Strategic planning. (Checklist 064).

This checklist is for managers involved in considering the strategic position and direction of their organisation for the first time. It provides a framework of practice to draw on and encourages strategic thinking rather than imposing a sequence of steps to follow.

In the 1990s such is the pace of change, the growth of uncertainty and the diversity of customer expectations that the major risk to survival and success is in not planning. Strategic planning helps you manage the future; if you don't manage the future, the future will manage you.

There are no magic formulas; each organisation will be different. So getting the questions right is crucial to success. This checklist details the questions to address in the strategic planning process and should be read in conjunction with the checklist on Producing a Corporate Mission.

Management Standards

This checklist has relevance to the MSC National Occupational Standards for Management: Key Role A--Manage Activities.

Definition

Strategic planning goes to the heart of what an organisation does, why it does it, how it does it and where it is going. It is "a total concept of the whole business involving a framework and process that guides its future" (Napuk). Strategic planning addresses a number of basic questions:

* where are you now?

* how did you get there?

* what business are you in?

* where do you want to be in the future?

* how are you going to get there?

Advantages of planning

Strategic planning will provide the organisation with a framework for:

* understanding the organisation's position in the marketplace

* moving forward with a sense of direction, purpose and urgency

* focusing on key issues such as quality, productivity and customers

* better motivation and communication throughout the organisation

* changing the organisation to deliver required results and profitability.

Requirements of strategic plans

By failing to plan, the organisation will be reactive, vulnerable to threats and closed to opportunities. The strategic plan needs to be:

* flexible--adaptable to change, but too much change can cause havoc

* responsive--taking account of the market and environmental conditions

* creative to inspire commitment and make the organisation stand out

* challenging--but realistic so that people can get to grips with it

* focused--clear, defined and understandable to staff and customers.

Action checklist

1. Involve all managers and staff

The planning process should not be restricted merely to contributions from senior representatives; all parts of the organisation should play a part and all staff will have a contribution to make as stakeholders.

2. Where are you now?

This involves an analysis of recent performance to identify the current position of the organisation in relation to its market and industry sector. Questions include:

* what is your current market position in relation to competitors?

* how do customers see you?

* what is your market share?

* what are your strengths (weaknesses) in relation to your competitors?

* are you on an upward or downward curve?

3. How did you get there?

Next it is important to assess the reasons and factors which created this situation, for example:

* what did you do right (wrong) to get there?

* what did you do well (badly)?

* were you in the right place at the right time?

* what was down to market circumstances?

* what was down to good planning, bad planning, or no planning?

4. Examine your corporate identity

Try to gain a clear sense of identity by asking:

* what kind of people are you?

* what kind of values do you have?

* what people strengths (weaknesses) do you have?

* what kind of leadership do you have?

* what kind of morale is present?

It is important to gain a balanced view of the organisation--not just the rosy side. Do not just believe in what you choose to--seek evidence for it; base your future planning on realism.

5. Carry out a SWOT analysis

Summarise your findings from the external and internal audits conducted in steps 2-4 above under the headings of (internal) Strengths & Weaknesses, and (external) Opportunities and Threats. (There is a related checklist on SWOT analysis).

6. What business are you in?

Question your own marketing literature. Does it convey the purposes for the existence of your organisation? Think of the focus of your organisation--why it is there and what it is there to do. The business you are in is usually expressed in the organisation's mission statement. There is a risk of limiting scope too much in an age of increasing specialisation; equally there is a risk of broadening too far in an age which requires increasing diversification. Don't have such a narrow perspective that you lose opportunities, but be wary of too broad a church, which might lose focus and appeal.

7. Where do you want to go?

Do you want to stay in the same business? Where do you want to be in the future? This involves a vision for the future with objectives whose achievement will lead to attaining that vision. Do you want to expand into new areas? Why? Or give priority to your "core" area? What is it? Working out where you want the organisation to be in the future means identifying a target destination which will shape all planning and decisions. Destination is usually expressed in terms of a vision statement.

There is some confusion and a good deal of overlap between missions and visions. Whatever distinctions are drawn it is down to senior management to make a clear statement of what business the organisation is in, where the organisation is going, and how it is going to get there. The statement should:

* constitute a clear message to all stakeholders and to the market

* be inspirational but realistic

* be motivating but believable

* be challenging but attainable.

Carry out a reality-check against the picture which emerged from steps 2-6.

8. Establish a time-frame

Visions are usually longer- rather than shorter-term. Although an organisation needs time to change thinking and shift resources, targets are taking on ever tighter time-frames. As a general guide, visions may well take up to 8-10 years to achieve, but the strategic planning process should generate objectives or targets which are achievable within 2-4 years.

9. Set objectives

Direction and destination must be clarified, communicated and agreed upon, and be firm without being so rigid that modification causes failure. Objectives are set by asking what needs to be done to contribute to the realisation of the vision and need to cover aspects of:

* profitability and return on investment

* market share and meeting market needs

* product/service quality and customer service

* growth and public responsibility

* people participation and commitment.

Your objectives may involve some or all of these elements, should lead towards attaining the vision, and should be measurable. There is a related checklist on objective setting.

10. How do you get there?

Strategies must account for the organisation's weaknesses and provide the framework to put them right. The focus of the strategy however is on the outside world. Think of levels of empowerment and employee development; take account of plant and equipment and the investment needed; think of flexible control systems and the information that you have available (or not) to make decisions. The SWOT analysis above related to the past and the present; now it is time to apply such questions to the future, both outside the organisation:

* what changes are happening in today's markets?

* what is happening to customers' attitudes and demands?

* what is happening to technology?

* in which market areas will you have the best chance of success?

* what will customers want in the future?

* how will you tackle competitors? and inside:

* what people skills do you need to develop?

* how can you improve your product(s) or service(s)?

* how can performance be improved to meet demand?

* what critical success factors do you have?

* how will you generate the resources to do all this?

Communicate and seek feedback

11. Communicate details of the emerging plan throughout the organisation. Consultation and feedback are vital to widespread understanding and commitment as well as for hearing of threats and opportunities from those who actually do the jobs. Depending on the size of the organisation, the plan must be translated into business / operational plans, marketing plans, financial plans (budgets), project plans and personal development plans.

12. Measure, adapt and renew

The end point of strategic action is the combination of product(s), market(s) and technologies that produce results which realise the vision. The one constant is to stay close to the market--that means continuous change for the organisation and continuous measurement of progress against the plan. Measurement is a key process which can indicate the levels of change and modification needed as the plan adapts to changing technologies and market forces and evolves to embrace new opportunities. Strategic plans need to be rolling plans; 5-year plans need rolling over every 3 years, 3-year plans every 2 years.

Related checklists

* Setting objectives

* Producing a corporate mission

* Mapping an effective change programme