Statements

YMCA Strategic Planning Process And Strategic Leadership
A presentation by Louis Tong to the National General Secretaries Conference organised
by Asia Alliance of YMCAs in Hong Kong, 12-16 January, 2000

" I keep striving to win the prize for which Christ Jesus has already won me to himself. Of course, my brothers, I really do not think that I have already won it; the one thing I do however, is to forget what is behind me and do my best to reach what is ahead. So I run straight towards the goal in order to win the prize which is God's call through Christ Jesus to the life above." ( Philippians 3, 12-14)

Good morning, YMCA friends from Asia, Ladies and Gentlemen:

May I start my presentation by sending my Millennium greetings to you all and to each and everyone here a warm welcome to Hong Kong. To be invited to give a Keynote Presentation to the National General Secretaries Conference is indeed a great honour. Thank you.

In the following presentation, I will discuss the evolution of strategic planning, the latest thinking on the subject, its benefits for management and for the YMCA movement and the planning process itself adapted to meet the needs of the YMCA movement. Finally, I will discuss the relationship between strategic planning and YMCA leadership.

Evolution of Strategic Planning

Strategic Planning is a management tool developed since the 1950s. Like a lot of other disciplines, there has been significant developments in this management science in the last half century. The analogy is the imaging industry used in medical diagnosis. In recent months, I had some personal experience of witnessing how the advance of the imaging industry serves as a progressively useful tool in diagnosis for the medical profession. A close relative of mine had a spinal problem. She had X ray, then CT Scanning and finally MR Imaging. X ray was invented many decades ago, CT Scanning in the 70s and MR Imaging in the 80s. From X ray film to CT film, we could observe much more clearly how the calcification of the spinal bones pressed on the nerves. When we finally saw the MR films, the analysis of the spinal problem was fully captured in the films as if we could see through the patient's body and see how different pieces of bones of the spine touched the nerve cord with some pieces in normal condition and others in abnormal condition.

Over the past half century, strategic planning went through a period of growth and changes as well. In the 1950s, companies had long range planning which was extrapolation of historical growth. Companies projected into the future, set goals, budget, profit target and action programmes. In the 1960s, companies found that it could be dangerous to plan their future based on just extrapolation of past trends. They began to take into account threats and opportunities. Strategic planning up till then was very much cut off from operations. In the 70s and 80s, there were increasing criticism against over-reliance on analysis at the expense of the learnings from doing. Emphasis turned more to executive leadership. The pendulum of management thinking switched from a rigid predictable future to that the future is unknowable. Then, the 1990s arrived. Management thinking further developed that things were not just black and white, that the future - future threats and opportunities- may become progressively clearer as i nformation and knowledge accumulates. We need both intuitive managers as well as planners. Doing and thinking are equally important. As the environment changes rapidly, there is a constant need to review the impact of the environment on the ability of the organisation to fulfil its aims and objectives(Strategic Intent and Strategic Directions ). Strategic planning gradually evolves to management of critical factors(Strategic Issues) which affect the organisation in fulfilling its mission, covering both its Strategic Intent and Directions. We will discuss these concepts in more details later.

Over the past half century, the evolution of strategic planning thinking has moved from the emphasis on mechanistic planning to emphasis on hands-on doing to currently combining the best of both worlds i.e. thinking(planning) and doing are given equal importance.

In this presentation, I am recommending a proposed YMCA Strategic Planning Process which is based on the latest thinking on strategic planning i.e. Strategic Issues- Based Planning. In this approach, the experience and ideas of the key "doers" (key managers) are thoroughly accounted for while objective analysis whenever available will also be used. Doing and thinking( analysis) are given equal importance.

Strategic Planning as a Tool of Strategic Management

The proposed YMCA Strategic Planning Process (YMCA SP Process in short) is a tool of strategic management which encompasses both managing strategy and managing organisation. Effective implementation of this Process is a good starting point of steering our movement in our respective countries. This Process is never a replacement of the strategic leadership which is each and every one of you working with your Board and your key managers. It is my hope that this YMCA SP Process will be the "MR film" I just talked to you about, showing you the best way forward in steering your movement in your respective countries. Effective management uses effective tools. I also hope the proposed YMCA SP Process will be your effective management tool like your PC in your office which I believe is a Pentium of a certain version, not a 386 or 286. Up-dated tools are important for optimising our performance.

Strategic Management as Doing the Right Thing

Some people ask what is the difference between strategic management and operational management. Some explanation is appropriate at this juncture. In simple terms, strategic management is about doing the right thing and operational management is making sure the thing is done right (Peter Drucker). Strategic management has a strong future orientation. It is about what new products or services to create, what new markets to enter into, what markets to exit, what competitive strategies are required to succeed in the marketplace etc. All these are about doing the "right thing". Operational management on the other hand is to ensure that the thing decided to be done is done. Hence, it involves sourcing input or raw materials, producing the goods or services, marketing and distributing them. It is about raising productivity, cutting cost, work improvement programme, TQM, quality circles etc.

The danger that many leaders of organisations face today is that for various reasons, they spend too much time on operational management, busy fire-fighting all the time. They spend little or no time in strategic management i.e. no time to think about the future, no time to reflect on the critical issues affecting on the organisation, no time to plan ahead.

Organisations Are Doomed To Fail Without Strategic Management

Note that this caption says Strategic Management not Strategic Planning Process. Some good managers have very good strategic sense and thinking, not necessarily the process discipline itself.

In Hong Kong, there was a very famous company called Leung So Kee. It was a family business producing umbrellas. It lasted for generations. In the past, it was very successful. One of the reasons for its success was that it produced quality umbrellas which were durable. They promoted their products on the basis that if the umbrellas purchased from them were broken, consumers could always bring them back for repair. This after sales service was important in the past and their business prospered. Unfortunately, this family business did not read the signs of times and the management became further and further away from the customers in terms of their tastes, consumer needs and their mindset. They did not understand that consumers want more than umbrellas to protect them from rain that last forever! Recently I received an umbrella as a gift which says ultra-violet proof, presumably for giving my wife to shade her against the sun! Unfortunately in the case of Leung So Kee, they had no concept whatsoever of str ategic management, no concept of obsolescence marketing, no concept of thinking what new products they could produce, what new markets to enter other than the dull, black umbrellas that last forever! The company folded a couple of years ago!

Absence or inadequate strategic management can also hamper the development of large companies. Many people in the investment world admire Warren Buffet and consider him as one of the top investment gurus in America and in the world. Unfortunately, he adopts an old paradigm in his investment practices. He believes in value stocks not growth stocks. He does not have faith in technology stocks for their financial ratios, such as PEs, do not match his investment requirements. As we know, the stocks and shares markets these day are led by technology stocks in most countries in the world. As a result, the stock of Buffet's investment company Berkshire Hathaway (BRK) fell by one-third in 1999 when the total market( Dow Jones Industrial Index and NASDAQ in particular ) rose substantially that year. A successful strategy in the past may not be a good strategy today or tomorrow! We need constantly reviewing our Strategic Directions or Strategic Scope!

Another good example of inadequate strategic management relates to IBM's recent history in the early 1990s. It was a wrong management judgement of the importance of the PC market which resulted in the stock plummeting, loss of jobs and change of top management. Focus and dominance in the mainframe market brought success to IBM in the past, but the same insistence in a different time was the cause of its failure.

Benefits of Strategic Management

Strategic management has the benefits of discovering new windows of opportunities, strengthening competitive advantages, resolving critical issues affecting the organisation and implementing what I call, "economy of focus". Let me explain.

By definition, strategic management is about doing the right thing and the right thing includes identification of opportunities for the organisation and resolving critical issues affecting the organisation. Effective strategic management will provide an effective management of the critical issues (or the Strategic Issues) affecting the organisation. The Strategic Action Plan which is the product of strategic planning will enhance the competitive advantage of the organisation. Due to the fact that strategic management focuses the resources of the organisation to resolve these critical issues, the economy of focus will apply. This means people will not be pushing the organisation in different directions. They will push the organisation based on pre-determined directional goals. We will come back to this concept of economy of focus later.

Strategic management for the YMCA movement is becoming more critical today in the Third Millennium than ever before. This is because the world has become global, many businesses have become global. Globalisation forces are now at work. We do need the economy of focus to work on a global scale to advance our cause if we really want to create an impact on this world.
In businesses, successful multinational companies have fully employed the global strategy to produce reliable and quality products at low cost and to market them at global markets. Their price and productivity benefit from economy of scale, low cost sourcing by their global team and just-in-time planning. Their marketing benefits from the power of global brand, sophisticated market research, advertising and promotion on a global scale. Their distribution, by just-in-time logistics planning.

In the YMCA world, we set our vision of building a Transformed World. In the 14th World Council of YMCAs held in Frechen, Germany in 1998, we adopted this vision of " building a human community of justice with love, peace and reconciliation for the fullness of life for all creation." This is our sustainable civil society! This is our Kingdom on earth! In strategic planning terminology, this is our Strategic Intent, our broad goal.

How effective are we in trying to fulfil this vision, this Strategic Intent? Can we do this job effectively if each national movement or local movement simply does its own thing? We have been relatively successful at the local or national level. How can we be even more successful? Especially, how can we become more successful at the international level?

In the ancient past, our world was our home and our village. Today, living in the Third Millennium, our world is this global world in this vast Universe. Experts tell us that in the next 20 to 30 years, our world is likely to move towards a "Fortress World". This means that only 30% of the global population will benefit from the prosperity of the world and that there will be increasing disparity between the rich and the poor. As a result, there will be increasing social conflicts and instability. The world will be a polarised world and our societies, polarised societies. The rich are living in a "fortress' where security guards are hired to protect them. Indeed, in Hong Kong, the very rich hire security guards who accompany their bosses when they go out as if they are political leaders. Some buy very expensive bullet-proof Mercedes Benz to protect them and their families.

The YMCA movement at both World and Area levels believes that this "Fortress World" is not the desired goal. Instead, the movement is aspiring to the "Transformed World" where a more peaceful, equitable and environmentally secure global society can be established.

Absence of a global strategy might not have affected us much in the past, but in the Third Millennium, we need stronger tools than our own shovels to "clear the snow in our own doorsteps". This is because today, unlike in the past, we have acid rain, we have polluted air with air pollution index always at the high side in certain areas. (When you watch our television in Hong Kong tonight, do pay some attention to the reporting of air pollution indices during weather reporting.) We need to implement the economy of focus on a global level through a global strategy so that we can become a significant player in this global world!

Key Concepts of Strategic Planning

We have had a long discussion of the benefits of strategic management. Let's move on to discuss some key strategic planning concepts. I would like to introduce to you the key concepts of:

Strategic Intent

On this first concept of strategic intent, imagine you are riding on a heavy load carriage going uphill in a rugged road like cowboys in the old Wild West of America. You ask all your friends to alight and all focus their muscle power to push the carriage forward to the goal, which is the top of the hill. So strategically, you have defined the top of the hill as your broad goal and you focus all resources( the muscle power of your friends and yourself) to work towards this broad goal i.e. up to the hill top. This reminds me of St. Paul in Philippians 3 verses 13-14. He said:

" Of course, my brothers, I really do not think that I have already won it, the one thing I do however, is to forget what is behind me and do my best to reach what is ahead.

So I run straight towards the goal in order to win the prize which is God's call through Christ Jesus to the life above."

St. Paul was focusing his resources, his energy by doing his best to reach what is ahead. He focused so that he could run straight towards the goal.

In strategic management, we need to define our goal. In the case of St. Paul, his goal is very clear i.e. God's call through Christ Jesus to the life above. Obviously, St. Paul did not just keep the goal to himself. He shared it with all people he encountered. In the YMCA movement, we adopted in the last World Council to affirm the Paris Basis adopted in 1855 and specified the goal being "building a human community of justice with love, peace and reconciliation for the fullness of life for all creation."

In strategic management, we first contextualise our vision and mission i.e. put them into current context. At the 14th World Council, we did just that and the Challenge 21 which we just discussed was the result. (See formal document of Challenge 21 is in the Appendix I.)
Strategic Directions

In this document, you can see our broad goal or our Strategic Intent. You can also see our Strategic Directions or our Strategic Scope which are:

Defining the scope of work(Strategic Scope) is important and wrong judgement here can bring disasters. A while ago, I talked about the mistake that IBM made. A very serious strategic blunder in fact i.e mis-judging the importance of the PC market. Of course, the trouble is well over now. The "trouble" was the decline of the mainframe sales and profits which led to shareholders' losing billions of dollars and employees' losing tens of thousands of jobs. Why a successful company like IBM could have such a disastrous "trouble"? Ancient wisdom from China in the words of Lao Tse had this to say:" Success contains the seed of disaster". This IBM case has elevated itself to textbook arena of Strategic Management. The authors of The Portable MBA In Strategy said," The mainframe segment had catapulted IBM to its position of dominance in the computer industry. IBM believed that its technological prowess could add to the mainframe a level of functionality that customers would appreciate and value. It also a ssumed that the rate of market decline would not increase and that new customers could be attracted to the mainframe. The combination of these beliefs and assumptions allowed IBM to stumble into disaster." IBM mis-judged and under-assessed the importance of the PC market then. We know today that technological development in micro-processors and in the silicon chip industry has made the PC doing a lot of the work that previously only a mainframe could do.

There are many instances that businesses are missing the boat. Another example is Microsoft for under-assessing the importance of the internet. Well, both IBM and Microsoft made serious strategic mistakes in terms of their scope of work, their strategic directions. Fortunately, both companies took a U turn once they realised they made mistakes in their strategic directions. They continue to be very successful companies today.

Businesses have very good and early warning signals through their current and forecast financial data. Hence, shrewd businessmen can take immediate action to correct the situation else the business will perish like the story of Leung So Kee we talked about earlier.

In YMCA movement, do we have such warning signals if we make serious strategic mistakes? What happen if we ignore the work of youth empowerment? We can still carry on as a financially successful YMCA with sophisticated and modern facilities. We probably can earn more money by catering to the financially successful adults than investing on youth empowerment. How do we achieve our mission as a Christian youth movement while being pragmatic enough to earn our keep?

After defining our Strategic Intent and Strategic Directions, the next question is what is our Strategic Posture i.e. our positioning.

Four hundred years ago, Matteo Ricci came to China to spread the gospel. At others' advice, he dressed up as a Chinese Buddhist monk and was known as a Xi He Shang, literally meant a Western monk. At that time, Buddhist monks in Japan had high social status and he received his advice from missionaries in Japan who thought that foreign missionaries entering China would be better accepted if they adapted themselves externally to the practices of Buddhism. Later Matteo Ricci found out the contrary was true i.e. Buddhist monks had in fact relatively low social status and educated people did not respect them. He also found out that intellectuals had very high social status and were well respected by both the government and the people. This was of course the influence of Confucianism, which placed intellectuals on the top of the social latter. Later, Ricci decided to re-position himself as an intellectual. He spent many years studying and translating the Chinese classics including the Four Books and Five Classic s. He put on the Confucian scholar's dress. He became very successful and even became a personal friend of the Emperor. If it was not because of the Chinese rites controversy, China could become a Christian country, but God has His own plan.

Strategic Posture or positioning is a crucial part of a successful movement. In Challenge 21, we position our international movement as "a world-wide Christian, ecumenical, voluntary movement for women and men with special emphasis on and the genuine involvement of young people". In each national movement, the positioning can vary depending on the national context. For example, in Jerusalem, racial harmony is a top agenda due to historical reasons and the high sensitivity atmosphere in the city. Hence, the Board of Jerusalem YMCA consists of a third Arabs, a third Jews and a third representing foreign countries. They have a chapel, which is not called a chapel, but a Reconciliation Room. In China, due to the historical linkage of missionaries with colonialism, the positioning emphasis is not on Christian movement but a Youth Club. YMCA in China is called "Ching Nien Wei"(Youth Club). What is the Strategic Posture of Asia Alliance of YMCAs? Have we taken full account that Christians are but a minority of o nly 4% in the whole Area? That many world religions were born and are still very pre-dominant in the Area? Is there anything we can learn from the Jerusalem YMCA particularly in countries where religious conflicts are serious?

So far we have discussed Strategic Intent, Strategic Directions and Strategic Posture. In the YMCA context, the Strategic Intent for a national movement is a consensus interpretation of the Paris Basis for the relevant country. As to Strategic Directions and Strategic Posture, these do not come out of nowhere but they are the result of a systematic identification of the Strategic Issues affecting the national movement, issues that have an important impact on the ability of the national movement to meet its Strategic Intent.

In recent years, strategic management is more involved as a strategy process for managing the Strategic Issues. The management of Strategic Issues becomes the heart of strategic planning process. This is issues-based planning instead of objectives-based planning. This change is more a result of the rapid environmental changes and Strategic Issues come up which need addressing in real time. Hence, some organisations have both the annual strategic planning cycle and strategic issues management systems which keep updating the Strategic Issues Agenda and have a strategic issue management to manage the strategic action.

How do we draw up our Strategic Issues Agenda? Environmental developments ( socio-economic-political developments, technology and competition etc.) can generate Strategic Issues. These are issues that affect our ability to fulfil our mission, our Strategic Intent. In addition, our organisation's experimental moves to achieve its Strategic Intent can also generate this agenda. In the YMCA context, our day to day YMCA work attempting to fulfil our mission can also generate strategic issues which require our attention.

To generate our Strategic Issue Agenda, we need to do analysis of both the external environment and our internal organisation. There are a number of tools one can use. For this presentation, I am recommending the PEST Analysis, Customer Analysis, Competition Analysis and SWOT Analysis.

PEST stands for political, economic, social and technological events and trends. The exercise is a brainstorming session on each of the 4 aspects. Listing key events and trends on each aspect which may have a significant impact on our national movement in terms of achieving our strategic Intent i.e. our broad goal or our mission.

We will then rate them for their importance so that the analysis is concentrated on the most important trends and events. We will also try to find out which trends will become more prominent in the next 5 to 10 years. This is what we call a future orientation. In a separate paper presented to the 17th Advanced Studies, I mentioned about some of these trends including what I called, Youth Power, Network Power and Economy of Speed. In summary, the world will be witnessing the rising power of young people (both constructive and destructive), the rising power of the internet as in e-commerce and telecommunication and the increasing demand for immediate action and instant occurrence. People have no patience to wait( just watch people in elevators how they press the buttons to go up or down!). The deadline is always yesterday!

We will study our clientele in terms of membership and participants in different activities by carrying out a demographic analysis. Check whether we are catering more to certain groupings and find out the reasons why. Check whether we are fulfulling our Strategic Intent. Rate their importance in terms of contributing to our Strategic Intent. Have we missed out certain important groupings? Are certain important groupings such as university students and young executives under-represented when compared to the demographic mix of the population? Why is this? We need to understand our primary and secondary clientele. Who they are. What they think and what they need.

Who are the people doing similar work? For each type of our programmes, list the competitors and rank them. Find out why some are more successful and others not. What is our market position in terms of share of the market and status?

This is a very popular analytical tool based on listing usually via brainstorming techniques. For each of the 4 aspects i.e.

We will list out point by point what they are. In terms of strengthes and weaknesses, they usually evolve around the areas of skill sets, organisation, personnel, marketing, networking ability, and finance. In terms of opportunities and threats, these can be grouped under the headings of political, social, economic, technology, products, demographic, market and competition.

This technique is widely used since it is simple and pragmatic. Its limitation is subjectivity. Some organisations complement this by using social and market research, sometimes by finding out from the perceptions of customers and competitors. This is like finding how good or bad you are from your friends and enemies.

Following the establishment of the Strategic Issues Agenda, we proceed to the formulation of Strategic Actions. To do this, we can employ one very useful technique called, Cognitive Mapping. Essentially, it is about conducting in-depth interviews with key managers on Strategic Issues and their ideas and suggestions to resolve those issues. Then, holding workshops involving these key managers to develop consensus and agree on a Strategic Action Plan. This interactive process will knit together the individual "cognitive maps" of the key managers into single group maps which are discussed, modified and supplemented by the various analyses mentioned earlier (PEST Analysis, Customer Analysis, Competition Analysis, SWOT Analysis).

In this process of Strategic Action Formulation, creativity is encouraged. We must not let the past to hinder us. In fact, we need to jump out from our old mode of thought, our old paradigm and search for innovative ways to solve our Strategic Issues. You can in fact employ a technique called Disney Creative Strategy to help you formulate your Strategic Action. The benefits of this strategy are optimisinig creativity but also taking account of practicality and feasibility. Walt Disney was a genius. He was a dreamer, a realist and a critic combined.

In planning his film, he first created a vision of the whole film. He got the feelings of every character in the film by imagining how the story appeared through their eyes. He then told the animators to draw the characters from the standpoint of those feelings.

After dreaming about his film romantically, he switched role. He changed to a different position. He became a realist to look at his work realistically. He drew up his budget, estimated time and other resources required to make sure the film would be a success i.e. how to turn the dream into a reality.

In this final step, he switched role again and turned himself to be a critical member of the audience. He asked himself the questions, "Is the film interesting?" "Is it entertaining?" "Are there irrelevant elements in the film?" In this process, he dissociated himself as the creator and planner of the film.

In fact, when Disney performed these three functions, he usually went to different rooms. He had a Dreamer Room, a Realist Room and a Critic Room. Naturally, this change of environment helped him to assume a different role and allowed his brain to take on different positioning in order to access different resources of his brain! In psychology, this is called "anchoring", the brain being triggered by external environment which opens up certain part of the brain favouring certain pre-determined function.

In our YMCA strategic planning process we can consider having different committees to each handle one of the three roles or the same group of people doing all three functions. Generally, a very skilled facilitator is required to facilitate this formulation process of the Strategic Action Plan whether we adopt the three committees approach or the single committee approach. This facilitator can be sourced internally within the national movement. In the absence of suitable people, national movements should be able to seek help from the Asia Alliance or other external resources.

To prepare an effective Strategic Action Plan, it would be useful to conduct a Resources Analysis. This is to identify what resources required, where & how to obtain them and how critical they are for implementing each of the specific Strategic Actions in the Plan.

After the Strategic Action Plan is established and agreed, the next step is Implementation.

In order to ensure the Plan is on track, we can build in a Monitoring System to review the results of the Implementation say every six months or so. The review criteria are basically whether the Strategic Issues are being resolved. In some situations, short term goals are established in the Strategic Action Plan and the review will be checking whether these short term goals are achieved or not.

Some national movements have been doing their own strategic planning very effectively. Others are probably new to this game. I have therefore drawn up in Appendix II a set of proposed YMCA SP Process Worksheets to facilitate the process. In Appendix III, a flowchart of this Process is provided. This is also a pictorial summary of this YMCA SP Process.

In the next session, we can conduct a review of these Worksheets for people who are interested.

Let me conclude here by saying that strategic planning process is a powerful management tool which combines both objective analysis and subjective creativity in the identification of Strategic Issues and the formulation of Strategic Action Plan to resolve those issues. Strategic planning has always a future orientation. It emphasises a lot on communication among key managers, coming up with the same vision (Strategic Intent), a thorough identification of the Strategic Issues and an effective Strategic Action Plan to address them which covers the Strategic Directions and Strategic Posture.

YMCA Strategic Planning Process is only a management tool for an effective YMCA leader. It cannot replace him or her, but it should be part of his or her tool box. This is because an effective YMCA leader needs to manage not only strategy but also organisation. Strategic management means managing both strategy and organisation, not just either. Our YMCA movement today, in the Third Millennium, needs strategic leaders. Our local movement needs strategic leaders, our national movements need strategic leaders, our Area movements need strategic leaders and our international movement needs strategic leaders. Living in today's global world facing the powerful globalisation forces, the YMCA movement can only be effective if we have a global strategy, which is being worked out at the moment. Hopefully, we can see the results very soon. A crucial element in this in my view is the linkage between the international movement, the Area movements, the national movements and the local movements. Another cru cial element is the strategic planning support resource. Today, more than any other times in our history, effective YMCA leaders must have an effective Strategic Action Plan, have the ability to modify the mindset of their key managers, orient and integrate the operating processes, and adjust the infrastructure. They do so in anticipation of changes in the environment rather than in reaction to it. This is Strategic Leadership. They create change within the organisation before performance results suggest this is necessary. They read the signs of the times, feel the pulse of the society and adapt and alter when necessary their Strategic Directions, Strategic Posture and, when applicable, short term objectives in their Strategic Action Plan. They are dynamic strategic leaders. Like St. Paul, they always do the "best to reach what is ahead" and "run straight towards the goal", the goal of a "Transformed World", a "new earth" and God's Kingdom on earth.