ICSAN Strategic Operations cheat sheet

Strategy hierarchy: mission and vision → strategic goals → corporate strategy → business-unit strategy → functional/operational plans; each lower tier must trace upward to a stated goal.

Board roles split into conformance (oversight, accountability, compliance) and performance (strategy, value creation); an effective board balances both rather than over-weighting either.

Governance codes generally rest on principles of board independence, separation of chair and CEO, audit committee independence, and disclosure; most are applied on a comply-or-explain basis.

Porter's five forces assesses industry attractiveness: rivalry, buyer power, supplier power, threat of new entrants, threat of substitutes; high combined force pressure implies lower structural profitability.

SWOT feeds strategy only when paired: strengths/weaknesses are internal, opportunities/threats external; combine them into SO, ST, WO, WT options before prioritising.

Ansoff matrix options: market penetration (existing product/market), product development, market development, diversification (highest risk).

Strategy formulation ends at an approved plan with owners, milestones, and resource commitments; without these it remains intent, not strategy.

Board committees typically include audit, risk, remuneration, and nomination; delegation to a committee does not transfer ultimate board accountability.

Operations strategy must align with competitive priorities: cost, quality, speed, dependability, flexibility; trade-offs are explicit because improving all simultaneously is rarely feasible.

Balanced Scorecard perspectives: financial, customer, internal process, learning and growth; each objective needs a measure, target, and initiative linked by cause-and-effect assumptions.

KPI design tests: specific, measurable, achievable, relevant, time-bound, plus ownership and data source; unowned or unmeasurable KPIs are invalid.

Goodhart's law: when a measure becomes a target it ceases to be a good measure; use paired or counter-balancing metrics to limit gaming.

Productivity = outputs / inputs; partial productivity uses one input, total factor productivity uses a weighted bundle of inputs.

Capacity utilisation = actual output / maximum possible output; effective capacity adjusts design capacity for planned downtime and maintenance.

Little's Law: average work-in-process = throughput rate × average flow time; useful for queue and process cycle-time analysis.

Leading indicators predict future performance; lagging indicators confirm past results. A scorecard needs both to avoid steering by the rear-view mirror.

Variance analysis compares actual versus budget/standard; split into price and volume/efficiency components to identify the true driver.

Risk = likelihood × impact; risk rating is usually a 5×5 matrix producing inherent risk, then residual risk after controls are applied.

Risk appetite is the amount of risk the organisation is willing to accept in pursuit of objectives; risk tolerance is the acceptable variation around that appetite.

COSO ERM components: governance and culture, strategy and objective-setting, performance, review and revision, information/communication/reporting.

COSO internal control components: control environment, risk assessment, control activities, information and communication, monitoring activities.

Three lines model: first line owns and manages risk; second line provides oversight, frameworks and challenge; third line (internal audit) provides independent assurance.

Control types: preventive versus detective; manual versus automated; entity-level versus transaction-level. Segregation of duties is a preventive control.

Inherent risk = risk before controls; residual risk = risk after controls. Residual risk exceeding appetite requires escalation, additional controls, transfer, or avoidance.

Risk responses: avoid, reduce/mitigate, transfer/share (insurance, contracts), accept. Acceptance must be documented and owned at the right authority level.

Key risk indicators are forward-looking thresholds with defined trigger points that prompt escalation before losses materialise.

Net Present Value = sum of discounted future cash flows minus initial investment; accept projects with NPV > 0 when capital is unconstrained.

Internal Rate of Return is the discount rate at which NPV = 0; accept if IRR exceeds the cost of capital, but IRR can mislead with non-conventional cash flows or scale differences.

Payback period ignores time value and cash flows after payback; use as a liquidity screen, not a sole decision rule.

Weighted Average Cost of Capital = (E/V × cost of equity) + (D/V × after-tax cost of debt); it is the hurdle rate for projects of average risk.

Capital rationing: when funds are limited, rank by profitability index (NPV / initial investment) rather than absolute NPV.

Zero-based budgeting builds each budget from a nil base and requires justification of every cost; incremental budgeting adjusts the prior period and tends to entrench historic spend.

Break-even volume = fixed costs / contribution per unit, where contribution = selling price − variable cost per unit.

Working capital = current assets − current liabilities; the cash conversion cycle = days inventory + days receivable − days payable.

Stewardship duties include safeguarding assets, accurate records, authorisation limits, and segregation between approval, custody, and recording of funds.

Mendelow's matrix classifies stakeholders by power and interest: high power/high interest = manage closely; high power/low interest = keep satisfied; low power/high interest = keep informed; low/low = monitor.

Stakeholder salience model uses power, legitimacy, and urgency; stakeholders holding all three are definitive, two are expectant, one is latent.

Engagement spectrum: inform → consult → involve → collaborate → empower; choice depends on the decision's impact on the stakeholder and their influence.

Materiality assessment determines which environmental, social, and governance topics are significant to the business and to stakeholders; it drives sustainability reporting content.

Crisis communication principles: respond quickly, state known facts, avoid speculation, designate a single spokesperson, and commit to updates at stated intervals.

Investor communication must satisfy disclosure and equal-access rules; selective briefing of analysts on price-sensitive information breaches market-abuse norms.

Message structure for executives: situation, complication, question, answer (SCQA); lead with the conclusion for time-poor audiences.

Communication is effective only when feedback confirms the message was received and correctly interpreted; one-way broadcast is transmission, not engagement.

Lewin's model: unfreeze (create readiness), change (transition), refreeze (embed new norms); skipping unfreeze produces resistance and relapse.

Kotter's eight steps: urgency, guiding coalition, vision, communicate, empower action, short-term wins, consolidate gains, anchor in culture.

ADKAR sequences individual change: Awareness, Desire, Knowledge, Ability, Reinforcement; organisational change succeeds only when individuals progress through all five.

Bridges' transition model separates external change (event) from internal transition (ending, neutral zone, new beginning); productivity dips in the neutral zone.

Force-field analysis weighs driving forces against restraining forces; reducing restraining forces usually meets less resistance than increasing pressure.

Change curve (denial, resistance, exploration, commitment) predicts performance dip; communication and involvement shorten it.

Readiness for change is assessed through capability, capacity, and willingness; a change with high technical capability but low willingness still stalls.

Resistance is data: identify whether it is rational (interests), political (power), or emotional (identity) before choosing a response.

Sustaining change requires aligning performance metrics, reward systems, role definitions, and systems with the new way of working; otherwise old incentives reinstate old behaviour.

Core ethical principles for professional bodies: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

Threats to objectivity: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and disclosure.

Confidentiality is not absolute: disclosure is permitted where required by law, permitted by the client/employer, or where there is a professional duty or right to disclose.

Compliance programme elements: tone at the top, code of conduct, risk assessment, training, whistleblowing channel, monitoring, and consistent enforcement.

Conflict of interest is managed by identify → disclose → recuse or mitigate; undisclosed conflicts undermine the credibility of the decision regardless of outcome.

Whistleblower protection requires a confidential, independent reporting route and explicit anti-retaliation measures; fear of retaliation suppresses reporting.

A code of ethics states principles; a code of conduct states required behaviours. Both need consequences attached to be effective.

Ethical decision tests: legality, public disclosure (would you be comfortable if it appeared in the press), fairness to affected parties, and consistency with stated values.

Regulatory compliance is a floor, not a ceiling: legal conduct can still breach professional standards or stakeholder expectations.