Strategic Planning


Strategic Planning

Strategic planning refers to the process by which an organization maps out its economic future, and the steps by which it will achieve its business purpose over time. This process typically considers four factors: internal Strengths and Weaknesses, and external Opportunities and Threats (SWOT being the common acronym). It also identifies the goals, functions, priorities, and resources that will be necessary to achieve its purpose. Over the last half century there have been at least six major swings or phases in strategic planning (see Fastpaths 1995, Koch) and the paradigm march continues. Where training tends to function at the managerial level and organizational development at the executive level, strategic planning tends to occur at the boardroom level.

Fastpaths

1962

Alfred Chandler: Strategy and Structure. One of the first major books in the field, defined strategy as setting long-term goals and objectives, determining a course of action, and allocating resources to achieve those goals.

1980

Michael Porter: Competitive Strategy: Techniques for Analyzing Industries and Competitors. Porter remains an academic phenomenon to this day, but is difficult to access for the uninitiated.

1982

Kenichi Ohmae: The Mind of the Strategies: The Art of Japanese Business. Still one of the best explanations of how strategy plays out in the real world.

1988

John Bryson: Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement.

1994

Gary Hamel and C. K. Prahalad: Competing for the Future.

1994

Henry Mintzberg: The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners.

1995

Marvin Weisbord: Future Search: An Action Guide to Finding Common Ground in Organizations and Communities.

1995

Richard Koch: The Financial Times Guide to Strategy: How to Create and Deliver a Useful Strategy. A superb book for the beginner as well as intermediate practitioner. Koch, with great lucidity, explains not only the theory but also the practice, including a do-it-yourself guide in Part I. Concludes with an A to Z of strategic thinkers, tools and techniques, and concepts and definitions. A great book to start with.

1997

Sumantra Ghoshal and Christopher Bartlett: The Individualized Organization. Stresses people, processes, and purpose.

2002

Tony Manning: Making Sense of Strategy. Manning addresses the philosophy, products, positioning, and partners that go into strategic planning. A clear, brief exposition of the topic.

See also Organizational Development



Total Quality Management

Quality control must be built into the front end of the manufacturing cycle, not viewed as a last-minute check to be done just before goods are shipped.

—Don Marchand and Forest Horton: Infotrends (1986)

Total Quality Management (TQM) is a data-driven continuous improvement methodology that places great emphasis on product quality and customer satisfaction. Typically led by senior management and driven by organization-wide teams, TQM got its start in the 1980s with the work of W. Edwards Deming, who had used the technique with enormous success in Japan (see Deming). TQM was the unspoken force behind Michael Hammer's "reengineering" (process redesign) of the 1990s and lies behind today's customer-focused "continuous performance improvement" movements as well.

Fastpaths

1924

Walter Shewhart, a statistician at Bell Labs and grandfather of Total Quality Management (TQM), develops the Statistical Process Control method (SPC). The SPC "control chart" uses statistical techniques to control unwanted variations on an assembly line in a manufacturing environment. By constantly monitoring the work, the chart "controls" the process, maintaining one that is statistically stable. Shewhart also formulates the Shewhart Learning and Improvement cycle, which combines creative management techniques with statistical analyses in a "Plan-Do-Study-and-Act" (PDSA) cycle. W. Edwards Deming, one of Shewhart's students, would popularize these quality control methods as TQM in the 1980s—adding Deming's own variation, called the Plan-Do-Check-Act cycle (PDCA), which is still used in the automotive industry today.

1951

Joseph Juran's Quality Control Handbook appears. During the late 1940s and the 1950s, Juran and W. Edwards Deming introduce statistical quality control methods to Japanese manufacturers (the United States is not yet interested). Thirty years later, during the 1980s, U.S. corporations catch on and the movement becomes Total Quality Management (as opposed to Total Quantity Management). In the 1990s some of these techniques, coupled with process reengineering, become part of the "performance improvement" movement.

1982

W. Edwards Deming: Out of the Crisis. Deming launches the TQM (total quality management) movement in the 1980s, which in the 1990s is transformed by others into process reengineering and performance improvement. Deming's success in post-World War II Japan pitted quality management against the quantity management of typical American industrial-age management. It would take others and the amazing success of the Japanese "economic miracle" to convince Americans to undertake total quality management.

1991

Armand Feigenbaum: Total Quality Control. Feigenbaum notoriously emphasized that every employee and function in the organization was responsible for quality and customer satisfaction.

1994

Elaine Biech: TQM for Training. Excellent introduction to the field.

2001

S. Chowdhury: The Power of Six Sigma. The TQM quality improvement initiatives of the 1980s returned in the twenty-first century as "Six Sigma." Six Sigma is a statistical measure of quality control for assembly lines, designating less than 3.4 defects per one million units (sigma designates the estimated standard deviation).

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"If I can measure it, I can improve it."

—Deming, Out of the Crisis, 1982

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See also Deming