JADE - European Confederation of Junior Enterprises \ Avenue du Frioul 51, Evere - 1140, Belgium \ mail@jadenet.org
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STRATEGY MANAGEMENT IN A JUNIOR ENTERPRISE __ A best practices book from JADE
JADE - European Confederation of Junior Enterprises \ Avenue du Frioul 51, Evere - 1140, Belgium \ mail@jadenet.org
STRATEGY MANAGEMENT IN A JUNIOR ENTERPRISE __ A best practices book from JADE
JADE – European Confederation of Junior Enterprises Book written by the JADE training team:
Edgar Nazarenus \ JADE Training Manager Giorgio Sleiter \ JADE Treasurer and Head of Training March 2018
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Table of Content Introduction ................................................................................................................................................................. 4 3 1. Assess Information ................................................................................................................................................ 5 1.1. Strategic Issues .............................................................................................................................................. 6 1.2. Contextual Analysis (PEST Analysis) ....................................................................................................... 7 1.3. Competitor Analysis .................................................................................................................................... 9 1.4. Market Research ..........................................................................................................................................10 1.5. Defining Customer Segments .................................................................................................................13 1.6. SWOT Analysis ............................................................................................................................................ 14 2. Design Strategy ....................................................................................................................................................16 2.1. Mission ............................................................................................................................................................17 2.2. Values .............................................................................................................................................................18 2.3. Vision ..............................................................................................................................................................19 2.4. Identifying Competitive Advantages ....................................................................................................21 3. Build......................................................................................................................................................................... 22 3.1. Using our SWOT to set priorities (TOWS Matrix)............................................................................. 23 3.2. Defining Long-Term Objectives ............................................................................................................ 24 3.3. Defining Goals and Measures................................................................................................................ 25 3.4. Selecting Key Performance Indicators (KPIs) .................................................................................... 26 3.5. Steps to build a Strategy Scorecard .................................................................................................... 27 3.6. Goal Pyramid............................................................................................................................................... 28 3.7. Building Action Plans ................................................................................................................................ 28 4. Manage .................................................................................................................................................................. 30 4.1. Tracking Goals & Actions..........................................................................................................................31 Conclusion ................................................................................................................................................................ 33
JADE - European Confederation of Junior Enterprises \ Avenue du Frioul 51, Evere - 1140, Belgium \ mail@jadenet.org
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Introduction ------------------------------------------------------------------------------------------------------Hello fellow Junior Entrepreneurs, Together we’ll embark on a journey towards personal empowerment through knowledge. This manual is the first in our series and marks our starting point for the way to come. So, pack your things, strap your shoes and continue reading about strategy. The strategic management process is about getting from Point A to Point B more efficiently. Part of that journey is proper planning and part of it is effective execution. Having a good strategy dictates “how” we travel the road we have selected. Continuous updates make sure we don’t get lost along the way. Down below you’ll see our roadmap to successful planning. In the following pages we will go through each step and provide you with a basic understanding about strategic planning. Why? Because JADE cares about you. Enjoy reading! Yours Sincerely, JADE – European Confederation of Junior Enterprises -------------------------------------------------------------------------------------------------------
Figure 1: Overview of the Strategic Management Process
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chapter 1
ASSESS INFORMATION
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In order to plan our bright future, it is crucial to know where we are right now. A detailed analysis of the current situation enables us to define our strengths and weaknesses as well as our Junior Enterprises’ market position and environment. Assessing the status quo is usually the first step towards building a solid strategic plan. When finished, our plan will be as good as the information we’ve put into it. A well-done assessment of the situation is one that considers the surrounding factors of the present as well as giving a prediction for possible future developments. Here are a number of ways to collect information:
a) Web Research on macro, market and industry trends b) Sending out Customer and JE-Member Surveys c) Acquiring information about companies through Secret Shoppers, Trade Shows or Industry Reports
Keep in mind that these methods are only suggestions, you don’t have to apply all of them. How deep you want to go with collecting and analysing information is up to you. Best is not too much or too little. We need to feel confident in making strategic choices and decisions but don’t have the time to spend weeks on acquiring unnecessary data. In the end we make sense of the data by synthesizing main themes into a SWOT Analysis. SWOT is a handy 2x2 matrix of your Strengths, Weaknesses, Opportunities and Threats. Later in the planning process, we’ll use our SWOT to define goals and objectives. -------------------------------------------------------------------------------------------------------
1.1. Strategic Issues These issues should be a summary of critical topics that need to be addressed during the planning process. The idea is to call these issues out early to ensure that these important areas are not lost as we deep dive into a lot of data, detail and ideas. Strategic issues are usually quite easy to identify as such. If they are not jumping out right now, we can move on. They will certainly surface during the SWOT Analysis.
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Some examples of strategic issues are: > Two customers comprise 75% of total revenue > Failure during the last audit > Low staff motivation -------------------------------------------------------------------------------------------------------
1.2. Contextual Analysis (PEST Analysis) To get a holistic perspective on our operating environment, we can start by conducting a Contextual Analysis also referred to as PEST Analysis. PEST is an acronym for Political, Economic, Social and Technological trends. Sometimes it is helpful to include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment and therefore influence our organization in its development.
Figure 2: Layers of Influence
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> Political factors \ are the way governments intervene in the economy (may also include legal and regulatory issues). Examples: Political stability, elections, labour laws, tax policy, inter-country relationships/ attitudes (e.g. Brexit), trade restrictions, possible grants for NGO’s and legal status for JE’s. > Economic factors \ greatly affect how businesses operate and make decisions. Interest rates for example affect a firm's cost of capital and therefore to what extent potential clients grow and expand. Examples: Economic growth, interest rates, inflation, taxation, government spending, production levels, import/export ratios, job growth and unemployment. > Social factors \ include cultural aspects that may influence how our organization operates. For example, the offered Bachelor/Master Programs at our local university influences the type of people joining our JE. Examples: Demographics, lifestyle changes, population shifts, education, immigration/emigration, health, standard of living and attitudes towards work. > Technological factors \ can affect costs, quality, and the need for adaptation or innovation. Examples: Inventions, new discoveries, research, rates of obsolescence, information technology, transportation, automation and digitalisation.
Conducting a contextual analysis does not have to be exhausting. Usually it is enough to identify general trends and characterize them in terms of expected development and impact. The table below can be used to assess existing trends. This allows for various developments to be sorted by the amount of impact on our Junior Enterprise.
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Vector / Trend e.g. economic growth
Current Status GDP growth of 0.9%
(…)
Expected Development In 2018 the GDP is expected to grow by 1.2%
Impact
Expectations Increased investment by companies in consulting projects
Figure 3: Example for a contextual analysis
PEST Analysis definitely helps to identify SWOT factors. The outcomes from our PEST flow into the Opportunities and Threats quadrants of our SWOT. This is why PEST is useful before a SWOT Analysis. -------------------------------------------------------------------------------------------------------
1.3. Competitor Analysis As Junior Entrepreneurs we are in constant competition against other organizations. In terms of recruitment, we are competing against other student organizations for high potentials on campus. In case of the market, we are competing against other local Junior Enterprises or companies with the same core business. In order to survive, we need to have an understanding what our competitors are offering potential clients or potential members.
Here are a few other key areas a competitor analysis fits into strategic planning: > To help us assess whether our competitive advantage is really an advantage. > To understand what our competitors’ current and future strategies are so we can plan accordingly. > To provide information that helps us evaluate decisions against what our competitors may or not be doing.
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We can start doing this by following these simple steps: > Making a list of similar organizations by name or group. What are each one’s strengths and weaknesses? > Are these organizations a posing threat and impacting us in a significant way? > What are possible future developments? Are they growing or shrinking? > Start to collect information about their strategy, processes and best practices. We can always learn from our competition. The end results of our Competitor Analysis will soon be integrated into our SWOT Analysis. -------------------------------------------------------------------------------------------------------
1.4. Market Research In order to develop a successful strategy, it is important to have a thorough understanding of our market and its needs. This is why we do market studies. A market study starts with the collection of data. After having done so, we can start applying statistical methods to analyse the data sets. A classical approach to data collection is to ask people directly via surveys. Before developing a survey, it is helpful to have an overview of the desired outcome information. The way we ask our questions and how we measure the answers influences the type of statistical operations we can do. The quality of our questions determines the quality of our answers and ultimately the meaning we can derive from them. With our desired results in mind, we can start thinking about the right way of measuring. There are four types of measuring, each one enables us to calculate different statistical parameters:
> Nominal (mode) > Ordinal (mode, median) > Interval (mode, median, mean) > Ratio (mode, median, mean)
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Nominal scales \ are used for measuring information without quantitative value, meaning information with no numerical significance. One can choose between a number of categories but the categories neither overlap nor have an objective order. Nominal variables \ are used to name or label things. Thanks to them, we can segment our survey’s participants and divide them into groups for further analysis. This is useful for screening our data. It also enables us to compare statistical parameters between the groups we created (e.g. “Do men in average spend more money on XY product than women?”). By applying statistical tests such as the Student’s t-test, we can even say if differences between the groups are significant or not (this is commonly done in empirical research). Note: a subtype of nominal variables with only two categories is called dichotomous.
What is your gender? Male
Female
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⃝
Figure 4: Example for measuring dichotomous variables
What is your subject of study? Business
Law
Engineering
Psychology
Other
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⃝
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⃝
Figure 5: Example for measuring nominal variables
Ordinal scales \ put an emphasis on the order of values. One answer is better than the other, but the difference between them is not really known. For example, is the difference between OK and Unhappy the same as the difference between Very Happy and Happy? Without assigning them numerical values as response anchors, we don’t know.
Are you happy with your purchase? Very Unhappy
Unhappy
OK
Happy
Very Happy
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⃝
⃝
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Figure 6: Example for measuring ordinal variables
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When having numerical anchor points, we are using interval scales. Here we know the order as well as the exact differences between the values. A classic example for an interval scale is Celsius temperature. The difference between each value is the same. For example, the difference between 10 and 20 degrees is the same as between 30 and 40 degrees. The increments are known, consistent and measurable. Interval scales \ are nice because the realm of statistical operations opens up for these data sets. A central tendency can be measured by mode, median or mean. Standard deviation can also be calculated. The only problem with interval scales is that they don’t have a true zero. For example, there is no such thing as no temperature. Therefore, we can only add and subtract, but cannot multiply or divide.
How would you rate the quality of the product you purchased? poor 1
below average 2
average 3
above average 4
Excellent 5
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⃝
⃝
⃝
⃝
Figure 7: Example for measuring interval variables
Ratio scales \ tell us about the order and the exact value between the units. They also have an absolute zero, this allows for numerous statistical calculations to be applied. Good examples of ratio variables include height and weight. In our business context monetary value would be a good example as well.
How much money do you spend on XY product annually? Annual investment: Figure 8: Example for measuring ratio variables
€
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Nominal
Ordinal
Interval
Ratio
x
x
x
x
x
x
x
x
x
Mean
x
x
Can quantify the difference between each value
x
x
Can add or subtract values
x
x
The order of values is known Mode
x
Median
Can multiply and divide values
x
Has a true zero
x
Figure 9: Summary of measuring types
After conceptualizing our survey’s questions, we can start collecting our responses and apply statistics to analyse the data. Now we can start drawing conclusions and it becomes possible to evaluate the current situation, define customer segments and to derive goals for the future. This should be our central focus. -------------------------------------------------------------------------------------------------------
1.5. Defining Customer Segments Clients are a heterogeneous group and too varied in their needs. Therefore, it becomes extremely hard to appeal to all clients in the same way and it proves difficult to compete in the entire market. Instead, it is preferable to identify parts of the market that we can serve best. The most effective way to do this is to segment customers. The goal is to create customer segments that have similar needs and wants in order to target them with specific messages, products, pricing and through the same distribution/communication channels. When done correctly, our target market will respond similarly to our marketing efforts. (Note: this applies to the recruitment process as well. Do we want all students on campus to join our JE or do we have a specific target audience in mind? What do they value?)
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After having identified our segments, we can determine what they need and how we can satisfy them best by providing value for them. Many organizations are committed to do the right things, but fail to understand what their people value. It is best to ask clients and stakeholders themselves. If our gathered data is not sufficient enough to do so, another survey comes to mind. Answers to the following questions can help to identify our target customers: > Who are our biggest customers? > Do our clients fall into any logical segments based on needs, motivations or other characteristics such as geography, price, etc. -------------------------------------------------------------------------------------------------------
1.6. SWOT Analysis A SWOT analysis is a quick way of examining our organization by looking at internal strengths and weaknesses in relation to external opportunities and threats. It is a great method to explore new ideas, make decisions, identify areas where change can occur, and define or redefine strategies. By creating a SWOT analysis, we can see all the important factors affecting our organization together in one place. It is easy to read, easy to communicate and easy to create. > Strengths \ refer to what our organization does well. They give us an advantage in meeting the needs of our members and target markets. Strengths give us enhanced competitiveness. Questions to ask: What do we do well (e.g. sales, marketing, management)? What are our core competencies? What differentiates us from our competitors? Why do our clients work with us? > Weaknesses \ refer to any limitations we face in developing or implementing our strategy. A weakness is something we lack or do poorly in comparison to others. They are conditions that put us at a disadvantage. Questions to ask: What do we need (e.g. marketing, accounting, planning)? Where do we lack resources? What could we do better? What necessary expertise do we lack? In what areas are our competitors better than us?
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> Opportunities \ are positive conditions that exist and help us to reach our objectives when acted upon. They offer chances for growth and expansion. They are situations that match capabilities we already possess and could easily capitalize on. Questions to ask: What are economic trends that benefit us? What are emerging political and social opportunities? What are technological breakthroughs? What new needs could we meet? What niches have our competitors missed? > Threats \ refer to external conditions or barriers that may prevent us from reaching our objectives. Questions to ask: What are dangerous developments? What are negative economic trends? What are negative political and social trends? Where are we vulnerable?
Once we completed our SWOT, we can use the information to start developing a strategy that: > Maintains and maximizes strengths; > Removes weaknesses; > Capitalizes on opportunities; > and neutralizes threats. Most importantly, we can use our strengths as starting points to formulate goals that pursue opportunities, reduce weaknesses and combat threats.
Figure 10: Example for a SWOT Analysis
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chapter 2
DESIGN STRATEGY
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Knowing why we are doing what we’re doing (our mission), where we’re trying to go (our vision) and how you we’re going about it (our values) is an essential part for building a strategic foundation. While our strategies and goals may change depending on current developments, we still try to preserve our identity along the way. We may modify our mission, vision or values over time, but at its core they will remain unchanged. This provides us with the necessary clarity to make critical strategic decisions that impact our future. Don’t let too much pragmatism get in the way of this important stage of building a strong foundation for our organization. If we don’t take the time to articulate mission, values and vision, we might pay for it later when writing goals and objectives without having a crystal clear strategic direction. -------------------------------------------------------------------------------------------------------
2.1. Mission A mission statement is a declaration of our organization’s purpose. It is the underlying “WHY?” (watch Simon Sinek’s famous TED Talk on the importance of having a “WHY?” here: https://www.youtube.com/watch?v=u4ZoJKF_VuA&t=20s). To build a solid strategy for our organization, it is essential to have written a clear and concise mission statement that explains who we are and why we exist. Our mission statement should serve as a guide for day-to-day operations and as the foundation for future decision making. Keep it short and inspirational. Here are some guidelines when writing a new or evaluating an existing one: > Base the mission statement on core competencies, superior internal strengths, or resources that our organization performs well in comparison to similar organizations. > Be motivating and inspiring. Our members need to feel that their work is significant and that it contributes to people’s lives. > Be realistic. Avoid making the mission to narrow or too broad. > Be short, specific and memorable. Make a precise statement of purpose that describes the essence of the organization in words that can be remembered easily.
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> Be clear and understandable. Write a statement that can be easily explained to people you meet at a party. Try to be as simple as possible. That helps in giving your team a simple focus for everything they do as an organization. 18 Examples: > Google \ To organize the world’s information and make it universally accessible and useful. > Space X \ Space X designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. -------------------------------------------------------------------------------------------------------
2.2. Values Values are enduring and distinctive core beliefs. They’re an essential part of developing our strategy. They are enduring guiding principles to adhere to no matter what mountain we climb. Our core values represent our strategic foundation. They are the beliefs that guide the conduct, activities and goals of our organization. They define what we stand for. Values are deeply held convictions, priorities and underlying principles that influence the attitudes and behaviours of our organization. They never change. When values and beliefs are deeply ingrained and widely shared by all members. They become a way of life within the organization and they form organizational strategy. Here are some guidelines for developing core values: > Keep the list of values to between five and seven. They need to be memorable. > Create phrases, but not paragraphs. One word is usually not enough to convey the real meaning of a value. > Make these values specific, not generic. It takes more than one word to define specificity. > Values need to be shared. While we don’t need consensus from everyone in our organization, we do need agreement from most of them.
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Herb Kelleher, former CEO of Southwest Airlines on core values: “We always felt that people should be treated right as a matter of morality. Then, incidentally, that turned out to be good business too. But it didn’t start as strategy. It began with us thinking about what is the right thing to do in a business context. We said we want to really take care of these people, we want to honour them and we love them as individuals. Now that induces the kind of reciprocal trust and diligent effort that made us successful. But the motivation was not strategy – it was core values.”
Figure 11: JADE's values
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2.3. Vision A Vision statement is a picture of our organization future. It describes where we are headed. Vision provides a clear mental picture of what our organization will look like in 3 to 5 years from now. Forming a strategic vision should provide a long-term direction, delineate the organizational activities to be pursued and the capabilities our organization plans to develop. It infuses our organization with a sense of purposeful action. It serves as a unifying focal point for everyone in the organization. It delineates the future focus and where we are going. Visions are also referred to as Big, Hairy, Audacious Goals or BHAGs. Here are two examples of visions or BHAGs that were lofty at the time they were established.
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> JFK \ We will put a man on the moon before the end of the decade and bring him back. > Microsoft \ A computer on every desk and in every home using great software as an empowering tool. 20 An effective vision statement consists of the following elements. Your Vision statement may or may not incorporate all of these elements, but keep them in mind when writing or evaluating yours. > Futurecasting \ Provides a picture of what your business will look in the future. > Audacious \ Represents a dream that is beyond what you think is possible. It represents the mountaintop our organization is striving to reach. Visioning takes us out beyond our present reality. > Motivating \ Clarifies the direction in which our organization needs to move and keeps everyone pushing forward to reach it. > Purpose-Driven \ Worded to give our members a larger sense of purpose. So they understand that they are building a “cathedral” rather than “laying stones”. > Inspiring \ Worded in engaging language that inspires and engages people. It creates a vivid image in people’s heads that provokes emotion and excitement. > Capitalizes on Core Competencies \ Builds on our organization’s core competencies. meaning on strengths, resources and assets we already established.
Examples: Alzheimer’s Association \ Our vision: a world without Alzheimer. JADE (2018) \ The JE concept is recognized at European level, and the JE movement is positioned as the expert network in Europe about student entrepreneurship, ensuring the high quality of the JE’s and Confederations around the continent. -------------------------------------------------------------------------------------------------------
JADE - European Confederation of Junior Enterprises \ Avenue du Frioul 51, Evere - 1140, Belgium \ mail@jadenet.org
2.4. Identifying Competitive Advantages A competitive advantage is something we do better than similar organizations. Successful organizations deliberately make choices to be unique and different in activities that they are really good at. They focus most of their energies on these areas to develop a unique competitive advantage. Throughout the planning process we will need to evaluate every part of our plan to determine whether it supports or distracts from this. Consider asking fellow JEurs for their perspective, when you survey them. Their insightful comments can be truly amazing in helping us to define competitive advantages. In the end, the statement shouldn’t be longer than one or two sentences or a couple of bullet points. Think of it as our organization’s DNA – a collection of attributes that make us unique. Here are criteria to check if we’re on the right track: > Consistency \ People must see a consistent difference between us and our competition. The difference needs to be obvious to our clients and should influence their decision making. > Difficult to imitate \ Our competitive advantage has to be difficult to imitate. We want to have a true advantage that our competition cannot easily duplicate. This might be in the form of people, knowledge within our organization or business processes working behind the scenes. > Motivating \ Clarify the direction in which our organization needs to move and keep everyone pushing forward to reach it. > Constantly improved \ In order to keep our advantages persistent, they should be constantly nurtured and improved upon. This helps in maintaining an edge over our competition. -------------------------------------------------------------------------------------------------------
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chapter 3
BUILD
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Previously, we addressed where we are and where we are going. Now, we will focus on how to get there. As we build a roadmap from where we are today to where we want to be, we use our SWOT to stay grounded. As we develop our strategy and set our goals, we have to remember that being strategic is about making hard choices. A good strategy is one with a clear focus. By focussing on the most relevant success factors, our goals and objectives remain achievable. A well-rounded strategy is one that aligns the organization as a whole to drive key performance indicators.
3.1. Using our SWOT to set priorities (TOWS Matrix) The SWOT analysis helped us to understand our current situation. Now is the time to develop strategies in order to shape the future. In order to make better strategic decisions we can rearrange our SWOT into a TOWS Matrix. This helps us to match interior strengths and weaknesses with external opportunities and threats.
Figure 12: TOWS Strategic Alternatives Matrix
Evaluate the options generated and identify the ones that help us achieve our mission and vision the most effectively. -------------------------------------------------------------------------------------------------------
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3.2. Defining Long-Term Objectives There are a few general areas that are of utmost importance for our organization. In order to develop a balanced strategy, we define at least one long-term strategic objectives for each area. To come up with one or more long-term objectives, we use the gathered information in our SWOT. Areas of interest can be: > People/Learning \ JADE is primarily about people. This area is probably the most important. It focusses on creating value for our members by developing an environment that fosters learning and self-realisation. Keep in mind that people ultimately drive all the other elements to achieve our organization’s goals. > Internal Processes \ Positive long-term results rely on maximizing the effectiveness of internal operations. > Clients \ How do we create more value for our clients? This area deals with the acquisition, retaining and servicing of clients. > Resources \ Does our strategy’s implementation and execution contributes to improvements in terms of financial assets and resources. More resources mean more value for our members.
Examples: People & Learning \ (1) Provide members with rewarding and study related practical experiences. (2) Structured training (sales, IT, management, soft skills, etc.). (3) Strong bonds between our members. Internal Processes \ (1) Improve or establish a sales process to increase closing rate and lead generation. (2) Achieve more efficient communication through process improvements. (3) Improve brand image through consistent use of social media. Clients \ (1) Increase loyalty, client satisfaction and referral volume. (2) Develop new products and services to offer our clients more value. Resources \ (1) To establish financial stability. (2) Acquire resources to finance XY service for our members.
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3.3. Defining Goals and Measures Once we have formulated our strategic objectives, we start translating them into specific goals and measures. We want to set goals that convert the strategic objectives into specific performance targets that can be communicated to our team. Effective goals clearly say: “what?”, “when?”, “how?” and “who?”. They address what we need to do in the short-term (1-3 years) to achieve our strategic objectives. To guarantee effective goals, we can apply the SMART formula: > Specific \ To create a clear picture for everyone involved, goals need to be specific. It should be understandable for everyone what has to be done in order to accomplish them. > Measurable \ Goals must be stated in quantifiable terms, in order to monitor their completion. Measurable goals facilitate proper planning, implementation and control. Without them being measurable, our goals remain only good intentions. > Achievable \ While goals must provide a stretch that inspires people to aim higher, they still have to be achievable. Otherwise, they are set up for failure. Set goals you know we can realistically reach. > Responsible Person \ In order to have someone feel responsible for the completion of our goals, they have to be assigned to a specific person or department. That doesn’t mean that they are solely responsible, but they make sure the goals are achieved. > Time Specific \ Our goals must include a timeline of when they should be accomplished. -------------------------------------------------------------------------------------------------------
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3.4. Selecting Key Performance Indicators (KPIs) To help monitor our strategic plan, one of the best tool around is the Balanced Scorecard, developed by Kaplan and Norton from Harvard. The scorecard is to be used as both a measurement and management tool to assist in fulfilling our organization’s vision. With it, we can actively track progress towards our goals. We begin by asking: “What are the key performance measures we need to track in order to monitor if we are achieving our goals?”. These KPIs include the key goals that will have the most impact in moving our organization forward in all areas. Typically, the scorecard has four categories of measures, previously introduced for defining long-term objectives. Since these areas are universal, they serve as orientation for specific measures as well: > People/Learning \ What do we have to learn or improve to excel at our processes? These measures identify the skills we have to acquire to sustain longterm growth and improvement. They include measures to recruit, improve and learn. > Internal Processes/Operations \ Which processes must we improve in order to reach our goals? These measures focus on internal operations that have an impact on the effectiveness of our work. They influence the satisfaction of our clients as well as our members. > Clients \ How do we provide value? These measures are targeted towards the target groups we serve. > Resources \ These measures indicate whether our strategy’s implementation and execution contributes to improvements in terms of financial assets and resources. -------------------------------------------------------------------------------------------------------
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3.5. Steps to build a Strategy Scorecard 1\ Identifying the right measures: Most of our goals should have measures associated with each one. If not, pick a measure to track the goal. 2\ Establishing time frames: Try to estimate the right time frame for each measure and assign deadlines. Try to use the same increments for all your measures. If you are reporting monthly, then use monthly measures. 3\ Identifying data sources: Clearly identify where the monthly KPIs are coming from and who is responsible for reporting on it. Be sure that the measures are easily accessible. 4\ Input numbers monthly: Keep record of each reported KPI for every month. 5\ See the big picture: The primary purpose of KPIs is to give us a big-picture look at our organization with a relatively small amount of information. If it’s not working, change the measures. A great way to get visual is to produce a chart for each graph for each measure. 6\ Take action: Take the right actions in a timely manner. The whole point of using the scorecard is to make adjustments, before it’s too late. Regular strategy meetings will help facilitate this process.
Figure 13: Strategy Scorecard
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3.6. Goal Pyramid Translating big goals into specific action can be actually quite difficult. To help us get moving nonetheless, we can start by using the Goal Pyramid. When drawing the pyramid, we start from the top (our specific goal) and go down by defining the necessary steps for it. We cascade downwards by asking ourselves what’s necessary in order to achieve the previous step. When finished, we can start writing our action plan by going up the pyramid to reach our goal.
Figure 14: Goal pyramid
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3.7. Building Action Plans To support our organization-wide goals we need to develop short-term goals and assign them to specific people or whole departments. Here, we can start developing an action plan for each goal. When formulating the individual actions, make sure that each step has a start and end date, as well as assigned people that are responsible – make it SMART. In the end we should have identified all actions that need to occur in the following months to achieve our short-term goals. From there, we can finally start working on them.
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Figure 15: Example for an action plan
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chapter 4
MANAGE
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Now that we have spent so much time and energy on developing our strategy we have to focus on the execution to prevent it from becoming a document that sits on a shelf somewhere. Remember that successful execution relies heavily on having a committed team that feels accountable. For that reason, we have to make sure that everyone is sufficiently informed and motivated enough in order to perform their tasks. So here are some next steps for successful implementation: > Communicate the strategy to everyone in our organization. > Involve all members in the development of the plan by gathering feedback. > Assign our members clear goals that play into their individual strengths. > Hold them responsible for the achievement of assigned goals. > Monitor the Scorecard monthly or quarterly. > Hold regular strategy meetings to review the progress. > If something in our plan is not working, change it and take corrective actions. When things are going well, build on that success. > Make true self-assessment an ongoing practice. > Celebrate when goals are reached. > Reward the team.
4.1. Tracking Goals & Actions In this stage of the strategic process we have to schedule regular meetings to review the progress we have been making. The outcomes of these reviews determine how we are going to proceed with our plan. Regular strategy meetings don’t need to take an exhausting amount of time. Thirty to sixty minutes should be more than enough. Nonetheless, it is important that key team members report on their progress towards the goals they are responsible for. By reviewing the KPIs, it becomes easy to make course corrections if necessary.
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Keep in mind that strategic plans are guidelines, not rules. Every six months or so, we can evaluate our plan implementation by asking key questions: > Will our goals be achieved within the planned time frame? If not, why? > Should deadlines be modified? (Before modifying deadlines, get to the cause of the delay) > Are our goals still realistic? > Should our whole organization’s focus be changed in order to put an emphasis on achieving certain goals? > Should our goals be changed? (Be careful about making these changes (figure out why our efforts are fruitless first) > What can be learned for future planning sessions? > Until we start another formal planning session where we start at the beginning again, follow the plan and create success. -------------------------------------------------------------------------------------------------------
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CONCLUSION ------------------------------------------------------------------------------------------------------All things considered, we feel confident that this book provided you with valuable information to build a brighter future. We hope that it serves as your starting point for future adventures through the strategic management process. Still, we recommend reading further literature for supreme excellence. If a particular topic sparked your interest, feel free to deep dive into it. There is a sea of knowledge waiting to be discovered. Practice makes perfect. So, build your first strategic plan and start applying your new-found knowledge. Every step you take is a step towards your vision. Remember that you are never alone on your journey. You are part of a global movement. Together we focus on making a better tomorrow.
We wish you great success in all your endeavours, JADE – European Confederation of Junior Enterprises -------------------------------------------------------------------------------------------------------
__ If you have any question regarding the book, please contact training@jadenet.org
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