ABCDE Strategic Plan ModelFor Reference SMK

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Directorate Technical and Vocational EducationDirector General of Secondary Education

Ministry of Education and CultureRepublic of Indonesia

September, 2014

ABCDE ModelThe ABCDE Model* to be a very useful model for understanding the flow of strategy from the beginning to the end of a cycle of strategic planning/execution activities:A – Assessment of current situation. This element involves scanning the external

environment, competitive scanning, assessing the current situation; and clarifying perceptions of problems, needs, and opportunities.

B – Baseline the gap. This element involves identifying performance gaps, and evaluating trends.

C – Components of strategy. Include common concepts like core competencies, values, mission, vision, metrics, goals and objectives, portfolios, and processes.

D – Delivery of component. This is the delivery of the strategic initiative, as well as other programs, projects, and operational work. Executives will formulate action plans; benefits capture plans, targets, standards, and metrics.

E – Evaluation of progress. This includes review of progress, reporting, tweaking of goals, corrective actions, and learning.

Environment 1. Political Environment – Strategic initiatives are often international in scope, and they

can be affected by local politics. Director of Strategic Initiatives has an important responsibility to interacting with local politicians as the company makes capital improvement investments in new rail terminals

2. Economic Environment– Here we would look at macroeconomic factors such as GDP, inflation, and industry growth rates.

3. Social Environment– There are differences in generations that have far-ranging affects upon the organization and its strategy. This contextual factor might affect HR strategic initiatives or marketing strategic initiatives.

4. Technical Environment– The technical environment gives us constraints, as well as new tools and capabilities. Many companies have launched initiatives involving social networking and mobile computing.

5. Legal Environment – The legal environment is closely associated with the political environment when we are considering the impact of new regulations or mergers and acquisitions.

6. Earth – Climate, earthquakes, are just a few of the concerns that can affect an organization’s strategy, hence its strategic initiatives.

4 important questions in the organization’s :

1. Where is the organization at? you have to know the background of the strategic initiative.

2. Where does it want to be? The vision statement is a crucial tool that needs to be understood and agreed by others.

3. How will the strategic initiative team close the performance gap? We will close the performance gap by applying resources and provide program leadership.”

4. How will the strategic initiative team measure and report its benefits? “We will identify the vital metrics of most importance to strategic stakeholders and communicate them per our program governance strategy.”

– First, they are performers of the key activities of the current business model, and will also perform activities if the organization migrates to a new business model.

– Second, they are providers and controllers of resources that are used in the strategic initiative.

– Third, when operations people change their behaviors to adopt strategy, they create benefits.

Operations people are important stakeholders for several reasons.

A Polarity Map illustrates Organizational Tensions and Polarization.A template for a polarity map is shown in the following graphic.

The strategic-operational tension is shown on the left and right. Note the symbols in the corners. The “+” sign is a place for capturing the advantages of that pole, and the “-” sign is for the disadvantages. Thus,

• The upper left is advantages of strategic focus; • the lower left is disadvantages of strategic focus.• The upper right is advantages of operational focus; • the lower right is disadvantages of operational focus.

The organizational goal is to stay in the upper half of the polarity map. Recognize that there will be tension between the two poles. Sometimes there will be more emphasis on operations and sometimes more on strategy. Be prepared to cycle back and forth.Recognize, too, that the downsides are natural and unavoidable. When the downsides of the polarity become noticeable, it is time to shift energy to the opposite pole. When you start to see the dysfunctions of the operational focus (too many projects and conflicting priorities), it is time to invest more energy in discussions about strategic alignment.The key, of course, is balance.Strategy is not the solution to the problem of operations, and operations is not the solution to the problem of strategy. Remember, there are few problems to solve. Rather, there are tensions to manage.

What is Strategic Planning?

Strategic planning is a systematic process through which an organization agrees on – and builds commitment among key stakeholders to – priorities which are essential to its mission and responsive to the operating environment

Strategic Management

The process of identifying and pursuing the organization’s mission by aligning the organization’s internal capabilities with the external demands of its environment

Modern Environments are

1. Bigger than they used to be2. More diverse then they used to be 3. Changing more quickly than they did in the past 4. More powerful and threatening than they used

to be 5. More competitive than used to be 6. More resource-limited than they used to be

Long-Range Planning Strategic Planning

View future as predictable View future as unpredictable

View planning as a periodic process View planning as a continuous process.

Assume current trends will continue Expects new trends, changes, and surprise

Assumes a most likely future and emphasizes working backward to map out a year-by-year sequence of events necessary to achieve it

Considers a range of possible futures and emphasizes the development of strategies based on a current assessment of the organization’s environment.

Asks “ What business are we in?” Asks “What business should we be in? Are we doing the right thing?”

What is Strategic Planning?

1. Process to establish priorities on what you will accomplish in the future

2. Forces you to make choices on what you will do and what you will not do

3. Pulls the entire organization together around a single game plan for execution

4. Broad outline on where resources will get allocated

Why do Strategic Planning?1. Be proactive about the future2. Strategic planning improves performance3. Counter excessive inward and short-term

thinking4. Solve major issues at a macro level5. Communicate to everyone what is most

important

A Good Strategic Plan should . . . 1. Address critical performance issues2. Create the right balance between Capability of the

organization to do vs what the organization would like to do

3. Cover a sufficient time period to close the performance gap

4. Visionary – convey a desired future end state5. Flexible – allow and accommodate change6. Guide decision making at lower levels – operational,

tactical, individual

Strategic Planning Process

1. Articulating Mission and Vision 2. Assessing the Environment3. Agree on Priorities4. Writing the Strategic Plan5. Implementing Strategic Plan6. Monitoring and Evaluating

Fundamental Questions to Ask

1. Where are we now? (Assessment)2. Where do we need to be? (Gap / Future End

State)3. How will we close the gap (Strategic Plan)4. How will we monitor our progress (Balanced-

Scorecard)

Strategic Planning ModelA B C D E

• Environmental Scan

Assessment

• Background Information

• Situational Analysis

• SWOT – Strength’s, Weaknesses, Opportunities, Threats

• Situation – Past, Present and Future

• Significant Issues

• Align / Fit with Capabilities

• Mission & Vision

• Values / Guiding Principles

• Major Goals

• Specific Objectives

• Performance Measurement

• Targets / Standards of Performance

• Initiatives and Projects

Baseline Components

• Performance Management

• Review Progress – Balanced Scorecard

• Take Corrective Actions

Down to Specifics

Evaluate

Where we are Where we want to be How we will do it How are we doing

• Gaps • Action Plans • Feedback upstream – revise plans

Assessment Model:S W O T

Assessment

External Assessment: Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles .

Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . .

• Easy to Understand• Apply at any

organizational level

• Needs to be Analytical and Specific

• Be honest about your weaknesses

Good Points Possible Pitfalls

SWOT SWOT

Gap AnalysisBaseline

Baseline / Org Profile Challenges / SWOT

Gap = Basis for Long-Term Strategic Plan

Major Components of theStrategic Plan / Down to Action

Components

Mission

Vision

Goals

Objectives

Measures

Why we exist

What we want to be

Indicators and Monitors of success

Desired level of performance and timelines

Planned Actions to Achieve Objectives

O1 O2

AI1 AI2 AI3

M1 M2 M3

T1 T1 T1

Specific outcomes expressed in measurable terms (NOT activities)

Strategic Plan

Action Plans

Evaluate Progress

Targets

Initiatives

What we must achieve to be successful

Down to Specifics

What are Action Plans?

Objectives

Initiatives

Action Plans

1. The Action Plan identifies the specific steps that will be taken to achieve the initiatives and strategic objectives – where the rubber meets the road

2. Each Initiative has a supporting Action Plan(s) attached to it3. Action Plans are geared toward operations, procedures, and processes 4. They describe who does what, when it will be completed, and how the

organization knows when steps are completed 5. Like Initiatives, Action Plans require the monitoring of progress on

Objectives, for which measures are needed

Down to Specifics

Evaluate

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A Balanced Scorecard Sets Expectations, Removes Emotion, Establishes a Baseline to Measure Progress

Strategic Alignment Cause and Effect

Managed AchievementMeasurement

Financial Customer

Internal Business Processes

Learning and Growth

Alignment through Measurement

Key Result (Performance) Areas

These are priority areas within an organization’s mandate, consistent with the Mission Statement, the successful performance of which will largely determine the overall success of the organization.

Balanced ScorecardDimensions

Customers

Process

Learning and GrowthFinance

•IT Cost per user•IT Spending by portfolio category•Performance to spending targets•IS&T staff engagement score•IS&T capabilities vs. benchmarks •Price competitiveness of IT services vs. external benchmark

•Willingness to engage IS&T in developing major projects•% of projects delivered to agreed scope, time and budget•Business owner satisfaction score•End-user satisfaction score

•IS&T contribution to initiatives of corporate strategic importance•Overall ability to deliver technical/business solutions and services•Extent to which supports government initiatives

•System downtime•Help desk first-call resolution rate•Tickets per registered user per month•Number of failure incidents with business impact per quarter•Security audit results

Key Result Indicators

Quantifiable criteria for measuring success in achieving management goals and objectives, overall and by Key Result Area :

SpecificMeasurableAchievableRelevant, and Time Based