Strategic planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan."
While strategic planning may be used to effectively plot a company's longer-term direction, one cannot use it to reliably forecast how the market will evolve and what issues will surface in the immediate future. Therefore, strategic innovation and tinkering with the "strategic plan" have to be a cornerstone strategy for an organization to survive the turbulent business climate.
Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:
1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"
In many organizations, this is viewed as a process for determining where an organization is going over the next year or—more typically—3 to 5 years (long term), although some extend their vision to 20 years.
A strategic planning process is not something that can happen in an ad hoc way, at a regular planning meeting or during a staff meeting. It requires careful planning to set it up so that the process is thorough and comprehensive. When you develop or revise a strategic plan, you are setting the parameters for the work of your organisation, usually for two to three years or longer. So, it does make sense to spend some time and energy planning for your strategic planning process.
TIMING
The questions to ask here are:
· When do you need to do a strategic planning process?
· How often do you need to do a strategic planning process?
· At what point in an organisational or project cycle do you need to do a strategic planning process?
· How long should a strategic planning process be?
Some suggestions:
· You need a strategic planning process when the strategic framework within which your organisation or project functions needs to be developed, clarified, or consolidated. On the next page, you will find a questionnaire to help you decide whether or not your organisation or project needs to organise a strategic planning process.
· Don’t do a strategic planning process more than once every two years unless the external or internal context has changed dramatically. Usually once in three years is enough. This does not exclude you from doing a strategic review more often, say once a year. A strategic review is quick - a day or less where you look at the strategic framework, against what is happening internally or externally, as a sort of reality check.
· There are various times in the life cycle of a project or organisation where it makes sense to do a strategic planning process. So, for example, when you are initiating a new project or new organisation, then you need to do a strategic planning process. If you have just had a major evaluation of the organisation or work, and this has led to challenging recommendations, then you may decide to have a strategic planning process immediately afterwards. When you reach the end of a major phase in a project, it makes sense to review progress and prepare for the next phase through a strategic planning process.
· It is not possible to do a thorough strategic planning process in fewer than three days. If you are not used to this sort of process, you will need at least four or five days.
Steps towards a Strategic Plan
The first step is to develop a realistic Vision for the business. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance, size, activities etc. Answer the question: "if someone from Mars visited the business, what would they see (or sense)?" Consider its future products, markets, customers, processes, location, staffing etc. Here is a great example of a vision:
I will come to Indonesia, which is the country for me. Once there, I will become the greatest General Manager of rebuild Hotel Indonesia in history.......... I will go into Hotelier as an Author, GM and eventually a good wealth man. By the time I am 30 I will have starred in rebuild Hotel Indonesia and I will be a millionaire...... I will collect houses, art and automobiles. I will marry a glamorous and intelligent wife. By 32, I will have been invited to the Istana Presiden. Attributed to next president who was elected in 2025.
The nature of a business is often expressed in terms of its Mission which indicates the purpose and activities of the business, for example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas". A statement along these lines indicates what the business is about and is infinitely clearer than saying, for instance, "we're in electronics" or worse still, "we are in business to make money" (assuming that the business is not a mint !). Also, some people confuse mission statements with value statements (see below) - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business. The following table contrastshard and soft mission statements. For the example :
The company will engage in research, development, and manufacture and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers. This will include thin films, thick films, semiconductor devices, and ......... A variety of processes will be established, both at a laboratory and production level ...... as well as the development and manufacture of special processing and test equipment required to carry out these processes. Products may include dioded transistors ....... Principal customers for these products are expected to be the manufacturers of advanced electronic systems ..... It is anticipated that many of these customers will be located outside Indonesia
The next element is to address the Values governing the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders.
The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds), objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. These objectives could cover growth, profitability, technology, offerings and markets.
Next are the Strategies - the rules and guidelines by which the mission, objectives etc. may be achieved. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example:
- The company's internal cash flow will fund all future growth.
- New products will progressively replace existing ones over the next 3 years.
- All assembly work will be contracted out to lower the company's break-even point.
Use SWOTs to help identify possible strategies by building on strengths, resolving weaknesses, exploiting opportunities and avoiding threats. For further discussion on strategies, refer to the paper on Devising Business Strategies as well as these items below: Use Hindsight when Strategic Planning, Effect not Equal to Cause when Planning Strategy and SWOTs - Keys to Business Strategies.
Next come the Goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives, for example, to achieve sales of $3m in three years time. Goals should be quantifiable, consistent, realistic and achievable. They can relate to factors like market (sizes and shares), products, finances, profitability, utilization, efficiency.
The final elements are the Programs which set out the implementation plans for the key strategies. These should cover resources, objectives, time-scales, deadlines, budgets and performance targets.
Scope of Strategic Planning
Judging from it's scope :
a. strategic plan (strategic planning), describes the long-term political objectives and the realization of a long time. Model plan difficult to change.
b. tactical plans (tactical planning) is a plan that contains a description of the short term, easy to adjust their activities, provided that the purpose has not changed.
c. comprehensive plan (integrated planning) is a plan that contains the full and complete description.
d. the plan (integrated planning) is the plan, which contains a detailed description should be integrated, for example, with other non-health programmes.
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