Plan and Lead in the Plan and Lead in the Right Direction Right Direction

By Rex Gatto, Ph.D.By Rex Gatto, Ph.D.

Gatto Associates, LLCGatto Associates, LLC

412-344-2277412-344-2277

Email: rex@rexgatto.comEmail: rex@rexgatto.com

Website: www.rexgatto .comWebsite: www.rexgatto .com

Thought Provoking BooksThought Provoking Books

“Smart Mangers FAQ” by Gatto

“ Winning in Fast Time ” Harness the competitive advantage of Prometheus by Warden

“Blue Ocean Strategy” by Kim

Leadership ObjectivesLeadership Objectives

I. Learn leadership styles and dimensions needed for firm development characteristics

II. Learn how to write a strategic plan process for your firm

III. Learn how to effectively lead people to achieve

Strategic LeadershipStrategic Leadership

Every action affects the future of your firm

Specific actions = a specific future

Everything happens in a system

All systems can resist change

Four Leadership Four Leadership ImperativesImperatives

Design the future

Target for success

Campaign to win (who is the person on the white horse)

Finish with finesse

LeadershipLeadership

Asking the right questions

Making the right choices

Leadership Planning ProcessLeadership Planning Process

Pre-planning

Environmental Scan

Formulate Strategy

Implement Strategy

Evaluate Strategy and Make adjustment

Pre-PlanningPre-Planning

Decide on:

Process

People involved

Time frame

Planning tools (i.e. SWOT or PEST)

Have and Wants (reviewed later)

Environmental ScanEnvironmental Scan

How is the firm doing?

Do we have the right people in place?

Right niche or department mix?

Are we meeting competitive challenges?

Where are we NOW?

Formulate StrategyFormulate Strategy

NOT TOO SOON!

Develop your firm’s vision

Develop your firm’s mission

Establish your firm’s values (what is rewarded)

Establish measureable action plans

Where do we want to be?

Implement StrategyImplement Strategy

Develop measurable goals

Develop a budget

Develop niche or department goals

Develop individual partner goals to support niche/department goals

Execute: take the right action

How do we get to where we want to be?

Evaluate Strategy and Make Evaluate Strategy and Make AdjustmentsAdjustments

Measure actions and results

Adjust (do not wait)

Continue to use the strengths of the firm for a competitive advantage

Be specific and layout practical steps toward achievement

Know your: firm, industry, marketplace and technology

Strategic PlanningStrategic PlanningPages 13-26; 237-241Pages 13-26; 237-241

IntroductionIntroduction

Development of a Planning Process

Ability to plan is an important part of the business environment

Planning should answer the questions of how and why

IntroductionIntroduction

Development of a planning process

Ability to plan

Future behavior

Response

Decision making

Self development

Planning Process in ActionPlanning Process in Action

Background: analyze present situation

Reason to plan: Identify needs, wants, and desires; Course correct goals if needed

Comparison: future to present situation

Implementation: explain the goal, develop alternatives, and be flexible

Planning ProcessPlanning Process

The Right QuestionsThe Right Questions

Where are we now?

Where do we want to be?

Definition of PlanningDefinition of Planning

Decision making

Where you are

ID risks

Hazards/opportunities/goals

Power to control

Plan to SucceedPlan to Succeed

Identify the future

Understand the present

Develop a strategy

Present/Future ModelPresent/Future Model

Have

Don’t Have

Want Don’t Want

Acquire

Maintain

(Strength)

(Future Direction)

Prevent

Eliminate

(Problem)

(Possible Pitfalls)

2. 3.

4.1.

Present Situation

Future Situation

Planning for the Future

Simplified Strategic Process Simplified Strategic Process OrganizationOrganization

GoalsGoals

Strategic ActionStrategic Action

ParticipationParticipation

ResultsResults

Simplified Strategic Process Simplified Strategic Process OrganizationOrganization

BenefitsBenefits

Shared Visions – measurableShared Visions – measurable

Teamwork – shared ideasTeamwork – shared ideas

Set priorities and adapt to Set priorities and adapt to changechange

Develop new thinkingDevelop new thinking

Simplified StrategySimplified Strategy

Work with the end in mindWork with the end in mind

Establish a personal/team visionEstablish a personal/team vision

ACTACT

InputInput

Know the desired resultsKnow the desired results

Five BenefitsFive Benefits

List five benefits you will gain from List five benefits you will gain from strategic planning:strategic planning:

1.1.

2.2.

3.3.

4.4.

5.5.

Avoid in Strategic Avoid in Strategic PlanningPlanning

Unclear goal; not clarifiedUnclear goal; not clarified

No input from othersNo input from others

Not utilizing resourcesNot utilizing resources

No implementationNo implementation

No measured successNo measured success

Failure to support ideasFailure to support ideas

Not complying with strategyNot complying with strategy

Not making tough decisionNot making tough decision

Conceptual ModelConceptual Model

1. Our firm will be committed to achieve recognition as business leaders 1. Our firm will be committed to achieve recognition as business leaders in providing effective and ethical accounting principles to clients in providing effective and ethical accounting principles to clients

  

2. Our partners, managers and staff will be perceived as dedicated, 2. Our partners, managers and staff will be perceived as dedicated, competent and quality conscious.competent and quality conscious.

  

3. Our firm will be know for offering a fair equitable and stable work 3. Our firm will be know for offering a fair equitable and stable work environment with competitive compensation, learning opportunities environment with competitive compensation, learning opportunities and career growth for it peopleand career growth for it people

  

4. Our clients will recognize us for our leadership, business acumen and 4. Our clients will recognize us for our leadership, business acumen and advice in providing business accounting servicesadvice in providing business accounting services

Strategic Actions: Points of Strategic Actions: Points of MeasurementMeasurement

Cultivate and nurture productive partnerships – Cultivate and nurture productive partnerships – people - business communitypeople - business community

Acknowledge and recognize our people & Acknowledge and recognize our people & clientsclients

Establish best team practices Establish best team practices

Collaborate/Educate without being Collaborate/Educate without being condescendingcondescending

Determine right method to cost inventoryDetermine right method to cost inventory

Understand the impact of our decision in other Understand the impact of our decision in other areasareas

Support each other - unificationSupport each other - unification

Operational TacticsOperational Tactics

Operational tactics = Operational tactics = Decisive ActionsDecisive Actions

Strategic Action Strategic Action StatementStatement

Tactical actions support Tactical actions support and help to achieve the and help to achieve the Strategic actionStrategic action

Follow-up ActionFollow-up Action

What is being What is being worked onworked on

Significant Significant experiencesexperiences

LearningsLearnings

Do differentlyDo differently

Situational changeSituational change

Gone wellGone well

ChangeChange

Decision MakingDecision Making

Thought processThought process

Selection of a course of Selection of a course of actionaction

Final choice = decisionFinal choice = decision

Therefore, decision-Therefore, decision-making is a reasoning making is a reasoning process, which can be process, which can be rational or irrational, rational or irrational, and can be based on and can be based on explicit assumptions or explicit assumptions or tacit assumptionstacit assumptions

Examples: shopping or Examples: shopping or eatingeating

Equation for Decision Equation for Decision MakingMaking

(Vroom Jargo)(Vroom Jargo)

D (effectiveness) D (effectiveness)

==

D(quality) + D(Commitment) D(quality) + D(Commitment)

– – D (time penalty)D (time penalty)

QuestionsQuestions

Questions: Questions:

Is commitment high or low? Is commitment high or low?

Is leaders’ information high or low?Is leaders’ information high or low?

Is problem stated clearly?Is problem stated clearly?

Do followers share the Do followers share the goal/outcome? goal/outcome?

Is there conflict? Is there conflict?

Do you have enough information?Do you have enough information?

Equation for Decision Equation for Decision MakingMaking

  Overall (effectiveness) + Dec. Overall (effectiveness) + Dec. (effectiveness) – Costs +Development(effectiveness) – Costs +Development  

Overall (effectiveness) + Overall (effectiveness) + D(effectiveness) – Costs D(effectiveness) – Costs +Development(time/training)+Development(time/training)

We don’t see a decision – we see We don’t see a decision – we see

the observable actions from it.the observable actions from it.

Common Decision-Making Common Decision-Making BiasesBiases

Common Decision-Making-Biases.Common Decision-Making-Biases.

Selective search for evidence Selective search for evidence

Premature termination of search for evidence Premature termination of search for evidence

Conservatism and inertia Conservatism and inertia

Experiential limitations Experiential limitations

Selective perception Selective perception

Wishful thinking or optimism Wishful thinking or optimism

Choice supportive bias - when we distort our Choice supportive bias - when we distort our memories memories

Recent - attention on more recent informationRecent - attention on more recent information

SummarySummary

You are going through a developmental leadership

process; challenge yourself to be the best version of a

leader that you can