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Monday, December 27, 2010
Monday Mentor-Week 52-Gaps, SWOTs and Segments
Most managers and leaders are familiar with the common organizational analysis tools of SWOT and Gap but these tools are largely ineffectual when not properly segmented. Using a segmented approach will deliver greater value to these time worn tools.
SWOT is an acronym for strengths, weaknesses, opportunities and threats. When performed normally, this type of analysis yields almost cursory and useless results. Typical responses when looking at an organization as a whole include comments about having good people (a strength), lacking suitable space (a weakness), growth of a business in a strong economic market (an opportunity) or the presence of a competitor (a threat). This provides a brief snapshot of where an organization is and what might be on the horizon in very high overview. This approach contains only the singular dimension of flat area.
Gap analysis is even more of a simplistic approach. It is linear and clearly defines where an organization is and where it wants to be. The gap between the then and now represent a self-writing action plan when a company identifies how to move from the now to the future. Like SWOT, it is flat and, unique to gap, it is a single straight line.
Now imagine these analysis tools in three dimensions with depth and breadth added. That is what adding segmentation to these tools will achieve. Starting with SWOT, instead of looking at the organization as a whole, segmentation forces the same analysis except broken down in the key operating areas of the company. First the organization defines the key operating areas and many of those are common to all organizations. Typical ones include human talent, financial, facilities, technology, core products and services and regulatory or legal issues.
For example, the training department at High Stakes Motors wants to begin the strategic planning process for 2008 and rather than beginning with a SWOT analysis of the department, they segment their approach and begin with the people in the department. They determine that there are some core strengths and individuals who could be called strong. They also determine there are some general deficiencies and weaknesses among their staff. They look at opportunities to improve personnel skill levels and cross-train key team members and they identify the threats of organizations that have higher compensation or benefit packages. From this view, the management team for the training department at High Stakes Motors can craft a 2008 plan that capitalizes on their strengths, addresses the weaknesses, captures some opportunities and strategically positions to minimize the threats.
Wash, rinse and repeat for all the major segments of the High Stakes Motors training department for all aspects of their operation including their facilities, the technology used, strategic partnerships, financial structure and core training offering. The end result is a significantly more detailed, more useable and more reliable way of looking at this operation.
Now imagine a Chia pet. One that has been watered and is beginning to grow a bit. That is what we are going to create instead of a linear gap analysis. With the center point of segmented gap being the “where we want to be” mark, the lines out from that point will represent where we are based on the same segments used in the segmented SWOT analysis. So, for the High Stakes Motors training department we have one line to the center for technology, one for human talent, one for core products and services offered, one for customer service level, one for facilities and so forth. Each line begins at a different spot because, as in most organizations, these segments are in different stages and degrees of closeness to the ideal.
The really helpful part of segmented gap analysis is that it allows for the construction of simultaneous action planning and action plans that can be interdependent upon other action plans. So rather than approaching the organization linearly, the organization is viewed in full three dimensions and strategic planning can be built to attack all segments at once.
Is a segmented approach more difficult and time consuming? Absolutely but the results will dramatically improve the ability of an organization to plan effectively for the coming years.
Gap and SWOT analysis have been around for a long time and are great strategic planning tools. Tools and not the end game. A common misconception in strategic planning is that gap and SWOT analysis are a result and not a tool to help achieve a results.
In it’s most simple form, gap analysis is a view of where we are, where we want to be and mapping a process of how to get there. This can be a powerful process when crafting strategic objectives and actions plans. It is also extremely helpful in the honest assessment of where an organization or department is currently performing.
SWOT analysis is a little more in-depth and detailed. It helps identify strengths, weaknesses, opportunities and threats (thus the SWOT). This too, is very powerful, especially when identifying action plan items.
Effective leaders embrace and use these tools in a collaborative and participatory manner within the overall strategic planning process.
SWOT is an acronym for strengths, weaknesses, opportunities and threats. When performed normally, this type of analysis yields almost cursory and useless results. Typical responses when looking at an organization as a whole include comments about having good people (a strength), lacking suitable space (a weakness), growth of a business in a strong economic market (an opportunity) or the presence of a competitor (a threat). This provides a brief snapshot of where an organization is and what might be on the horizon in very high overview. This approach contains only the singular dimension of flat area.
Gap analysis is even more of a simplistic approach. It is linear and clearly defines where an organization is and where it wants to be. The gap between the then and now represent a self-writing action plan when a company identifies how to move from the now to the future. Like SWOT, it is flat and, unique to gap, it is a single straight line.
Now imagine these analysis tools in three dimensions with depth and breadth added. That is what adding segmentation to these tools will achieve. Starting with SWOT, instead of looking at the organization as a whole, segmentation forces the same analysis except broken down in the key operating areas of the company. First the organization defines the key operating areas and many of those are common to all organizations. Typical ones include human talent, financial, facilities, technology, core products and services and regulatory or legal issues.
For example, the training department at High Stakes Motors wants to begin the strategic planning process for 2008 and rather than beginning with a SWOT analysis of the department, they segment their approach and begin with the people in the department. They determine that there are some core strengths and individuals who could be called strong. They also determine there are some general deficiencies and weaknesses among their staff. They look at opportunities to improve personnel skill levels and cross-train key team members and they identify the threats of organizations that have higher compensation or benefit packages. From this view, the management team for the training department at High Stakes Motors can craft a 2008 plan that capitalizes on their strengths, addresses the weaknesses, captures some opportunities and strategically positions to minimize the threats.
Wash, rinse and repeat for all the major segments of the High Stakes Motors training department for all aspects of their operation including their facilities, the technology used, strategic partnerships, financial structure and core training offering. The end result is a significantly more detailed, more useable and more reliable way of looking at this operation.
Now imagine a Chia pet. One that has been watered and is beginning to grow a bit. That is what we are going to create instead of a linear gap analysis. With the center point of segmented gap being the “where we want to be” mark, the lines out from that point will represent where we are based on the same segments used in the segmented SWOT analysis. So, for the High Stakes Motors training department we have one line to the center for technology, one for human talent, one for core products and services offered, one for customer service level, one for facilities and so forth. Each line begins at a different spot because, as in most organizations, these segments are in different stages and degrees of closeness to the ideal.
The really helpful part of segmented gap analysis is that it allows for the construction of simultaneous action planning and action plans that can be interdependent upon other action plans. So rather than approaching the organization linearly, the organization is viewed in full three dimensions and strategic planning can be built to attack all segments at once.
Is a segmented approach more difficult and time consuming? Absolutely but the results will dramatically improve the ability of an organization to plan effectively for the coming years.
Gap and SWOT analysis have been around for a long time and are great strategic planning tools. Tools and not the end game. A common misconception in strategic planning is that gap and SWOT analysis are a result and not a tool to help achieve a results.
In it’s most simple form, gap analysis is a view of where we are, where we want to be and mapping a process of how to get there. This can be a powerful process when crafting strategic objectives and actions plans. It is also extremely helpful in the honest assessment of where an organization or department is currently performing.
SWOT analysis is a little more in-depth and detailed. It helps identify strengths, weaknesses, opportunities and threats (thus the SWOT). This too, is very powerful, especially when identifying action plan items.
Effective leaders embrace and use these tools in a collaborative and participatory manner within the overall strategic planning process.
Monday, December 13, 2010
Monday Mentor-Week 50-Decision Making Ownership
At the end of the day, the decision was yours. Even with collaboration and using systems thinking, you made the call. The decision is part of your leadership record and legacy.
Effective leaders cannot run from their decisions. They cannot blame others. They cannot blame the economy. They cannot hedge or try to escape accountability. It was your decision.
When right on target a decision is a glorious thing. Your hard work paid off and you chose the correct course of action. Everything fell into place nicely and the return was better than anticipated. It is pretty easy to own that type of decision.
The harder decisions to own are the clunkers. The ones that don’t work out so well or the choice that just did not pan out. Those are hard to swallow and to have your name attached.
Effective leaders own decisions that are both good and bad. With good decisions, the leader will share credit with the team, those that provided valuable input and any stakeholder that gave clues about outcomes or consequences.
When the decision is a poor choice you are on your own buddy. Can’t blame the data or any person. It is all you.
With bad decisions, there are a couple of additional decision points that come into play. The poorest choice is to defend and continue to cheerlead for a bad decision. This is simply digging a bigger hole and drawing more attention and potentially, criticism to a bad decision.
The effective leader must admit the mistake and work diligently to fix it. Simply say that you made a mistake, you are sorry and you will get it fixed. Use plenty of personal pronouns to make sure the ownership of the decision is clear. You may not get beaten up for a bad decision but you will certainly loose credibility if you try to run from it.
When looking at a poor decision, first check and see if you gave yourself enough time to analyze and diagnose the situation and all of the potential impacts. This is the most common reason for poor decisions. Then, retrace the system thinking and seek a different and wider scope of input that focuses on why the first decision failed and that the issue still exists. Never compound a poor decision with a rash or arbitrary fix that is simply designed to save face.
Effective leaders cannot run from their decisions. They cannot blame others. They cannot blame the economy. They cannot hedge or try to escape accountability. It was your decision.
When right on target a decision is a glorious thing. Your hard work paid off and you chose the correct course of action. Everything fell into place nicely and the return was better than anticipated. It is pretty easy to own that type of decision.
The harder decisions to own are the clunkers. The ones that don’t work out so well or the choice that just did not pan out. Those are hard to swallow and to have your name attached.
Effective leaders own decisions that are both good and bad. With good decisions, the leader will share credit with the team, those that provided valuable input and any stakeholder that gave clues about outcomes or consequences.
When the decision is a poor choice you are on your own buddy. Can’t blame the data or any person. It is all you.
With bad decisions, there are a couple of additional decision points that come into play. The poorest choice is to defend and continue to cheerlead for a bad decision. This is simply digging a bigger hole and drawing more attention and potentially, criticism to a bad decision.
The effective leader must admit the mistake and work diligently to fix it. Simply say that you made a mistake, you are sorry and you will get it fixed. Use plenty of personal pronouns to make sure the ownership of the decision is clear. You may not get beaten up for a bad decision but you will certainly loose credibility if you try to run from it.
When looking at a poor decision, first check and see if you gave yourself enough time to analyze and diagnose the situation and all of the potential impacts. This is the most common reason for poor decisions. Then, retrace the system thinking and seek a different and wider scope of input that focuses on why the first decision failed and that the issue still exists. Never compound a poor decision with a rash or arbitrary fix that is simply designed to save face.
Monday, December 6, 2010
Monday Mentor-Week 49-Critical Objectives
Goals. Targets. Objectives. Milestones. All the same thing with a little different nomenclature.
Critical objectives are those measurable, meaningful, comparable and important benchmarks that track progress towards the vision of an organization or unit within a company. These objectives are usually expressed in annual terms but can be created for less than a year in start-ups and environments requiring significant turnaround.
This is another part of strategic planning in which minimizing is better. Five to seven objectives per year is the top end. More will convolute your ability to achieve real ownership and buy-in into these objectives. Our teams must be able to remember them and lock onto them as the year progresses.
Each objective must incorporate a significant business segment. Most commonly, strategic planning will incorporate objectives related to revenue or sales volume, customer service quality, productivity, quality of work or product, team member satisfaction and expense control. These major headings represent not only important areas of organizational success but also those areas in which each individual team member can contribute and participate. They are also the categories that can be easily measured and reported.
The best format of a strategic objective includes a comparable element to a prior year or prior period. By example this would look like “Improve Customer Satisfaction by 4% Over 2010.” This example also includes the measurability required in good strategic planning. By contrast, the example of “Improve Customer Service” meets neither of these requirements. Measurability and comparability are important to demonstrate progress and to connect to important business elements.
The incorporation of comparability also assists the effective leader in promoting improvement and growth. From year to year or period to period, the leader is able to raise the bar in some or all strategic areas of performance. The one required element in this area is that the growth factor cannot be some arbitrary number. The best tool for this is a standard progression analysis that looks at change and improvement from year to year and uses that as the improvement factor for the coming period. Another tool for that purpose is to diagnose capacity for maximum performance and factor that over a three to five year period.
Two final notes on critical objectives include the ability to connect each objective back to a line or element in the company vision and mission. This connectivity will insure that proper progress in being made towards the ultimate target described in the vision. The other final element is the reminder to make sure that all of the critical objectives can be impacted by team members. For example, team members can contribute to revenue but have very little impact on net income.
Critical objectives are those measurable, meaningful, comparable and important benchmarks that track progress towards the vision of an organization or unit within a company. These objectives are usually expressed in annual terms but can be created for less than a year in start-ups and environments requiring significant turnaround.
This is another part of strategic planning in which minimizing is better. Five to seven objectives per year is the top end. More will convolute your ability to achieve real ownership and buy-in into these objectives. Our teams must be able to remember them and lock onto them as the year progresses.
Each objective must incorporate a significant business segment. Most commonly, strategic planning will incorporate objectives related to revenue or sales volume, customer service quality, productivity, quality of work or product, team member satisfaction and expense control. These major headings represent not only important areas of organizational success but also those areas in which each individual team member can contribute and participate. They are also the categories that can be easily measured and reported.
The best format of a strategic objective includes a comparable element to a prior year or prior period. By example this would look like “Improve Customer Satisfaction by 4% Over 2010.” This example also includes the measurability required in good strategic planning. By contrast, the example of “Improve Customer Service” meets neither of these requirements. Measurability and comparability are important to demonstrate progress and to connect to important business elements.
The incorporation of comparability also assists the effective leader in promoting improvement and growth. From year to year or period to period, the leader is able to raise the bar in some or all strategic areas of performance. The one required element in this area is that the growth factor cannot be some arbitrary number. The best tool for this is a standard progression analysis that looks at change and improvement from year to year and uses that as the improvement factor for the coming period. Another tool for that purpose is to diagnose capacity for maximum performance and factor that over a three to five year period.
Two final notes on critical objectives include the ability to connect each objective back to a line or element in the company vision and mission. This connectivity will insure that proper progress in being made towards the ultimate target described in the vision. The other final element is the reminder to make sure that all of the critical objectives can be impacted by team members. For example, team members can contribute to revenue but have very little impact on net income.
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