Purpose of the SHU
Statement of Direction
Purpose of the SHU "Statement of Direction" Document
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 most of this document (web site) 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 web pages cover many different horizontal units. No
horizontal unit should feel slighted.
The Cover Page
- The cover page is surprisingly important for two reasons. First, the
quality of the printing on the top page is the first impression readers will
have of the plan. Using a bold font suggests a bold plan. Second, the name(s)
printed on the cover signal the political weight of the document.
The "Purpose
of this Document" Page - This page explains to the reader that
the purpose of the Strategic Horizontal Unit (SHU) Statement of Direction
document is to clearly define how the unit is and will support the corporate
businesses. 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).
Caution: 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.
The "Table of
Contents" page - lists the sections of the Statement of Direction
document. Each section starts on a new page. The document is easy to customize
by adding and deleting sections. The complete framework represented by the table
of contents should remain relatively intact. Maintaining the framework
facilitates the process of gathering data at a later date. It also helps to use
a consistent format for all horizontal units in order to facilitate the review
process and to promote information sharing throughout the organization.
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