Enabling Sustainable Organization Performance via Model-Based Strategic Management and Operations Management
Every company has a strategy; on the back end you have the results you generate through implementation and execution to make the formulated strategy/idea work as intended. In most companies, there is a "strategy-to-performance gap" which is where the real work gets done and unique value gets created for the business. Our solutions platform allows users to develop deeper understanding and insight into complex real world organization problems leading to improved strategic decisions' quality. and successful implementation and execution of good strategies ensuring sustainable organizational performance. Simulation based analysis allows us to experiment and evaluate a number of strategic options/alternatives to inform the decision to select from among the strategies considered, the strategy which will best meet the organization's objectives and mission goals.
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Validating Strategy Design
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Strategic Action Plan
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Strategy Execution System
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Effective Capacity Design
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Strategic Options Development
Successful strategy formulation involves crafting strategic options and produces a clear set of recommendations with supporting justifications, that revise as necessary the organization's mission, its supply of resources and objectives in meeting the expectations of the stakeholders. An option is a course of action that it appears possible to take. Strategic options are creative alternative action-oriented responses to the external situation that an organization faces. Strategic options take advantage of facts and actors, trends, opportunities and threats of the outside world. A Strategic Option is comprised of coherent set of options from corporate, business, and functional areas of the organization.
A Strategic Option is a set of related options (typically combining options for products/markets and services, and resources) that form a potential strategy.
Crafting Strategic Options
Crafting a strategy - strategic options - is primarily an intellectual and creative act involving developing solutions to known strategic problems identified and defined the strategic issues agenda and events. Crafting strategy brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. It involves the following:
Crafting a strategy is an exercise in entrepreneurship searching for opportunities to
The simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. Most choices have more shades of possibility than this, including:
.
In effect, strategy is the pattern of strategic decisions (options) that management has to consider, such as:.
The time-scales for developing resources and capabilities may be very long, and may be longer than the time-scale for market entry.
Strategic Options
A Strategic Option is a set of related options; typically combining options for products/markets, resources/capabilities, and methods of implementation, to form a strategy. This may be a bottom-up or top-down process.
[TBD]
Strategy acceptability evaluation is based on a set of selection criteria that ensures the chosen strategies will be acceptable to stakeholders. The acceptability criteria may include the following: Does it fit with the values of the company and the employees? Is the strategy acceptable to the Board, key staff, and other stakeholders? A viable strategy is defined in terms of the degree to which the strategy meets those criteria.
[TBD]
Strategy management focuses on the creation, evolution and control of the means - strategy - by which organizations achieve mission goals and objectives. A valid strategy for an organization can gain extraordinary results for an organization with an average general level of competence and leadership.
Most managers in organizations have difficulty developing valid strategy statements without the determination process degenerating into solemn recording of platitudes, and trappings of strategy which is useless for either clarification of the direction or achievement of consensus among managers.
The strategy management process viewed within the larger framework - planning, organizing, leading, and controlling (P-O-L-C) requires managers to first think strategically and apply that thought to a set of managerial decisions and actions that determine organization valid strategy, and the long-run performance of the organization.
Successful strategy formulation involves crafting strategic options and produces a clear set of recommendations with supporting justifications, that revise as necessary the organization's mission, its supply of resources and objectives in meeting the expectations of the stakeholders. An option is a course of action that it appears possible to take. Strategic options are creative alternative action-oriented responses to the external situation that an organization faces. Strategic options take advantage of facts and actors, trends, opportunities and threats of the outside world. A Strategic Option is comprised of coherent set of options from corporate, business, and functional areas of the organization.
- Corporate options - These are about domain selection options and includes decisions and choices about the following: (1) What should be the capabilities that distinguish the company? (2) What should be the company's comparative advantage in adding value to its individual businesses? (3) What businesses should the company be in?. These are the fundamental choices that a corporate strategy comprises and they frame and guide all the decisions that a company's corporate executives, functions, and staff make every day.
- Business/competitive options - These relate to which products or services to offer in which markets. This is informed by answers to fundamental questions such as: (1) Who should be the customers that define our target market? This is the market need and includes any group of potential customers whether defined by their needs, inclinations, or income bracket; (2) What should be the value proposition that differentiates our products and services with those customers? (3) Market geography? These business strategy choices drive the decisions of business units' management teams, functions, and staff that make every day decisions on pricing, R&D, where to manufacture, etc.
- Options to Improve Resources and Capabilities - What should be the capabilities that make our business better than any other in delivering that value proposition? Strategic assessment may have identified strengths and weaknesses in existing resources and capabilities in comparison with competitors; this may lead to identification of the improvements needed either to shore up weakness or build on existing strengths. It is also likely that potential market/product options will require supporting changes in resources and capabilities.
A Strategic Option is a set of related options (typically combining options for products/markets and services, and resources) that form a potential strategy.
Crafting Strategic Options
Crafting a strategy - strategic options - is primarily an intellectual and creative act involving developing solutions to known strategic problems identified and defined the strategic issues agenda and events. Crafting strategy brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. It involves the following:
- Deciding to match organization's strengths with prospective opportunities; we might base strategies around taking advantage of our strengths - points of leverage.
- Organization has internal weakness in areas in which there is significant opportunity. In this case, we might base strategy on changing the internal weakness that acts as a constraint.
- An external threat exists in an area of internal strength. In this case, we might device strategies to shore up vulnerable areas.
- An external threat exists in an area where the organization is weak, presenting a problem. In this case, strategies could include: taking on a partner who has the strength that we lack; building our internal strengths; or eliminating the areas of weakness.
Crafting a strategy is an exercise in entrepreneurship searching for opportunities to
- do new things,
- do existing things in new and better ways
- do nothing
- withdraw - liquidate the business
- consolidate
The simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. Most choices have more shades of possibility than this, including:
.
In effect, strategy is the pattern of strategic decisions (options) that management has to consider, such as:.
- Options for Markets and Products
- Do nothing
- Withdraw i.e., liquidate the business
- Consolidate
- Market and Product - Market Penetration, Market Development, Product Development, or Diversification (related or unrelated). While research may measure how successful different forms of market or product development are in general, the management choice has to focus on the relative attractiveness of available options.
- Options for Building Resources, Capabilities, and Competences
- Strategic assessment might have identified the strengths and weaknesses in existing resources and capabilities in comparison to competitors; this may lead to identifying improvements to shore up existing weaknesses, or to build on existing strengths.
- It is also likely that potential product/market options will require supporting changes in resources and capabilities.
The time-scales for developing resources and capabilities may be very long, and may be longer than the time-scale for market entry.
Strategic Options
A Strategic Option is a set of related options; typically combining options for products/markets, resources/capabilities, and methods of implementation, to form a strategy. This may be a bottom-up or top-down process.
[TBD]
Strategy acceptability evaluation is based on a set of selection criteria that ensures the chosen strategies will be acceptable to stakeholders. The acceptability criteria may include the following: Does it fit with the values of the company and the employees? Is the strategy acceptable to the Board, key staff, and other stakeholders? A viable strategy is defined in terms of the degree to which the strategy meets those criteria.
[TBD]
Strategy management focuses on the creation, evolution and control of the means - strategy - by which organizations achieve mission goals and objectives. A valid strategy for an organization can gain extraordinary results for an organization with an average general level of competence and leadership.
Most managers in organizations have difficulty developing valid strategy statements without the determination process degenerating into solemn recording of platitudes, and trappings of strategy which is useless for either clarification of the direction or achievement of consensus among managers.
The strategy management process viewed within the larger framework - planning, organizing, leading, and controlling (P-O-L-C) requires managers to first think strategically and apply that thought to a set of managerial decisions and actions that determine organization valid strategy, and the long-run performance of the organization.
Strategy Implementation & Execution
Strategy formulation is one of three (3) stages in the systematic discipline of strategic management including strategy implementation and execution, and strategy evaluation and control. It involves the process of determining and establishing the goals, mission, and objectives of an organization, and identifying the appropriate and best courses or plans of action among all available alternative strategies/strategic options to achieve them.
Strategy formulation is concerned with creating the framework which guides strategic decision-making in the specific courses of action to follow, or establishing the confines on how to act in order to achieve a desired end - the organizational goals.
Strategy Content Model
Strategy Dynamic Model
The dynamic model of strategy is a goals model of the aspects of strategy. The model defines an integrated hierarchy of the different levels of strategy through the corresponding goals models for each level. Model-based approach to strategy design and evaluation involves developing an explicit model of the organization's mission and vision, and strategy in terms of a set of strategic goals and major policies. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Vision Statement and Goals
Corporate level goals are indications of what the organization as a whole is trying to achieve and to become. In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems.In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc.
The key to organization success is its ability to identify the important needs of each of these groups to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Documenting The Strategy
While the notion of strategy is easy to grasp, working out an agreed-upon strategy statement (formulation) for a given company is very difficult. A valid strategy statement, however, can be a fundamental contribution to an organization's future success. The model-based approach enables and supports managers in the process of strategy determination and developing valid strategy statements which clarifies the strategy in terms of direction and achievement of goals. An explicit model of the strategy allows effective analysis to ensure processes are coherent and strategy is sound and viable, and effective management to ensure successful strategy implementation and execution.
Making strategy explicit has the following benefits:
Strategy formulation is one of three (3) stages in the systematic discipline of strategic management including strategy implementation and execution, and strategy evaluation and control. It involves the process of determining and establishing the goals, mission, and objectives of an organization, and identifying the appropriate and best courses or plans of action among all available alternative strategies/strategic options to achieve them.
Strategy formulation is concerned with creating the framework which guides strategic decision-making in the specific courses of action to follow, or establishing the confines on how to act in order to achieve a desired end - the organizational goals.
Strategy Content Model
Strategy Dynamic Model
The dynamic model of strategy is a goals model of the aspects of strategy. The model defines an integrated hierarchy of the different levels of strategy through the corresponding goals models for each level. Model-based approach to strategy design and evaluation involves developing an explicit model of the organization's mission and vision, and strategy in terms of a set of strategic goals and major policies. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Vision Statement and Goals
Corporate level goals are indications of what the organization as a whole is trying to achieve and to become. In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems.In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc.
The key to organization success is its ability to identify the important needs of each of these groups to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Documenting The Strategy
While the notion of strategy is easy to grasp, working out an agreed-upon strategy statement (formulation) for a given company is very difficult. A valid strategy statement, however, can be a fundamental contribution to an organization's future success. The model-based approach enables and supports managers in the process of strategy determination and developing valid strategy statements which clarifies the strategy in terms of direction and achievement of goals. An explicit model of the strategy allows effective analysis to ensure processes are coherent and strategy is sound and viable, and effective management to ensure successful strategy implementation and execution.
Making strategy explicit has the following benefits:
- Improves a company managers' awareness of the strategy underlying their success/failure and makes it easy for a coherent effort to improve the strategy.
- Guides and informs strategic decisions in successfully growing the company through diversification and M&A.
- Improves and informs managers' assessment of the strategy's viability - i.e., is the strategy right for your company?
Strategy Execution System
[TBD]
Successful strategy development and execution concerns balancing gut feel with in-depth situational analysis so that action is not delayed, but also focuses on areas of maximum impact.
In the traditional strategy execution, "Plan-then-Do" approach, the organization creates its best forecast of the future market and competitive landscape. Leadership then specifies a plan that it believes will position the company to win in this predicted future. This approach is prone to failure because in the today's fast-paced world, the "cone of uncertainty" surrounding future market and competitive conditions is too grate for companies to prescribe every element of a multi-year strategy. An agile, test-and-learn approach is better suited to today's tumultuous environment. Some examples of the agile, "Decide-Do/Refine-Do" approach include:
[TBD]
Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. Bringing the strategy "execution gap" may require addressing the shortcomings in the implementation and/or flawed execution plans. Technically, a strategy can never actually be fully implemented because every thing that was necessarily assumed when formulating the strategy - about customers, technology, regulation, labor market, competitors, and so on - is in a constant state of flux.
Organizations must acquire the necessary organizational capabilities to better respond to changing environments in order to attain sustainable growth and profitability. Those required organizational capabilities include: accountability, leadership, coordination, strategic unity, and efficiency, in addition to talent.
Effective strategy execution requires a systematic approach to exposing reality and acting on it. The organization's actions involve decisions made every day by employees acting, according to the information they have and their own self-interest, within the context of strategy implementation, and activities undertaken at all levels in the organization - top management, middle management, and front-line managers and workers - to turn implemented strategy into commercial/social success. The execution system is a change management process model that integrates the series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. The change may be planned or emergent. Successful execution involves decisions about changes to strategy, structure, capabilities (organizational and individuals), and incentives, and involves coordination, information sharing, and controls that results in an organization's actual strategy.
Strategy Execution System Model
Strategy execution is about how decisions take place within an organizational context of power, culture, leadership and ability to manage change. This requires the ability to understand and manage the interactions among those execution decisions and contextual forces. The execution flow involves both top down flows of decisions and actions from corporate strategy decisions through business strategy decisions to strategy implementation decision and actions (participation and communication down and across operating units), and bottom up flows of participation and communication information up the organization.
Strategy execution systems are social-technical systems that provide the framework that integrates the following elements:
Closing the strategy gap in organizations in today's world involves bridging the chasm that exists between great strategy, great execution, and great performance.
[TBD]
This is model-based evaluation tool that allows organizations to create models of crafted strategy to reify an intangible concept and enable managers to develop shared understanding of the underlying assumptions and logical decisions flowing from those assumptions so they can each understand the basis of their decisions and the relative importance and prioritization of strategic issues.
A strategy model that is company specific, customized to the company's own situation and performance objectives. It is comprised of component options that address such concerns as how to grow the business, how to satisfy customers, how to out-compete rivals, how to respond to changing market conditions, how to manage the organization's functional areas, and how to achieve strategic and financial objectives.
compete competitors, in converting They are converted to corporate and business strategy. Corporate strategy is concerned with choices regarding strategic positioning and direction, and sets the context for business strategy which is concerned with choices regarding competitors, and the nature of competition.
Creating integrated goal models of corporate and business strategy collectively define the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame. The strategy model can be visually analyzed enabling managers to assess the acceptability of the strategy to the managers and its potential effectiveness of achieving intended strategic mission goals..
exhibiting entrepreneurship and strategic thinking in crafting adaptation of intended strategy to development in the external and internal environment of the organization and necessary adjustments to keep them in tune with changing circumstances.
[TBD]
Successful strategy development and execution concerns balancing gut feel with in-depth situational analysis so that action is not delayed, but also focuses on areas of maximum impact.
In the traditional strategy execution, "Plan-then-Do" approach, the organization creates its best forecast of the future market and competitive landscape. Leadership then specifies a plan that it believes will position the company to win in this predicted future. This approach is prone to failure because in the today's fast-paced world, the "cone of uncertainty" surrounding future market and competitive conditions is too grate for companies to prescribe every element of a multi-year strategy. An agile, test-and-learn approach is better suited to today's tumultuous environment. Some examples of the agile, "Decide-Do/Refine-Do" approach include:
- Treat Strategy as Evergreen - []
[TBD]
Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. Bringing the strategy "execution gap" may require addressing the shortcomings in the implementation and/or flawed execution plans. Technically, a strategy can never actually be fully implemented because every thing that was necessarily assumed when formulating the strategy - about customers, technology, regulation, labor market, competitors, and so on - is in a constant state of flux.
Organizations must acquire the necessary organizational capabilities to better respond to changing environments in order to attain sustainable growth and profitability. Those required organizational capabilities include: accountability, leadership, coordination, strategic unity, and efficiency, in addition to talent.
Effective strategy execution requires a systematic approach to exposing reality and acting on it. The organization's actions involve decisions made every day by employees acting, according to the information they have and their own self-interest, within the context of strategy implementation, and activities undertaken at all levels in the organization - top management, middle management, and front-line managers and workers - to turn implemented strategy into commercial/social success. The execution system is a change management process model that integrates the series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. The change may be planned or emergent. Successful execution involves decisions about changes to strategy, structure, capabilities (organizational and individuals), and incentives, and involves coordination, information sharing, and controls that results in an organization's actual strategy.
Strategy Execution System Model
Strategy execution is about how decisions take place within an organizational context of power, culture, leadership and ability to manage change. This requires the ability to understand and manage the interactions among those execution decisions and contextual forces. The execution flow involves both top down flows of decisions and actions from corporate strategy decisions through business strategy decisions to strategy implementation decision and actions (participation and communication down and across operating units), and bottom up flows of participation and communication information up the organization.
Strategy execution systems are social-technical systems that provide the framework that integrates the following elements:
- Strategic decisions and actions taken resulting from decisions.
- Operations management decisions and activities performed resulting from decisions.
- Observing the outputs and outcomes of strategic actions through reporting and monitoring environment changes.
- Diagnosing the issues resulting from the patterns of organization behavior effected by organization outputs.
- Timely adaptation to changes in environment and timely response to any identified opportunities or threats to achieving the mission objectives and strategic goals.
Closing the strategy gap in organizations in today's world involves bridging the chasm that exists between great strategy, great execution, and great performance.
[TBD]
This is model-based evaluation tool that allows organizations to create models of crafted strategy to reify an intangible concept and enable managers to develop shared understanding of the underlying assumptions and logical decisions flowing from those assumptions so they can each understand the basis of their decisions and the relative importance and prioritization of strategic issues.
A strategy model that is company specific, customized to the company's own situation and performance objectives. It is comprised of component options that address such concerns as how to grow the business, how to satisfy customers, how to out-compete rivals, how to respond to changing market conditions, how to manage the organization's functional areas, and how to achieve strategic and financial objectives.
compete competitors, in converting They are converted to corporate and business strategy. Corporate strategy is concerned with choices regarding strategic positioning and direction, and sets the context for business strategy which is concerned with choices regarding competitors, and the nature of competition.
Creating integrated goal models of corporate and business strategy collectively define the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame. The strategy model can be visually analyzed enabling managers to assess the acceptability of the strategy to the managers and its potential effectiveness of achieving intended strategic mission goals..
exhibiting entrepreneurship and strategic thinking in crafting adaptation of intended strategy to development in the external and internal environment of the organization and necessary adjustments to keep them in tune with changing circumstances.
Operations Strategy
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
- Operations Strategy design decisions are concerned with choices and commitment to organization operations infrastructure, operations structure design.
- Operations System for the organization's production unit - This is the joint configuration of resources and processes with the resulting competencies ...
- Tactical Decisions - Tactically, Operations Management focuses on utilizing the Operations System to carefully manage the processes and resources, of the organization to produce and distribute products and services to customers which in turn realize strategic decisions to capitalize on opportunities.
- Operational Control Decisions - Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs. Operations decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new.
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