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Simply put, strategic planning determines where an organization
is going over the next year or more, how it's going
to get there and how it'll know if it got there or not.
Far more important than the strategic plan document,
is the planning process itself. There are a variety
of perspectives about strategic planning and a variety
of approaches used in the strategic planning processes.
Quite often,
an organization's strategic planners already know much
of what will go into a strategic plan (this is true
for business planning, too). However, development of
the strategic plan greatly helps to clarify the organization's
plans and ensure that key leaders are all "on the
same script". Far more important than the plan
document, is the planning process itself.
First,
a Point About For-Profit and Nonprofit Strategic Planning
- Major differences in how organizations carry
out the various steps and associated activities in the
strategic planning process are more a matter of the
size of the organization -- than its for-profit/nonprofit
status.
Small non-profit's
and small for-profits tend to conduct somewhat similar
planning activities that are different from those conducted
in large organizations. On the other hand, large non-profit's
and large for-profits tend to conduct somewhat similar
planning activities that are different from those conducted
in small organizations. (The focus of the planning activities
is often different between for-profits and non-profit's
Non-profit's tend to focus more on matters of board
development, fundraising and volunteer management. For-profits
tend to focus more on activities to maximize profit.)
Also, in addition to the size of the organization, differences
in how organizations carry out the planning activities
are more a matter of the nature of the participants
in the organization -- than its for-profit/nonprofit
status. For example, detail-oriented people may prefer
a linear, top-down, general-to-specific approach to
planning. On the other hand, rather artistic and highly
reflective people may favor of a highly divergent and
"organic" approach to planning.
Benefits
of Strategic Planning
Strategic planning serves
a variety of purposes in organization, including to:
1. Clearly define
the purpose of the organization and to establish realistic
goals and objectives consistent with that mission
in a defined time frame within the organization’s
capacity for implementation.
2. Communicate
those goals and objectives to the organization’s
constituents.
3. Develop a
sense of ownership of the plan.
4. Ensure the
most effective use is made of the organization’s
resources by focusing the resources on the key priorities.
5. Provide a
base from which progress can be measured and establish
a mechanism for informed change when needed.
6. Bring together
of everyone’s best and most reasoned efforts
have important value in building a consensus about
where an organization is going.
Other reasons
include that strategic planning:
7. Provides
clearer focus of organization, producing more efficiency
and effectiveness
8. Bridges staff
and board of directors (in the case of corporations)
9. Builds strong
teams in the board and the staff (in the case of corporations)
10. Provides
the glue that keeps the board together (in the case
of corporations)
11.Produces
great satisfaction among planners around a common
vision
12. Increases
productivity from increased efficiency and effectiveness
13. Solves major
problems
When Should
Strategic Planning Be Done? The scheduling
for the strategic planning process depends on the nature
and needs of the organization and the its immediate
external environment.
For example, planning
should be carried out frequently in an organization
whose products and services are in an industry that
is changing rapidly . In this situation, planning might
be carried out once or even twice a year and done in
a very comprehensive and detailed fashion (that is,
with attention to mission, vision, values, environmental
scan, issues, goals, strategies, objectives, responsibilities,
time lines, budgets, etc). On the other hand, if the
organization has been around for many years and is in
a fairly stable marketplace, then planning might be
carried out once a year and only certain parts of the
planning process, for example, action planning (objectives,
responsibilities, time lines, budgets, etc) are updated
each year. Consider the following guidelines:
1. Strategic planning
should be done when an organization is just getting
started. (The strategic plan is usually part of an overall
business plan, along with a marketing plan, financial
plan and operational/management plan.)
2. Strategic planning
should also be done in preparation for a new major venture,
for example, developing a new department, division,
major new product or line of products, etc.
3. Strategic planning
should also be conducted at least once a year in order
to be ready for the coming fiscal year (the financial
management of an organization is usually based on a
year-to-year, or fiscal year, basis). In this case,
strategic planning should be conducted in time to identify
the organizational goals to be achieved at least over
the coming fiscal year, resources needed to achieve
those goals, and funded needed to obtain the resources.
These funds are included in budget planning for the
coming fiscal year. However, not all phases of strategic
planning need be fully completed each year. The full
strategic planning process should be conducted at least
once every three years.
As noted above,
these activities should be conducted every year if the
organization is experiencing tremendous change.
4. Each year,
action plans should be updated.
5. Note that,
during implementation of the plan, the progress of the
implementation should be reviewed at least on a quarterly
basis by the board. Again, the frequency of review depends
on the extent of the rate of change in and around the
organization. Various Overviews of Strategic Planning
(basics, models, skills to have)NOTE: Although there
are separate sections listed below for many of the major
activities in strategic planning (for example, the sections
"Developing a Mission", "Developing a
Vision", etc.), this section "Various Overviews
of Strategic Planning" also includes information
about developing mission, etc.
When a
company embarks on a strategic planning effort, who
should do it? The strategic planning efforts
most likely to produce results are performed by the
companies themselves. Strategy formulation requires,
among other things, "intimate" knowledge of
several aspects of a particular business--knowledge
of one's company, knowledge of one's markets, knowledge
of customers, and more. Only the very rare consultant
possesses such intimate knowledge for any specific company.
Consequently, people within a given firm are the richest
source of persons who should be assigned to a strategic
planning effort. This answer, however, only partially
addresses the question and leaves the following question:
Who inside a given company should be responsible
for strategic planning? People with sufficient influence--by
position or persuasion--to ensure that the effort is
not a sideline exercise. While not a completely satisfactory
definition, strategy has been defined as "the
art of generals," the art of leaders. This would
suggest that a company's chief executive should be the
chief strategist, aided by senior management. But, particularly
for publicly owned companies traded on an exchange,
a chief executive commonly has his/her hands full taking
care of financial concerns, stakeholder demands and
organizational issues. A CEO's regular presence and
involvement are desired, but often not practical or
feasible. A way around CEO unavailability is for a strategic
planning team to be created--a team with the CEO's unqualified
backing. Prototypically, such teams are comprised of
senior management.
For companies
just starting their strategic planning efforts, the
level of time commitment in the first year should be
expected to be higher than for subsequent years. |
