STRATEGIC AND SYSTEMS THINKING:
The State of the Art Best Practices Report
By Stephen Haines
THE TOP 12 STRATEGIC MANAGEMENT MISTAKES BY LARGE ORGANIZATIONS
MISTAKE #2:
Problem: Thinking that planning and budgeting are a yearly ritual
Best Practice: A cascade of planning and budgeting, leading to cultural change and accountabililty
"Core
Strategies are the Third Shared Common Directions for successful Organizations"
Many organizations do annual
planning and budgeting as a yearly ritual.
It is not that this is wrong but that it is necessary and not sufficient
for success. Organizations may often do
a strategic plan that is multiyear in nature.
However, they then develop silo-based departmental plans and budgets to
carry out this holistic strategic plan. You need to change your organization from a
functional silo oriented organization to a strategy oriented organization. This is THE fundamental problem that all most
all organizations have. They have
departments that are functionally oriented, not strategically oriented.
We all know that organizations
need a common vision and a common set of core values. However we have found through our research
and practical applications of strategic and systems thinking that organizations
also need a third shared document; shared
core strategies as the more practical way to get employees to understand
how their job fits into the big picture.
The big picture of a vision may be too big for many employees.
Now comes the task of cascading
the planning and the budgeting down throughout the entire organization. In regards to core strategies, the best way
to do that is to eliminate all departmental goal setting and replace it with
every single department having the same goals: these corporate wide core
strategies.
Further (1) these core strategies
should be one of the three ways that every single employee is evaluated on
their performance appraisal. The other
two ways that all employees should be evaluated is (2) on their adherence to
the core values and (3) their self development to learn grow and become more
effective.
The shared strategies are the business glue of the organization and the
core values are the social glue!
As Jay Galbreath has said "most organizations usually have
tomorrow's strategies, today's structures, and yesterday's people and
rewards."
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