Strategic planning is both a present and a future look at
your organization and its related environment. It’s the process of thinking about
your enterprise as an integrated whole - a process during which your “planning
team” considers three key questions:
- Where are we today?
- Where do we wish to arrive, and when?
- How do we get from here to there?
Strategic planning’s most significant benefit
lies in its redirection of your management’s attention from tasks to opportunities.
Managers busy fighting day-to-day “brush fires” become task oriented -
unwatchful of significant opportunities. Strategic planning first provides a format for
recognition of available opportunities. Then, it wrests management’s attention from
daily tasks and refocuses it on those recognized opportunities. Strategic planning, thus,
elevates managerial attention from its earlier task-oriented, to a higher
opportunity-oriented level.
Where are we today?
Your planning team considers the first question, “Where are we
today?” during its “situation analysis.” During this process step, your
planning team will create four lists:
- Internal Strengths
- Internal Weaknesses
- External Opportunities
- External Threats
Internal strengths are those characteristics
of your company which place it at a significant competitive advantage. Internal
weaknesses, on the other hand, are characteristics of your firm which place it at a
significant disadvantage.
External opportunities are those factors, independent of your
organization, which you might choose to pursue. And external threats, again external and
out of your control, threaten your firm with harm.
Where do we wish to arrive, and
when?
The question, “Where do we wish to arrive, and
when?” leads to your development of objectives. Objectives deal with the various
measures of organizational performance. For example: a financial objective might set a
minimum level of net profit or return on investment. A marketing objective might call for
a specific sales level, sales growth rate, or market share. An operating objective might
measure improvement in productivity or efficiency.
An objective must meet a number of criteria. Each objective must be
quantified so management can measure its accomplishment. Each must be challenging and, at
the same time, attainable - so your employees will extend the effort necessary to its
achievement. And objectives must also be limited in number, to avoid dilution of effort
and confusion.
In conjunction with its objective setting session, your planning
team will develop a “mission statement,” a concise declaration of “what
business we’re in.” This mission statement should have both an internal
dimension (a description of functional activities, products and services) and an external
dimension (an answer to the question, “Who buys it, and why?”). Thus your
mission statement will define your organization’s “playing field” and set
the stage for the strategies which follow.
How do we get from here to there?
Knowing “where we are today,” and “where we wish to
arrive, and when,” your planning team must next decide “how do we get from here
to there?” This third key question is the subject of strategy development. Your
planning team will develop two fundamental types of strategy.
- Defensive strategies
- Strategies built on strength
A defensive strategy will either counter an
external threat directly, or correct internal weakness to reduce your organization’s
vulnerability to that threat.
Strategies built on strength utilize internal strengths to
seize external opportunities. These strategies thus employ your firm’s competitive
advantage to its benefit.
How can you benefit from
strategic planning?
Through developing, communicating and implementing an effective
strategic plan, you’ll benefit in a number of ways. First, you’ll benefit
through increased organizational effectiveness. This increased effectiveness will result
from the direction provided by your having set specific objectives. Recognizing those
objectives, your employees can more effectively utilize your firm’s resources.
A second benefit of planning is improved employee motivation.
Communicating your strategic plan will stimulate positive employee response. Your
employees will feel that they’re part of a “more professional
organization.” In fact, they’ll be correct. For their management will have
identified where it wishes to go, and made the necessary commitment to get there.
Strategic planning also provides a framework for evaluating
alternative strategies. It forces consideration of “what if?” questions. This
prepares your firm for future events.
Yet another benefit of strategic planning is the enhancement of
managerial skills. As your planning process includes discussions bearing on all functional
areas, those discussion provide your entire planning team a general-management overview of
your enterprise. This offers your functional managers an opportunity to broaden their
viewpoint and grow with your organization. The planning team for a client company of ours
included the Engineering Manager, soon to be promoted to Vice-President of Engineering.
The strategic discussions provided, for that executive, an excellent introduction to his
company’s vital issues. This introduction went a long way toward preparing him for
his up-coming promotion.
What must you do to begin
strategic planning?
To begin strategic planning, you must first understand
strategic planning. Thus, you’ll be able to make an informed cost-versus-benefit
judgment regarding its application to your organization. You’ll have to consider the
specific benefits you wish to obtain from developing a strategic plan. Also, you’ll
need to determine planning’s costs, mainly the managerial time you’ll devote to
the process. You can obtain information about strategic planning from books and articles
as well as through courses and seminars sponsored by universities, business organizations
and associations.
Next, you’ll need to select the members of your planning team.
And remember this - you’ll select your team members both for their ability to
contribute to the development of the plan, and their ability and enthusiasm to help in
implementing the resultant strategies. Once you’ve selected members
for your planning team, you’ll need to see that they’re educated to the planning process.
Courses, seminars and workshops are all possibilities. In fact, the most beneficial format
for an educational session is the workshop. For the workshop not only educates, but also builds enthusiasm among your planning team members. In the workshop, your team will
work on an actual case to develop a “mini” strategic plan. And while working on
that case, they’ll extend their thinking into their own organization. Thus the
workshop builds enthusiasm for applying the planning process in “real life.”
Finally, your “plan to plan” - the “who does what,
where and when.” You’ll develop your planning session agenda, select a
location and decide who will facilitate your strategy sessions. Also, your planning team
must identify the information it will need during its up-coming strategy sessions.
Following these preparations, your development, communication and
implementation of an effective strategic plan will deliver significant benefits. Those benefits
include organizational effectiveness, improvement in managerial skills, the ability to
evaluate alternative strategies and, most important, the redirection of management’s
attention from tasks to opportunities.
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