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The Future Is Now: Improve the Future via Strategy Dynamics

Editor's Note: Take a look at our featured best practice, Objectives and Key Results (OKR) (23-slide PowerPoint presentation). Successful organizations are using Objectives and Key Results (OKR) now. OKRs are efficient way to track company and team goals and measure their progress. It helps every organization's success by cutting out unimportant goals and focusing on what truly is important within the organization. OKR [read more]

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Have you heard of Strategy Dynamics?  Most people haven’t.

Strategy Dynamics is a framework to explain our current performance–and to develop and execute strategies for improving our future performance of our organization.  This approach emphasizes building and sustaining the resources and capabilities necessary to succeed.

Strategy Dynamics focuses on performance over time. The overarching objective of strategic management is to develop a sustainable approach to quantitatively improve performance through time.  This can apply to the enterprise as a whole, or for a key functional areas (e.g. Sales, Human Resources, Product Development, etc.).

Strategy Dynamics seeks to answer 3 key questions:

  1. WHY is performance following its current path?
  1. WHERE will performance go if we continue as we are doing today?
  1. HOW can we design a robust strategy to radically improve that performance into the future?

dynamics

The application of Strategy Dynamics is essentially universal.  It can be used for every kind of enterprise, whether commercial, public-service, or voluntary, as well as to every corporate function within an organization.  It is also applicable to not yet existing enterprises, such as new ventures or voluntary initiatives.

Strategy Dynamics also has numerous benefits:

  • The method works for every kind of enterprise—commercial, public-service, or voluntary—as well as to every function within an enterprise.
  • It is also applicable to not yet existing enterprises, such as new ventures or voluntary initiatives.
  • The method is strongly evidence-based and rigorous, offering a solid understanding of what causes current performance and confidence in the future performance.
  • Being evidence-based, it can solve differences of opinion amongst team-members. It also allows each individual, both amongst the management team and in the wider organization beyond, to see where their activity contributes to the whole, and on whom they depend.
  • Since it highlights exactly where management actions and decisions exert control, it provides clear and specific strategies and action plans, that can be adapted as the future unfolds.
  • The method provides a solid foundation for methods such as the Balanced Scorecard and Value Based Management, and is a means of integrating other established strategy frameworks and approaches, such as PEST(EL), Core Competence, and Value Chain Analysis.
Are you a management consultant?  You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

Starting from the view of looking at how performance is changing over time, Strategy Dynamics works logically through 3 stages:

  • Stage 1: Resources
    Identify the resources that performance depends on.  Customers, cash, people, product catalog, and capacity are the most common examples of resources.
  • Stage 2: Flows
    Identify the flows that cause these resources to “fill and drain.”  The thinking behind this step explains why today’s performance and future performance are both unavoidably dependent on history.
  • Stage 3: Factors
    Identify the factors that cause resources to be won and lost.   The final question of causality we need to answer is what has been driving the “flow-rates” for each resource.  For example, how quickly customers have been won, or how quickly staff were lost, etc.  These flow-rates turn out to depend upon:

    • Management Decisions
    • External Factors
    • Existing Resource-levels

When the 3 steps are combined, the principles create an integrated diagram that depicts  the “physics” of the system, known as the Strategic Architecture.

Are you a management consultant?  You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

Interested in gaining more understanding on how to apply Strategy Dynamics?  You can learn more and download an editable PowerPoint about Strategy Dynamics here on the Flevy documents marketplace.

241-slide PowerPoint presentation
Benchmarking is the pursuit of superior company performance through best practices. It involves setting operational targets based on industry best practices. Traditional target-setting methods have left some companies vulnerable to global competition. Japanese philosophy of "dantotsu" [read more]

Want to Achieve Excellence in Performance Management?

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Performance Management (also known as Strategic Performance Management, Performance Measurement, Business Performance Management, Enterprise Performance Management, or Corporate Performance Management) is a strategic management approach for monitoring how a business is performing. It describes the methodologies, metrics, processes, systems, and software that are used for monitoring and managing the business performance of an organization.

As Peter Drucker famously said, "If you can't measure it, you can't improve it."

Having a structured and robust Strategic Performance Management system (e.g. the Balanced Scorecard) is critical to the sustainable success of any organization; and affects all areas of our organization.

Learn about our Performance Management Best Practice Frameworks here.

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About David Tang

David Tang is an entrepreneur and management consultant. His current focus is Flevy, the marketplace for business best practices (e.g. frameworks & methodologies, presentation templates, financial models). Prior to Flevy, David worked as a management consultant for 8 years. His consulting experience spans corporate strategy, marketing, operations, change management, and IT; both domestic and international (EMEA + APAC). Industries served include Media & Entertainment, Telecommunications, Consumer Products/Retail, High-Tech, Life Sciences, and Business Services. You can connect with David here on LinkedIn.





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