Strategic planning at UPS faced challenges in the early 1990s from increased competition. To address this, UPS implemented strategic planning to help focus priorities and resources. This involved timeline planning, identifying questions around strategic challenges, and discussing scenario planning. Scenario planning helped UPS prepare for uncertainties by considering multiple possibilities. UPS' 1997 scenario planning provided a framework to explore opportunities and strategies, while its 2017 horizon planning expanded the framework to regional levels with additional stakeholder input. Key elements of UPS’ strategic approach included its customer-focused charter, centennial themes and projects roadmap, and role of strategic integration leader John McDevitt.
7. Strategic planning
What are the major challenges of strategic planning?
What is there so often a large gap between the promise and the reality of startergic
planning?
What are the primary barriers to effective strategic planning?
8. Strategic planning
• UPS Always followed a system of highly centralized, hierarchical organization. It always believed and
followed traditional methods, UPS believes that this is their main strength.
• In the Early's 1990’s competition from both private companies and large government – supported agencies
started to threaten the position of UPS’s position. So to compete with them Strategic planning was one of the
tool implemented to compete with them.
• Strategic Planning can be understood as a systematic long-range planning activity, that an organization uses
to fix priorities, strengthen operations, ascertain objectives and focus on the resources required and are to be
allocated in order to pursue the strategy and attain the objectives.
• Strategic Planning was one of the key method of planning and implementing in the organization
9. Strategic planning
1. Major challenges of strategic planning are:
Lack of ownership
Poor communication
Lack of alignment
Slow adoption
2. Only in an ideal world a manager formulates a long-term strategy, methodically implement it and then sustains the
resulting competitive advantage. In the reality a lot of macroeconomic variables fluctuate, technology evolves, consumer's
take surprising decisions, even the regulations shifts. So implementation of strategy is not so neat and easy in the reality.
Managers role are very important to execute strategy as circumstances change:
1. They must capture new information
2. 2. Make midcourse corrections
3. 3. Get the timing right
4. 4. Go beyond the long held view of strategy as a linear process
11. Scenario planning
What are the strength and weakness of scenario planning?
What kind of organizations most need scenario planning? What settings are or environment are most conducive to
scenario planning?
What precisely is the purpose of scenario planning? What exactly accomplish
a. What is the value of focusing on:
i. Critical uncertainities
ii.Robust startergies?
iii.Early warning signals
12. Scenario planning
• Scenario planning is a process that stimulates imaginative, creative thinking to better prepare an
organization for the future. It has been described as a way of rehearsing the future to avoid surprises by
breaking through the “illusion of certainty.” Scenario planning entertains multiple possibilities because it
investigates several uncertainties simultaneously.
13. Scenario planning
b. Example, Farmers use scenarios to predict whether the harvest will be good or bad, depending on the weather. It
helps them forecast their sales but also their future investments. Military institutions use scenario planning in their
operations to cope with any unlikely situations, anticipating the consequences of every event. In this case, scenario
planning can mean the difference between life and death. When a worst-case event arises, scenario planning
documents add tremendous value by playing out multiple outcomes and listing immediate steps to contain damage.
c. Purpose of scenario planning To analyze the impact of possible future events on the system performance by taking
into account several alternative scenarios and to present different options for future development paths resulting in
varying outcomes
d.
i) uncertainties are unstable or unpredictable, such as consumer tastes, government regulations, natural disasters, or
new technologies or products. A critical uncertainty is an uncertainty that’s key to the decision you focused on from
Step 1. Sometimes phrasing these uncertainties as questions can help you clarify them.
ii) The strategy robustness tool provides an evaluation of different strategies against various context scenarios or
what is also known as the wind tunneling of strategies. This technique provides a basis for a decision depending on
possible future developments (specifically those that organizations are exposed to but cannot control).
14. What is your evaluation of UPS’s 1997
scenario planning exercises? Its
horizon 2017 planning exercise? How
do the two efforts compare?
15. Evaluation of UPS’s 1997 V/S
Horizon 2017 Scenario Planning
• UPS’s 1997 scenario planning provided a common basis to allow investigating growth opportunities and competitive strategies.
It overall can be termed as success, although the planning exercise was confusing as it would be difficult to say what would
happen in the world. It helped tremendously by allowing the company managers to think beyond the business-planning horizon.
It forced the company to answer several what-if questions and respond to strategic threats.
• The 2017 planning exercise was necessary for a future further. It was add-on to the1997 in the sense that the basic framework
was now laid out and one needed to adjust to newer realities.
• Differences between these two scenario planning.
• First, Eskew and the CSG decided to take the scenarios and implications deeper, to regional levels as opposed to a single global
picture.
• Second, extensive interviews, perspective of academics, consultants and etc.
• Third variation involved participants. As before, participants from operations were excluded.
16. What are the other key elements of UPS’s
approach to strategic planning? In particular,
what is your evaluation of:
:)The ups charter?
:)The centennial planning?
:) The strategy road map?
17. • UPS Charter is very customer-focused and is poised for success as it clearly articulates how UPS makes
their customers successful. The Charter incorporated the change in the company’s purpose from “Serving the
package – delivery needs of our customers” to “ enabling global commerce”.
• Centennial plan provided the themes and broad over-arching direction. Four strategic imperatives were
defined:
• Winning Team
• Valued add solutions
• Customer Focus
• Enterprise Excellence
• The strategy roadmap provided took the four elements of the plan and came up with 100 distinct projects to
implement the strategy.
18. Why was john McDevitt put in charge
of “strategic integration?” Should he
remain in that role?
19. • John McDevitt was put in charge because progress on some initiative seemed to have stalled. He
was considered by many to be the champion of strategy execution and had the necessary skills to
reach consensus. Without him, Esken would have been the only one to resolve issues at that level.
• I think he should remain in that role because there are different opinion about what was being
accomplished and how to get things done. Because one of the biggest weaknesses of scenario
planning is the possible lack of consensus due to different perspectives and participants opinions
there might be a problem with common conclusions and formulating shared strategy. So keep John
McDevitt in the role can make sure that all teams delivered on what they were being asked.
Listen
carefully
Do nothing !!
20. How does UPS’s strategic planning
process compare with the approach
at your organization (As an
example)