A Guide to Organized Change

Level Two: Defining Core Competencies and Tentative Goals
Level Two is where you get down to the real business of planning, by integrating the scenarios envisioned in Level One with your knowledge of your company's core competencies and then using this combination to set goals for the future.

A core competency is a set of activities, structures, processes, and resources fundamental to the ways in which an organization excels. Two key words are fundamental here: core and excels. Just because an organization excels at something doesn't mean it is an integral part of an organization's business. And just because a process is core to an organization's success, doesn't mean that it does it well.

Separating these two concepts can be liberating. It frees the company to compare what it currently does well with what it will need to do well in the future. This distinction can suddenly break through bounds that have stifled past attempts at goal setting.

Can We Start at Level Two?
Some organizations can skip Level One and start at Level Two because they have either conducted a formal strategic planning initiative, or because they inherently adopt an ongoing strategic view, continually conducting forward-looking planning in real time.

On the other hand, some companies start at Level Two for riskier reasons, on the assumptions that:

• the future will be like the past or at least predictable.
• the future is embodied in the CEO's vision for the future.
• management doesn't know where else to start.
• management is too afraid to start at Level One because of the changes needed to really meet future requirements.
• the only mandate they have is to refine what mission already exists.

Some of these companies will learn the hard way that you cannot effectively set goals until you have thought creatively and realistically about what the future may bring.

Level Two is best begun with a SWOT analysis. SWOT stands for: Strengths, Weaknesses, Opportunities, and Threats.

If your business started the change process at Level One, you'll want to create a separate SWOT analysis for each scenario that came out of the Level One planning.

Strengths and Weaknesses
You should understand and document your company's strengths and weaknesses, not only in the current marketplace, but also in the hypothetical marketplace of each of your future scenarios. Of course, if you began the change process at Level Two, you are assuming that the future will be much like the present, and that your relative strengths and weaknesses will change more through your own efforts than through outside events or forces.

Opportunities and Threats
Each hypothetical future offers new opportunities for your business, and each opportunity has an equally likely threat associated with it. Exercise caution in brainstorming opportunities, because the temptation is to predict Pollyanna scenarios-all opportunity and no threat.

Usually, when an organization's executives talk about SWOT, they want to emphasize what their organization does well at the moment. However, using SWOT analysis in combination with future scenario planning suggests that what defines strengths and weaknesses is more complicated. Strengths and weaknesses are depended on which future scenario comes to pass, and what it takes to be successful in that particular scenario.