All About Strategic Planning elenihan@ucc.ie

All About Strategic Planning Strategic planning determines where an organization is going over the next year or more How it is going to get there How it will know if it got there or not The focus of a strategic plan is usually on the entire organization The focus of a business plan is usually on a particular product, service or programme

Strategy Biographers of Napoleon Bonaparte talk about his ability to size up a situation with a single “stroke of the eye” or “glance”  Napoleon was so knowledgeable about his strategic situation the landscape the enemy available technology similar situations from the past That he could understand and respond quickly to ever-changing circumstances

Strategic Intuition To become a master strategist, you must develop strategic intuition Consider Warren Buffett’s masterful ability to see investment gems lying unnoticed in a huge pool of possibilities…. Or Steve Jobs’ ability to rightly intuit the features and qualities of technology that will bring magic to consumers Or Oprah Winfrey’s ability to discern what her viewers want to experience and learn about In the end, wisdom on this scale cannot be gained through analytical tools or logic… it is a matter of knowing without knowing how you know.

Strategic Management Process

Seven Principles of Masterful Planning 1. Be clear on purpose 2. Start with an accurate assessment of today 3. Create a shared vision of success 4. Identify your critical successful factors and barriers 5. Define the drivers: your strategies and priorities 6. Monitor and report results 7. Have rewards and consequences to build accountability

Five Good Reasons for a Plan To set direction and priorities To get everyone on the same page To simplify decision-making To drive alignment To communicate the message

Perspectives, Models and Approaches There are a variety of perspectives, models and approaches used in strategic planning The way that a strategic plan is developed depends on the nature of the organization's leadership On the culture of the organization On the complexity of the organization's environment On the size of the organization On the expertise of the planners

Strategic Planning Models There are a variety of strategic planning models Goals-based Issues-based Organic Scenario (some would assert that scenario planning is more of a technique than model) etc

Goals-based Goals-based planning is probably the most common and starts with focus on the organization's mission (and vision and/or values) Goals to work toward the mission Strategies to achieve the goals Action planning who will do what and by when

Issues-based Issues-based strategic planning often starts by examining: Issues facing the organization Strategies to address those issues Action plans

Organic Organic strategic planning might start by articulating the organization's vision and values Then action plans to achieve the vision while adhering to those values Some planners prefer a particular approach to planning, e.g., appreciative inquiry

Scope Some plans are scoped to one year Many to three years Some to five to ten years into the future Some plans include only top-level information and no action plans Some plans are five to eight pages long, while others can be considerably longer.

Plan or Process 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 strategic plan document, is the strategic planning process itself

Strategic v Business Panning The two phrases “strategic planning” and “business planning” are used interchangeably, much more than ever It is better to see the phrases as different than to generalize them as the same.

Strategic Planning Strategic Planning Should Be Organisation-Wide Strategic planning is best viewed as clarifying the overall purpose and priorities of the organisation There are many different ways to do strategic planning, and the contents of the plan vary, depending on the purpose of the planning The focus of the planning should primarily be organisation-wide.

Business Planning Business Planning Should Be Product- or Service-Specific Business planning is best viewed as planning for a specific product or service The customers and clients for a particular product or service might be very different than for another product or service You would not advertise or sell racing cars the same way you would advertise or sell minivans Each needs a different business plan

Many Approaches to Strategic Planning There is no one perfect strategic planning model for each organization The approach, or model, for strategic planning depends on: The purpose of strategic planning - if planning is meant to add a new product or programme, then the process will probably include market research to verify the need, markets, pricing, etc., for the new product or service. . Whether the organization has done planning before, for example, if the organization has not done planning before, then extensive attention to mission, vision and values statements is probably warranted.

The approach, or model, for strategic planning depends on: The culture of the organization Some cultures might prefer a "linear" approach from mission, vision, values, quantified goals, strategies, action plans, financial analysis, etc. Other cultures might prefer a more organic and unfolding approach, such as telling stories

The approach, or model, for strategic planning depends on: Whether the environment of the organisation is changing rapidly If the environment is changing rapidly, then planning should probably be a shorter term than for an organisation whose environment is fairly stable. Whether the organisation has had success in planning in the past, for example, if an organisation has done planning in the past, but planners do not believe it was successful, then the organisation should perhaps undertake a simple, short-term planning process for now

Vision-Based or Goals-Based Strategic Planning This very basic process is typically followed by organisations that are extremely small, busy, and have not done much strategic planning before 1. Identify the purpose (mission statement) - This is the statement that describes why the organisation exists, i.e., its basic purpose The statement should describe what client needs are intended to be met and with what services The top-level management should develop and agree on the mission statement The statements will change somewhat over the years.

Vision-Based or Goals-Based Strategic Planning 2. Establish a vision statement - This statement describes the future state of your customers and your organisation at some point in the future 3. Select the goals your organisation must reach if it is to effectively work toward your mission and achieve your vision Goals are general statements about what is needed to accomplish to meet the purpose, or mission, and address major issues facing the organisation The vision and goals might be long-range - 3-5 years

Vision-Based or Goals-Based Strategic Planning 4. Identify specific approaches (or strategies) that must be implemented to reach each goal The strategies are often what change the most as the organisation eventually conducts more robust strategic planning More closely examining the external and internal environments of the organisation Small organizations might not refer to strategies and, instead, go to the next step about action planning for each goal

Vision-Based or Goals-Based Strategic Planning 5. Identify specific action plans to implement each strategy (or objectives to achieve each goal) These are the specific activities or objectives that each major function (for example, department, etc.) must undertake to ensure it is effectively implementing each strategy (or achieving each goal) Objectives should be clearly worded to the extent that it can be assessed if the objectives have been met or not Ideally, the top management develops specific committees that each have a work plan, or set of objectives

Vision-Based or Goals-Based Strategic Planning 5. Compile the mission, vision, strategies and action plans into a Strategic Plan document Ensure that top management approves the Plan 6. Monitor implementation of the Plan and update the Plan as Needed Planners regularly reflect on the extent to which the goals are being met and whether action plans are being implemented An important indicator of success of the firm is positive feedback from its customers

Issues-Based Planning Organisations that have: very limited resources several current, major issues little success with achieving future-oriented goals very little buy-in to strategic planning Might use the issues-based approach to planning instead of the goals-based approach.

Issues-Based Planning 1. Identify the current, major issues facing the organization Write down 3-5 major issues. 2. Brainstorm ideas to address each major issue It's not important that the ideas be the perfect ideas -- it's important for now to identify at least a reasonable approach to address each issue. The issues and ideas are usually short-range, for example, for 9-12 months in to the future.

Issues-Based Planning 3. Compile the issues and ideas into a Strategic Plan document Ensure that top management approves the Plan. 4. Monitor implementation of the Plan and update the Plan as Needed Planners regularly reflect on the extent to which the goals are being met and whether action plans are being implemented Also an important indicator here of success of the organization is positive feedback from the organization’s customers

Alignment Model The overall purpose of the model is to ensure strong alignment among the organisation’s mission and its resources to effectively operate the organization This model is useful for organisations that need to fine-tune strategies or find out why they are not working An organization might also choose this model if it is experiencing a large number of issues around internal efficiencies.

Alignment Model Overall steps include: 1. The planning group outlines the organisation’s mission, programmes, resources, and needed support. 2. Identify what’s working well and what needs adjustment. 3. Identify how these adjustments should be made. 4. Include the adjustments as strategies in the strategic plan.

Scenario Planning This approach might be used in conjunction with other models to ensure planners truly undertake strategic thinking The model may be useful, particularly in identifying strategic issues and goals. 1. Select several external forces and imagine related changes which might influence the organization Change in regulations Demographic changes, etc. Scanning the media for key headlines often suggests potential changes that might effect the organisation.

Scenario Planning 2. For each change in a force, discuss three different future organisational scenarios Best case Worst case OK/reasonable case - which might arise with the organisation as a result of each change Reviewing the worst-case scenario often provokes strong motivation to change the organisation. 3. Suggest what the organization might do, or potential strategies, in each of the three scenarios to respond to each change

Scenario Planning 4. Planners soon detect common considerations or strategies that must be addressed to respond to possible external changes 5. Select the most likely external changes to effect the organization, e.g., over the next three to five years, and identify the most reasonable strategies the organisation can undertake to respond to the change

Organic (or Self-Organising) Planning Traditional strategic planning processes are sometimes considered “mechanistic” or “linear,” They are rather general-to-specific or cause-and-effect in nature The processes often begin by conducting a broad assessment of the external and internal environments of the organization, conducting a strategic analysis (“SWOT” analysis), narrowing down to identifying and prioritizing issues, and then developing specific strategies to address the specific issues.

Organic (or Self-Organising) Planning Another view of planning is similar to the development of an organism, i.e., an “organic,” self-organising process Certain cultures, e.g., Native American Indians, might prefer unfolding and naturalistic “organic” planning processes more than the traditional mechanistic, linear processes Self-organising requires continual reference to common values, dialoguing around these values, and continued shared reflection around the systems current processes.

Organic (or Self-Organising) Planning General steps include: 1. Clarify and articulate the organization’s cultural values Use dialogue and story-boarding techniques 2. Articulate the group’s vision for the organisation 3. On an on-going basis, e.g., once every quarter, dialogue about what processes are needed to arrive at the vision and what the group is going to do now about those processes

Organic (or Self-Organising) Planning 4. Continually consider that this type of naturalistic planning is never really “over with,” and that, rather, the group needs to learn to conduct its own values clarification, dialogue/reflection, and process updates 5. Be very, very patient 6. Focus on learning and less on method 7. Reflect on how the organisation will portray its strategic plans to stakeholders, etc., who often expect the “mechanistic, linear” plan formats

Real-Time Planning Many experts assert that conventional strategic planning has become rather out-dated because the world is changing much more rapidly than before, to the extent that conventional (especially long-range) plans quickly become obsolete These experts might assert that planning be done continuously, or in "real time"

Real-Time Planning The process might look like the following: 1. Initial discussions to clarify mission, vision and values Ideally, these are documented, such that changes are easily recognised and communicated. 2. Discussions in, for example, Board and staff meeting that clarify current, major priorities It is important that these discussions be based not only on people's current opinions, but that they also be based, as much as possible, on verified impressions from accurate data, from: from environmental scans market research brainstorming or product/program evaluations

Real-Time Planning It is important that the updated/changed priorities also be documented. A challenge in this type of planning is that many investors and funders expect to see "stable" documented strategic plans. Many might infer that regular changes are the result of poor planning, rather than from a new type of strategic planning