Most of us believe that if we do things right, we will be successful. Nevertheless, few managers have been spared the frustration of seeing weeks of good hard work wasted because what we were doing right was not the right thing for our organisation at that time. Reading this article may save you from doing it again.
Strategic Planning ensures that an organisation is doing the right things. In the context of a change program, a strategic plan explains what the organisation is changing to. Once it has determined what the right things to do are, it devolves accountability for doing them right to one or more business plans.
In large organisations, strategic plans may be prepared at different levels in the organisation and may define the role of particular functions across the whole organisation. The Corporate Plan gives overall direction to divisional or departmental strategic plans and to functional strategic plans for e.g. human resource management or information management. Business Plans are prepared by organisational units to explain how each of them will contribute to implementation of the strategic plans.
Small businesses do not need this many plans, and often have one plan only, which is both a Strategic and a Business Plan. The inputs to your strategic planning processes should be critical stakeholder needs, any environmental risks and threats to your success and your organisation's competencies, values and resources.
Strategic plans must address critical stakeholder needs
Your organisation's critical stakeholders are those individuals, groups or organisations who have the power to either make or break your business if their needs are not met. Who they are varies from one organisation to another but they could be employees, directors, major customers, senior managers, government bodies or others that are specific to your industry.
To clarify whom your critical stakeholders are, you must first understand what all your customers and stakeholders need from you, and what are the possible consequences of your failing to satisfy these needs. Once you have identified the critical stakeholders, I strongly suggest that you involve them in your strategic planning processes.
Why? Because few organisations in today's complex environments can satisfy the needs of all their stakeholders all of the time. Involving critical stakeholders in the strategy development process makes it easier for them to accept this fact and forces them to identify those needs that are really important. Corporate or Strategic Planning workshops provide an excellent opportunity for this involvement.
Strategic plans prepare for environmental threats and risks
Competition is the biggest threat to most organisations. It is now widely recognised that the greatest (some say only) source of competitive advantage for any company is that they can change faster than their competitors.
Any other change in your environment may become a risk or threat to your ability to satisfy your critical stakeholders. The change-ready organisation monitors, understands and, if necessary prepares for the following:
- Industry changes
New competitors, mergers, new suppliers, etc.
- Political changes
Change in government, legislation, taxation, etc.
- Economic changes
Inflation, interest rates, unemployment etc.
- Social changes
Population trends, community attitudes, etc.
- Technological changes
Beakthroughs, new products, enabling technologies, etc.
Strategic planning requires understanding of your organisation's competencies, values and resources
You need to understand these values, competencies and resources and the impact that these have had on your performance to date. This tells you where you are now - the platform that you will change from.
You need to know which competencies and values have helped you achieve and which have held you back.
- Have you missed out on any opportunities because you did not have the competency to tackle them properly?
- Have the values and attitudes of employees helped or hindered you?
- Have you had all the resources you really needed or could you have done better if you were better resourced?
This review also tells you what you must not change - that is, those competencies and values that have underpinned your success in the past and on which your future success may depend.
The strategic planning process
The process usually consists of one or more workshops at which critical stakeholders reach consensus on the combination on a Vision and Mission Statement for the organisation, the objectives and strategies that will be pursued, the values that will guide behaviour and performance measures.
The strategies will describe product or service lines that the organisation will deliver, the markets they will deliver them to and the technologies they will use to do so. These may be hard or soft technologies.
Examples of the hard technologies are automation or new information management systems. The soft technologies are those concerned with the management of people, the most important of which are organisational re-design and cultural change.