Strategic Planning - Why should your organization bother? After all a strategic plan can be informal as well as formal. If the organization is small, the owner develops the strategic plan in his head and communicates it so clearly that all employees know the goal and the approach to achieve it - then an informal plan can be very successful. However, as the organization grows, there needs to be a systematic method for developing the strategic plan and the approach for deployment. The objective is the same as for the successful informal plan - everyone needs to clearly understand the marching orders and how to measure their attainment. Hope is not a strategic plan!
Once you've decided to embark on the strategic planning process - you will want it be an effective tool for achieving growth and implementing change. To establish the foundation, a strategic plan begins with defining the current overall environment that your company operates in. What market segments do you compete in? What are the key characteristics of the company as it stands now? Who are your competitors? How do they operate? Who are your clients and what motivates them to buy?
Next, what does your crystal ball show you about the future? Are significant changes underway in your marketplace? Is someone developing new product improvements that will be lower the demand for your products? Where is the technology in your industry headed? Is there revolutionary technology being developed outside of your industry that will obsolete your product offerings? Where do you want your company to be positioned relative to the competition? What will differentiate you from the crowd over the next three to five years?
There are many tools to help you to more systematically develop a strategic plan such as: Outcome-based problem solving, Balanced Scorecard methodology, Constraint Management techniques, Scenario planning, etc.
Outcomes-based problem solving techniques help you to define the overarching desirable outcomes that drive your marketplace.
Balanced Scorecard methodology considers a balance between both the external and internal perspectives of your organization. Further, it seeks to balance your measurement system between predictive and historic measures to help you forecast where you are going and to confirm that you achieved your goals.
Constraint Methodology seeks to help companies who have limited resources - ultimately every organization is constrained in some fashion - to best manage these constraints and limitations. Maybe the constraint in your organization should be strategically shifted so as to generate higher revenues and profits.
Scenario Planning seeks to prepare the company to make a significant change in strategic direction to cope with a major shift in your environment. This particular planning method can dramatically improve your organization's overall agility and help you to outmaneuver the competition.
Finally, what approach will you use to achieve your future company vision? Does everyone in the organization understand what the desired outcomes for the company are? Does everyone know what the key business factors for success are? Have resources (people, budgets, etc.) been assigned to achieving these strategic goals? Are your employees able to monitor the results so they can take corrective action quickly?
A systematic strategic planning process can facilitate your organization's ability to address these questions and become more agile and adaptive to a changing environment. One organization that I've had the pleasure to work with actually holds a regular strategic planning session every other week - they have a "living" strategic planning process that enables them to react promptly. This may not be necessary for every company but as the pace of business continues to accelerate the annual review of a strategic plan will soon become extinct!
HPK Group, LLC