use or reproduce any part of this overview, except for brief quotations in critical reviews or articles. Leadership Advisors, Inc Tawny Woods Place Boise, ID Dimensional Strategy is a trademark of Leadership Advisors, Inc. Itzme is a trademark of Leadership Advisors, Inc. Eastman, Philip H., Dimensional Strategy Overview: ISBN Printed in the United States of America

3 About Dimensional Strategy Dimensional Strategy is a fresh way at looking at the subject of strategic planning. It focuses on the leader s role in building and executing a strategic plan. The Dimensional Strategy Overview will provide you a basic understanding of the framework and includes a copy of the Dimensional Strategy Framework Strength Assessment. Inside you will meet Itzme, a friendly character who is tackling the process of strategic planning just like you. To order the complete version of Dimensional Strategy that includes the leader s guide and electronic versions of the Dimensional Strategy tools please visit Contact Us [email protected]

4 If you were to search Amazon.com for Strategic Planning you will get more than 58,000 books recommended. I can save you some time and suggest that you select Dimensional Strategy by Phil Eastman. You will notice a couple of things that set apart Phil Eastman s book. Firstly, Phil has business insight and experience in the form of more than 20 years in commerce. This is especially useful as his book provides approach to actually implement the researched ideas he suggests. Secondly, Dimensional Strategy is not just a book for a senior leader to read and place on a book shelf but one that lends itself to be shared and used as a work plan to provide a sense of agility to any organization s ability to design, create and implement strategic planning. And most importantly ensure that this exercise does not become an annual review but one that works like a modern day SatNav tool for the organisation in terms of being able to be updated easily to travel around challenges as they appear. Global news platforms provide almost daily stories of organizations that have still not re-structured their thinking post-2008! Phil Eastman s book, Dimensional Strategy, provides a new and updated approach to crafting, executing and amending the strategic plan. A welcome and refreshingly insightful tool for senior leaders and their teams to chart a course through consistently rough waters of the new business world order. Dil Sidhu MBA, MA, MSc Director Custom Corporate Executive Education London Business School What Leaders Are Saying About Dimensional Strategy Today s businesses have evolved into fluid environments which are constantly changing and continually adapting at least that is the goal. And how can that goal be reached? Through a radically new approach to strategic planning which discards the stiff constructs of the past and replaces them with a dimensional strategy. Dimensional Strategy, by Phil Eastman, is a model that captures the essence and fluidity of today s business climate. Its focus on leadership and shared vision encourages users to view strategic planning as a vital, core discipline -- as opposed to a rote, necessary event. The assessments and tools take a typically arduous and daunting process and provide a roadmap for creating a plan that is comprehensive, robust and flexible. Not a book for the faint of heart; nevertheless, a fascinating read for the bold thinkers among us! Robert Hirai Program Manager - Employee Engagement & Development Organizational Development Department St. Luke's Health System 4

5 Introduction Strategic planning is facing unprecedented challenges in today s fast-changing world. Some perceive strategic planning as being ineffective or even obsolete in today s world of dynamic markets, globalization, technological innovation, industry deregulation, shorter market and product life cycle, and competitors entering the market faster than ever. The truth is organizations, more than ever, need superior strategies that will move them ahead of their rivals and guide them toward future success. Strategic planning is a process where-by organizations activate a set of procedures to create value in meeting the needs of their chosen customers or markets through a series of uniquely integrated activities. For today's organizations to remain competitive and achieve superior results, one of their most important assets is the ability to develop their strategies, integrate organizational structures, systems and processes with those strategies, and consequently create value for their chosen markets or customers. Further, when carried out effectively, organizations succeed in forming a competitive advantage and sustainable success. In creating that advantage, every organization, regardless of its type or industry, faces navigating significant internal and external complexities. These complexities or dimensions provide the backdrop against which a successful strategy is constructed. Navigating the leadership, operating environmental, mechanical, and human dimensions while steering through time (movement), represents a significant ongoing leadership challenge. The required dimensional navigation is rendering obsolete the types of strategic planning that are simple, orderly and rational. Those models and tools were borne out of the industrial age. A time when organizations competed in a relatively static, predictable, consistent and domestic marketplace. A time where efficiency was the driving force for competitive advantage and success. In a new era, characterized by new assumptions, practices, and the needs of people, organizations need up to date strategic planning tools. Tools that take into consideration the uncertainties and complexities of the environment. They need tools that anticipate the malleability of the contextual and personal elements in the organizations. They need a framework that fits all these pieces together. This type of strategic planning approach is a powerful tool that helps organizations achieve a competitive advantage. Dimensional Strategy provides a framework for meeting the challenges in today s strategic planning tasks. Dimensional Strategy allows leaders to navigate your organization s complexity to create a unifying, compelling and achievable strategic plan. Using the Dimensional Strategy framework requires a concerted effort from multiple participants; some will help craft the plan and others will execute it. 5

6 What Strategy Is About Strategy entered the business world some forty years ago to describe what companies do to counter competitors actual or predicted moves in the marketplace. Over time, practitioners and researchers have attached a wide range of interpretations to the meaning of strategy as well as to the methods for strategic planning. According to management guru Michael Porter, a good strategy is one developed around the company s unique place in the market. It means deliberately choosing a different set of activities to deliver a unique mix of value (1996, HBR). In his book Competitive Strategy (1996), Porter defines competitive strategy as a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there. In other words, Porter believes strategy is about choosing a competitive position, setting oneself apart in the eyes of the customer, and adding value through a mix of activities different from those used by competitors. All companies with long-term success share one common characteristic: They have a near lockdown on their market. At its core, a strategy answers three questions of every organization: 1. Who are we? 2. Where shall we go? 3. How should we achieve our goals? Answering those three questions in a strategy is critical because it concerns your organization s long-term sustainability. Only with a clear understanding of strategic planning can we stay committed to the particular strategic course of action without being distracted and derailed by the many challenges and opportunities we encounter every day. Strategic planning is iterative. It never unfolds in a linear fashion. It continuously loops around following an upward trajectory (if done right). This process must accommodate the generating of possible courses of action. Organizations need to conduct strategic evaluations periodically to gauge whether they are staying on track. The Dimensional Strategy framework is consistent with this premise. 6

7 What Strategy Is Not A successful organizational strategy bears the distinct characteristics of being unique, valuable, and sustainable. There are several common misunderstandings about strategy that jeopardize the effectiveness of the planning process. Too often, decision-makers confuse strategy with operational effectiveness, organizational direction, or head-on competition. Operational effectiveness. Operational effectiveness refers to efficiency and a number of other practices that allow an organization to better utilize resources. It is about doing the same thing more efficiently. In contrast, strategic positioning is about doing things differently or doing the same thing differently. Operational effectiveness is necessary for superior performance. It is not sufficient to create and preserve a competitive advantage. Operational effectiveness covers elements such as productivity, quality, cost, and speed. This means that quality management, benchmarking, time-based competition, outsourcing, partnering, reengineering, and change management are not strategies. Organizations that deviate from choosing a unique competitive position risk moving farther away from viable competitive positions and eventually lose. Organizational direction. Direction is important because it predefines choices, decisions, and actions the company will take. However, vision statements and mission statements are not substitutes for a comprehensive strategy. A strategic plan connects actions to the larger vision and aligns resources to the mission and goals it creates. Competition. Copying the competition is not a viable long-term strategy. 7

8 Advantages of the Dimensional Strategy Framework Strategic planning should be guided by a system or framework, a set of procedures and content. Its purpose is to prepare organizations to anticipate, forecast, manage, and control their future. It is a daunting task in today s rapidly changing business world. The future is rarely predictable and controllable. Therefore, the true value of strategic planning lies in its process. What makes it unique is the fact that, with strategic planning, an organization establishes the discipline for exercising long-term thinking about its future direction, vigilantly recognizing opportunities and threats in the environment while aligning internal resources to adapt to changes. Dimensional Strategy explains the significance of activities across different organizational levels in achieving the organization s strategic needs. It also synthesizes interrelated activities often treated separately in traditional planning approaches. This multidimensional approach is advantageous in understanding the complex interaction between organizational strategy, its external environment, and internal resources and activities. This framework is the result of years of experience and extensive research. Leonardo De Vinci once said, Practice should always be based upon a sound knowledge of theory. With Dimensional Strategy, users understand what matters in strategic planning and how to develop a plan that works. We take a multidimensional approach because we believe a set of organizational capabilities that leads to effectiveness is likely to depend on a host of strategic, and environmental characteristics. There are three unique advantages to this highly valuable framework. (1), it is systematic. This approach goes beyond the mechanics of planning and helps users understand the rationale of planning activities. In strategic planning, decision-makers work through a constant interactive process with numerous pieces of information and ideas. Dimensional Strategy coaches planners through an often bewildering process as it teaches them how to filter the information and find out what matters. 8

9 (2), it is adaptable. Classical approaches to strategic planning follow a clear, rational, planned, and deliberate process. Decision-makers are able to analyze their environment thoroughly and make highly calculated decisions in order to adopt the best possible choices. Top leaders focus on building a strategy and leave the implementation to operational managers. This approach likely results in success when objectives are clear, the external environment is relatively stable and information about both its external and internal environment is reliable. This scenario is hardly the norm anymore. Today s climate is fluid, ambiguous and uncertain. Dimensional Strategy takes into consideration contingencies, such as people and environment as ingredients in plan formulation and execution. Current economic values are likely borne out of experience as opposed to operational efficiency. A process that does not take contingencies into account can be very limited in its effectiveness. (3), it accentuates the role of leaders in strategic planning and execution. Leadership is the core element that ties this process together and ensures success. 9

10 Dimensional Strategy Dimensional Strategy is a holistic approach that leads to sustainable and long-term organizational performance. Each of its three phases is critical to gaining a competitive advantage. The framework helps organizations generate unity among the various organizational aspects. It recognizes the dynamic nature of organizations and the dimensions that must be navigated for plans to be successfully created and executed. The Dimensional Strategy framework has three phases that navigate six organizational dimensions to help leaders build and execute a strategic plan. 10

11 Assumptions Our approach to creating this framework is to weave together classic strategic planning elements, a strong focus on leadership and our considerable experience. Based on those elements, this approach by definition is biased because of the subjectivity of our experience, our views of what constitutes the classic elements of strategic planning and what we have chosen to highlight from a leadership perspective. Given that reality, here are the assumptions that underlie the Dimensional Strategy framework. Clarity is a Good Thing There is pain involved in constructing and executing a strategic plan. However, the construction process inevitably provides clarity throughout the organization, and clarity is a good thing. Clarity is good even when it inflicts pain. It is better to see your organization with clear eyes than through a haze of assumptions and inferences. Strategy is a Team Effort Though planning is essentially a leadership function, it requires a team to craft and multiple teams to execute goals, objectives and the actions it produces. Any attempt to plan in isolation of those impacted will fail. Planning Initiates Change There are two parts to this assumption. The first is that we see strategic planning as a process of determining what and how to make changes to an organization. This means Dimensional Strategy does not attempt to reconcile all the operating aspects of the organization nor would we want to. That approach to planning is cumbersome and rigid, and in our experience often leads to frustration and plan failure. 11

12 Dimensional Strategy alternatively programs the major (strategic) aspects of an organization and highlights how opportunities and challenges are best met. To that end, the number of goals produced should be limited to those that can be accomplished without disrupting daily operations. Secondly, the benefits your goals are intended to deliver will be realized only when you successfully lead people impacted by them to comprehend, commit and demonstrate capability. This means that the benefit realization is in the hands of people. Strategic Plans Are Crafted Our belief is that your organization already has a strategy in place and that some planning is ongoing. This is true even if you have never conducted a planning session or established an official strategic model. As you plan, include a cross section of people familiar with organizational operations. This helps ensure the best strategic aspects of the organization while eliminating the least desirable. 12

13 Dimensional Strategy Framework Strength Assessment The following assessment is a high-level review of the relative strengths of the existing leadership competency for creating and executing a strategic plan. This tool also determines the existing strength of each of the planning phases. It is used to determine which of the planning process and plan execution steps represent risks to success or strengths to capitalize upon. Use this assessment before any planning activities begin and at milestones in the planning process. It can be completed by leaders, the leadership team and planning team members as well as others in the organization with a keen interest in the planning process and its results. Beyond completing this assessment, there needs to be an interpretation of the results. Our experience is that most organizations are either stronger at the leadership components or the action components. You should use these results to: Assess your organization s planning-readiness, strengths, and potential risk. Apply resources to the areas where risk is perceived. Emphasize your organization s strengths. Educate the various people involved in the planning process about the essential elements that will predict success of the plan.. 13

14 Dimensional Strategy Framework Strength Assessment Indicate your level of agreement with the following statements. Add your scores together Leadership 1 Our leaders demonstrate the strategic thinking necessary to create and implement Our leaders demonstrate the change skills needed to engage people in successfully 5 goals into the daily work of employees. Leadership Total 14

15 Dimensional Strategy Framework Strength Assessment Indicate your level of agreement with the following statements. Add your scores together Direction 6 used in decision-making by all employees. 7 8 used to provide meaning to employees work Direction Total 15

16 Dimensional Strategy Framework Strength Assessment Indicate your level of agreement with the following statements. Add your scores together Alignment 11 all employees can relate accomplish our mission and achieve our vision. 15 budget, structure and people. Alignment Total 16

17 Dimensional Strategy Framework Strength Assessment Indicate your level of agreement with the following statements. Add your scores together 16 Execution the goal s expected benefits The adequacy of each goal's results is evaluated, reported to leadership and shared with interested employees. Execution Total 17

18 Understanding Your Assessment First, plot each of the scores on a bar graph showing the strength of the four assessment components: Leadership, Direction, Alignment and Execution. It will show how each of these components contributes to the leadership and action axes in the next graphic. Dimensional Strategy Framework Componet Strength 50 Leadership Direction Alignment Execution Score

19 You can also plot your assessment scores on the grid. The y-axis represents leadership and the x-axis is action. Add your Leadership and Direction scores together and plot the total along the vertical axis. Next, add the Alignment and Execution scores and plot that result along the horizontal axis. Dimensional Strategy Framework Strength Leadership Action 19

20 Where these scores meet is your strength assessment. The high-risk area is bound by the red dashed area in the lower left section of the graph. Organizations with strength assessments in this area will want to pay close attention to each of the concepts and steps of Dimensional Strategy, since many of the concepts and practices of planning are likely foreign. Conversely, the yellow dashed area is shown in the upper right section of the graph. Organizations with strength assessments here are very strong in both leadership and action. Assessments in this area demonstrate an organization that is already adept at planning and Execution, and thus Dimensional Strategy will provide a framework they can use to refine existing strengths. Many organizations will find they do not fit into either extreme. Rather, most will show strength in action or leadership. If your organization is strong in leadership but lacking in action, then accentuate this strength by involving leaders in the Alignment phase, and providing them an active role in Execution. If your organization is strong in action but not in leadership, then create a case where strong leadership is the primary predictor of success in any endeavor. You can also challenge leadership to fill the role of Direction for the organization by helping them understand the connection between it and results. Contact Us To order the complete version of Dimensional Strategy that includes the leader s guide and electronic versions of the Dimensional Strategy tools please visit You can engage with one of our advisors by contacting Leadership Advisors Group at: [email protected]