Minimizing Risk in Strategy Implementation

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With Fall being such a popular time for developing a new Strategic Plan, it’s not surprising that after the holiday break, the focus begins to shift to implementation.  Most Strategic Plans include the development and deployment of new initiatives, expansion (or contraction) of services, or the execution of Tactics to help achieve one or more Goals.  Some of these inherent changes come with risk and uncertainty.  Problems may occur during implementation, jeopardizing the entire effort.  And these days, no one wants the added drain on time and resources needed to address unanticipated problems. Fortunately, there are a few tools that can minimize risk and ensure you have effective contingencies for any unwanted surprises that may emerge during implementation.

Invaluable Preparation  One of these tools is particularly well suited for larger scope initiatives.  It’s even a great tool to use in the final stages of Strategic Plan Development. "The Process Decision Program Chart (PDPC) systematically identifies what might go wrong in a plan under development. In a PDPC, each potential problem is linked to one or more undesirable effects, and in turn, each effect is associated with a specific countermeasure. Countermeasures are developed to prevent or offset those problems. By using PDPC, you can either revise the plan to avoid the problems or be ready with the best response when a problem occurs.1" The PDPC helps you anticipate where problems could occur during implementation, and then design effective countermeasures, or in some cases, even reverse-engineer a better plan that avoids the problems all together.

Solve Problems Before They Occur!  If you are implementing at a more detailed, operational level another tool can help: Failure Modes and Effects Analysis (FMEA).  This structured analysis takes a small team sequentially through three major phases:

1. Identification of possible failure modes (ways the implementation can fail)

2. Comparative ranking of the failures based on the severity, frequency, and detectability of each failure

3. Prioritization of the highest ranking (worst) failures and the determination of the most effective way(s) to prevent them from occurring.

FMEA can be used as part of any new product or service design as well as current product / service improvement efforts, regardless of whether it is part of your Strategic Plan.

It’s About Managing Risk  We often associate Risk Management with daily operations and the prepared response to situations that we hope will never occur.  However, there is always some level of risk and uncertainty associated with implementing strategy; after all, Strategy is about change...and improvement.  Fortunately, there are some great tools to make the implementation of improvement at any level easier and more successful.

If you would like help with using the PDPC or FMEA, or with other aspects of Plan implementation, including Business Plans or Feasibility Studies, contact me at your convenience.

Jeff

 

1 American Society for Quality Web Site (www.asq.org)

2 For more information on FMEA, I recommend a great little book on the topic, The Basics of FMEA, 2nd Edition, by R. Mikulak, R. McDermott, and M. Beauregard (ISBN-13: 978-1563273773).

Mission Matters

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In a recent Strategic Planning work session with a client, a Board member asked if the organization was running the risk of “Mission Creep”, which they felt should be avoided.  Also called “Mission Drift”, this is when organizations begin to diversify into services or products that are increasingly different from their original purpose and offerings.  In the US and some other economies, when taken to the extreme in pursuit of more earnings, this sometimes resulted in a conglomerate, a holding corporation with many subsidiaries that are unrelated, or at least seem to be.

Stick to Your Knitting  Critics of Mission Creep warn organizations not to stray too far from their core purpose, and to stick to what they know and do best.  Moving into areas where the organization had no experience or fundamental capabilities, either of it own or though partnership, is certainly a high risk and could have severe consequences.  And there is much to be said about knowing what you do best…and continuing to improve it.

We’re in the Railroad Business  But taken to the extreme, a complete lack of any evolution in purpose and portfolio is also dangerous.  This Mission Obsolescence ignores the reality of a constantly changing world, society, and customer.  It’s true that with customers, some of what they need and want from your organization rarely (or never) changes (e.g. safety, respect).  However some of your customers’ key quality characteristics - the attributes they use to evaluate how good your services or products are – do change over time.  This is inevitable in a world of constant innovation.  History has many examples of organizations and even entire industries that failed, or almost failed, due to mission obsolescence.  Remember learning about how railroads almost completely disappeared because they thought they were in the railroad business, all the while choosing to ignore the rapidly expanding world of transportation (cars, trucks, planes)?

Timing…and Information   So how does your organization find the prosperous “middle ground” between Mission Creep and Mission Obsolescence?  By keeping an ear on what your customers need and want and what’s happening with organizations like yours.  I refer to these as Market and Industry Assessments, respectively, and they are a critical early-stage component of Strategic Planning.  If like many organizations, you develop a new Strategic Plan every three years (or maybe less), make sure the process starts with thorough Market and Industry Assessments.

But don’t stop there.  The beginning of a new calendar year is one of several perfect times to refresh your understanding of what’s going on in your industry.  Why?  Because it is often when associations publish updated “Environmental Assessments” or other annual publications where they report on the latest trends, issues, and emerging best practices of interest to members. It’s also a good time, after the holiday rush starts to subside, to reach out to customers for their latest feedback and perceptions.  Staying tuned to your customers and your industry on an ongoing basis is the best way to avoid Mission Obsolescence and build the rationale for well-timed and well-planned Mission Evolution.

Let me know if I can help with an Assessment refresh, or anything else.

All the best in 2024,

Jeff