Where the change is severe due to the difficulties of the business – a ‘strategic turnaround’ – then this puts more pressure on the strategy development and implementation process. Leadership needs to be both commercially and strategically wise, and magnetic. Where there is inappropriate leadership, strategy will get bogged down no matter how good the process is.

In terms of controls, it is important that besides the conventional financials and efficiency metrics and customer satisfaction ones that we find in a ‘balanced score card’, also include more outward-looking, dynamic and less tactical ones too, such as:

1. Relative market share
2. Customer ratings compared with those of key competitors
3. Strategic breakthrough milestones achieved
4. Long-term economic value actually generated (‘economic value added’ is the net present value of net cash flow in the business).

Finally a number of strategy implementation tools can be deployed, including:
1. The option grid to evaluate and prioritise different ways of implementing a strategy, and also individual strategic projects, both before and after.
2. The extended ‘gap analysis’ in the form of ‘from-to’ analysis.
3. Value and cost driver analysis.

When evaluating implementation difficulty, to go behind the box in the strategic option grid and also within the detailed planning of the breakthroughs – there are a number of tools, one of these, ‘force field’ analysis, which splits out and evaluates the key enablers and constraints.

To evaluate how impactful the positive and negative forces are likely to be – on the basis of elegance implementation plan, you look at the overall picture of vector arrows up and down: if they are mainly down it tells you that you will have a very rough ride.

Project management, should kick in at the start. The first stage of the process should be to do a ‘plan for the plan’. This is an area where the CFO should be very much being involved.

A ‘plan for the plan’ is defined as ‘a detailed document of the optimal stage-by-stage process which deals specifically with the strategic issues faced in a creative, incisive and robust way, and that produces appropriate insights and outputs of maximum value’.

A plan for the plan typically contains:
1. A list of the key strategic issues
2. A very high-level view of the likely gap analysis to get an idea of the stretch
3. Some separate first-stage planning activities (‘planning modules’), such as market analysis, customer value analysis, technology change, competitor analysis, process development, organisation development, cost management
4. Second-stage activities, such as strategic options workshop, board integration workshop, change management, communication, controls and metrics timings and time absorbed.

Each one of these might have as a one-pager:
1. Outputs
2. Process and tools
3. Inputs (data, etc.)
4. Interdependencies with other modules
5. People, timings and facilities.
The Finance Officer/ Manager Can play a big role in planning this.

There is a second area of input for the CFO in writing ‘strategic position papers’ or ‘documents which diagnose the current position and explore options for a particular area or more generally without reaching definitive conclusions’. The aims of these are to generate a rich debate of the issues before making resource and other decisions, to provide input to the final strategic plan, to build commitment and to influence key stakeholders.

Managing Strategic innovation and change addresses how technologies evolve and how they drive the need for organizational change and adaptation, focusing on the general-management challenges that innovative firms face.

Hence SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person.

PEST analysis (‘Political, Economic, Social and Technological analysis”’) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added legal and rearranged the mnemonic to SLEPT; inserting Environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom.

Balanced scorecard (BSC) is a strategy performance management tool-a semi-standard structured report, supported by design methods and automation tools, which can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.

Dr Dada Adefolami, MBA. PhD. CPF Acct. is Finance / Management Consultant and Certified Forensic Accountant([email protected];
08052043855)