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Friday, August 26, 2011

Strategic Planning & Operations


By Shyamsunder Panchavati

This is an article positioned at the CEO, COO, CXO, and other senior management executives. The students can also read this article, but it is quite possible that they may find it a bit confusing. I have tried to detail all the tools and implements that could be helpful in this process. Indians would be happy to know that an Indian PSU Hindustan Petroleum Corporation LTD has made it to the list  top twenty  organizations in the world, who have entered the BSC Hall of Fame Report 2011.They have for company, FBI, Abu-Dhabi Government, City of San Fernando Philippines and others.

The article quite naturally lacks in specifics and details. However, it is wide and diverse, in the inclusion of elements. The strategic planning process is different and customized according to the nature size and geographic location of the organization, and an expert needs to be consulted before implementation.


The Article.........

Strategic Planning and Implementation for an organization, is akin to supply of oxygen to a Living Organism. The wherewithal’s and Tools for Strategic Planning and Execution.

Strategic planning of process and operation has become the hallmark of sustenance and growth n the current difficult scenario worldwide. Organizations of all hues including Private, Government, Manufacturing, Service, even those in the “Not for Profit “sector are implementing it.

However a strategic planning needs a quantitative approach with evaluation metrics in place. For, if you can’t measure, you can’t manage. Similarly the best planning needs to be followed by adept execution. However the best driving force for an organization is the demanding customer.

Customer the driving force, Customer the disruption

Customers always have high expectations in terms of the quality of goods and services they buy, however when it comes to pricing, the benchmarks established by the industry and competition often travel in opposite direction in terms of quality and price. This hardly leaves any profit margins for the organizations specially the manufacturing organizations. Add to this, is the disruption caused by the ever demanding customer, who has little or no respect for the organization’s schedules and procedures.

A customer is a “Here” and “Now” man. Asking for an impossible facility is the most common attribute of a demanding customer. However these disruptions are welcome as they make the organizations to continuously stretch their process research to a new level. The organizations that are able to do this often succeed in positioning themselves a few notches above the competition in terms of quality, pricing, brand equity & customer loyalty. Quite naturally there are exceptions; Industries in certain segments do not entertain disruptions from the customers.
All these disruptions welcome or otherwise leave organizations with very little space for maneuverability.  Organizations are left to eke out a profit margin by optimizing the highly optimized processes. There are various tools that can be used in strategic planning and execution.

Balanced Score card

It is a well known fact that Balance Score Card has been an important ever since it was designed 20 years back by Dr. Robert Kaplan, & Dr. David Norton. They have proved that it is possible for any organization having the desire to do so, and the right capabilities in place, to implement the Balanced Score Card. Organizations clarify their strategy using a strategy map; translate it into action with the Balanced Scorecard; align the organization through shared objectives and performance incentives; link strategy to operations through plans, processes, and resources; monitor and learn through dashboards and key performance indicators (KPIs); and test and adapt the strategy to ensure the desired outcomes.

In 2000, Balanced Score Hall of Fame was introduced, where the top & successful implementers of BSC were mentioned in the Hall of Fame Report. The eight edition of the Hall of Fame Report, which was out recently contained a diverse pack of Government, Private, NGOs and yes FBI too.

 Indians will be pleasantly surprised to note that an Indian PSU Hindustan Petrochemical Corporation LTD (HPCL) made a place for itself in the top twenty organizations that constituted the Hall of Fame organizations for the year 2010. You can view the details of HPCL implementation of BSC details HERE 









Balance Score Card in Action


Image Source The Palladium Group

  
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