strategic planning in early childhood education centres
Post on 18-Oct-2021
5 Views
Preview:
TRANSCRIPT
Strategic Planning in early childhood education centres
ECC Workshop 2014
Peter Reynolds CEO Early Childhood Council
Contents
• Why planning is important • How it all fits together • Typical Plan contents • The four key questions of strategic
planning… • …and then in detail
Planning and Monitoring are part of the learning cycle
Monitor
Learn
Reflect
Plan
Determine what is to be done, how, when and by whom
Consider performance and reflect on outcomes
Measure performance against targets
Review progress and learn from mistakes and successes
Planning and Monitoring must occur at all levels within the organisation
CEO or Centre Manager
Head Teacher or other middle management
Staff
Board Strategic Planning: addresses the long-term direction of the organisation; what it is going to do and how
Business Planning: addresses the activities and resources required to implement the Strategic Plan; eg: forecasts; financial, marketing and personnel plans
Operational Planning: addresses the activities and resources required to implement the Business Plan; eg: production plans
Plans have different time horizons
Strategic Planning 3-5yrs annually
Business Planning 12-18mths quarterly
Operational day/week daily/ Planning weekly
Planning Horizon
Reviewed
CEO or Centre Manager
Head Teacher or other middle management
Staff
Board
Illustrative plan contents Strategic Plan
• Vision, values, mission • Internal capabilities
review • Market overview • Strategic goals • Key performance
indicators • Risk factors and
mitigation • Competitive advantage
Business Plan • Strategic goals • Tactics • Budget/forecast profit &
loss • Budget/forecast balance
sheet • Other key targets, eg:
market share, brand recognition
A Strategic Plan should answer four questions…
Formulation Approval Monitoring
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Where are we now? Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
SWOT Analysis
Internal Environment External Environment
Strengths Weaknesses Opportunities Threats
An organisation’s resources and capabilities that can be used to develop a competitive advantage
The lack of strengths may be considered weaknesses
Some strengths may also pose threats
External factors in the market place that are able to be exploited
External factors that pose risks to the business
The Environment…
• SWOT • SW – internal
– Structure, location, financial, HR, processes, customer relations
• OT – external – PEST
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Places to look for Strengths and Weakness Area of Business Strengths Weakness
Processes Processes mapped, high productivity/efficiency
Processes largely undocumented, inefficiencies
Management Clear management approach, team, high staff satisfaction
Poor staff management, high turnover, sick leave, etc
Marketing & Sales Good enrolment::enquiry ratio; clear understanding of market segments; clearly expressed benefits
Poor market research; inefficient enquiry management; benefits unclear
Other skills Excellent R&D Poor maintenance
Experiences Previous success Fingers burnt somewhere
Intellectual Property Branding, clear and unique competencies
No real brand; obscure or unknown competencies
Premises Excellent Location; presentation; welcoming; well-maintained
Poor location; poorly maintained; poor design
Plant, machinery Specialist equipment; well-maintained; popular with children
Worn out equipment; to little; bored/out-of-control children
Information technology Good management information Poor automation
Finance Good cash Flow Burden of debt
External Environment –PEST
Political Economic • Changes in policy
• Changes in financial market
Social Technological • Changes in research or
demographics
• Technology changes
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Places to look for Opportunities and Threats Area of Business Opportunities Threats
Political Policies open up new markets Policies threaten income or increase (compliance) costs
Economic Economic expansion will boost demand Resilience to natural disasters, mobility, flexibility Low-cost funds available Locally-available skilled workforce Competition is fragmented Market is growing rapidly
Growing unemployment will reduce demand Service closures, loss of data Higher borrowing costs will reduce customer spending power Skilled workforce herd to get; militant workforce Competitors are strong Market is mature, crowded
Social Latest research reflects current service delivery
Research points to shortfall in quality of service delivery; leading customer expectation; pressure on costs
Technological Technology slow, easy to access, decreases costs
Technology growth rate rapid, expensive, difficult to access; but led by customer expectation
SWOT Strengths Weaknesses • Things you do well; unique
• Things you don’t do well, in development
Opportunities Threats • Usually as a result of something
that has changed in your environment, that if you took advantage of it, would benefit your customer and create a strength
• External things outside your control that can impact badly on your centre
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Where do we want to be? • Vision
– A compelling description of the centre once it has implemented the strategic plan. It should PULL customers to the organisation and PUSH employees/members to greatness
• Values – The core priorities in the centre’s culture, including
what drives employees’/members’ priorities and how they truly act in the centre
• Mission – Defines the centre’s purpose and its core business in
the context of its Values; describes how the Vision will be achieved
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Vision
• Establishing a vision – 3 step method:
• Say what you want you centre to be – be really specific/use “here and now” terms/be definitive
• Think it/feel it on behalf of your customers – engage the passion you would feel, once you had achieved it; make it relevant to your parents
• Write it down daily – research shows there is a much greater chance of success if you do
Values and Culture • What are values?
– An organisational value is “a belief that a specific mode of conduct is preferable to an opposite or contrary mode of conduct” according to Rokeach (1973, The Nature Of Human Values)
• What is organisational culture? – the psychology, attitudes, experiences, beliefs
and values of an organisation – “The way we do things around here”
Mission
• Creating a mission
– Describes how you intend to achieve your vision, in the context of your values
– “XYZ centre provides quality early childhood
education and care for children aged 0 to 5. We involve parents in our centre and in their child’s learning and life journey.”
Where do we want to be?
• Determine how the centre will create a sustainable value for its shareholders
• What are its target markets? • What service option(s) will it provide? • How will it deliver that service(s)?
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
How are we going to get there?
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Two broad categories of Strategy: Growth Cost Reduction
•Increase revenue •Improve scale – spread fixed costs over higher volume •Diversify revenue base – reduce risk/ reliance on single market/product
•Diversify into home-based? •Offer after-school programme? •Saturday parents’ day? •Creche? •Offer a child minder network? •Offer an infant induction programme (including home visit)
•For a given level of quality, being the lowest cost producer •Can either sell services:
–At average market price, thus earning higher-than-average margins –At lower-than-market price, thus gaining market share
•In a price war, able to maintain profitability while the competition suffers
Leading to better return on assets
Strategy - Growth Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track? Ansoff Matrix1
Existing products
New products
Existing markets
Market penetration
Product development
New markets Market development
diversification
Organic growth vs. Acquisition
1 H I Ansoff, Harvard Business Review (1957)
Strategy – Cost Reduction
• Achieve by: – Increasing productivity – Sourcing inputs at lower costs – Vertical integration – Process improvement
• Requirements: – Access to capital in order to invest in production
assets – Skill in designing services for efficient delivery – Efficient distribution channels
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Strategy – Cost Reduction (cont.)
• Risks: – Competitors also able to reduce costs by
following the same strategies – Competitors able to make greater step-
change cost reduction – Competitors with narrower focus able to
produce at lower cost – Customers may cease to need/want the
service or may jump ship
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Monitoring
Monitor what matters!
Monitoring
• Did we do what we said we would do? • Was it effective?
How will we know we’re on track?
• The Board should establish a few vital measures of performance that should directly relate to the areas of the business that greatly influence its success
• These KPIs should alert the Board to pending trouble and can also be used to identify areas where the business is performing exceptionally well so that the cause of success can be recognised
• Monitoring is most effective when attention is given to those factors that truly impact performance
Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
A simple reporting model Where are we now?
Where do we want to be?
How do we get there?
How will we know we’re on track?
Monitoring requires knowing when and how to intervene
• To protect stakeholder interests, directors must monitor performance
• Performance should be measured against agreed KPIs • KPIs should reflect current and future performance • Tolerance limits should be set around each indicator
– If measurement is outside the tolerance limit, action is required • The degree of intervention required by the Directors will
depend on how far from forecast the measurement is • Intervention approach should be set at the time the plan
is approved
Strategic Risks Concept
development Idea
Planning & Design
Execution
15% 10%
65%
10%
• Incorrect strategy selection
• Competing value creation agendas
• Lack of market relevance
Key reasons for failure
• Inappropriate business case
• Inadequate buy-in from executive team
• Poor decision-making
• Inadequate hand-off to execution team
• Cultural resistance • Insufficient detail
in design • Takes too long to
deliver results
Successful capture of value
Ready. Fire. AIM!
How to manage risk
• Ask two questions: – How likely is it to happen? – What would be the impact if it did?
Highly likely; low impact Highly likely; high impact
Less likely; low impact Less likely; high impact
Mitigating Failure Key reasons for failures Mitigation measures
Idea/concept development
•Incorrect strategy selection •Competing value creation agendas •Lack of market relevance
•Follow rigorous strategy evaluation and selection processes
Planning/design •Inappropriate business case •Inadequate buy-in from executive team •Poor decision-making
•Develop rigorous business case approval process •Involve executive team in strategic planning process •Have controls in place around decision-making process •Ensure decision-makers have access to required information
Execution •Inadequate hand-off to execution team •Cultural resistance •Insufficient detail in design •Takes too long to deliver results
•Involve executive team in exe4cution •Understanding current centre culture, recognise desired/required culture, develop plan to close the gap •Develop detailed implementation plans •Set realistic expectations for result timing
Strategic Planning Checklist
How does the strategy create value for stakeholders? Is this level of value acceptable?
Is the strategy consistent with the Vision, Values and Mission? Does the SP exploit the centre’s strengths and opportunities in the market? Does the SP minimise the centre’s weaknesses and susceptibility to
threats? Does the SP address the likely responses by competitors? Are the key areas of risk in adopting this strategy identified and mitigated
against? Does this fit with the risk profile of the centre’s shareholders? Does the SP include exit strategies that are viable Is the strategy sustainable? Are the strategic targets enough of a stretch but still attainable? Are there measures in place to know if the centre is on track to achieve
these targets?
Formulation Approval Monitoring
Strategic Planning Checklist
Do we have the necessary environment and resources to execute? Is accountability for the SP’s realisation clearly allocated? Do indicators of current performance show that the centre is
performing better or worse than forecast? Do indicators of future performance show that the centre will perform
better of worse than forecast? If worse, what alternate strategies are available to improve
performance? Are shareholder funds at high risk? Is intervention required? If so, of what nature? What exit strategies are available? Have we put in place a learning loop: what went wrong?
Formulation Approval Monitoring
Drafting your own Strategic Plan
1. What is your vision for your centre for the future?
2. What is important to you, your philosophy or values?
3. How will you achieve your Vision (Mission)? 4. What is your current situation (SWOT)? 5. What are your strategic options? 6. How will you monitor your success?
How the ECC Can Help…
• www.ecc.org.nz – Login
• Support – Governance and Strategic Planning
• 21 tools and templates to make your
governance and strategic planning activities easier
Your Strategic Plan
• Your questions? • Does this information give you cause to re-
think? • What will you do next? • Go to:
– www.ecc.org.nz member’s support and explore the governance section
– Use the tools and templates – Call the ECC for help/advice
top related