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290 THE DEVELOPMENT OF STRATEGIC INTENTIONS, WITH EXAMPLES


its strategic intentions, then a management that is interested in applying NIE practices
and the Value Chain needs to develop one, using what management is intending to do
as a basis.


DEVELOPING STRATEGIC INTENTIONS
From a process perspective, we suggest a five-part approach:

1. Develop strawman statements of strategic intentions.
2. Review strawman statements with individual CxO and line-of-business chief
executives.
Submit a revised statement to the senior leadership team.2
3.
4. Circulate the revised statement to the business leadership team.
5. Agree on this statement as the basis on which to go forward.

It sounds simple, and it can be. Our experience has been that: (1) senior manage-
ment teams do not invent strategic statements very easily, but (2) they respond very
effectively when presented with strawman statements. Furthermore, there are plenty
of clues as to what the strawman statement should contain. These include senior man-
agement messages to the company, budgets, significant programs and initiatives, annual
reports, and any other indicator of what management is actually doing. By “doing,”
we emphasize those things on which senior management is, or is proposing to, spend
money on.3 Strawman statements also come from the management culture. See Chap-
ter 13 for ideas on how culture can be defined.
A complicating factor can be the degree of independence of individual business
units, particularly when they view themselves as conducting significantly different busi-
ness activities from other business units. A large holding company with various business
units is a clear example of this.
On the one hand, it is questionable whether IT is to be managed centrally in such
a situation. Typically, a shared service organization provides data center and perhaps
systems development services to the business units. But the drivers for determining IT
spend and development investments may be unique to each business unit. In this case,
the Real Decision/Real Results activities are most likely focused on each individual busi-
ness unit. Then, the issue of strategic intentions is a business-unit-level issue. On the
other hand, it may be company culture to use common strategic intentions for all busi-
ness units but to allow those units to vary their relative importance (e.g., weighting for
prioritization) and goal-setting (e.g., for establishing performance metrics). Finally, some
companies have chosen to mix the two, using some corporate strategic intentions (with
a predetermined weight relative to business unit strategic intentions) combined with
strategic intentions specific to each business unit.


A WORKSHOP APPROACH
An alternative is to conduct a workshop, primarily with the Business Leadership Team.
This workshop can be part of the Innovation practice activities, part of strategic plan-
ning, or part of the IT governance process. For example, some companies regularly
291
A Workshop Approach


convene an IT management committee as a steering committee to oversee IT activities.
This group can participate in this workshop activity.
An example of a workshop agenda follows:

1. Introduction and expectations.
2. Facilitated discussion of issues and opportunities, enabled by “strawman” inputs
developed by the facilitator prior to the workshop.
3. Focus on management strategic intentions, based on competitive conditions, strat-
egy development.
4. Develop consensus on the most pertinent and important issues and opportunities.
5. Create preliminary strategic intention statements.
6. Closure based on crystallizing the results and positing the next steps to be ac-
complished.

Examples of questions for issues and opportunities include:

What are the key business and competitive drivers affecting my markets, my indus-
try, and my business? What are the key opportunities presented by the business
change in markets, industry, and business?
What are the critical things the management team intends to do: What are the
most likely scenarios that describe what my company would need to do to respond
to business changes and technology opportunities?
What are the major initiatives that we™d need to undertake to meet these strate-
gic intentions?
What are the major hurdles that stand between my company and accomplishing
any of these scenarios?

Examples of questions that can be used in developing strategic intentions include:

What are my company™s goals and strategies? What are the initiatives on which
we™re currently working?
What are the basic principles on which my company rests?
What major initiatives are most likely to be undertaken in the coming one to two
years?
What are the major initiatives that most likely would be necessary to achieve the
scenario?
What are the strategic intentions that best synthesize my company™s goals, strate-
gies, initiatives, and principles?
Given these strategic intentions, which of the scenarios are most likely for my
company? What is the priority of the scenarios, compared against the company™s
values and business goals?

Generally, such a workshop can be successful in producing a first round of strate-
gic intentions statements suitable for use in the NIE practices.4
292 THE DEVELOPMENT OF STRATEGIC INTENTIONS, WITH EXAMPLES


EXAMPLES OF STRATEGIC INTENTIONS
Several examples of strategic intentions were included in this book™s chapters. They are
repeated here for reference. Following these, several other examples are provided.

From Chapter 3
EXHIBIT C.1 Strategic Intentions 1
Strategic Intention Strategic Intention Goals Strategic Intention Metrics Weight
Name
Focus on Specific, 30
• Focus on markets in which the • Market share in specific
Narrow Markets company can profitably compete markets
• Build strategic partnerships with • Profitability in specific markets
key customers
Improve Efficiency • Employ best practices throughout 10
• Percent of standard systems
through Common the company used throughout the company
Business Practices • Reduce the unique systems and • Percent of standard processes
processes in each operating in use throughout the
location company
Be the Lowest- 40
• Reduce the administrative, • Production throughput
Cost Supplier in manufacturing, and operations • Net delivered cost of product
Focused Markets costs of the company
• Optimize purchasing power
Grow through 20
• Increase the capability of the • Time to integrate a new
Acquisition company to rapidly integrate new acquisition or operation
applications and operations, with
decreased cost


From Chapter 8
EXHIBIT C.2 Strategic Intentions 2
Category Standard Company One Example Company Two Example
Information
Economics
Strategic Intentions
Measurable A Return on investment Internal rate of return Profitability index
Business
Performance
B Competitive impact Effect on market Customer satisfaction
share
Management C Management Connectivity and Product shelf life
Agenda information decision support improvement
(connection
D Strategic alignment Quality performance NA
to business
strategic
intentions) E Competitive response Manufacturing cycle Empowered employee
reduction
F IT strategic alignment Comprehensive Point of sale global
management system
Risk and G Project and NA NA
Uncertainty organization risk
H Definitional NA NA
uncertainty
I Technical uncertainty NA Project milestone
achievements
J IS infrastructure NA Enterprise network
installation
Total weight 100 Total weight 100
293
Examples of Strategic Intentions


From Chapter 8 (Continued)
EXHIBIT C.3 Strategic Intentions 3
Strategic Intention Description Goal Key Metric Weight
Wholesale Market Attract, retain, and Strengthen the product Wholesale market 50
Share line available to dealers share
provide high-quality
service to wholesaler Build the relationship Wholesalers
satisfaction
based on wholesaler
financial incentives
Retail Market Share Attract, retain, and Improve ease of doing Retail market 20
business share
provide high-quality
service to end Provide effective
customers products and financial Customer
incentives satisfaction

Securitization/ Capability to securitize Reduce cost of funds Time to market 15
Funding Efficiency receivables Cost of funds

Reduce Losses/ Receivable portfolio Reduce collection Collection losses 10
Improve Portfolio losses
quality and collection Wholesale losses
Quality efficiency Improve collection Residual losses
efficiency
Reduce Management and Reduce the total cost of Administration 5
Administrative and doing business
performance of all percent of
Operating Costs revenue
organizations and
functions




Other Examples
EXHIBIT C.4 Strategic Intentions 4
Strategic Intention Strategic Intention
Name Description

Support Business Growth The Company will be capable of sustaining efficient operations
during high business growth periods, such as that caused by
mergers and acquisitions.

Intimate Knowledge about The Company will develop and maintain knowledge about the needs
Customer and Producer and requirements of its target producers and high end customers.
Requirements

Complete and Integrated The Company will develop complete and integrated information
Management Information about products, producers, and customers and make it available
throughout The Company and its distribution networks.

Simplified, Common Business The Company will increase its efficiency by reducing the complexity
Models and Processes and variations of its internal management and systems processes.
The Company will move to a single business model and standard
processes across the organization.

Strengthened Distributor The Company will build and strengthen its relationships with highly
Relationship productive producers.

Superior, Touch-Point-Sensitive The Company will improve its services to producers and customers
Service to Producer and through improved systems capabilities and interfaces, particularly in
Customer key touch-point areas.
294 THE DEVELOPMENT OF STRATEGIC INTENTIONS, WITH EXAMPLES


Other Examples (Continued)
EXHIBIT C.5 Strategic Intentions 5
Strategic Strategic Intention Description Candidate Weight
Intention Name Measure
Customer The Company will respond to customer requests Customer 15
Request better than any competitor. satisfaction
Response
Customer The Company will lead the market in customizing Market share 9
Product products and responding to customer requests
Response for new products.
Customer The Company will lead the market in customized Customer 27
Relationships business and management relationships. retention
[Providers will choose and remain with The
Company because of these innovations.]
Management The Company will lead the market in creating Benefit and 9
Information and using the best information to manage the utilization cost
Company business.
Bottom-Line The Company will add $XM to the reserve. Addition to 18
Performance reserve

Customer The Company will achieve 10 percent growth in Customers 11
Growth customers.


Cost per The Company will reduce the rate of growth of Cost per 11
Customer cost per member by 50 percent. customer


EXHIBIT C.6 Strategic Intentions 6
Name Management Factor Description Metrics Weight
22
Customized The Company will connect, and customize, the best Revenue and profit
Product Delivery channels for delivering product to each customer.
21
Customer The Company will provide personalized information Customer base
Information services to provide exactly the information the
Services customer wants, when wanted.

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