People - HR Strategy

Question 1

Definitions:
- Strategy
- Strategic Planning
- Strategic Management

Answer 1

Strategy - plan of action for accomplishing an organization’s long-term goals

Strategic Planning - process of setting goals and designing a path toward them

Strategic Management - actions leaders take to move their organizations toward the goals set during the planning stage

Question 2

Tips for successful strategic planning

Answer 2

• Do your homework, including careful research/evaluation of the organization and it’s competitive environment
• Be prepared to change and to take calculated risks
• Don’t delegate it to a consultant; you need commitment from senior management and the board
• Include the rest of the organization, to secure their commitment as well
• Communicate the intent and decisions with the whole organization
• Follow through - use the plan as a basis for decision-making

Question 3

4 stages of strategic planning/management cycle

Answer 3

• Formulation - gathering info, analyzing organization’s position/capabilities/opportunities
• Development - deciding on goals and tactics that will optimize success; these will make up the strategic plan
• Implementation - process of strategic management; includes communication throughout the organization, support of efforts, and control of resources
• Evaluation - measure results (continually and at specific intervals) to determine effectiveness of strategy and need for change or improvement

Return to Formulation stage when evaluation shows that change is needed

Question 4

Environmental scanning (definition)

Answer 4

Process of systematically gathering data from internal and external sources, that can be analyzed to identify opportunities/threats and strengthen strategic plans

Question 5

PESTLE analysis

Answer 5

Scan of an organization’s environment that includes:
Political
Economic
Social
Technological
Legal
Environmental

Question 6

SWOT analysis

Answer 6

Examines internal strengths and weaknesses, and external opportunities and threats

Question 7

Growth-Share matrix

Answer 7

Tool used by larger organizations to find where the greatest value in their organization lies; places each business line in one of 4 quadrants depending on it’s market share and growth trend

Question 8

Mission vs. Vision

Answer 8

Mission - a concise statement of the organization’s strategy

Vision - a vivid, guiding image of the organization’s desired future (which it hopes to attain through it’s strategy)

Question 9

Value drivers
Value driver tree

Answer 9

Value drivers - actions, processes, or results that are needed to deliver a desired value

Value driver tree - chart that illustrates line of sight from an organization’s strategic goals, through functional goals and more specific objectives - shows exactly how a specific function will create value to contribute to an organizational goal

Question 10

Balanced scorecard - connection with strategic plan

Answer 10

Balanced scorecard can include KPIs (key performance indicators) for objectives that are linked to the organization’s strategic plan

KPIs might include metrics for finance, customers, internal business processes, learning and growth, sustainability and social programs, employee engagement

Question 11

Leading indicator vs. lagging indicator

Answer 11

Leading indicator can help predict future results (ex: employee satisfaction is a leading indicator for future retention rates)

Lagging indicator measures effects that have already occurred and can’t be changed (ex: turnover rate - the turnover has already happened by the time you measure it)

Question 12

SMARTER objectives

Answer 12

Specific
Measurable
Achievable
Relevant
Time-based
Evaluated
Revised

Question 13

Benchmarking

Answer 13

Comparing performance levels or processes of one entity with those of another to identify performance gaps and set goals for improvement

Question 14

Strategic “Fit”

Answer 14

Compatibility of an organization’s strategy with its external and internal environments

Question 15

2 aspects of organization’s strategy
- business strategy
- corporate strategy

Answer 15

Business strategy - how the organization will create strategic position in which it has a competitive edge over its rivals

Corporate strategy - the scope of the organization, including which markets and industries it will compete in

Question 16

Blue ocean vs red ocean strategies

Answer 16

Blue ocean - extreme example of creating competitive advantage through innovation; business creates a new arena (although usually within an existing industry)

Red ocean - more conventional strategies where businesses compete in an existing marketplace by taking shares from their competitors, usually by differentiation or lower cost

Question 17

Porter’s Competitive Strategies - cost leadership vs. differentiation

Answer 17

From Michael Porter

Cost leadership - strategy that aims to capture market share by having the lowest price (ex: Walmart, Amazon)

Differentiation - strategy that aims to offer something different from competitors, allowing the company to charge a higher price (ex: a company charges more but donates a pair of socks to a homeless shelter for every pair purchased)

Question 18

Growth strategies
- strategic alliance
- joint venture

Answer 18

Strategic alliance - companies agree to share assets (such as technology or sales capabilities) to accomplish a goal

Joint venture - two or more companies invest together to form a new company that they jointly own

Question 19

Growth strategies
- merger/acquisition
- equity partnership

Answer 19

Merger/acquisition - a firm purchases the assets of another one, expanding the acquiring company’s employee base and facilities

Equity partnership - one firm acquires partial ownership of another through purchase of shares; there is usually a partnership agreement that defines issues such as leadership and division of profits/losses

Question 20

Growth strategies
- franchising
- licensing

Answer 20

Both are low-risk ways to enter a new market

Franchising - what we frequently see in fast food industry (each Domino’s Pizza is a franchise); main company maintains a lot of control over it’s franchisees

Licensing - local firm is granted rights to produce or sell a product; can help avoid tariffs or quotas imposed on exports, but main company doesn’t have much control over the licensee

Question 21

Growth strategies
- contract manufacturing
- management contract

Answer 21

Contract manufacturing - a firm arranges for a local manufacturer to produce a product or components as a way of lowering labor costs

Management contract - another company is brought in to manage and run daily operations of a local business; the main company retains ownership and financing decisions

Question 22

Growth strategies
- turnkey operation
- brownfield operation
- greenfield operation

Answer 22

Turnkey - company acquires an existing facility and its operations, and runs it without making major changes

Brownfield - company repurposes an abandoned, closed, or underused property

Greenfield - company builds a new location from the ground up

Question 23

Project stages
- planning
- executing
- closing

Answer 23

Planning - project manager works with stakeholders to define objectives, creates project charter, defines deliverables, creates schedule, assembles a team

Executing - project manager establishes and maintains communication within the team and with stakeholders, provides leadership, clears away obstacles, manages stakeholders, monitors/controls progress

Closing - assess the project and it’s results, document what worked and didn’t, identify ways the process could have been improved - should be done even if project is canceled before completion

Question 24

Project management scheduling tools
- Critical path analysis
- Gantt chart

Answer 24

Critical path analysis - uses data about set start/end dates, logical relationship of tasks, and length of each task to find earliest completion date (or latest start date)

Gantt chart - linear chart showing length and timing of certain activities based on calendar (frequent result of PM software such as Microsoft Project)

Question 25

Project management approaches - lean project management

Answer 25

Eliminates waste by maintaining tight focus on project’s intended value, empowering the team to make decisions, analyzing/solving problems, and continuously learning

Question 26

Project management approaches - Six Sigma

Answer 26

Aims for an exceptionally high level of quality with very few errors

Focuses on projects with quantifiable return of value, carefully measures results, uses fact-based decision making

Question 27

Project management approaches - Agile

Answer 27

Used when basic assumptions of a project are unclear or might evolve as work proceeds

Focuses on iterations of deliverables, with frequent customer input

Question 28

Project management approaches - critical chain

Answer 28

Used when resources can’t be increased to meet deadlines (ex: a department can only use 10 hours of staff time per week on this project)

Requires careful scheduling; buffers are built into the schedule, but once set, are strictly enforced

Question 29

Project management approaches - Kaizen

Answer 29

Systematic approach for business improvement, requiring that all people and processes work to continuously improve

5 principles:
- Know your customer
- Let it flow (always work to reduce waste to zero)
- Go to Gemba (understand what’s happening at all levels of organization, and focus on places/actions that produce the most value)
- Empower people
- Be transparent (track goals using tangible data to show progress)

Question 30

Project management approaches - design thinking

Answer 30

Places the customer at center of project; focuses on empathy to understand requirements of the project’s end user and ensure that intended stakeholder receives value from the project

Usually moves through multiple iterations, with customer feedback on each and then improvement of the solution