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The strategy gap lavaraging thechnology to execute winning strategies - Goveney M.

Goveney M. The strategy gap lavaraging thechnology to execute winning strategies - Wiley & sons , 2003. - 242 p.
ISBN 0-471-21450-7
Download (direct link): thestrategygapleveraging2003.pdf
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Successful CPM requires not only horizontal alignment of the individual processes—analysis, direction, and implementation—but also vertical
35
The Strategy Gap
Exhibit 2.3 Top-down and bottom-up inputs and outputs for strategic management processes.
Aligning Top-Down and Bottom-Up Views
Overall Threats, Opportunities, Strengths, Weaknesses, Stakeholders
Planning
Scenarios
Corporate
Plan
Functional Units)
T
Trends in Operational Activities Product / Service Strengths & Weaknesses
T
Operational Optimization & Reengineering
i
Corporate
Plan
alignment of the top-down and bottom-up views of the organization. These views need to be reconciled, synthesized, and coordinated across each of the CPM processes. Exhibit 2.3 summarizes the required inputs and outputs from and to the top and the bottom for each of these processes.
During strategic analysis, information and knowledge has to come from both the top and the bottom. The top-down perspective offers a consolidated picture of the overall environmental threats and opportunities facing the organization, the combined strengths and weaknesses of the resources within the individual operational units, and the collective expectations of all the stakeholders inside and outside the organization. The bottom-up perspective provides a series of individual images highlighting the trends in various operational activities and the relative strengths and weaknesses of specific products and services in comparison with those of specific competitors.
From the standpoint of strategy formulation, the consolidated top-down analysis can be used, for example, to create various planning scenarios. These planning scenarios can help define or redefine the
36
Strategy in the Next Economy
organization’s future directions, its strategic choices, and its overall portfolio of products and services. The bottom-up analysis can help identify potential innovations in products and services and possible areas for operational optimization and reengineering. The bottom-up analysis also can serve as the basis for various planning models. Taken together, these can help answer questions about the potential outcomes of various strategic options for the individual operational or business units making up the organization.
Finally, the process of strategic implementation will result in a series of plans and programs for both the top-down organizational level and the bottom-up operational level. The number of plans and programs will depend on the number of products, industries, and markets served by the organization. As Exhibit 2.4 indicates, the number of implementation plans and programs obviously increases as the combination of products, industries, and markets increases. Fortunately, recent CPM systems enable an organization to provide a single online source for accessing, monitoring, and controlling the combined top-down and bottom-up strategies, objectives, tactics, and key performance indicators (KPIs) regardless of the number of products, industries, or markets involved.
DISCONTINUITIES
Strategy formulation requires management to predict the future. Based on these predictions, management makes strategic choices about company direction, focus, and resource allocation. By their very nature, strategic choices impact the entire organization, have long time horizons, require a substantial commitment of time and money, are not easily reversed, and can impact the organization’s survival.
In today’s business world, the level of uncertainty makes the future hard to predict. Uncertainty, however, is not the only reason it is difficult. The business world is an example of a complex system. Complex systems are hard to predict because they exhibit “punctuated equilibrium.” These systems are characterized by long periods of stability in which continuous, incremental changes occur that are disrupted by dramatic, discontinuous change. This pattern of stability interspersed with discontinuous change is called punctuated equilibrium.15 Punctuated equilibrium makes it difficult to craft a strategy that can handle incremental improvements in existing products and services while simultaneously trying to introduce new products and services. “Strategic vision
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Exhibit 2.4 The number of plans and strategies increases as the combination of products, industries, and markets increases.
One product group Several product groups Several product groups
in one (1,2,...) in one (1,2,...) in several
industry market industry market industry markets (a, b,...)
Key: CS - Corporate Strategy Source: Based on work done by Rudolf Griinig and Richard Kuhn, Process-based Strategic Planning (Berlin: Springer-Verlag, 2001) pp. 34-35.
BS - Business Strategy CP - Corporate Plan BP-Business Plan
Strategy in the Next Economy
that foresees discontinuities and strategic planning that prepares for discontinuities are the key challenges to strategic thinking.”16
The changes that have occurred in the NASA space program over the years provide a hint of how organizations can develop and implement strategies in the face of punctuated equilibrium. We have already recounted the Apollo program—America’s race to be the first country to put a man on the moon. America succeeded in putting men on the moon—six missions in all. The first success was Apollo 11 (July 1969). The last success was Apollo 17 (December 1972). The Apollo program had all the trappings of a “big” strategic decision. It was a long-term decision. It was very risky. It cost a lot in time, money, and people. Additionally, there was never any intention to reverse the decision. Thirty years later, the space program bears little resemblance to the earlier days. With programs like the Lunar Prospector and Mars Sojourner, NASA has moved from a “big-ticket” approach to a new “smaller, faster, cheaper” approach. The Lunar Prospector, for instance, cost $63 million to build and launch. This compares with the $266 million for an Apollo launch. Even if it fails, NASA still has money for four more tries. Basically, with programs like the Lunar Prospector, NASA has moved into an era of experimentation with smaller, cheaper probes.
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