While developing the strategy of any enterprise, the current-state analysis is one of the key inputs to determine where the enterprise stands. The strategy formulation begins with strategic intelligence gathering and analysis of markets, competitors, technology, and past performance. This provides an information base for strategic decision-making, a common vision for the future, and a profile of the environment in which strategic decisions are made. Typically, the PESTLE and SWOT techniques are used to identify the external and internal issues, challenges and opportunities for an organization. For the ABM Case Study, the Kepner-Tregoe’s Situation Analysis method was used to identify and analyze the issues the organization has been encountering over the years.
The Situation Analysis helped the team clarifying the concerns and identifying the actions required along with the seriousness and urgency of the identified concerns. The team initially categorized the next best actions under the headings of strategy & innovation, business, process and people. However, it was soon realized that a strategy layer needs to be built between ABM concerns and the next best action as no measurement criteria was built to determine the success of the next best actions. The absence of a formal ABM strategy was also highlighted in the Situation Analysis.
The team agreed to use the Balanced Scorecard Approach to derive the enterprise objectives from the concerns and challenges identified during the Situation Analysis. The Balanced Scorecard Approach can be leveraged for strategy cascading by using top-down approach. At the same time, the same approach is used for the strategy implementation by adopting bottom-up implementation. The bottom-up approach is more about showing the cause-and-effect relationship among all the four perspectives (resources, processes, customer & financial) of Balanced Scorecard.
The Situation Analysis indicates that the root cause of the ABM problems more about resources. This includes, low employee motivations & satisfaction resulting in key executives leaving the organization, unavailability of core decision support and report capabilities and learning & growth opportunities. Once the organization makes gains in these areas it will improve the internal operations including the innovation management, change & communication management, capacity planning and customer management etc. The capabilities enhancement in the resource and process areas will have direct and positive impact on the customers (image, satisfaction, loyalty) that will result in financial stability and growth.
The team will continue finalizing the organizational objectives, KPIs, critical success factors and initiatives for short, medium and long term.