Strategic planning process: phases, purposes, and organizational challenges

Strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. The scheduling for the strategic planning process depends on the nature and needs of the organization and the its immediate external environment. The four phases of strategic management will be as follows:

Environmental Scan: Defining who we are as an organization

Vision Formulation: Determining who we want to be.

Plan Development: Discovering how we will achieve our goals

Plan Implementation: Evaluating our achievements

Having built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence. SWOT stands for Strength, Weakenesses, Opportunities, and Threats.

Strategic planning serves a variety of purposes in organizations, including the following:

Clearly defines the purpose of the organization Communicates those goals and objectives to the organization's constituents.

Develops a sense of ownership of the plan.

Ensures the most effective use is made of the organization's resources by focusing the resources on the key priorities.

Provides a base from which progress can be measured and establishes a mechanism for informed change when needed.

Brings together of everyone's best and most reasoned efforts have important value in building a consensus about where an organization is going.

Provides clearer focus of organization, producing more efficiency and effectiveness

Produces great satisfaction among planners around a common vision

Increases productivity from increased efficiency and effectiveness

However, the strategic planning process has its problem areas. Problem areas include 1) ensuring commitment at the top, because in some ways, strategic planning reduces executive decision-making power; 2) planning might inhibit creativity; 3) strategic planning, if misused, might become a tool for gaining control over decisions, strategies, present, future, actions, management, employees, markets, and customers; and 4) Strategic planning dismisses intuition and favors readily available, interpretable "hard" data and assumes that all goals are "reconcilable in a single statement of objectives."

C) Who Should Be Involved in Strategic Planning?

Is a vision and strategic plan something you should worry about? Alternatively, is this something only for an executive team or the top leaders of your organization? You can answer these questions yourself.

You need to have a vision and strategic plan for your organization if one of the following is true:

You have embarked on an initiative to produce breakthrough results for your organization, and you are on the team or the leader of the initiative.

Your organization is performing poorly in critical areas for business success (operating costs, customer satisfaction, quality of goods or services, etc.), and you have been ask to help work this issue.

You need to prioritize a limited amount of investment dollars between a variety of improvement initiatives (the organization can't do everything).

You have been asked to set short- and long-term goals for your organization in key performance areas.

D) Four Phases of Strategic Management

The four phases of strategic management will be as follows: (http://www.managementhelp.org/plan_dec/str_plan/str_plan.htm#anchor4293674666)

1. Environmental Scan: Defining who we are as an organization. Once the vision and mission are clearly identified, the organization must analyze its external and internal environment. The environmental scan, performed within the frameworks of the Five Forces Model and SWOT, analyzes information about organization's external environment (economic, social, demographic, political, legal, technological, and international factors), the industry, and internal organizational factors. The labor market projections provided on this site are most valuable for the environmental scan. Please refer to the brief description of the Basic Models.

2. Vision Formulation: Determining who we want to be. Identification of the organization's vision and mission is the first step of any strategic planning process. The organization's vision sets out the reasons for organization's existence and the "ideal" state that the organization aims to achieve; the mission identifies major goals and performance objectives. Both are defined within the framework of the organization's philosophy, and are used as a context for development and evaluation of intended and emergent strategies. One can not overemphasize the importance of a clear vision and mission; none of the subsequent steps will matter if the organization is not certain where it is headed.

3. Plan Development: Discovering how we will achieve our goals. Organizations evaluate the difference between their current position and desired future through gap analysis. As a result, an organization can develop specific strategies and allocate resources to close the gap (CSUN strategic planning leadership retreat, April 1997), and achieve its desired state. Measuring and comparing the organization's operations, practices, and performance against others is useful for identifying "best" practices. Through an ongoing systematic benchmarking process campuses find a reference point for setting their own goals and targets.

4. Plan Implementation: Evaluating our achievements. After assessing the progress of the strategic planning process, the organization needs to review the strategic plan, make necessary changes, and adjust its course based on these evaluations. The revised plan must take into consideration emergent strategies, and changes affecting the organization's intended course. Organization determines its strategic issues based on (and consistent with) its vision and mission, within the framework of environmental and other analyses. Strategic issues are the fundamental issues the organization has to address to achieve its mission and move towards its desired future.

To address strategic issues and develop deliberate strategies for achieving their mission, organizations set strategic goals, action plans, and tactics during the strategic programming stage

Strategic goals are the milestones the campus aims to achieve that evolve from the strategic issues. The SMART goals model is essential to setting meaningful goals. Smart goals are specific, measurable, agreed upon, realistic, and time/cost bound

Action plans... define how we get to where we want to go," the steps required to reach our strategic goals.

Tactics are specific actions used to achieve the strategic goals and implement the strategic plans.

E) Strategic Planning Worksheet

Having built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence. SWOT stands for Strength, Weakenesses, Opportunities, and Threats.

Strengths & Weaknesses

Strengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programs and organization in key areas. These include:

Sales - marketing - distribution - promotion - support;

Management - systems - expertise - resources;

Operations - efficiency - capacity - processes;

Products - services - quality - pricing - features - range - competitiveness;

Finances - resources - performance;

R&D - effort - direction - resources;

Costs - productivity - purchasing;

Systems - organization - structures.

If a startup is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their experience, expertise and management abilities - rather than to the project. The objective is to build up a picture of the outstanding good and bad points, achievements and failures and other critical features within the company.

Threats & Opportunities

The external threats and opportunities confronting a company, can exist or develop in the following areas:

The company's own industry where structural changes may be occurring

(Size and segmentation; growth patterns and maturity; established patterns and relationships, emergence/contraction of niches; international dimensions; relative attractiveness of segments)

The marketplace which may be altering due to economic or social factors (Customers; distribution channels; economic factors, social/demographic issues; political & environmental factors)

Competition which may be creating new threats or opportunities

(Identities, performances, market shares, likely plans, aggressiveness, strengths & weaknesses)

New technologies which may be causing fundamental changes in products, processes, etc. (Substitute products, alternative solutions, shifting channels, cost savings etc.)

Against an uncertain and shifting background, the objective must be to identify and prioritize the key SWOTs in a one-handed manner (Don't say "on the one hand but on the other hand

When using the Strategic Planning Worksheet below, note the following suggestions:

Relate the planning exercise to a specific company or, if diversified, to individual strategic business units.

Ideally the worksheet should be compiled by a multi-discipline management group, or separately by 2/3 groups and then discussed in plenary session if a large business unit is involved.

If working on your own, complete the worksheet and then return to it a few times over the following few days and critically review what you wrote - why, why, why etc. And ask yourself whether you have seen the "wood for trees." completed worksheet should be edited down into a 1-2-page document and reviewed by the group(s). The final form of the document need not follow the worksheet's layout provided all the matters are covered.

All ideas, issues etc. should be internally consistent and realistic.

You need a very good understanding of the market, competitors etc. In order to make a clear assessment of your SWOTs. If you haven't got this insight, suspend work on your strategic plan until you have done this basic research.

Allow enough time as you may find it much more difficult to write a short plan than a long one

F) Criteria to evaluate strategies

Periodic evaluations of strategies, tactics, and action programs are essential to assessing success of the strategic planning process. It is important to measure performance at least annually (but preferably more often), to evaluate the effect of specific actions on long-term results and on the organization's vision and mission (Rowley, Lujan, & Dolence, 1997). The organization should measure current performance against previously set expectations, and consider any changes or events that may have impacted the desired course of actions.

G) Competitive strategies

Unpredicted and unintended events frequently occur that differ from the organization's intended strategies, and the organization must