Michael Porter (1998), a Harvard Business School professor, defines strategy as the creation of a unique and valuable market position supported by a system of activities that fit together in a complementary way. It is about making choices and trade-offs. It is about deliberately choosing to be different.
It should not be confused with operational effectiveness — what is good for everybody and what every business should be doing — performing the same activities better than your competitors, e.g., TQM, benchmarking, or being a learning organization.
When developing strategies, the goal is to be different from your competitors. However, this does not mean that you are willing to do anything. Thus, the goal is not to be all things to everyone, but to determine where the opportunities are so that you can best exploit it.
A strategic performance plan needs to tie in with the strategic organization plan. That is, in going back to the definition of strategy, the leaders of the organization should create the unique and valuable market position; while their followers' goal is to support the organization with performance initiatives that fit together in a complementary way. That does not mean you cannot do things differently or set your own goals. It simply means that you need to keep your leaders visions and goals in focus when setting your own performance goals. For example, if the leaders have ethics and diversity at the forefront of their strategic vision, you cannot put e-learning and knowledge management at the forefront of your strategic goals. However, that does not mean you cannot use e-learning and knowledge management technologies to bring about ethical and diversity goals.
Visioning is the start of any strategic plan. Once your leaders have set the organizational strategic plans, you need to determine how best you can bring about changes that will support those plans. And while their strategic plans needs to be unique, you need to think along the same lines — coming up with a unique plan to create change.
While looking at the direction that performance is growing gives you an environmental outlook, you also need to look inside the organization with an internal analysis or audit. Your internal performance analysis will provide you with a snapshot of where you are now. Your reading, research, and creativity will provide you with plentiful opportunities of growth. However, remember that the goal is NOT to be everything to everyone, but to be unique. Thus, a performance visioning strategy takes a four-prong approach:
- Internal Audit - Where are we now?
- Reading and Research - Where can we grow?
- Organization Vision - Where is the organization going?
- Performance Vision - Where do we want to grow?
Note that steps 1, 2, and 3 can be done in just about any order. Step 4 will be based upon the other three prongs.
Strategies are forward-looking. They provide the guidelines for growth. When discussing performance, we often start by looking at the gap — the desired performance minus the present performance equals the performance gap. With performance strategies, you are in reality, talking of future performance gaps and how you are going to overcome them.
Tactical is more or less "present" orientated. So when speaking of tactical plans, you are basically speaking of present performance gaps and how you are going to overcome them.
What have you done today to enhance (or at least insure against the decline of) the relative overall useful-skill level of your work force vis-a-vis competitors - Tom Peters, Thriving on Chaos.
When Tom Peters writes of "enhancing," he is speaking of the strategic plans that will grow the employees to meet tomorrow's challenges. When he writes of "insure against the decline of," he is speaking of the tactical impediments that are presently challenging employees from meeting expected performance standards. In order to grow, you must be able to ward off present roadblocks. Thus, tactical plans are about providing performance stability so that change may take affect for growth. Sounds sort of like a paradox — providing stability so that change may take place.
That is, if performance keeps collapsing, then you have to keep rebuilding, thus it is downright difficult, if not impossible, to grow to the next level. So you use tactical measures to stabilize performance (prevent its decline) and to reach the next strategy objective. Sort of like a series of steps going up a staircase. The horizontal part of the step is the present performance that must be stabilized, while the vertical part of the step is the next strategy objective which must be met, overcome, and then stabilized.
Strategies normally look at about an average of six years into the future (with a range of about one to ten years). Tactics look ahead just far enough to secure objectives set by strategy. Thus, it is characterized by adroitness, ingenuity, or skill.
Tactics is from the Greek taktika: matters pertaining to arrangement; while strategy has its roots in "office of a General" or "to lead".
When looking at the performance gaps, there are five layers that need to be looked into:
- Learners: What needs to take place to bring about a change in skills, knowledge, or attitudes?
- Context: These are the experiences that allow the learner to grow. This growth comes from understanding.
- Content: This is the information that the learner must absorb or identify so that a task may be accomplished.
- System or process: These allow the flow of business. From the learners perspective they may be an impediment or a helper. If a process is considered an impediment by the learner, then either the learner or the process has to change.
- Infrastructure: These are normally the technologies and physical environment that must be manipulated by the learner to accomplish a task. Learning to manipulate a technology or physical object is a hard skill, while working with others in an Infrastructure is normally considered a soft skill.
Porter, M. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.
Rummler, G., Brache, A., (1990). Improving Performance: How to Manage the White Space on the Organization Chart. San Francisco: Jossey-Bass.