Brief explanation of why organizations need a strategic direction

1-Read and Make a summary of the author paper– no less than 125 words

What you agreed with, did not agree with and why – no less than 125 words

Minimum of 2 sources from the literature in addition to course

This discussion will begin with a brief explanation of why organizations need a strategic direction. Next, the process of developing, executing and maintaining a strategic direction is discussed. The advantages of strategic thinking are included with an example. The decision models utilized throughout these processes are included as well as the benefits.

Globalization has created additional and enhanced competition amongst organizations (Kaplan & Norton, 2006). This additional competition requires top organizational management to establish a clear strategic vision for the company. The strategic vision is an organizational management activity that is utilized to establish an overall direction. A strategic vision requires an organization to focus time and resources, strengthen operations/logics, ensure that the workforce and stakeholders are collaborating and actively moving toward goals and evaluates and refines the organization’s direction in response to ever changing environments (pp. 101-109).

Process

Developing a strategy that provides organizational direction is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, defines the customers it serves, what it produces and why it does it, while focusing on the way forward. This means, the effective articulation of the organizational strategy provides direction as well as the progressive actions needed to move toward defined success.

This process is similar to the project management lifecycle. In the following paragraph both the strategic process development and project management lifecycle are synthesized. These processes follow similar routes through initiation, planning, execution, monitoring and control (Kenny, 2003). Linking the lifecycle and strategic process assists with explaining this discussion topic.

Setting the organization’s direction through strategic planning begins with the following generalized steps. First, the organization needs to initiate an open and honest analysis or assessment with the goal of understanding the current/future of internal and external environmental factors (Kenny, 2003; Rumelt, 2011). Next, strategy formulation occurs when a high-level strategic outline is developed as well as a basic plan is documented (Rumelt, 2011). At this point, the strategy execution takes place. This is when the high-level strategic outline is translated into an operational plan with action items. Finally, evaluation and sustainment is undertaken. This is conducted through monitoring and controlling strategic processes. This means conducting continuous refinements and evaluations of organizational performance, culture, communications and other strategic management areas (pp. 97-105).

Advantages of Strategic Thinking

The processes assist with the creation of a strategic vision, which provides multiple advantages to an organization. Firstly, the organizational vision provides a broadly shared sense of organizational direction and meaningful purpose (Rumelt, 2011, p. 113). The importance of providing direction is because few organizations have achieved success by being all things to all customers/stakeholders. Meaningful purpose challenges the organization as a whole to achieve a market leadership position by adopting a vision greater than resources and competencies would normally allow. This results in the establishment of a framework for the missions that require the organization to reach for higher and higher goals.

Without an organizational vision, the individual business branches could pursue isolated goals in which some employees do not identify or understand. For instance, goals such as attaining a 15% increase in customer satisfaction scores would not be a goal shared by the research and development (R & D) branch. Also, without a vision, an organizational goal could be interpreted differently by individual stakeholders.

A clear and concise strategic vision connects goals to the organization’s underlying values and will make it more understandable about how to achieve each particular goal. Therefore, a strategic vision is vital for developing a strategically focused organization and direction within the entity (Kaplan & Norton, 2006). Finally, a clear and concise organizational direction leads to enhanced com­munication, participation and commitment by the workforce.

Decision Model

There are several decision models that aid this process of developing a strategic vision. For the initial/assessment phase, the Rumsfeld matrix and the Black Swan Model assists with developing the known and unknowns, which could be opportunities (Krogerus, Tschäppeler, Piening, & Earnhart, 2017, pp. 84 & 112). In the planning phase of vision development, the Pareto principle assists with focusing efforts toward the majority of the challenges (p. 104). In the execution phase, the Black Box Model may seem to be an odd choice. However, during execution, the strategic direction is focused on accomplishing the goals, so the organization just needs to move toward the strategic vision. The complexities of the development are no longer as important (p. 118). Finally, the monitoring and controlling phase decision model is the Hard Choice Model. This is the process of evaluating processes and making refinements based on information provided (p.74).

Using multiple decision models throughout a process are both useful and harmful. It is useful in that the decision models are specific to the situation being addressed. This aids in focusing a team’s efforts to developing a decision. On the other hand, multiple decision models hinder the process. This is because the team can be easily confused by which model to use and when. To overcome this, communication and clear instruction are required.

Conclusion

A clear and concise strategic vision is utilized to establish an overall direction for an organization. The development is similar to the project management lifecycle of a project, which is defined as the initiation, planning, execution and monitoring/control process groups. In this developmental process, fundamental decisions and actions shape and guide what an organization is, defines the customers it serves, what it produces and why it does it, while focusing on the way forward. This requires several decision models to initiate, plan, execute and monitor the impacts brought on by the strategic direction that will affect the organization. When accomplished properly, an organizational vision provides direction and meaningful purpose to the entire entity.

Kaplan, R. S., & Norton, D. P. (2006). How to implement a new strategy without disrupting your organization. Harvard business review, 84(3), 100.

Kenny, J. (2003). Effective project management for strategic innovation and change in an organizational context. Project Management Journal, 34(1), 43-53 https://doi.org/10.1177/875697280303400106

Krogerus, M., Tschäppeler, R., Piening, J., & Earnhart, P. (2017). The decision book: Fifty models for strategic thinking. New York: W. W. Norton & Company.

Rumelt, R. P. (2011). Good strategy, bad strategy: The difference and why it matters. New York, NY: Crown Publishing Group.

2-Read and Make a summary of the author paper– no less than 125 words

What you agreed with, did not agree with and why – no less than 125 words

Minimum of 2 sources from the literature in addition to course

Strategy Formulation & Strategic Thinking Forum Two

If asked, anyone can put together a strategy, by their own definition, and present that strategy in a way that many would accept as worthy of attention.The truth is, that most organizations do a poor job of strategy development (Rumelt, 2011).Many company strategies do not incorporate the appropriate amount of research, are unrealistic, or are unsustainable.Appropriate strategy formulation must include the development of a strategic vision, creating objectives, creating a strategy, executing the strategy, and measuring and evaluating the outcomes (Gamble, Peteraf & Thompson, 2019).

Process: Setting the Company’s Direction with Strategy

The five-stage process discussed by Gamble et al. (2019) must also include a number of internal and external considerations.A company must pay attention to what is happening around them in order to predict where the strategy will lead them and whether the results are worthy of change, provide them a competitive advantage, or lead them down a path that someone in their industry has already been down.

A company must first determine where it is going, its strategic vision.A well-developed vision provides a clearly defined statement of where the company is going.Additionally, it gives a clear point of reference for strategic decision-making (Gamble et al., 2019).A company’s mission provides a snapshot of what the business does now in terms of products, service, and identity. The values of the organization outline how the organization conducts their business in terms of their beliefs and norms and direct the activities described in the vision and mission (Gamble et al., 2019).

In order to focus the organization on specific actions and determine whether the actions are providing the desire outcome, the organization must develop objectives that are measurable and provide a timeline for completion.These “targets” are what the organization hopes to achieve both financially and strategically, short-term and long-term.The organization is then ready to develop the strategy, or game plan, on how all of this will work together and what steps must be taken in order to do so (Gamble et al., 2019).

For both public and private organizations, a strategic planning approach to decision-making has been show to result in decisions that are more informed and target specific (George, Walker, & Monster, 2019).

Strategic Thinking: Discussion of Key Advantage or Disadvantage – Rumelt

The success of an organization often depends on the ability of leaders to explore business opportunities that might otherwise not appear viable and to innovate and capitalize on these opportunities (Calabrese & Costs, 2015).In addition, leaders must identify the obstacles and focus on why things are being done rather than what is being done.Strategic thinking requires one to move beyond simplistic alternatives that can be easily argued or disputed (Rumelt, 2011). One key advantage of a good strategy, as described by Rumelt (2011), is that a good strategy builds a bridge between a critical challenge and actions.Of course, leaders must first be able to identify the critical challenge and discuss why it is a challenge before they are able to determine what actions might be taken to alter that challenge.Rumelt (2011) describes this combination of thought and action as the kernel, where the core of the strategy includes diagnosing the challenge, creating an approach to overcome obstacles, and coordinated steps to successfully accomplish desired results.It may include making difficult choices or reallocating resources toward favorable outcomes.Rumelt (2011) says, “A good strategy draws power from focusing minds, energy, and action.That focus, channeled at the right moment onto a pivotal objective can produce a cascade of favorable outcomes (p.97).

Decision Model

Most often, I choose decision models based on changes that I would like to see in myself such as the conflict resolution model or SWOT analysis.Although these models may serve to open my own mind to strategic thinking, I believe that working toward defining a direction for an organization or setting its direction, I would likely choose Krogerus, Tschäppeler, and Piening’s (2018) Team Model (p.126).The Team Model is a tool that will help to determine whether the right people are available to move the project in the desired direction, based on their skill set and capability.If a strategy is going to be successful, it is important to know if your team is able to see that strategy through to completion.

Conclusion

In conclusion, there are a number of considerations when developing a strategic plan.Leaders and decision-makers must pay attention to what is happening around them in order to predict where the strategy will lead them and whether the results are worthy of change, provide them a competitive advantage, or lead them down a path that someone in their industry has already been down.Effective strategy will address obstacles and methods for getting around those obstacles, internal and external considerations, and a detailed plan of action to successfully reach organizational objectives.

References

Calabrese, A., & Costa, R. (2015). Strategic thinking and business innovation: Abduction as cognitive element of leaders’ strategizing. Journal of Engineering and Technology Management, 38, 24-36. doi:10.1016/j.jengtecman.2015.06.001

Gamble, J., Peteraf, M., & Thompson, A. (2019). Essentials of strategic management: The quest for competitive advantage. McGraw-Hill Education: New York, NY.

George, B., Walker, R. M., & Monster, J. (2019). Does strategic planning improve organizational performance? A meta-analysis. Public Administration Review, 79(6), 810-819. doi:10.1111/puar.13104

Keller, T. (2012).Every good endeavor: Connecting your work to God’s work. Penguin Random House LLC: New York: NY.

Krogerus, M., Tschäppeler, R., & Piening, J. (2018). The decision book: Fifty models for strategic thinking.New York: W.W. Norton & Company.

Rumelt, R. (2011). Good strategy bad strategy: The difference and why it matters. Penguin Random House LLC. New York: NY.