The Strategic Plan

1. The Strategic Plan • A review • of the eight strategies common • to all organizations

2. Module 1 – Day 2 • Reviewing the Situation

3. Module 1 – Day 2 Reviewing the Situation • Strategic Plan Content & Process • SWOT Analysis Redux • Situation Review • Nominal Group Technique

4. Strategic Plan Content • 1. Content & Process • The Fact Gathering Process • Major External Factors • Stakeholder Expectations • Organizational Performance • Description of Current Strategies and Strategy Configuration • Facts • The Situation • Analysis • 2. Analysis • Issue • Development • The Analysis Process • Likely Impact of Major Factors • A Ranking of Major Factors & Expectations • Possible Responses & Rationale • A Description of Changes, if any, to Strategy • An Explanation of the Rationale for Change • Impact on the Organization (Timing and Degree) • Major Risk Factors / Assumptions • Financial Implications • Long Term Hoped for Impact • 3. Strategy • The Change • Agenda

5. Strategic Planning • 1. Content & Process • 1. Choice of Planning Process: Should we be doing strategic planning or business planning? • Day One: • Situation • Analysis • 2. Scoping Expectations: Have we assessed the expectations for strategic planning? • 3. Internal Assessment: Do we truly understand the what’s, how’s and why’s of our current strategy? • 4. External Assessment: What factors in the external environment must we truly understand? • 5. The Situation Analysis Review: Do we have enough understanding to support informed decisions? • Day Two: • Strategic • Planning • 6. Issue Development: Are we able to connect external factors to the strategy framework? • 7. Strategic Issue Identification: Are we able to develop scenarios to identify possible strategic issues? • 8. Strategic Plan Communication: Have we described the likely “what” and “when” impact of change? • 9. Strategic Plan Review: Do we understand the strategic plan and how it is likely to impact us? • Day Three: • Business • Planning • 10. Expectations Impact: Can we identify theimpact of strategic plan expectations on functional activities? • 11. Expectations Testing: Are the strategic plan expectations consistent with competitive reality ? • 12. Strategy Implementation: How are new expectations (if any) to be integrated with ongoing responsibilities?

6. SWOT • 2. SWOT Redux • Under Tarion’s Control – What is the situation •  •  •  •  • Not Under Tarion’s Control – What has changed externally?

7. Fact vs. Fiction • 3. Situation Review • Fiction Tarion’s Board of Directors is controlled by the builders • Fact Builders have 8 of 16 seats on the board. • Fiction Tarion’s responsibilities as a regulator and warranty vendor conflict • Fact The KPMG study found the combination of responsibilities a significant success factor. • FictionAll builders pay the same registration fee • Fact The basic registration fee may be the same but conditions of licensing vary dramatically. • Fiction Tarion has a monopoly on new home warranty insurance • Fact All new homes must carry the Tarion warranty as the minimum warranty – not the only warranty • Fiction New home building industry standards in Ontario need to be improved • Fact New home industry standards are the highest of any jurisdiction. • Fiction BC has put into place a new home warranty program structure that Ontario should adopt • Fact The BC program is unproven and the BC market for is a fraction of the size of the Ontario market. • Fiction Tarion should extend its regulatory and warranty coverage to the renovation industry • Fact The renovation industry is fundamentally different from the new home building industry

8. Stakeholder Identification • 3. Situation Review

9. ONHWP Act Model • 3. Situation Review • Consumer Protection • Risks to Consumer • Builder Risk • Assuring Builder Ability to Perform • Insuring Builder Failure to Perform • Regulatory Protection • Mandatory Builder • Registration & Minimum Standards of • Acceptable Builder Performance • Financial Compensation • No-fault Consumer Warranty Coverage • & Simplified Consumer • Claims Process • Delivered by a not-for-profit industry stakeholder controlled • Corporation & completely self-funded from fee income • Accountable to • Ministry (MOU) • Accountable to • Industry • Stakeholders • Accountable to • Corporate Law

10. 3. Situation Review

11. 3. Situation Review

12. 3. Situation Review Scoping the Appetite for Change • X = Change Acceptable • ● = Change Not Acceptable • New Homebuilders: • Board Mgmt: • New Homebuyers: • Consumer Groups: • Mandate • Risk • Growth • X • X • X • ● • ● • ● • Organization • Management • ● • ● • X • X • Financial • Management • ● • ● • ● • X • X • Warranty Claims • Management • Communications • X • R&D • / Technology

13. Current Strategy Configuration • 3. Situation Review

14. 3. Situation Review From Strategy to Org Design • Board of Directors • President • & Registrar • Chief • Operating Officer • VP & • CFO • VP & • CIO • VP & • General Counsel • VP Licensing & • Underwriting • VP Human Resources • VP Warranty Services • VP • Communications • VP Stakeholder Engagement • VP & Special Advisor to the CEO

15. Strengths & Weaknesses • 3. Situation Review

16. Strengths & Weaknesses • 3. Situation Review

17. Warranty Industry Analysis • 3. Situation Review

18. Warranty Competitor Analysis • 3. Situation Review

19. Regulator Stakeholder Focus Analysis • 3. Situation Review

20. Tarion Warranty Customer Analysis • 3. Situation Review

21. External Factors Identified • 4. Nominal Group • Technique

22. Nominal Group Factors Ranking • 4. Nominal Group • Technique

23. Factors Scoring • 4. Nominal Group • Technique

24. Module 1 – Day 2 Reviewing the Situation • Strategic Plan Content & Process • SWOT Analysis Redux • Situation Review • Tools: Nominal Group

25. Module 2– Day 2 • The First Step towards Change

26. Module 2 – Day 2Identifying Issues • Process Overview • Strategic Issues • Issues Identification

27. Strategic Issue Definition • 2. Strategic Issues • A question about strategy The two strategy questions: 1. Do we improve existing strategy ? or 2. Do we replace existing strategy with a new strategy ?

28. The CEO Aligns the 8 Strategieswith Major Stakeholder Expectations and Competitive Reality • Mandate • Bus Definition • Production/ • Service • Delivery • Marketing / • Communi- • cations • Growth • Risk • Org • Tech • Finance • Changes in • Need / Risk • Changing • Trends • Change in Alternatives/ • Competition • Changes in • Demand • 2. Strategic Issues Changed Stakeholder Expectations • Industry • Change • Changes in • Best Practices

29. All Managers Align Activities Assigned to Themto Strategic Plan Expectationsfirst and with competitive reality second • Call • Centre • Customer • Relations • Marketing / • Services • Recruiting • Training • Budget • Admin • Compliance • Monitoring • 2. Strategic Issues Changed Expectations

30. Alpha Sets Culture • 2. Strategic Issues • Identity • Organization • 8 Strategy Focus • Actual Strategy • Information Technology • IBM • Business Definition • Morphing to the high margin • Major Global Design Firm • Stantec • Growth • Growth by Acquisition • Canada’s Financial • Risk Manager • Bank of Canada • Risk • Managing Investor Expectations • Deposit-Taking • The Bank of No Surprises • Bank of Montreal • Financial Management • One-of-a-kind design • Frank Gehry Architects • Organization • Starchitect • The Biggest Cloud • Google • R&D / Technology • To manage all your • information needs • The Swoosh • Nike • Marketing • Clothing for winners • Service Excellence • FedEx • Service Delivery • 24 Hour Delivery

31. Strategy Focus (Public / NFP) • 2. Strategic Issues • Entity • The 8 Strategies • Mandate • Mandate can never be dominant strategy for • A NFP / Public Sector Entity • Toronto Police Services • Risk • Ontario Financing Authority • Financial Management • Stratford Theatre Company • Organization Management • National Research Council • R&D / Technology • CICA • Marketing / Communications • City of Toronto • Service Delivery

32. 3 Tips for Drafting Issues • 3. Issues Identification

33. Issues: Connecting Factors to Strategy • 3. Issues Identification

34. 7 Ways to Avoid Action 1. For every proposal, point out every possible problem. 2. Ask detailed questions which cannot possibly be answered. 3. Profess not to have any answers while earnestly cautioning against proceeding. 4. Emphasize that the issue cannot be separated from all the other issues and therefore, cannot be resolved until all the other issues are resolved. 5. Appoint a consultant. 6. Create a committee. 7. Congratulate the issue. Discussion on it wasted 3 hours, but we are better for it. • 3. Issues Identification

35. Module 2 – Day 2 Identifying Issues • Process Overview • Strategic Issues • Issues Identification

36. Module 3 – Day 2 • Building Strategic Issues

37. Module 3 – Day 2 Building Strategic Issues • Scenario Thinking • Strategic Issues • SMART Objectives & Assumptions • Strategy Focus & Impact

38. 1. Scenario • Thinking SWOT:The Basis of All Strategic Thinking • Strength • Strategy: Defend • Strategy: Attack • Threat • Opportunity • Strategy: Retreat • Strategy: Retrain • Weakness • Heinz Weihrich, The TOWS Matrix, A Tool for Situational Analysis. • Source: http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf

39. 2. Scenario • Thinking Strategy Development:2 Basic Strategic Thinking Frameworks • Assessing Expectations • Assessing Strategy • Expectation 1 • Met • Strategy Changed • Expectation 2 • not Met • Expectation 2 • Met • External Factor • Addressed • External Factor • Not Addressed • Expectation 1 • not Met • Strategy Not Changed

40. Strategy Scenario Development • 2. Scenario • Thinking • 1. In the lower left, describe how we look today because of the strategy we are using • 2. In the upper right, identify an organization that is the best example of what we could look like if we successfully implemented the strategy and it became our Dominant Strategy. • Current Strategy Changed • Who would we want to look like if this became our dominant strategy? • External Factor Addressed • External Factor not Addressed • Who do we look like to an outsider because of our strategy? • Current Strategy not Changed

41. Strategy Scenario Development • 2. Scenario • Thinking • Change EB Marketing Strategy • - A highly focused retailer • Customer Factor not Addressed • Customer Factor Addressed • Possibility of EB failure • No Change in EB Marketing Strategy

42. Strategic Issue Development • 2. Strategic Issues • Redrafted Strategic Issue: • Should we change our present strategy • which has characterized us as • to a strategy which will change our image to • and, by • , deliver ?

43. SMART Strategy (Objective) Statement • 3. SMART • Objectives • English Bay • Business Definition Strategy / Objective • To return to being a niche retailer over the next 2 years so that 80% of profitability comes from stores serving markets of our target customer

44. Strategic Assumption Identification • 3. Assumptions • Assumptions Considered conjecture on specific factors

45. Strategic Focus • 4. Strategy Impact • & Focus

46. Impact of Strategic Focus (Change Implementation) • 4. Strategy Impact • & Focus

47. Module 3 – Day 2 Building Strategic Issues • Scenario Thinking • Strategic Issues • SMART Objectives & Assumptions • Strategy Focus & Impact

48. Module 4 – Day 2 • Communicating the Strategic Plan

49. Module 4 – Day 2 Communicating the Strategic Plan • Communicating Change • Selected Examples • Evolution of a Firm

50. 1. Communicating Assessing the Tarion Plan