Structured Strategic Planning Process - Notes from Experience   by Manny Chhahl (MSc., P.Eng(ON), Director East88 Canada Limited)

                                 definition :  The word strategy decends from the word strategem . From American Heritage here are the modern definitions.

  1. 1. The science and art of military command as applied to the overall planning and conduct of large-scale combat operations.
  2. 2. The science and art of using all the forces of a nation to execute approved plans as effectively as possible during peace or war.
In business, the meaning can be simplified to "plans and actions for achieving defined objectives of the organization".  One problem faced by organizations is to first define the strategic objectives.  In large public companies many board members are weak at determining the strategic objectives for the corporation.  They depend on the executive management for the inputs and adoption.  The executive management is also generally weak in matters of strategy, and often confuses tactics with strategy.  This problem stems from lack of education in this area and entire focus on the day to day operations of the organization.  Unfortunatly this is true for many large and well known organizations. Lets examine this subject in some detail.
 


strategy process
 
Strategic planning is a complex undertaking.  Many organizational facets are involved in an effective strategic palnning process.  Strategic planning is an ongoing effort, the outputs from this process must become drivers for efforts in the defined direction.
Finally, the strategy must impact the resource allocation for the organization.  Here are some notes from experience:
  1. Top management must drive and be involved in the strategic planning and strategy implementation process.
  2. Strategic planning process can not be delegated.  This means that the top level managment must be responsible for the results - with personal involvement throughout the process.
  3. Involve the entire organization.
  4. Strategic planning process should bring new insights and surface new ways of looking at the current situation.
  5. Outcomes of strategic palanning process must be communicated throughout the organization.
  6. Strategic planning process must come up with only a few strategic objectives (1-5).
  7. Strategic Planning outputs must be synchronized with the annual budgeting excercise.
  8. Objectives should be easy to explain.

Strategic Objectives  - (What should be achieved and by when (quantitative requirements)

More often than not, strategy efforts are triggered by doubts of survival of the organization, or an imminent shift in the market or technologies on the horizon.  In these cases the strategic objective may simply be to survive the next year.  
 
Sometimes there are leaders in the organizations that have already understood and zeroed in on these objectives and would like the organization to march in that direction. We know that is easier said than done.  Strategic objectives have to be bought in by the management and understood by all in order to succeed. 
 
In summary, strategic objectives are a set of statements describing outcomes and timeframe that the organization wishes to achieve. 
 
Sometimes the strategic knowledge is widely distributed in the organization, in this case the knowledge has to be crystalized and synthesized into strategic objectives.  This is generally a team based process where the senior management takes direction from the board, or it has to come up a set of strategic objectives itself.
 
Both scenarios call for special planning processes that involve all members of the organization who will implement the plan.  This team based process needs to be defined with the following in mind:
Ideally the strategic planning process should be an ongoing process where often only adjustments need to be made to the existing plans.

Strategy Development  (What method and tactics will be used)

This phase consists of defining the process and steps needed to achive the Strategic Objectives. Startegy development is a team activity that allows the organization to analyze the information about the current sitiation and understand the viewpoints of all departments in the organization.  This process allows for significant learning by the participants about the market, the organization, new technologies and processes because they are discused  by subject matter experts. 
 
Strategy development requires a number of suitable business analysis tools and techniques to quantify and synthesize the strategy such that it can be translated into concrete actions.
 
Strategy development consists of bringing old and new ideas about achieving the strategic objects through processes such as delphi, brainstroming, ISM, SME, surveys and other.  Once the list of proposd ideas has been collected, the senior management can clarify and rate these ideas and start to synhesize, and document links between the ideas with a tool such as ISM.  For clarification of complex issues, subject matter experts from within and outside the organization should be available during the sessions.  Small-group activites are recommended for developing a number of  alternate srtategies and out-of-the-box soultions.  Finally the team/s can create action plans based on the structured themes that emerge from the sessions.

Strategyy Implementation  (What actions are needed, how resources will be allocated)

It is not surprising that in many organizations the strategy is developed but never implemented. This 'dusty binder' phnomenon can happen due to many reasons some examples are:
 
Strategy implementation phase must coinside with the annual budgeting cycle for successful implementation, because if the strategy implementations do not arrive before the budgeting process it would be unlikely that re-budgeting would be done to include the strategic resource allocations.  Budgeting process is onerous enough to go through once.
 
Strategic planning synchronized with budgeting cycle

Strategy review

Strategic planning is an ongoing process, it never stops.  Review of the accomplishments and failures is an important step that helps to improve the strategic planning process every year.  Outputs from this process step must be included in the strategic objectives definition process.  Strategy review implies that there are metrics for the entire process. Outcome of each initiative has to be compared with the objectives to measure success and to improve the process incrementally.  
 
For culture objectives and other soft objecives, a number of instruments are available for use, however, do not change the instruments(survey, focus groups etc.) through the years because comparison then becomes meaningless. In the long run this would also render those instruments useless. Adding instruments does not pose a problem, but changing them is not a good practice.  Strategy review also forms a good forum to talk about the overall strategic planning process and thus should be included as a review item.

Notes on Implementing a good Strategic Planning Process

Role of the Planning Department

Planning department does everything except formulate the plan.  The plan is created by the top management.  The planning department must undertake the type of activites that are listed in the figure.  The planning department's role is that of facilitation and defining the process.  Consultants with experience in Strategic planning can be very beneficial to the organization.  This can also allow the planning staff to learn new tools and techniques.  External facilitators and strategic planning leaders can actually be more economical than having internal staff.  Internal staff should not facilitate the sessions as their rank in the organization would be a hinderance in the open and frank dialog that needs to be managed by the facilititors. Staff is would still be needed for ongoing documentation and CI activities and selecting external rsources. 

Subject Matter Experts

During the strategic planning process, there are times when deeper understanding of technical and non-technical subjects is required.  A list of subject matter experts should be available during planning sessions.  They can be 'on call' either in person or available on the video or speakerphone.  Rank should not be a consideration when selecting subject matter experts.  The person should be the best available mind on the subject.

Conclusions

Strategic Planning in its best form is set a team based activities involving exploration, analysis, data gathering, negotiation and synthesis.
To make the process successful the planning staff must learn and source the best tools and facilitators that the organizaion can afford.  Concept Star is one of the important tools for the many types of group activities that need to be facilitated and documented. It is important that the people responsible for the strategic planning process become familiar with as many different tools and techniques as possible, including facilitation skills. The following list consists of many of the tools and techniques that are applicable to strategic planning process.  The stratgic planning staff will need to select the most apropriate tools needed for their specific needs.

Tools and processes required in strategic planning

It is not within the scope of this paper to describe all of the tools that are needed for strategic planning porcess, but a short list is provided below for reference and further study.
 
Activity Network Diagram i.e. Gantt Chart
Affinity Diagram
Brain Storming
Break-even Charts
Cause and effect diagram
Control charts
Critical path charts
Data Models
Distribution charts
Elasticity of demand equations and plots
Elasticity of Supply equation and plots
Forcasting tools and models
Force Field Analysis
Flow Charts
Adoption formulae and plots
Geographic distribution charts
Histogram
Index derivation
Interrelationship Tables/Diagraph
Interpretive Structural modeling (ISM)
Matrix Chart
Nominal Group Techique(NGT)
percent overlay charts
Performance maps - scatter/line
Pie charts
Pressure charts (Economic)
Pugh Matrix
Rate of change plots
Radar Chart
Six Hats
Size trend charts
Supply and demand charts
Scenario Planning
SWOT
Time-Line charts - project planning etc.