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ASPBOK 2.

0
Guide to the
Strategic Planning and
Strategic Management
Body of Knowledge
Second Edition

ASP BOK 2.0 5/1/2015 0


ASSOCIATION FOR STRATEGIC PLANNING CERTIFICATION PROGRAM
LEAD-THINK-PLAN-ACT

©Association for Strategic Planning—All Rights Reserved. May 1, 2015


All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopy, recording, or information storage or retrieval system, without
permission in writing from The Association for Strategic Planning. 12021 Wilshire Blvd. Suite 286, Los Angeles, CA
90025-1200. Phone: 877-816-2080 Fax: 323-954-0507 Email: executivedirector@strategyassociation.org

ASP BOK 2.0 5/1/2015 1


Table of Contentss
Table of Contents ............................................................................................................................. 2
Preface ............................................................................................................................................ 7

SECTION I – The Strategic Planning/Management Framework ................................................... 8

Chapter 1 – Overview ..................................................................................................................... 8


1.1 INTRODUCTION......................................................................................................................... 8
1.2 BASE DEFINITIONS ..................................................................................................................... 8
1.3 ASP CERTIFICATION PROGRAM ................................................................................................ 8
1.4 BEST PRACTICES ATTRIBUTES SUMMARY .......................................................................... 12

Chapter 2 – Industry and Professional Business Acumen .......................................................... 15


2.1 INDUSTRY/SECTOR KNOWLEDGE ........................................................................................... 15
A. Executive Presence ............................................................................................. 15
B. Customer ............................................................................................................ 15
C. Finance ............................................................................................................... 15
D. Technology ......................................................................................................... 15
E. Products and Services ......................................................................................... 15
F. Delivery/Logistics/Process .................................................................................. 15
G. Administration .................................................................................................... 15
H. Human Resources ............................................................................................... 15
I. Environmental Scanning ..................................................................................... 15
J. Research Methods .............................................................................................. 15
K. Society Acumen .................................................................................................. 15
L. Thought Leadership ............................................................................................ 15
M. Cross-Cultural Communications ......................................................................... 15
2.2 PROFESSIONAL ROLES ............................................................................................................. 16
2.2.01 Strategic Planning Professional ................................................................................ 16
2.2.02 Strategic Management Professional.......................................................................... 16

Chapter 3 – Model Framework .................................................................................................... 17


3.1 PURPOSE AND STRUCTURE of the ASP BOK 2.0 GUIDE ........................................................... 17
3.2 STRATEGIC PLANNING AND STRATEGIC MANAGEMENT FRAMEWORK ................................. 17

SECTION II – The Strategic Management Building Blocks........................................................... 19

Chapter 4 - Building Block –LEAD ................................................................................................ 19


4.1 CONTENT ................................................................................................................................. 19
4.1.01 Theories and Models ................................................................................................ 20
A. Personality Based ............................................................................................... 20
B. Behavioral ........................................................................................................... 20
C. Situational and Contingency .............................................................................. 21
D. Transactional ...................................................................................................... 22
E. Transformational ................................................................................................ 22
F. Power and Influence Based ................................................................................ 22
4.1.02 Tools .......................................................................................................................... 22
A. Psychometric Assessment ................................................................................. 22
B. Leadership Facilitation........................................................................................ 23

ASP BOK 2.0 5/1/2015 2


4.2 PROCESS.................................................................................................................................... 24
4.2.01 Perpetual Leadership ................................................................................................ 24
A. Personal leadership characteristics .................................................................... 25
B. Interpersonal relationships ................................................................................ 25
C. Documentation of the process ........................................................................... 26
D. Communications plan and change management process leadership ................ 26
4.2.02 Assessing the Situation ............................................................................................. 27
A. Expectations ....................................................................................................... 27
B. Critical strategic issues ....................................................................................... 27
C. Business/organizational model, assumptions and measures of performance ... 28
D. Strategy and the strategic planning/strategic management capabilities ........... 28
E. Project management capabilities ....................................................................... 28
F. Portfolio management capabilities .................................................................... 29
G. Key roles and responsibilities for strategy execution ......................................... 29
H. A documented strategy‐review process ............................................................. 29
4.2.03 Organizing strategic planning and strategic management initiatives ..................... 30
A. Summary of assessment results ......................................................................... 30
B. Action implications and constraints ................................................................... 30
C. Capabilities: Human, capital, organizational, and knowledge ............................ 30
D. Gaps in capabilities ............................................................................................. 30
E. Strategic management model(s) ....................................................................... 31
F. Process/program/infrastructure design ............................................................. 31
G. Schedule and resources ...................................................................................... 32
H. Roles and responsibilities: Management and/or strategic planning team ........ 32
I. Roles and responsibilities: Rest of the organization........................................... 33
J. Stakeholder education ....................................................................................... 33
K. Stakeholder participation process ...................................................................... 33
L. Communication and preliminary change management plan ............................. 34
M. Strategic management system scope ................................................................. 34
N. Performance measurement and reporting system ............................................ 34
4.3 CONTEXT .................................................................................................................................. 34
4.3.01 Historical ................................................................................................................... 34
4.3.02 Business Acumen ...................................................................................................... 35
A. LEAD Personal Credibility - Strategic Planning Professional (Level I) ................. 35
B. LEAD Interpersonal Skills - Strategic Planning Professional (Level I) .................. 35
C. LEAD Planning Teamwork - Strategic Management Professional (Level II) ........ 36
D. LEAD Cross Functional Teams - Strategic Management Professional (Level II) .. 37
E. LEAD Organization Wide - Strategic Management Professional (Level II) .......... 37
4.3.03 References ................................................................................................................. 39

Chapter 5 - Building Block – THINK .............................................................................................. 41


5.1 CONTENT ................................................................................................................................. 41
5.1.01 Theories and Models ................................................................................................. 43
A. Positioning Based ................................................................................................ 43
B. Resource Based View .......................................................................................... 44
C. Other ................................................................................................................... 44
5.1.02 Tools ........................................................................................................................... 45
A. Business Modeling .............................................................................................. 45
B. Environmental Scanning ...................................................................................... 45
C. Thinking Facilitation ............................................................................................ 46
5.2 PROCESS .................................................................................................................................. 46
5.2.01 Metacognition ........................................................................................................... 46

ASP BOK 2.0 5/1/2015 3


5.2.02
External assessment ................................................................................................. 47
A. Environmental scans .......................................................................................... 47
B. Industry dynamics .............................................................................................. 49
C. Market ................................................................................................................ 50
D. Current and potential customers ....................................................................... 51
E. Stakeholder expectations ................................................................................... 52
F. Implications of the future assessment ............................................................... 52
G. Scenario planning, industry mapping and futures research .............................. 54
5.2.03 Internal assessment .................................................................................................. 55
A. Internal scan ....................................................................................................... 55
B. Current state ...................................................................................................... 56
C. Core competencies and competitive advantages .............................................. 57
5.3 CONTEXT .................................................................................................................................. 57
5.3.01 Historical ................................................................................................................... 57
5.3.02 Business Acumen ...................................................................................................... 58
A. THINK Content – Strategic Planning Professional (Level I) ................................. 58
B. THINK Processes - Strategic Planning Professional (Level I) ............................... 59
C. THINK Context - Strategic Management Professional (Level II) ......................... 59
D. THINK Content - Strategic Management Professional (Level II) ......................... 60
E. THINK Processes - Strategic Management Professional (Level II) ...................... 60
F. THINK Context - Strategic Management Professional (Level II) ......................... 61
5.3.03 References ................................................................................................................. 62

Chapter 6 - Building Block – PLAN ............................................................................................... 63


6.1 CONTENT ................................................................................................................................. 63
6.1.01 Theories and Models ................................................................................................ 64
6.1.02 Tools .......................................................................................................................... 64
A. Project Planning Tools ........................................................................................ 64
B. Planning Visualization Tools .............................................................................. 65
6.2 PROCESS .................................................................................................................................. 65
6.2.01 Strategic Elements .................................................................................................... 65
A. Mission ............................................................................................................... 65
B. Vision .................................................................................................................. 66
C. Core Values ......................................................................................................... 67
D. Policies ................................................................................................................ 69
E. Goals/Objectives ................................................................................................ 69
6.2.02 Key Organizational Drivers of Success...................................................................... 71
A. Scenarios and strategies ..................................................................................... 71
B. Evaluation of scenarios and strategies ............................................................... 72
C. Selection of strategies ........................................................................................ 73
D. Value proposition ............................................................................................... 74
E. Organization culture change plans ..................................................................... 75
F. High level strategic budgets ............................................................................... 76
G. Strategic objectives ............................................................................................ 76
H. Visual representations of strategy ..................................................................... 77
I. Strategy measures (leading and lagging) ............................................................ 80
J. Strategic initiatives (program selection)............................................................. 83
K. Performance reporting systems ......................................................................... 83
L. The strategic plan summary statement .............................................................. 83
6.2.03 Operational Planning ................................................................................................ 84
A. Roles and responsibilities ................................................................................... 84
B. Alignment and procurement of resources ......................................................... 85

ASP BOK 2.0 5/1/2015 4


C. Temporary and permanent required structures ................................................ 86
D. Operational initiatives ........................................................................................ 86
E. Organizational progress measurements ............................................................ 87
F. Required culture changes ................................................................................... 87
G. Potential risk factors ........................................................................................... 87
H. Operating plans and budgets ............................................................................. 87
I. Business unit operating plans and budgets ........................................................ 88
6.3 CONTEXT .................................................................................................................................. 88
6.3.01 Historical ................................................................................................................... 88
6.3.02 Business Acumen ...................................................................................................... 90
A. PLAN Content - Strategic Planning Professional (Level I) ................................... 90
B. PLAN Processes - Strategic Planning Professional (Level I) ................................ 91
C. PLAN Context - Strategic Planning Professional (Level I).................................... 91
D. PLAN Content - Strategic Management Professional (Level II) .......................... 92
E. PLAN Processes - Strategic Management Professional (Level II) ........................ 92
F. PLAN Context - Strategic Management Professional (Level II) .......................... 93
6.3.03 References ................................................................................................................. 94

Chapter 7 - Building Block - ACT .................................................................................................. 95


7.1 CONTENT ................................................................................................................................. 95
7.1.01 Theories and Models ................................................................................................ 95
7.1.02 Tools .......................................................................................................................... 96
A. Change Management ......................................................................................... 96
B. Productivity Management .................................................................................. 97
C. Quality Management ......................................................................................... 97
7.2 PROCESS .................................................................................................................................. 98
7.2.01 Performance Culture and Strategy Execution .......................................................... 98
A. Alignment of organization with strategy ............................................................ 99
B. Communication of strategy and expectations ................................................. 100
C. Operationalizing strategy ................................................................................. 102
D. Risk management ............................................................................................. 104
E. Management of projects and initiatives .......................................................... 104
F. Management of change ................................................................................... 105
G. Improvement of strategy execution and processes ......................................... 107
7.2.02 Alignment and Accountability ................................................................................ 107
A. Organizational Alignment ................................................................................. 107
B. Individual Strategy Alignment .......................................................................... 108
C. Right people, right jobs .................................................................................... 109
D. Accountability, results and performance ......................................................... 109
E. Incentivize desired behaviors ........................................................................... 110
7.2.03 Performance Analysis and Management ............................................................... 110
A. Fact-based decision making capabilities .......................................................... 111
B. Reporting results .............................................................................................. 112
C. Critical questioning, analysis and reviews ........................................................ 112
D. Follow through on decisions............................................................................. 112
E. Process improvement ....................................................................................... 113
7.2.04 Strategy Execution Evaluation ................................................................................ 113
A. Modification of program plans and tactics....................................................... 114
B. A culture of continuous improvement ............................................................. 114
C. Incorporation of learning ................................................................................. 115

ASP BOK 2.0 5/1/2015 5


7.3 CONTEXT ................................................................................................................................ 116
7.3.01 Historical ................................................................................................................. 116
7.3.02 Business Acumen .................................................................................................... 118
A. ACT Content - Strategic Planning Professional (Level I) ................................... 118
B. ACT Processes- Strategic Planning Professional (Level I).................................. 119
C. ACT Context- Strategic Planning Professional (Level I) ..................................... 119
D. ACT Content - Strategic Management Professional (Level II) ........................... 119
E. ACT Processes - Strategic Management Professional (Level II) ........................ 120
F. ACT Context - Strategic Management Professional (Level II) ........................... 120
7.3.03 References ............................................................................................................... 122

SECTION III – Appendices ........................................................................................................... 123


A. Evolution of the ASP BOK ................................................................................. 123
B. Governance of ASP Standards and Certification Program ................................ 125
C. Contributors and Reviewers of the ASP BOK 2.0 .............................................. 125
D. Glossary ............................................................................................................ 126
E. BOK 1.0 References .......................................................................................... 140

ASP BOK 2.0 5/1/2015 6


Prefaces

The Association for Strategic Planning (ASP) is a professional society whose mission is to help people and
organizations succeed through improved strategic thinking, planning, and action.

Founded in 1999, the ASP is a not-for-profit professional association dedicated to advancing thought and
practice in strategy development and deployment and promoting strategic planning and management for
business, nonprofit, and government organizations worldwide. ASP provides opportunities to explore
cutting-edge strategic planning principles and practices that enhance organizational success and advance
members and organizations' knowledge, capability, capacity for innovation, and professionalism.

Our diverse membership reflects a broad range of industries. Members include:

• Organizational Leaders: business, government, and nonprofit leaders responsible for strategy design
and execution, from CEO to those leading a division, department, or team that has a critical strategy
component;
• Strategy Practitioners/Consultants: internal and external practitioners/consultants who provide
content and process expertise for setting and implementing strategic direction; and
• Academics: professors, authors, and students who create and transfer new knowledge to enhance
the effectiveness of strategy and further the profession.

ASP is recognized worldwide as the pre-eminent professional association for those engaged in strategic
thinking, planning, and action. Leaders concerned with steering an organization through strategic
thinking, planning, and action know of and turn to ASP for access to knowledge and for access to a
community of like-minded leaders and professionals.

Three professional levels are recognized by ASP, identified by the logos below: Strategic Management
Professional (certification), Strategic Planning Professional (certification), and Strategic Planning Associate
(designation).

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PSection I: The Strategic Management Framework
Chapter 1 - Overview

1.1 INTRODUCTION
It is our hope that the ASPBOK 2.0 Guide will establish a common language and set of best practices for
certification of professionals in strategic planning and strategic management. The purpose of the ASP
Certification Program is to create a high level of quality and consistency within the strategic planning and
management industry so that strategic planners and those responsible for developing and deploying
strategy can assist organizations in meeting and exceeding the challenges of the 21st century. ASP offers
two certifications, the Level I Strategic Planning Professional (SPP) and the Level II Strategic Management
Professional (SMP), and a designation, the Strategic Planning Associate (SPA). ASP members as well as
nonmembers are eligible to apply for certification. The Association also qualifies Registered Educational
Providers (REPs) to offer training courses and programs in strategic planning and management that align
with ASP’s BOK 2.0 Framework, including but not limited to courses to prepare individuals for passing the
certification exams.

1.2 BASE DEFINITIONS


Strategy is the calculation of objectives, concepts (ways), and resources (means) within acceptable
bounds of risk to create more favorable outcomes (ends) than might otherwise occur by chance or at the
hands of others.

Strategic planning is an organization's process of identifying its future direction and strategy and
allocating resources in pursuit of that future direction.

Strategic management is an organization’s process of continuous planning, executing, monitoring,


analyzing and assessing all that is necessary for an organization to meet its goals and objectives in
pursuit of a future direction.

1.3 ASP CERTIFICATION PROGRAM


The Strategic Planning and Strategic Management Certification Credentials used for this manual have
been based on:

• Market Needs—an extensive survey was conducted with ASP members regarding their wants and
desires and the perceived benefits of planning and management certification. The results included a
resounding “yes” to the need for a standardized certification.

• Best Practices Research—a detailed set of interviews were conducted with more than 20 firms and
universities to ensure a best practice Body of Knowledge Guide for the 21st century. Also the
certification development process itself included interviews and process reviews with more than 10
other excellent associations such as Project Management Institute (PMI), Society for Human Resource
Management (SHRM), American Society for Training and Development (ASTD), etc. , to avoid
reinventing the wheel.

This Guide to the Body of Knowledge representing current best practices in the field of strategic planning
and strategic management is the result of interviewing the best 20+ firms and advanced educational
institutions we could collectively identify that teach strategic planning in some form. In addition, we
reviewed their course purposes, benefits, and agendas where these existed.

ASP BOK 2.0 5/1/2015 8


These organizations were identified collectively by our seven Core Project Team Members and our
roughly 20 Extended Team Members. We were able to identify everything that was being taught in 2008–
09 that is relevant in the twenty-first century. This Body of Knowledge Guide is what these many
organizations, senior-level professionals, and faculty members collectively believe represents the
meaningful knowledge about strategic planning and strategic management that, if properly applied,
would lead to significantly improved organizational results. It is organized under the rubric of Lead--
Think—Plan—Act that is the identity of our Association.

Since the first draft, this Body of Knowledge Guide has undergone extensive review, critique, and revisions
to represent a consensus version of the desired knowledge required by successful practitioners, both
within and outside of ASP.

Our final review was held with an Advisory Board of Pioneers consisting of the most distinguished
professionals in the field who are members of ASP.

This research led to two goals:

• Phase I—to develop a best practice Body of Knowledge Guide in the strategic planning and strategic
management Field (embodying ASP’s Lead—Think—Plan—Act mantra) for both Levels I and II below.

• Phase II—to develop an ongoing certification process that would include these components:
o Body of Knowledge exams with an ethics consideration
o Registered Educational Providers (REPs) to provide the education
o Independent governance structure
o An application process and criteria that take into account an applicant’s life, jobs, experiences,
and education
o Administrative support to run the day-to-day certification program for ASP
o An independent testing service

This project has been supported by extensive outreach and inclusiveness to everyone interested in this
project; feedback, critiques, and recommendations to improve the result have been obtained from many
stakeholders interested in strategic planning and management.

Results—Credentialing at these Levels of Professionalism


1. Strategic Planning Professionals (SPP)—Level I
2. Strategic Management Professionals (SMP)—Level II
3. Strategic Planning Associate (SPA) Designation

Certification Program Vision Elements


• This certification and its Body of Knowledge Guide establish best practices and clear professional
standards.
• The certification program is based upon objective criteria that cover the full set of knowledge
associated with the Body of Knowledge Guide (BOK) of Lead—Think—Plan—Act in Strategic Planning
and Management.
• This certification recognizes expertise gained from appropriate life and work experiences.
• ASP’s BOK Guide and certification process will be established using rigorous criteria, in keeping with
the standards of the national organizations that offer certification programs.

Mission of this Certification Program

This certification program enables ASP members and nonmembers to become highly knowledgeable and
skilled professionals in strategic planning and strategic management (Lead-Think-Plan-Act), and to be
recognized as such.

ASP BOK 2.0 5/1/2015 9


Mission

To improve the quality and consistency of Strategic Planning and Management as a community of
practitioners, or profession.

Expectations and Rough Profiles for the Levels of ASP Certifications

To better understand what one can expect in term of performance from a Strategic Management
Professional (SMP) versus a Strategic Planning Professional (SPP) versus a Strategic Planning Associate
(SPA) a conceptual model has been defined based on levels of cognition that build on prior knowledge
and level of complexity. ASP has chosen to use the 2001 Blooms Taxonomy model, shown in Figure 1
below to facilitate this understanding. (Bloom, B.S.; Engelhart, M.D., Furst, E.J., Hill, W.H. and Krathwohl.
D.R. 1956. Taxonomy of Educational Objectives: The Classification of Educational Goals. Handbook I:
Cognitive Domain. New York: David McKay Company.)

Figure 1: Performance Expectations based on the 2001 Bloom's Taxonomy model

These performance expectations move from the least complex at the base of the pyramid to higher order
thinking skills at the top. Leadership is perpetual and applied at each level of the pyramid. The SMP
certification focuses on an integrated perspective of the enterprise (knowledge, comprehension,
application, analysis, synthesis, and evaluation). The SPP certification focuses on systemic programming of
identified strategies (knowledge, comprehension and application). The SPA designation focuses on the
same knowledge and comprehension content as the SPP exam. The manner in which a Strategic Planner
or Strategic Manager moves through the Lead-Think-Plan-Act pedagogy is similar to the increasing levels
of cognition built on prior knowledge illustrated by the taxonomy pyramid. In this Guide, learning
outcomes are defined as:

• Remembering (Knowledge Level): Retrieving, recognizing, and recalling pertinent knowledge from
long-term memory

ASP BOK 2.0 5/1/2015 10


• Understanding (Comprehension Level): Building meaning from spoken, written, and graphic
messages through interpreting, exemplifying, classifying, summarizing, comparing, contrasting, and
explaining

• Applying (Application Level): Executing a procedure


• Analyzing (Analysis Level): The process of breaking down material into component parts and
determining how the parts relate to one another and to an overall structure or purpose through
differentiation
• Creating (Synthesis Level): Arranging elements in a coherent whole or a new pattern or structure
• Evaluating (Evaluation Level): Critiquing and making judgments based on criteria and standards

Requirements for Certification

The requirements for certification are detailed below.

LEVEL I—Strategic Planning Professional (SPP)

1. At least two years’ experience in a planning role or as a junior external consultant


2. Ethical, has integrity and knows how to maintain confidentiality
3. Manager of themselves first, then able to collaborate with others
4. Interpersonal leadership skills with executives on a one-one basis such as coaching, advising, etc.
5. An accomplished analyst in future environmental scanning and current state assessment (SWOT
Analysis)
6. Excellent critical thinking skills and a basic understanding of strategic and systems thinking
7. Frequent work with executives and their organizational units such as business unit heads or
managers/leaders of major staff units and their teams
8. Facilitates action, execution, and implementation of the strategic and annual plans
9. A working knowledge of change management and the processes and infrastructures that successful
change requires
10. Demonstrated mastery of selected parts of this Body of Knowledge Guide through REP Courses/PDUs,
etc.

LEVEL II—Strategic Management Professional (SMP)

1. At least five years’ experience in planning as an internal executive or external consultant participating
in or leading multiple strategic planning and management assignments
2. Holds the Strategic Planning Professional (SPP) credential or meets all of its requirements
3. Demonstrated mastery of the entire ASP Body of Knowledge Guide through REP Courses/PDUs, etc.
4. Works with C-Level (CEOs, CIOs, CFOs etc.) executives and their teams
5. Uses the full Body of Knowledge Guide and facilitates getting the organization to its desired outcomes
6. A strategic and systems thinker who regularly applies systemic thinking and skills
7. An advocate for the full field of strategic planning and management and all its Lead-Think-Plan-Act
components
8. Demonstrated strategic leadership in an organization, sector, or the planning field

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Level- Strategic Planning Associate Designation

Expectations and Rough Profile for the designation of an ASP Strategic Planning Apprentice

1. No years’ experience necessary in a planning role or as a junior external consultant


2. Someone just starting out in planning or transferring their career into planning from another
discipline such as marketing, finance, human resources, or Organizational Development(OD)
3. If a student, then in their last year of school (undergraduate or graduate degree) with the prospect of
graduating within 12 months
4. Not required to have business acumen yet
5. Demonstrated mastery of the same selected parts of this Body of Knowledge Guide as the current
Level I (SPP -Strategic Planning Professional) through passing the SPP Level Test Examination (ASP
may grant scholarships for those in need)
6. Ethical, has integrity, and knows how to maintain confidentiality based on two character/professional
references
7. Academic transcripts to show academic background/degrees obtained/expected in the next 12
months.
8. Willingness and ability to be mentored and form an apprenticeship with a more senior level planner
specifically identified to ASP who in turn provides them with a letter of reference
9. Manager of themselves first, then able to collaborate with others
10. Knowledge of interpersonal leadership skills with executives/managers on a one-one basis such as
coaching, advising, etc.
11. Excellent critical thinking skills and a basic understanding of strategic thinking and systems thinking
12. Understanding of how to facilitate action, execution, and implementation of strategic/annual plans
13. Expected to become a strategic planning professional within three years by submitting an application,
earning six CEUs/90 PDUs from REPs/ASP (and retaking exam), and paying the application and
examination fees

1.4 BEST PRACTICES SUMMARY

This section provides best practice criteria for authors of strategic planning and management frameworks
that support the Association for Strategic Planning’s Lead-Think-Plan-Act rubric and accompanying Body
of Knowledge Guide.

These best practices have been developed by a group of international trainers, coaches, academics,
practitioners, and consultants, with experience in many different strategic planning and management
systems and frameworks. Several purposes are served:

ASP BOK 2.0 5/1/2015 12


• ASP will expand and refine the current Body of Knowledge Guide to include these best practices.
• ASP will maintain a list of qualifying commercial and academic frameworks that can be used to
provide certification examination preparation training to prepare participants to sit for the three ASP
certification examinations.
• ASP will use these criteria to evaluate potential Registered Education Providers (REPs).
• ASP will use these criteria as part of the Richard Goodman Award criteria.
• ASP members and other interested parties can use these best practices to refine and improve their
own product and service offerings.

To qualify for the ASP stamp of “Qualifying ASP Framework,” a candidate strategic planning and
management framework, must meet the following best practice criteria. A scoring system (1 to 5) will be
used to score each framework applicant and a score of 80 percent or higher will be needed to secure the
“Qualifying” designation.

Attribute 1 – Uses a systems approach that starts with the end in mind. The systems approach includes:
agreed-upon definitions of terms, an understanding of what is to be accomplished (outcomes), how
desired outcomes will be accomplished (strategy, processes, human capital, and technology), how
progress will be measured, and how results will be evaluated and corrective action taken. The systems
approach incorporates strategic thinking, leading and leadership development, people, technology,
processes, change management, rewards and recognition to incentivize desired behaviors, clear
communication, inclusion and transparency, customer and stakeholder value creation, and organization
culture. Feedback loops are incorporated to promote continuous improvement and learning, and a
periodic cycle (e.g., yearly) is established to refresh the system. A discipline to get things done turns
systems thinking into strategy execution and action.

Attribute 2 – Incorporates change management and leadership development to effectively transform an


organization into high performance. Organization culture change is built into the fabric of the process and
led by senior leaders (e.g., the board, C-level executives, and managers) rather than treated as an add-on
for the Human Resources Department to address after the system is developed. Roles and responsibilities
are defined, as are governance policies and procedures. Employee internalization of “what’s in it for me”
is as important as "what’s in it for the organization." Communicating necessary organization changes
with clarity starts with a shared vision of the future and the senior leadership team and becomes
everyone’s responsibility. Leadership development happens at all levels in the organization, not just at the
C-level.

Attribute 3 – Provides actionable performance information to better inform decision making. Meaningful
strategic and operational performance measures and targets, logically derived, are used to monitor
progress against targets. Appropriate outcome (accomplishment), output (production), process
(efficiency), project (schedule and resource adherence), and input (resource) measures are the basis for
transforming performance data into performance information and performance information into business
intelligence. Performance information is provided in a timely manner throughout the organization to
better inform decision making at all levels, not just at the executive level.

Attribute 4 – Incorporates assessment-based inputs from the external and internal environments and an
understanding of customers’ and stakeholders’ needs and expectations. Strategic thinking and discovery
are used to describe the current situation in terms of the social, economic, political, competitive,
technological, and regulatory factors affecting the organization. Possible future states are discussed and
analyzed. Business strategy options for achieving the organization’s vision are derived from the external
and internal assessments. Additional inputs include: mission, vision, core values, customer value and
needs, competitive analysis and marketplace positioning, workforce competencies, organization culture,
environmental and policy variables and guidance, and desired results.

ASP BOK 2.0 5/1/2015 13


Attribute 5 – Includes strategic initiatives to focus attention on the most important performance
improvement projects. Prioritized initiatives (e.g., projects or programs) are developed consistently as
part of strategy development and turned into risk-managed projects where schedule and resource
adherence are tracked and reported, risks are identified and mitigated, and scope creep is managed.

Attribute 6 – Offers a supporting toolkit, including terminology, concepts, steps, tools, and techniques
that are flexible and scalable for building and connecting the elements of the system in a consistent and
integrated manner—horizontally across business and support units as well as vertically from the
enterprise to the shop floor and the desktop. Uses efficient and effective automation systems to
transform performance data into business information and intelligence and to document the strategic
thinking process and deliberations.

Attribute 7 – Aligns strategy and culture, with a focus on results and the drivers of results. Employees
need to be part of system development so that everyone, not just the senior executive team, takes
ownership of the system. The focus on unifying strategy should also include line-of-sight alignment of
enterprise-wide strategy with departmental strategy and personal objectives; individual and collective
accountability for results; and a shared vision of the future that can be translated into action for all
employees. This future vision is based on input at all levels so that the vision created is actively supported
as it cascades throughout the organization. Necessary changes are communicated with clarity throughout
the organization, based on a communication and change management plan and strategy. The system
reports on how well strategy is being implemented and the degree to which results are achieved, and
corrective action is taken as required to improve outcomes.
Attribute 8 – Integrates existing organization systems and aligns the organization around strategy. The
system is integrated into the organization’s structure and culture so that it meshes with existing project
management, process improvement, and budgeting and other financial systems. Changes are made to the
holistic system as new information becomes available, and the system focuses organization attention and
effort on strategy. Strategy developed at the organization-wide level is cascaded down to business and
support units and then to teams and individuals, to make strategy everyone’s job and build ownership
and accountability for results.

Attribute 9 – Ensures that the system is simple to administer, is clear to understand and direct, and
delivers practical benefits over the long term. The system uses common business language, logical
structures, and documentation. Practical benefits, measureable results, and improved customer value are
evident and demonstrable, and there should be evidence of use in a variety of business and industry,
government, and nonprofit organizations. The system is not treated as a separate system—it becomes
part of the organization’s culture.

Attribute 10 – Incorporates learning and feedback to promote continuous long-term improvement. The
system has feedback loops built in, so the benefit of learning at both the strategic and operational levels
can be incorporated, along with changes in assessment variables, into revised strategies and business
plans. The system is flexible and sustainable, and improvements are incorporated when appropriate to
create long-term enhancements.

ASP BOK 2.0 5/1/2015 14


Section I: The Strategic Management Framework
Chapter 2 – Industry and Professional Business Acumen

2.1 INDUSTRY / SECTOR KNOWLEDGE


Professional strategic planners and managers must have a high degree of business acumen and technical/content
knowledge about the industry and sector in which they are working. However, this business acumen is not a simple
and universal set of standards common to every organization. Therefore, we have elected NOT to attempt to build
a common set of business acumen standards but rather have the certification process include the applicant’s
demonstration of this important factor in their life and career experiences.
Some of these business acumen areas might include but are not limited to the following (illustrative only):

A. Executive Presence Supply-Chain Management Use of Competitor Intelligence


Professionalism Purchasing
K. Society Acumen
Confidence with CEOs Distribution/Warehousing
Citizenship and Governance
Communication Skills—oral Delivery Channels
Community Actions/Leadership
Communication Skills—written Process Management
Political Campaigns
Operations
B. Customer Government Agencies
Outsourcing
Sales/Pricing Social Responsibility
Benchmarking
Marketing Peacemaking
Merchandising/Placement G. Administration Environmentalist
Advertising/Promotion Legal Matters Special Interest Groups
Customer Service/Complaints Safety Government Planning
Information/Data Administration Content Production
Branding Facilities Course Development
Regulatory Compliance
C. Finance L. Thought Leadership
Financial Analysis H. Human Resources Use of Competitor Intelligence
Reading Financial Statements Talent Management Think Tank Activity
Accounting Recruiting/Selection
M. Cross-Cultural Communications
Budgeting High Performance
Second Language Fluency
Treasury/Cash Management Development/Improvement
Multi-year Residence in more than
Capital Financing Compensation/Benefits
one country
Regulatory Compliance Labor/Union Relations
Multi-country Business Experience
Global Finance Cultural Influence/Issues
Implementation of Cross-cultural
Consumer Finance Development and
Change Management
Mortgage Banking Succession/Training
Sensitivity and Knowledge of
Insurance Ethics Management
Cultural Custom
Investment Banking Regulatory Compliance
D. Technology
I. Environmental Scanning
Computers and IT
Business and Competitor Scanning
Telecommunications
and Intelligence
Other Technology
Global Marketplace
Knowledge Management
Suppliers/Venders
Information Management
Sector Dynamics
Research and Development
Competition/Substitutes
E. Products and Services Customers
Engineering Industry Dynamics
Design of Products/Life Cycle Strategic Alliances
Product and Service Knowledge Trend Tracking/Research
Manufacturing
J. Research Methods
Innovation and New Product
Knowledge about Databases
Service/Development
Internet Research
F. Delivery/Logistics/Process Source Evaluation and Verification

ASP BOK 2.0 5/1/2015 15


Professional strategic planners and managers must also have business acumen specific to the Lead-Think-
Plan-Act Strategic Planning Professional and Strategic Management Professional rubric. Building Block
specific references to this rubric are located in the individual Lead-Think-Plan-Act sections.

2.2 PROFESSIONAL ROLES

2.2.01 Strategic Planning Professional Foundation - Professional Roles (Level I)

The candidate should know and/or understand:

A. The role of the Strategic Planning/Strategic Management Professional in Strategic Planning (Lead-
Think-Plan-Act).

B. The roles of the key others the Strategic Planning Professionals and Strategic Management
Professionals will interact with, including the board of directors, CEO, senior management team, line
managers, and strategic business units.

C. The terminology, definitions and framework of the different components of the field of Strategic
Planning (Lead-Think-Plan-Act).

D. The roles and relationships of Strategic Planning Professionals and Strategic Management
Professionals with internal and external clients.

E. The keys to engineer success “up front” in successful strategic planning and implementation.

2.2.02 Strategic Management Professional Foundation – Professional Roles (Level II)

The candidate should know and/or understand:

A. The role of the Strategic Planning/Strategic Management Professional in Strategic Planning (Lead-
Think-Plan-Act).

B. The roles of the key others the Strategic Planning Professionals and Strategic Management
Professionals will interact with, including the board of directors, CEO, senior management team, line
managers, strategic business units, and cross organizational roles.

C. The terminology, definitions and framework of the different components of the field of Strategic
Planning (Lead-Think-Plan-Act).

D. The roles and relationships of Strategic Planning Professionals and Strategic Management
Professionals with internal and external clients.

E. The keys to engineer success “up front” in successful strategic planning and implementation.

ASP BOK 2.0 5/1/2015 16


PSection I: The Strategic Management Framework
Chapter 3 – Model Framework
3.1 PURPOSE AND STRUCTURE OF THE ASP BOK 2.0 GUIDE

There are five fundamental components that together make up this BOK Framework. They represent the
standards that planning professionals must know in order to be credentialed by the Association for
Strategic Planning and to warrant the use of our certification credential and designation.

These components include:

1. Lead-Think-Plan-Act (L-T-P-A)—ASP has adopted the Lead-Think-Plan-Act as its mantra and framework
for strategic planning and management. This then becomes our framework for the Body of Knowledge
Guide in this certification program because planning in the twenty-first century is now recognized for
what it is: PLANNING FOR CHANGE.

2. Leadership—Planning and change are the primary jobs of leaders in all organizations, including the
planning profession to which this certification is aimed. For this reason, leadership is required for good
planning/change professionals. Staff leaders do not lead organizations. They provide leadership, support,
coaching, advice, guidance, facilitation, logistics, and staff functional expertise to the line executives who
lead the organization.

3. Structure and Process—In addition, in the field of systems thinking and organization effectiveness
and change, we view that every situation in life has three components occurring at the same time:

• The content of the Lead-Think-Plan-Act discussions


• The processes that are going on during the Lead-Think-Plan-Act discussions
• The context within which the Lead-Think-Plan-Act occurs

4. Business Acumen—Professional planners must also have a high degree of business acumen and
technical/content knowledge about the industry and sector in which their organizations compete.
However, this business acumen is not a simple and universal set of standards common to every
organization and sector. Therefore, we have elected NOT to attempt to build a common set of business
acumen standards in our BOK but rather have the certification process assess the applicant’s knowledge
of this important factor by examining their life and career experiences.

5. Roles—A key capacity, often overlooked but crucial to success as a professional, is being clear on one’s
own role and those of others. There is confusion in many organizations between the roles of the board of
directors, CEO, senior management team, and line and division management in relation to strategy and
strategic management. Failure to achieve clarity of respective roles builds in failure. Setting the roles
clearly and properly engineers success from the beginning.

3.2 STRATEGIC PLANNING AND MANAGEMENT FRAMEWORK

ASPBOK 2.0 is organized using the L-T-P-A rubric based on the generic work strategy practitioners need to
know and actually perform. This approach is summarized in a strategic management framework depicted
below in Figure 2. Each element of the ASP rubric is referred to as a “Building Block” and begins with a
definition. Each building block is then broken down by its individual processes.

ASP BOK 2.0 5/1/2015 17


.

Figure 2: Strategic Planning and Management Framework

ASPBOK 2.0 was drafted to be a guide to knowledge, wherever it exists, not a book of the knowledge
(virtually impossible task) – a guide potential certificants can use to efficiently guide their study efforts
and the REP team can use to inform the development of their own proprietary training materials.

Each of the L-T-P-A building blocks includes a content-process-context section consistent with the BOK1.0
structure. All work to date has made every effort to maintain linkage to the original SPP/SMP structure
and competencies included in ASPBOK 1.0.

ASP BOK 2.0 5/1/2015 18


PSection 2: The Strategic Management Building Blocks
Chapter 4 - LEAD

4.1 CONTENT

LEAD provides the vision and direction for the growth and success of an organization. Leadership is an art,
not an exact skill or science or skill set. Planning, communicating, and managing change are the primary
jobs of leaders in all organizations. Strategic planning is “planning for change” in an entire organization.
Leadership skills in strategic planning and strategic management involve engaging the five levels of any
organization:

Strategic Planning Professional (SPP):


• Personal
• Interpersonal
• Functional teams

Strategic Management Professional (SMP):


• Cross-functional teams
• Organization-wide, governing boards, and external stakeholders

Leading can be described as a practice of social influence where one enrolls the support of others in the
accomplishment of a strategic undertaking. Some state it is the art of getting others to want to do
something that the organization is convinced should be done. Leadership is different from management.
Peter Drucker stated that "Management is doing things right. Leadership is doing the right things”.
Strategy leadership involves clearly communicating the organization’s strategic objectives to convince
others to follow a course of action, enabling an organization’s leadership team to develop and execute an
effective and efficient strategic plan and ultimately a strategic management system. Leading also includes
change management, communications and problem solving. (Drucker, P. 2001. Essential Drucker:
Management, the Individual and Society. New York: Harper & Row Publishers.)

ASP BOK 2.0 5/1/2015 19


4.1.01 Leadership Theories and Models

The many leadership theories can be grouped into distinct theoretical groupings: Personality Theories,
Behavioral Theories, Situational and Contingency Theories, Transactional Theories, Transformational
Theories, and Power and Influence Theories. Note: This is only a sampling of well-known models; many
other models exist.

A. Personality-based (Effective leadership via traits and personality)

Great Man Theory (1840s): The Great Man Theory of leadership states that great leaders are born into
the world, not made. Leadership cannot be learned. Thomas Carlyle influential Scottish philosopher,
professor, author and historian, claimed that "history is nothing but the biography of great men." (Carlyle,
Thomas. 1840. "The Hero as Divinity." Heroes and Hero Worship)

Trait Theory (1930s-1940s): The Trait Theory of Leadership assumes that great leaders share a
combination of definable characteristics and traits that facilitates superior leadership. Trait theory focuses
on the study of the common traits (vision, intelligence, creativity, etc.) that make great leaders. Gordon
Allport, one of the founding figures of personality psychology, considered that the combination and
interaction of various traits forms a unique pattern of personality. He categorized these traits into three
cores: Cardinal Traits (dominate an individual’s whole life), Central Traits (form the basic fundamentals of
personality), and Secondary Traits (related to attitudes or preferences). (Allport, G.W. 1937. Personality: A
Psychological Interpretation. New York: Holt, Rinehart, & Winston.)

B. Behavioral (Effective leadership through learned behavior and experience)

Role Theory (1920s): Mead, Parsons, Merton, and others developed a system of role play in which each
individual is an actor playing a role in a scenario on a stage. That actor inserts his or her own personality in
the role. The leader can utilize role play on stage sets of their design to focus on desirable behavior they
are trying to replicate in real life. (Mead, George H. 1934. Mind, Self, and Society. Chicago: University of
Chicago Press.)

Lewin Leadership Styles (1930s): Kurt Lewin advanced a style structure based on a leader's behavior. He
contended that there are three types of leaders: 1. Autocratic leaders who make decisions without
conferring with others. 2. Democratic leaders who allow the team to interject before making a decision. 3.
Laissez-faire leaders who don't impede but allow the group to make decisions. (Lewin, K., R. Lippitt, R. and
White, R.K. 1939. Patterns of Aggressive Behavior in Experimentally Created Social Climates. Journal of
Social Psychology, 10, 271-301)

The Ohio State Leadership Studies (1940s): This study employed the Leader Behavior Description
Questionnaire (LBDQ) to determine that there are two different properties of leadership that define how
leaders carry out their role: “Initiating structure” (a task-oriented action) that involves the planning,
organizing, and management of the work of subordinates and “Consideration structure” (a people-
oriented action) that involves showing concern for underlings. (Bass, B.M. 1990. Bass and Stogdill's
Handbook of Leadership. New York: The Free Press.)

The Michigan Leadership Studies (1950s): This study sought to define the standards of leadership
that led to productivity and employee job satisfaction. The study indicated that leaders were either
"employee centered” or "job centered." Leaders with an employee-centered alignment exhibited an
honest concern for interpersonal relations, and leaders with a job-centered orientation exhibited a
honest concern for the task or mechanical aspects of the job. This study also identified three acute
characteristics of effective leaders: Task-positioned behavior, relationship-positioned behavior, and
participative leadership. (Katz, D. and Kahn, R.L. 1952. Some Recent Findings in Human Relations Research

ASP BOK 2.0 5/1/2015 20


in Swanson, E., Newcombe, T., and Hartley, E. (eds.), Readings in Social Psychology, New York: Holt,
Reinhart and Winston [Michigan Studies].)

Managerial or Leadership Grid (1964): A grid advanced by Blake and Mouton to combine the "concern
for production" with "concern for people," it offers five different behavioral typologies of leadership
(Impoverished, Country-Club, Task, Middle-of-the-Road, and—the preferred style—Team Management).
(Blake, R. and Mouton, J. 1964. The Managerial Grid: The Key to Leadership Excellence. Houston: Gulf
Publishing Co.)

C. Situational and Contingency (Effective leadership as situation specific)

Hersey-Blanchard Situational Leadership Model (1970s): Advanced by Hersey and Blanchard, this model
states that leadership is task-relevant. Effective leaders acclimatize their leadership style to the "maturity
level" of the group or organization they are attempting to lead or influence. The theory focuses on four
main types of leadership style: Telling (Leaders tell what to do and how to do it), Selling (leaders hawk
their message to get individuals on board), Participating (leaders emphasize relationships), and Delegating
(leaders pass responsibility onto the follower). (Hersey, P. and Blanchard, K.H. 1969. Management of
Organizational Behavior: Utilizing Human Resources. Upper Saddle River NJ: Prentice Hall.)

Path-goal Theory (1970): Developed by Martin G. Evans, the model states that the manager’s
responsibility is to guide subordinates in choosing the best direction to reach their individual and
organizational goals. Leaders must engage in different types of actions depending on specific situations.
Path-goal articulating leaders can change their style, as situations require. The model has two variables
that moderate the leader-subordinate relationship: Environment and follower characteristics. The model
helps leaders and subordinates reach goals in an effective manner. (Evans, Martin G. 1970. The Effects of
Supervisory Behavior on the Path-Goal Relationship. Organizational Behavior and Human Performance. 5,
277-298.)

Vroom–Yetton Contingency Model (1973): Developed by Vroom and Yetton, the model is a situational
leadership model that argues that the leadership style is subject to the situation. The model offers five
different styles based on the situation: Autocratic Type 1 (leader makes decision alone, no follower input),
Autocratic Type 2 (leader makes decision alone after reviewing follower input), Consultative Type 1
(leader shares problem and seeks suggestions but makes decision alone), Consultative Type 2 (leader
shares problem with appropriate followers as a group and pursues their input but makes decision alone),
Group-based Type 2 (leader discuss problem with followers as a group and seeks their ideas and input
through brainstorming, decision by group). (Vroom, Victor H. and Yetton, Phillip W. 1973. Leadership and
Decision Making. Pittsburgh: University of Pittsburgh Press.)

Fiedler's Contingency Theory (1987): Developed by management psychologist Fred Fiedler and Joe
Garcia, the model is a contingency theory based on leadership effectiveness that focuses on leadership
and subordinate stress as it relates to group effectiveness in environment. The model focuses on a least
preferred co-worker (LPC) scale that measures leadership orientation on a scale of 1 to 8 for attributes
such as: Unfriendly-Friendly, Uncooperative-Cooperative, Hostile-Supportive, and Guarded-Open. High
LPC scores indicate a "human relations orientation." Low LPC scores indicate a "task orientation." (Fiedler,
F. E. 1967. A Theory of Leadership Effectiveness. New York: McGraw-Hill.)

Cognitive Resource Theory (1987): Developed by Fiedler and Garcia to re-conceptualize the Fiedler
Contingency Model, the theory relates a leader's intelligence and experience to their reaction to stress.
Intelligence is more important in low-stress conditions, and experience is more important during high-
stress moments. (Fiedler, F.E. and Garcia, J.E. 1987. New Approaches to Leadership: Cognitive Resources
and Organizational Performance. New York: John Wiley and Sons, Inc.

ASP BOK 2.0 5/1/2015 21


D. Transactional (Effective leadership as a series of transactions)

Leader-Member Exchange Theory (1976): Developed by G. B. Graen, the model focuses on network
dynamics, the back and forth exchanges relationship between supervisors and subordinates (leader-
member). Some subordinates feel they are part of the leader’s in-group; others see themselves as not in
the in-group (part of the out-group). The quality of these in-group and out-group exchange relationships
affects responsibility, decisions, influence, performance, and power. (Graen, G. B. and Uhl-Bien, M. 1995.
The Relationship-based approach to leadership: Development of LMX theory of leadership over 25 years:
Applying a multi-level, multi-domain perspective. Leadership Quarterly. Volume 6, Number 2: 219-247.)

E. Transformational (Effective leadership through follower transformation)

Burns’s Transformational Leadership Theory (1978): Developed by James MacGregor Burns, this model
focuses upon the ethical motivations and values (people-centric versus ego-centric) in assessing how a
leader approaches power. Burns sees transformational leadership as being inextricably connected to
higher order values. (Burns, James MacGregor. 2003. Transforming Leadership: A New Pursuit of
Happiness. New York: Atlantic Monthly Press. Burns, James MacGregor.1970. Roosevelt: The Soldier of
Freedom, 1940-45. New York: Harcourt Brace Jovanovich.)

Bass’s Transformational Leadership Theory (1990): Developed by B.M. Bass, this model focuses on how
the leader transforms followers by increasing their consciousness of task rank and value, getting them
to focus on team or organizational objectives, and by stimulating their higher-order needs. Bass believes
that authentic transformational leadership encompasses idealized influence, inspiration, intellectual
stimulation, and individualized consideration. (Bass, B. M. 1985. Leadership and Performance Beyond
Expectation. New York: The Free Press.)

F. Power and Influence-based Theories (Effective leadership through power and influence)

French and Raven's Seven Bases of Power (1959, 1965): This model developed by John French and
Bertram Raven to remedy the opinion that power and authority are not synonymous and formal
definitions of leadership did not include any reference to social influence and power. French and Raven
subsequently subdivided power into seven bases of power that affect leadership and success. The seven
bases of power include: Coercive, reward, legitimate, referent, expert, informational, and connectional
power. (Raven, Bertram and John, R.P. French, Jr. In Encyclopedia of Power, Dowding, Keith, editor. 2011.
SAGE Publications Inc.)

4.1.02 Tools

A. Psychometric Assessment

Four Temperaments (460 -370 BC): Developed by the Greek physician Hippocrates, the model illustrates
four personality typologies: 1. Sanguine (pleasure-seeking-sociable), 2. Choleric (ambitious-leader-like), 3.
Melancholic (analytical-quiet), and 4. Phlegmatic (relaxed-peaceful). Most personalities include different
mixes of the types. This model set the basis for many of the psychometric models that followed. (Kagan,
Jerome. 1998. Galen's Prophecy: Temperament in Human Nature. New York: Basic Books. [Four
Temperaments].)

The Myers–Briggs Type Indicator (MBTI) (1940s): A psychometric questionnaire, developed by Katharine
Cook Briggs and Isabel Briggs Myers based on the theories of Carl Jung, is designed to measure
psychological typologies. Jung hypothesized that there are four basic psychological functions through
which people experience the world: Sensation, Intuition, Feeling, and Thinking. Of these four, one is
usually dominant most of the time. This is the most widely used personality assessment model. The

ASP BOK 2.0 5/1/2015 22


(MBTI) Extraverted iNtuitive Thinking Judging (ENTJ) personality type in this model is often described as
the most prominent CEO personality leadership type. (Myers, Isabel Briggs with Myers, Peter B. 1995
[1980]. Gifts Differing: Understanding Personality Type. Mountain View, CA: Davies-Black Publishing.)

Keirsey Temperament Sorter (KTS) (1956): Developed by David Keirsey, the KTS is one of the most
extensively used self-assessed personality assessments in the world. It is widely associated with the
Myers-Briggs Type Indicator (MBTI) but there are many theoretical differences in the typology of their
descriptions. (Keirsey, David. 1998 [1978]. Please Understand Me II: Temperament, Character,
Intelligence (1st Ed. ed.). Del Mar, CA: Prometheus Nemesis Book Co.

Fundamental Interpersonal Relations Orientation (FIRO) (1958): Developed by William Schutz, this is an
assessment of interpersonal relations in a group. The model states three main interpersonal desires:
Affection/openness, Control, and Inclusion. This is administered via an assessment that contains six scales
of nine-item questions called FIRO-B. (Schutz, W.C. 1958. FIRO: A Three Dimensional Theory of
Interpersonal Behavior. New York: Holt, Rinehart, & Winston)

The Belbin Team Inventory (1981): Developed by Meredith Belbin to assess behavior preference for nine
different team roles that Belbin named: Chairman, Plant, Shaper, Monitor-Evaluator, Company-Worker,
Resource-Investigator, Team-Worker, Completer-Finisher and Specialist. (Belbin, M. 1981. Management
Teams: Why They Succeed or Fail. Portsmouth, NH: Taylor & Francis.)

The Leadership Participation Inventory (2002): James Kouzes and Barry Z. Posner developed this survey
to ask people: What are the personal characteristics of a leader that you admire and that would cause you
to follow them? The result of this survey is called the Leadership Participation Inventory. Extracted from
the survey, are five essential characteristics for effective leadership: Role model, inspiration, facing
adversity, getting others to act, and engendering enthusiasm to act. (Kouzes, James and Posner, B. 2002.
The Leadership Challenge. Hoboken, NJ: Jossey Bass)

Other models include: Hans Eysenck's personality types theory, the "Big Five" Factors personality model,
Katherine Benziger's Brain Type theory, the Birkman Method, Lumina Spark, Morphopsychology, Nudge
Theory, Emotional Intelligence (EQ), Gardner's Multiple Intelligences, William Moulton Marston's DISC
Personality Theory, Herzberg's Motivational Theory, Johari Window Model, Kolb Learning Styles,
Mcclelland's Achievement-motivation Theory, Maslow's Hierarchy of Needs, Tannenbaum and Schmidt
Continuum, Transactional Analysis, Tuckman's Forming Storming Norming Performing model and VAK
Learning Styles model.

B. Leadership Facilitation Tools

Assessment and Self-assessment:

360 Degree Feedback (1950s): A tool to gather information about employee performance initially was
used at the Esso Research and Engineering Company. Performance feedback is gathered from 360
degrees: Colleagues, subordinates, superiors, and a self-evaluation. (Maylett, T. M. and Riboldi, J. 2007.
Using 360° Feedback to Predict Performance. Training + Development September: 48–52.)
Collaboration:

Cumulative voting or multi-voting (1800s): A multiple-winner voting system utilized to promote


proportional representation rather than winner-take-all elections. (Robert's Rules of Order. Newly Revised
(11th ed.) 2011. Philadelphia, PA: Da Capo Press, p. 573, ll. 25-28.)

ASP BOK 2.0 5/1/2015 23


Robert's Rules of Order (1870s): First outlined by Henry Martyn Robert containing parliamentary
authority rules of order to be adopted as for use by a deliberative assembly or meeting. (Robert's Rules of
Order. Newly Revised (11th ed.) 2011. Philadelphia: Da Capo Press.)

Root Cause Analysis (1950s): This is a method of problem solving that identifies the root causes as
opposed to symptoms of problems. (Wilson, Paul F., Dell, Larry D. and Anderson, Gaylord F. (1993). Root
Cause Analysis: A Tool for Total Quality Management. Milwaukee WI: ASQ Quality Press.)

Parking Lot Technique (2006): The parking lot technique is a method of meeting goals while still taking
advantage of brainstorming ideas by agreeing to “park” tangent ideas until the end of the meeting. (Ross,
M. 2006. Secrets to Successful Meetings: How to Tame Time Gobblers and Meeting Monsters.)

Appreciative Inquiry (1980s): A model developed at Case Western Reserve University, focused on
decision-making and the creation of strategic change. This model is based on five principles: 1. The
constructionist principle (what we believe determines what we do), 2. The principle of simultaneity (the
seeds of change are implicit in the questions that we ask), 3. The poetic principle (organizational life is
expressed in the stories we tell), 4. The anticipatory principle (our daily acts are guided by our image of
the future), and 5. The positive principle (sustainable change requires positive affect and social bonding).
(Case Western Reserve University's Weatherhead School of Management
http://appreciativeinquiry.case.edu/)

Knowledge Café or World Café (1990s): Developed by Elizabeth Lank, this is a type of facilitated meeting
or workshop that aims to provide an open and creative talk on the issues involved. The session starts with
open-ended questions after which the group breaks into small groups for further discussion. (Lank,
Elizabeth. 1998. Cafe Society. People Management, Volume 4, Issue 4, page 40.)

Information Visualization:

Mind Mapping (1970s): A diagramming technique of visualizing information in which a map is created
around a single concept from which other ideas branch out. (Willis, C.L. 2006. Mind Maps as Active
Learning Tools. Journal of Computing Sciences in Colleges. Volume: 21 Issue: 4.)

Affinity Diagrams (1960s): This was developed by Jiro Kawakita to organize ideas and data from
brainstorming into groups based on natural relationships. (Britz, Galen C. et al. 2006. Improving
Performance through Statistical Thinking. Milwaukee, WI: ASQ Quality Press.)

Fishbone Diagrams (1960s): this is a tool created by Kaoru Ishikawa that shows the cause and effect
interrelationships in a complex problem and outcomes. (Ishikawa, Kaoru. 1976. Guide to Quality Control.
Asian Productivity Organization.

Prioritization Matrix: This tool is used to prioritize items with weighted criteria using a combination of the
tree and matrix diagramming visualizations.

4.2 PROCESS

4.2.01 Perpetual Leadership

Throughout the strategic management process the strategy practitioner must provide thoughtful,
consistent, and dependable leadership. It begins by understanding the goals and expectations of the
leadership team itself and the values and culture of the organization and then by selecting the most
appropriate models and tools to achieve the team’s goals and expectations.

ASP BOK 2.0 5/1/2015 24


Strategy practitioners must also provide leadership to ensure the strategy development team has the
necessary information to facilitate the strategic thinking and strategy-setting processes.

Once the strategy is approved and the execution process begins, the strategy practitioner has an ongoing
role to ensure alignment occurs, implementation follows, and strategic management process
improvements take place over time.

A. Personal Leadership Characteristics

Leadership requires a strong set of personal values grounded in being honest, open, and secure. It is
essential to possess high degrees of emotional intelligence and personal integrity to do this work, which
begins with real-time self-awareness.

Personality and behavioral assessment models are widely used in organizations. When used
appropriately, psychometrics and personality tests can bring great benefits via improved knowledge of
self (motivations, strengths, weaknesses, thinking styles, working styles, communication styles, learning
styles, and team- working preferences). Leaders should have a good understanding of “self” and “team”
via personality and behavioral indicators. Note: The list below is only a sampling of well-known models;
many other models exist.

• Four Temperaments
• The Myers–Briggs Type Indicator
• Keirsey Temperament Sorter (KTS)
• Fundamental Interpersonal Relations Orientation
• The Belbin Team Inventory

B. Interpersonal Relationships

To be an effective strategy practitioner requires being well rounded and skilled in working effectively with
groups of people who, individually, bring differing perspectives and mindsets to the table. Strategy
practitioners must be able to listen, facilitate, engage, motivate, confront, prod, present, communicate
with clarity, and manage people without calling unnecessary attention to themselves. They must remain
objective, lead by example, and manage expectations of a wide range of stakeholders by being
dependable, timely, and organized. Strategy practitioners must maintain professionalism in all
interactions in order to confront inappropriate behavior and give constructive feedback without offending
others.

Dorothy Leonard and Susan Straus refer to “creative abrasion as ideas that really rub against each other
productively as opposed to destructively.” “Whole brained” teams with creative abrasion can most
effectively be achieved through the juxtaposition of preference opposites, such as thinking styles, working
styles, communication styles, learning styles, and team-working preferences. Just as important as knowing
self is for leaders, knowing and finding team members with the opposite-of-self-preferences is also
important and can lead to creative abrasion. (Leonard, Dorothy and Straus, S. 1997. Harvard Business
Review: July-August 1997. 113-21.)

Before any strategy process begins, strategy practitioners are responsible for leadership in carefully
assessing the needs, wants, expectations, and capabilities of the organization to be served. Only when an
accurate assessment of these factors is made can a meaningful strategic planning process be organized
and implemented.

The ability to think strategically and get others to do it is a primary skill and responsibility of a strategy
practitioner. It is the collecting and synthesis of facts, ideas, opinions, and team creative thinking that

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informs and enables a leadership team to be successful during the strategic planning process and
ultimately empowers them to make viable strategic choices.

The challenges facing organizations today are increasingly complex. Strategy practitioners are responsible
for directing effective strategic planning. This includes supporting the leadership team in setting a viable
strategic direction; identifying, evaluating, and selecting strategic alternatives; and ultimately in
developing an executable operating plan.

Once a strategic plan has been developed and approved by the board of directors and/or the leadership
team, the role of the strategy practitioner turns to making the strategy contained in the strategic plan
actionable to employees and to the ongoing work and processes of the organization. At this juncture,
work shifts to assisting the leadership marshal organization resources into action to achieve the stated
strategic direction.

C. Documentation of the Process


Strategic factors, including assumptions, analysis, assessments, studies, and other factors, are identified
and consolidated and documented in an assessment database. This way the findings, conclusions, and
recommendations of strategic planning and strategic management process can be made available to
everyone in the organization who needs access to this information.

Documentation is an essential step in the strategic planning process as it serves to level the playing field
for everyone involved by providing equal access to information. Strategy practitioners must place careful
emphasis to promote and maintain shared understanding by ensuring the findings, conclusions and
recommendations are reviewed and absorbed by the entire leadership team on an ongoing basis.

Special emphasis should be placed on determining how to collect, organize, and disseminate the analyzed
information to the organization in a form that is useful. Consider the right format and media to reach
various stakeholder groups (e.g., mid-management, board, front-line, etc.). Clearly distinguish findings
(analyzed data in objective, unbiased form); conclusions (interpretations about the findings); and
recommendations (suggested actions). Doing so invites effective strategic deliberations, permits
challenging of implicit mental models and assumptions, and encourages discussion of alternative
approaches.

D. Communications Plan and Change Management Process Leadership

Strategy practitioners play a leading role in facilitating, developing, and modifying the change
management and communications plan throughout the process. Part of designing and developing a
strategic thinking and planning process is to have a communications plan for announcing the kickoff of the
process as well as mechanisms and guidelines for reporting findings as information becomes available.
Even more important than the planning process are discussions with stakeholders affected by the
proposed changes. For example, these discussions may explore what is likely to change; who will be
impacted; how should people be included in the change process; what resources such as training will be
expended; and what resistance issues are likely to surface and how will they be dealt with and by whom.
It is vital to communicate the reason for the change initiatives to everyone in the organization.
Communication, dialogue, and employee buy-in are keys to successful change, and managing that change
through an effective communications strategy and plan is critical.

An effective communications strategy recognizes that separate messages need to be crafted for different
audiences in an organization, messengers need to be selected who are respected by their peers at

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different levels in the organization, different media approaches work with different audience groups, and
message timing and information roll-out need to be sequenced correctly.

A communication plan is a document that shapes, highlights, and details the communications needs and
expectations for the entire strategic plan. It often involves:

• Setting objectives
• Conducting research
• Defining activities
• Identifying audience
• Designing messages
• Identifying the messengers
• Identifying the timing of the messages
• Identifying the networks
• Selecting channels or vehicles (media) for information dissemination
• Managing feedback
• Identifying costs

Simultaneously, work should begin to draft a change management plan based on what was learned during
the preliminary assessment process and what the anticipated / potential outcomes of the strategic
planning process will be.

4.2.02 Assessing the Situation

A. Expectations

In any strategic effort vigilant attention must be paid to the expectations and goals of the sponsors of the
proposed initiative. These expectations and goals are best determined by meeting with the sponsor(s) to
explore the reasons behind launching the initiative. Careful listening and probing are essential to
identifying these goals and expectations. Sponsors of strategy development processes and key
stakeholders generally have a good idea of what they want to be different as a result of the initiative.
These expectations for what is to change may not be the same across all key parties. Strategy
practitioners must listen and probe to clearly identify what these desired changes are and how they may
differ across various stakeholders.

B. Critical Strategic Issues

Whether through facilitated discussions, interviews with the sponsor(s), or use of preliminary assessment
surveys, it is vitally important to understand what the sponsor(s) believe are the critical strategic issues to
be addressed. It is always necessary to remember that the issues highlighted by the sponsor(s) may
ultimately be determined to be symptoms rather than root issues. Careful listening and probing are
essential to identifying critical strategic issues including the organizational culture, drivers, pressures, and
factors causing the planning process to be launched.

There should be a base understanding gained regarding the direction of the organization, its strategy for
success, and its priorities. Significant differences in perceptions among senior leadership should be noted.
Problems and/or issues that could sidetrack the leadership team’s interest and commitment to the
strategy process should be identified; these could include a strike, a merger, an acquisition, loss of a key
manager or technical resource, loss of a key customer, differences in perceptions between the board and
management team, or loss of a key funding source.

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C. The Current Business/Organizational Model Assumptions and Measures of Performance

From the outset, strategy practitioners should understand the organization’s most recently defined
strategy and business model. Many elements are important to understand in this regard including the
assumptions being made about the market, the overall strategic direction and value proposition of the
organization, key strategic partners and their overall performance, primary resources being deployed, key
customer relationships, channels of distribution, priority customer segments, cost structure, and revenue
streams. Review of core planning documents, status reports, and outcome measures are helpful
resources to review early on.

A business model is generally comprised of essentials that create and provide value for the organization,
including the customer value proposition, the profit formula, critical resources, and critical processes.
There are many forms and tools for the analysis and innovation of business models. Note: Below is only a
sampling of well- known models; many other models exist and are examined in the THINK Building Block.

 Business Concept (Al-Debei, M.M., El-Haddadeh, R. and Avison, D. 2008. Defining the Business Model
in the New World of Digital Business. In Proceedings of the Americas Conference on Information
Systems. Vol. 2008: 1-11.)
 The Business Model Canvas (Osterwalder, A., Pigneur, Yves, and Smith, A. 2010. Business Model
Generation. Hoboken, NJ: John Wiley and Sons, Inc.)
 Business Model Innovation (Lindgardt, Z., Reeves, M, Stalk, G. and Deimler, M. 2009. Business Model
Innovation Model. Boston: Boston Consulting Group, December 2009)

D. Strategy and Strategic Planning/Strategic Management Capabilities

Strategy development and execution requires strong leadership by the senior management team.
Insights into the leadership capabilities and historic performance of the team is important for any strategy
practitioner to gain from the outset in order to understand the strategic management capabilities of the
leadership team. When gaps are determined, it is vitally important to initiate efforts to fill these gaps as
soon as possible. There are many theories and approaches to assessing leadership capabilities. See
Section 4.1.01 above.

E. Project Management Capabilities

Assessing the project management capabilities of the organization is an important element in any
preliminary assessment of the leadership team’s strategic management capabilities. Strategy
practitioners should determine the abilities of the organization to define and execute strategic projects
including their ability to define scope and manage time, cost, quality, risk, and support project personnel.
Efforts should also be made to understand the organization's procurement capabilities and its track
record in integrating change into operations of the organization. Special attention should be placed on
assessing the communications skills of the leadership team and key personnel. Measuring project
performance in terms of schedule adherence, resource adherence, project scope, and project risk is also
an important component of project management.

The nature and scope of the strategic planning effort will depend on the competency set and availability
of critical human resources. New initiatives require resources to implement, and these often compete
with existing initiatives for time and attention. There must be sufficient slack in the organization system
to support the strategic effort; if there is not, initiatives to develop that capacity merit high priority.

F. Portfolio Management Capabilities

The art and science of supporting decision making about the organization's investment mix, project
portfolio management, and strategic initiative prioritization are vital capabilities. They include policy

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setting, matching investments to objectives, allocating asset, and balancing risk against performance. It
is important to understand these factors from the outset.

Essentially, leadership teams must evaluate the choices the leadership team has historically faced.
Questions faced by senior leaders include financing growth with debt versus equity, investing
domestically versus internationally, and moving the organization forward with an aggressive growth
strategy versus focusing on safer, less risky investment. Many tradeoffs are encountered in an attempt to
maximize return on investment at a given appetite for risk. The leadership team’s ability to manage its
portfolio of investments is important to assess from the beginning. This is important core strategic
management capability.

When done well, results of the strategic planning effort feed back to the portfolio process. In particular,
the results of future environmental scanning will identify pockets of opportunity that warrant
investment as well as threats to existing elements of the portfolio.

G. Key Roles and Responsibilities for Strategy Execution

For any strategy to be successfully executed all key players must understand their specific role and
responsibilities in this regard. This is particularly important for C-level executives, senior leadership team
members, and senior advisors to these leaders. Early in any strategic planning process strategy
practitioners should assess the extent to which these roles and responsibilities have historically been
defined, been followed, and been effective and efficient. The findings from these assessments shed
substantial light on the strategic management capability of the leadership team.

Strategy practitioners should place special emphasis on understanding whether roles and responsibilities
have been defined related to the following outcomes:

• Engaged leadership team


• Messaging and communications
• Visible commitment to the strategy
• Clear strategy execution guidelines in place
• Employee alignment in place
• Stakeholder vesting
• Prioritization of work occurring
• Job descriptions linked to strategy
• Integrated planning, evaluation, and budgeting calendar
• Measurement system in place and used
• Two-way communication practiced
• Process improvements taking place
• Accountabilities defined and understood

H. A Documented Strategy Review Process

One valid indicator of an organization’s strategic management capability is the extent to which the
leadership team follows a documented strategy review process. While there is no single best approach to
strategy review it should include several base elements:

• Status on the organization’s primary strategic initiatives should be reported regularly


• Key stakeholders should be briefed on the strategy and be given periodic opportunities to monitor
execution
• Performance indicators, including a balanced set of leading and lagging indicators, should be defined
and tracked
• The strategy review process should be integrated with the annual budgeting process.

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4.2.03 Organizing Strategic Planning and Strategic Management Initiatives

A. Summary of Assessment Results

When done effectively, an early stage assessment process yields a great deal of valuable and objective
information. This information must be summarized for the use of the strategy practitioner. It should
enable the strategy practitioner to define and organize an effective and efficient strategic planning
process that best meets the goals and expectations or the leadership team. Some of the major areas to
assess include:

• Potential issues, pains, hot buttons


• Systemic problems
• Visible threats requiring response
• Health indicators of the organization (e.g., Balanced Scorecard (BSC) measures, Key Strategic
Measures/Key Performance Indicators (KSM/KPI)
• Major competing priorities

B. Action Implications and Constraints

Derived from the preliminary assessment is a series of conclusions drawn by the strategy practitioner.
These conclusions highlight implications for moving forward actions as well as constraints that must be
considered and then factored in to the design of a proposed strategic planning process. These
considerations are sometimes shared with the leadership team and other times retained by the strategy
practitioner to help guide actions taken by the practitioner during the planning and execution processes.

C. Capacities: Human, Capital, Organization, and Knowledge

Effective strategic planning and ongoing strategic management builds on the core capacities of the
organization. Special consideration should be given to the human resource capacities of the team.
Special skills, knowledge, qualifications, or achievements are particularly noteworthy. Availability and
sources of capital are also important to understand and quantify at this early stage in the process. Other
special organizational capabilities can also play a significant role in defining the going forward strategy.
Each of these should be identified and utilized in defining the scope and organization of the planning
process.

D. Gaps in Capabilities

Likewise, effective strategic planning and ongoing strategic management seek to avoid or minimize
strategic gaps in capacities of the organization. The capacity and capability of the organization to respond
appropriately to strategic initiatives and strategic goals require a needs assessment to ensure that the
right employees are in the right jobs and have the required knowledge, skills, and abilities. As these gaps
are identified, they should be noted and shared with the leadership team when appropriate. Filling the
gaps is a management decision that has timing, resource commitments, infrastructure, legal, and other
impacts. Some of the frequently encountered gaps include:

• Inadequate environmental scan data


• Different understandings/interpretations about strategic management
• Uneven appreciation for the benefits of strategic management
• Lack of required skills
• Lack of required knowledge
• Mismatches between required positions and trained employees
• Recruiting timing
• Tools and technology not optimized for people and positions

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E. Strategic Management Models

Strategy practitioners must be able to decide what strategy tools best match up with the goals,
expectations, time frames, and capabilities of the organization. All models have their strengths and
weaknesses. Strategy professionals should have a range of tools they are able to bring forward depending
on the situation.

Beginning in the 1960s an increasing number of analytic models, concepts, and tools began to appear in
response to the private sector’s need for more effective approaches to the accelerating tempo of change
and uncertainty in the environment. Some of the classic models are noted below; details on these
models are located in the THINK Building Block.

• The Boston Consulting Group “Experience Curve” (Henderson, B. 1973. The Experience Curve,
reviewed. The Boston Consulting Group.)
• The Boston Consulting Group Growth-Share Matrix (Henderson, B. 1970. The Product Portfolio. The
Boston Consulting Group.)
• GE-McKinsey’s nine box matrix (Enduring Ideas: The GE–McKinsey Nine-Box Matrix. McKinsey
Quarterly, September 2008.)
• Porter’s Five Forces (Porter, M. 1980. Competitive Strategy. New York: The Free Press; Porter, M.
1985. Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free
Press.)
• Seven S (Peters, T. and Austin, N. 1985. A Passion for Excellence: The Leadership Difference. New
York: Random House; Peters, T. and Waterman, R., Jr. 1982. In Search of Excellence: Lessons from
America’s Best‐Run Companies. New York: Harper & Row Publishers.)
• Balanced Scorecard (Kaplan, R.S. and Norton, D.P. 1996. The Balanced Scorecard. Boston: Harvard
Business School Press; Kaplan, R.S. and Norton, D.P. 2001. The Strategy Focused Organization, or How
Balanced Scorecard Companies Thrive in the New Business Environment. Boston: Harvard Business
School Press.)
• Dynamic Capabilities (Teece, D. 2009. Dynamic Capabilities and Strategic Management. Oxford:
Oxford University Press)
• The Hedgehog Concept (Collins, J. 2001. Good to Great: Why Some Companies Make the Leap...and
Others Don’t. New York: HarperCollins Publisher.)
• Blue Ocean Strategy (Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create
Uncontested Market Space and Make the Competition Irrelevant. Boston: Harvard Business Press;
Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy. Boston: Harvard Business Review,
October 2004.

Regardless of the model chosen, for a model to be a valid it must be purpose-driven, integrated,
systematic, dynamic, holistic, understandable, and realistic.

F. Process / Program / Scope Requirements Design

Once the preliminary assessment results have been digested and the appropriate conceptual model(s)
have been selected, the strategy practitioner must design the strategic planning and operational planning
processes to be followed. This includes the scope requirements, time frames or context within which the
Think, Plan, and Act discussions will occur. This too includes tools, exercises, and approaches to
environmental assessment, strategy formulation, operating planning, and execution.

G. Schedule and Resources

Leadership teams are extremely busy people. To use their time effectively and efficiently is a basic
capability for all strategy practitioners to master. A thoughtful work plan linked to a realistic schedule is
vital to manage the time and expectations of all planning team members. Additionally, understanding

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human resources requirements and budget implications of the process is central to gaining
alignment and managing expectations of the team. To the extent training and consulting support is
required, these resources should be identified, contracted, and oriented.

H. Roles and Responsibilities: Board of Directors, Management and/or Strategic Planning Team

For a strategic planning process to result in successful development of a functioning strategic


management system, all parties must understand and accept their respective roles and responsibilities.
Ultimately the board of directors must approve the strategy and help to shape the environment within
which a strategic management system can flourish. Similarly, the management team must take
responsibility for development and eventually execution of the strategy. The strategic planning team
must accept responsibility for doing the necessary work which will ultimately lead to development and
approval of the plan. The lead strategy practitioner is responsible for helping the leadership determine
who should be involved and working with all parties to ensure they understand and accept these
responsibilities.

Overall strategic planning roles and responsibilities of the board, C-level executives/senior leadership
team, and senior advisors are important for strategy practitioners to define.

The Chief Executive Officer (CEO) is the highest corporate officer position in an organization. An individual
appointed as CEO usually reports to the board of directors. A CEO holds the primary responsibility for
strategic management and planning development and implementation. Other titles for CEO will be used in
different sectors. For example, in government the title of Assistant Secretary is used in Cabinet-level
agencies. Director, Executive Director, and Head are also common. For nonprofits, Executive Director or
Director are used.

Others in the C-Suite and on the senior management team who share primary responsibility for best
deciding the strategic plan content for an organization often include:

The Chief Administrative Officer (CAO) is responsible for administration and management of private,
public, or governmental corporations. The CAO is one of the highest corporate officer positions in an
organization, managing daily operations and reporting directly to the chief executive officer. The roles of
CAO and the Chief Operating Officer (COO) are often combined into one position.

The Chief Operating Officer (COO) is usually one of the highest-ranking managers in an organization and
is responsible for a firm’s ongoing operations. The roles of CAO and COO are often combined into one
position.

The Chief Communications Officer (CCO) is responsible for communications, public relations, media
relations, social media, and public affairs, usually reporting directly to the chief executive officer.

The Chief Creative Officer (CCO) or Creative Director is a position often found within the graphic design,
film, branding and identity, fashion, advertising, gaming, media, or entertainment industries. The
responsibilities include overseeing all aspects of design, design development, branding, and advertising.

The Chief Financial Officer (CFO) is a corporate officer responsible for managing the financial and
accounting aspects of the firm. The CFO is responsible for all record-keeping and tax accounting. The CFO
typically reports to the CEO and to the board of directors.

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The Chief Human Resources Officer (CHRO) is a corporate officer who oversees all human resources
aspects of an organization. CHROs can be thought of as “labor force strategists” and “organizational
performance conductors.”

The Chief Information Officer (CIO) is a corporate officer and the senior executive in an organization
responsible for all the information technology, data centers, and enterprise-wide computer systems that
support enterprise goals and objectives. The CIO typically reports to the chief executive officer. The roles of
CIO and CTO are often combined into one position.

The Chief Technical Officer (CIO) is responsible for an organization's technological research and
development direction. The CTO typically oversees the development of the technology that is to be
commercialized. The roles of CTO and CIO are often combined into one position

The Chief Risk Management Officer (CRMO) is responsible an organization's management and
governance of risk and related concerns. Usually responsible for an organization's Enterprise Risk
Management approach.

The Chief Privacy Officer (CPO) is responsible for managing an organization's privacy laws and policies.

The Chief Strategy Officer (CSO) is a corporate officer title given to the executive who is responsible for
assisting the chief executive officer with generating strategy and communicating, executing, and
sustaining strategic initiatives within an organization. CSOs often also drive and execute organization’s
long-term continuous improvement efforts.

I. Roles and Responsibilities: Rest of the Organization

Others in the organization often have roles to play, too. When these situations arise, the strategy
practitioner is responsible for identifying who these parties are and then working to secure their
commitment to fulfill the necessary responsibilities.

J. Stakeholder Participation Process

Again, alignment behind the resulting strategy is the key to execution of any strategy. Knowing who the
key stakeholders are is certainly an important step in gaining such alignment. Knowing when and how to
bring stakeholders into the process is critically important too. Strategy practitioners must be able to
manage this part of the strategic planning and management process.

K. Stakeholder Education

Alignment behind the resulting strategy is the key to execution of any strategy. Strategy practitioners are
responsible for bringing along all stakeholder groups during the strategy development process. At times
this requires education of key constituents as to the nature of the environment or to the conceptual
models that will be employed to define the chosen strategy.

L. Communication and Preliminary Change Management Plan

Part of designing and developing a strategic planning process is to have a communications plan for
announcing the kickoff of the process as well as mechanisms and guidelines for reporting findings as
information becomes available. Preliminary efforts should also be made to draft a change management

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plan based on what was learned during the assessment process and on what the expected
outcomes of the process will be.

The change management plan orchestrates how changes are coordinated across the organization. The
plan determines how the adjustments will be made and describes the means and methods to manage the
changes as they occur.

M. Strategic Management System Scope

For any strategic planning effort to be successful all parties must understand that execution of the
strategy must actually occur. To increase the probability of achieving success, strategy practitioners must
help their client define what organizational and leadership success looks like from the outset. Key
elements to be included are employees' alignment behind a shared vision and key stakeholders'
investment in the strategy. Operationally, work is prioritized, process improvements are taking place, job
descriptions are linked to the strategy, accountabilities are defined and understood, and two-way
communications are valued and practiced. Finally, a well-designed measurement system is in place and
being used.

N. Performance Measurement and Reporting System

Leaders, managers, and all employees need to be informed by performance information. What starts out
as raw performance measurement data gets transformed into performance information, usually using
graphical interpretations of the raw data. Next, performance information can be transformed into
business intelligence using techniques of statistical comparisons and other analytical tools. This
information is reported throughout the organization, not just to leaders. Better informed decision making
is the desired result.

4.3 CONTEXT

4.3.01 Historical Context

Leadership theory in the twentieth century evolved as follows:

• 1900s Great man leadership theory


• 1930s Group leadership theory
• 1940s-50s Trait leadership theory
• 1950s-60s Behavioral leadership theory
• 1960s-70s Contingency/situational leadership theory
• 1980s-2000s Transactional/transformational leadership theory

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4.3.02 Business Acumen

A. LEAD Personal Credibility - Strategic Planning Professional (Level I)

The candidate should know and/or understand:

1. Lifelong learning: The candidate should know and/or understand how to set goals and opportunities
for his/her own lifelong learning and continuing education in the field.

2. Balanced life: The candidate should know and/or understand how to develop and maintain a
balanced life (body-mind-spirit).

3. Act with conscious intent: The candidate should know and/or understand how to act with conscious
intent by deliberately guiding his/her behavior in accordance with a personal vision and values.

4. Commit to ethical practices and standards: The candidate should know and/or understand how to
commit to ethical practices and high professional standards by acting with consistency, honesty, high
integrity, and civility in all aspects of life.

5. Take inventory of themselves: The candidate should know and/or understand how to take inventory
of themselves by knowing their style, strengths, and weaknesses and have flexibility to change as
circumstances permit.

6. Develop a personal vision: The candidate should know and/or understand how to develop a personal
vision, goals, and personal strategies for his/her life and career.

7. Develop personal credibility: The candidate should know and/or understand how to develop
personal credibility through having the courage of their convictions to confront dysfunctional
behavior.

B. LEAD Interpersonal Skills - Strategic Planning Professional (Level I)

The candidate should know and/or understand:

1. Show empathy, caring, and respect by respecting the feelings and perspectives of others: The candidate
should know and/or understand how to show empathy, caring, and respect by respecting the feelings,
emotions, and perspectives of others.

2. Communicate effectively and actively through active listening: The candidate should know and/or
understand how to communicate effectively and actively through listening actively, questioning
others, and giving and receiving honest and effective feedback.

3. Mentor and coach others: The candidate should know and/or understand how to mentor and coach
others by helping them be accountable and achieve better results.

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4. Manage conflict: The candidate should know and/or understand how to manage conflict by
influencing and persuading others and him/herself toward a "win-win" solution.

5. Be innovative and creative: The candidate should know and/or understand how to be innovative and
creative in strategic thinking, strategic and annual planning, and strategic implementing of change as
well as continuous improvement. The candidate should know how to support creativity in others.

6. Build and adhere to reputation for integrity, ethical behavior, and fairness: The candidate should
know and/or understand how to build and adhere to a reputation for integrity, ethical behavior, and
fairness to others.

7. Facilitate better problem solving and decision making: The candidate should know and/or
understand how to facilitate better problem solving and decision making between individuals,
seeking consensus where possible yet not allowing compromises on strategic direction.

8. Seek and act upon constructive feedback: The candidate should know and/or understand how to
seek and act upon constructive feedback from others to further his/her personal growth and
development.

9. Give constructive feedback: The candidate should know and/or understand how to give critical yet
constructive feedback to others, including executives.

C. LEAD Planning Teamwork - Strategic Management Professional (Level II)

The candidate should know and/or understand:

1. Practice participative planning and department management: The candidate should know and/or
understand how to practice participative planning department management through involving others
and building consensus.

2. Facilitate implementation work of groups: The candidate should know and/or understand how to
facilitate the thinking, planning, and implementation work of groups in meetings, task forces, and
department teams.

3. Educate managers, employees and teams: The candidate should know and/or understand how to
educate managers, employees, and teams (regarding thinking, planning, and implementation).

4. Guide and support communication: The candidate should know and/or understand how to guide and
support communication with department management and employees about the strategic and
annual plan to ensure “buy-in” for implementation.

5. Lead an effective planning department team: The candidate should know and/or understand how to
lead an effective planning department team of both management and employees alike.

6. Promote better planning department problem solving and decision making: The candidate should
know and/or understand how to promote better planning department problem solving and decision
making as a role model for the organization.

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D. LEAD Cross-Functional Teams - Strategic Management Professional (Level II)

1. Create and support cross-functional teams: The candidate should know and/or understand how to
create, charter, and support cross-functional teams, projects, and task forces.

2. Support and integrate business processes: The candidate should know and/or understand how to
support and integrate business processes based on anticipating and delivering customers’ wants and
needs for quality products and services.

3. Institutionalize strategic thinking tools: The candidate should know and/or understand how to
institutionalize strategic thinking tools and critical thinking across functions in a more holistic and
effective manner.

4. Manage planning processes through sound project management: The candidate should know
and/or understand how to manage planning processes effectively through sound project
management skills.

5. Foster a culture of innovation and strategic thinking: The candidate should know and/or understand
how to foster a culture of innovation and strategic thinking throughout the organization.

6. Foster knowledge transfer: The candidate should know and/or understand how to foster networking,
knowledge transfer, and the development of a learning organization across the entire organization.

E. LEAD Organization Wide - Strategic Management Professional (Level II)

The candidate should know and/or understand:

1. Support the organization's vision: The candidate should know and/or understand how to support the
organization's vision, values, and competitive position in the marketplace and strategies to achieve
them throughout the organization.

2. Support organization design professionals and senior management: The candidate should know
and/or understand how to support organization design professionals and senior management to
effectively redesign and restructure the organization chart to align it with the strategic plan for day-
to-day responsibility and accountability.

3. Coordinate communications of strategic content: The candidate should know and/or understand
how to coordinate communications of strategic content through senior management and
communications staff relying on a range of channels and methods.

4. Align planning and implementation tasks with accountability: The candidate should know and/or
understand how to align planning and implementation tasks with accountability for their
achievement at all levels.

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5. Support cultural change and transformation: The candidate should know and/or understand how to
support cultural change and transformation to create a customer-focused, high-performance,
adaptive organization.

6. Organize and design the change management infrastructures: The candidate should know and/or
understand how to organize and design the change management infrastructures and change
processes of the organization to smooth out strategic plan implementation and effective change
management.

7. Be a change agent/advocate and advisor to management: The candidate should know and/or
understand how to be a change agent/advocate and advisor to management during strategic
implementation.

8. Assist the organization in being flexible and adaptable: The candidate should know and/or
understand how to assist the organization in being flexible and adaptable to changing environments,
demands, and deadlines.

9. Guide effective sourcing, application, and sharing of knowledge: The candidate should know and/or
understand how to guide effective sourcing, application, and sharing of knowledge and learning
across the organization.

10. Ensure that the underlying business model and processes for organization are aligned: The
candidate should know and/or understand how to ensure that the underlying business model and
processes for the organization are aligned with the desired changes arising from the strategic plan
and its implementation for strategic planning.

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4.4 References

• Al-Debei, M.M., El-Haddadeh, R. and Avison, D. 2008. Defining the Business Model in the New World
of Digital Business. In Proceedings of the Americas Conference on Information Systems. Vol. 2008: 1-
11.
• Allport, G.W. 1937. Personality: A Psychological Interpretation. New York: Holt, Rinehart, & Winston.
• Bass, B.M. 1990. Bass and Stogdill's Handbook of Leadership. New York: Free Press [Ohio State
Studies].
• Bass, B. M. 1985. Leadership and Performance Beyond Expectation. New York: Free Press.
• Belbin, Meredith. 1981. Management Teams: Why They Succeed or Fail. Portsmouth, NH: Taylor &
Francis.
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Section 2: The Strategic Management Building Blocks
Chapter 5 - THINK

5.1 CONTENT

The THINK Building Block is about analyzing, understanding, forecasting, and decision making. Critical
thinking and course selection must take place at many stages in the strategic planning and management
process and begins with the organization’s current and possible future external and internal
environments. The purpose at this stage is to gather and consider sufficient information to provide a
sound basis for optimal organizational strategy development. THINK provides the intellectual capacity for
entire process. It is an iterative process that constantly engages every step of the Lead-Think-Plan-Act
rubric.

Environmental scanning incorporates internal and external views of an organization. THINK is a process of
looking outward at the external environment in which the organization operates or competes. It is also
the process of looking inward and understanding how the organization’s employees, policies, processes,
and procedures produce value for customers, employees, and other stakeholders. Simply put, THINK at
this stage is about understanding the environment and how the organization “fits” into the bigger
picture of its place in the world.

Note that the value creation process and the beneficiaries of value are different for different organization
types. In business and industry, the owners of the business expect to benefit financially from value
creation and customer satisfaction with produced products and services. In government, citizens, program
recipients and other stakeholders and elements of society benefit from value creation. And in nonprofit
organizations, the members and other stakeholders of the association, charity, or foundation benefit. The
THINK Building Block involves analyses, facts, conclusions, and recommendations that help determine
how strategy will be developed and executed to move the organization to a higher level of performance
and improve value creation for customers and stakeholders.

Strategy practitioners have important roles and responsibilities in the THINK Building Block, including
knowledge building, understanding, applying, analyzing, and evaluating. Strategy practitioners play a role

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in ensuring that the most meaningful and accurate internal and external information is available to the
planning team. They coordinate, follow through, monitor, facilitate, and provide feedback on the
environmental scanning process to assist the planning team in using environmental information
effectively during the strategy development and strategic planning process. Strategy practitioners also
play a role in risk management and mitigation and in ensuring that performance information is available
and acted upon, that planned organizational changes are being implemented, and that feedback and
learning are incorporated into future strategy. In general, the strategy practitioner has a major role in
helping the organization think strategically.

To think is to employ one's conscious mind rationally and objectively in evaluating or dealing with a given
situation.

Mintzberg put things into perspective with his definition of strategic thinking, which is a particular way of
thinking with discernible, inherent attributes. He frames strategic planning as a systematic programming
of already identified strategies for which an action plan is then developed. In contrast, strategic thinking is
a synthesizing process utilizing intuition and creativity. The outcome is a statement of strategic intent
focused on the future, not simply a projection of past trends, and market predictions.” (Mintzberg, H.
1994. The Rise and Fall of Strategic Planning. NY: The Free Press. Lawrence, E. 1999. Strategic Thinking –
A Discussion Paper. Research Directorate, Public Service Commission of Canada)

Heracleous also contrasts strategic thinking and strategic planning. He views the strategic thought
process as synthetic, divergent, and creative and the strategic planning process as analytic, convergent,
and conventional. He also makes a very insightful and useful observation: "It all comes down to the ability
to go up and down the ladder of abstraction, and being able to see both the big picture and the
operational implications, which are signs of outstanding leaders and strategists." (Heracleous, L. 1998.
Strategic Planning or Strategic Thinking? Long Range Planning, Vol. 31 No. 3: 481-487)

Jeanne Liedtka 1998 defines strategic thinking as a particular method of thinking with specific and clearly
identifiable characteristics and competencies: Systems perspective, intelligent opportunism, intent focus,
thinking in time, and hypothesis driven. (Liedtka, J. 1998. Strategic Thinking: Can it Be Taught? Long Range
Planning, Vol. 31. No. 1: 120-129)

Figure 3: Five Major Competencies of Strategic Thinking

• Systems Perspective: A strategic thinker must have a metacognitive view of the complete system of
value creation and understand the interdependencies and competencies it contains.
• Intelligent Opportunism: A strategic thinker must be open to new experience, which allows one to be
responsive to good opportunities that may emerge in a rapidly changing business environment.

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• Intent Focus: A strategic thinker must be more determined and less distractible than rivals in the
marketplace.
• Thinking in Time: A strategic thinker must be able to hold past, present, and future in mind at the
same time to create better and quicker decision making.
• Hypothesis Driven: A strategic thinker must ensure that both creative processes and critical thinking
are incorporated into strategy making.

Graetz believes that strategic thinking and planning are “distinct, but interrelated and complementary
thought processes” that must be sustainable and synergistic for effective strategic management. Graetz
states that the responsibility of strategic thinking is "to seek innovation and imagine new and very
different futures that may lead the company to redefine its core strategies and even its industry." (Graetz,
F. 2002. Strategic Thinking versus Strategic Planning: Towards Understanding the Complementarities.
Management Decision, Vol. 40 Issue 5: 456-462.)

Horwath describes the strategic thinking process as involving the generation of insights that drives
organizational strategy development. Strategic thinking is a combination of skill sets that goes beyond
simply generating insights and new directions for the organization. It is the synthesis of creative and
action-oriented thinking applied in a specific organization. (Horwath, R. 2004. Storm Rider: Becoming a
Strategic Thinker. Chicago: Sculptura Consulting, Inc.)

5.1.01 Thinking Theories and Models

A. Positioning-based View

The Boston Consulting Group (BCG) Growth-Share Matrix (1970): Bruce Henderson, founder of the BCG,
developed a diagnostic model for managing a portfolio of diverse product lines and business units. The
initial use of portfolio analysis, the BCG Growth-Share Matrix, exhibits the various business units or
product lines on a graph charting growth rate versus market share relative to competitors. (Henderson, B.
1970. The Product Portfolio. Boston: BCG Perspectives 1970. Boston Consulting Group.)

GE-McKinsey’s nine-box matrix” (1971): In the early 1970s, General Electric was investigating the
alternative strategy models because of disappointment with profits across business units. GE hired
McKinsey and Company, to develop a portfolio (43 strategic business units) wide approach because of
their dissatisfaction with the limitations of the BCG matrix. The model is known as the industry
attractiveness – business strength matrix and the nine-box matrix. (Enduring Ideas: The GE–McKinsey
Nine-Box Matrix. McKinsey Quarterly, September 2008.)

Porter's Five Forces (1979): Michael Porter developed a framework in which he used concepts from
industrial economics to derive five competitive forces that indicate the attractiveness or unattractiveness
of a market. The five forces are: The bargaining power of customers, the bargaining power of suppliers,
the threat of new entrants, the threat of substitute products, and the level of competition in an industry.
Understanding the character of each of these forces gives insight to enable the formulation of appropriate
strategies in response to competitive market conditions. (Porter, M. 1980. Competitive Strategy. New
York: The Free Press)

Blue Ocean Strategy (2005): W. C. Kim and Renee Mauborgne developed an imaginative and creative
positioning approach to stretching and leveraging core competencies so as to gain an advantage in
competing for the future. Kim and Mauborgne state that “tomorrow’s leading companies will succeed not
by battling competitors, but by creating ‘blue oceans’ of uncontested market space ripe for growth.”
They call these strategic moves the “value innovations” that “render rivals obsolete and unleashes
new demand.” (Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested
Market Space and Make the Competition Irrelevant. Boston: Harvard Business Press)

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B. Resourced-based View

VRIN (1980s): This resource-based view (RBV) of a firm views competitive advantage as the means and
methods of applying the resources at an organization's disposal. Birger Wernerfelt took this perspective in
his 1984 article "A Resource-based View of the Firm." Competitive advantage is increased if resources are
V (valuable), R (rare), I (in-imitable), and N (nonsubstitutable). (Wernerfelt, B. 1984. The Resource-based
View of the Firm. Strategic Management Journal Vol. 5: 171-180)

The Hedgehog Concept (2001): Emphasis on the creative and imaginative approaches to strategic
management continues to receive attention by researchers and practitioners alike. In this regard, it is
important to note the work of Jim Collins in developing the Hedgehog Concept. According to Jim Collins in
Good to Great, the Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intent
to be the best, or even a plan to be the best. Rather, it is arriving at a fundamental grasp of what you can
be the best at. This distinction is crucial to the theory. (Collins, Jim. 2001. Good to Great: Why Some
Companies Make the Leap...and Others Don’t. New York: HarperCollins Publishers.)

C. Other Models

The Boston Consulting Group Experience Curve (1966): The understanding of "learning curves" was first
observed by psychologist Herman Ebbinghaus in the nineteenth century and was based on the difficulty of
remembering varying numbers of verbal stimuli. As entities and/or organizations become more practiced
at a task, efficiencies rise following a progression of the learning getting easier and easier but then
becoming harder as one approaches a limit. (Henderson, B. 1973. The Experience Curve. Boston
Consulting Group.)

Seven S (1982): Tom Peters and Robert Waterman in their book In Search of Excellence developed an
organizational model called the Seven S model that puts strategic management within the context of a
complex organizational network. The model includes: Strategy, Structure, Staff, Skills, Style, Systems,
and Shared values. (Peters, T. and Waterman, R., Jr. 1982. In Search of Excellence: Lessons from America’s
Best‐Run Companies. New York: Harper & Row Publishers.)

Balanced Scorecard (1992): Kaplan and Norton developed the concept of a “balanced scorecard” that
stressed the need to monitor, measure, and control strategic performance within four perspectives:
financial, customer, internal business process, and learning and growth. The main value of the balanced
scorecard model lies in its emphasis on forging a balanced approach to measuring and managing strategic
control factors. It remains for each organization to identify its own key strategy, strategic objectives,
strategic initiatives, and strategic measurements. The main assumption underlying the balanced
scorecard, that is, that measuring drives performance, should be a prerequisite for any effective strategic
management system. It is important to note that the metrics selected can be based on either internal or
external factors. It is their emphasis on balanced measures driving performance that make it an internal
consideration, that is, a major determinant of management effectiveness. (Kaplan, R. S. and Norton. D.P.
1996. The Balanced Scorecard. Boston: Harvard Business School Press.)

Dynamic Capabilities (1997): Influenced by Gary Hamel and developed by David Teece, this model refers
to the dynamics between long-term strategic capabilities and short-term operational capabilities.
Dynamic capabilities are usually described in three activities or adjustments that are required if the
enterprise is to sustain itself as markets/technologies change: Identification of an opportunity (sensing),
mobilization to capture value (seizing), and renewal (transforming). The Dynamic Capabilities model shifts
the strategic conversation from sustainable competitive advantage to competitive survival. (Teece, D.
2009. Dynamic Capabilities and Strategic Management. Oxford: Oxford University Press)

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Paradigms (2012): Thomas S. Kuhn caused the word paradigm to become widely used more than 50
years ago by defining how change takes place from the dominant way of thinking to solve a problem.
Specifically, this concept shows how an approach becomes the dominant paradigm to solve a problem,
and even when evidence exists to the contrary, the scientific community will still adhere to the dominant
paradigm. To respond to intelligent opportunism and think in time, a strategic thinker must be capable
of understanding that dominant paradigms may be wrong and or opportunities exist for leveraging
emerging solutions to problems. (Kuhn, T. 1970. The Structure of Scientific Revolutions. 2nd ed. Chicago:
University of Chicago Press.)

5.1.02 Tools

A. Business Modeling

Business Concept Innovation (2000): Developed by Gary Hamel in his publication Leading the Revolution,
this model describes a business concept as being comprised of a core strategy (how an organization
chooses to compete), strategic resources (core competencies, strategic assets, and core processes), a
customer interface (relationship dynamics and pricing configuration), and a value network (suppliers and
partners). (Al-Debei, M.M., El-Haddadeh, R. and Avison, D. 2008. Defining the Business Model in the New
World of Digital Business. Proceedings of the Americas Conference on Information Systems (AMCIS). Vol.
2008, 1-11.)

The Business Model Canvas (2008): Developed by Alexander Osterwalder, this is a template for designing
new or documenting current business models. The template describes the business model in terms of an
organization's value proposition, consumer relationships, consumer segments, key activities, key partners,
key resources, channels, cost structure, and income streams. (Osterwalder, A., Pigneur, Yves, and Smith,
A. 2010. Business Model Generation. Hoboken, NJ: John Wiley & Sons, Inc.)

Business Model Innovation (2009): This defines a business model as consisting of two elements: the value
proposition (consisting of target segments, product/service offerings, and a revenue model) and the
operating model (consisting of the value chain, the cost model, and the organization). The model states
that innovations may be implemented via many forms including the value proposition, the operating
model, or the business system architecture. (Lindgardt, Z., Reeves, M., Stalk, G. and Deimler, M. 2009.
Business Innovation Model. Boston: Boston Consulting Group.)

B. Environmental Scanning

PESTEL: Many factors in the macro-environment affect management decisions on what strategies to
pursue to satisfy customers and stakeholders. Some of the earliest known references to these factors
emerged from the work in 1967 of Francis J. Aguilar who used ETPS— economic, technical, political, and
social—as a mnemonic for the four sectors of his taxonomy of the environment. Arnold Brown of the
Institute of Life Insurance reorganized it as STEP (strategic, trend, evaluation, process) as a means of
organizing environmental scanning results. By the 1980s many other authors such as Porter, Narayanan,
Boucher, and Mecca developed variations of the taxonomy. The acronym PESTEL will be defined in
5.2.02A. (Aguilar, Francis J. 1967. Scanning the Business Environment. New York: Macmillan)

SWOT Analysis: SWOT analysis originated in the 1960s from Albert Humphrey’s work at Stanford
University on investigating why corporate planning failed. Humphrey’s research was initially termed SOFT
analysis. S (what is good in the present is satisfactory), O (good in the future is an opportunity), F (bad in
the present is a fault) and T (bad in the future is a threat). In 1964 Urick and Orr at a conference changed
the F to a W and changed the term to SWOT analysis: S (strength), W (weakness), O (opportunity), and T
(threat). See also 5.2.02F. (Humphrey, A. 1974. MBO Turned Upside Down, Management Review 68 (8): 4-
8.)

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C. Thinking Facilitation

Role Playing (Sixteenth Century-Present): A process where two or more people act out a role in the
context of a predefined stage set to explore scenarios. Steps involve identifying the situation, adding
details, assigning roles, acting out scenarios, and discussing what the group has learned.

Brainstorming (1950s): Developed by Madison Avenue advertising executive Alex Osbom in his 1953 book
Applied Imagination, brainstorming involves a relaxed informal, lateral thinking approach to problem
solving. The process encourages crazy ideas that hopefully can be molded into creative solutions. (Osborn,
A. 1953. Applied Imagination: Principles and Procedures of Creative Problem Solving. New York: Charles
Scribner's Sons.)

The Delphi Method (1950s): This method is a structured communication process that relies on a panel of
experts who answer questionnaires in two or more rounds. A facilitator then provides an anonymous
summary of the experts' forecasts and the reason for their forecasts. A process of revision then occurs,
converging the group's opinion into an appropriate response "mean" or "median" result. (Rand
Corporation. 1950)

Six Thinking Hats (1980s): Developed by Edward de Bono in his book Six Thinking Hats, the tool
describes a process of facilitation in which the participants adopt planned "parallel" thinking processes.
The six hats include natural and unnatural thinking processes associated with colored hats: blue-
managing, white-information, red-emotions, black-discernment, yellow-optimistic response, and green-
creativity. The hats are used as metaphors for more elaborate segregation of thinking directions in pursuit
of problem resolution. (Edward de Bono. 1985. Six Thinking Hats. Boston: Little Brown and Company.)

5.2 PROCESS

5.2.01 Metacognition

A key variable that differentiates effective strategic thinkers from others is metacognition.

Metacognition is a higher order of thinking involving dynamic control over inner cognitive processes
engaged in learning, that is., how to approach a new learning task, how to monitor understanding of the
task, and how to evaluate progress toward completing the task.

Sometimes metacognition is referred to as “thinking about thinking” and is most often associated with
the work of John Flavell. It is critical for strategy professionals to form an understanding of metacognition
so that they are better able to control and influence their thought processes. (Flavell, J. H. 1979.
Metacognition and Cognitive Monitoring: A New Area of Cognitive‐ Developmental Inquiry. American
Psychologist, Vol. 34 (10), Oct. 1979, 906-11.)

If cognition is the act or process of knowing, acquired through perception, reasoning, and intuition,
metacognition is one’s ability to comprehend, control, and manipulate one’s cognitive processes. The
result of metacognition is a conscious process of regulation and rearrangement of how we think. The skill
of metacognition is about strategically managing self-awareness. (Meichenbaum, D. 1985. Metacognitive
Methods of Instruction: Current Status and Future Prospects. 1985. Special Services in the Schools. Vol 3,
Issue 1-2: 23-32.)

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Some strategy professionals differentiate metacognitive knowledge (what thinkers know about their own
cognitive capabilities) from metacognitive regulation (adjustments thinkers can make to control learning).
Flavell further divides metacognitive into three categories:

• Person variables: Self-reflection on one’s own strengths and weaknesses in learning and
processing information
• Task variables: Tweaks to processing in response to specific demands required to
complete a task
• Strategy variables: The internal array of strategies one has to apply in a flexible way to
successfully accomplish a task

Livingston provides an example of an application of all three metacognitive variables: “I know that I
(person variable) have difficulty with word problems (task variable), so I will answer the computational
problems first and save the word problems for last (strategy variable).” (Livingston, J.A. 1997.
Metacognition: An Overview. Retrieved from
http://www.gse.buffalo.edu/fas/shuell/cep564/Metacog.htm, 10 – 5)

Another way of looking at metacognition is that everyone processes data at two levels. Level 1 is a closed
loop system that processes data without feedback. Level 2 is a higher order executive loop that has
the capacity to give feedback and rewrite the processes used at Level 1. One might also abstract this to
higher levels, Level 3, Level 4, etc. Strategic thinkers must constantly master metacognition, managing
personal development by monitoring and managing internal thought processes.

5.2.02 External Assessment

There are many external forces, dynamics, and constraints that must be taken into account in arriving at
the most desirable and effective strategy, but it begins with a comprehensive understanding of these
forces and constraints and how they interact to enable a particular strategic direction to emerge within a
specific organizational context. An external assessment is specifically concerned with the specific external
stakeholders of the organization, including those within the industry.

A. Conducting Future Micro- and Macro-environmental Scans

The external environmental scan provides information on the policies, regulations, economics,
technology, governance, competition, and other factors that can exert influence on the organization.
These factors influence the strategy and direction of the organization, now and in the future. Several
formats and processes are available to structure the collection and analysis of relevant data to gain insight
into external factors. These include identification of areas to include, such as PESTEL, to better understand
external influencers of the organization, as well as internal perspectives and focus areas, such as the
SWOT analysis (described later).

PESTEL: Many factors in the macro-environment affect management decisions on what strategies to
pursue to satisfy customers and stakeholders. Some of the earliest known references to these factors
emerged from the work in 1967 of Francis J. Aguilar who used ETPS— economic, technical, political, and
social—as a mnemonic for the four sectors of his taxonomy of the environment. (Aguilar, F. 1967.
Scanning the Business Environment) Arnold Brown of the Institute of Life Insurance reorganized it as STEP
(strategic, trend, evaluation, process) as a means of organizing environmental scanning results. (Weiner,
E. and Brown A. 1986. Stakeholder Analysis for Effective Issues Management, Planning Review, Vol. 14
Issue: 3, pp.27 – 31.)

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By the 1980s, many other authors such as Porter, M., Narayanan, V.K., Boucher, T.J. and Mecca developed
variations of the taxonomy. The acronym PESTEL (see Figure 4) includes:

• Political factors. Political changes to governments, trade barriers, and policy


• Economic factors. Interest rates, taxation changes, economic growth, inflation and exchange rates
• Social factors. Demographics and changes in social trends
• Technological factors. New technologies and their impact on society
• Environmental factors. Global warming and climate change, weather, and changes in temperature
• Legal factors. Changes to the legal environment in which governments, society, and corporations
operate

Figure 4: PESTEL

Once factors are identified, they are consolidated and documented in an assessment database so the
findings, conclusions, and recommendations arising from the environmental scan can be shared and
understood by everyone in the organization who needs access to this type of information.

Documentation is an essential step in the strategic planning process as it serves to level the playing field
for everyone involved by providing equal access to information. Strategy practitioners must place careful
emphasis on promoting and maintaining shared understanding by ensuring the findings, conclusions, and
recommendations are reviewed and absorbed by the entire leadership team on an ongoing basis.
While wide sharing of information is encouraged as a general rule, practical considerations regarding
privacy/confidentiality concerns and common sense will help dictate what specifically should be shared
with whom, how, and when.

Special emphasis should be placed on determining how to collect, organize, and disseminate the analyzed
information to the organization in a form that is useful. Communication clarity is crucial, as the analysis of
information has broad influence and importance to an organization. One has only to remember the
Challenger accident in 1986, caused by inadequate data analysis and communication to decision makers,
to appreciate the importance of factual analysis and solid conclusions and recommendations to inform
decision making. Consider the right format and media to reach various stakeholder groups (e.g., mid-
management, board, front-line, etc.).

Clearly distinguish findings (analyzed data in objective, unbiased form), conclusions (interpretations about
the findings), and recommendations (suggested actions). Doing so invites effective strategic deliberations,

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permits challenging of implicit mental models and assumptions, and encourages discussion of alternative
approaches.

B. Assessing Industry Dynamics

Industry means the enterprise the organization is engaged in—business, government, or nonprofit. An
industry analysis can be considered a high-level profile of industry dynamics that could have been made
without considering the organization except as a statistical unit in the industry. As leadership teams
become more familiar with the many types and sources of industry information required for strategic
management within their organization, they are able to combine their ideas and insights in the
development of a more comprehensive and systematic approach to industry-level information collection
and compilation. Understanding industry dynamics helps a leadership team position their organization to
be more competitive and responsive to customers and stakeholders. A number of models has been
developed to analyze industry dynamics, leading to a better understanding of how the organization
operates in its competitive market.

In 1980 Michael Porter developed a framework, Porter’s Five Forces, in which he applied concepts
developed in industrial organization economics to derive five competitive forces that define the
attractiveness of a market (see Figure 5). Porter described these forces as the micro-environment to
contrast it with the more broad-spectrum macro-environment. The microenvironment consists of forces
close to an organization that affect its ability to serve its customers and make a profit. Changes in the
micro-environment normally require organizations to reassess the marketplace. The four forces of (1) the
bargaining power of customers, (2) the bargaining power of suppliers, (3) the threat of new entrants, and
(4) the threat of substitute products combine with other variables to create a fifth force, (5) the level of
competition in an industry or rivalry. Each of these forces has several determinants and can be used to
develop an understanding of the dynamics of the firm in its marketplace. Understanding the nature of
each of these forces gives organizations the necessary insights to enable them to formulate the
appropriate strategies to be successful in their market.

Figure 5: Porter's Five Forces Model of Competition

• Supplier Power: Any company that supplies materials or services to companies in the industry is of
interest in terms of the amount of bargaining power they have. This bargaining power gives suppliers
the ability to influence the price of goods or services in the industry and ultimately drive down
industry profits.
• Threat of Substitutes: Substitution is a situation in which a customer is not lost to a direct competitor
but to an altogether different solution to the customer’s need (e.g. taking the bus instead of an

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airline). Some industries have an inherently higher threat from substitutes than other industries,
making them relatively less attractive industries. The threat of substitutes is increased dramatically
with the speed of development and new technological breakthroughs.
• Buyer Power: Buyers create demand in the industry and thus have strong negotiating power. This
negotiating power can be used to wring profits from all firms within an industry that are dependent
on that buyer. For example, Wal-Mart is traditionally thought of as a king of buyer power in the U.S.
because it uses its large purchasing volume to negotiate ever lower prices from its suppliers, which in
turn tends to squeeze profits from those industries affected.
• Barriers to Entry: Some industries have high barriers to entry (e.g., requiring exceptionally large start-
up investment or scarce resources) that make it exceptionally difficult for a new company to enter
the industry. This makes it easier for players in that industry to maintain higher prices and profits.
Industries that have low barriers to entry are thought of as risky because there is often not enough
time to earn a return on any initial research and development investment before imitators flood the
market with lower prices.
• Degree of Rivalry: The more competitors in the industry, the more competition there is for the same
customer dollar. A large number of competitors tend to force prices, and thus profits, down industry-
wide.

Every type of organization operates in a competitive environment, not just business and industry as
described above. While we typically think of only business and industry being in competition,
governments face competitive pressures also (e.g., provide program services internally or outsource these
activities or taxpayer dissatisfaction with program and spending priorities). And nonprofit organizations
face competitive pressures also (e.g., associations compete for member subscriptions and sell
competitive programs and services). While Porter’s framework was developed primarily for business and
industry, the type of thinking involved in analyzing markets and competitive forces applies to any
organization. (Porter, M. 1980. Competitive Strategy. New York: The Free Press)

C. Assessing the Market

In what markets should our organization participate? What markets should be avoided? What products
and services should be provided to satisfy customer needs? Who are the organization’s customers, and
what do they need that the organization is capable of providing (for a profit—business and industry; as a
mandated or necessary service—government; or as a member or societal benefit—nonprofit
organization)? Industry and market boundaries are constantly changing, so it is necessary to review and
update industry and market definitions, market segments, market niches, market positions, market life
cycle, customer situations, and existing customer classifications. Assessing the market involves
understanding who your customers are (primary, secondary, and stakeholders), what their value
proposition is (through their eyes), and how your organization can respond to meet customer needs in an
efficient and cost-effective manner.

Customers are the direct beneficiaries of an organization’s products or services, where value is given for
value received (i.e., quid pro quo).

Stakeholders are people or other organizations that have an interest in the organization’s success (either
positively or negatively). Stakeholder groups include the public, constituents, taxpayers, etc.

So customers are a subset of stakeholders and have a special value proposition that includes
considerations of the functionality and attributes of products and services, image the leadership teams
wants to cultivate for the organization, and the relationship desired with customers and stakeholders.

Market studies and analyses are used to gain an understanding of a particular organization relative to
other organizations in the same market space. For business and industry, a competitive market analysis

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will identify possible challenges and opportunities for the organization as it competes for market share
with others. For government, a market analysis can be used to determine if there are overlapping services
provided by state, local, and federal programs and entities. And for nonprofits, a market analysis can
determine the uniqueness of the organization’s offerings to a select constituency of people interested in
the nonprofit’s purpose and mission.

Strategy practitioners are responsible for ensuring that necessary market information is collected,
evaluated, and incorporated into the leadership team’s strategic thinking and planning processes.

D. Assessing Current and Potential Customers

Understanding customers and potential customers is often the most critical element in developing the
insight needed to support complex, strategic decision making. Customers and potential customers can
help drive improved understanding of market needs, wants, expectation and growth projections,
technology, product changes, and the organization’s performance, as well as competitors’ plans and
performance.

Strategy practitioners are often responsible for assessing customer needs and expectations and the
degrees of satisfaction current customers have with the organization and its products and services. The
objective is to obtain strategic intelligence and actionable insights that serve to inform the strategy
formulation processes.

Strategic customer assessments include the following elements:

• Primary versus secondary customers


• Customers versus other stakeholders
• Customer satisfaction
• Stakeholder satisfaction
• Customer focus group results
• New business opportunity development
• New market entry
• New product/service introduction
• Image and brand analysis

Not all customers are created equal. Not every customer provides equal benefits to the organization, and
not all potential customers should be specifically targeted. The value of identifying “optimum” customers
(sometimes called the primary customer segment) is to align the organization’s delivery system to better
serve that optimum set.

An important step in identifying optimum customers is to define the criteria for evaluation and choose the
right segmentation for customer analysis. Criteria might include ease in serving customers, profit margins,
scale economies, segment growth potential, synergies, and other deliberately chosen criteria. Customer
segmentation criteria might include market size and trends, industry, functions within an industry, or the
following:

• Decision-making power
• Sales potential
• Growth potential
• Niche potential
• Retention potential
• Common motivations
• Problem potential

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• Responsiveness
• Media market
When properly done, an analysis of this kind will identify optimum customers and establish the relative
value of all current (and potential) customer segments. This, in turn, helps identify which customers to
target with increased attention and which to phase out.

In the government and nonprofit sectors, the term customer is often replaced by a name more
meaningful for the program or service being delivered. Names such as client, citizen, member, recipient,
warfighter, and associate are used in place of customer. And the stakeholder group will be different for
government and nonprofit organizations, where stakeholders are composed of the constituents making
up the universe of people and other organizations with an interest in the government or nonprofit
organization.

Strategy practitioners are responsible for ensuring that necessary customer information is collected,
evaluated, and incorporated into the leadership teams strategic thinking and planning processes.

E. Assessing Stakeholder Needs, Wants, and Expectations

Similar to the assessment of the needs of customers, the strategy practitioner can be expected to assess
the needs, wants, and expectations of key stakeholders. Again, the objective is to obtain strategic
intelligence and actionable insights that serve to inform the strategy formulation processes. This
assessment should be done on any stakeholder group that is determined to potentially have a
significant impact on the organization’s strategic success.

F. Identifying Implications of the Future Assessment

Following a thorough PESTEL analysis (covered earlier), the organization’s leadership team needs to
understand where its organization fits in the world surrounding it. Two tools are often used to paint this
picture—the SWOT assessment, and the strategy canvas or profile. SWOT analyses are used to identify
the strengths, weaknesses, opportunities, and threats that impact the organization's strategic success.

SWOT Analysis: SWOT analysis (see Figure 6) originated in the 1960s and 1970s from the work of Albert
Humphrey at Stanford University who investigated why corporate planning failed. Humphrey’s research
was initially termed SOFT analysis. Humphrey and the original research team used the categories “What is
good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and
bad in the future is a Threat. SWOT analysis helps match an organization’s goals and capacities to the
environment in which it operates and aids with the assessment of both internal capabilities (internal scan)
and the external environment (external scan). (Humphrey, A. 1974. MBO Turned Upside Down,
Management Review 68 (8): 4-8).

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Figure 6: SWOT Analysis

Internal Scan

Strengths
• Positive attributes, tangible and intangible, internal to an organization that enhances its ability to
attain a desired goal
• Factors within the organization’s control

Weaknesses
• Negative attributes internal to an organization that detract from its ability to attain the desired goal
• Factors within an organization’s control where improvements can and should be made

External Scan

Opportunities
• Attractive factors in the external environment that represent the reason for an organization to exist
and develop
• Opportunities in the environment that will propel the organization forward

Threats
• External factors, beyond an organization’s control, that could place the organization's mission or
operation at risk. Sometimes classified by their “seriousness” and “probability of occurrence”
• The organization may benefit by having contingency plans to address threats if they should occur

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Strategy Canvas: A strategy canvas (see Figure 7) is a planning tool commonly used with the Blue Ocean
Strategy model to graphically depict key competitive strategic factors of the organization’s value
proposition to customers, compared to other organizations operating in the same market space. The
strategy canvas can be used in the public sector in an “as is” versus “to be” format.

Figure 7: Strategy Canvas

Two lines are drawn, one for the company in question and the other for competing companies. The x-axis
consists of the competitive factors, and the y-axis is the relative importance of the factors. For example,
attaining low prices is a competitive factor, and company A has an aggressive strategy around being the
low price leader. Another company, B, may not compete as much on price, stressing quality and service
over low price. So, company A would score high on the low price factor, whereas company B would score
lower on this factor. (Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create
Uncontested Market. Boston: Harvard Business Press.)

Tools and models identified in earlier sections help create a picture of the external environment the
organization has to operate within to be successful in the present and in the future. Once the analyses
and assessments are completed, a snapshot can be created to guide current and future decision making
and actions. For example, the Strength and Opportunities from the SWOT assessment can be combined
into a summary category of factors called Enablers, and the Weaknesses and Threats are grouped into a
Pains or Challenges category. The results of other models and analyses can be summarized into actionable
understanding of the environment, regulations, governance, customer value, technology, innovation,
and other factors that will help shape the development of strategy.

G. Scenario Planning, Industry Mapping, and Futures Research


Scenario planning, industry mapping, and futures research are tools that can help visualize the future.

Scenario Planning: Scenario planning is rooted in the military strategy work of Herman Kahn related to
the possible scenarios associated with thermonuclear war in the late 1960s. Scenario planning is not
about predicting the future but identifying what can possibly occur (i.e., different scenarios). Scenario
planning is a methodology that organizations use to make flexible long-term plans. Alternative scenarios
can be developed from the assessments and analyses completed earlier. These alternative scenarios will
incorporate different assumptions about how the environmental factors may be realized. Demographics
and other assumptions should be documented so that alternative scenarios can be reviewed periodically
and assumptions re-tested and validated against the evolving situation. Strategy practitioners play a

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major role in facilitating this process. (Kahn, H. 1960, On Thermonuclear War. Princeton: Princeton
University Press.)

Industry Mapping: Industry mapping is a powerful tool that gives a strategic view of the competitive
terrain. It can be used as the foundation of an ongoing intelligence program. Understanding where the
organization is positioned within its markets and relative to competitors can be invaluable information for
decision makers in guiding strategy development. Industry mapping can be a powerful tool for informing
decisions around alternative strategies. It can help uncover growth opportunities, demonstrate that some
segments are in danger of becoming too crowded, signify when consolidation is needed, and identify
potential acquisition targets. Industry mapping can be used in conjunction with other models (e.g.,
Porter’s Five Forces and a Strategy Canvas) to better understand how an organization is positioned in its
markets relative to its competitors.

Futures Research: Futures research is the study of hypothesizing about alternative futures and the various
perspectives that underlie them. It is carried out by forecasting based on a combination of past
performance, cross-disciplined treatment of subject matter, established mathematical forecasting, and
systems models, and by carefully collecting input from subject matter experts. Futures research is an
outgrowth of operations research and systems thinking and allows strategic planners to think about the
future in three distinct ways: form perceptions about the possible, analyze likely probable alternative
futures, and make choices to bring about preferred events. Futures research typically focuses on time
frames of five years and beyond.

While the three mentioned above have their roots in defense and business, governments and nonprofit
organizations can benefit from the strategic thinking that is at the foundation of all these tools.
Sometimes the language needs to be changed (e.g., citizens or clients, not customers), but many of the
underlying principles and related strategic thinking remain the same. For example, a government or
nonprofit organization could use futures research to think about future socioeconomic perspectives. And
scenario planning can apply to any industry, government, or nonprofit sector, as these organizations plan
strategically for the future.

5.2.03 Internal Assessment

A. Conducting an Internal Scan

This component builds an understanding of the internal factors that contribute to organization success.
Included are identification and analysis of the status of key factors related to organization effectiveness
and strategy formulation. Various tools and analysis instruments are used to develop this understanding,
including the organization’s strengths and weaknesses, core competencies, competitive advantages, the
customer-value proposition, core values, culture, work atmosphere, pending issues, management and
leadership, financial performance, resources, and intangible assets.

The internal scan should examine and analyze core systems, processes, governance, and infrastructure.
Additional analyses (such as tools and technology) can supplement the assessment. Attention should also
be given to “soft” factors such as employee satisfaction, work-life balance, culture, and employee values.
Because these factors vary by stakeholder group, they should be conducted in a way that allows breakout
of results by the roles and levels of employees and other stakeholders.

The well-known SWOT analysis (described earlier in this section) is a frequent starting point, but more in-
depth and focused analyses are needed to complete the internal scan. An annual assessment may be
appropriate using the Baldrige criteria or other assessments that use criteria that help the organization
measure and improve efficiency, enhance effectiveness and results to customers and stakeholders, and
improve accountability and governance.

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Malcolm Baldrige Criteria: The Malcolm Baldrige approach is a set of guidelines written and used as a
yardstick to assess how well an organization is able to meet a specific excellence level. (Malcolm Baldrige
Criteria. 2014. Criteria for Performance Excellence, National Institute of Standards.)

The Baldrige approach has a point scoring system with a total potential score of 1000 points compiled
over seven categories:

• Leadership
• Strategic planning
• Customer and market focus
• Information and Data Analysis
• Human resource management and development
• Process management
• Business results

The Baldrige approach has 11 values and concepts:

1. Visionary leadership
2. Customer-driven excellence
3. Organizational and personal learning
4. Valuing employees and partners
5. Agility
6. Focus on the future
7. Managing for innovation
8. Management by fact
9. Public responsibility and citizenship
10. Focus on results and creating value
11. Systems perspective and similar approaches

Six different Baldrige sectors make up the Baldrige Performance Excellence Program: education, health
care, manufacturing, nonprofit/government, service, and small business. The Baldrige program is
administered by the National Institute of Standards and Technology, an agency of the U.S. Commerce
Department.

B. Developing a Shared Understanding of the Organization’s Current State

Once strategic factors have been identified, they are consolidated and documented in an assessment
database so the findings, conclusions, and recommendations arising from the internal scan can be shared
and understood by everyone in the organization who needs access to this type of information.

Clearly distinguish findings (analyzed data in objective, unbiased form), conclusions (interpretations about
the findings), and recommendations (suggested actions). Doing so invites effective strategic
deliberations, permits challenging of implicit mental models and assumptions, and encourages discussion
of alternative approaches.

It is important to clearly distinguish these three types of information:

Findings are analyzed data in objective, unbiased form.

Conclusions are interpretations about the findings.

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Recommendations are suggested actions.

Consider how to best communicate the results of internal assessments to employees and other key
stakeholders.

C. Developing Shared Understanding of the Organization’s Core Competencies/Competitive Advantages

Core Competence is a bundle of skills and technologies that enable a company to provide a particular
value to a customer (Hamel and Prahalad, 1994).

Core competence is traditionally thought of as something that can be marketed and yet that is difficult to
imitate – the greater the difficulty, the greater the competitive advantage gained by the organization.
Competitive advantage captures how an organization differentiates itself competitively. Traditionally, if a
private sector organization consistently maintains profits higher than its competitors, it is thought to have
a competitive advantage. Michael Porter felt that competitive advantage was usually based on either a
cost advantage or a differentiation advantage. (Porter, M. 1980. Competitive Strategy. New York: The
Free Press)

Likewise for government and nonprofit organizations, core competencies are critical to understanding
where programs and services can be delivered efficiently and cost-effectively. Should program A be
housed in the Federal Department of Education, the Department of Energy, or administered at the state
level? Would citizens or clients be better served by program B's being funded from state tax revenues
from county collections, or from both?

It is the role of the strategy practitioner to facilitate a leadership team through an analysis and
understanding of the organization’s core competencies and competitive advantages.

5.3 CONTEXT

5.3.01 Historical
The history of strategic thinking extends back to ancient Sun Tzu's Art of War (2300–2500 years ago); the
History of the Peloponnesian War by Thucydides (431–404 BCE); the Greeks/Alexander the Great; The
Prince by Machiavelli (the 1500s); and other more recent military leaders, including Carl Von Clausewitz’s
Principles of War, Napoleon, and the strategic thinkers at West Point starting in the 1800s.

Beginning in the late 1800s, military strategic thinking became the basis for business and organizational
strategy. By the 1950s, management science emerged as a field with Peter Drucker defining the
Management by Objectives methodology. In the 1960s, the field of strategic management started to take
shape with Alfred Chandler refining the notion of applying strategy to business and Igor Ansoff developing
the “planning approach” to strategy and Ansoff’s Grid. The following decades saw the invention of many
new models with the original work on the SWOT Analysis (1969), the BCG Growth-Share Matrix by the
Boston Consulting Group (1970), Drucker’s Application of Systems Thinking to Organization Performance,
and Michael Porter’s Generic Strategies and Five Forces Analysis (1980). Kenneth Andrews built on
Chandler’s work to define the concept of corporate strategy and developed the “design approach to
strategy setting” in 1980 about the same time that James Brian Quinn used the expression “logical
incrementalism to express his view of the way strategy and strategic decisions evolve. In 1982 Tom
instrumentalism”
Peters and Robert Waterman proposed the Seven S Model of strategic management, and in 1986 Richard
Neustadt proposed that by connecting the past with the present and linking this to the future, strategic
thinking is always “thinking in time.” In 1989, C.K. Prahalad and G. Hamel suggested that strategic thinking
is “crafting strategic architecture.”

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The 1990s was a rich decade for the academics of strategic thinking. In 1990 Peter Senge wrote that a
strategic thinker has a mental model of the complete system and stresses the significance of mental
models in influencing our behavior. In 1991 Peter Schwartz wrote that “a leader must look into an
uncertain future, quantifying likely outcomes and trends.” In 1992 as Drs. Kaplan and Norton were
developing the Balanced Scorecard, Ralph Stacey wrote that strategic thinking is “… using analogies and
qualitative similarities to develop creative new ideas….” In 1994 as Ian Wilson suggested that “strategic
thinking is merely thinking about strategy,” Hamel and Prahalad suggested that strategic thinking is
“intent-focused and intent-driven.”

In the 1990s, Henry Mintzberg, L. Heracleous, and Jeanne Liedtka all contributed to the definition of
strategic thinking. Mintzberg (1994) defined strategic thinking as a particular way thinking with
discernible, inherent attributes, while Heracleous (1998) viewed the strategic thought process as
synthetic, divergent, and creative and the strategic planning process as analytic, convergent, and
conventional. Jeanne Liedtka (1998) defined strategic thinking as a particular way of thinking with specific
and clearly identifiable characteristics and competencies. Those competencies included systems
perspective, intent focus, intelligent opportunism, thinking in time, and hypothesis driven.
In the late 1990sHenry Mintzberg identified his 10 schools of strategy:

1. The Design School


2. The Planning School
3. The Positioning School
4. The Entrepreneurial School
5. The Cognitive School
6. The Learning School
7. The Power School
8. The Cultural School
9. The Environmental School
10. The Configuration School

In the 2000s Jim Collins introduced the Hedgehog Concept for maintaining focus (“doing one thing and
doing it well"), Graetz and Horwath both contributed to the definition of strategic thinking, and W.C. Kim
and Renee Mauborgne developed an imaginative and creative approach to gain competitive advantage
called Blue Ocean Strategy.

5.3.02 Business Acumen

A. THINK Content – Strategic Planning Professional (Level I)

The candidate should know and/or understand how to:

1. Design a future global environmental scanning system and process utilizing accepted methodologies
for today’s global competition.

2. Ensure that enterprise-wide risk management, scenario planning, portfolio analysis, and futuring are
part of the strategic planning process.

3. Support full economic and portfolio analysis of tentative/alternative strategic directions to ensure
their viability, growth, and sustainability.

4. Assist senior management with industry and organizational structural analysis in search of a better
business model.

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5. Gather customer satisfaction information and intelligence, especially regarding their wants, needs,
loyalty, and retention.

6. Assist the collective management team in developing and using a common framework and language
to become a strategy-oriented organization attuned to the frequency of the business’ dynamic nature
and processes.

7. Provide benchmarking and best practices research on what works or does not work.

8. Focus the organization on strategic goals and measurements for its short- and long-term success.

B. THINK Processes - Strategic Planning Professional (Level I)

The candidate should know and/or understand how to:

1. Promote ethical considerations as part of the strategic thinking process.

2. Draw quiet people out safely and ensure open and frank communications in strategic thinking
sessions.

3. Lead virtual teams to openly discuss strategic thinking topics.

4. Foster a culture of creativity and innovation as part of the strategic thinking process.

5. Focus on keeping things simple (simplicity wins the game every time) as it is a way to make an
organization more strategic yet faster and cheaper.

6. Guide near-term trend and competitive/industry analysis to be able to strategize in dynamic and
evolving global markets.

7. Utilize proactive pre-work and pre-meetings to tailor and sequence the organization’s Think-Plan-Act
framework to ensure that all senior and middle management understand and use the same process.

C. THINK Context - Strategic Management Professional (Level II)

The candidate should know and/or understand how to:

1. Provide the necessary and specific holistic strategic thinking framework to ensure better strategic
decision making.

2. Provide the needed strategic thinking context to keep it separate from the day-to-day tactical and
pressured world of business.

3. Organize meetings with a single agenda item on difficult and chronic strategic issues affecting the
organization.

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4. Involve a broader array of middle management and others in the strategic thinking process as a
learning experience while ensuring there is no “dumbing down” result.

D. THINK Content - Strategic Management Professional (Level II)

The candidate should know and/or understand how to:

1. Provide strategic intelligence to senior management to lead competitive advantage and strategy
discussions, ending with consensus decision making, where possible.

2. Evaluate different strategic alternatives to develop a uniqueness that creates value for their
customers and a competitive advantage for the organization.

3. Assist senior management with the development of their vision and mission/purpose, core values,
and long-range direction for the future.

4. Assist senior management with value chain management analysis, sustainable value chains, and
business models that drive entrepreneurial behavior.

5. Link strategic thinking with strategic budgeting to ensure a focus on the future and opportunities
versus sunk costs.

6. Guide the dissemination of acquired knowledge to the entire organization in a form that is useful.

E. THINK Processes - Strategic Management Professional (Level II)

The candidate should know and/or understand how to:

1. Conduct strategic deliberations through an understanding of group dynamics, personalities,


facilitation, good questions, and assistance in consensus and closure.

2. Challenge existing assumptions and confront the logic of all involved, including senior executives.

3. Facilitate conflict management in order to persevere through difficult discussions and chronic issues
that have no easy answers.

4. Assist senior management with redefining industry boundaries if necessary, including scenario
planning or modeling to transform and create new market space.

5. Assist senior executives in identifying the unintended consequences within every strategic discussion
in the complexity of today’s world.

6. Provide a systemic approach to strategic thinking during future environmental scanning and clarify
the desired outcomes before moving forward with any analysis, problem solving, or decision making.

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7. Teach the senior management first, the rest of management second, and the entire workforce third
in thinking strategically as a better way to be strategic on a daily, weekly, monthly, and yearly basis.

F. THINK Context - Strategic Management Professional (Level II)

The candidate should know and/or understand how to:

1. Design a Strategy Management Office to guide the strategic thinking—strategic planning—strategic


implementation processes.

2. Design a strategic management system and yearly cycle as a way to run the business day-to-day,
week-to-week, month-to-month, and year-to-year while thinking dynamically and tuned to the
frequencies of the business.

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5.3.03 References
• Aguilar, Francis J. 1967. Scanning the Business Environment. New York: Macmillan.
• Al-Debei, M.M., El-Haddadeh, R. and Avison, D. 2008. Defining the Business Model in the New World
of Digital Business. Proceedings of the Americas Conference on Information Systems (AMCIS). Vol.
2008, 1-11.
• Collins, Jim. 2001. Good to Great: Why Some Companies Make the Leap...and Others Don’t. New York:
HarperCollins Publishers, Inc.
• de Bono, E. 1985. Six Thinking Hats. Boston: Little Brown and Company.
• Enduring Ideas: The GE–McKinsey Nine-box Matrix. McKinsey Quarterly, September 2008.
• Flavell, J. H. 1979. Metacognition and Cognitive Monitoring: A New Area of Cognitive‐ Developmental
Inquiry. American Psychologist, Vol. 34 (10), Oct. 1979, 906-11.
• Graetz, F. 2002. Strategic Thinking Versus Strategic Planning: Towards Understanding the
Complementarities. Management Decision Vol. 40 Issue 5: 456-462.
• Henderson, B. 1970. The Product Portfolio. Boston: BCG Perspectives 1970. Boston Consulting Group.
• Henderson, B. 1973. The Experience Curve. Boston Consulting Group.
• Heracleous, L. 1998. Strategic Planning or Strategic Thinking? Long Range Planning, Vol. 31 No. 3:
481-487.
• Horwath, R. 2004. Storm Rider: Becoming a Strategic Thinker. Chicago: Sculptura Consulting, Inc.
• Humphrey, A. 1974. MBO Turned Upside Down, Management Review 68 (8): 4-8
• Kahn, H. 1960. On Thermonuclear War. Princeton: Princeton University Press.
• Kaplan, R. S. and Norton, D.P. 1996. The Balanced Scorecard. Boston: Harvard Business School Press.
• Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested Market
Space and Make the Competition Irrelevant. Boston: Harvard Business Press.
• Kuhn, T. 1970. The Structure of Scientific Revolutions. 2nd ed. Chicago: University of Chicago Press.
• Liedtka, J. 1998. Strategic Thinking: Can it Be Taught? Long Range Planning, Vol. 31. No. 1: 120-129.
• Lindgardt, Z., Reeves, M., Stalk, G. and Deimler, M. 2009. Business Innovation Model. Boston
Consulting Group.
• Livingston, J. A. 1997. Metacognition: An Overview. Retrieved from
http://www.gse.buffalo.edu/fas/shuell/cep564/Metacog.htm
• Malcolm Baldrige Criteria. 2014. Criteria for Performance Excellence, National Institute of Standards.
• Meichenbaum, D. 1985. Metacognitive Methods of Instruction: Current Status and Future Prospects.
1985. Special Services in the Schools. Vol 3, Issue 1-2: 23-3
• Mintzberg, Henry. 1994. The Rise and Fall of Strategic Planning. New York: The Free Press.
• Osborn, A. 1953. Applied Imagination: Principles and Procedures of Creative Problem Solving. New
York: Charles Scribner's Sons.
• Osterwalder, A., Pigneur, Yves and Smith, A. 2010. Business Model Generation. Hoboken, NJ: John
Wiley & Sons, Inc.
• Peters, T. and Waterman, T., Jr. 1982. In Search of Excellence: Lessons from America’s Best Run
Companies. New York: Harper & Row Publishers.
• Porter, M. 1980. Competitive Strategy. New York: The Free Press.
• Rand Corporation. 1950 The Delphi Method.
• Teece, D. 2009. Dynamic Capabilities and Strategic Management. Oxford: Oxford University Press.
• Weiner, E. and Brown A. (1986) "Stakeholder Analysis for Effective Issues Management,” Planning
Review, Vol. 14 Issue: 3, pp.27 – 31.
• Wernerfelt, B. 1984. The Resource-based View of the Firm. Strategic Management Journal Vol. 5:
171-180.

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Section 2: The Strategic Management Building Blocks
Chapter 6 - Plan

6.1 CONTENT

Planning is a process of thinking and organizing activities to achieve a future-oriented goal.

Planning involves forethought and forecasting.

Forethought is planning with consideration for the future.

Forecasting is predicting what the future will look like.

The processes of developing a written strategic plan and eventually a formal operating plan are set in
motion based on the external, internal, and customer assessments previously described. From a holistic
perspective, planning is the process by which needs are anticipated and prioritized to implement change.
Planning is critical to maintain control over change. Planning anticipates what changes will take place and
puts into place a process to respond effectively. Assessment drives better decision making around a
future course of action by documenting, in measurable terms, knowledge, skill, attitudes, and ability.
Planning becomes strategic in nature, when a dual focus is employed to meld long-term developments of
a strategic direction with short-term resources and capabilities available to pursue the chosen direction.
This work is set in motion based on the external, internal, and customer assessments previously
described: the establishment of vision, mission, values, policies, and goals for the entity and subsequent
development of a written strategic plan, a capacity and capabilities assessment of the organization’s
ability to meet customer and stakeholder needs, and, eventually, a formal operating plan.

Strategy formulation covers the processes necessary to articulate the overall strategic direction of the
organization as well as the high-level strategies an organization pursues to arrive at the desired
destination. From a team-based perspective, the importance of building and managing strategy, in
tandem with the resulting change management process, is vital in the strategy formulation phase. This is
the point at which overall direction and core strategies are defined.

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6.1.01 Theories and Models

Scenario Planning or Scenario Analysis (1971): Developed by Pierre Wack at the Royal Dutch Shell
Company as a forecasting model to guide strategy for long-term planning. This was a version of what was
routinely done by military organizations in the past utilizing simulation games often involving systems
thinking and game theory elements. This section focuses on planning or “choosing a desired course.”
(Wack, Pierre. 1985. Scenarios: Uncharted Waters Ahead. Harvard Business Review. September‐ October;
Wack, Pierre. 1985. Scenarios: Shooting the Rapids. Harvard Business Review. November‐December)

Strategic Planning (1960s): Strategic planning is a management activity that is used to set focus priorities,
energy and resources, to strengthen operations, ensure that employees and other stakeholders are
working toward common goals, establish agreement around intended outcomes/results, and assess and
fine-tune the organization's course in reaction to a changing environment.

Operational Planning: Operational planning is a process of converting strategic goals and objectives to
tactical goals and objectives.

6.1.02 Tools

A. Project Planning Tools

Critical Path Method (1950s): A project modeling tool developed by Morgan Walker of the DuPont
Corporation and James Kelley of Remington Rand, the tool uses a project network logic diagram to lay out
task durations, dependencies, and milestones of a project. (Kelley, J. and Walker, M. 1959. Critical Path
Planning and Scheduling. In Proceedings IRE-ACM ’59 (Eastern) Papers Presented at the December 1-3,
1959 Eastern Joint IRE-AIEI-ACM Computer Conference.)

PERT (1950s): The project evaluation and review technique was developed by the U.S. Navy to manage
the Polaris Submarine Project. The tool makes dependencies and critical path visible and identifies early
start, late start, and slack for each activity. (Fazar, W. 1959. Program Evaluation and Review Technique.
The American Statistician, Vol. 13, No. 2: 10)

Scrum (1970s): Often used for software development, Scrum is an agile software non-sequential
development tool. Members work as self-organizing teams who are usually in daily face-to-face
collaboration. (Sutherland, J. and Schwaber, Ken. 2013. Scrum Guides. ScrumGuides.org.

Logical Model Framework (1970s): The U.S. Agency for International Development (USAID) developed the
Logical Model Framework approach in 1970 during a worldwide study conducted by Leon J. Rosenberg, a
principal of Fry Consultants Inc. The Logical Framework Approach is an analytical and management tool
used by international NGOs and partner governments for project management. The Logical Framework
appears as a four-by-four project table. The four rows describe four different types of events that take
place as a project is implemented: Activities, Outputs, Purpose and Goal. (Rosenberg, L.J. 1970. USAID
Final Report, Contract csd-2510)

Kellogg Performance Logic Model (1990s): This model is a systematic and visual way to present and share
relationships among the resources needed to operate a program, indicating the activities planned and the
changes or results intended to achieve. This involves a mapping of (1) Planned Work: Resources/Inputs,
and Activities and (2) Intended Results: Outputs, Outcomes, and Impact. (Kellogg Foundation. 2001. Logic
Model Development Guide: Logic Models to Bring Together Planning, Evaluation and Action. Battle Creek,
MI: W.K. Kellogg Foundation)

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B. Planning Visualization Tools

Strategy Canvas (2005): A strategy canvas is a planning tool graphically depicting key competitive
strategic factors of the organization’s value proposition to customers compared to other organizations
operating in the same market space. The strategy canvas is the central analytic and action structure for
building a Blue Ocean Strategy. The horizontal axis indicates the range of factors that the industry
competes on and invests in; the vertical axis indicates the offering level that buyers receive. Kim, W. Chan
and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested Market. Boston: Harvard
Business Press.

Industry Mapping: Industry mapping is a powerful tool that gives a strategic view of the competitive
terrain. It can be used as the foundation of an ongoing intelligence program. Understanding where the
organization is positioned within its markets and relative to competitors can be invaluable information for
decision makers in guiding strategy development. Industry mapping can be a powerful tool for informing
decisions around alternative strategies. It can help uncover growth opportunities, demonstrate that some
segments are in danger of becoming too crowded, signify when consolidation is needed, and identify
potential acquisition targets. Industry mapping can be used in conjunction with other models (e.g.,
Porter’s Five Forces and a Strategy Canvas) to better understand how an organization is positioned in its
markets relative to its competitors.

6.2 PROCESS

6.2.01 Strategic Elements

A. Mission

Mission is an organization’s purpose and reason for its existence. It defines who the organization is,
what it will do, and how (in general terms) it will do it.

The mission statement should guide the actions of the enterprise, articulate its overall goals, deliver a
sense of direction, and guide decision making. The mission gives context to organization strategy
formulation. For government, the mission is often described in legislation and requires legislation to
change.

Regardless of the reason, every organization needs to clearly state its mission, linking its human capital,
systems, and processes to keep the organization from straying from its shared commitment.

Articulating a mission statement is challenging to leaders who spend much of their time immersed in the
detail of managing day-to-day activities of the organization. Strategy practitioners must place high
priority on helping their organization or client to clearly define their mission.

Characteristics of effective mission statements include the following:

• Communicate a sense of purpose


• State clearly the arena of interest, i.e. what the organization does
• Identify, in broad terms, how the organization pursues its mission
• Establish boundaries within which the organization operates
• Affirm the direction set forth in the vision statement
• Are not so broadly stated that it is of little use to leadership in guiding the organization
• Are action oriented, to the point, and easily remembered
• Are divided into functional mission statements, as necessary

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Some example mission statements are listed below:

ASP: ASP’s mission is to help people and organizations succeed through improved strategic thinking,
planning, and action.

CHICAGO BULLS: The Chicago Bulls organization is a sports entertainment company dedicated to winning
NBA Championships, growing new basketball fans, and providing superior entertainment, value, and
service.

GOOGLE: Google’s mission is to organize the world’s information and make it universally accessible and
useful.

NASA: Drive advances in Science, Technology, Aeronautics, and Space Exploration to enhance knowledge,
education, innovation, economic vitality, and steward our Earth.

MIT: The mission of MIT is to advance knowledge and educate students in science, technology, and other
areas of scholarship that will best serve the nation and the world in the twenty-first century.

NIKE: To bring innovation and inspiration to every athlete in the world.

UNITED WAY: To improve lives by mobilizing the caring power of communities around the world.

VETERANS ADMINISTRATION: To fulfill President Lincoln's promise. To care for him who shall have borne
the battle, and for his widow, and his orphan by serving and honoring the men and women who are
America’s Veterans.

B. Vision

Vision articulates the desired future state of an enterprise in terms of its strategic direction. It is an
expression of a desired end-state that inspires a compelling future; a mental image produced by the
imagination.

Vision statements use clear and concise vision descriptors. Some vision statements will be built around a
goal, such as “our vision is to have 2000 stores by the year 2000”; other vision statements will not include
goal language but may include a goal as a separate statement.

A vision statement is central to an organization’s strategy. It is a concise, thoughtful, and inclusive


statement describing where the organization is going and what it looks like when it reaches the desired
destination. Vision employs a long-term view, describing where the organization will be in the accepted
long-range planning horizon of the organization. It provides a long-term focus for the entire organization.

Purposes of a vision statement include aligning the organization’s actions and operations and inspiring
stakeholders in the pursuit of it. A vision statement is a team development and change management tool
of the highest order as it communicates a sense of being comprehensive, integrated, and sustainable,
while allowing for change, development, and innovation. But while the eventual statement is important
for communication purposes, it is the strategic thinking that goes into the statement that sets the basis
for strategy, programs, projects, and services that drive the organization to higher performance.

Producing an effective vision statement is a matter of great interest—primarily because of the imperative
that it be a shared vision, that is, the product of team-based development and decision-making effort.

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Arriving at a shared decision of this magnitude can be a challenge, especially for organizations emerging
from command and control cultures with a strict top-down management philosophy.

To be actionable and effective, a vision statement needs to be purpose-driven, motivating, future-


oriented, and core competencies-oriented. Creating or updating an organization’s vision statement is
often one of the most exciting parts of strategic planning.

Characteristics of effective vision statements include the following:

• What the organization can realistically expect to achieve, based in part on past experience but also
with provision for “stretching” to new levels of achievement
• Sustainable and the basis for continuous expansion and advancement
• Written in terms that will clearly communicate to all stakeholders how achieving the vision will
benefit them
• Written in present tense and in a style that will energize and mobilize the various units of an
organization and give the board, management, and staff a sense of purpose and direction
• Written in terms that are clear, concise, easy to remember, and distinctive

Some example vision statements are listed below:

AMAZON: Our vision is to be earth's most customer centric company; to build a place where people can
come to find and discover anything they might want to buy online.

CISCO: Changing the way we work, live, play, and learn.

DUBAI: To position Dubai as the leading tourism destination and commercial hub in the world.

TOYOTA: To sustain profitable growth by providing the best customer experience and dealer support.

NASA – Dryden Flight Research Center (Armstrong): To fly what others only imagine.

Differences between mission and vision

While a vision alludes to the future, the mission statement is rooted in the here and now—what we
currently do. However, the two are not unrelated. A mission statement should describe modus operandi
that will lead to the fulfillment of the organization’s vision.

A second, and very important, difference between mission and vision is that vision can be revised and
refocused relatively easily since it describes a future state. A mission statement cannot since it serves to
communicate the organization’s purpose “here and now” and provide high-level direction to its intended
actions. Some nonprofits and government organizations state that where they want to go and how they
need to change is driven by the vision, all the while conducting their assigned mission.

In government and nonprofit organizations, missions can drive the strategic thinking and planning process
more than can vision. This is because the mission of these organizations is rooted in law, regulation, or, in
the case of nonprofits, the common purpose of a constituency. In private sector organizations, the
opposite is usually the case, as strategy and goal setting are more closely derived from the vision.

D. Core Values

Core values are fundamental beliefs or philosophies that dictate correct behavior and guide the actions
of an organization’s leaders and workforce in the production of its goods and delivery of its services.

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The core values of an organization are fundamental in nature, forming the foundation on which board and
staff perform work and conduct themselves. In a rapidly changing world, core values are unshakable and
constant.

Core values are not descriptions of the work that organizations execute or the strategies employed to
accomplish a mission. The core values of an organization inform how work is to be performed consistent
with the belief structure of the organization. In an ever-changing world, core values are constant and are
the basic foundational elements that define expectations for the fulfillment of all organizational and
individual roles and responsibilities.

Core values play an important role in determining the strategic direction of an organization by being a
filter in the selection process of core strategies. If a proposed strategy can pass the core values litmus
test, it can be considered a viable option.

Values are the foundation of a strategic planning and management system, providing stability to the
selection process of core strategies. For example, if “protecting the environment” is held as an
organization value, it should figure heavily into the consideration and decision-making process for
developing strategies and deploying tactics.

The responsibility of a strategy practitioner is to help the leadership team articulate the shared values
that the board of directors, managers, and staff will proactively commit time and resources to operate by.

Characteristics of effective values include the following:

• Organizationally relevant core beliefs


• Held over the long-term and only subject to slow, incremental changes
• Widely shared among members of the organization
• Central to the development and maintenance of corporate culture
• Substantive beliefs, not slogans, sound bites, or superficial statements made for promotional or
public relations purposes or to enhance the organization’s image
• Sufficiently specific to translate into actions and transactions
• Incorporated in the way the organization acts and reacts with its stakeholders

Examples of core value statements are listed below:

CITI INSTITUTIONAL CONSULTING: Our core values encompass a commitment to complete objectivity and
transparency in all areas of our investment advice. Our advice is managed—in all aspects and at all
times—by the same team that originally provided your customized solutions.

ST. JOHN’s UNIVERSITY: The Vincentian tradition at St. John’s University is the foundation and the source
of the core values its members strive to embody: truth, love, respect, opportunity, excellence, and
service.

WHOLE FOODS:
• Selling the highest quality natural and organic products available
• Satisfying and delighting our customers Supporting team member happiness and excellence
• Creating wealth through profits and growth
• Caring about our communities and our environment
• Creating ongoing win-win partnerships with our suppliers
• Promoting the health of our stakeholders through healthy eating education

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U.S. DEPARTMENT OF DEFENSE:
• Leadership
• Professionalism
• Technical know-how

ZAPPOS:
• Deliver WOW through service
• Embrace and drive change
• Create fun and a little weirdness
• Be adventurous, creative, and open-minded
• Pursue growth and learning
• Build open and honest relationships with communication
• Build a positive team and family spirit
• Do more with less
• Be passionate and determined
• Be humble

E. Policies

Policies are guidelines developed for use in an organization to influence, instruct, and specify how
members of the organization should make decisions in given circumstances.

Policies are also a key component of strategic direction. However, the role policies and regulations play in
strategic management is often not considered.

This lack of consideration can be traced, in part, to two primary factors. First, many of the most
important policies of an organization have been part of the organization’s culture for so long that they are
taken for granted. And second, most policies govern the design and use of operations, processes, systems,
and procedures—not strategies. Thus, it becomes easy to omit consideration of policies as components of
strategic direction.

The aim is to identify all the policies, written and unwritten, that will have an impact on formulating a
strategic plan of action. Some of these policies are inviolate and simply need to be identified and taken
into account. Others may well be due for a review by leadership.

Example policies are listed below:

• We will only pursue international opportunities in support of our current customers.


• Only family members who have demonstrated professional competency will be promoted to
leadership positions within the business.
• No acquisition will be made unless it strengthens the core organization.
• The U.S. government will provide citizens with information about what their government is doing so
that government can be held accountable.

F. Goals/Objectives

Goals are the long-range, generally-stated directional themes or aims to be achieved in accordance
with the organization’s vision and mission.

Goals are defined while developing the organization’s vision and mission statements. Goal statements
serve to energize and motivate the board of directors, management team, and staff. They are more

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narrowly focused than either vision or mission statements. In fact, lower-level managers and staff often
find it easier to align their own efforts on goals rather than on the more generally-stated vision and
mission statements.

As used here, high-level strategic goals have the following characteristics:

• Describe a future end-state that is supportive of the mission and vision


• Describe actions in actionable terms
• Relate to the expectations/requirements of all the major stakeholders and employees and reveal the
underlying reasons for running the business
• Imply a completion date at some point in the future but not defined at this point
• Can be divided into milestones that, in turn, can be translated into achievable, assignable, and
measurable objectives

Example high-level strategic goals are listed below:

• Become a global organization


• Maintain and enhance the physical infrastructure
• Improve the quality of responsiveness to customers / clients / citizens
• Reorganize for customer service efficiency
• Increase market share
• Reduce childhood illnesses
• Grow member value
• Be measurable so progress can be monitored on their achievement

Goals versus Strategies versus Objectives versus Tactics

Strategies are the methods and approaches taken to advance goals.

Objectives are the quantifiable milestones and targets to demonstrate achievement of goals.

Tactics are the tools used to reach the objectives/targets.


.

Goals versus Objectives

Words matter in strategic planning and management discussions. If one's goals are another’s objectives,
nothing but confusion can result. So while there is no one universally accepted definition of all the terms
used in strategic planning and management, it is very important for an organization to agree on
definitions of terms early in the strategic discovery process.

The term goal is distinctly separate from the term objective. There are no hard and fast rules governing
the use of these terms related to strategy, which has led to a major source of confusion in management
literature and, more importantly, in practical application of strategic planning and management
initiatives. In fact, many authors use the terms interchangeably. In actual practice, the terms arise from
two different development processes serving two very different purposes.

Goal setting is included as part of the process of setting the strategic direction of an organization. Goals
are generally derived from the previously discussed components of strategic direction, i.e., vision,
mission, values, and policies. However, if the resources and capabilities of the organization are to be
focused on the central thrust of the strategic direction, goals must be consistent with the other
components of the strategic direction.

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In contrast, objective setting is a more specific component part of the strategic planning process.
Strategic objectives provide a foundation on which strategy can be communicated and an operating plan
can be built. Objectives are established before specific initiatives, processes, and projects are defined,
designed, integrated into an overall operating plan, and then implemented. Suffice it to say that
objectives are set after a specific strategy has been selected. Objectives are achievable, assignable
outcomes with continuous improvement potential used to manage on-going operations. Simply put,
objectives make strategy actionable.

Confusion about strategy terminology extends to other concepts as well, such as the terms strategies
and tactics. If goals are the broad brush outcomes desired, strategies are the methods and approaches
(i.e., the path and the plan) taken to advance the goals. Objectives are the quantifiable steps to realize
strategies, and tactics are the specific activities and tools used to achieve objectives. Beyond that, there
are many other similar terms that are often confused – purpose, outcome, outputs, priorities, aims, goals,
results, objectives, etc. Again, the most important thing an organization can do to make the complicated
simple is to define terms early in the process.

6.2.02 Key Organizational Drivers of Success

Having a clear understanding of the current state (derived from the environmental assessment or THINK
Building Block) and now the desired future state (specified in the several strategic direction statements),
the team should be able to reach consensus and specify the key organizational drivers of success.

Key organizational drivers of success are areas internal to the organization or external where positive
results must be generated for the organization to achieve its primary goal(s) and ultimately long-term
vision.

With the key drivers of success agreed upon, the leadership team can now identify a reasonably sized set
(or repository) of feasible strategies and high-level tactics for each of the drivers.

Strategy practitioners must play a significant role in helping the leadership team identify the key elements
that will drive organizational success. While each organization is unique, these key organizational drivers
are often related to one or more of the following factors:

• Technology
• Innovation
• Product service mix
• Process efficiency
• Cost
• Partnerships
• Stakeholder inputs
• Unique skills
• Matched job positions and people
• Location
• Governance
• In the case of government and nonprofits, laws, regulations, orders, common purpose

A. Scenarios and Strategies

Once the components of strategic direction have been constructed, alternative scenarios can be
developed. Scenario planning tools and techniques are core skills for any strategy professional to possess.

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Scenario planning is rooted in the military strategy work of Herman Kahn related to the possible scenarios
associated with thermonuclear war in the late 1960s. (Kahn, H. 1960. On Thermonuclear War. Princeton
University Press.) Scenario planning in a business environment goes back to the 1970s with the work of
Pierre Wack at Royal Dutch Shell in 1973 around the Mideast oil crisis.

Scenario planning is not about predicting the future but identifying what can possibly occur in the future
(i.e., different scenarios). Scenario planning is a methodology that some organizations use to make
flexible long-term plans. It centers on alternative scenarios developed from assessments and analyses
completed earlier. These alternative scenarios incorporate different assumptions about how the
environmental factors may be realized.

Scenarios should include a set of optional “how to” strategies for achieving the organization’s strategic
direction. Each strategy should leverage the organization’s core strengths and take advantage of available
opportunities. To ensure the best use of the organization’s resources, every effort should be made to
identify a broad set of strategic alternatives for each scenario.

This work requires the identification of alternatives that flow from a study of the organization’s strategic
direction and its real capacity to achieve these ends. It entails development of new alternatives that will
enable the organization to succeed or defend against the competition. The overall result is a set of
potentially actionable and feasible strategies developed by the organization’s leadership team. It is a
fundamental accomplishment.

To get the best results, skilled strategy practitioners must effectively guide the leadership team to
consider each strategy alternative separately. Perhaps more than in any other step in the planning
process, this step will demonstrate the benefits of a team approach to strategic and operational planning.
Strategy practitioners play a major role in facilitating this process.

B. Evaluation of Scenarios and Strategies

In virtually every organization resources are limited and strategic choices must be made as to which of the
“potentially actionable and feasible strategies” to actually select for inclusion in the organization’s
strategic plan.

Strategy practitioners must play significant role in helping the leadership team ensure that strategies
provisionally identified are those most likely to contribute to the achievement of vision, mission, and
goals and be in harmony with the core values of the organization. Furthermore, strategy practitioners
must help the team understand the constraints and limitations of each strategy alternative. They can
accomplish both of these roles by reminding the leadership team to give special consideration to the
results of assessments already completed including the following:

• Internal and external assessments


• Pains/enablers assessments
• Capabilities assessments
• Values and culture assessments

The goal of the analysis and evaluation processes is to select scenarios and strategies that best leverage
the core competencies of the organization and therefore enhance its overall competitive advantage. To
the extent leadership teams select strategies that leverage their core competencies, they are better able
to take advantage of capabilities already valued by their customers and therefore mitigate their overall
risk profile.

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During processes for identifying optional scenarios and/or creating feasible strategies, it is neither
effective to do an in-depth analysis and evaluation of each option nor realistic to assess the interaction
and impacts of several potential strategies.
Below are typical areas where core competency can be found:

• Quality of the product or service – high above industry standards


• Fill a special niche
• Strong consumer orientation – leading to a high degree of customer intimacy
• Service levels – high above industry standards
• Operational efficiency – leading to low cost provider
• Reputation and brand image – established over many years of outstanding performance
• Site selection – "location, location, location"
• Flexibility and adaptability – needs of customers can change quickly
• Special and unique technical skills of one or more people on the team

Careful consideration should be given to what internal capabilities the organization possesses that are
recognized by customers as its competitive advantage. Once these capabilities are identified, alternative
strategies should be assessed to determine what productive or synergistic match exists between a
particular scenario or strategy and the core competencies of the organization.

C. Selection of Strategies

After the analysis and evaluation processes have been completed, a set of primary strategies should be
selected for inclusion in the written strategic plan. The selection process considers strategies currently
being implemented with those newly proposed. In most cases, selection relies heavily on the judgment of
the leadership team making the evaluations. However, no matter how diligent the team is in setting and
applying objective selection criteria, there are always subjective factors introduced by individual team
members used in making their own evaluations and selections. Strategy practitioners have a major
leadership role here in helping facilitate a transparent discussion of these subjective factors.

The analysis and evaluation processes tend to offset the more creative processes of identifying and/or
generating potentially feasible strategies. What seems initially desirable while considering optional
scenarios and developing feasible strategy alternatives may not prove to be so if a particular strategy does
not meet the tests of profitability, ROI, cost, feasibility, growth and similar evaluation criteria—tests most
often applied during the analysis and evaluation processes.

Consequently, it is not good practice to simply summarize individual ratings based on some scoring
model. The use of any scoring model needs to be accompanied by thorough discussions that include all
members of the leadership team. This will allow team members to understand the reasons for the
differences in the ratings and give them an opportunity to reconsider their selections with new
information and insights. The result will be a consensus-based selection process that is much more robust
and effective.

While there is no exact number of primary strategies that should be selected, the strategy practitioner
should make every effort to minimize the number of goals and strategies. In most cases fewer is better.

Sample strategy selection criteria include the following:

• Perceptions of the leadership team


• Alignment with the strategic goals
• Feasibility of the strategy
• Priority of a particular strategy

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• Time phasing of various strategies
• Sequencing and interaction impacts of strategies
• Long lead times
• Skill gaps
• Acquisition of resources and/or competencies
• Costs versus benefits
• Primary assumptions being made by the leadership team

D. Value Proposition

While formulating the overall direction and strategy of the organization, it is timely to sharpen the
customer value proposition. There are several well-known models in the popular literature addressing
the customer/client/citizen value proposition.

Customer value proposition is the intended overall value and/or benefit a customer will gain from
your product or service in return for its costs, including money, time and effort; a marketing statement
that summarizes the tangible and intangible value of a particular offering and helps customers
understand why they might want to buy a product or use a service.

Ideally, the product or service is “worth” the price in the eye of the customer. Attributes such as
functionality, quality, timeliness, convenience/accessibility, and price figure into the perception of value.
A company’s value proposition should differentiate it from competitors. Image and relationship are
intangible benefits that also may attract a customer to an organization. Image addresses perceived brand
image, status, and reputation, while relationship addresses the interactive experience customers have
with an organization.

To sharpen a customer value proposition one may ask the following set of questions:

• What developments/trends should we be paying attention to in our target markets/customer


groups? What will they be looking for/expecting next year?
• What is the urgent customer and market need?
• What products or services are available to the targeted customers?
• What is the creative approach for addressing this need?
• What makes the product or service uniquely different from other options?
• What is the most important benefit the customer can expect to receive?
• How is the product or service priced in the market?
• How can we prove our overt benefit and the points of differentiation?

The importance of giving customers real reasons to believe that an organization can do what it says it can
do, cannot be overemphasized.

Closely related to the value proposition is the concept of positioning (called by many other names, such as
competitive edge, etc.) Positioning is what is unique, different, or better about a product/service in the
eyes of the customer, relative to the competition, that causes customers to do business with an
organization. Positioning is the process by which strategists try to fashion an image or identity in the
minds of their audience for its product, brand, or organization.

In the public sector a customer value proposition could simply be thought of as what an organization must
deliver to develop, retain, and deepen its relationship with stakeholders. A customer value proposition
should convince a potential customer that one particular product or service will add more value or better
solve a problem than other competing offerings.

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When developing a customer value proposition, it is important to be clear and concise. Some suggest that
the process start by brainstorming and focusing on what needs an organization’s target demographic
group has in common. What do customers want that the organization provides? What is important to
customers? Once common need(s) have been determined, the organization can develop a value
proposition around that need. The purpose of the customer value proposition is to identify and satisfy an
unmet want or need that a target market possesses.

To sharpen the customer value proposition, one must develop an understanding of what specific value an
offering has for customers, recognizing that what the customer values are the benefits of the
product/service, not the product/service itself.

Examples of customer value propositions follow:

• Stradivarius violins and Rolex watches: Quality


• IKEA and Toyota: Bang for the buck
• United Way of Greater Daytona: With a base of tens of thousands of organized individual and group
contributors, United Way has the unique capacity to engage more donors and volunteers to address
the new realities of our economy and make our region one of the most caring and livable places in
America.
• Rolex, BMW, and Hermes: Luxury
• Bloomberg terminals and Uggs: Must haves
• Amazon: Low price, wide selection with added convenience anytime, anywhere
• Google: Find what you want quicker
• US Office of Personnel Management – Presidential Management Fellows Program: By drawing
graduate students from diverse social and cultural backgrounds, the PMF Program provides a
continuing source of trained men and women to meet the future challenges of public service.

E. Organization Culture Change Plans

The units and people within an organization directly impacted by a particular strategy must be given
special consideration by the leadership team and the strategy practitioner. Since people vary dramatically
in how they react to change, their potential for resistance needs to be understood and planned for
deliberately and constructively.

These considerations should be given early on once strategies have been selected. Those who will be
affected must be identified to assess how they will be impacted, what changes they can expect, and
how to answer why these changes are being made.

Confronting the need for culture change, resistance, fears, and opposition to proposed changes are key
challenges facing every strategy practitioner in the strategy management process. Constructively planning
for and communicating what to expect, accept, and develop tolerance for are central to the role of
strategy practitioners. Change implementation involves leadership support, influencers support, stories,
rewards and recognition, and consistency. It takes a strong commitment from all parties involved to make
sure the organization and culture changes are properly communicated. Many believe that organizational
culture plans should be driven by (a) organizational performance assessments and (b) SWOT analysis.

Early on the strategy practitioner must assist the leadership team in identifying those individuals within
the organization who will be impacted by strategies selected for inclusion in the strategic plan.

Those “targets of change” (who will be affected) must be identified to assess how, what changes they can
expect and why. Since people vary dramatically in how they react to change, their potential for resistance
needs to be understood and dealt with effectively.

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Confronting resistance, fears, and opposition to proposed changes are key challenges facing change
agents. Constructively helping their fellow staff members to expect, accept, and develop tolerance for the
changes coming their way is a responsibility of strategic practitioners.
With respect to dealing with people in an environment of change, a number of approaches can be
employed.

• Consistently employ active listening skills


• Translate the message of change in language that is meaningful to targets of change
• Build team strength at the project level, in the senior management group, and among target groups
• Use proven coaching and counseling techniques
• Build organization and structure into the change process whenever possible
• Use fishbone diagramming to monitor and track change
• Know when to solve problems and how to do it effectively
• Know when to delegate and how to manage the delegation process

Strategy practitioners can use their findings and resources to guide any change management process.
John Kotter and others (Conner and Bridges) have done pioneering work in this area, demonstrating
change management practices can have a positive impact on an organization’s ability to actually change.
(Kotter, John P. 1996.Leading Change. Boston: Harvard Business School Press.)

F. High-level Strategic Budgets

At this stage in the strategic planning process, it is prudent to make high-level revenue and cost estimates
of the anticipated impact of the proposed strategies. These estimates will likely forecast ranges for major
profit and loss or revenue and expense/expenditure line items. Sufficient detail should be provided to
enable a board and management team to sign off before more detailed strategic planning is undertaken.
What remains is to submit a detailed request for funding and the approval for the resources, especially
staffing, that should be outlined in sufficient detail to permit management to authorize expenditures and
the use of resources. Special emphasis should be placed on delineating the assumptions that underlie the
plan.

G. Strategic Objectives

A strategic objective is a broadly defined objective that an organization must achieve to make its
strategy succeed.

Leadership teams must translate their organizational strategy into a balanced set of strategic or “stretch”
objectives. Strategy practitioners work with the leadership team to help them understand the outcomes
they are seeking for each key driver of success and major strategy statement. Defining the functional
linkages between the longer-term strategic plan and the nearer-term operating plan is the fundamental
requirement to move from the state of planning into the state of implementation. /Clearly
communicating these relationships enables operational alignments to develop into final form and
eventually occur.

D.P. Norton and R.S. Kaplan were among the first to recognize the need to carefully define the
relationship/dynamics between strategy and operations. They helped explain the importance of executing
the overall organizational strategy through a balanced operational approach. Norton and Kaplan’s
Balanced Scorecard methodology specifies four strategic perspectives leadership teams must consider
when building the bridge between the strategic plan and the strategic operating plan. They include
financial, customer, internal business, and learning and growth perspectives. (Kaplan, R. S. and Norton,
D.P. 1996. The Balanced Scorecard. Boston: Harvard Business School Press.)

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Whether an organization employs the four basic perspectives of the Balanced Scorecard, modifies the
perspectives, or uses a traditional functional approach is not the key issue. The critical point is to link and
align organization level goals and strategies with a “balanced” set of operational objectives rather than
maintaining a singular focus on financial outcomes.

When writing strategic objectives careful attention must be placed on stating them correctly. They should
always be stated as outcomes and not as activities. Only when objectives are stated as outcomes, do they
provide a stable foundation upon which execution of the strategic plan can occur. Strategy practitioners
should always write strategic objectives which can be used to make vision and mission statements
operational. They should be SMART:

• Specific (precise and explicit)


• Measurable (quantifiable and assessable)
• Attainable (suitable and fitting)
• Relevant (pragmatic and sensible)
• Timely (opportune and well-timed)

SMART is a mnemonic device for the characteristics of effective objectives. They should be: Specific,
Measurable, Attainable, Relevant, and Time-bound (Peter Drucker 1954). Other authors have used
somewhat different words for the letters A, R and T, but their advice is similar.

H. Visual Representations of Strategy


Visual representations of the overall organization strategy have evolved over time and are often specific
to the strategic planning model utilized. For example, a strategy map is a visual representation used to
document the primary strategic objectives being pursued by an organization associated with the Balanced
Scorecard model.

Strategy Map: A strategy map is a visual representation of the cause and effect relationships among
strategic objectives linked to one particular goal or theme. Developing a strategy map provides the
leadership team an effective and simple means of checking for imbalances and/or ineffective linkages
among the strategic objectives. It also provides management with a summary view of the integrations
taking shape within the implementation plan. It is a highly effective tool in facilitating internal
communications regarding the operating plan and serves as a significant first step toward aligning the
workforce behind the plan. Kaplan, R. S. and Norton, D.P. 2004. Strategy Maps, Converting Intangible
Assets into Tangible Outcomes. Boston: Harvard Business School Press)

The two strategy maps in Figure 8 and Figure 8 below show how businesses are different from
government organizations.

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Figure 8: Example Private Sector Strategy Map

Figure 9: Example Public Sector Strategy Map

Strategy Canvas: The strategy canvas (see Figure 8) is a diagnostic/action scaffold for building a
persuasive Blue Ocean strategy. (Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to
Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business Press.)

The strategy canvas serves two purposes:


• To capture the current state of play in the known market space, which allows users to clearly see the
factors that the industry competes on and where the competition currently invests and
• To propel users to action by reorienting focus from competitors to alternatives and from customers to
noncustomers of the industry

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Figure 1: The Strategy Canvas

Value Curve: The value curve is the basic component of the strategy canvas. It is a graphic depiction of a
company’s relative performance across its industry’s factors of competition. According to Kim and
Mauborgne, “A strong value curve has focus, divergence as well as a compelling tagline.” (Kim, W. Chan
and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested Market Space and Make
Competition Irrelevant. Boston: Harvard Business Press.)

Strategy Profile: A strategy profile (sometimes called a strategy combination), as shown in Figure 10, is a
set of strategies that fully specifies all actions in a game for each player. A strategy profile must include
one and only one strategy for every player. (Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy:
How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business
Press.)

Figure 10: A Strategy Profile

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I. Strategy Measures (Leading and Lagging)

Implementing a strategic plan often results in a gap between the strategies as they come down from the
top of the organization and the level of employee perception of how their daily activities contribute to
achieving the vision. The fact that the strategic plan is by its nature a series of long-term goals and
objectives while most managers are trained to gauge their progress using short-term actions often
formulates the gap.

Short-term evaluation criteria are often focused exclusively on financial performance, which in turn
focuses on managing physical and financial assets. Today’s competitive reward systems take into
consideration this gap and increasingly reward those who best manage their intellectual assets or “brain
trust.”

Actual implementation of an operating plan works most effectively when all levels of the leadership team
work together to further translate overall goal statements by defining key performance indicators for
each strategic objective included in the strategy map. Once the broader team can relate goals, strategies,
and objectives to key performance indicators, a consensus starts to build. A real shared understanding of
the challenge ahead begins to form. This consensus is further enhanced once specific targets are set for
each indicator.

A more sensible approach to performance measurement is one that supplements traditional financial
measures with benchmarks that measure performance from additional perspectives including the
customer, internal operations, information technology, and people development views. These
perspectives are too often neglected, and the strategy practitioners should take special efforts to ensure
this balance.

Performance indicators should include a mix of leading and lagging indicators to provide a balanced
portfolio of results to be analyzed. Leading indicators help teams forecast what is likely to occur in the
future, whereas lagging indicators document what has actually occurred in the past. They should cover all
major functions or dimensions of the organization, i.e., financial performance, customer satisfaction,
operational and information technology, efficiency, and human resource growth and development.

Collecting and using key performance indicators to evaluate the soundness of the strategic direction is a
necessity for well-run organizations in today’s tumultuous global economy. Strategy practitioners must
work closely with their leadership team to agree upon the appropriate indicators and set realistic target
or target ranges.

Helpful questions to consider when selecting performance indicators:


• Is the indicator valid?
• Is the indicator of value?
• How difficult will it be to track the indicator?
• Does the indicator send the correct message to key stakeholders?
• Does the indicator hold the team to an appropriate level of accountability?
• Is there a blend of leading and lagging indicators?

To lay the groundwork for cascading the strategy and eventually evaluating and controlling the plan,
performance indicators and targets or target ranges should be established for each performance
indicator. A target or target range is the specific performance level the organization seeks for a particular
indicator.

To establish a realistic target for a particular indicator, the following steps are recommended:

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• Create a formula for calculating the indicator.

A Variable is a quantity that may take on any set of values, e.g. Total number of customers served in
one year.

A Baseline is the organization’s actual performance for the most recent reporting period.

A Benchmark is an external comparison point, e.g., an industry-wide statistic.

• Identify the source of variable level information.


• Determine the baseline information on every variable included in the formula.
• (If available) identify external benchmark information.
• Specify the reporting frequency.
• Determine data collection and reporting responsibility.
• Approve acceptable targets or target ranges for each indicator.

All of the above are means of measurement. Often attributed to Peter Drucker, the famous quote “What
gets measured gets done” emphasizes the importance of measuring the most important indicators of
success. Strategy practitioners must work closely with their team to understand that performance
measurement and management are integrated processes, not an event. Collecting, reporting, and
visualizing performance information is the easy part; using performance information to continuously
improve processes and systems is the hard part. Strategy practitioners have a leading role to play in this
regard.

Measurement is the description of a property of an object, activity, process, or result that allows
comparisons across items being compared or allows comparisons of the same item across time.
Performance measurement is used to monitor the implementation and effectiveness of organization
strategy, to determine the gap between actual and targeted levels of performance, and to determine
operational and human performance efficiency and effectiveness.

Performance measures are developed in four major categories:

1. Input measures used to track items that are used in production or workflow processes
2. Process measures used to monitor quality and efficiency of processes
3. Output measures used to monitor what is produced
4. Outcome measures used to monitor what is actually accomplished

Performance measurement answers key questions:

1. How much work is the organization doing? output measures


2. How efficiently is the work being performed? efficiency measures
3. What benefits are being derived from the work? outcome measures (accomplishments)
4. How satisfied are customers with the organization’s products and services? outcome measures
5. How are resources being allocated? input measures
6. How well are initiatives, projects, and programs being managed? project management measures

The performance measurement process consists of five main phases:

1. Describe the desired outcome or objective.


2. Describe the most appropriate measure(s) or indicators that capture that outcome either directly (if
possible) or indirectly (if necessary).

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3. Describe the desired level of performance (targets and thresholds), engaging in benchmarking when
appropriate.
4. Collect, evaluate, and report performance data
5. Transform performance data into performance information in easy to understand formats to
everyone in the organization who needs it to better inform decision making, using benchmarking
information to help drive continuous improvement.

When measuring programs, an additional measure category is sometimes useful for intermediate
outcomes. Intermediate outcome measures are useful when an organization, e.g., a government agency,
has partial responsibility for an outcome and contributes to a higher-level end outcome. Solving child
hunger is an example. No one single agency is responsible for eliminating child hunger, and many
government agencies have programs and responsibilities in this area. Each of the agencies would use
intermediate outcomes to capture and monitor their contribution to the overall end outcome of ending
child hunger.

There is a logical relationship among these different measure types. Using education as an example, the
desired end outcome is to have a child educated and prepared to thrive in the world. An output that
contributes to the desired outcome is completion of a prescribed course of study leading to graduation.
Many processes are required to successfully have a child graduate from school—processes dealing with
course curriculum, building safety and security, teacher education, and so on. And, finally, inputs are
required to run efficient processes, such as budget resources, people resources, and information.

Examples of different types of measures that can be useful to an organization striving to improve
performance and to become more strategy-focused include measures of quality, timeliness, economics
(price or cost), effectiveness, efficiency, completeness, satisfaction, governance, and compliance. Another
important consideration in performance measurement is the concept of leading and lagging performance
measures. Leading measures give the team some idea of what is “likely” to happen in the future. Lagging
measures inform the team on what actually happened in the past.

Developing meaningful performance measures begins with an understanding of the processes that are
produced to produce desired outcomes. These outcomes are usually measured from the point of view of
internal and external customers, and processes are measured from the point of view of the process
owners and the activities needed to meet customer requirements. Relationships among the preferred
outcomes and the processes needed to get the outcomes must be fully comprehended before meaningful
performance measures can be developed and accountability defined.

Developing meaningful performance measures and the predictable levels of performance goals is hard
work; the development process is filled with challenges. One drawback is the tendency to rush to pinpoint
many measures, limiting the value of the measures generated. Also the burden of data collection and
reporting can rapidly become overwhelming.

Another pitfall is the tendency to rush to judgment – not thinking deeply about what measures are
important and why. This happens usually in response to pressure from a supervisor who then creates a
“sense of urgency” to develop a final set of performance measures (“I need measures…get me
measures!”). It is important to remember that performance measures are a means to an end, not the end
themselves.

The role of strategy practitioners in performance measurement includes:

• Provide advice on performance measurement development, target setting, data quality, and data
transformation into information and, ultimately, into business intelligence.

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• Visualization of performance information and teaching employees how to use performance
measurement information and business intelligence to improve decision making.
• Evaluating efficiency and effectiveness in the performance measurement process

J. Strategic Initiatives (Program Selection)

With performance measures and targets for the upcoming reporting in place, a leadership team will move
on to identifying where specifically to invest resources to achieve a particular objective.

Within the scope of strategic management, the terms initiatives, programs and projects refer to the
means by which a strategy is carried out to achieve a particular objective and ultimately achieve an overall
goal. For each objective the leadership team must clearly define what proactive efforts it will take to
achieve the targets that have been set for each objective. Careful attention must be given to matching
up available resources and responsibilities required to execute the strategic plan. Strategy practitioners
must pay particular attention to availability and sequencing of resources.

Sample initiative screening criteria:

• Consistent with the perceptions of the leadership team


• Operationally and financially feasible
• Requires significant “cross-functional” support.
• Contributes in a significant way to the achievement of more than one strategic objective

K. Performance Reporting Information Systems


From the outset of the strategy formulation process, strategy practitioners must work to develop and
refine a functional and efficient data management and information reporting system. Special efforts
should be placed on optimizing this process, as the leadership team will need timely information to
manage (i.e., monitor, evaluate, and refine) the ongoing development and execution of their strategy.

Additionally, leadership teams will require timely information (and often strategic intelligence) in order to
lead through disruptive change, which can occur at any time and place.

The design, development, and implementation of a data management and information performance
reporting system is a fundamental capability a strategy-aligned organization must possess.

L. The Strategic Plan Summary Statement

Writing a summary statement of the strategic plan provides a rationale and explanation of the strategic
plan. It outlines the assumptions and key points of the plan for both the long and short term in an
integrated overview that incorporates the thinking of the leadership team.

A summary statement of the strategic plan should include the assumptions, vision, mission, values,
goals/results, strategies, critical success factors, strategic objectives, initiatives, performance indicators /
targets, responsibilities, and a schedule. It should be limited to a few pages for ease of communication
with key stakeholders. A more detailed document will likely be of value to the leadership team.

To facilitate buy-in from all key stakeholders it is recommended that the strategic plan be drafted by one
of the strategy team members and then reviewed with key stakeholders and refined as necessary.
Practicing the art of “active listening” is especially important when seeking refinements to the plan.

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6.2.03 Operational Planning

Operational planning is a process of converting strategic goals and objectives to tactical goals and
objectives.

The high-level strategic direction and strategic plan must be translated into a practical operating plan for
real value to be realized. Why is this the case?

Often a gap develops between the intended strategic direction, as it comes down from the uppermost
echelons of the organization and the level of employee conception of how their daily tasks contribute to
achieving the vision. This gap appears almost by necessity because a strategic plan is, by its nature, a
series of long-term goals and strategies, while most managers are trained to gauge their progress by
assessing achievement in meeting operations level “here and now” demands and deliverables.

Translating the big picture to daily operational actions has been the preferred end result of strategic
planning from the beginning. To frontline workers, the corporate strategy can seem highly irrelevant to
their daily existence. Their sense of engagement and powerlessness to affect the outcome can be
overwhelming. They often feel, “Why should this matter to me? Success at the top never reaches us down
here.” To avoid this problem careful attention must be placed on development of a practical strategic
operating plan.

The strategic operating plan is the physical manifestation of strategy formulation converging with
implementation. It is a set of marching orders detailing exactly what will be done to transform selected
and approved strategies into operating activities with measurable results during the annual budgeting and
operating cycle. (See Figure 11)

Figure 11: Operational Plan

As with strategic planning, there is no single “right way” to build an operating plan. Theorists and
practitioners alike have their own legitimate perspectives. It is not our goal to recommend one process of
building an operating plan over another. See theories and models 6.1.01 and historical context 6.3.01.

A. Roles and Responsibilities

It is important for the senior leadership team to be transparent regarding what a specific leader will have
authority and responsibility for in each component of the strategy and the strategic operating plan. Unless
an accountability model, including roles and responsibilities, are clearly defined, implementation will
falter, and expected outcomes will not be achieved.

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Careful attention must be given to clarifying specific roles and responsibilities linked to execution of
strategy throughout the organization and incorporating them into job descriptions and expectations. It is
often helpful to conduct a “to-from” analysis to characterize needed role changes.

Existing organizational design, operational responsibilities, and culture of the organization are primary
considerations the strategy practitioner must assess as they work with the management team to define
these roles and responsibilities. How best and when to communicate these changes is another primary
consideration.

A Responsibility Matrix (RACI matrix) is a helpful tool that describes the responsibility by various
participants in completing tasks or deliverables for a strategic plan.

Responsibility Matrix: RACI (see Figure 12) is an acronym derived from the four key responsibilities most
typically used:
• Responsible (R)
• Approves (A)
• Consulted (C)
• Informed (I)

Figure 2: Example Responsibility Matrix

B. The Alignment and Procurement of Resources

In the course of developing implementation plans for each strategy, it is customary to confirm that
required personnel and other resources are available though it is not enough to ensure implementation.
No matter how large or small, every organization has limited resources, and these resources must be
allocated carefully. Nothing is gained when resources are allocated “on paper” but, in reality, spread too
thin to be effective.

Therefore, it is imperative to determine the aggregate of implementation requirements to ensure that the
appropriate resources will be available. Determining available resources is an important set of
calculations that strategy practitioners must help determine. The implementation requirements for a
given strategy naturally compete with the resource expectations for other strategies and with present
demands made by ongoing activities in the organization.

Once the strategic management team has a realistic estimate of committed versus available resources,
then adjustments based on priorities, scheduling, scope, scale, and content modifications can be made. If
these estimations are being made for the first time, there will inevitably be miscalculations. In such cases,
it is advisable to err on the side of overestimating required resources (present demands) and
underestimating available resources (future needs).

Again it is critically important to have the right people with the right skills and attitude aligned behind the
strategy. If they are not available, then new resources must be procured or the strategy should be
modified. It is the strategy practitioner who must facilitate a realistic alignment process.

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C. Temporary or Permanent Structures Required

It can be necessary to set up task forces, review boards, and other temporary structures to support the
role out of the strategy and guide implementation. These decisions should be made early on and put in
place before the execution process begins. Again, careful attention should be given by the strategy
practitioner to each of these structures. They can include the following:
• Executive leadership
• Change management teams
• Project/initiative teams
• Technology task force
• HR task force
• Advisory boards
• Benchmarking teams
• Environmental scanning teams

Setting up these temporary structures must be done carefully. The role, responsibility, scope, time frame,
and schedule of activities of each temporary structure should be carefully defined so as to manage
expectations and facilitate communications across the organization.

In addition, it may be advisable to set up a permanent Strategic Management Office. A Strategic


Management Office helps to govern the analysis, decisions, and actions an organization initiates to create
and sustain competitive advantage. The Strategic Management Office is concerned with the analysis of
strategic goals (vision, mission, and objectives) along with the internal and external environment of the
organization. The Strategic Management Office makes recommendations on industries an organization
should compete in and how this competition should take place and also helps to define and procure the
necessary resources to make intended strategies actionable.

D. Operational Initiatives
As the high-level strategy comes down from the top of the organization, refinements often occur. Top
priority initiatives that align with the corporate strategy always receive priority. As resources are
generally limited, it may be necessary to make any or all of the following changes in the upcoming
operating cycle and budget:

• Identify new resources to fund the priority strategic initiatives


• Re-allocate resources to other strategic objectives within a given core function.
• Re-allocate resources among the strategic objectives in other core functions.
• Change the resources available for implementing new organization-level priorities including capital
improvements.
• Modify the scope of the strategy and/or the strategic objective itself.
• Adjust the rate of progress and duration of the new/revised strategies based on management, staff,
and other resources available.
• Reschedule strategic initiatives as necessary because of resource and funds availability.

All these considerations are at work each year during the annual operational planning and budgeting
process. Strategy practitioners are critically important as they help to facilitate this process. Integral is
identification of an appropriate set of resource categories required to execute the strategy, e.g.,
manpower of various types, cash requirements, intellectual property, and technology. Also required is
preparation of resource requests for strategy execution (programs, projects, products, services, etc.)

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E. Organizational Progress Measurements

Ideally an operational plan is best served when it includes a balanced set of leading and lagging indicators.
Leading indicators will likely be discovered in the human resource, information technology, and
operations functions as milestones are reached in tactical efforts and process improvements are initiated.
Lagging indicators will likely be discovered in the marketing, sales, and finance functions once results are
measured and numbers become available.

A performance reporting process and calendar should be established to track output, process, and project
level performance against predetermined operational targets. Assistance in helping to provide baseline
performance is also important. The strategy practitioner should take on a primary role in helping to define
and guide these processes.

F. Required Culture Changes

Culture change is never easy, occurring at what seems to be a glacial pace. In most cases it requires that
changes first be made at the leadership level of the organization. Executive coaching and training can
help executives align their own behavior behind the vision and further develop their leadership skills.
Modeling the appropriate behavior from the top is a major step in the right direction, and the strategy
practitioner can have a major impact here.

Setting up the key to execution success – a change leadership team – led by the CEO with the senior
management team is another major responsibility of the strategy practitioner. This team should meet
monthly to review the strategy, strategic initiatives, and performance measures and prioritize changes to
the operating plan. A thoughtful communications plan should be regularly reviewed and updated by the
change leadership team.

In competitive environments, strategy formulation and implementation are becoming a continuous and
simultaneous process. Today’s environment requires a dynamic approach to strategic management
ownership enabling organizations to develop strategies at the point where the most appropriate
knowledge exists. A carefully constructed, practical, and thoughtful strategy review and refinement
process can have a major impact on positive culture change.

G. Potential Risk Factors and External Risk

Identifying, assessing, and measuring the challenges and opportunities of potential risk factors is a
significant role of strategy practitioners. It requires comprehensive understanding of the changing
environment and the interrelationship among these factors. It also includes identifying new and potential
risks. A close working relationship with the workforce is vital as the employees are close to the internal
and external processes of the organization and often in the best position to identify potential risks.

H. Organization Operating Plans and Budgets

The Annual Operating Plan (AOP) is the annual financial plan that moves an organization toward
achieving its strategic destination or strategic result.

The AOP provides financial data based on analysis of the current budget, as well as a forecasted five-year
financial plan.

The annual budget summary is supported by current-year budget detail in the form of financial
statements and supporting schedules.

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The purpose of the AOP is to identify, communicate, and monitor progress on key priorities for the
year that advance the strategic plan. It should establish clear expectations. It should be as simple as
possible in order to facilitate communication and establish accountabilities. It should be distributed to the
leadership team and other key stakeholders as appropriate including the board of directors.

I. Business Unit Operating Plans and Budgets

Similarly each business/program unit or support unit should prepare and submit an Annual Operating
Plan. The purpose the document is to identify, prioritize, and manage the work efforts of business units
toward aligning with the corporate or central office strategy. It should describe a realistic set of activities
to be carried out during the year, in light of known obligations and resource realities. The AOP should
help integrate efforts across business/program unit lines where appropriate and serve as a point of
reference throughout the year between the central office and the business unit leadership and,
correspondingly, between the business/program unit leadership and their respective managers and staff.

6.3 CONTEXT

6.3.01 Historical

The origin of the word strategy comes from strategos, or military commander in histories of fifth century
B.C.E. Greek city-states. Western (Greek/Roman) military strategy is but one pillar of the strategic
management discipline. Another emerged 2,300 years ago in China when Sun Tzu is credited for having
written The Art of War, a compilation of essays that are often described as the concentrated essence of
wisdom on the conduct of war.

Beginning In the early sixteenth century, the Roman model was re-introduced by Machiavelli in his Art of
War as the first model for modern warfare. Military strategy continued to evolve incrementally during the
next few centuries, but it took the military genius of Napoleon and Clausewitz to define new paradigms
for modern military strategy that were nothing short of a revolution.

In the early 1800s West Point introduced a revolutionary method of running the organization. It was
based on a detailed system of writing, examination, grading, and discipline covering all individual and
group activities, and maintenance of detailed permanent performance records. This comprehensive
approach to maintaining discipline made it possible for a centralized command to develop and implement
a strategic plan of action based on a fact-based, continuous record of the performance of an organization
and its members.

During the U.S. Civil War era, this approach spread, with line and staff organizations becoming
commonplace, especially in the Northern armies. Following the Civil War through the early twentieth
century, this method of managing organizations became widespread in the military and in business.

In the decade before World War II, the need for strategy was not so apparent with a great many unsolved
business problems of organization and management still being answered in the military model. After
World War II strategic concepts and tools evolved to become the cornerstones of successful business
management thinking and action. In succeeding decades it became clear that neither the military
command and control structures nor the military models of strategic leadership were well suited to the
needs of the private sector.

Peter Drucker, the seminal thinker on management in the last half of the twentieth century, wrote about
“Management by Objective” (MBO) in his classic The Practice of Management (1954). He further
developed his ideas pertaining to strategy in Management by Results (1964). Strategic planning was
viewed as the optimal way to ensure productivity and profits. Everything that was of potential value to

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strategic planning could be measured by various quantitative models; results would indicate best
strategies. It was later in the era that Kenneth Andrews and C. Roland Christensen stated that strategy
could be a powerful tool for assessing an organization’s weaknesses and strengths in relationship to its
competition.

In 1963 the Boston Consulting Group pioneered the "experience curve" and the "growth and market-
share matrix,” and in the 1970s, the use of strategic planning models in Fortune 500 Companies increased
dramatically, focusing on diversification and portfolio planning.

In 1980 Michael E. Porter published Competitive Strategy, that outlined five forces that influence strategic
market success in a particular industry as well as generic strategies that organizations use to compete,
which revolutionized strategic thinking and planning. Later in that decade, however, General Electric
Chairman Jack Welch significantly scaled down the GE operating units' planning departments, which
prompted many other executives to follow suit. Strategic planning was replaced with total quality
management (TQM) and the quality philosophies of Edward Deming, Joseph Juran, and Philip Crosby. That
trend continued into the 1990s, as Michael Hammer and James Champy influenced corporations to focus
on process reengineering and downsizing.

In the late 1990s strategic planning was reborn by focusing on growth through mergers, joint ventures,
partnering, and innovative new ideas through decentralized strategic efforts within the company. Focus
on core competencies became popular. In the 2000s focus has shifted to “big data” and external risk.

1910-1940
• Time study of jobs
• Motion study of jobs
• Gantt charts
• Assembly lines
• Economic lot sizes for inventory
• Statistical quality control
• Inspection sampling plans

1940-1970
• Operations research development and application in World War II
• Linear programming development and application in postwar industry
• Mathematical programming in linear and stochastic processes
• Computer simulation
• Management by objectives (MBO)
• Kanban scheduling system
• Hoshin kanri
• Short interval scheduling
• Queuing theory
• PERT/CPM
• Simple computer applications in manufacturing, i.e., scheduling and control, inventory control

1970-2000
• Supply chain management
• Multi-unit strategic/operational planning and scheduling both nationally and internationally
• ISO 9000
• Continuous improvement processes
• Material requirements planning (MRP I)
• Manufacturing requirements planning (MRP II)

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• Factory automation/robotics
• Just-in-time (JIT)
• Total quality control (TQM)
• Computer-aided design/Computer-aided manufacturing (CAD-CAM)
• Lean manufacturing
• Expert systems
• Enterprise resource planning (ERP)
• Scrum
• Knowledge-based engineering
• Integrated business planning
• Service sector operations management
• Activity-based Management
• Management/cost accounting
• Balanced Scorecard (BSC)
• Hoshin kanri
• Applications of operations management in finance, marketing, and human resources

2000-2014
• Strategic project management
• Continuous improvement, integration, and linking of organization strategic planning to operations
planning tools and concepts listed above both conceptually and in software

6.3.02 Business Acumen

A. PLAN Content - Strategic Planning Professional (Level I)

The candidate should know and/or understand how to:

1. Guide the design and implementation of a good corporate strategic plan and understand best
practices as to why good ones work and bad ones do not work.

2. Advise on identification and evaluation of different options to grow the top line (sales/revenues).

3. Advise on different methods to lower costs, increase profit margins, and improve cash flow and the
balance sheet.

4. Conduct a future environmental scan and ensure it is global in scope to capture the worldwide
dynamic trends of strategic significance.

5. Use quantitative tools to conduct decision analysis, modeling, and risk management to support
executive decision making.

6. Explain the concepts and principles of the premier theorists and practitioners in the field of strategic
planning, both in history and the current field of planning, including the major schools of strategy as
well as the newer emerging ones such as Balanced
7. Scorecard, Blue Ocean Strategy, the Knowledge Economy, the Systems Thinking Approach, etc.

8. Leverage, align, and cascade the corporate direction into three-year business plans for all strategic
business units and major functional areas.

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9. Use goal setting and metrics extensively with targeted goals to track and measure “smart” outcomes.

10. Articulate the importance of the organization’s distinctive core competencies and strategies that
result in a competitive advantage versus MOS (more of the same).

11. Assess the degree to which the corporate culture will obstruct or enable implementation of the
strategic plan and adjust accordingly.

B. PLAN Processes - Strategic Planning Professional (Level I)

The candidate should know and/or understand how to

1. Integrate, communicate, and cascade all the strategic planning components into an annual planning
and budgeting process across and down the entire organization.

2. Identify and explain at least two of the different methodologies for strategic planning that follow the
Lead-- Think—Plan—Act process.

3. Conduct an effective current state assessment (such as a SWOT analysis), including status of the
organization with respect to its competitors.

4. Understand the strategic planning process that starts with the desired outcomes such as the ideal
future vision, mission, core values, and desired competitive advantage/positioning to set a future
direction for the organization.

5. Understand how to use scenario planning and modeling to anticipate and make sense of changes
happening in the world and their impact on the organization.

6. Support, communicate, and audit the organization’s core values.

7. Facilitate formulation of the vision and mission statements to be clear in defining “why the
organization exists” (its purpose) including who its future customers/clients are and what products
and services it will provide them.

8. Provide an annual department planning process that is in a line of sight linked to the corporate
strategic plan.

9. Articulate numerous ways to involve all key internal and external stakeholders in the process since
people are willing to change when they are involved, not when change is imposed on them.

C. PLAN Context - Strategic Planning Professional (Level I)

The candidate should know and/or understand how to

1. Guide relevant research and required data collection required in a timely fashion.

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2. Utilize online and computer technologies to facilitate and speed the strategic planning process.

3. Designate a corporate “support team and functional cadre” to ensure that the knowledge, timing,
outcomes, processes, and infrastructures of planning and strategic management achieve the
corporate-wide integration and leverage they require to ensure business success.

4. Implement an annual strategic planning review and update of the system to ensure the continued
improvement of the strategic planning process.

5. Assist the organization in keeping simple, clear, and well understood language and terminology of
the entire strategic management system.

6. Work toward evolving continuous improvement processes that are in synch with rapidly changing
global systems and events.

D. PLAN Content - Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Facilitate the art of strategy identification, evaluation, and selection.

2. Guide the creation of a marketplace competitive advantage and how to strengthen it.

3. Influence the strategic direction and vision of the organization as well as the determination of core
strategies to achieve this direction.

4. Cascade goals and core strategies into corporate-wide annual top priority strategic action items and
annual department plans to achieve these goals/core strategies.

5. Ensure that a yearly strategic management system integrates with the corporate budgeting and
financing processes as well as HR rewards and recognition systems.

6. Articulate the importance of brand/reputation and support the development of plans to strengthen
this.

7. Assess market opportunities, strategic alliances, and new business development challenges.

8. Create viable and mutually exclusive strategic alternatives and best strategies using carefully chosen
criteria.

9. Facilitate a thorough financial analysis of the organization’s financial health and human resources.

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E. PLAN Processes - Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Focus the organization on the most critical issues to address.

2. Facilitate a top management planning team process led by the CEO that appropriately involves the
board of directors and other key internal and external stakeholders.

3. Build necessary relationships across countries, cultures, languages, and continents with global
sensitivity, awareness, and sophistication.

4. Facilitate effective decision-making processes in plan development.

5. Facilitate a process to uncover and clarify the organization’s core competencies and any gaps.

F. PLAN Context- Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Install a timely preplanning process to “engineer success upfront” in the planning process.

2. Set up a planning infrastructure whereby the core planning team is led by the CEO and includes all
members of senior management within a manageable size so they can be productive.

3. Install a Strategy Management Office structure/staff person(s) to guide the strategic planning (Lead--
Think—Plan—Act) process.

4. Coordinate and integrate specific structural linkages between strategic plans and operating plans for
appropriate performance, results, and associated rewards.

5. Develop specific frameworks and structures to build, review, and evaluate the links between the
corporate strategic plan and strategic business units with three-year business plans.

6. Coordinate a merger/acquisition process or system for the organization.

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6.4 References
• Bridges, W. 2009. Managing Transitions, 3rd Ed. Boston: MA. Da Capo Press.
• Conner, D.R. 1993. Managing at the Speed of Change, NY: Penguin Random House.
• Fazar, W. 1959. Program Evaluation and Review Technique. The American Statistician, Vol. 13, No. 2:
10.
• Kahn, H. 1960. On Thermonuclear War. Princeton University Press.
• Kaplan, R. S. and Norton, D.P. 1996. The Balanced Scorecard. Boston: Harvard Business School Press.
• Kaplan, R. S. and Norton, D.P. 2004. Strategy Maps: Converting Intangible Assets into Tangible
Outcomes. Boston: Harvard Business School Press.
• Kelley, J. and Walker, M. 1959. Critical Path Planning and Scheduling. In Proceedings IRE-ACM ’59
(Eastern) Papers Presented at the December 1-3, 1959 Eastern Joint IRE-AIEI-ACM Computer
Conference.
• Kellogg Foundation. 2001. Logic Model Development Guide: Logic Models to Bring Together Planning,
Evaluation and Action. Battle Creek MI: W.K. Kellogg Foundation.
• Kim, W. Chan and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested Market
Space and Make Competition Irrelevant. Boston: Harvard Business Press.
• Kotter, John P. 1996. Leading Change. Boston: Harvard Business School Press.
• Rosenberg, L.J. 1970. USAID Final Report, Contract csd-2510)
• Sutherland, J. and Schwaber, Ken. 2013. Scrum Guides. ScrumGuides.org.
• Wack, Pierre. 1985. Scenarios: Uncharted Waters Ahead. Harvard Business Review. September–
October.
• Wack, Pierre. 1985. Scenarios: Shooting the Rapids. Harvard Business Review. November–December.

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Section 2: The Strategic Management Building Blocks
Chapter 7 - Act

7.1 CONTENT

ACT is strategy execution--getting important things done in a culture of teamwork and continuous
improvement. It’s about getting things done by making decisions and following through on commitments
to the agreed upon strategy. ACT is about measuring and evaluating performance to identify what works
well and what doesn’t, taking corrective action and striving to transform the organization into a high-
performance entity.

Strategy practitioners have important roles and responsibilities in the ACT Building Block. While
implementation is the responsibility of the organization’s operating and support divisions, strategy
practitioners have coordination, follow-through, monitoring, facilitation, and feedback roles and
responsibilities to ensure that processes, projects, programs, products, and services are efficiently
produced and effectively delivered to customers and stakeholders. Strategy practitioners also play a role
in risk management and mitigation by ensuring that performance information is available and acted upon,
that planned organizational changes are being implemented, and that feedback and learning informs
future strategy formulation.

ACT is about the process of executing. The ACT Building Block completes the strategic planning and
management cycle. At this stage in the process, the organization implements its strategic direction
developed in the earlier LEAD, THINK, and PLAN Building Blocks. Strategy has been translated into a
budget and an operating plan whose scope is either multi-year or annual depending on the organization.
Action is now undertaken to run the programs, manage the initiatives and projects, and produce the
products and services called for in the strategic plan.

7.1.01 Theories and Models

Progressive management theories address two aspects of goal achievement: (1) the organization of work
and (2) the supervision, monitoring and motivation of people/workers. Many theories integrate both but
tend to emphasize one or the other.

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A. Organization of Work Theories

Business Process Reengineering (1990): Initially developed by Michael Hammer at MIT in his Harvard
Business Review article “Reengineering Work: Don’t Automate, Obliterate,” the theory states that
managers should remove any form of work that does not add value. It is a rethinking and redesign of
business processes, performance, quality, and service. (Hammer, M. 1990. Reengineering Work: Don’t
Automate, Obliterate. Boston: Harvard Business Review. July 1990.)

B. Managing People Theories

Human Relations Theories (1930-present): Businesses/organizations prosper when individuals within


them prosper. The development of behavioral sciences (psychology, sociology) led to development of
strategies to encourage individuals’ unique capabilities. Human resource departments were added to
organizations. (Drucker, P. 1954. The Practice of Management. New York: Harper Business; Drucker, P.
1964. Management for Results. New York: Harper & Row Publishers.)

Hersey-Blanchard Situational Leadership Model (1970s): This model states that leadership should
be responsive to specific tasks and individuals. Effective leaders acclimatize their leadership style to
the "maturity level" of the individuals, groups, or organizations they are attempting to lead or
influence. The theory focuses on four main leadership styles: telling (leaders tell what to do and how
to do it), selling (leaders get individuals on board), participating (leaders emphasize relationships),
and delegating (leaders pass responsibility onto the follower). Each style is responsive to the
developmental needs of the followers for that task.

C. Combination Theories

Systems Theory (1930–present): Borrowed from the “hard” sciences and applied to human organizations,
advocates consider the impact of any action on the entire system (i.e., the organization). The theories
suggest that some cause-and-effect relationships are predictable and manageable and that effective
interaction among all parts of the system is essential for effective functioning of the whole. (Von
Bertalanffy, Ludwig. 1955. General System Theory. In: Main Currents in Modern Thought 11: pp.75-83.

Double-loop Learning (DLL) (1977): The concept of double-loop learning was developed by Chris Argyris.
It involves the consideration of how the problem is defined, which could be the source of the problem.
Single-loop learning is repeated attempts to solve a problem without questioning the goal or values we
are using to solve the problem. Double-loop learning reevaluates and reframes goals and values. (Argyris,
C. Double Loop Learning in Organizations. Boston: Harvard Business Review. September 1977.)

Management by Wandering Around (MBWA) (1980s): The strategy is traceable to Hewlett-


Packard executives in the 1970s. First in print by Tom Peters and Robert H. Waterman in 1982.
Leaders and managers are more effective when they stay in touch with the day-to-day operations
of their business. This is best done by regularly but randomly visiting all parts of the business,
talking with and listening to workers, and observing conditions and issues firsthand. (Peters, T.,
Waterman, R.H. 1982. In Search of Excellence. NY: Harpers Collins Publishers.)

7.1.02 Tools

A. Change Management Tools

Burke-Litwin Organizational Performance Model (1960s): The Burke-Litwin tool is a systems and causal
model widely used for 40+ years. It focuses on how performance is affected by internal and external
factors and offers a framework to assess these factors in pursuing change. (Burke, W. and Litwin, G. 1992.

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A Causal Model of Organizational Performance and Change, Journal of Management. Vol.18, No. 3, 523-
545.)

The model focuses on the interrelationship between 12 organizational dimensions:

 External environment
 Mission/strategy
 Leadership
 Organizational culture
 Structure
 Management
 Systems
 Work unit climate
 Task/individual skills
 Individual needs/values
 Motivation
 Individual/organizational performance

Kotter's 8 Steps (1996): Developed by John Kotter of Harvard Business School from his bestselling book
Leading Change. (Kotter, John P. 1996. Leading Change. Boston: Harvard Business School Press)

The eight steps are:


1. Increase urgency
2. Build the guiding team
3. Get the vision right
4. Communicate for buy-in
5. Empower action
6. Create short-term wins
7. Don't let up
8. Make change stick

Change Adoption Models – These models describe how people/organizations react to change and advise
leaders how to respond. One model proposes that all change means loss at some level (e.g., of the
familiar) and relates responses to the five stages of grief described by (Kubler-Ross, E. 1969. On Death and
Dying. New York: The Macmillan Company.) A second model (Rogers, Everett. Diffusion of Innovations,
1962. New York: The Free Press, a division of Simon and Schuster) describes response to change in terms
of subgroups of adopters: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards and
recommends methods for encouraging each group.

B. Productivity Management Tools

Management by Objectives (MBO) (1954): Developed by Peter Drucker in his 1954 book The Practice of
Management. (Drucker, P. 1954. The Practice of Management: New York: Harper Row Publishers.

C. Quality Management Tools

Total Quality Management (TQM) (1980s): Also generally considered an operations management tool is
W. Edwards Deming’s total quality management model. The goal of TQM is to reduce the number of
errors produced during manufacturing or service practices, increase client satisfaction, streamline supply
chain management, aim for modernization of equipment, and guarantee that workers have the highest
level of training. (Deming, W. Edwards. 1994. The New Economics for Industry, Government, and
Education. Boston: MIT Press.)

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Kaizen (1986): This practice of continuous improvement was introduced to the world by Masaaki Imai.
This continuous improvement involves functions, processes, logistics, and activities, and it was adopted by
many Japanese companies after World War II. (Imai, M. 1986. Kaizen: The Key to Japan's Competitive
Success. McGraw-Hill Publishers.)

Six Sigma (1986): Six Sigma is used to improve quality (reduce errors) of processes. It is a controlled,
data-driven approach and methodology for eliminating defects (driving toward six standard deviations
between the mean and the nearest specification limit), used in manufacturing processes and service-
based transaction processes. It was developed by Motorola. (Tennant, G. 2001. SIX SIGMA: SPC and TQM
in Manufacturing and Services. Hampshire, England: Gower Publishing, Ltd.)

ISO 9000 (1987): While generally considered an operations management tool, the ISO 9000 family of
standards is another approach that represents a worldwide consensus on sound quality management
practices. It consists of standards and guidelines relating to quality management systems and correlated
supporting standards. ISO 9001 deals with the requirements that organizations wishing to meet the
standard have to meet. The standards are published by ISO, the International Organization for
Standardization. It is estimated that more than one million global organizations are independently
certified, making ISO 9001 one of the most widely used management tools. (Poksinska, B., Dahlgaard, Jens
and Antoni, M.J. 2002. The State of ISO 9000 Certification: A Study of Swedish Organizations. The TQM
Magazine.)

Malcolm Baldrige Quality Program (1987): This is a quality improvement program and awards program
named after a former U.S. Secretary of Commerce. The Malcolm Baldrige National Quality Award
recognizes performance excellence in business, health care, education, and nonprofits. (Baldridge
Performance Excellence Program. 2013. 2013-14 Criteria for Performance Excellence. Gaitherburg, MD:
U.S. Department of Commerce, National Institute of Standards and Technology.)

The program is based on seven disciplines:


1. Leadership/culture
2. Strategy
3. Customer focus
4. Measurement
5. People
6. Processes
7. Results

Lean (1990s): Lean is a universal system-based method used to reduce waste in the processes of industrial
manufacturing. This management philosophy was originated by Toyota in the 1990s. It had the goal of
“making obvious what adds value by reducing everything else.” Lean manufacturing or lean production
was widely attributed to the Toyota Production System. (Womack, J., Jones, D. and Roos, D. 1990. The
Machine That Changed the World: The Story of Lean Production. New York: The Free Press.)

7.2 PROCESS

7.2.01 Performance Culture and Strategy Execution


Operating plans form the basis and justification for an annual operating budget requests. They are the
details that specifically direct the organization in performing the day-to-day tasks required to run the
organization. ACT deals with executing the strategy through an operating plan; holding individuals and the
organization accountable for results; making fact-based decisions based on reviews, analysis, questioning,
and progress reporting; measuring what matters; and incorporating learning into new strategy
development to transform the organization into a high performance entity. ACT means following through

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to ensure that decisions are made, initiatives and projects are well managed, and the work of
implementation gets done correctly.

Establishing a performance culture is a fundamental requirement for effective implementation and a


frequent failure point in many strategic planning and management processes. Larry Bossidy and Ram
Charan in their book entitled Execution: The Discipline of Getting Things Done point out the following:

• “Execution is not only the biggest issue facing business today; it is something nobody has explained
satisfactorily.
• “Strategies most often fail because they aren’t executed well. Things that are supposed to happen
don’t happen. Either the organizations aren’t capable of making them happen, or the leaders of the
business misjudge the challenges their companies face in the business environment, or both.”
• "An organization can execute only if the leader’s heart and soul are immersed in the company…The
leader is the only person in a position to achieve that understanding. And only the leader can make
execution happen, through his or her deep personal involvement in the substance and even the
details of execution.”

Strategy professionals have an important role to play in helping top executives and their leadership teams
understand, appreciate, and heed these foundational requirements. (Bossidy, L. and Charan, R. 2002.
Execution: The Discipline of Getting Things Done. New York: Crown Business.)

A. Alignment of Organization with Strategy

Once an operating plan has been developed, it is ready to go to the next level for implementation. The
focus now becomes how to actually implement the operating plan as a plan of action. Work turns to
integrating the operating plan within the ongoing processes of the organization.

A critical requirement is aligning organizational units and people in those units with the strategy. The
concept of aligning the work employees do on a day-to-day basis with an organization’s shared vision of
the future is called cascading.

The likelihood of a chosen strategy being successful increases dramatically when everyone across the
organization aligns with it. To ensure this takes place, the senior leadership team must be clear on what
alignment means for each unit before effective cascading can occur.

Once alignment expectations have been communicated, the process of cascading organization-wide
strategy to business and support units begins. Programs and projects are deployed at the unit strategy
level consistent with the goals and objectives of the organization.

Some objectives may be mandatory for all business and support units to align with. Others can best be
cascaded by asking each unit how they can contribute to attaining the objective for the next one to three
years. Still other objectives may best be handled by allowing discretionary alignment. Mandatory
objectives can often be found in franchise-type organization. In portfolio organizations the cascading can
be on more of a discretionary basis. And in vertically-integrated organizations the cascading may be more
of a contributory nature.

Cascading is arranging strategic devices to ensure collaboration and cooperation downward through
all levels of the organizational system in a connected series or sequence, similar to a waterfall, so that
the intended strategy is exhibited from leadership levels all the way to the customer-facing personnel.

The organization-wide strategic plan (sometimes referred to as Tier 1 strategy) can be first translated into
objectives for departments, agencies, divisions, regions, support units, or any other operational or

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business unit representing a next level within the organization. This is referred to as Tier 2 strategy. To
further align employees to the strategy of their units, Tier 2 strategic objectives are then translated into
objectives for individual employees or teams of employees (e.g., employees doing similar job functions, or
employees teamed together to work on a specific project). Alignment at the employee level is considered
Tier 3 alignment. Once the appropriate policy for cascading has been defined and communicated to the
various operating units, “service level” agreements should be developed and approved. The strategy
practitioner should provide a support/facilitator role to assist the senior management team in this work
including support of the process with online and computer technologies.

Strategy execution is a process of continuing resource mobilization, not an event. The strategy execution
process starts with the first components of strategic planning and continues until activities are completed.
The execution process integrates strategy, human capital, workflow and production processes,
technology, resource allocation, and operations. The operational part of strategy execution, the “get it
done” part, is described in the organization’s operating plan and completed by business units and support
units that make up the structure of the organization.

The role of the strategy practitioner is to help mesh strategy, people, processes, technology, and
operations strategy by aligning the operating plan across and down through the organization.

In addition to the operating plan, change management and communication plans should be refined to
communicate necessary changes to all employees. Change management is critical to employee buy-in and
accountability, as the organization strives to improve performance and alignment.

The strategy practitioner’s role is to help integrate the individual pieces of strategy execution into an
enterprise-wide process. Core responsibilities include listening, facilitation, and education, coordination,
scheduling, advising on resource allocation, and being one of the champions of execution process

B. Communication of Strategy and Expectations

The thread that connects the different pieces of strategy execution is clear communication throughout
the organization. Communicating strategy is more than review meetings, memos, and emails. It is more
than sharing results through an executive dashboard of performance measures for leaders and managers.
Clear communication of strategy relies on interactive discussions with two-way dialogue taking place and
creates shared understanding at all levels of the organization.

Successful strategy implementation requires communicating to the entire organization what the new
strategy is and why it is important to the organization. This includes communicating the goals, objectives,
and their associated processes to be pursued and the expected impacts and changes to customers,
employees, and stakeholders, as a result of strategy implementation. An effective communications effort
will achieve employee buy-in, build stakeholder understanding, identify potential implementation
challenges, and build a strong team-focused “we’re in this together” culture. Integral to effective
communications is setting and managing expectations to create buy-in and maintain an organizational
culture that values transparency and accountability.

Strategy practitioners have a primary role to play in ensuring accountabilities are clear. This includes
working with the leadership team to define ownership of each strategic objective,
program/initiative/project, and performance measure. Unless these expectations are understood, valued,
and met, neither transparency nor accountability can be maintained. A communication and change
management plan needs to incorporate these expectations. The plan should not only inform but “win
hearts and minds” and ultimately change behaviors. It begins with leaders and managers taking
responsibility to communicate their personal understanding, commitment, and long-term view to others
in the organization. In this process, one can identify and maximize the “change levers” that tell the entire

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workforce this effort is an enterprise-wide priority that is beneficial to everyone internally, to the
organization’s customers, and to other external stakeholders.

Strategy practitioners have a primary role to play in facilitating and communication change. The work of
John Kotter on the fundamentals of change management is a helpful framework to consider from the
beginning (and throughout) the strategic planning and management process. (Kotter, J.P. 1996. Leading
Change. Boston: Harvard Business Press.)

Leadership and management development teams are responsible for developing the key communication
messages around the strategy and necessary change. Strategy practitioners should reinforce
management’s statements, when necessary and appropriate, with emphasis on communicating
implementation and technical matters throughout the organization.

The role of the strategy practitioner revolves around facilitation, messaging, and information transfer.
Participating in the strategy planning, resource allocation and operation planning processes gives the
practitioner information that can be shared in dialogue sessions with others in the organization.
Participating in communication workshops designed to create clear messaging gives the strategy
practitioner insights into how the organization will communicate internally to employees and externally to
customers and other stakeholders.

At an organizational level, change management refers to the internal process of change--“changing hearts
and minds.” Managing the internal journey starts with employees having awareness or basic knowledge
of proposed change. Then comes understanding where stakeholders more fully comprehend the nature,
scope, and intent of the change. That leads to acceptance, where stakeholders demonstrate visible
actions toward implementing the change and begin using the new systems and processes. The last step is
commitment, where stakeholders embrace the new corporate culture, values, and processes. The
purpose of drafting a change management plan is to begin the process of defining and agreeing on how
changes are to be coordinated across the organization and how leadership will ensure that changes to be
made are beneficial.

As the strategic management process unfolds, refinements to the change management and
communication plans will need to be made. This is an ongoing process requiring careful attention by the
strategy practitioner. All leaders on the team must keep in mind that even modest changes in the
organization’s strategic direction, e.g., a shift in a targeted customer segment, can have ripple effects
across virtually all departments and functions.

Leadership teams cannot over communicate when they are soliciting change in the organization. This
includes communicating to both internal and external stakeholders as issues of transparency and
governance and team-based management replace “command and control” leadership style.

Communication is one of the hardest issues organizations face, and to be effective at it requires five
components:

• Messages must be presented clearly and in detail and exude integrity and authenticity.
• The messenger must be appropriate for the message.
• The recipient of the message must choose to listen, request clarity, and trust the sender of the
message.
• The conveyance must suit the circumstances and the needs of both the sender and the receiver.
• The substance must resonate and connect, on some level, with the already-held values of the
receiver.

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C. Operationalizing Strategy

Strategy implementation (execution) starts when the high-level enterprise-wide strategy has been
translated into operational action plans and budgets for the enterprise and its various business and
support units. This translation is completed at the end of the PLAN Building Block. Now it is time to act
upon the operating plan and approved budget. Simply put, strategy execution is about the discipline of
getting things done through the mobilization of resources.

Strategy’s execution includes continuing the change management work started during the previous
building blocks to ensure necessary change initiatives are built into strategy and operations, not treated
like a hood ornament added to the car at the end of the assembly line. It is not enough to simply
announce the annual operating plan. This alone will not be sufficient to motivate anyone to get behind
the plan and facilitate its implementation. Along with most change comes uncertainty, rumors,
reservations, resistance, and stress -- all adding to resistance to change. Not only must changes be clear
and understood by the leadership team, but they must also be accepted and implemented by the
workforce.

As part of this process, each employee impacted by the annual operating plan needs to understand what
is at stake in the plan for him or her individually. Strategy execution will impact employees in different
ways, so different behaviors must be respected/accounted for to effectively communicate strategy and
make it actionable for all employees.

Strategy practitioners play a role in making organization strategy actionable. They do this by assisting in
the translation of strategy into an operating plan, facilitating communication and planning workshops to
ensure strategy and operating elements in the operating plan are understood, and, finally, ensuring that
decisions are made and acted upon with resources committed.

It is important for strategy practitioners to work with the leadership team to build an operational culture
that understands, accepts, and ultimately embraces the notion of individual and collective
accountability for results. Central to the process is to have a clear program for linking human resource
performance to established targets linked to a thoughtful and practical program of reward,
recognition, and incentive appropriate and relevant for a specific organization. Strategy practitioners must
understand that implementation of a plan proceeds along several dimensions simultaneously. Even
modest changes in strategy can lead to managerial, operational, cultural, and technical changes at
differing rates and levels of resistance requiring different levels of response and adjustment in attitudes
and behavior.

Below is a list of situational and contextual factors strategy practitioners should consider when trying to
anticipate and communicate the nature and scope of organizational change:

Human resource process features


 Employee skill level and distribution
 Disparity in level of development of functional areas
 Previous implementation experience of the workforce
 The scope and complexity of required new competencies
 The staff education level and learning capabilities
 Relevant personnel performance evaluation
 The current reward and compensation systems and practices

Operational process features


 Degree of integration between strategic management and the operating function.

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 Level of operations processes and systems development
 Level of technology development
 Extent of organized innovation processes
 Operations management implementation capabilities
 Operational implementation tools and concepts
 Strategy deployment linkage
 Experience in using the tools and concepts of change management

Organizational features
 Stage and level of organization development
 Vertical versus horizontal relationships
 Differences in the level of functional area development
 Level of process development
 Workplace atmosphere
 Communication systems
 Information processing capability
 Reporting and documentation capability

Cultural features
 Entrepreneurial versus. bureaucratic values and policies
 Cultural diversity versus cultural homogeneity
 Management cultural characteristics
 Professional staff cultural characteristics
 Administrative staff cultural characteristics
 Cross-cultural communications barriers

Features of external relationships


 Owners
o Distribution of ownership
o Public versus private ownership versus nonprofit
o Scope and type of intervention in the organization
 Board members
o Role in setting strategic direction of the organization
o Scope and type of intervention in the organization
o Ratio of internal managers on the board
 Customers
o Impact of key customers on strategic decisions
o Customer requirements impacting key drivers of success
 Suppliers
o Impact of key suppliers on strategic decisions
o Role in implementing the strategic operating plan
o Supplier capabilities impacting key drivers of success
 Joint ventures, strategic partners, strategic alliances
o Impact of relationships on implementation of the operating plan
o Active versus reactive relationships
 Advisors, consultants, contractors
o Role in implementing the operating plan
o Responsibilities of advisors, consultants, contractors
 Volunteers
o Full time
o Part time

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D. Risk Management and Mitigation

Central to the strategic management process is management of risk. Organizations need to regularly
undertake comprehensive, focused assessment of possible risks to the organization from strategy
implementation. This focused assessment should be part of the strategy development process to ensure
that as strategies are being developed the risk of failures are being analyzed. Periodic reviews should be
conducted by a team of staff members representing all the major functions of the organization. The
assessment should be carefully planned, documented, and methodically carried out. The essence of a
successful strategy is tangible movement and realization of a shared vision – in other words, turning
strategy into action. Consequently, management has a responsibility from a risk management perspective
to remain vigilant about where risk hazards are in the implementation of strategy, prepare risk mitigation
plans to deal with these hazards, and monitor mitigation plans to ensure successful reduction or
elimination of the identified risks.

Important factors to consider include the following:

 Have there been unanticipated market changes?


 Has there been a highly effective competitor response?
 Do we really have sufficient resources to be successful?
 Is there a lack of buy-in, understanding, and/or communication?

Risk can only be managed effectively if a performance measurement and control system has been set up
to monitor the strategy implementation process. Its primary purpose is to determine the performance
and progress during implementation. Using a performance measurement and control system makes it
possible to review and assess the effectiveness of strategy implementation through the annual operating
plan.

During the course of executing the annual operating plan there will be plenty of indications as to whether
the plan is making a positive contribution to the organization and achieving the results expected.
Indications, trends, performance, and events need to be monitored closely to minimize risk at all levels of
the organization.

Strategy practitioners must embrace a holistic perspective on this topic. Risk can come from anywhere,
and special efforts should be taken to identify and manage for these risks. Strategy practitioners
contribute ideas on risk areas and possible mitigations during strategy development processes and serve
on risk identification and evaluation teams to eliminate risks as the strategy is being implemented.

Strategy practitioners can mitigate risks at all levels of the organization by ensuring the following:

 Organizational alignment and capabilities are in place.


 Anticipation of contingencies for competitor responses are taking place.
 Senior level leadership is deeply involved in strategy development and implementation planning.
 All levels of the organization are consistent/persistent in communications.
 Budgets at all levels of the organization are aligned with action plans and available resources.
 Leadership teams insist upon timely monitoring and accountability.

E. Management of Initiatives and Projects

Project Management is the discipline of mobilizing resources to bring about the successful completion
of specific project outcomes and outputs.

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Projects are finite endeavors, with defined resource expenditures, scope, and schedule that are managed
to successful completion. Projects are designed to meet unique goals and objectives important to the
organization-level goals and success. Projects can be strategic, as in “strategic initiatives” that impact the
organization as a whole and have enterprise-wide significance, or operational, designed to serve a
business or support unit’s more operational goals. The primary challenge of project management is to
achieve all of the project goals and objectives while meeting the agreed to project scope, schedule,
resource, and risk requirements.

Project management includes balancing the four components of project management: resources,
including human capital, money, information, equipment, and material; schedule, including adherence,
control, and recalibration; scope, including specifications and variations from same (“scope creep”); and
risk, including risk factors and mitigation controls.

Successful project management involves simultaneously managing the four basic elements of a project.
These elements are interrelated and sometimes tradeoffs must be made in one or more of these
elements to achieve an optimized project experience. The role of strategy practitioners in project
management is to help define the outputs and outcomes and contribution of accepted projects, define
project scope for strategic projects, manage strategic projects, monitor project performance that impact
the overall strategy of the organization, suggest corrective actions for projects that are out of desired
control limits, and contribute to manage change. In general, project management is most effective and
efficient when outcomes include a degree of risk and uncertainty; when the assignment is complex, multi-
functional, multi-disciplined, and long run; and where outcomes are new, even unique. As such, new and
unique outcomes constitute un-programmed activities and new challenges for the personnel involved.

It is important to remember, however, that project management should be used for those strategic
initiatives and projects where it can be justified. Too many organizations have attempted to use project
management for increasingly smaller in scale assignments. This is ineffective and inefficient in most cases,
since much simpler organization and management techniques, i.e., committee/team/individual
assignments or external contracts, are available for the purposes of strategic management.

F. Management of Change

Strategic changes often cascade through all components of the strategy and operating plan. These
changes in direction, in turn, often require changes in the culture of the organization and in the behavior,
attitude, and performance of all the members of the organization, albeit in different ways, and therein is
the challenge.

Successful organizations think deeply about this challenge: their shared vision of the future, strategic
goals, competition, governance, and customer satisfaction, project management, improving performance
to get intended results, and managing effective internal and external communications. Turning these
elements of success into actionable strategies for success requires organization change. Turning strategy
into action to “get things done” often involves making changes in the way employees work, think, behave,
and interact with each other and with customers. Changes in process including job knowledge, skills, and
abilities needed to addresses new challenges and improve performance complete the picture. Change
management should be built into the fabric of the strategy development and execution process, not
treated as an add-on at the end of strategy development.

Successful organizations use systems, people, and technology interactively with employees working in a
systematic way and being better informed through technology. Moving an organization forward to a
shared vision requires changing hearts and minds – not just of employees but of customers, governing

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boards, and other stakeholders as well. To change hearts and minds, we need to know about change
management.

Change management is the primary responsibility of the executive leadership team and involves
understanding and managing internal and external change and understanding the influencers of change.
However, as the process of implementing change becomes more continuous and grows in scope and
complexity (both strategically and operationally), a set of change management roles begin to emerge that
require recognition, training, and development.

Though these roles are not formally included on the organization chart, they are ones that must be filled
to manage any significant change process. They include the following:

• Sponsors—the leaders, executives, and managers with the authority to make changes in the current
strategic direction, the organization structure, and/or the processes required to implement and
manage change.
• Champions—the individuals throughout the organization that identify strongly with the need for
given changes. They are self-appointed and need the unwavering support of management to be
recognized by other managers and staff members.
• Change agents—the individuals responsible for any part of the implementation process. They can
also be sponsors and champions of change, as well as targets of change themselves, but primarily
they understand change, know how to manage change, and deal with the people involved in the
changes they undertake.
• Targets of change—the people within the organization directly impacted by implementation of the
operating plan and the changes it brings about. Those who will be affected must be identified to
assess how they will be affected, what changes they can expect, and why. Since people vary
dramatically in how they react to change, their potential for resistance needs to be understood and
dealt with constructively.

With these roles filled and understood, effective change actually occurs when an accurate appraisal is
made of what changes are required, who and what will be involved, and what resistance issues will likely
surface as the changes are taking place. Employees must identify with and internalize the meaning of a
change initiative if it is to succeed effectively. Managing change requires real leaders who can innovate
and communicate with clarity. Transparency and openness are required of leaders and strategy
practitioners throughout the change process.

Change management can also involve restructuring the organization to become more strategic, for
example, to meet new challenges and capture new market opportunities. Strategy practitioners can be
called upon to support the leadership team in making changes in how the organization is designed,
structured, and organized. Changes in organizational structure at the team level may also occur. The
organization should be structured to efficiently support execution of the strategy with the appropriate
emphasis on decision making, completing assignments, follow through, feedback, and learning. Specific
roles and responsibilities can shift, and new responsibilities can be added while others are eliminated. In
each instance strategy practitioners can be called upon to help facilitate this process and communicate
guidance throughout the organization.

In designing the operating plan, assignments are made for what is to be implemented. Corollary to this
is the need to consider how it is to be implemented. The “how” will differ from one organization to the
next by the way their implementation processes are organized and managed and each organization’s
unique set of realities.

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The role of the strategy practitioner is one of acting as a catalyst of change, of “walking the talk,” and
modeling the desired behaviors expected of others. Implementing change initiatives is the oversight
responsibility of senior leaders. If restructuring of the strategy office is planned, the strategy practitioners
have a strong role to play in creating a restructuring plan; if restructuring of other business and/or
support units is planned, the human resource or personnel department would typically take the lead in
planning for the change.

Change management includes communications, leadership development, incentivizing desired behavior,


and recognizing and rewarding success. Change management involves understanding resistance issues
and dealing with them effectively.

G. Improvement of Strategy Execution and Processes

Successful strategy execution depends on efficient and effective mobilization of resources, good decision
making, getting things done, and follow-through. Strategy execution without an effective measurement
and control system in place will almost ensure that execution is neither efficient nor effective. Feedback
about assumptions and future strategy development is critical to the process of strategy execution.
Plans too often fail to achieve the desired results and produce unintended consequences that need to be
evaluated and subsequently managed. Close scrutiny is required to assess their impact on the
organization and its strategic direction. This work should be treated as an ongoing responsibility of the
leadership team and strategy practitioner. A periodic assessment of performance (and the associated
processes) should be completed at least quarterly.
Similarly, as new ways of communicating and messaging are discovered and used successfully, they need
to be integrated into the organization’s strategy planning and development process, too, so an
atmosphere of continuous improvement permeates the organization.
The role of strategy practitioners in continuous improvement is to observe, learn, and give feedback on
how things are working (or not) and provide recommendations for improvement coming out of the
learning process. Quality management is one example of continuous improvement:

• Total Quality Management


• Kaizen
• Six Sigma
• ISO 9000
• Malcolm Baldrige Quality Program
• Lean

7.2.02 Alignment and Accountability

Organizational leadership teams put a great deal of effort into formulating strategic plans for their
workforce to follow. But leadership teams cannot mandate alignment and execution. Organizations who
actually achieve the promise of their strategy are able to build “accountability” that results in a healthy
culture of transparency, goal alignment, and team engagement.

A. Organization alignment

Organization alignment refers to how strategy elements connect to operational elements that, in turn,
connect to the work people do on a day-to-day basis. In aligned organizations, a shared vision of the
future connects to:

• Strategies that are understood across the organization and are actionable

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• A resource allocation and budget formulation process informed by strategy and operational
requirements
• Processes that are efficient and effectively serving customer needs
• Work employees do on a day-to-day basis aligned with business and support unit objectives and
strategies
• Key stakeholders who are working in a collaborative fashion
• Effective and efficient measurement of performance (employee job descriptions describing how
strategy is made actionable in the work employees do)
• Employee development plans tailored to improving knowledge, skills, and abilities of employees

The role of strategy practitioners is to help make strategy actionable to all employees. This involves
effective communications to show how operations connect to strategy and how employee contributions
at the “shop floor level” contribute to the organization’s shared vision of the future.

B. Individual Strategy Alignment

Aligning individual roles to an organization’s strategy requires understanding how an employee’s work fits
into the organization’s strategy. Business and support unit purpose statements can be prepared along
with strategic objectives for each reporting unit. These purpose statements and strategic objectives are
the key components needed to cascade to individual employees and teams of employees. Other
important inputs include: work assignments, job descriptions, personal goals, and job competencies.

One tool to help thinking around personal objectives is SMART (See Figure 13).

Figure 13: SMART Objectives

Once employee performance objectives are developed, other employee information can be captured,
such as individual employee development plans, reward and recognition plans, incentive plans, targeted
training programs, individual coaching plans, and communication plans. Note that employee performance
objectives are much more operational than at the business and support unit level or at the organization-
wide level. Even though employee performance objectives are operational and tactical, strategic intent is
preserved by aligning of multiple organization levels. Individual and team operational objectives with
associated job accomplishments and individual performance measures form the basis for the
organization’s personnel performance management system.

Strategy practitioners play a coordinating role in working with the personnel department on translating
strategy and strategy execution processes and language into employee job descriptions and individual

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development plans. The key to aligning the organization around strategy is to maintain “line of sight”
linkages to the strategy objectives that make up strategy at all levels of the organization.

C. Right people, right jobs

Placing the right person in the right job helps to ensure that the organization is operating efficiently and
effectively. It is important for each employee to have the knowledge to do the assigned job well, to have
the opportunity to grow from the job experience, and to embrace the values of the organization.

Jim Collins notes that: "People are not your most important asset. The right people are. Get the right
people on the bus, the wrong people off the bus, and the right people in the right seats." Organization
success or failure depends a lot on having the right people in the right jobs. (Collins, J. 2001. Good to
Great. New York: Harper Business.)

Having the right person in the right job can be improved by using a structured hiring process that assesses
knowledge, skills, and abilities and matches position requirements with hiring process skill sets. The
structured process should include consideration of the degree of behavioral “fit” between the applicant
and the position. Many structured hiring processes use assessment-based tools to help judge candidate
potential.

Equally important to the structured hiring process is knowing exactly who the organization is looking for.
Every step in the hiring process is dependent on the position description, including a carefully crafted
profile of the position and the qualifications needed to fill the position. Identifying the knowledge, skills,
abilities, and personal behaviors flow from an accurate position description.

The role of the strategy practitioner is to advise senior management and the human resources
department of possible opportunities where strategy can be made more actionable. Each position will
have a strategic component, where one or more job elements will align with the strategy of the business
or support unit to which the employee reports. Because strategy practitioners interact with all levels
within the organization, they are in a position to observe where “strategy focus” is working well and
where it is not.

D. Accountability, results and performance

Accountability requires leadership, managing expectations, sharing intentions, accepting responsibility,


taking ownership, developing a commitment to action, and following through. Accountability includes
transparency, effort, energy, efficiency, and effectiveness.

In high-performing organizations, accountability exists at the individual level, unit level, and the
organization level. Everyone needs to embrace the same definition of accountability in order to ensure
results. Executing strategy accountability across levels is a process, not an event. As such, accountability
requires an organization-wide commitment to sustained effort to:

• Set goals and manage expectations


• Define and fulfill roles and responsibilities
• Measure and monitor progress on a timely basis
• Report results and follow through to act on results
• Ensure learning is incorporated into future strategy development

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The role of strategy practitioners is to act as a catalyst to ensure accountability is built into strategy
execution processes.

E. Incentivize desired behaviors

Leadership teams are constantly in need of information to determine where improvements can be made
in processes, systems, technology, employee and customer interactions, and innovation. Employee
incentive and reward systems can enable necessary behavior changes the organization must make to
improve performance.

Change is enabled when employees are involved and properly equipped and when they see visible
commitment to the necessary changes. Rewards and recognition tied to change-related performance puts
organization “skin in the game.” But too frequent or too much reward and recognition can create job fear
and the likelihood of passive resistance or sabotage.

Recognition and rewards should fit the person and what is important to that person. Recognition should
come first, before reward, as it can be more frequent, is no or low cost, and generally means more if the
recognition is done sincerely by a respected person. People want to know that their ideas and work are
valued.

A good approach is to informally interview people to find out what recognition and reward approaches
really matter. Whatever methods are used, make sure that recognition and rewards are timely, sincere,
meaningful, and tied to the behaviors/results desired.

The role of strategy practitioners is supportive to the human resource department who normally takes the
lead in developing and implementing recognition and reward systems. Strategy practitioners can identify
processes and positions where incentives might improve performance.

7.2.03 Performance Analysis and Management

Ultimately, the tangible value of strategic planning and management is derived from successfully
achieving a particular organization’s vision, goal(s), and objectives as set forth in the strategic plan of the
organization.

Performance Management is the process of achieving desired organizational outcomes. It includes


all organizational activities aimed at ensuring that the organization’s strategic goal(s) and objectives
are met in an effective and efficient manner.

Performance management can be thought of as comparing the organization’s “actual results” against its
“desired results.” Any discrepancy, where actual is less than desired, constitutes (by definition) a
performance improvement threshold requiring action. (See Figure 14)

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Result To Target
Performance
140% Improvement
Threshold
Performance Index 120%
100%
80%
60%
40%
20%
0%
200 200 200 200 200 200 200 200 200 201 201 201
1 2 3 4 5 6 7 8 9 0 1 2
Index 128 104 96% 74% 92% 108 93% 83% 107 110 74% 64%
Figure 14: Performance Improvement Threshold

A. Fact-based Decision-making Capability


Decision making is a key component in ACT requiring analyzing alternative courses of action, making
choices, and taking action to get things done. Decision making can also be thought of as a process of
reducing uncertainty and doubt about alternatives in order to allow a good choice to be made from the
alternatives presented for acceptance. Evidence-based or fact-based decision making has at its core the
notion that decisions that are supported by hard facts and solid analysis are more likely to be better than
decisions made on the basis of instinct.

Fact-based decision making applies to private sector, government, and nonprofit organizations. In the
private sector, better decision making will yield better financial performance. In government,
programmatic decisions based on the outcomes and costs to produce a unit of outcome will result in
more cost-effective use of taxpayer dollars. And in the nonprofit sector, resource allocation decisions
better informed by analysis of what outcomes are produced for what expenditures will result in better
stewardship of limited resources.

Fact-based decision making should be tempered by other inputs to the decision process—political
judgments, impact on customers and stakeholders, governance issues, environmental issues, and others.
These other inputs may be difficult to quantify, but remain important to the process of making choices.
For instance, political judgments play a strong role in government program decisions, or donor
considerations impact nonprofit association decision making. Evidence and facts will help inform or
support a decision.

Fact-based decision making takes advantage of recent advances in technology and the data analytics
capability of data analysis and performance measurement software. For example, business intelligence
software allows organizations to “slice and dice” information to look for correlations and cause-effect
relationships among disparate data elements. Exception reporting (e.g., red, yellow, green performance
thresholds) and drill-down capabilities to get at underlying data trends and patterns are commonplace in
most software solutions.

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The role of strategy practitioners in building fact-based decision capabilities revolves around
understanding how facts and evidence can be used to better inform decision making by being able to
properly set up and conduct analyses, develop alternative courses of action, and present facts in
meaningful ways to decision makers.

B. Reporting Results

The need to monitor implementation of the strategy and operating plan is vital. Execution of an annual
operating plan without an effective measurement and control system in place will almost guarantee that
implementation is neither efficient nor effective. It is not simply setting of schedules and performance
measures that ensures implementation; it is the mandate that the entire organization operates effectively
and efficiently to produce value for customers and stakeholders. Effective and efficient strategy execution
is not possible without accurate and realistic performance information from all levels in the organization.

It is important to measure what matters. Performance measurement “stethoscopes” can be placed


anywhere meaningful performance data are needed to better inform decision making. This means that
the organization should look to both the strategy side of the equation as well as to the operations side of
the equation for what to measure. Once useful performance measures are identified, it is necessary to
further define the performance measures and then transform the raw data into useful performance
information and then into business intelligence. Getting quality performance information in a timely
manner to the people who need it completes the measurement and monitoring cycle.

Strategy practitioners play an important role in helping key stakeholders understand the need for (and
how to build) a measurement and control system for the strategy implementation (execution) process. At
regular intervals the strategy practitioner also plays an important role directly helping the leadership
team monitor results. This naturally occurs if when the leadership team focuses on strategy at periodic
review meetings. During these strategy review sessions, the strategy practitioner helps the leadership
team monitor the results of change management initiatives and facilitates making adjustments to plans as
necessary. The strategy practitioner plays a central role in establishing these expectations and practices.

C. Critical Questioning, Analysis, and Reviews

Critical questioning, analysis, and review of progress run parallel with decision making and getting
things done. Review meetings at the management and governance levels of the organization are
structured around the organization’s strategy, and progress is reported around the strategic objectives
and initiatives that have been identified as critical to organization improvement.

These review meetings are a perfect time to ask critical probing questions. The questions should be in the
form of a dialogue between the senior management team and the project and operations managers,
and/or between the governing board and senior management. The questions should focus on clarifying
and validating assumptions, understanding progress, and discussing challenges and what to do about
them.

The role of strategy practitioners is to frame and ask critical questions, to organize review meetings, to
analyze the results from strategy implementation, to review performance and to recommend corrective
actions.

D. Follow-through on Decisions

A “get it done” mindset is about making decisions and following through to ensure compliance and
progress. This requires discipline and dedication, followed by acting on performance information as

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implementation work proceeds through the organization’s processes. To get to this level of diligence in
executing strategy is about transforming the organization into higher-level performance. When it occurs,
it is powerful evidence of effective change management and the “changing hearts and minds” journey the
organization is on.

The different levels of change that the strategy office must be sensitive to and supportive of include:

• Stakeholder awareness
• Stakeholder understanding
• Stakeholder acceptance
• Stakeholder commitment

The role of strategy practitioners is to identify where decision making is working well and where it needs
to be improved, to advise on the adequacy of follow-through procedures, and to look for ways to make
improvements.

E. Process Improvement

Strategy development focuses on "doing the right things" while process improvement focuses on "doing
things right". Process improvement attempts to reduce variation and/or waste in processes so desired
process outputs and outcomes can be achieved efficiently and cost-effectively.

The goal of process improvement is to improve breakthrough organization performance. Tools and
techniques to assist in process improvement include Six Sigma, Lean, ISO 9000, (End Note) TQM, Business
Process Reengineering, Kaizen, and others. Process improvement actions are built on teamwork,
discipline, improved morale, quality circles and improvement suggestions.

The role of strategy practitioners is to identify where processes can be improved and to offer suggested
improvements. The leadership role for process improvement usually rests in a quality improvement or
process improvement group, not the strategic planning office.

7.2.04 Strategy Execution Evaluation

Evaluating strategy execution is a fundamental responsibility of leadership and management of any


organization. Without this foundational capability and process, meaningful progress will not happen.
Many questions are considered when evaluating strategy execution, including some the following:

• Are we achieving the outcomes we originally intended?


• Is the organization moving toward a strategy focused culture?
• Has the strategy been effectively communicated?
• Is the workforce actively engaged in execution of the strategy?
• Is the organization skilled in initiative and project management?
• Is there an objective-setting process in place for individuals?
• Are managers skilled in performance management?

Strategy execution evaluation should link back to the performance logic models to evaluate a strategy
against outcomes.

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A. Modification of Program Plans and Tactics

Sustaining a focus on strategy execution can be understood using the “double-loop learning” model, a
concept made popular by Chris Argyris in Knowledge for Action: a Guide to Overcoming Barriers to
Organizational Change. (See Figure 15) In double-loop learning, feedback from management
consequences (strategy execution) is fed back to the action strategy development process and also back
to the assumptions (governing variables) that were used to develop the strategies in the first place. In
contrast, single-loop feedback systems feed information back to the strategy development process only.
(Argyris, C. 1993. Knowledge for Action: A Guide to Overcoming Barriers to Organizational Change. New
York: Jossey-Bass.)

Figure 15: Double Loop Learning

Another important aspect of sustaining the focus on strategy is to maintain committed and engaged
leadership so transformation is led from the top of the organization and desired behaviors are lived, not
just pronounced. Building individual and collective accountability for results is another important aspect
of becoming a more strategy-focused organization. Accountability depends on information coming out of
the performance system that results in feedback and learning.

Continuous support for acting on feedback and learning can be enhanced by centralizing responsibility for
maintaining the strategy execution process. In many organizations, a strategy management office is
created and maintained to handle these responsibilities.

The role of the strategy practitioner centers on recommending how strategy can be improved based on
the way current strategy is being executed. Another important role is observing and recommending
where lessons have been learned that should be incorporated into new or revised processes, training
programs, strategies, and behaviors.

B. A Culture of Continuous Improvement

Strategy execution is a process, not an event. So it follows that strategy execution should be a process
integral to company strategy development, goal setting, and culture. To have a long-term positive impact
on the organization, any emergent strategic management process must be institutionalized within the
operations and culture of the organization. Central to accomplishing this objective is the development of
an annual strategic management calendar that integrates strategic planning, operational planning, and
budgeting processes. (See Figure 16)

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Figure 16: Strategy Management Calendar
The emphasis should be on continual improvement, in processes in employee learning and skills
development, in understanding customer needs and satisfaction, and in creating an employee-friendly
culture that focuses on and rewards results.

Strategy practitioners play a leadership role in helping the leadership team understand the value of
investing in this process; they must convey the concept that all components of the system are interrelated
and need to be valued. A complete integrated strategic planning and management system can take two
to three years to be fully institutionalized within an organization. Strategy practitioners have a strong
leadership role to play in helping to shape and manage expectations around the strategy execution
process and strategic management system.

C. Incorporation of Learning

Strategy practitioners must be attentive to how the annual strategy setting process can be improved and
made more valuable to the organization. In this regard it is helpful to carefully review the strategic
management process from beginning to end. The organization should be structured to efficiently support
execution of the strategy. Once the annual operating plan has moved into the execution phase, it often
becomes necessary to better align the organization around strategy and performance. Changes in
organizational structure at the team level may also occur. Specific roles and responsibilities can shift, and
new responsibilities can be added while others are eliminated. Strategy practitioners frequently support
the leadership team in making these changes. In each instance strategy practitioners can be called upon
to help facilitate this process.

Further refinements to the organizational structure are often required as the implementation
alignment process unfolds. The organization structure and support systems should be optimized to
support execution of the strategy.

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Some examples of restructuring that should be considered include:

• Create a strategy management office, to consolidate strategy and performance matters in a single
office with a chief strategy officer as the executive in charge
• Prepare a strategy-based budget to supplement the capital improvement and operating budgets that
are in current use
• Prepare a strategy-driven operating plan to focus effort on the things that are strategically important
• Align department strategy with enterprise-wide strategy
• Align desktop and shop floor job descriptions with department strategy
• Create departments that correspond to the high-level strategies aligned with the vision

The role of strategy management practitioners is to advise and research optional restructuring options.
Another role is the development and regular refinement of the management calendar that integrates
strategic planning, operational planning, and the annual budgeting process.

Strategy practitioners assess the operationalizing of strategy by determining whether the strategy is
meeting the needs of the organization with regard to profitability or cost recovery or other targeted
measures of success. For government and nonprofit organizations, measures of success are found in
mission accomplishments (or lack thereof), customer and stakeholder satisfaction, and cost-effective use
of resources.

Strategy practitioners help to create new processes and improve existing processes to make them more
effective and efficient in meeting or exceed targets and stakeholder expectations. Strategy practitioners
must assess and report on strategy implementation in terms of operational decision making, process
improvement, quality improvement, and timeliness.

7.3 CONTEXT

7.3.01 Historical
The history of ACT, the execution of strategy, goes back at least as far as Adam Smith’s The Wealth of
Nations, which defined economics at the beginning of the Industrial Revolution and touched upon topics
as broad as the division of labor, productivity, and free markets. In 1911 Frederick Winslow Taylor built on
that with The Principles of Scientific Management, which laid out the principles of scientific management,
while the Harvard Business School developed its Harvard Policy Model in the 1920s.

In the first half of the twentieth century many operational planning and production methodologies were
created that would later feed the strategy execution literature, including time study of jobs, motion study
of jobs, Gantt charts, assembly lines, economic lot sizes for inventory statistical quality control, and
inspection sampling plans.

In the 1950s and 1960s strategic actions become more of a standard part of business management, as the
“portfolio model” of development, management of risk, growth, and market share became more
sophisticated, and the RAND Corporation developed the Delphi Method.

The middle decades of the twentieth century saw more advancements in operational strategy execution,
such as operations research development and application in World War II, linear programming
development and application in postwar industry, mathematical programming in linear and stochastic
processes, computer simulation, management by objectives (MBO), Kanban scheduling system, Hoshin
kanri, short interval scheduling, Queuing theory, PERT/CPM, and simple computer applications in
manufacturing, i.e., scheduling and control and inventory control.

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In the 1980s, strategic action and execution evolved further, as public sector organizations begin picking
up on the techniques, W. Edwards Deming published Out of the Crisis (1986), TQM became popular,
Motorola developed Six Sigma, and the methods of strategic action become common in
entrepreneurship.

The last three decades of the twentieth century saw more strategy execution and operational advances,
such as supply chain management, multi-unit strategic/operational planning and scheduling both
nationally and internationally, ISO 9000, continuous improvement processes, material requirements
planning (MRP I and MRP II), factory automation/robotics, Just-in-time (JIT), computer-aided
design/computer-aided manufacturing (CAD-CAM), expert systems, enterprise resource planning (ERP),
SCRUM (Takeuchi & Nonaka), knowledge-based engineering, integrated business planning, service sector
operations management, activity-based management, management/cost accounting, and applications of
operations management in finance, marketing, and human resources.

In the 1990s, as Jack Welch became a celebrity CEO by demonstrating ACT-oriented leadership, strategic
actions expanded to corporate governance and business ethics, and lean manufacturing grew out of the
Toyota Production System. R.S. Kaplan and D.P. Norton published the Balanced Scorecard, a work that
they would redirect squarely on strategy execution with The Execution Premium a decade later.

In the 2000s, Larry Bossidy and Ram Charan wrote Execution: The Discipline of Getting Things Done while
Kim Warren published Strategic Management Dynamics: Improving Performance Over Time. 2008. New
York: John Wiley and Sons.

1890-1940
• Scientific management (Frederick Taylor)
o Time study of jobs
o Motion study of jobs
o Assembly lines
• Economic lot sizes for inventory
• Statistical quality control
• Inspection sampling plans

1930-1970
• Bureaucratic management (Max Weber) – hierarchical structure, authority, standardization, control
• Management by objectives (MBO)
• Kanban scheduling system
• Hoshin kanri
• Short interval scheduling
• Queuing theory
• Simple computer applications in manufacturing, i.e., scheduling and control, inventory control
• Human relations theory – business prospers when individual prosper

1970-2000
• Supply chain management
• ISO 9000
• Continuous improvement processes
• Material requirements planning (MRP I)
• Manufacturing requirements planning (MRP II)
• Factory automation/robotics
• Just-in-time (JIT)

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• Total quality control (TQM)
• Lean Manufacturing
• Computer-aided design/computer-aided manufacturing (CAD/CAM)
• Expert systems
• Enterprise resource planning (ERP)
• SCRUM (Takeuchi & Nonaka)
• Knowledge-based engineering
• Service sector operations management
• Activity based Management
• Management/cost accounting
• Balanced Scorecard (BSC)
• Hoshin kanri BSC
• Self-managing work teams
• Applications of operations management in finance, marketing, and human resources

2000-2014
• Strategic project management
• Continuous improvement, integration, and linking of organization strategic planning to operations
planning tools and concepts listed above both conceptually and in software
• Sustainable development/social responsibility

7.3.02 Business Acumen

A. ACT Content - Strategic Planning Professional (Level I)

The candidate should know and/or understand how to:

1. Leverage the fact that “people support what they help create” in supporting change across the
entire organization.

2. Ensure teamwork and project management skills are taught to those in the organization needing to
effectively implement strategic plan projects and initiatives.

3. Take into account the importance of the organization’s culture when planning/implementing
organizational change.

4. Break down long-term strategic plans into annual and project plans.

5. Keep the organization abreast of new emerging theories and methods of creating customer value,
including listening to and involving customers to create such value.

6. Ensure the application of quality management and customer service best practices in support of the
organization’s strategic direction and core values.

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B. ACT Processes- Strategic Planning Professional (Level I)

The candidate should know and/or understand how to

1. Foster ongoing communications processes and involvement of all key internal and external
stakeholders so they “buy in” and “stay in” over time with the new strategic direction.

2. Set up a monitoring and accountability process and information systems to track key success
factors—“smart” goals and implementation of the change.

3. Review progress and coordinate the modification of the implementation plan as needed.

4. Provide mechanisms, including lessons learned, that ensure the process is improved over time.

5. Serve as the trusted advisor to project teams and continuous improvement teams as they implement
the strategic initiatives throughout the year.

C. ACT Context- Strategic Planning Professional (Level I)

The candidate should know and/or understand how to:

1. Identify and engage the key stakeholders that will drive the change and the best practice structures.

2. Work with the CEO and CFO to ensure that adequate funding and resources for the required change
initiatives and infrastructures are in place.

3. Guide the development of regular change leadership teams at all unit levels as appropriate.

4. Establish an effective portfolio management system to support the strategic plan initiatives and
projects.

5. Assist senior management in developing and executing an annual implementation schedule


(corporate yearly calendar).

6. Convey the concept that an organization is a system wherein all components of the system are
interrelated.

7. Support ideas to ensure employee engagement and attunement of their hearts and minds in support
of the strategic direction.

D. ACT Content - Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Ensure that change theories and their application to the organization are taught and applied at all
levels of management by subject matter experts including knowledge of behavioral science principles
and change management applications.

2. Facilitate a line of sight for the organization’s goals and objectives across/down the entire
organization.

3. Facilitate changing the culture of management and employees.

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4. Facilitate ways to motivate and incentivize people.

5. Foster innovation in new product/services development.

6. Ensure that an effective monitoring and evaluation system is in place.

7. Ensure that a code of conduct has been developed and is properly communicated and enforced with
all employees.

E. ACT Processes - Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Follow best practices in change management and overcoming resistance to ensure that the change
initiative succeeds.

2. Obtain the commitment of the board, CEO, senior management, and middle management to lead
and support the strategic change.

3. Guide senior management in understanding the impact of change on all aspects of the organization
and the need to appropriately “keep up the pressure” for change so employees don’t slip back to old
routines.

4. Facilitate the development of a change game plan that can be fully supported by senior management
before the formal change and implementation process begins.

5. Facilitate reward and accountability systems at all levels to support the change initiative.

6. Assist senior management in making effective critical decisions to drive change based on valid
information and objective analysis.

F. ACT Context - Strategic Management Professional (Level II)

The candidate should know and/or understand how to

1. Ensure that the needed rewards and recognition structures for the new strategic direction are in
place and reinforced at all levels of the organization.

2. Facilitate an organization-wide change leadership team that is led by the CEO, supported by the
strategy management office, and meets monthly. The purpose of the team is to lead tracking,
reporting, adjusting, communication, and follow-up of the strategic plan implementation.

3. Set up and run a strategy management office to coordinate the entire strategic plan change effort in
support of the CEO and change leadership team.

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4. Identify and install other change infrastructures/teams (such as an employee development board, IT
steering group, facilities management team, etc. as appropriate).

5. Guide the horizontal integration of strategies and strategic initiatives across functions.

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7.4 References
• Argyris, C. Double Loop Learning in Organizations. Boston: Harvard Business Review. September
1977.
• Argyris, C. 1993. Knowledge for Action: A Guide to Overcoming Barriers to Organizational Change.
New York: Jossey-Bass, Inc. Publishers.
• Baldridge Performance Excellence Program. 2013. 2013-14 Criteria for Performance Excellence.
Gaitherburg, MD: U.S. Department of Commerce, National Institute of Standards and Technology.
• Bossidy, L. and R. Charan. 2002. Execution: The Discipline of Getting Things Done. New York: Crown
Business).
• Burke, W., Litwin G. 1992. A Causal Model of Organizational Performance and Change. Journal of
Management. Vol.18, No. 3, 523-545.
• Collins, J. 2001. Good to Great. New York: Harper Business.
• Deming, W. Edwards. 1994. The New Economics for Industry, Government, and Education. Boston:
MIT Press.
• Drucker, P. 1964. Managing for Results: New York: Harper Collins Publishers.
• Drucker, P. 1954. The Practice of Management. New York: Harper Business.
• Rogers, Everett. 1962. Diffusion of Innovations. New York: The Free Press, a division of Simon and
Schuster.
• Hammer, M. 1990. Reengineering Work: Don’t Automate, Obliterate. Boston: Harvard Business
Review. July 1990.
• Imai, M. 1986. Kaizen: The Key to Japan's Competitive Success. McGraw-Hill Publishers.
• Kotter, John P. 1996. Leading Change. Boston: Harvard Business School Press.
• Kubler-Ross, E. 1969. On Death and Dying. New York: The Macmillan Company.
• Peters, T. and Waterman, R.H. 1982. In Search of Excellence. New York: HarperCollins
Publishers.
• Poksinska, B., Dahlgaard, Jens, and Antoni, M.J. 2002. The State of ISO 9000 Certification: A Study of
Swedish Organizations. The TQM Magazine.
• Rogers, Everett. Diffusion of Innovations, 1962. New York: The Free Press, a division of Simon and
Schuster.
• Tennant, G. 2001. SIX SIGMA: SPC and TQM in Manufacturing and Services. Hampshire, England:
Gower Publishing, Ltd.
• Von Bertalanffy. 1955. General System Theory. Main Currents in Modern Thought 11: pp.75-83.
• Womack, J., Jones, D. and Roos, D. 1990. The Machine That Changed the World: The Story of Lean
Production. New York: The Free Press).

ASP BOK 2.0 5/1/2015 122


Section 3 Appendices
A. Evolution of the ASPBOK

As part of the Association for Strategic Planning (ASP) 2009‐2011 strategic planning process, the ASP
Board of Directors made a commitment to a long-term process of summarizing and defining the body of
knowledge, boundary definitions, and overall certification program for strategic planning and strategic
management practitioners. After extensive dialogue within the membership, the ASP board agreed there
was a strong argument to be made for developing standards, a body of knowledge (BOK), and a
certification process that would provide tangible value to its members and to the organizations they serve
or consult to. After an intense process covering several years and involving nine Core Team Members, two
dozen Extended Team Members, and other planning professionals, ASP BOK 1.0 was developed. ASP
Members who served on the ASPBOK Task Force included:

Core Team Members David Crain


Steve Haines - San Diego, CA Fred David
Richard Condit - Tempe, AZ Gwendolyn Esco-Davis
Gail Aller-Stead - Toronto Drumm McNaughton
Sara Brann - Vienna, VA Susan Obermeier
Crystal Davis - Fairmont, WV Howard Rohm
Jim McComb - Pasadena, CA Micki Rops
Frank Mruk - New York, NY
Terry Schmidt - Seattle, WA 2009-2010 ASP Board
Tom Carter - Toronto ASP President Tim Trotter - Wheaton, IL
Past President Dr. Stan Rosen – Westchester, CA
Extended Team Members Vice-President Steve Haines – San Diego, CA
Diane Alario – New York, NY Treasurer Don Ricketts, Highlands Ranch, CO
Dr. George Arras - Toronto Secretary Terrianne Reynolds – North Chicago, IL
Dr. Mary Anne Brady - San Francisco, CA Director-at-Large Dr. Mary Anne Brady – Alameda,
Bill Braun - Los Angeles, CA CA
Portia Davidson - Washington, DC Director-at-Large Laurie Erickson – Orono, MN
Kris Downing - Greensboro, NC Director-at-Large Pamela (Pam) Johnson –
Charles Everett - Washington DC Tallahassee, FL
Karen Hammond - Washington, DC Director-at-Large V. Rory Jones – San Francisco, CA
Ken Hein - Phoenix, AZ Director-at-Large Alan Leeds – Fremont, CA
Marcus Jennings - Laurel, MD Director-at-Large Alex Urmersbach – Calabasas, CA
Alan Kalish- West Palm Beach, FL Director-at-Large Dan Marshall – Phoenix, AZ
Alan Levis - Seattle, WA Director-at-Large Paul Ratoff – Placentia, CA
Jim McClain - Orange County, CA Director-at-Large Carola Venot De-Suarez – Tempe,
Jason Osterhage - Atlanta, GA AZ
Howard Rasheed - Wilmington, NC Director-at-Large Dr. Tina White Potter – Plano, TX
Terrianne Reynolds - Chicago, IL Executive Director Janice Laureen – Los Angeles, CA
Tanaia Parker - Washington DC
Randall Rollinson - Chicago, IL 2008-2009 ASP Board
Anika Savage - Newburyport, MA President Dr. Stanley G. Rosen – Westchester, CA
Iain Somerville - Los Angeles, CA Past President James A. McComb – Pasadena, CA
Michele Studer - Dallas, TX Vice President Matt Kinnich – Northfield, IL
Daren Tolz – NY, NY Treasurer William Braun – Los Angeles, CA
Jim Wilson - Claremont, CA Secretary Terrianne Reynolds –Chicago, IL
Director Mary Anne Brady – Alameda, CA
Other ASP Professionals involved Director Laurie Erickson – Orono, MN
Stan Abraham Director Gwendolyn Davis – Detroit, MI

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Director Stephen Haines – San Diego, CA Director Joyce Reynolds-Sinclair – Palo Alto,
Director Pamela Johnson – Tallahassee, FL CA
Director V. Rory Jones – San Francisco, CA Director Ian Somerville – Burbank, CA
Director Alan Leeds – Fremont, CA Executive Director Janice Laureen – Los
Director Paul Ratoff – Placentia, CA Angeles, CA

The intent of ASPBOK 1.0 was to focus on what strategy practitioners need to “know” to meet the
certification standard. Companies, associations, and educational institutions interviewed for the planning
body of knowledge guide and best practices in certifications included:

Academy of Competitive Intelligence Northwestern University - Kellogg School


American Management Association Project Management Institute (PMI)
Association of Professionals in Business Professional Pricing Society.com
Management Stanford University – Strategic Planning
Balanced Scorecard Certification Certification
Cornell University – Certification Strategic Strategic HR Management (SHRM) Association
Management UCLA Technical Management Program
Design Build Institute of America (DBIA) University of Calgary
Haines Centre for Strategic Management University of Michigan
IMC/CMC University of San Francisco – MSPMGT Program
INSEAD Blue Ocean Strategy Institute University of Virginia/Darden School of Business
MIT Sloan Executive Certification US Green Council/LEED

BOK 1.0 was finally approved by the ASP Board in March 2010 after a rigorous process that yielded nine
separate drafts. ASP now offered two certifications: the Strategic Planning Professional (SPP) and the
Strategic Management Professional (SMP); and a designation: the Strategic Planning Apprentice (SPA).
Twenty-six ASP certification “pioneers” launched the exam in 2010:

Terrianne Reynolds, Chicago Joyce Reynolds-Sinclair, Northern California


Randy Rollinson, Chicago Paul Ratoff, Orange County, CA
Tim Trotter, Chicago Richard Condit, Phoenix
Jim McComb, Denver Ken Hein, Phoenix
Stan Abraham, Los Angeles Dan Marshall, Phoenix
Janice Laureen, Los Angeles Stephen Haines, San Diego
Stan Rosen, Los Angeles Pam Johnson, Florida
Jim Wilson, Los Angeles Howard Rohm, North Carolina
Frank Mruk, New York Terry Schmidt, Seattle
Paul Arveson, National Capital Area Joan Campbell, South Carolina
Barbara Collins National Capital Tom Carter, Toronto, Canada
Mary Ann Brady, N. California Valerie MacLeod, Calgary, Canada
Alan Leeds, Northern California Gail Aller-Stead, Toronto, Canada

In addition ASP approved an initial set of Registered Educational Providers (REP) who offer courses, seminars,
and programs in strategic planning and strategic management consistent with ASP’s BOK. ASP Registered
Educational Providers’ status consisted of approval, by several senior ASP reviewers, to train certificate exam
delegates in BOK 1.0 using proprietary materials developed by each REP. Five REPs were chosen to provide the
training.

LBL Strategies, Ltd.


NY Center for Strategic Innovation, LLC
The Balanced Scorecard Institute
Haines Centre for Strategic Management
Management Pro

ASP BOK 2.0 5/1/2015 124


In 2014 the ASP Board asked the Registered Education Providers to develop the next generation of the
Body of Knowledge Guide, ASPBOK 2.0. A team was assembled by Frank Mruk and included Barbra Collins,
Randall Rollinson, Howard Rohm, and David Wilsey. The team submitted an Outline and Charter to the
ASP National Board on September 22, 2014. The Charter and Outline were approved at a special Board
Meeting on October 1, 2014.

B. Governance of ASP Standards and Certification Program


A functional governance structure is necessary to manage the ASP Standards and Certification Program.
Since we will rely primarily on volunteer labor, this requires a clear and simple infrastructure to manage
and coordinate the process pipelines involved.

The six entities involved in the governance and operations of the ASP Certification Program are:

1. The ASP Board oversees the certification program's policy decisions, operations, and budget.

2. The Certification Operations Team, which is the managing entity of the certification program and
responsible for granting credentials and maintaining the integrity of the program. A minimum of two
Board Members must serve on the Operations Team, and REPs cannot serve on the Team.

3. The Certification Application Team, which has primary responsibility for review and scoring of
certification applications. A minimum of two Board Members must serve on the Application Team.
Members must be certified Strategic Management Professionals, and any member of the Team
closely involved with an applicant must recuse him/herself from any decision-making for that
application.

4. The REP Qualification Team, which has primary responsibility for the active recruitment of new REPs,
the review of REP applications as the basis for identifying new REPs, and the provision of quality
educational programs. A minimum of two Board Members must serve on the REP Qualification Team.
REPs cannot form a majority of the team membership.

5. The Program Director, who is the day-to-day administrator of the entire Certification Program,
reports to the Operations Team. Questions concerning eligibility for the examination and/or status of
an application should be directed to the Program Director. Send all ASP Certification inquiries to:
CertificationProgram@strategyplus.org.

6. Professional Testing Corporation (PTC) (www.ptcny.com) is the independent testing company that
manages the ASP Exam Testing Program. PTC uses computer test centers run by PSI Testing.

C. Contributors and Reviewers of the ASP BOK 2.0

BOK 2.0 Task Force: A task force comprised of five authors (Barbara Collins, Frank Mruk, Howard Rohm,
Randall Rollinson, and David Wilsey with support from Candice Ramer), representing four Associations for
Strategic Planning Registered Educational Providers, created this training guide. The five authors have well
over 100 years’ experience with strategic planning and management in every type of organization and in
every corner of the globe. BOK 2.0 Executive Review: A Stage 1 review team was formed of BOK 1.0
participants, chapter presidents, certification committee participants, and current and past board
members.

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D. Glossary

360 Degree Feedback (1950s): A tool to gather information about employee performance initially
used at the Esso Research and Engineering Company. Performance feedback is gathered from 360
degrees: Colleagues, subordinates, superiors, and a self-evaluation.

ACT: The process of executing. The ACT Building Block completes the strategic planning and
management cycle. At this stage in the process, the organization implements its strategic direction
developed in the earlier LEAD, THINK, and PLAN Building Blocks. Strategy has been translated into
a budget and an operating plan whose scope is either multi-year or annual depending on the
organization.

Affinity Diagrams (1960s): Developed by Jiro Kawakita to organize ideas and data from
brainstorming into groups based on natural relationships.

The Annual Operating Plan (AOP): The annual plan that financially moves an organization toward
achieving its strategic destination, sometimes referred to as strategic result or BHAG, i.e., Big Hairy
Audacious Goal. The AOP provides financial data based on analysis of the current budget, as well
as a forecasted five-year financial plan.

Appreciative Inquiry (1980s): A model developed at Case Western Reserve University, focused on
decision making and the creation of strategic change. Based on five principles: 1. The
constructionist principle (what we believe determines what we do); 2. The principle of simultaneity
(the seeds of change are implicit in the questions that we ask), 3. The poetic principle
(organizational life is expressed in the stories we tell), 4. The anticipatory principle (our daily acts
are guided by our image of the future), and 5. The positive principle (sustainable change requires
positive affect and social bonding).

The Association for Strategic Planning (ASP): Recognized as the pre-eminent professional
association for those engaged in strategic thinking, planning, and action. Leaders concerned with
steering an organization through strategic thinking, planning, and action know of and turn to ASP
for access to knowledge, leading, thinking, and to a community of like-minded leaders and
professionals.

Balanced Scorecard (1992): Developed by Kaplan and Norton, the concept of a “balanced
scorecard” stressed the need to monitor, measure, and control strategic performance within four
perspectives: Financial, Customer, Internal Business Process, and Learning and Growth. The main
value of the balanced scorecard model lies in its emphasis on forging a balanced approach to
measuring and managing strategic control factors. It remains for each organization to identify its
own key strategy, strategic objectives, strategic initiatives, and strategic measurements. The main
assumption underlying the balanced scorecard, that is, that measuring drives performance, should
be a prerequisite for any effective strategic management system. It is important to note that the
metrics selected can be based on either internal or external factors. It is their emphasis on
balanced measures driving performance that makes it an internal consideration, that is, a major
determinant of management effectiveness.

Baseline: The baseline information on every variable included in the formula. A baseline is the
organization’s actual performance for the most recent reporting period.

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Bass’s Transformational Leadership Theory (1990): Developed by B.M. Bass, this model focused
on how the leader transforms followers by increasing their consciousness of task rank and value,
getting them to focus on team or organizational objectives, and stimulating their higher-order
needs. Bass believes that authentic transformational leadership encompasses idealized influence,
inspiration, intellectual stimulation, and individualized consideration.

Behavioral Based Leadership Theories: Effective leadership through learned behavior and
experience.

The Belbin Team Inventory (1981): Developed by Meredith Belbin to assess behavioral preference
for the nine team roles identified by the author. The assessment embraces 360-degree feedback
from outside observers. The nine team roles are named: Chairman, Shaper, Plant, Monitor-
Evaluator, Company Worker, Resource Investigator, Team Worker, Completer-Finisher and
Specialist.

Benchmark: A benchmark is an external comparison point, e.g., an industry-wide statistic.

Blue Ocean Strategy (2005): Developed by W. C. Kim and Renee Mauborgne, an imaginative and
creative positioning approach to stretching and leveraging core competencies so as to gain an
advantage in competing for the future. Kim and Mauborgne state that “tomorrow’s leading
companies will succeed not by battling competitors, but by creating ‘blue oceans’ of uncontested
market space ripe for growth.” They call these strategic moves as the “value innovation” that
“renders rivals obsolete and unleashes new demand.”

The Boston Consulting Group (BCG) “Experience Curve” (1966): The understanding of "learning
curves" first observed by psychologist Herman Ebbinghaus in the nineteenth century based on the
difficulty of remembering varying numbers of verbal stimuli. As entities and/or organizations get
more practiced at a task, efficiencies arise following a progression of the learning getting easier
and easier but then harder as one approaches a limit.

The Boston Consulting Group Growth-Share Matrix (1970): Developed by BCG as a diagnostic
model for managing a portfolio of diverse product lines and business units. The initial use of
portfolio analysis, the BCG Growth-Share Matrix, exhibits the various business units or product
lines on a graph charting growth rate versus market share relative to competitors.

The Boston Consulting Group Business Innovation Model (2009): Defines a business model as
consisting of two elements, the value proposition (consisting of target segments, product/service
offerings, and a revenue model) and the operating model (consisting of the value chain, the cost
model, and the organization). The model states that innovations may be implemented via many
forms including the value proposition, the operating model, or the business system architecture.

Brainstorming (1950s): Developed by Madison Avenue advertising executive Alex Osborn in his 1953 book
Applied Imagination, involves a relaxed informal, lateral thinking approach to problem solving. The
process encourages crazy ideas that potentially can be molded into creative solutions.

Burn’s Transformational Leadership Theory (1978): Developed by James MacGregor Burns, this model
focuses upon the ethical motivations and values (people-centric versus ego-centric) in assessing how a
leader approaches power. Burns sees transformational leadership as being inextricably connected to
higher order values.

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Business Acumen: Technical/content knowledge about the industry and sector in which
organizations compete. However, this business acumen is not a simple and universal set of
standards common to every organization and sector.

Business Concept Innovation (2000): Developed by Gary Hamel in his publication Leading the
Revolution, a business concept described as comprised of a Core Strategy (how an organization
chooses to compete), Strategic Resources (core competencies, strategic assets, and core
processes), a Customer Interface (relationship dynamics and pricing configuration), and a Value
Network (suppliers and partners).

The Business Model Canvas (2008): Developed by Alexander Osterwalder, a template for designing
new or documenting current business models. The template describes the business model in terms
of an organization's value proposition, consumer relationships, consumer segments, key activities,
key partners, key resources, channels, cost structure, and income streams.

Business Process Reengineering (1990): Initially developed by Michael Hammer at MIT in his
Harvard Business Review article “Reengineering Work: Don’t Automate, Obliterate,” the theory
states that managers should remove any form of work that does not add value; it is a rethinking
and redesign of business processes, performance, quality, and service.

Cascading: Arranging a number of strategic devices downward in a connected series or sequence,


similar to a waterfall. Cascading can often occur beyond the departmental level. The organization-
wide strategic plan (sometimes referred to as Tier 1 strategy) can be first translated into objectives
for departments, agencies, divisions, regions, support units, or any other operational or business
unit representing a next level within the organization. This is referred to as Tier 2 strategy. To
further align employees to the strategy of their units, Tier 2 strategic objectives are then translated
into objectives for individual employees or teams of employees (e.g., employees doing similar job
functions or employees teamed together to work on a specific project). Alignment at the
employee level is considered Tier 3 alignment. Once the appropriate policy for cascading has been
defined and communicated to the various operating units, “service level” agreements should be
developed and approved. The strategy practitioner should provide a support / facilitator role to
assist the senior management team in this work including support of the process with online and
computer technologies.

Champions: The individuals throughout the organization that identify strongly with the need for
given changes. They are self-appointed and need the unwavering support of management to be
recognized by other managers and staff members.

Change agents: The individuals responsible for any part of the implementation process. They can
also be sponsors and champions of change, as well as targets of change themselves, but primarily
they understand change, know how to manage change, and deal with the people involved in the
changes they undertake.

Change Management: The internal process of change--“changing hearts and minds.” Managing the
internal journey starts with employees having awareness or basic knowledge of proposed change.
Then comes understanding where stakeholders more fully comprehend the nature, scope, and
intent of the change. That leads to acceptance, where stakeholders demonstrate visible actions
toward implementing the change and begin using the new systems and processes. The last step is
commitment, where stakeholders embrace the new corporate culture, values, and processes.

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The Chief Administrative Officer (CAO): Responsible for administration and management of
private, public, or governmental corporations. The CAO is one of the highest corporate officer
positions in an organization, managing daily operations and reporting directly to the chief
executive officer.

The Chief Communications Officer (CCO): Responsible for communications, public relations, media
relations, social media, and public affairs, usually reporting directly to the chief executive officer.

The Chief Creative Officer (CCO) or Creative Director: A position often found within the graphic
design, film, branding and identity, fashion, advertising, gaming, media, or entertainment
industries. The responsibilities include overseeing all aspects of design, design development,
branding, and advertising.

The Chief Executive Officer (CEO): The highest corporate officer position in an organization. An
individual appointed as CEO usually reports to the board of directors. A CEO holds the primary
responsibility for strategic management and planning development and implementation. Other
titles for CEO will be used in different sectors. For example, in government the title of Assistant
Secretary is used in Cabinet-level agencies. Director, Executive Director, and Head are also
common. For nonprofits, Executive Director or Director is used.

The Chief Financial Officer (CFO): A corporate officer responsible for managing the financial and
accounting aspects of the firm. The CFO is responsible for all record keeping and tax accounting.
The CFO typically reports to the CEO and to the board of directors.

The Chief Human Resources Officer (CHRO): A corporate officer who oversees all Human
Resources aspects of an organization. CHROs can be thought of as “labor force strategists” and
“organizational performance conductors."

The Chief Information Officer (CIO): A corporate officer and the most senior executive in an
organization responsible for all the information technology, data centers, and enterprise-wide
computer systems that support enterprise goals and objectives. The CIO typically reports to the
chief executive officer.

The Chief Risk Management Officer (CRMO): Responsible for an organization's management and
governance of risk and related opportunities. Usually responsible for an organization's Enterprise
Risk Management approach.

The Chief Operating Officer (COO): One of the highest-ranking executives in an organization and
responsible for the ongoing operations of the company.

The Chief Privacy Officer (CPO): Responsible for managing an organization's privacy laws and
policies.

The Chief Strategy Officer (CSO): A corporate officer title given to the executive who is responsible
for assisting the chief executive officer with generating strategy and communicating, executing,
and sustaining strategic initiatives within an organization. CSOs often also drive and execute an
organization’s long-term continuous improvement efforts.

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The Chief Technical Officer (CTO): Responsible for the company's technological research and
development (R&D) direction. The CTO typically oversees the development of the technology that
is to be commercialized.

Cognitive Resource Theory (1987): Developed by Fiedler and Garcia to re-conceptualize the Fiedler
Contingency Model. The theory relates a leader's intelligence and experience on their reaction to
stress. Intelligence is more important in low-stress conditions, and experience is more important
during high-stress moments.

Communication: Communication is one of the toughest issues organizations face, and to be


effective at it requires four components: 1) Messages must be presented clearly and in detail and
radiate integrity and authenticity. 2) The messenger must be appropriate for the message. 3) The
person receiving the message must decide to listen and trust the sender. 4) The delivery method
must suit the circumstances and the needs of both the sender and the receiver.

Core Competence: Hamel and Prahalad (1994) define core competence as a bundle of skills and
technologies that enable a company to provide a particular value to a customer. It is traditionally
thought of as something that can be marketed and yet is difficult to imitate – the greater the
difficulty, the greater the competitive advantage gained by the organization. Competitive
advantage captures how an organization differentiates itself competitively. Traditionally, if a
private sector organization consistently maintains profits higher than its competitors, it is thought
to have a competitive advantage.

Core Values: An organization’s fundamental beliefs or philosophies that dictate correct behavior
and guide the actions of an organization’s leaders and workforce in the production of its goods and
delivery of its services. The core values of an organization are fundamental in nature forming the
foundation on which we perform work and conduct ourselves. In a rapidly changing world, core
values are unshakable and constant.

Creative Abrasion: Ideas that really rub against each other productively as opposed to
destructively.

Critical Path Method (1950s): A project modeling tool developed by Morgan Walker of the DuPont
Corporation and James Kelly of Remington Rand. The tool uses a project network logic diagram to
lay out task durations, dependencies, and milestones of a project.

Cumulative Voting or Multivoting (1800s): A multiple-winner voting system utilized to promote


proportional representation rather than winner-take-all elections.

Customer Value Proposition: A marketing statement that summarizes the tangible and intangible
value of a particular offering and helps the customers understand why they might want to buy a
product or use a service. It describes the key benefits gained by key customers for the price (cost)
charged. In the public sector a Customer Value Proposition could simply be thought of as what an
organization must deliver to develop, retain, and deepen its relationship with stakeholders. This
statement should help convince a potential consumer that one particular product or service will
add more value or solve a problem better than other similar offerings.

The Delphi Method (1970s): A structured communication process that relies on a panel of experts who
answer questionnaires in two or more rounds. A facilitator then provides an anonymous summary of the
experts’ forecast and the reason for their forecasts. A process of revision then occurs converging the
group's opinion to an appropriate response "mean" or "median" result.

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Double-loop Learning (DLL) (1978): Developed by Chris Argyris, involves the consideration of how the
problem is defined, which could be the source of the problem. Single-loop learning is repeated attempts
to solve a problem without questioning the goal or values being used to solve the problem. Double-loop
learning revaluates and reframes goals and values.

Dynamic Capabilities (1997): Influenced by Gary Hamel and developed by David Teece, refers to
the dynamics between long-term strategic capabilities and short-term operational capabilities.
Dynamic capabilities are usually described in three activities or adjustments that are required if the
enterprise is to sustain itself as markets/technologies change: Identification of an opportunity
(sensing), mobilization to capture value (seizing), and renewal (transforming). Dynamic Capabilities
shift the strategic conversation from sustainable competitive advantage to competitive survival.

Fiedler's Contingency Theory (1987): Developed by management psychologist Fred Fiedler and Joe
Garcia, a contingency theory based on leadership effectiveness that focuses on leadership and
subordinate stress as it relates to group effectiveness in environment. The model focuses on a
least preferred co-worker (LPC) scale that measures leadership orientation on a scale of 1-8 for
attributes such as: Unfriendly-Friendly, Uncooperative-Cooperative, Hostile-Supportive, and
Guarded-Open. A high LPC score indicates that the leader takes a "human relations orientation"; a
low LPC score indicates that the leader takes a "task orientation."

Fishbone Diagrams (1960s): A tool created by Kaoru Ishikawa that shows the cause and effect
interrelationships in a complex problem – and outcomes.

Four Temperaments (460-370 BC): Developed by the Greek physician Hippocrates, states that
there are four personality typologies: Sanguine (pleasure-seeking, sociable), choleric (ambitious,
leader-like), melancholic (analytical, quiet), and phlegmatic (relaxed, peaceful). Most personalities
include different mixtures of the four types. This set the basis for many of the models that
followed.

French and Raven's 7 Bases of Power (1959, 1965): Developed by John French and Bertram Raven
to remedy the opinion that power and authority are not synonymous and formal definitions of
leadership did not include any reference to social influence and power. They subsequently
subdivided power into seven bases of power that affect leadership and success. The seven bases of
power include: Coercive, reward, legitimate, referent, expert, informational, and connectional
power.

Fundamental Interpersonal Relations Orientation (1958): Developed by William Schutz, an


assessment of interpersonal relations in a group. The model states three main interpersonal
desires: Affection/openness, Control, and Inclusion and is administered via an assessment that
contains six scales of nine item questions called FIRO-B.

Futures Research: The study of hypothesizing about alternative futures and the various
perspectives that underlie them. It is carried out by forecasting based on a combination of past
performance, cross-disciplined treatment of subject matter, established mathematical forecasting
and systems models and by carefully collected input from subject matter experts.

GE McKinsey’s “Nine-Box Matrix” (1971): In the early 1970s, General Electric was investigating the
alternative strategy models because of disappointment with profits across business units. GE hired
McKinsey and Company to develop a portfolio-wide (43 strategic business units) approach because
of their dissatisfaction with the limitations of the BCG matrix. The model is known as industry
attractiveness—business strength matrix and the nine-box matrix.

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Goals: Goals are defined while developing the organization’s vision and mission statements. They
are the long-range generally stated directional themes or aims to be achieved in accordance with
the organization’s vision and mission. Goal statements serve to energize and motivate the board of
directors, management team, and staff. They are more narrowly focused than either vision or
mission statements. In fact, lower-level managers and staff often find it easier to align their own
efforts on goals rather than on the more generally stated vision and mission statements.

Great Man Theory (1840s): The Great Man Theory of leadership states that great leaders are born
into the world, not made. Leadership cannot be learned, either one is born with the intrinsic
capabilities of a leader or not. During the Victorian era Thomas Carlyle (1795-1881), an influential
Scottish philosopher, professor, author, and historian, perpetuated this theory through his lectures
and writings on heroes, hero reverence, and the heroic in history. He claimed that "history is
nothing but the biography of great men.”

The Hedgehog Concept (2001): Emphasis on the creative and imaginative approaches to strategic
management continues to receive attention by researchers and practitioners alike. In this regard, it
is important to note the work of Jim Collins in developing the Hedgehog Concept. According to Jim
Collins in Good to Great, the Hedgehog Concept is not a goal to be the best, a strategy to be the
best, an intent to be the best, or even a plan to be the best. Rather, it is arriving at a fundamental
grasp of what you can be the best at. This distinction is crucial to the theory.

Hersey-Blanchard Situational Leadership Model (1970s): Advanced by Hersey and Blanchard,


states leadership is task-relevant. Effective leaders acclimatize their leadership style to the
"maturity level" of the group or organization one is attempting to lead or influence. The theory
focuses on four main types of leadership style: Telling (leaders tell what to do and how to do it),
Selling (leaders hawk their message to get individuals on board), Participating (leaders emphasize
relationships), and Delegating (leaders pass responsibility onto the follower).

Industry Mapping: A powerful tool that provides a strategic view of the competitive terrain. It can
be used as the foundation of an ongoing intelligence program. Understanding where the
organization is positioned within its markets and relative to competitors can be invaluable
information for decision makers in guiding strategy development. Industry mapping can be a
powerful tool for informing decisions around alternative strategies. It can help uncover growth
opportunities; demonstrate that some segments are in danger of becoming too crowded; signify
when consolidation is needed; and identify potential acquisition targets. Industry mapping can be
used in conjunction with other models (e.g., Porter’s Five Forces and a Strategy Canvas) to better
understand how an organization is positioned in its markets relative to its competitors.

ISO 9000 (1987): While generally considered an operations management tool, the ISO 9000 family
of standards is another approach that represents a worldwide consensus on sound quality
management practices. It consists of standards and guidelines relating to quality management
systems and correlated supporting standards. ISO 9001 deals with the requirements that
organizations wishing to meet the standard have to meet. The standards are published by ISO,
the International Organization for Standardization.

Kaizen (1986): This practice of continuous improvement was introduced to the world by Masaaki
Imai in the book, Kaizen: The Key to Japan’s Competitive Success. This continuous improvement
involves functions, processes, logistics, and activities; it was adopted by many Japanese companies
after World War II.

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Keirsey Temperament Sorter (KTS) (1956): Developed by David Keirsey, one of the most
extensively used self-assessed personality assessments in the world. It is widely associated with
the Myers-Briggs Type Indicator (MBTI) but there are many theoretical differences in the typology
of their descriptions.

Kellogg Performance Logic Model (1990s): A systematic and visual way to present and share
relationships among the resources needed to operate a program, indicating the activities you plan
and the changes or results you intend to achieve. A mapping of 1) Planned Work:
Resources/inputs and Activities and 2) Intended Results: Outputs, Outcomes, and Impact.

Knowledge Café or World Café (1990s): A type of facilitated meeting or workshop which aims to
provide an open and creative talk on the issues involved. The session starts with open-ended
questions after which the group breaks into small groups for further discussion.

Kotter’s 8 Steps (1996): Developed by John Kotter of Harvard Business School from his bestselling
book Leading Change. The 8 steps are: increase urgency, build the guiding team, get the vision
right, communicate for buy-in, empower action, create short-term wins, don't let up, and make
change stick.

Leader-Member Exchange Theory (1976): Developed by G.B. Graen, focuses on network


dynamics, the back and forth exchanges relationship between supervisors and subordinates
(leader-member). Some subordinates feel they are part of the leader’s in-group, others see
themselves as not in the in-group (part of the out-group). The quality of these in-group and out-
group exchange relationships affects responsibility, decisions, influence, performance, and power.

LEAD: “Leading” has been described as a process of social influence where one person or group
enrolls the support of others in the accomplishment of a strategic undertaking or the art of getting
others to want to do something that the organization is convinced should be done.

The Leadership Participation Inventory (2002): A survey developed by James Kouzes and Barry Z.
Posner to ask people: What are the personal characteristics of a leader that you admire and that
would cause you to follow them? The result of this survey was called the Leadership Participation
Inventory. Extracted from the survey were five essential characteristics for effective leadership:
role model, inspiration, facing adversity, getting others to act, and engendering enthusiasm to act.

Lean (1990s): A universal-system based method used to reduce waste in the processes of
industrial manufacturing. This management philosophy was originated by Toyota in the 1990s. It
had the goal of “making obvious what adds value by reducing everything else to waste.” Lean
manufacturing of lean production was widely attributed to the Toyota Production System.

Lewin Leadership Styles (1930s): Kurt Lewin advanced a style structure based on a leader's
behavior. He contended that there are three types of leaders: 1. Autocratic leaders make decisions
without consulting with their teams. 2. Democratic leaders allow the team to contribute before
making a decision, although the degree of input can vary from leader to leader. 3. Laissez-faire
leaders don't impede; they allow people within the group to make decisions. The way leaders
behave affects their performance.

Malcolm Baldrige Criteria: Guidelines written and used as a yardstick to assess how well an
organization is able to meet a specific excellence level. The Baldrige approach has a point scoring
system with a total potential score of 1000 points compiled over seven categories: Leadership,
Strategic Planning, Customer and Market Focus, Information and Data Analysis, Human Resource

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Management and Development, Process Management, and Business Results. The Baldrige
approach has eleven values and concepts: Visionary Leadership, Customer-Driven Excellence,
Organizational and Personal Learning, Valuing Employees and Partners, Agility, Focus on the
Future, Managing for Innovation, Management by Fact, Public Responsibility and Citizenship, Focus
on Results, and Creating Value and Systems Perspective.

Management by Objectives (MBO) (1954): Developed by Peter Drucker in his 1954 book The
Practice of Management.

Managerial or Leadership Grid (1964): A grid advanced by Blake and Mouton to combine the
"concern for production" with "concern for people," it offers five different behavioral typologies of
leadership (Impoverished, Country-Club, Task, Middle-of-the-Road, and — the preferred style —
Team Management).

Metacognition: A higher order thinking involving dynamic control over inner cognitive processes
engaged in learning, i.e., how to approach a new learning task, monitoring understanding of the
task, and evaluating progress toward completing the task. Sometimes metacognition is referred to
as “thinking about thinking” and is most often associated with the work of John Flavell.

The Michigan Leadership Studies (1950s): Define the standards of leadership that led to
productivity and employee job satisfaction. The study indicated that leaders were either
"employee-centered,” or "job-centered." Leaders with an employee-centered alignment exhibited
an honest concern for interpersonal relations, and leaders with a job-centered orientation
exhibited an honest concern for the task or mechanical aspects of the job. This study also identified
three acute characteristics of effective leaders: task positioned behavior, relationship positioned
behavior, and participative leadership.

Mind Mapping (1970s): A diagraming technique of visualizing information where a map is created
around a single concept from which other ideas branch out.

Mission: Defines an organization’s purpose and reason for its existence. It defines who the
organization is, what it will do, and how (in general terms) it will do it. The mission statement
should guide the actions of the enterprise, articulate its overall goals, deliver a sense of direction,
and guide decision making. The mission gives context to organization strategy formulation.

The Myers-Briggs Type Indicator (1940s): A psychometric questionnaire developed by Katharine


Cook Briggs and Isabel Briggs Myers based on the theories of Carl Jung, designed to measure
psychological typologies. Jung hypothesized that there are four basic psychological functions
through which people experience the world: sensation, intuition, feeling, and thinking. Of these
four, one is usually dominant most of the time. This is the most widely used personality
assessment model. The (MBTI) ENTJ personality type in this model is often described as the most
prominent CEO personality leadership type.

Objectives: The quantifiable steps to achieve strategies.

The Ohio State Leadership Studies (1940s): Employed the Leader Behavior Description
Questionnaire (LBDQ) to determine that there are two different properties of leadership that
define how leaders carry out their role: “Initiating structure” (a task-oriented action) involves the
planning, organizing, and management of the work of subordinates; “Consideration structure” (a
people-oriented action) which involves showing concern for underlings.

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Operating Plans: The basis and justification for annual operating budget requests. They are the
details that specifically direct the organization in performing its day-to-day tasks. ACT deals with
executing the strategy through an operating plan, holding individuals and the organization
accountable for results, making fact-based decisions based on reviews, analysis, questioning, and
progress reporting, measuring what matters, and incorporating learning into new strategy
development, to transform the organization into a high performance entity. ACT means following
through to ensure that decisions are made, initiatives and projects are well managed, and the work
of implementation gets done correctly.

Operational Planning: A process of converting strategic goals and objectives to tactical goals and
objectives.

Parking Lot Technique: A method of meeting goals while still taking advantage of brainstorming
ideas by agreeing to “park” tangent ideas until the end of the meeting.

Path-goal Theory (1970): Developed by Martin G. Evans, states that the manager’s
responsibility is to guide subordinates in choosing the best direction to reach their goals, and
organizational goals. Leaders must engage in different types of actions depending on specific
situations. Path-goal articulating leaders can change their style, as situations require. The model
has two variables that moderate the leader subordinate relationship: Environment and follower
characteristics. The model helps leaders and subordinates reach goals in an effective manner.

Performance Management: The process of “achieving” desired organizational outcomes.

PERT (1950s): The Project Evaluation and Review Technique was developed by the U.S. Navy to
manage the Polaris Submarine Project. The tool makes dependencies and critical path visible and
identifies early start, late start and slack for each activity.

PESTEL (1967): Many factors in the macro environment affect management decisions on what
strategies to pursue to satisfy customers and stakeholders. Some of the earliest known references
to these factors emerged from the (1967) work of Francis J. Aguilar who used ETPS as a mnemonic
for the four sectors of his taxonomy of the environment: Economic, Technical, Political, and Social.
Arnold Brown of the Institute of Life Insurance reorganized it as STEP (Strategic Trend Evaluation
Process) as a means of organizing environmental scanning results. By the 1980s, many other
authors such as Porter, Narayanan, Boucher, and Mecca developed variations of the taxonomy.

PLAN: A process of thinking and organizing activities to achieve a future oriented goal. Planning
involves forethought, thinking or planning with consideration for the future, and forecasting,
predicting what the future will look like.

Policies: Guidelines developed for use in an organization to influence/instruct/specify how


members of the organization should make decisions in given circumstances. They are also a key
component of strategic direction. However, the role policies and regulations play in strategic
management is often not considered.

Porter’s Five Forces (1979): Developed by Michael Porter, a framework in which he used concepts
from industrial economics to derive five competitive forces that indicate the attractiveness or
unattractiveness of a market. The five forces are: The bargaining power of customers, the
bargaining power of suppliers, the threat of new entrants, the threat of substitute products, and
the level of competition in an industry.

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Porter’s Three Choices: Described by Michael Porter, a category scheme consisting of three
general types of strategies that are used by businesses to achieve competitive advantage. The
three generic strategies are defined along two dimensions: strategic scope and strategic strength.
Strategic scope is a demand-side dimension and examines the size and composition of the target
market. Strategic strength is a supply-side dimension and examines the strength or core
competency of the organization.

Prioritization Matrix: Used to prioritize items with weighted criteria using a combination of the
tree and matrix diagraming visualizations.

Project Management: The discipline of mobilizing resources to bring about the successful
completion of specific project outcomes and outputs. This includes balancing the four
components of project management: resources, including human capital, money, information,
equipment, and material; schedule, including adherence, control, and recalibration; scope,
including specifications and variations from same (“scope creep”); and risk, including risk factors
and mitigation controls.

Projects: Finite endeavors, with defined resource expenditures, scope, and schedule that are
managed to successful completion. Projects are designed to meet unique goals and objectives
important to the organization-level goals and success. Projects can be strategic, as in “strategic
initiatives” that impact the organization as a whole and have enterprise-wide significance, or
operational, designed to serve a business or support unit’s more operational goals.

Risk Management: Central to the strategic management process is management of risk.


Organizations should regularly undertake comprehensive, focused assessment of potential risks to
the organization from strategy implementation. This focused assessment should be part of the
strategy development process to ensure that as strategies are being developed the risk of failures
are being analyzed. Periodic reviews should be conducted by a team of staff members
representing all the major functions of the organization.

Responsibility Matrix: RACI is an acronym derived from the four key responsibilities most typically
used: Responsible, Approves, Consulted and Informed.

Robert's Rules of Order (1870s): First outlined by Henry Martyn Robert containing parliamentary
authority rules of order to be adopted for use by a deliberative assembly or meeting.

Role Playing (Sixteenth Century–Present): A process in which two or more people act out a role in the
context of a predefined stage set (context) to explore scenarios. Steps involve identifying the situation,
adding details, assigning roles, acting out scenarios, and discussing what the group has learned.

Role theory (1920s): Developed by Margaret Mead, Talcott Parsons, Robert K. Merton, and others,
a system of role play in which each individual is an actor playing a role in a scenario on a stage.
That actor inserts his or her own personality in the role. The leader can utilize role play to focus on
desirable behavior to be replicated on stage sets of their design in real life.

Root Cause Analysis (1950s): A method of problem solving that identifies the root causes of
problems as opposed to symptoms.

Scenario Planning or Scenario Analysis (1971): Developed by Pierre Wack at the Royal Dutch Shell
Company as a forecasting model to guide strategy for long-term planning. A version of what was

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routinely done by military organizations to utilize simulation games that involved systems thinking
and game theory elements.

Scrum (1970s): Often used for software development, Scrum is an agile software non-sequential
development tool. Members work as self-organizing teams who are usually in daily face-to-face
collaboration.

Seven S (1982): Tom Peters and Robert Waterman in their book In Search of Excellence developed
an organizational model called the “Seven S” model that puts strategic management within the
context of a complex organizational network. The model includes Strategy, Structure, Staff, Skills,
Style, Systems, and Shared values.

Six Sigma (1986): Six Sigma is used to improve quality (reduce errors) of processes. It is a
controlled, data-driven approach and methodology for eradicating defects (driving toward six
standard deviations between the mean and the nearest specification limit), used in manufacturing
processes and service-based transaction processes. It was developed by Motorola.

Six Thinking Hats (1980s): Developed by Edward de Bono in his book Six Thinking Hats, the tool
describes a process of facilitation where the participants adopt planned "parallel" thinking
processes. The six hats include natural and unnatural thinking processes associated with colored
hats: Blue (Managing), White (Information), Red (Emotions), Black (Discernment), Yellow (Optimistic
Response), and Green (Creativity). The hats are used as metaphors for more elaborate segregation
of thinking directions in pursuit of problem resolution.

SMART Objectives: Objectives that are Specific, Measurable, Appropriate, Realistic and Timely.

Sponsors: The leaders, executives, and managers with the authority to make changes in the
current strategic direction, the organization structure, and/or the processes required to implement
and manage it.

Strategic Management: The organization’s process of continuous planning, monitoring, analysis,


and assessment of all that is necessary for an organization to meet its goals and objectives.

Strategic Management Office: Helps to govern the analysis, decisions, and actions an organization
initiates to create and sustain competitive advantage. The Strategic Management Office is
concerned with the analysis of strategic goals (vision, mission, and objectives) along with the
internal and external environment of the organization. The Strategic Management Office makes
recommendations about industries in which an organization should compete and how this
competition should take place. It also helps to define and procure the necessary resources to make
intended strategies actionable.

Strategic Objective: A broadly defined objective that an organization must achieve to make its
strategy succeed.

Strategic Planning: An organization's process of identifying its future direction and strategy and
allocation of resources in pursuit of that future direction.

Strategy: The calculation of objectives, concepts (ways), and resources (means) within acceptable
bounds of risk to create more favorable outcomes (ends) than might otherwise occur by chance or
at the hands of others.

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Strategy Canvas (2005): A Strategy Canvas is a planning tool graphically depict key competitive
strategic factors of the organization’s value proposition to customers, compared to other
organizations operating in the same market space. The strategy canvas is the central diagnostic
and action framework for building a Blue Ocean Strategy (Kim and Mauborgne). The strategy
canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy.
The horizontal axis captures the range of factors that the industry competes and invests in, while
the vertical axis captures the offering level that buyers receive across all of these key competing
factors.

Strategy Combination: Sometimes called a strategy profile, a set of strategies for each player that
fully specifies all actions in a game. A strategy profile must include one and only one strategy for
every player.

Strategy Map: A visual representation of the cause and effect relationships among strategic
objectives linked to one particular goal or theme. Developing a strategy map provides the
leadership team an effective and simple means of checking for imbalances and/or ineffective
linkages among the strategic objectives. It also provides management with a summary view of the
integrations taking shape within the implementation plan.

Strategy Profile: Sometimes called a strategy combination, a set of strategies for each player that
fully specifies all actions in a game. A strategy profile must include one and only one strategy for
every player.

SWOT Analysis (1960s): A technique originated from Albert Humphrey’s work at Stanford
University on investigating why corporate planning failed. Humphrey’s research was initially
termed SOFT analysis. S (what is good in the present is Satisfactory), O (good in the future is an
Opportunity), F (bad in the present is a Fault) and T (bad in the future is a Threat). In 1964 Urick
and Orr at a conference changed the F to a W, and changed the term to SWOT analysis. S
(Strength), W (Weakness), O (Opportunity), and T (Threat).

Tactics: The tools used.

Targets of change: The people within the organization directly impacted by implementation of the
operating plan and the changes it brings about. Those who will be affected must be identified to
assess how they will be affected, what changes they can expect, and why. Since people vary
dramatically in how they react to change, their potential for resistance needs to be understood and
dealt with constructively.

THINK: To employ one's conscious mind rationally and objectively in evaluating or dealing with a
given situation.

Total Quality Management (TQM) (1980s): An operations management tool developed by W.


Edwards Deming. The goal of TQM is to reduce the number of errors produced during
manufacturing or service practices, increase client satisfaction, streamline supply chain
management, aim for modernization of equipment, and ensure that employees have the highest
level of training.

Trait Theory (1930s–1940s): The Trait Theory of Leadership assumes that great leaders share a
combination of definable characteristics and traits that facilitates superior leadership. Trait theory
focuses on the study of the common traits (vision, intelligence, creativity, etc.) that make great

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leaders. Gordon Allport (1897–1967), one of the founding figures of personality psychology,
considered that the combination and interaction of various traits forms a unique pattern of
personality. He categorized these traits into three cores: Cardinal Traits (dominate an individual’s
whole life), Central Traits (form the basic fundamentals of personality), and Secondary Traits (related
to attitudes or preferences). Traits, this theory assumes, are key to leadership success.

Tree Diagrams: A tool used to break down broad categories, from generalities to specifics, into finer
and finer levels of detail.

Value Curve: The basic component of the strategy canvas. It is a graphic depiction of a company’s
relative performance across its industry’s factors of competition. According to Kim and Mauborgne,
“A strong value curve has focus, divergence as well as a compelling tagline.”

Vision: Vision articulates the desired future state of an enterprise in terms of its ultimate strategic
direction. Vision is an expression of a desired end-state that inspires a compelling future. Vision is a
mental image produced by the imagination. Vision statements use clear and concise vision
descriptors. Some vision statements will be built around a goal, such as “our vision is to have 2000
stores by the year 2020”; other vision statements will not include goal language but may include a
goal as a separate statement.

VRIN (1980s): The resource-based view (RBV) of a firm views competitive advantage as the means
and methods of applying the resources at an organization's disposal. Birger Wernerfelt took this
perspective in his 1984 article "A Resource-Based View of the Firm." Competitive advantage is
increased if resources are V (Valuable), R (Rare), I (Inimitable), and N (Nonsubstitutable).

Vroom–Yetton Contingency Model (1973): Developed by Vroom and Yetton, the model is a
situational leadership model that argues that the leadership style is subject to the situation. The
model offers five different styles based on the situation: Autocratic Type 1 (leader makes decision
alone, no follower input), Autocratic Type 2 (leader makes decision alone after reviewing follower
input), Consultative Type 1 (leader shares problem, seeks suggestions but makes decision alone),
Consultative Type 2 (leader shares problem with appropriate followers as a group and pursues their
input, but makes decision alone), Group-based Type 2 (leader discuss problem with followers as a
group and seeks their ideas and input through brainstorming, decision by group).

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E. BOK 1.0 Further Reading

LEAD (Other Reference Material Recommended by the ASP Pioneers)

Bennis, W. 1994. An Invented Life, Reflections on Leadership and Change.


Covey, S. 1991. Principle‐Centered Leadership. NY: Summit Books.
Covey, S. 1990. Seven Habits of Highly Effective People. NY: Fireside.
Hanna, David P. 2001. Leadership for the Ages. Provo, Utah: Executive Excellence Publishing.
Juran. 1989. Juran on Leadership for Quality. NY: The Free Press.
Oshry, B. 1999. Leading Systems; Lessons from the Power Lab. San Francisco: Berrett‐Koehler Publishers.
Welch, J.F., Jr. & Byrne, J.A. 2001. Jack: Straight from the Gut. NY: Warner Business Books.

THINK (Other Reference Material Recommended by the ASP Pioneers)

Ackoff, R. 1999. Ackoff’s Best: Classical Writings on Management. Chichester, England: John Wiley &
Sons, Inc.
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ACT (Other Reference Material Recommended by the ASP Pioneers)

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