Why Strategy Formulation also needs an Objective and Action Plan?

Strategy Formulation is the first primary stage of strategy management. It is argued to be one of the most important stages for strategy execution. Despite being argued to be agile in executing the strategies, strategy formulation is undeniably essential to avoid undesired wastes and ineffectiveness (failure to deliver the results as planned) in implementing the strategies. Before setting the objectives for strategy formulation, it needs to define the articulate meaning of strategy for executives to converge their mental model, goals and critical inputs for designing the strategies and strategic modeling. Strategy can be shortened in a way to win which varies by the types of organization. For Business organization, profit gain is the winning over their rival companies. For school, excellent quality of student’s learning outcome is a win for educators or school leaders. For Non-Governmental Organization (NGO), critical and tangible impact on key beneficiaries and community at large is a win for NGO leaders to build trusts from donors and sponsors through their efficient and effective strategy implementation. Therefore, designing a strategy is defining what the strategy is to be agreed by all key executives / boards in your organization.

The essence of strategy formulation is the capability of leaders to synthesize their key organizational competencies to deter the threats and to overcome the weaknesses for winning. Since weaknesses are usually hidden and leaders are hesitant to determine the weaknesses of their own department, units or team, it is strongly argued for transparent and open analysis of internal weakness. Moreover, it is critically imperative for the organization to dig deeper into their internal strength and weakness through using the Congruence Model with 5 organizational building blocks to align with one another, Mckinsey’s 7 S framework which composes of Shared Values, System, Structure, Staff, Style, Skills and Strategy and the Baldrige Excellent Framework. Although It is time consuming to conduct analysis of internal strength and weakness, organizations will gain invaluable data to inform their strategies. Since the synthesized data is highly valuable, it is strongly argued to well maintain the data for multiple time using in the entire strategic management process and as the baseline indicators for the next strategic planning cycle. 

Why formulating the strategies? It is answered with the objective and the action plan during the strategy formulation phase. Setting the key objectives is strongly encouraged to converge all actions to achieve the results. Moreover, having a clear objective for the strategy formulation process can hold executives accountable for the results on top of their core responsibilities. It also explicitly informs them that the task is mandatory which they can integrate into their work plan to achieve the objectives. Forming a committee or team to work on formulating the strategies is advisable. In addition, they must create an interactive and comprehensive work plan or action plan form to define, assign, monitor and evaluate the work progress and results to the deadline. Using the Web-based task management platform like ASANA is also encouraged to build a consistent platform for managing the data and for ensuring the tasks to be completed by the deadline or not for corrective actions to be inserted. Finally, using the Google Calendar to schedule the meeting based on the agreed interval timeline to follow up the progress and to tackle with any issues or barriers for achieving the objectives. 

 Conceptual Framework for Effective School Operation

Globalization, Decentralization and Flatter Structure Redesign for SLO

Globalization is a generic term and shadows every country for global competitiveness, benchmarking and ranking from economic performance (global GDP growth rate…) to education performance (PISA, TIMSS, PIRLS). No country is immune to the globalization process (Mok, 2006) and the concept of knowledge society (Zajda, 2015; Mok, 2006) or information/digital society emerges for all governments to address quality education. The link between quality education and economic growth was confirmed (Hanushek & Woessmann, 2010; Hanushek & Wößmann, 2007). Therefore, education reform has been the top agenda for every government as a response to the ultimate needs of economic growth and global competitiveness. Globalization may render centralized education systems obsolete due to bureaucratic and hierarchical processes which hinder responsiveness and flexibility (McGinn & Welsh,1999) in the constantly changing environment. Decentralization is a major reform tool for quality service delivery that the governments use as a remedial solution for society (Parry, 1997). According to Leung (2004), educational decentralization is a global trend that almost all countries worldwide have implemented or are implementing. School-based management (SBM) is a popular government strategy for improving quality of education, despite its dichotomy of research findings to confirm its link with student's learning outcomes (Santibañez, 2006; De Grauwe, 2005). The rationale for the debatable SBM’s impacts on quality learning was argued for the SBM to be conceptualized for managerial reforms not for teaching and learning reform (De Grauwe, 2005). 

School to sustain in the constantly changing environment is to transform to Learning Organization, which was argued to well tackle with internal ineffectiveness and to seamlessly adapt with external threats. According to Kools & Stoll (2016), School as Learning Organization is the one "that has the capacity to change and adapt routinely to new environments and circumstances as its members, individually and together, learn their way to realizing their vision”. Being an LO is fluid and adaptive to the constantly changing environment which will nurture creativity and innovation as firm response to the changes. To achieve this, SLO must set a new paradigm perimeter to foster creativity and innovation as a product of their continuous learning. As it was argued by Senge (1990), team learning requires more than just knowing and communicating within teams. Team learning must be deep to align their mental models to achieve a shared vision and strategic goals. Since individual staff comes with their distinct culture, team learning is argued to converge all the difference into one which involves intertwining culture and value. Unfortunately, aligning the mental model, culture and value can't be achieved by superficial talk or discussion, it needs trust, time and deep collaboration to foster a culture of proactiveness and risk-taking. Having reviewed several findings of SLO implementation in European schools, hierarchical structure was argued to raise the high barrier for team learning and the SLO implementation. Bureaucracy, power distance and high norm are all factors to hinder all three levels of learning process (individual, team and organizational levels of learning).

Will redesigning flatter structure or reducing hierarchy fix the issue of SLO implementation at school? SLO model implies the reform to flatter structure to empower the learning at all levels to achieve the shared inclusive vision. Flatter structure was less popular in school research but it will narrow the communication gaps among school staff through reduced layers in reporting and channels of communication. According to Ghiselli & Siegel (1972), flat structure had few levels of management and broad span of control. Flat structure was argued to correlate with staff well-being (Webb, 2023) but it did not make any difference in terms of performance when comparing with staff performance (Carzo Jr & Yanouzas, 1969). Although flatter structure is indifferent from hierarchical structure, it is argued to redesign flatter structure to reduce hierarchy, empower democracy in shared decision-making and build staff high relatedness (Serrini, 2018). Several impediments reported from Latvia studies, Spain, Bulgaria, Turkey and Italy confirmed trusts and individualistic teaching culture to hinder the SLO transformation. To tackle these challenges, school leaders need to redesign flatter structure to empower team learning and shared decision-making with all school staff. Flatter structure will also reduce administrative work of reporting to different supervisors. Therefore, school leaders need to redesign a flatter structure for effective communication, team learning and shared decision-making which will support the practice of collaborative learning culture of all school staff. 

The Organizational Alignment, Measurement and Assessment

Building an organization is like building a house which requires alignment of all foundations to support the growth and sustainability. Building an effective organization, thus, relies on the alignment of internal structures, system, processes, people and culture. We can also refer the organizational foundation as the building blocks where each layer must be aligned to close the imbalance or gaps, which will drag one down while fixing the other. Aligning system, process, structure, people and culture is argued to be paramount and most necessary for effective organizational operation and growth. Therefore, we bring the three important organizational alignment tools up for discussion. These four organizational alignment tools can also be used as the diagnostic tool for evaluating the organizational performance. 

1. The Congruence Model

The Congruence Model was developed by the Nadler, O’Reilly & Tushman, professors of Harvard Business School. It was developed in response to addressing the performance gaps and opportunity gaps in the organization. The alignment is to balance the five organizational building blocks, namely Component Tasks and Interdependence, Capabilities, Formal Organization, Leadership and Culture, where leadership is argued to facilitate or to enable all the rest four components to align with one another. Using the Congruence Model, organization can conduct diagnosis on their internal strength, where all components are aligned to support one another. Being aligned is being able to interoperate to move the organization forward. Using this model is to put all the components on the grid, collect data (onsite primary data and secondary data) to answer in each component and conduct analysis for alignment or misalignment. 

2. The 7-S Framework (McKinsey’s 7S model)

The 7 S framework, as per name call, has words that start with S namely Style, Skills, Systems, Structure, Staff, Strategy and Shared Values. The 7 S model is developed mainly for building the organizational effectiveness through the comprehensive lens of all dimensions in the organization. As argued by the director of Mckinsey’s company, the core of the 7S framework aims to coordinate the interconnectedness of these 7-S dimensions. However, the 7S model can inform the organizational performance through alignment of all 7-S dimensions. Leaders can use this framework to assess each dimension and propose the corrective actions for their strategic execution. To assess your organization with 7S framework, you can develop the sets of questions that fall under each dimension to be answered by leaders / managers in your organization. 

3. The Balanced Scorecard

The Balanced Scorecard (BSC) is a popular strategic management and measurement tool, which was developed by Kaplan & Norton (1991) to tackle a common business financial perspective that exclude other key internal non-financial perspectives namely Customer, Internal Business process (value chain process) and Learning & Growth. The BSC argued to have these four perspectives to be aligned with the company's vision and strategic goals. The BSC has four quadrants on the grid which can be mapped and translated to objective, measure, targets and initiatives. Having the BSC in hand, leaders can cascade these objectives, measures and targets into team and individual performance plans which ultimately align with the company’s strategic goals. Companies can apply these BSC four perspectives to assess if all staff converge their performances to the strategic goals and shared vision. 

4. Malcolm Baldridge National Quality Award (MBNQA) framework

The MBNQA can also be called the Baldridge Excellence Framework which was developed for improving the excellent quality of the US companies to gain competitive advantages over their rivals. However, the Excellent Framework is now a global quality framework to be applied by companies outside of the US. The framework has 7 aspects divided into 6 processes and 1 result. The 6 processes are Leadership, Strategy, Customer, Workforce, Operation and Measurement, Analysis and Knowledge Management. The measurement is argued to first start with the Organizational Profiles which fall into two key parts- Organization Characteristics and Organization Situation. Using the Excellent Framework, leaders can apply through the Baldridge Excellence Builder published in the booklet with sets of questions, scoring and evaluation. 

These four organizational diagnostic tools are built into different dimensions but with a similar objective to measure and to improve the organizational effectiveness. The 7S framework and the Baldridge Excellent Framework seem to  have detailed elements for auditing and diagnosing the organizational performance of which alignment is the underlying objective for organizational assessment. However, the Congruence model is also offering a concise guide for organizational assessment which is simpler and precise for using. 

 Balanced Scorecards for SLO Strategic Management

The Balanced Scorecard (BSC) was conceptualized by Kaplan & Norton (1996), which was published in several book series by Kaplan & Norton. The BSC is argued to be a powerful tool for managing the strategy in organization, where many US firms have adopted the BSC for their strategic management tool. However, it is first rather odds for the education industry, particularly school to adopt the BSC for managing their strategy. BSC is a strategic management tool where its applicability is not for only business organization but any NGO and schools to grab the opportunity for managing their strategies. There are four main streams argued in the BSC model for planning and managing the strategies. The figure shown below demonstrates the whole picture of BSC in Financial, Customer, Internal Business Process and Learning and Growth. 

 Figure 1. The BSC model

There is no order to follow in the BSC streams. Organization is suggested to plan their strategies under each of these main streams to achieve the vision. Despite seeing the vision in this model, mission is also the key tenet for achieving the vision. In principle, mission, vision and values are the key binding elements for designing the strategies and plan The actions. In short, vision is what we want to be in the market, business and so forth, mission is what we must do to achieve the vision and values are about building the beliefs for our mission and vision. The MVV must be aligned or congruent for strategy development. 

Schools have their own strategies to achieve the mission and vision. For more details on strategic design toolkits, please refer to our earlier post in this blog. Assuming on the SLO strategies where schools have decided among their strategic leader teams, schools can translate those strategies into actions on the BSC grid. Before going to this step, another important thing to do is strategy mapping. Schools are strongly encouraged to visually map their SLO strategies for better conception of the strategies by all leaders and key stakeholders (students, parents, teachers, operation staff and external authorities). By the adopting the 7 action-oriented dimensions in the Integrated Model of SLO (Kools & Stoll, 2016), schools can decide which strategies to achieve the 7 dimensions. 

Figure 2. The Seven-Action Oriented Dimensions

School can find the sample of strategies for SLO transformation based on the 7 dimensions of the model above.

* School’s SLO Strategies: 

School is the Learning Organization to engage all internal and external learning to improve school performance

* How to translate these strategies to action?

The above strategy table is an example of high level strategy development based on the Balanced Scorecard and the Integrated Model of SLO, with seven- action oriented dimensions. The important part of strategy is its objective. For example, in the #4 of Learning & Growth perspective (based on the BSC), there is a key strategy column to lay out the approach for actions to achieve the objectives, shared vision and mission. School can translate the objective, key measures and targets into the departmental, unit and individual’s performance plan. Alignment of performance to achieve the strategies is everything where the performance management system must critically develop to align individual staff’s performance with team’s/ unit/ department performance with the key measures, targets and objectives. In all, the theory of change is strongly recommended for school to align actions with strategic objectives, measures and targets. There needs a visual map of the change theory from individual, teams and to achieving school’s objectives. 

How to Design Your Motivation System Fair, Transparent and Equitable?

Many organizations have spent a lot of money for staff engagement through designing motivation strategies to effectively improve staff performance results. In fact, staff performance is driven by staff motivation and being engaged in their work. Job satisfaction is a primary indicator for staff motivation and it is measured by subjectivity rather than objectivity. By observing and probing, leaders can subjectively conclude their staff’s satisfaction. Since staff satisfaction is the lead indicator for staff engagement and motivation, it is argued to be the first address method to measure staff’s job satisfaction. So far, there is lots of research on how to measure staff’s job satisfaction and how to improve it for high performance. Motivation and job satisfaction are mutually influenced and motivation arouses job satisfaction. Moreover, job satisfaction is the reflection of effective motivation deployed. If staff are motivated, they are engaged and their satisfaction is high. If they are less engaged, they will respond with low satisfaction, where motivation strategy is less effective. What Motivation strategy to increase staff engagement and high job satisfaction?

Motivation is a combination of extrinsic and intrinsic attributes which financial incentive is the main driver of extrinsic motivation and autonomy is the key arousing intrinsic motivation. There are many other types of extrinsic motivation being used in the organization, namely policy compliance, structure, system, process and so forth. Career growth, L&D of staff, promotion, praise, appreciation are all types of intrinsic motivation being applied in the organization. While financial incentives seem to shine, staff engagement is argued to go beyond the extrinsic to improve intrinsic aspects for a long-term strategy. Monetary motivation has been proven true to drive performance since the Maslow’s Hierarchy of Need theory together with the rise of industrial revolution, where scientific management proved the effects of financial incentives to fulfil the basic needs. In the contemporary socio-economy where the monetary system is valued and applied, financial incentive is still the main driver for staff motivation. However, the dark side of extrinsic motivation is the demotivation when ineffectively applied in the organization. Financial incentives, namely salary, bonus, fringe benefits, scholarship, cash-based commission, allowances and so forth must be objectively designed, structured and applied for transparency, fairness and equity in the organization. Many findings by Deci & Ryan (1985, 1993, 2005) confirmed the negative effect of extrinsic motivation, the so-called external regulation, on performance discontinuity. The financial incentive takes effect on the short-term or temporary basis which performance will be discontinued after the incentives are withdrawn or absent. Therefore, it is risky for the extrinsic motivation system to be subjectively applied which incurs unfairness, misconception and lack of transparency and credibility of performance based incentive. 

How to structure the incentive / motivation system for fairness, equity and transparency? My argument is that the incentive strategy must be defined at the policy level. HR policy or a separate compensation and benefit policy is argued to be an effective instrument for staff motivation. However, the most challenging part of structuring the incentive system is performance-based increment and salary scale development, needlessly the career ladder program. All of the compensation and benefits are weighted on the company's financial performance. Staff’s motivation, the extrinsic one, must be proceeded with caution where the evidence-based performance is strongly encouraged to benchmark against the effectiveness of the incentive system being deployed. While ensuring the fair, transparent and equitable benefits to engage staff in high performance, company or HR department must communicate the HR policy( compensation and benefit section, career ladder program, learning and growth opportunity and scholarship program) with the relevant managers and their teams to explicitly understand the goals and expectation from motivation system deployed in the company. From my experiences, the HR department plans their HR policy orientation for only twice a year. They rely on the induction program to initially guide the new incumbents with relevant policies. However, the performance-based incentives and other related compensation and benefits are normally absent at the initial induction program. This approach will create a gap where staff must understand the goal or objective of the company's motivation system and the performance expectation to link their productivities with financial performance for the motivation system to sustain. Moreover, there is a lack of explicit link between staff’s performance and motivation system to compensate their productivity with incentives. Therefore, the motivation system needs to be structured in the policy and how to deploy the motivation strategy is needed in the policy guideline for implementing the HR policy.