Key Factors for success of Strategic Planning

1. GCSO 100% dedicated, Full time —Strategy Team

2. Org. Sr. team(CxO/FH)
3. Mission-Vision-Objective—Goals
4. Patient detailed planning and advance resource enablement (Money,
Man, time, decision making etc.)
5. Upfront financial planning and timely funds availability
6. Top driven & commitment—Top Mgmt. MD/CEO/Function heads 100%
engagement and commitment(70/30 Tomorrow/today ratio)
7. Regular planned monitoring/support
8. Course correction (SWOT/SWAN , Environment, Resource based)
9. Quick and bold decision making (80% contribution)
 Alternative views on strategy (Past and Present)
• Sustainable CA
• Implicit Strg.Model of last decade 1. Build Unique Competitive positioning
1. One ideal position in Industry (PROACTIVE)
2. Benchmarking all activities for best 2. Activities tailored to strategy
3. Clear trade off and choices w.r.t. competition
3. Aggressive outsourcing and
4. CA comes from FIT across activities
partnering for efficiency
5. Sustainability comes from system not parts
4. CA rests on few KSF, Critical resource (Orchestra not solo music)
and core competencies 6. Operational effectiveness is must to achieve
5. Flexible and rapid response to all 7. Mgmt’s core is Strategy which is defining
competition and market changes company’s position, Making trade-offs, and
forging FIT among activities
(REACTIVE..dance to other’s tune not
8. Role of leadership is to define what to do and
PROACIVE..your own music i.e. more importantly “ what not to do”
strategy) 9. Distinguish between operational effectiveness
and Strategy
Deepening strategic positioning (SP) is making companies activities more distinctive,
strengthening fit and communicating strategies better to customers who value it.
Strategy: Cycle, Development, Deployment, Monitor & team

1. Strategy Cycle: Mission---Vision---Core Values---SWOT/SWAN---Strategy---

Objectives & Goals—O/all Plans—Functional and detailed action plan---
Execution—Monitor (Perf. & Environment changes)---Course correction
2. Strategy Team:
1. A-Team: Top Mgmt. leads (Owner/MD/CEO/Strategy Head)+
2. B-Team: SBU-H/Function Hd and their Strategy Reps. + Strategy Team
3. C-Team: Monitoring team SBU and function wise and at Corporate level
3. Overall responsibility and Coordination/facilitation and driven by Strategy
heads with his team+ Respective SBU/Function head
4. Review: Top-down review and commitment through----Review at defined
frequency and Quorum religiously—at least monthly at MD/CEO level and
SBU/department head level
5. Commitment level: Extremely high needed from A and B-team
 Leadership role in Strategy in M&A
Leadership Role:
1. Assessment & Exploitation of synergy and Integration
2. Involvement of HR throughout from Strategy team formation to
monitoring motivation, Engagement, manpower allocation etc.
3. Involvement and commitment
4. Strong monitoring
5. Resource deployment-Money for inorganic growth and
6. Quick decision making
 Role of leadership---very vital for success
1. Complete ownership, buy-in and commitment, topmost focus
2. Strong GCSO to drive, push, coordinate, tie up all, facilitate, enable,
mediate among all and problem solver, strong and good
communicator
3. Strategy formulation and support to others for their strategy
4. Resource mobilisation-5M
5. Rigorous monitoring and support (own team and other interacting
teams)
6. Own up, review, Solve and enable
 Strategy Failures
Reason for failure: Evolve
1. Mgmt. and leadership conviction
2. Strategy a fashion statement or a Fad---not a tool for planned growth
3. Funds deployment and top management support and conviction
4. Decision making delay/confidence
5. Lack of strong strategy team
6. Lack of Priority by other Sr. leaders
7. Sustaining and detailing of plans
8. Inadequate monitoring by top team
9. Lack of patience and intense profitability focus
10. Improper DD, M&A integration (cultural fit issues), Manpower
rationalisation
 What is strategy
Paper by Michael Porter

Dr. Manoj Mishra

 Michael Porter: What is Strategy (Strategic Fit)
1. Operational effectiveness (Efficiency) is about achieving excellence in individual
activities or functions; strategy is about combining activities ( Strategic Fit--SF) to get
desired Competitive Advantage (CA)
2. Core competency(CC), Critical resources(CR) and Key success factor (KSF)are the focus
of strategy
3. Strategic fit is more central component of CA
4. It creates trade-offs to remain focussed and sustain/exploit competitiveness
5. Competency is Capability while Competitive Advantage is its exploitation and
differentiation w.r.t. competitors
6. SF drives both CA and Sustainability
7. Fit locks out Imitators by creating a chain that is as strong as its strongest link
8. Various activities fit into each other, reinforce each other and build Competitive
advantage as a jig saw puzzle which competitors can not fix/copy easily e.g. Ordering to
supply chain to mfg/inventory management/production planning, Mfg, quality
assurance, delivery to payments—return mgmt. to replenish
 Strategic Fit..contd.
• Order of SF:
1. First order fit: Consistency between each activity (function) and overall strategy
2. Consistency ensures CA which is cumulative of different activities
3. Second order fit is when activities are reinforcing e.g. Nutragena (Global Health soap
and other health product’s Brand) offering hamper to hotels for guests—who later
become loyal customers after trial and happiness
4. All activities of fit are interrelated and offer cumulatively CA
5. Strategic fit among activities builds CA as well as creates sustainability (entry barrier
for competitor)
6. Strategic positioning is where company rests/sustains its CA they are 1st,2nd and even
3rd order SF
 What is strategy: Michael Porter
• Operational effectiveness (OE)
1. What is operational effectiveness—
A. Flexible and responsive to market and competitors
B. Benchmarking
C. Best practices
D. Outsource aggressively to gain efficiencies
E. Take market positioning in today’s dynamic market
F. Competitive advantage is temporary and can be copied
G. Hypercompetition is a bleeding wound/It sucks all
2. It is not strategy, Is necessary for survival but not sufficient for growth
3. Strategy is not rear-view driving :
A. Strategic Growth needs Focus,
B. Differentiation,
C. Futuristic vision and prep
D. USP refreshed continuously to avoid copying(Core competency amd Capability to renovate
continuously)
 What is strategy…contd
• Operational effectiveness (OE) is productivity, quality, speed:
1. It is performing better then competitor, deliver greater value or same value at lower cost
1. E.g. reduce defects, at less price, deliver faster and everywhere, service better and upgrade/replace sooner
2. Cost is generated owing to 100s of activities to deliver and satisfy customer needs
3. What and how to perform governs cost and value/Customer satisfaction
4. Tools are:
A. TQM,
B. Benchmarking,
C. Time-based competition,
D. Outsourcing,
E. Partnering,
F. Reengineering
G. Change Management
5. OE is necessary (Survival) but not sufficient (for Growth): What brought here will not take you
there(which is more fierce, untapped, red-ocean and a dog fight)
6. Create your niche well in time…Innovate continuously
7. Innovation is the key competency in today’s need for strategy:
A. Incremental, Continuous ( 0.1 to 1X)
B. Breakthrough (10X)
 What is strategy…contd
• Operational effectiveness (OE) is productivity, quality, speed:
1. OE is exploiting resources better
2. Japanese used it as differentiator for long—Faster…Better…Cheaper
3. Best practice in all aspects of business ..although started with production
4. It also needs effort, investment, time, focus, continuously mapping competitors & excelling
5. Benchmarking is copying and after a while all are alike(no differentiation/USP)
• Strategy is Not XXXX but YYYY :
1. Not best practice which can be benchmarked) but….Next practice (Innovate)
2. Not… Functional but organisational,
3. Not… Today but tomorrow and even day after
4. Not… Better ways of doing something but new ways of doing new things
5. Not…Drive through rear view but through windshield or using a telescope over hilltop
6. Not …Star gazing but using a Vikram Lender of Chandrayan 2
7. Not incremental (OE) but breakthrough or even disruptive (Strategy)
8. Not..be better then competition but outstanding and even unreachable/kill competition
9. Not copy/look alike but different (shining Pole star…may be for some time till imitated)
 What is strategy…contd
• Japan story:
1. During 1970 to 1990 Japanese used Overall efficiency practices (TQM,OEE, Kaizen, Six Sigma etc)
& Enjoyed cost and quality advantages.
2. Focussed miniaturisation, Simplification, QFD, Design iteration not breakthrough products
3. Japan needs to reorient to Strategy and shed consensus, mediation & welcome differences
4. Needed to take hard choices
5. Responded well sluggishly e.g. Hydrogen Engine, Fuel cell and EV MUCH LATER
• Southwest airline (SWA) story—Build differentiator /Niche (v/s Delta, United airline etc)
1. Short haul, Point to Point, Low cost, Midsize cities, Secondary airports, Frequent departures,
short distances
2. Customers are cost conscious Bz. Traveller, families, students (who use train/car/bus, taxi)
3. Strategic positioning: Price and convenience sensitive customer
4. SWA’s Strategy is to perform differently or perform different activities then rivals
5. Full service airline is a competition but not a red ocean due to their customer niche
• IKEA story is similar: own design, own warehouse, globally sourced, every product
displayed, customer selects as self service… delivered fast/customer pick up (unlike
traditional furniture stores)…IKEA also offers child care, DIY, Late hours store etc.
 What is strategy…contd
• Strategic Competition/Positioning:
1. Perceive new positions to woo customer from established position or new customer
2. E.g. Single product store (large selection) then broadline of products (more categories but
limited selection)
3. New ways of convenience for niche customer segment e.g. Mail order/pick off service
4. New entrants have less problem to take or shift to new positioning then incumbents
5. Can be based on customers’ needs, accessibility or variety of products or service
6. Can be for customer for most of varieties or most /all needs (Walmart) in a segment (Need
based) or Specific price, convenience, speed etc (Need based positioning--IKEA)
7. New positions appear due to change e.g. Health Diagnostics, E-com, Online used car sales,
Quick commerce, Work from home, Mobile payment platforms etc etc…many start ups
take the challenge and thrive , traditional incumbents sleep over and lose or later acquire
like Indian large cos.:
A. New customer group/purchase occasion
B. New needs emerge as society evolves
C. New distribution channels
D. New technologies developed
E. New machinery or Info. systems are available
 What is strategy…contd
• Strategic positions/postures (SP) contd…:
1. Generic strategies-Cost leadership (Southwest Airline), Differentiation and Focus (IKEA-
cost based focus) or wider needs met (Walmart)
2. Can be broad-based customer base or specific customer segment
3. To sustain SP, it requires trade-offs i.e. get more of one thing with less of another thing
A. Trade-offs needed to stay focussed
B. E.g. Nutragena healthy NICHE products focus on kind to skin USP and had to avoid deodorants and
skin softener ( sacrificed large volume mass multi competitor products)
C. Reasons for trade-off:
1. 1. Inconsistency in Image or reputation
2. 2. Activities had typical requirements to be followed as expected by customer/mfg. process-plants and m/c
etc./skill needed etc.
3. 3. Limit on internal coordination and control
4. Imitation is challenge to sustain SP and hence innovate