Strategic planning

Strategic planning suggests ways to identify and to move toward desired future states. It consists of the process of developing and implementing plans to reach goals and objectives. Strategic planning takes place primarily in military situations (see military strategy), in business activities and in government. Within business, strategic planning may provide overall direction (called strategic management) to a company or give specific direction in such area as:

financial strategies
human resource/organizational development strategies
information technology deployments
marketing strategies

But strategic planning can occur in a wide variety of activities from election campaigns to athletic competitions and in strategic games such as chess.

This article looks at strategic planning in a generic way so its content can apply to any of these areas.

A good strategy will:

have the capability to obtain the desired objective
fit well both with the external environment and with an organization's resources and core competencies - it must appear feasible and appropriate
have the capability of providing an organization with a sustainable competitive advantage - ideally through uniqueness and sustainability
prove dynamic, flexible, and able to adapt to changing situations
suffice on its own - i.e. provide value without the need for cross-subsidization

Contents

1 Methodologies

2 Goals and objectives

3 Mission statements and vision statements

4 Why strategic plans fail

5 See also

6 Finding related topics

7 Readings

8 For more info

Methodologies

Most strategic planning methodologies depend on a three-step process (sometimes called the STP process):

Situation - evaluation of the current situation and how this current situation came to pass
Target - definition of goals and/or objectives
Path - mapping a possible rout to the defined goals and/or objectives

In general terms, strategic planning can proceed incrementally or revolutionarily.

Strategy as logical incremental steps
- formal approach
- 4 steps:
  - analysis including environmental scanning, internal resource assessment, external assessment, intelligence-gathering, an assessment of the current situation
    - SWOT (Strengths, Weaknesses, Opportunities, Threats) - isolating those aspects of the environment that seem particularly important
  - strategy-development, including determining vision, mission, objectives, and strategem-generation
  - strategic plan including strategy specification and resource allocation
    - GTSM (Goals, Targets, Strategies, Measures) - the setting of goals, targets, and measurable objectives
  - implementation, monitoring, adjustment, and control
Strategy as revolution
- identify the unquestioned beliefs in your industry and challenge them - Look for opportunities to re-write the rules of the industry
- look for major discontinuities in technology, lifestyle, habits, and geopolitics, and embrace the change wholeheartedly - Do not waste time making small incremental adjustments - Be prepared to create a completely new business model at any time
- more a mind-set than a formal technique
- not rule or ritual oriented, not reductionist, not reactive, not autocratic

A distinction is frequently made between strategy and tactics. Strategy is planning how to get where you want to go. Tactics is the implementation of these plans. It deals with specific actions by particular people. Some theorists claim that it is a mistake to separate strategy and tactics. Constantinos Markides describes strategy formation and implementation (tactics) as an on-going, never-ending, integrated process requiring continuous reassessment and reformation. Strategic planning is both planned and emergent, dynamic, and interactive. J. Moncrieff also stresses strategy dynamics. He recognized that strategy is partially deliberate and partially unplanned. The unplanned element comes from two sources : “emergent strategies” (result from the emergence of opportunities and threats in the environment) and “Strategies in action” (ad hoc actions by many people from all parts of the organization).

Strategic plans typically look 5+ years into the future. They are distinguished from tactical plans [sometimes referred to as functional plans] which look 2 - 4 years into the future and from operational plans [such as budgets] which are annual.

Henry Mintzberg could not identify one process that could be called strategic planning. Instead he concludes that there are five types of strategies. They are:

Strategy as plan
Strategy as ploy
Strategy as pattern
Strategy as position
Strategy as perspective

Goals and objectives

Any differences between your current situation and the future aspirational state can be thought of as a deficiency or gap. Objectives and goals are how we eliminate this gap. Some writers distinguish between goals (inexactly formulated aims that lack specificity) and objectives (aims formulated exactly and quantitatively as to time-frames and magnitude of effect). For example, a gambler might have the ambiguous goal, "I want to get lucky tonight". Converting this into an objective, it becomes "I want to make $100 at the blackjack table by 8 o'clock tonight." Not all authors make this distinction, preferring to use the two terms interchangeably. When goals are used in the financial arena, they are often called targets.

People typically have several goals at the same time. "Goal congruency" refers to how well the goals combine with each other. Is one goal incompatible with another? Do they fit together to form a unified strategy. Goal hierarchy is the nesting of one goal into another. It is best to have short-term goals, medium term goals, and long-term goals. The short-term goals are fairly easy to attain, just slightly above your reach. At the other extreme, long-term goals are very difficult, almost impossible. Goal sequencing refers to using one goal as a stepping-stone to the next. You start by attaining the easy short-term goals, them step up to the medium, then long-term goals. Goal sequencing can create a "goal stairway".

In an organizational setting, goals must be coordinated so that they do not conflict. The goals of one part of the organization must be compatible with other parts of the organization. Individuals within organizations will typically have personal goals. Although individuals often have goals that oppose organizational goals, such as having as high a salary as possible, if personal goals are too incompatible with organizational goals the result will be limited progress towards the organizational goals.

Mission statements and vision statements

Goals and objectives are often summarized into a mission statement or vision statement. A vision statement describes in graphic terms where you want to be in the future. It describes how you see events unfolding in 10 or 20 years if everything goes exactly as you hope. A mission statement is similar except it is more immediate. It details what you will do today to attain your goal, purpose, or mission. Ford's brief but powerful slogan, "Quality is Job 1" is a mission statement. However most mission statements are more detailed often describing what will be done, by whom, for whom, and why. For example: "Our mission is to meet or exceed the demands of business computer users by offering a level of service that surpasses anything available in the Tritown area while providing our employees with a stimulating environment in which to grow and providing our shareholders with a return that is above the industry average."

Vision statements tend to be more graphic and abstract than mission statements (that tend more to the concrete and the proscriptive). A vision statement "paints a picture" of ideal future outcomes. Whereas the mission statement provides immediate guidance, a vision statement inspires. An athlete might have a vision of walking up the steps to a podium where she accepts a gold medal. Her vision statement would describe this event. In the 1980s, Bill Gates had a simple vision: "A personal computer on every desk, and every computer running Microsoft software." Variations of this vision have inspired and guided him throughout his career (anti-monopoly law suit not withstanding). An effective vision statement is:

clear and unambiguous
paints a vivid picture
describes the future
is memorable and engaging
involves aspirations that are realistic
is aligned with the organizations values and culture
is driven by customer needs (if it is for a business organization)

To be really effective, a vision statement must be assimilated into the organizations culture. It is the leader's responsibility to communicate the vision regularly, create narratives that illustrate the vision, act as a role-model by embodying the vision, create short-term objectives that are compatible with the vision, and encourage others to craft their own personal vision compatible with the organization's overall vision.

Why strategic plans fail

In general, strategic plans can fail for two types of reasons: inappropriate strategy, and poor implementation.

Inappropriate strategies may arise due to:

inaccurate intelligence gathering
failure to understand the true nature of the problem
the strategy is incapable of obtaining the desired objective
the strategy is a poor fit between the external environment and an organizations' resources
the strategy is not feasible

A strategy can be implemented poorly due to:

over-estimation of resources and abilities
failure to coordinate
ineffective attempt to gain the support of others
under-estimation of time, personnel, or financial requirements
failure to follow the plan

Finding related topics

Readings

American Society of Training and Development. (1990, October). "Quick response beats long-term planning." Training and Development Journal, 44(10), 9-10. �

Carter, P. (1998). "Cultural Change. A Framework for Getting Started." Community College Journal of Research and Practice, 22(4), 435-449. (EJ 578 000)

Covey, S.R. (1990). Principle-centered leadership. New York: Simon & Schuster.

Frank, D., & Rocks, W. (1996). "Exploiting instability: A model for managing organizational change." In: The Olympics of Leadership: Overcoming Obstacles, Balancing Skills, Taking Risks. Proceedings of the Annual International Conference of the National Community College Chair Academy. (ED 394 564)

Gould, E.O., & Caldwell, P.F. (1998). "Tomorrow's essentials in management: Decentralization, collaboration, and ownership." Community College Journal of Research and Practice, 22(4), 349-362. (EJ 577 995)

Lewin, K. (1951). Field Theory in Social Science. New York: Harper and Row.

Lorenzo, A.L. (1993). "Managing uncertainty: Thinking and planning strategically." New Directions for Community Colleges, 84, 47-60. (ED 367 403)

McClenney, B.N. (1982). "Organization development: A president's view." New Directions for Community Colleges, 37, 107-113. (ED 214 594)

Mohammadi, J. (1997, November). Strategic planning process resource manual. Hartford, Connecticut: Capital Community-Technical College. (ED 431 442)

Morrison, J.L., Renfro, W.L., & Boucher, W.I. (1984) "Futures research and the strategic planning process: Implications for higher education." ASHE-ERIC Higher Education Research Report Number 9. (ED 259 692)

Pettigrew, A.M., & Whipp, R. (1991). Managing change for competitive success. Oxford: Blackwell.

Spencer, L.. (1989). Winning Through Participation. Dubuque, Iowa: Kendal/ Hunt Publishing

Thor, L.M. (1993). The human side of quality: Employee care and empowerment. Tempe, Arizona: Rio Salado Community College. (ED 354 044)

Vaill, P.B. (1989). Managing as a performing art: New ideas for a world of chaotic change. San Francisco: Jossey-Bass.