Description

Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and explicitly links the business’s objectives to the actions and resources required to achieve them. Strategic Planning offers a systematic process to ask and answer the most critical questions confronting a management team—especially large, irrevocable resource commitment decisions.

Methodology

A successful Strategic Planning process should:
• Describe the organization’s mission, vision and fundamental values;
• Target potential business arenas and explore each market for emerging threats and opportunities;
• Understand the current and future priorities of targeted customer segments;
• Analyze the company’s strengths and weaknesses relative to competitors and determine which elements of the value chain the company should make versus buy;
• Identify and evaluate alternative strategies;
• Develop an advantageous business model that will profitably differentiate the company from its competitors;
• Define stakeholder expectations and establish clear and compelling objectives for the business;
• Prepare programs, policies, and plans to implement the strategy;
• Establish supportive organizational structures, decision processes, information and control systems, and hiring and training systems;
• Allocate resources to develop critical capabilities;
• Plan for and respond to contingencies or environmental changes;
• Monitor performance.

Common Uses

Strategic Planning processes are often implemented to:
• Change the direction and performance of a business;
• Encourage fact-based discussions of politically sensitive issues;
• Create a common framework for decision making in the organization;
• Set a proper context for budget decisions and performance evaluations;
• Train managers to develop better information to make better decisions;
• Increase confidence in the business’s direction.

Selected References

Drucker, Peter F. Managing in a Time of Great Change. Plume, 1998.

Eisenhardt, Kathleen M. “Has Strategy Changed?” Sloan Management Review, Winter 2002, pp. 88-91.

Galbraith, Jay R. Designing Organizations: An Executive Guide to Strategy, Structure, and Process, 2d ed. Jossey-Bass, 2001.

Goold, Michael, Andrew Campbell and Marcus Alexander. Corporate-Level Strategy: Creating Value in the Multibusiness Company. John Wiley & Sons, 1994.

Hamel, Gary, and C.K. Prahalad. Competing for the Future. Harvard Business School Press, 1994.

Mankins, Michael C. “Stop Wasting Valuable Time.” Harvard Business Review, September 2004, pp. 58-65.

Mintzberg, Henry. The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners. Free Press, 1994.

Ohmae, Kenichi. The Mind of the Strategist: The Art of Japanese Business. McGraw-Hill, 1996.

Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press, 1980.

Porter, Michael E. “What Is Strategy?” Harvard Business Review , November/December 1996, pp. 61-78