Business Management – Part II – Infrastructure for Building Corporate Strategies


Strategies define corporate goals and objectives in the context of corporate assets (capital, human resources, infrastructure and processes).

Goals are statements of an organization’s desired future state, objectives can be defined such that they become milestones toward attainment of such goals.

If an organization decides that it wants to be a major player in a particular industry area, a possible goal might be to achieve 30% market share from a starting position of 10%, with a gross profit margin of no less than 7.5 percent, down from a current 10 percent.

Possible objectives might be to raise capital to expand existing operations to move from 10% to 20% and acquire a competitor by way of a share swap to move from 20% to 30%. Clearly, the more objectives can be quantified, the easier it becomes to assess progress toward goals.

Strategic planning does not end with definition of goals and objectives.

In the above example, the issue of whether to pursue both objectives contemporaneously or one by one needs to be addressed. In a corporation that has multiple products within one industry area, increasing market share might involve assigning more of a focus on some products at the expense of others. It would be dangerous to do this in the absence of some knowledge of what the competition is doing.

The risk of failure or difficulty of success, if you want to look at scenarios positively, needs to be assessed. Many options, many possible outcomes, some of which contribute to the attainment of goals, others that detract.

You may have had a chance to read a post at this blog called “Strategic Planning Simplified” (https://kwkeirstead.wordpress.com/2011/11/03/strategic-planning-simplified/).

Now, might be a good time to re-read this to see the role that free-form  Knowledge Bases can play in making it easier for top executives to analyze different changing scenarios, describe, weight and rationalize these and rank possible outcomes, all at a visual interface where it makes no difference whether there are hundreds of documents or thousands. With an infrastructure such as described here, strategic planning can be simplified. But, it never becomes simple.

Most organizations set their strategic planning horizon to 5-10 years.  Once set, it is important that goals/objectives remain relatively stable for the simple reason that most operational initiatives have ROIs of 6-12-18 months. If strategy changes, some of these initiatives will have to be terminated or re-focused with the result that the intended ROI benefits may never be achieved.

Stay tuned for . . .

Business Management – Part III – Infrastructure for Achieving Operational Effectiveness.

 

About kwkeirstead@civerex.com

Management consultant and process control engineer (MSc EE) with a focus on bridging the gap between operations and strategy in the areas of critical infrastructure protection, healthcare, connect-the-dots law enforcement investigations, job shop manufacturing and b2b transactions. (C) 2010-2017 Karl Walter Keirstead, P. Eng. All rights reserved. The opinions expressed here are those of the author, and are not connected with Jay-Kell Technologies Inc, Civerex Systems Inc. (Canada), Civerex Systems Inc. (USA) or CvX Productions.
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