"SHU" Statement of Direction
Executive Summary
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Template for: SHU Executive Summary
The SHU Statement of Direction document should be used by a
horizontal unit performing one or more activities for the benefit of two or more
strategic business units.
A horizontal unit is sometimes called a cost center, functional
area, department, resource center, utility area, and countless other names. For
the remainder of this document, the term horizontal unit will be used.
The logical design of this document is appropriate for any
horizontal unit. It is just as useful for the centralized information systems
area, legal department, human resource department, controllers area, sales
force, marketing department, customer service function, or any other cost
center.
The examples used throughout the discussion pages of this
document cover many different horizontal units. No horizontal unit should feel
slighted.
The primary objective of this page is to clearly state to the
reader the purpose of the Strategic Horizontal Unit (SHU) Statement of Direction
document.
A second goal of this page is to list other documents that the
reader should be aware of, both internal corporate documents and external
industry documents, because they are relevant to fully understanding this
horizontal unit. This allows the SHU manager to say that everything you ever
wanted to know about the horizontal unit is described in this SHU Statement of
Direction document or is detailed in at least one of the documents listed on
this page (or the information does not exist).
Listing other horizontal unit, business unit and corporate
documents also helps the reader appreciate the amount of internal information
available, and how the documents and other planning efforts are linked or should
be linked. For example, the SHU document should, at a minimum, refer to the
competitive strategy documents of the business units it services, as well as the
company's corporate strategy and the company's annual report.
When developing the plans of the horizontal unit, it is a good
idea to use the term "Statement of Direction." Simply using the word
"Strategy" or any phrase that sounds too much like the SBU
"Competitive Strategy" will confuse the organization. The two
documents are different. They serve different purposes. The differences should
be clear to everyone involved in the corporate planning process.
It is logical and appropriate for the strategic business
units to clearly define their strategies before the horizontal units formulate
their statements of direction. In practice, this is not always the case. Some
horizontal units live in a state of frustration trying to serve the unspecified
needs of the businesses they serve. Although each SBU has a strategy, it is
often unclear, not written down, and frequently changing.
If desired, however, a horizontal unit can effectively develop
its plans based upon the perceived needs of the businesses. The only really
critical input the horizontal unit needs prior to developing a statement of
direction is an accurate list of the company's SBUs. Everything else can be
estimated and changed at a later date with little problem. But the list of the
company's SBUs provides the foundation of the horizontal unit's plan. In some
companies, especially those in manufacturing, identifying the company's
businesses is obvious. In other companies, especially in industries related to
information services and financial services, identifying the company's SBUs is
not always obvious. Too often the corporate organizational structure of the
company masks the true identity of the corporate businesses. If a horizontal
unit develops its plans based on serving the departments of the corporation,
rather than the strategic business units of the corporation, then the planning
effort is likely a waste of time.
This section presents a general overview of the horizontal unit
after first identifying the staffing and financial resources employed by the
unit.
Although somewhat redundant to the information found in the body
of this document, this brief section represents the most important information
about the horizontal unit.
In practice, especially in large corporations with many business
and horizontal units, the executive summary should be extremely well written and
clear not only because it is the first section read, but because of the real
possibility that not all corporate executives will find the time to read any
more than the summary itself.
Horizontal Unit Vital Statistics
The purpose of the vital statistics is to present objective,
quantifiable information regarding the horizontal unit. At a minimum,
information regarding the budget and staff size should be included.
In addition to the minimum list of statistics shown on the
opposite page, most horizontal units should add statistics that would accurately
summarize the level of performance of the unit. For example, a training
department might list the number of training classes given last year and the
number planned for this year.
Depending upon the political readiness of the organization, an
annual "SHU Evaluation Rating" from each SBU supported could be added
to the list of vital statistics as well. The SBU evaluation could be a
subjective grade from the SBU manager or an objective scoring based on agreed to
measurements. In practice, this type of SHU evaluation is more likely to happen
if the horizontal unit manager is either very successful or required to do so by
corporate management.
General Overview
The general overview of the horizontal unit should summarize the
principal functions performed by the unit. The overview should also provide
other general information required to appreciate the unit's current
philosophies, status and position. In practice, it is best to keep the overview
to one page
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