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The Abcde Model: This Earlier Article

The document summarizes the ABCDE model, which provides a framework for understanding the flow of strategic planning and execution activities from assessment to evaluation. It involves the following key steps: A) Assessment of the current situation through environmental scanning and identifying problems and opportunities. B) Identifying performance gaps by evaluating trends. C) Developing the components of strategy such as vision, goals, and strategic initiatives. D) Delivering strategic initiatives and action plans. E) Evaluating progress through review, reporting, and corrective actions.

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Wazeeer Ahmad
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134 views4 pages

The Abcde Model: This Earlier Article

The document summarizes the ABCDE model, which provides a framework for understanding the flow of strategic planning and execution activities from assessment to evaluation. It involves the following key steps: A) Assessment of the current situation through environmental scanning and identifying problems and opportunities. B) Identifying performance gaps by evaluating trends. C) Developing the components of strategy such as vision, goals, and strategic initiatives. D) Delivering strategic initiatives and action plans. E) Evaluating progress through review, reporting, and corrective actions.

Uploaded by

Wazeeer Ahmad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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The ABCDE Model

Many people find the ABCDE Model* to be a very useful model for understanding the flow of
strategy from the beginning to the end of a cycle of strategic planning/execution activities. The
model is illustrated in the nearby graphic and described below:

A – Assessment of current situation. This element involves scanning the external environment,
competitive scanning, assessing the current situation; and clarifying perceptions of problems,
needs, and opportunities. I provided two useful ideas for this sensing environmental context in
this earlier article.

B – Baseline the gap. This element involves identifying performance gaps, and evaluating trends.

C – Components of strategy. Example components of strategy include common concepts like


core competencies, values, mission, vision, metrics, goals and objectives, portfolios, and
processes. Vision is the most important of the components (in formulating and executing a
strategic initiative). This describes the point where managers would select and fund strategic
initiatives as a ‘C’ component.

D – Delivery of component. This is the delivery of the strategic initiative, as well as other
programs, projects, and operational work. As part of this, executives will formulate action plans;
benefits capture plans, targets, standards, and metrics.

E – Evaluation of progress. This includes review of progress, reporting, tweaking of goals,


corrective actions, and learning.

You could think of ABC as the process of strategy formulation and the DE as the strategy
execution piece. (For the record, I think it is unhelpful to separate strategy formulation and
execution; both require strategic thinking.)

.Chartering Strategic Initiati ves: Steps C & D


The process of identifying and chartering a strategic initiative falls somewhere in the C or D
area, depending on the organization. The process is this: the executive team considers the gap
between the current state and future state and develops answers to this question, “What are the
few critical programs that allow us to close our most important performance gaps? The answer is
to charter one or more strategic initiatives focused on achieving each critical outcome.

The strategy team then selects and funds the strategic initiatives.

The “Story Arc” and Story Telling

Through the ABCDE model, you can position four important questions in the organization’s
narrative arc:

1. Where is the organization at? As I wrote in tip #2 on backstory (see top of page for
link), you have to know the background of the strategic initiative.
2. Where does it want to be? The vision statement is a crucial tool that needs to be
understood and agreed by others.  Consult this article on socializing vision statements for
some useful advice.
3. How will the strategic initiative team close the performance gap? The short answer is,
“We will close the performance gap by applying resources and provide program
leadership.”
4. How will the strategic initiative team measure and report its benefits? The short
answer is, “We will identify the vital metrics of most importance to strategic stakeholders
and communicate them per our program governance strategy.”

Storytelling is a valuable strategic leadership tool. Stories – in their simplest form – involve a
beginning, a set of activities, and a conclusion.

When organizations “set strategy,” they start (the beginning of the story) with strategic inputs,
perform some activities, and conclude with some sort of learning.

An Example

Here is an example script for telling the strategic initiative story. You should be able to find all
elements of the ABCDE model in it:

My organization found its financial performance slipping versus expectations, due to changes in
the external environment that affect the entire industry. The organization developed a strategic
intent that went beyond survival, to thriving. The changes involve creating a more coherent
value proposition that will cause redesign of the elements of the business model. Accordingly,
executives chartered and resourced this strategic initiative to close the performance gap. Our
strategic initiative will incrementally provide benefits that support the balanced score card
metrics. We plan to complete delivery of targeted benefits in 24 months, and close the program.

The I/O Model of Above - Average Returns.


In the mid-twentieth century the ideal strategy for a company was the industrial organization
model of above-average returns. This model describes the external environment as a
primary determinant for a strategy of firms to use for successfulness. The strategy was used
because the firms used to think that the industry in which you compete must be essential to
do a better work than change the way of administration in the company. Some examples of
external environment can be economies of scale, barriers to market entry, diversification,
product differentiation, the degree of concentration of firms in the industry, and market
frictions.
The I/O model have four assumptions: the external environment would determine the
strategy of above-average returns; firms that compete in the same or similar industry would
have the same strategy and resources to compete; similar resources would be used in the
firms, and the differences between resources in the firms would be used only for short time;
the decisions made in the firms would be only in the best interest of the company. This
model was so popular due to all the companies that used the same resource and strategy,
so the firms started to imitate each other in order to compete in an equal level in the same
industry.
The five forces model was used to identify the attractive in a company as also to help find
the position in the market. The five forces are supplier, buyers, competitive rivalry among
firms currently in the same industry, product substitutes, and potential entrant in the industry.
The interaction between those five forces function to identify the profitability of the industry.
The I/O model explains that when a firm does a correct investigation about the external
environment as the main focus for creating a strategy, it will give above-average returns.
Meaning that firms that tend to invest more in their strategies for the external environment
are more prone to succeed that one firm that does not.
The model follows five steps: (1) The study of the external environment, not forgetting the
importance of the industrial and the competitor environment; (2) Find an attractive industry,
where the firm will know that they will get above-average returns; (3) When the industry is
selected, according to it and to the main goal, which is above-average returns, they firm
need to find the perfect strategy that will be implemented; (4) For implementing the strategy,
it is very important to invest in it, so that it will turn out well, so it is very important to develop
and/or acquire assets and skills to carry out the strategy; and (5) This step is when the
strategy is implemented by using the firm strengths, that are the new and developed skills.
This model can lead to realize that as much as everything is important to consider when
trying to succeed as a firm, it is extremely important to know what and how to make it succeed.
Meaning that at the end of the day it doesn’t really matter what the firm is selling
but how does the firm is approaching to the public.
The I/O model tells us that we must analyze and deeply understand the external
environment for a company to succeed, for this managers must be able to locate the industry
with the highest potential but also find the correct management strategy. This strategy
cannot focus solely on eliminating or joining the competition (ex. joint ventures), it also has to
innovate and add value to their products. For the company to accomplish its vision it must be
prepared internally and understand what’s happening externally and so be ready to manage
the variables and uncertainties of venturing the market.
The airline industry can be an example of the I/O Model, since for many years it was
heavily
regulated, which caused many companies in the market to be virtually similar, even after
deregulation. Many mergings occured overtime (Northwest Airlines and Delta, United and
Continental, US Air and American) due to consolidation. The services did not differed
significantly, but improved instead (On-Time flights, less carriage loss, etc) proving that it still
represented a major part for the industry.
Airlines like American and Delta suffered several fall-outs with time. It was in cases like
those that the difference between airlines were shown. On the other hand, companies like
Southwest developed its resources and capabilities, allowing it to improve its service and
performance.

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