Consulting | Strategic Planning
Strategic Planning Overview
Strategic planning is a process and thus has inputs, activities, outputs, and outcomes. This process, like all processes, has constraints. It may be formal or informal and is typically iterative, with feedback loops throughout the process. Some elements of the process may be continuous and others may be executed as discrete projects w/ a definitive start and end during a period. Strategic planning provides inputs for strategic thinking, which guides the actual strategy formation. The end result is the organization's strategy, including a diagnosis of the environment and competitive situation, a guiding policy on what the organization intends to accomplish, and key initiatives or action plans for achieving the guiding policy.
Formulation of competitive strategy includes consideration of four key elements through the strategic planning process:
Company strengths and weaknesses;
Personal values of the key implementers (i.e., management and the board);
Industry opportunities and threats; and
Broader societal expectations.
Data is gathered from a variety of sources, such as interviews with key executives, review of publicly available documents on the competition or market, primary research (e.g., visiting or observing competitor places of business or comparing prices), industry studies, etc as part of a competitive intelligence program. These help support an understanding of the competitive environment and its opportunities and risks. Other inputs include an understanding of the values of key stakeholders, such as the board, shareholders, and senior management.
The essence of formulating competitive strategy is relating a company to its environment. Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment (its strategy) should be.
The organization's leaders may have a series of questions they want to be answered in formulating the strategy and gathering inputs, such as:
What is the organization's business or interest?
What is considered "value" to the customer or constituency?
Which products and services should be included or excluded from the portfolio of offerings?
What is the geographic scope of the organization?
What differentiates the organization from its competitors in the eyes of customers and other stakeholders?
Which skills and resources should be developed within the organization?
The output of strategic planning includes documentation and communication describing the organization's strategy and how it should be implemented, sometimes referred to as the strategic plan. The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented.
Whilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces outcomes. These outcomes will invariably differ from strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. There will also arise unintended outcomes, which need to be attended to and understood for strategy development and execution to be a true learning process.