Strategic planning needs long perspectives, and it must be monitored constantly. By Kim Sommerfeld
Businesses must plan for the future. Planning enables management to pinpoint strengths and opportunities so as to develop a business to maximum potential. It allows management to understand weaknesses and threats, prepare for problems and strengthen elements that are crucial to strategic development. When managers engage in strategic planning, they review goals and consider the actions required to achieve those goals.
The strategic planning that management undertakes is a rigorous analysis of the business; where it is now, where it needs to be, how it is going to get there. It is carried out with serious consideration of the internal and external environment. It considers the direct and indirect external environments so as to recognise the many opportunities and threats that may affect the achievement of goals. The specification and documentation of these corporate goals provides a useful broad direction for management and employees alike.
Strategic planning concentrates on the long-term objectives of organisations. R.W. Oliver writes in “A thousand-year strategic plan” (The Journal of Business Strategy, 21/1, 2000) that strategic planning requires at least decade-long perspectives.
A good strategic plan will include elements that enable management to guide a path to their goals, maximise their results and deal with unanticipated outcomes. A poor strategic plan is likely to gather dust on the self.
The strategic plan will include aspects of the business’s product. These elements are the differences that distinguish the product from that of the competition. M. McGrath and D. Gilmore write in “Achieving growth, competitive advantage and increased profits” (World Class Design to Manufacture, 2/6, 1995): “Companies with the vision to create vectors of differentiation in their product strategy go far beyond unique product feature differentiations. Single points of differentiation are static, unconnected and vulnerable, while a vector implies a direction and continuous commitment to differentiating a product line or platform. A vector of differentiation whether it be ease-of-use, performance, unique customer benefits, better productivity or even product design is a pathway for continuous improvement, transition to new products and protection from competition.”
Understanding strengths and opportunities gives management its strategic advantages. Similarly, a comprehensive understanding of weaknesses and threats gives management its best opportunity for attaining corporate goals.
Strategic planning improves management ability to deal with uncertainty. Carter writes: “Many organisations have realised that the uncertainty of the current environment is precisely the reason why an organisation should proceed with strategic planning. In times of uncertainty, managers need a way a mechanism, a procedure, a methodology to monitor and react to the environment.”
Developing a strategic plan
A strategic plan needs to be a work-in-progress, it cannot be a one-off, static document. It will be a document that describes the business and where it is going. The strategic plan itself is the final documentation of the strategic planning process. It is important that there be regular planning sessions to ensure continued development, maintain momentum and reinforce strategy.
The extent of strategic planning will depend on the size of the business and management’s perceptions regarding the value of planning to the business. Small and medium-sized businesses are less likely to commit the same level of resources as large corporate entities. Management style, particularly in small business, is likely to influence the development of the planning process.
A strategic planning format
J. Stoner, P.W. Yetton, J.F. Craig and K.D. Johnston (Management. 2nd ed. Sydney: Prentice Hall Australia, 1994) recommend these steps:
Step 1 Goal formulation. What do we want?
Step 2 Identification of current objectives and strategy. What are we now doing to get what we want?
Step 3 Environmental analysis. What is “out there” that needs doing?
Step 4 Resource analysis. What do we have the capacity to do?
Step 5 Identification of strategic opportunities and threats. What can we do that needs doing?
Step 6 Determination of the extent of strategic change required. Will continuing to do what we are doing take us to where we want to go?
Step 7 Strategic decision making. This is what we will do to get what we want.
Step 8 Strategic implementation. Do it.
Step 9 Measurement and control of progress. Check frequently to make sure that we are doing it right.
How not to
Here we go again, again, again, again
Recording the perennial tendency towards nslavery, violent rivalry and sophistry
How not to protect working conditions
Call centres, which employ 400,000 people in Britain, are vying to be considered the modern equivalent of the “dark, satanic mills” of the Industrial Revolution.
In an English call centre, workers were told that whoever went to the toilet the most would have to wear a nappy. A manager took the nappies to work and made employees sign a “toilet book” to check how long they were spending there.
The incident was revealed when a hotline was set up by Britain’s peak union body, the TUC, in a campaign to improve the working conditions of call centres.
Other complaints included being forced to go to work to report sick, having to put up your hand for permission to go to the toilet, and being allowed only three seconds between calls.
But why stop there? What about time limits for oxygen use? A daily ration of syllables, the abuse of which can result in fines for overuse?
How not to communicate clearly
Asia’s first mad-cow disease scare came about because one word was missing from a press release.
When researchers at Bangkok’s Mahidol University in February confirmed that two patients had been diagnosed with mad-cow disease the first such case outside Europe foreign news agencies rushed to report the news. Meat sales nose-dived as Thai consumers were panicked into not eating beef. The news also sparked an international reaction with Malaysia threatening to ban the import of Thai beef.
Researchers later confessed that the word “similar” had been left off the press release. What it should have said was that the patients suffered from a variant of Creutzfeldt-Jakob disease, which is similar to, but not directly related to, mad-cow disease.
Meanwhile, the United States Government has found its own nifty way of dealing with the problem. The Food and Drug Administration is looking at clamping down on certain drugs containing cattle ingredients but says it cannot release a list of these drugs because many details are proprietary corporate information.
Sport as a metaphor for life
On June 27, 1969, a foolish referee awarded a late penalty to El Salvador in its World Cup match against Honduras, the decider in three fiercely contested games between the rival teams and neighbors.
El Salvador scored from the penalty spot and won the match 3 2. Riots broke out in the capital cities, with fans looting and beating up opposition supporters.
A week later, as a direct result, war broke out between the two countries. By the time peace was restored, 2000 soldiers had been killed and the Central American Common Market was in tatters, resulting in food shortages in the two countries.
El Salvador was eliminated in the next round of the World Cup.