Strategies Project Cycle Management A short training course in project cycle management for subdivisions of MFAR in Sri Lanka MFAR, ICEIDA and UNU-FTP Icelandic International Development Agency (ICEIDA) Iceland United Nations University Fisheries Training Programme (UNU-FTP) Iceland Ministry of Fisheries and Aquatic Resources (MFAR) Sri Lanka

Content of this lecture Evolution of a business strategy Strategies of non-profit organizations Mandates and policies Strategic processes Visions, missions and objectives Strategic planning Performance measures and targets

Learning objectives After this lecture participants will be familiar with the strategic hierarchy of a vision, mission, objectives and targets, and the importance of strategic planning

“If you don’t know where you are going, any road will take you there.” The Koran

The Harvard policy model SWOT

Two important approaches to strategy Market based view –Competitors analysis –Positioning products and services in the market Resource based view –Seeking sustainable advantage building on resources –Core competences

Mandates of non-profit organizations Set by –Specific laws or acts of the organization –Regulations regarding the operations of the organization or the services offered –Articles of the association Often states the purpose of the organization Long time-horizon

Mandates and stakeholder values

The five tasks of strategic management Craft a Strategy to Achieve Objectives Set Objectives Develop a Strategic Vision & Mission Implement & Execute Strategy Evaluate & Make Corrections Improve/ Change Revise as Needed Revise as Needed Improve/ Change Recycle as Needed Task 1Task 2Task 3Task 4Task 5

Why have a mission or strategic vision? Power of a well-conceived strategic vision – Guides managerial decision-making – Arouses employee buy-in and commitment – Prepares an organization for the future – Keeps strategy-related actions of managers on a common path

The vision Charts an organization’s future strategic course – Defines the organizational makeup in 5 to 10 years Organization specific, not general – Provides an organization with its own special identity and path to follow Requires the exercise of management foresight

The mission A good business definition incorporates three factors – Stakeholders needs -- WHAT is being satisfied – Stakeholders groups -- WHO is being satisfied – Technologies used and functions performed -- HOW stakeholder needs are satisfied

Establishing objectives Sets of actions that will realize the organizational vision Represent commitment to achieve specific performance targets by a certain time Must be stated in quantifiable terms and contain a deadline for achievement Spell-out how much of what kind of performance by when

Purpose of objectives Substitutes results-oriented decision-making for aimlessness over what to accomplish Provides benchmarks for judging organizational performance

Benefits of objectives Organizations whose managers set objectives for each key result area and then press forward with actions aimed directly at achieving these performance outcomes typically outperform organizations whose managers exhibit good intentions, try hard, and hope for the best!

Strategic planning A disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it

Strategic planning (short definition) “ The process of building a vision and the means to carry it out” “Strategic Planning and the Non Profit Board” by Dabney G. Park, Jr.

Integrated planning Strategic 3-10 years Operational 1-3 years Tactical 1 year or less

Strategic planning vs. long-term planning Long-term planning generally involves development of a plan for accomplishing a goal or set of goals over a period of years assuming predictable, fairly static conditions Strategic planning assumes the need to be responsive to a dynamic, changing environment –From: Alliance for Non-Profit Management 2002

Steps in strategic planning 1.Initiating and agreeing on a planning process 2.Identify organizational mandates 3.Establish an effective organizational vision for the future 4.Clarify organizational mission and values 5.Assess the external environment 6.Analyze opportunities and threats

Steps in strategic planning 7.Assess the internal environment: Revenue and cost structures - Strengths and weaknesses 8.Identify key strategic issues 9.Formulate strategies to manage issues 10.Plans for use, review, and updating

What is needed and feasible in your service area? OPPORTUNITIES/ THREATS What do you intend to do? MISSION What are you capable of doing? STRENGTHS/ WEAKNESSES THE “FIT” from “Strategic Planning Notebook”, Wilder Foundation The fit

Why initiate strategic planning? To clarify future direction To survive and flourish To solve organizational problems To build teamwork To direct the organization’s future

What can planning do for you? Promotes self assessment and continuous improvement Positioning for future success Provides framework for decision making; helps make tradeoffs explicit Promotes feasibility testing Demonstrates stewardship of resources/ responsiveness to needs

What do “good” plans look like? “Fit” with need and organizational context Well documented Includes strategic, operational and tactical components as appropriate Involvement/communication plan Clear accountability for implementation Plan for follow-up and use Timeframe and means for updating

Planning advice Stay flexible and adaptable. Remember that planning and life often do occur simultaneously Remember that different groups view a planning process differently at different times From: Strategic Planning: A Human Resource Tool for Higher Education. College and University Personnel Association. 121 pp.

Planning pitfalls Regarding the plan as an endpoint Regarding the plan as unalterable Failing to question assumptions Failing to gain organizational commitment Adopting the wrong goals Imposing unnecessary limitations From: Gordon, G.L Strategic Planning for Local Government, International City/County Management Association. 119 pp.

When not to initiate strategic planning. When facing an organizational crisis When there is no leadership buy-in When implementation is unlikely When costs outweigh benefits

What needs to be measured Is derived from what needs to be accomplished – strategy! There needs to be a balance (not too many measures) and focus (measures that reflect strategy Trends are more important than the value of a particular measure

Performance measures Combination of: Leading and lagging measures Financial & non-financial measures Input, process, output and outcome measures Internal & external measures

Performance measures should help us decide: Are we doing things right? (How?) Are we doing the right things? (What?) Input Process Output Outcome Input: Resources, including budget and workforce Process: Activities, efforts, workflow Output: Products and services produced Outcome: Results, accomplishments, impacts Efficient Effective

Identify targets When targets are used, performance improves Use “stretch” targets

Performance measures problems Too many measures and no focus Entrenched or no measurement systems Unjustified trust in informal feedback systems Fuzzy objectives

References Lynch, Richard (2006). Corporate Strategy: 4 th Edition. FT Prentice Hall; New York Thompson, Arthur A. Jr.; Strickland III, A. J.; Gamble, John E. (2006) Crafting and Executing Strategy. Irwin Professional Pub Dimensions; Burr Ridge, Illinois, U.S.A.