The Rational Processes: Situation Appraisal Jeden O. Tolentino De La Salle University

Getting priorities clear

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What is Situation Appraisal? Situation Appraisal is used to separate, clarify and prioritize concerns. When confusion is mounting, the correct approach is unclear, or priorities overwhelm plans, Situation Appraisal is the tool of choice. 3

What is Situation Appraisal? Situation Appraisal clarifies and keeps the issues that matter visible. It can create understanding of how concerns should be handled and priorities set, and it tracks the involvement of others through to resolution 4

What is Situation Appraisal? Consists of evaluative techniques that lead to proper selection and use of analytical techniques (i.e., Problem Analysis, Decision Analysis, and Potential Problem Analysis).

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Situation Appraisal improves: • • • •

Shift changes and hand-offs Staff and project status meetings Daily planning Crisis management 6

Situation Appraisal improves: • • • •

Project planning and status reporting Taskforce and steering committee planning Conflict resolution and negotiation Department or function planning 7

The stages of Situation Appraisal Recognizing concerns

Current or future deviations, threats, and opportunities

Separating concerns

Break broad concerns into more clearly defined subconcerns; list additional concerns that must be resolved

Setting priorities

Decide in which order to work on your separated concerns

Planning resolution

Select the appropriate process to resolve each concern; plan the Who, What, Where, When, Extent of the resolution 8

Recognizing concerns

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What is a concern? Any situation that requires action and for which you have full or partial responsibility. In other words, something needs to be done and you are in a position to do something about it.

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Kinds of concerns • Chronic situations • Adequately handled situations • Unexplored situations

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Major activities • List current deviations, threats, and opportunities • Review progress against your goals • Look ahead for surprises (within your organization and in the external environment) • Search for improvement 12

Specific questions to ask • Where are we not meeting standards? • What problems from the last six months remain unresolved? • What recommendations are we currently working on or will be coming up in the near future? 13

Specific questions to ask • What decisions need to be made now? • What decisions are being made now and will have to be implemented when a choice is made? • What major projects, systems, or plans are about to be implemented? 14

Separating concerns...

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...into manageable components Ensures that we take the steps of informationgathering necessary for evaluation of all concerns, simple or complex.

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...into manageable components Break broad concerns into more clearly defined subconcerns, and, if necessary, list additional concerns that must be resolved.

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Specific questions to ask • Do we think one action will really resolve this concern? • Are we talking about one thing or several things? • Are we in agreement as to the reason we are concerned about this? 18

Specific questions to ask • What evidence do we have that says this is a concern? • What do we mean by...? • What is actually happening in this situation? Anything else? 19

Specific questions to ask • What do we see (or hear, feel, smell, taste) that tells us we must take action? • What is there about the way we handled this situation that should be improved? • What is really troubling us about this situation? 20

Setting priorities

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Setting priorities In the expanded list of concerns that results from separation, each discrete issue we extract from undifferentiated “basket concerns” can be seen to have its own unique features and claims to priority. 22

Setting priorities Concerns must be broken down into their component parts in order to set sensible priorities.

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Setting priorities We must also have an organized, systematic way of determining what those priorities ought to be.

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Three dimensions to consider • How serious is the current impact of the concern on productivity, people, and/or resources? • How much time urgency does it have? • What is the best estimate of its probable growth? 25

Three dimensions to consider Cut away the concerns that rank low in all three dimensions, and designate them for further consideration at an appropriate time in the future.

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Planning resolution for concerns

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What to focus on Focus on how concerns may best be resolved, who will handle them, and the kinds of answers we need.

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When to use Problem Analysis • Does the situation require explanation? • Is there a deviation between expected and actual performance? • Is the deviation of unknown cause? • Would knowing the true cause help us take more effective action? 29

When to use Decision Analysis • Does a choice have to be made? • Do objectives need to be set in order to undertake some activity?

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When to use Potential Problem Analysis • Has a decision been made but not yet implemented, and is it necessary to act now to avoid possible future trouble? • Does a plan need to be made to safeguard some decision or future activity? 31

SWOT Analysis

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What is SWOT analysis? Strengths Weaknesses Opportunities Threats 33

What is SWOT analysis? For a company’s strategy to be well-conceived, it must be matched to its resource strengths and weaknesses and aimed at capturing its best market opportunities and erecting defenses against external threats to its well-being 34

SWOT analysis internal

positive attribute

Strengths

Weaknesses

Opportunities

Threats

negative attribute

external

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Identifying strengths and capabilities A strength is something a firm does well or an attribute that enhances its competitiveness.

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Identifying strengths and capabilities • Valuable skills, competencies, or capabilities • Valuable physical assets • Valuable human assets • Valuable organizational assets 37

Identifying strengths and capabilities • Valuable intangible assets • Important competitive capabilities • An attribute placing a company in a position of market advantage • Alliances or cooperative ventures with partners 38

Identifying weaknesses and deficiencies A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage.

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Identifying weaknesses and deficiencies Weaknesses relate to inferior or unproven skills, expertise, or intellectual capital; lack of important physical, organizational, or intangible assets; or missing capabilities in key areas.

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Identifying a company’s opportunities Opportunities most relevant to a company are those offering a good match with its financial and organizational resource capabilities, best prospects for profitable long-term growth, and potential for competitive advantage. 41

Identifying external threats • Emergence of cheaper/better technologies • Introduction of better products by rivals • Entry of lower-cost foreign competitors • Onerous regulations • Rise in interest rates 42

Identifying external threats • Potential of a hostile takeover • Unfavorable demographic shifts • Adverse shifts in foreign exchange rates • Political upheaval in a country 43

The role of SWOT analysis (ultimately) The most important part of SWOT analysis is using the four lists to draw conclusions about a company’s overall situation.

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The role of SWOT analysis (ultimately) The company should act on the conclusions to better match a company’s strategy to its resource strengths and market opportunities, to correct the important weaknesses, and to defend against external threats. 45

The role of SWOT analysis (ultimately)

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References Kepner, C. H., & Tregoe, B. B. (1965). The rational manager: A systematic approach to problem solving and decision making. Quezon City: Phoenix Press. Kepner, C. H., & Tregoe, B. B. (1981). The new rational manager. Princeton, NJ: Kepner-Tregoe. Kepner, C. H., & Tregoe, B. B. (1997). The new rational manager: An updated edition for a new world. Princeton, NJ: Princeton Research Press. Kepner-Tregoe, Inc. (2008). The KT way. Retrieved from http://www.kepnertregoe.com/TheKTWay/OurProcesses.cfm Thompson, A. A., Jr., Strickland, A. J., III, & Gamble J. E. (2008). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases (16th ed.). Boston, MA: McGraw-Hill/Irwin. 47