A strategic plan helps a company take stock and move forward, but it's important to follow the right process
KEY POINTS:
In today's fast-paced corporate environment, business managers are so caught up in the immediate issues in front of them that they often lose sight of the overall objective.
As a result, businesses can lose access to new opportunities, fail to see trouble ahead and lose competitive advantages that may have been gained over previous years.
A business review or the preparation of a strategic plan is vital to every organisation, as it allows the company to stop and look at its situation - then make some key decisions about its future direction from that point forward.
A strategic plan is different from a business plan or an operational plan. A strategic plan is visionary, conceptual and directional and usually quite a short document.
Probably the shortest and most ambitious strategic plan was made by John F Kennedy. In his landmark speech on May 25, 1961, he said: "I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth."
These 31 words conveyed very simply a clear strategic intent that would have far-reaching implications for the United States and the space programme.
Today, many managers decide to go off-site to build a strategic plan. Often, there is little thought given to collecting information beforehand and only a small group of stakeholders are involved. The result can be a long corporate bitching session and an opportunity for people to blame others for why the company is failing.
But it doesn't need to be this way. If the right process is followed, a well-developed strategic plan can rescue the company from an uncertain future, increase productivity and provide much-needed motivation for its staff.
So how should a strategic plan be developed?
A strategic plan will be, as most things, as good as the effort that is expended. For medium to large companies, it is recommended that a professional facilitator is used in the pre-strategy day activities, the facilitation of the strategy day and the post-strategy day activities. Before any strategy is decided, a lot of information needs to be collected, involving as many stakeholders as possible. If stakeholders are ignored, there is little or no buy-in to the outcomes by those people whose views were not canvassed.
Pre-strategy day activities:
When developing a strategic plan, a company needs to look at collecting information in four key areas: Market environment and trends that are taking place now.
Resources of the company. This is literally an audit of resources that the company has at its disposal. This doesn't only mean funding but relationships, potential alliances, human resources and skill sets.
Strengths, weaknesses, opportunities and threats. A SWOT analysis is probably the most under-used tool in strategic planning. If done correctly, it can clearly and concisely provide guidance to future activities. The key to a good SWOT is honesty in identifying weaknesses and threats. Edward De Bono defines a problem as the difference between what you are and what you want to be. If you are dishonest about what you are, then you will never be able to bridge the gap.
Future environment. This is probably the most important part of the information-collection process.
A strategic plan is "future looking" and strategic direction must be framed in the context of the future environment. Collectively, stakeholders are able to accurately predict what the future is going to be like.
Building consensus before the strategic planning session:
Once this information has been collected, it can be collated and used as pre-strategy day reading. Often, stakeholders hold similar views and consensus can be reached on a number of key issues before getting together to decide on strategic directions.
The strategy day:
The participants on the day should be representative of the company's operations, and smaller groups are recommended so everyone gets a chance to contribute.
A professional facilitator will work through an agenda, using the information already collected. The pre-reading material has already assisted in drawing out key issues so the group can concentrate on these during the day, rather than getting caught up in day-to-day operational issues.
Often the strategy is self-evident and most of the activities on the day are centred around how the company can organise itself to enact the strategic direction.
Many companies make the mistake of trying to do too much on the day. In reality, the company should come away with three or four key action items that it wishes to pursue.
A large part of the day is given up to nominating responsibilities for the next stage of developing the strategy. The facilitator will document all of the agreed actions and the responsibilities of post-strategy day activities.
Post-strategy day activities:
The worst outcome of a strategic planning process is a plan that sits in someone's drawer and never again sees the light of day. To guard against this possibility, the new strategic plan needs to be treated as an important corporate project.
Many companies include updates on the strategic plan at their board meetings.
The plan is also a valuable communication tool to explain the business to others in order to inform, motivate and involve stakeholders.
Craig McIvor is the director of Corporate Management Advice, a specialist in developing strategic plans. www.managementadvice.org
