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 organization at that time. Reading this article may save you from doing it again
Strategic Planning ensures that an organization is doing the right things. In the context of a change program, a strategic plan explains what the organization is changing to. Once it has determined what are the right things to do, it devolves accountability for doing them right to one or more business plans.
In large organizations strategic plans may be prepared at different levels in the organization and may define the role of particular functions across the whole organization: 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 organization’s competencies, values and resources.
Strategic Plans must address Critical Stakeholder Needs
Your organization’s critical stakeholders are those individuals, groups or organizations who have the power to either make or break your business if their needs are not met. Who they are varies from one organization 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 you 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 organizations in today’s complex environments can satisfy all the needs of 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 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 organizations. It is now widely recognized 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 organization 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 – breakthroughs, new products, enabling technologies, etc.
Strategic Planning requires Understanding of your Organization’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 organization, 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 organization 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.
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Do you know of an organization that performs extremely well during a crisis? Maybe your own?
Organizations do well during times of crisis because executives, managers, and individual contributors all gain clarity of purpose, action, and expectation. Clarity, along with a sense of urgency, breaks down organizational barriers allowing people to work together efficiently towards the singular goal. These factors enable the organization to resolve the crisis quickly and return to normal operations.
On a day-to-day basis, especially during a period of continuous success, organizations tend to lose clarity of purpose and the sense of urgency. Over time, bureaucracy builds as a diminished focus on the organization’s mission prevents well intentioned executives and managers from relentlessly eliminating resource waste. Bloated processes make cross-organizational execution more difficult; driving employees to focus on their personal performance and success instead of that of the organization. Silos form and performance declines. Therefore, it is critically important for leaders to clearly define the organization’s goals and actions and to instill the sense of urgency that motivates employees to work effectively and efficiently together in pursuit of mission objectives.
Strategic planning provides the foundation for creating clarity of purpose and action on a day-to-day basis. A well defined, measureable mission supported by specific organizational objectives and reinforced by vertically cascaded, horizontally shared performance measures and effective executive and managerial oversight creates and maintains the clarity of purpose needed for continuous success. Without the unifying vision provided by strategic planning, an organization may lose sight of its goals, stray from the road to success, stumble, and ultimately fall; failing to keep pace with competitors in today’s extremely aggressive marketplace.
Final Thought…
Some organizations become victims to cyclic performance. When this occurs, the downward slide is typically viewed as a crisis for which the organization rallies to improve performance. Having realized a performance upswing, the organization becomes complacent, losing its focus and once again falling behind the competition. This cycle is often the product of ineffective strategic planning and will likely continue until a strong, unified vision is created and embraced by all members of the organization.
It is the hope of all StrategyDriven contributors that the concepts and materials provided on our website (www.StrategyDriven.com) will help you to develop and communicate the unified vision needed to make your organization truly StrategyDriven.
All the Best,
Nathan Ives
Principal Contributor and
co-Host, StrategyDriven Podcast
StrategyDriven
www.StrategyDriven.com
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