Strategic planning is a
systematic process of making the fundamental decisions and actions to shape and
guide what an organisation is, what it does, and why it does it to develop a
road map to manage its positioning within a given market sector.
The management process of
strategic planning focuses organisational energy towards achieving common goals
to assess and shape its direction in response to a changing environment. Some
of the elements that underlie the strategic planning process include the
following:
- Strategic: It is a strategic process that
involves preparing the ultimate way forward to respond to the
circumstances of an organisation's environment, whether its events are
known in advance or not. Ultimately, this means understanding and being
transparent about objectives, being aware of resources and incorporating
them into a consciously responsive planning process within a dynamic
environment.
- Planning: Planning is related because
it involves setting goals by choosing a desired future and developing an
approach to achieve those goals.
- Disciplined: Discipline highlights the
constructive collaboration between the different steps in strategic
planning. The mission depends on the environment. Strategic planning is
concerned with a sequence of questions typically raised to examine the
experience of an organisation and test assumptions, gather, and use
information about the present to try to forecast the future environment in
which an organisation will be working. It calls for a specific order and
pattern to keep it focused and productive.
- Fundamentals: Organisational strategic planning
implies that some decisions and actions are more important than others and
that strategy formulation concerns making complex decisions about what is
essential to achieving organisational success.
- Decision-Making: Strategic planning is based on
the critical issues raised in the formal organisational planning process.
Choices must be made as the plan is no more or less than a set of
decisions about why they must be resolved, what to do about the issues
identified, and how to overcome them.
- Long-Range Planning: The long range is the most
extended period for which it makes sense to make plans. The period varies
from organisation to organisation, but a 3-5 year period is appropriate
for most organisations' meaningful long-term planning.
- Operating Plan: Operating plans detail the
actions required to achieve the goals laid out in the strategic plan,
outlining how each significant action corresponds to its fiscal year.
- Strategic Management: Strategic planning relates to
managing day-to-day and month-to-month in a way that focuses on the most
critical decisions and actions. It requires a longer-term perspective and
priorities resulting from a strategic plan. The concept also incorporates
the assumption that the market sector is constantly changing. Thus,
strategic management requires an ongoing reassessment of current projects,
considering long-term priorities.
A management team that
supports the strategic plan may need to align fully with an organisation's
goals and priorities, thus undermining its execution. It is expected that
without a proper assessment of the industry and an organisation's capabilities,
the plan will lack strategic thinking and become more of a projection of past
performance into the following year. The following steps will guide the
creation of a successful strategic planning process:
- Assess the Industry, Competitors,
and Market Trends:
To create an effective strategic plan, an organisation must assess the
external market sectors shaping an industry, understand the competitive
and regulatory landscape and identify market trends. If data is
unavailable, conducting an efficient external assessment before the
strategic planning event would be prudent to provide market insights and
validate data to inform decisions and test assumptions, resulting in more
strategic conversations during the event.
- Conduct a SWOT Analysis: To consider the threats and
opportunities in assessing the external market sector, an internal
organisational review will ground the strategy and set a baseline for an
organisation's culture and capabilities. A SWOT analysis will reveal an
organisation's strengths, weaknesses, opportunities, and threats. With
this information, a management team can draw a set of offensive/defensive
strategies that capitalise on opportunities to offset the risks of
potential threats.
- Review Organisational Mission and
Vision: The
value of a successful strategic event inspires a management team to
achieve meaningful goals. Reviewing an organisation's mission and vision
is essential at the start of a strategic planning event. An engaging
envisioning session helps a management team collaborate to create a shared
story of success. This activity unites and inspires a management team and
everyone to embrace an organisation's greater purpose.
- Set Organisational Goals and
Priorities:
By creating an unclouded vision of the internal and external assessments
and guided by an immersive vision, it is essential to focus on the
specific priorities and goals to achieve the vision. This is a critical
stage for decision-making as a management team defines the big
scenarios that will move an organisation towards its goals.
- Define Objectives and Critical
Initiatives:
With a clear set of organisational goals and priorities, the next stage is
to define the key objectives and initiatives that activate the strategic
plan, undertaken at a functional level, to enable alignment and increase
ownership. It is vital to keep the number of initiatives reasonable in
relation to what can be realistically done annually. It is also essential
that these initiatives truly align and help deliver on an organisation's
goals.
- Determine Staffing, Budgets, and
Financial Needs:
The strategic plan is operationalised by assigning sponsors, champions,
and resources behind the project to monitor budgets and sponsor-specific
issues to identify and deploy actions charged to tackle cross-functional
strategic initiatives.
- Identify and Track Success Measures: Regularly monitoring progress on
attaining strategic goals and objectives is critical to ensuring the plan
is implemented, making course corrections if needed, and ensuring
accountability and follow-through. Assigning someone to collate, track,
and report progress on the strategic plan using relevant measures is
critical. An annual organisational review includes a status report on
strategy implementation through key performance indicators.
Strategic planning is
critical for positioning an organisation for success, aligning a management
team to a standard plan and guiding decision-making. Most organisations conduct
some form of strategic planning event before starting a new year.
However, most strategic
planning processes fail to deliver real value due to common pitfalls, such as a
management team that views strategic planning as an event rather than an annual
cycle. Strategic plans must be fully implemented since they are seldom reviewed
throughout the year once a strategic vision is assimilated.
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