i The Strategic Planning Workbook ii THIS PAGE IS INTENTIONALLY LEFT BLANK iii Third EdiTiON The Strategic Planning Image Workbook to come THIS PAGE IS INTENTIONALLY LEFT BLANK Neville Lake iv Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author. First published in Great Britain in 2002 Second edition published in Great Britain and the United States in 2006 by Kogan Page Limited Third edition 2012 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 1518 Walnut Street, Suite 1100 4737/23 Ansari Road London N1 9JN Philadelphia PA 19102 Daryaganj United Kingdom USA New Delhi 110002 www.koganpage.com India © Neville Lake, 2002, 2006, 2012 The right of Neville Lake to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 6500 1 E-ISBN 978 0 7494 6501 8 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Lake, Neville. The strategic planning workbook / Neville Lake. – 3rd ed. p. cm. Includes index. ISBN 978-0-7494-6500-1 – ISBN 978-0-7494-6501-8 (ebook) 1. Strategic planning. I. Title. HD30.28.L35 2012 658.4’012–dc23 2011047305 Typeset by Graphicraft Ltd, Hong Kong Printed and bound in India by Replika Press Pvt Ltd ConTenTS ConTenTS v PrefaCe viii aCknoWledGemenTS xi abouT The auThor xii Getting a bigger brain 1 The really big questions 3 The key tactical questions 19 What are they thinking? 25 The customer from your point of view 25 Customers – from their point of view 32 Getting into their heads 38 observation 39 Talking 39 focus groups 41 Surveys 42 Who else is out there? 45 v Customers for the products/services you provide who are buying from your competitors 45 Customers who are not yet buying the products/services you (and others) provide 46 Customers you could have, if you developed your business in a different direction 48 What are they doing? 51 ConTenTS Competitor relationships 51 Competitor analysis 53 Who are the potential competitors? 56 Pressure points 58 environmental analysis 60 availability analysis 65 What are we thinking? 67 Stakeholder analysis 69 Culture analysis 70 Skills matrix/talent analysis 74 financial performance analysis 76 Preface viii Psurobc-oespst ipmeirzfaotrimona nacnea l(yussiisn)g 7 7the risk analysis 79 Acknowledgements xi resources versus outcomes analysis 80 Cause and effect analysis 82 About the author xii relative scale analysis (benchmarking) 84 absolute scale analysis (using a framework) 87 Change readiness analysis 89 building the guiderails for the future 91 01 Getting a bigger brain: how to think like The shape of the statements 92 The mission, vision and values workshop 98 a strategist 1 reinforcing the statements every day 102 how to pick a strategy that is right for your business 106 facilitation 107 The really big questions 3 Smcaernkaerti of uotputrieo nasn aalnyasliyss is 111124 lifecycle analysis 117 The key tactical questions 19 Portfolio analysis 119 SWoT analysis 121 Concentration of effort analysis 124 The activity hedgehog 129 movement analysis 131 02 What are they thinking? Customer analysis 25 making strategy happen 133 uniting themes 133 Generic strategies 135 The customer from your point of view 25 The action workshop 144 Selling your message 153 Customers – from their point of view 32 PShuottwin agn idt itne lwl riting 115632 bringing it all together 171 a strong mandate 172 a strong purpose 173 03 Getting into their heads: how to understand your Preparation 173 The right people 175 customers 38 Teharel yr iwghint sa ction plan 117767 Communication 178 lock-in 178 Observation 39 Tricks and traps 181 Trick 1: keeping perspective 182 Talking 39 Trick 2: keeping a grasp on reality 185 Trick 3: Seeing the world through others’ eyes 186 Focus groups 41 TTrraapp 12:: ffoinlldoiwngin tgh eco snovluetnitoino ntaolo t shoinokni ng 118990 Trap 3: not focusing on outcomes 192 Surveys 42 appendix: Worksheets 195 Worksheet 1: draft agenda for the decision-making workshop 196 Worksheet 2: draft agenda for the mission, vision and values workshop and the measures workshop 198 04 Who else is out there? Potential customer analysis 45 Worksheet 3: draft agenda for the action workshop 200 Worksheet 4: The sub-optimization analysis 201 Customers for the products/services you provide who are buying Worksheet 5: Tables 203 Worksheet 6: hallmarks of success analysis 205 from your competitors 45 Worksheet 7: The fear/freedom culture analysis 206 Worksheet 8: resources versus outcomes analysis 208 Customers who are not yet buying the products/services you (and Worksheet 9: market future analysis 210 Worksheet 10: lifecycle analysis 211 others) provide 46 WWoorrkksshheeeett 1112:: PTohret faocltiiov iatnya hlyesdigs ehog 221124 Worksheet 13: The path of least resistance quadrant 216 Customers you could have, if you developed your business in a Worksheet 14: The change preparation flow chart 218 Worksheet 15: The force field analysis 219 different direction 48 index 220 05 What are they doing? Competitor analysis 51 Competitor relationships 51 Competitor analysis 53 Who are the potential competitors? 56 vi Contents 06 Pressure points: understanding the driving forces in your industry 58 Environmental analysis 60 Barriers to entry analysis 63 Availability analysis 65 07 What are we thinking? understanding what is happening in your organization 67 Stakeholder analysis 69 Culture analysis 70 Skills matrix/talent analysis 74 Financial performance analysis 76 Process performance (using the sub-optimization analysis) 77 Risk analysis 79 Resources versus outcomes analysis 80 Cause and effect analysis 82 Relative scale analysis (benchmarking) 84 Absolute scale analysis (using a framework) 87 Change readiness analysis 89 08 building the guiderails for the future: mission, vision, values and measures 91 The shape of the statements 92 The mission, vision and values workshop 98 Reinforcing the statements every day 102 09 how to pick a strategy that is right for your business 106 Facilitation 107 Scenario options analysis 112 Market future analysis 114 Lifecycle analysis 117 Portfolio analysis 119 SWOT analysis 121 Concentration of effort analysis 124 The activity hedgehog 129 Movement analysis 131 Contents vii 10 making strategy happen: how to lead your business to success 133 Uniting themes 133 Generic strategies 135 The action workshop 144 11 Selling your message 153 Putting it in writing 153 Show and tell 162 12 bringing it all together 171 A strong mandate 172 A strong purpose 173 Preparation 173 The right people 175 The right action plan 176 Early wins 177 Communication 178 Lock-in 178 13 Tricks and traps 181 Trick 1: Keeping perspective 182 Trick 2: Keeping a grasp on reality 185 Trick 3: Seeing the world through others’ eyes 186 Trap 1: Finding the solution too soon 189 Trap 2: Following conventional thinking 190 Trap 3: Not focusing on outcomes 192 Appendix: Worksheets 195 Index 220 Video material to support this book is available at the Kogan Page website: www.koganpage.com/editions/the-strategic-planning-workbook/9780749465001 viii PrefaCe S trategy. It’s a great word, isn’t it? Just put the word ‘strategic’ in front of a project and it shines a little brighter than all others. Look at the fund- ing for activities – those that are labelled ‘strategic’ get the largest slice. The CEO’s projects are almost always ‘strategic projects’, and these – and all the others that go by the same name – get first priority. But what is a strategic project? Indeed, what is strategy? This is a surprisingly difficult question to answer, because ‘strategy’ is a term that means different things to different people, and too often it becomes a business process that hinders rather than helps organizations to take control of their future. It is difficult to get a good definition of strategy because: ● Too many strategists focus on the grandest strategic dilemmas. They write about how to shape a new business to take advantage of a breakthrough market opportunity. These are serious and real challenges. However, they trouble mid-sized and small businesses extremely infrequently, and only occasionally affect large multinationals. ● Many of the texts ignore the fact that there are boundaries for most organizations. The typical business is caught in a web of past financial commitments, current competencies and future contracts. The problem is not to seek new places to do business, but rather to take the greatest advantage of current opportunities. ● While there are boundaries, the amount of freedom you have within your available options is too often underestimated. Strategy is as much about choice as it is about analysis. I have found that those organizations that dream the big dream, pick the seemingly unattainable goal but also develop a great strategy are the ones that end up dominating their industry. If you ask the questions ‘Where do we want to be?’ and ‘What do we have to do to get there?’ and then have the courage to do what it takes, then success is likely to be the result. Most writers do not appreciate the blending of art, science, passion and performance that makes a good strategy. ● Most strategy books are interesting but leave you no closer to being able to complete a strategic planning project at a practical level. They present strategy as a theoretical pursuit, rather than a way to make practical decisions. Preface ix The consequence is that the definition of ‘strategy’ is overburdened by grand models put forward by theorists for multinationals. The average organization is left with an understanding of ‘strategy’ that is distorted and impractical. Strategy should be about thinking clearly and acting deliberately, so that you can get the most out of your current and potential opportunities. This book provides you with the concepts you need to perform this thinking, the tools you need to gather the necessary information, the techniques you require to make decisions and the frameworks to translate your conclusions into practical action plans. When you have completed the exercises, data gathering, analysis, the two workshops and the implementation plan, you will have a map to your best future possible. This book uses a practical definition of strategic planning, as follows: Strategic planning is gaining insights about where you are now, gathering the information that identifies where you should be in the future, generating the decisions that will give you a unique position, and then defining the actions that will bridge the gap. Strategic implementation is defined as: The ongoing application of those decisions and actions so that the outcomes are achieved. This is a book that has been designed for managers who own/work for organizations that are already established. It has been written in the expect- ation that, if you are reading this, you are the person responsible in your organization for making strategic planning happen, which means that you are the CEO, you are in planning/finance... or you were away when the other members of the management team voted on who should do this year’s strategic plan. This book is practical, eclectic and pragmatic – it gets the job done. The tools provided in this book are a mixture of my own diagnostic and analytical techniques and decision-making processes, along with many of the strategic planning standards and favourites. The book is written to show you how to generate good information for decision making, without expecting you to take a couple of months off to find the data. The exercises show you how to make the kinds of practical decisions that enable you to build on your past, so that you can secure success in the future. The workshops show you how to go about identifying what practical strategy means for you in your organization – whether it is large or small. The book applies if you own the organization, run it, or manage a bit of it. In the book I have considered customers as people/organizations that pay money for your products or services. However, many of the same concepts x Preface are relevant if you are in the public/not-for-profit sector – just substitute other outcomes for financial benefits – and the processes and messages apply. This kind of ‘universal applicability’ is possible because the book provides you with the key issues you need to consider so you are able to identify what you need to know to develop a set of options, and it then gives you the frameworks that help you to pick the right one.