Strategic planning is viewed by some as an absolute waste of time and energy and by others as an absolutely critical part of managing a business.

value in strategic planning

Figure 1 – Process Value vs Plan Value

 

The object of this post is not to resolve that dispute but toprovide some insights for those who wish to ensure their strategicplanning efforts deliver value to their organization. There are fourmain points to be made in this post:

  • The Value is in the Process
  • Fit the Process to Your Company
  • The Process is Iterative, not Linear
  • It is a Human Process

The Value is in the Process

 

sources of value in strategic planning

Figure 2 – Sources of Value

 

The first thing to know about strategic planning is that itsgreatest value is to be found in the process, not in the plan. That’sright; most of the value of strategic planning stems from the thinking,discussion, debate, analyses, insights, common understandings andcommitments to action made during the process, not their documentationin the form of a written plan. This is not to say that there is novalue in the plan itself but the value of the plan is far less thanthat obtained from the process. Graphically, this can be illustrated asshown in Figure 1. Another way of illustrating the disproportionatevalue from the process and the plan is a simple pie chart (see Figure2).

Fit the Process to Your Company

 

PEST structure

Figure 3 – PEST Analysis

 

The next thing to know is that one of the biggest mistakes you canmake is to assume there is one right way to do strategic planning andthat your company should do it that way.

linear process

Figure 4 – Linear Process

 

To plan – strategically or otherwise – is to do two things: (1)specify a set of desired outcomes and (2) identify the actions thatwill lead to them. What it takes to accomplish this twofold aim varieswith the type of business, the people involved, their values, theinformation and data available or obtainable, time pressures and manyother considerations. To be sure, there are some elements of strategicplanning that many people would agree should be present in all cases(e.g., a scan of the environment, mission and vision statements,objectives, strategies, action plans, etc); however, the emphasis giveneach will vary. For example, a non-profit company is likely to placemore importance on mission than a for-profit company. Some additionalvariations follow.

A PEST analysis (see Figure 3) involves an examination of thepolitical, economic, social and technological aspects of a company’senvironment. In the course of performing a PEST analysis, a high-techfirm is likely to pay more attention to the technological environmentthan a grocery wholesaler. And a defense contractor is likely to paymore attention to the political segment of the environment than a largeclothing retailer. The strategic planning process can also vary interms of sequencing. Some argue that a SWOT analysis (Strengths,Weaknesses, Opportunities, Threats) should be performed afterobjectives have been established because the SWOT should focus on andapply to those objectives; others argue that a SWOT analysis should beperformed in relation to the company, not its objectives and thus aSWOT analysis can and should be performed before any objectiveshave been established and serve as a basis for establishing thoseobjectives. To reiterate the key point being made here: You should fitthe strategic planning process to your company and its requirementsinstead of picking up an already-defined strategic planning process andtrying to force your company into that mold.

The Process is Iterative, not Linear

Most people who have any experience with strategic planning and manyauthorities will agree that the process is iterative, not linear. Thereis a certain amount of “bouncing around” from issue to issue and thereis interaction between the various stages so that each affects theother. Thus, later stages can “feed back” and lead to revisions inearlier stages and early work clearly carries implications for laterstages, which is to say it “feeds forward.” Yet, despite itsnon-linearity, the strategic planning process is often depicted in aremarkably linear and sequential manner (see Figure 4).

Some attempt to get around this linear depiction by illustrating theprocess in a cyclical manner (see Figure 5 below). Yet, even a cyclicalmodel is linear in its own way. Neither a linear or cyclical modelreally gets at the truly interactive and interdependent nature of thestages of strategic planning. On my part, I prefer a model like thatshown in Figure 6. It, or a model like it, makes clear that there areoptions for moving in all directions from any one element to any other.That reflects reality.

strategic planning process as a cycle

Figure 5 – A Cyclical View

interactive strategic planning cycle

Figure 6 – An Interactive View

 

Whatever model you choose to use, keep in mind that it will shapeyour thinking and your approach so choose it and use it carefully. Thisis especially important in light of the requirement to fit the processto your company instead of the other way around. So find one that seemsreasonable and then adapt it to fit your company.

Strategic Planning is a Human Process

The last point to be made in this post is an obvious one: thestrategic planning process is carried out by people (see Figure 7).There are no software packages that will decide upon a mission,interpret the implications of a complex business environment, setobjectives, formulate a strategy or implement it. Consequently, anotherobvious point is that you need to involve the right people in theprocess and you need to make certain the process accommodates humanbeings.

people

Figure 7 – People Do the Planning

 

Here are some factors to consider:

  • Involving key stakeholders
  • Bringing to bear a variety of viewpoints, especially the process perspective
  • Ensuring adequate representation of functional and operational areas
  • Legitimizing honest debate and disagreement
  • Keeping the process open to skepticism, criticism and suggestions for improvement
  • Getting your best thinkers involved, regardless of their technical specialty
  • Including the decision-makers in all stages of the process

Finally, remember the age-old advice derived from centuries ofmilitary planning and operations: “No plan ever survives first contactwith the enemy.” You must be alert to and willing and able to adjustand adapt your strategy and tactics to the circumstances you encounter,not those you assumed or hoped would exist. Strategy, then, is alwaysan emergent phenomenon and strategic planning is really nothing morethan a process for thinking through and getting clear about the resultsyou’re after and how you intend realizing them. All are subject tochange.

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