SEARCHING FOR GUIDANCE, STRATEGIC PLANNING EDITION

In today’s fast-paced business environment, if you are standing still, you are falling behind. Making the right decision at the right time is critical – and following through on those decisions is challenging. In a survey of a broad section of CEOs, the Malcolm Baldrige Foundation learned that CEOs believe that deploying strategy is three times more difficult than developing strategy.

The executive team’s strategic planning process must address both the development of key strategic imperatives and the successful execution of these strategies. The process starts by identifying the organization’s vision and mission, which should outline the development of future direction, the key influences on how it operates, and the key challenges currently faced. Through an understanding of the organization’s operating environment and key relationships with its customers, suppliers, partners, and stakeholders, the organization’s competitive environment can be described, ensuring that key strategic imperatives maintain the benchmarked position.

However, the process of developing this strategic plan seems onerous to many and of little value to others. In my experience, the fault lies not in the concept of strategic planning, but rather in the process of developing the plan itself.

Let's go through the process of developing a strategic plan that will bring vision and strategic imperatives to life.

Develop a Future Vision for the Organization
The first step in the strategic planning process is for the President / CEO and the executive team to work together to create a compelling vision. Creating this vision and developing the strategies to actualize it is one of the most difficult challenges for many organizations. In this complex and fast-changing world, anticipating the future can be very difficult. The vision is more than just a dream. It is an ambitious view of the future that everyone in the organization can believe in, one that can realistically be achieved, while offering a future that is better in important ways than what currently exists. When the vision is clearly articulated, everyday decisions and actions will respond to current problems and challenges in ways that move the organization toward the future vision rather than maintain the status quo.

Develop the Strategic Plan
Once the vision is developed, the executive team will follow this process to develop its strategic plan:

1. Collect customer feedback
Dramatic gains in overall organizational performance are very often customer-driven. Customers focus on how the organization’s delivery of products and services produce the results they’re looking for in quality, price, delivery, service, etc.  The organization’s success depends on an ability to satisfy the customer’s needs. In turn, this ability depends on how well the organization’s internal processes work to meet this external demand. Understanding the customer is key to determining some of the requirements for the strategic plan.

The leadership team must know:

• Who are the customers?

• How is the quality in product and service delivered to the customer measured?

• How is customer feedback obtained?

• What is done with the information it provides?

2. Collect employee feedback
It is essential to involve employees in planning strategy and direction for the department and / or organization. Employees' input will:

• Provide insight into issues, challenges, concerns, and opportunities that may not have been known;

• Ensure their buy-in during the executive planning stage, which will link the strategy development into action plans. 

The leadership team comes to the strategy development session prepared to respond to questions derived from their staff (in meetings and one-on-one sessions). Questions may include:

• What has been accomplished in their area(s) over the past couple of years?

• What have their customers been saying about their level of service?

• What have been their performance strengths, weaknesses, current goals, structure, and ways of operating?

• What do they see as emergent opportunities and threats?

• What benchmarking information is available and relevant?

• What would staff like to see in the future?

• What are the concerns and issues among staff and what do they see as the opportunities?

3. Conduct benchmarking research
Benchmarking is an integral part of the planning and ongoing review process, which ensures a focus on the external environment and strengthens the use of information in developing plans. Benchmarking is used to improve performance by understanding the methods and practices required to achieving world-class performance levels.

Comparisons to other similar and dissimilar organizations (and their departments) can yield valuable insights into the best strategies to improve overall quality, process, procedures, structure, and so on.

4. Review the current organizational and / or departmental situation
Each member of the leadership team presents a summary of what they’ve accomplished in their own area of responsibility over the past year, including any long and short-term problems encountered. Essentially, it's setting the stage for understanding the past so obstacles that might prevent the organization from meeting its vision can be overcome.

This stage in strategy development engages the leadership team in thinking about its view of its departments and areas of responsibilities and related positions. Reports collected from customer feedback and employee input and involvement help the team to understand the current situation. The questions raised, discussed, and recorded might include:

• What are our performance strengths and weaknesses?

• What other strengths and weaknesses do we have?

• What strategies do we see as necessary to bridge this gap?

• What do we think are the organization's current goals, structure, and ways of operating?

• What are the emergent opportunities and threats bearing on the organization from various environmental sectors? (i.e.; from customer feedback, knowledge of present market, staff feedback);

• What are we doing to create these opportunities and manage threats? 

5. Consider your 'ideal' future
Before leadership can begin developing its future strategies, it engages in a general discussion focusing on questions to kickstart thinking; nothing is recorded yet.

This step reviews staff responses from earlier meetings, on their vision of the future, together with customers' future needs. It also includes results from all benchmarking research that's been conducted. To define the strategic direction and determine the best focus of effort for the organization, this process requires the leadership team to consider several key questions:

• What is the dream or vision that we want to contribute to the organization over the next 1-3 years?

• What are the key assumptions about external circumstances that will exist in this time frame and what is our best opportunity to provide a unique contribution, based on these assumed circumstances?

• How do we translate this dream into action?

• What action plans must we develop?

• How will we get the financial, human, and physical resources to implement these plans?

• What performance standards should be used to measure the quality of effort?

• Do we have the commitment of others upon whom we depend? Do partners share this vision and these performance standards? If not, how do we gain commitment?

• How will success/contribution to building stakeholder value be measured?

• What information should be monitored to alert the organization to external changes that require changes in vision?

The philosophy behind these questions is that no matter who you are or what roles you occupy in an organization, you can form a vision of what you want to be contributing over the next several years. This requires making correct assumptions about what the organization will be like, and about your potential for making unique contributions, over the next 2-3 years.

Leadership engagement in discussing these issues is essential to strategy development process because success depends on the understanding and commitment of everyone involved in making the vision a reality.

6. Develop the Key Strategies
The key strategies will aim to close the gap between the present situation and the 'ideal future'. Essentially, these strategies will translate the vision of what the organization is trying to become in the customer’s eyes into reality. It is the framework, derived from an understanding of the customer’s needs, that describes the goods and services the organization is offering, to satisfy those customer needs and expectations. Ultimately, all employees must be able to understand, accept, and adopt these strategies.

The development of strategies requires considerable brainstorming using various creative techniques, including affinity diagrams, innovation processes, and critical thinking skills. Discussions among the leadership team take time as ideas are thrown out, discussed, weighed, and evaluated. It is important that the leadership team not eliminate any ideas too quickly. Rather, it should combine all ideas into key strategies and allow the balance of this strategic planning process to assist in determining which strategies should be included in the short-term plan and which may be better suited to a longer-term plan.

7. Conduct a Risk Assessment
Assessing risk must be a part of looking at the organization’s ideal future. It includes conducting an analysis of what might prevent the organization from reaching each of the identified key strategies. This analysis includes identifying risks and creating mitigation plans to overcome them. Keep in mind that:

• Risk can be either the most paralyzing or the most empowering force.

• The situations having the greatest opportunity and high potential are probably also the ones with medium-to-high risks.

• These are the risks that are highly unlikely to survive the leap from Strategy Development to the Execution Plan, simply because risk becomes a paralyzer.

• Low risk strategies, which usually have low potential, are much more likely to be implemented. 

Become more comfortable with risk. This can be achieved by:

• Insisting on creative problem-solving that focuses on reducing risk without reducing opportunity.

• Put contingencies in place to ensure an 'out' in case the worst possible scenario comes true.

• Withhold spending in other areas to allow some needed security.

The risk assessment process itself includes:

• Analyzing strategies and determining risks of either implementing them or not implementing them. Use a cause and effect analysis, pros and cons, and/or driving and restraining force-field analysis for examining each risk.

• Analyzing each strategy in relation to its potential cost in dollars, materials, resources, and so on. Benchmark this analysis against expected benefits. This cost-benefit analysis helps determine strategies that can be completed in the short-term, longer-term and/or eliminated.

• Completing a SWOT analysis on those strategies that leadership determines to move forward with. For strengths and weaknesses, considerations include people, money, technology, and information resources. And for threats and opportunities, considerations include resources, information, competition, industry changes, and global issues.

• Identifying which strategies should stay in the strategic plan and which should be eliminated (and why).

• Identifying which strategies will be short-term (1-2 years) and longer-term strategies.

8. Create the Execution Plan
The execution planning process begins with gaining agreement to the objectives required to meet each strategy and the detailed action plan required to meet each objective. Then, adding performance measures to ensure that it is clear when each strategy and related objective has been met.

Unless the objectives identified in execution plan are translated into action plans, it is unlikely they will ever be reached. This execution plan will include:

• Who will do it?

• What will they do?

• When will they do it?

• What resources are required?

• What costs are required?

Developing a strategic plan takes discipline, foresight, and a lot of honesty. Regardless of preparation, challenges will be encountered along the way. Like most everything in life, taking the time to do it right will pay off.

This means having the right people involved, analyzing the business environment and setting meaningful priorities that focus on results and making sure that people contribute to the planning, and understand and commit to the strategies.