Strategic Planning Models
To achieve outstanding organizational results is hard enough most of the time. However, to sustain them in a world of increasing business uncertainty, global competition, rapid technological innovation, ever changing working processes and frequent movement in the economic, political, social and customer environments is even harder. We therefore need a strategic planning model or review framework to help guide us.
A strategic review framework and overall plan can help us to organize the resources of the enterprise and maximize overall performance in the short, medium and long term. A well-developed framework can apply in many ways but most usefully to help determine areas of existing strength in terms of strategy and also to identify potentially weaknesses and gaps.
Many years of progressive research have indicated that high organizational performance and success in terms of strategy are significantly based on five key factors. These are that:
- The organization’s overall financial strategy for maintaining and growing income or profit and controlling costs is both well designed and well deployed.
- A plan exists to get the most out of the tangible and intangible assets of the enterprise.
- A proper ‘checks and balances’ controls system is in place to ensure that organizational processes perform efficiently and effectively in a predictable manner.
- The organization has a well-developed people strategy and a range of on-going methods to maintain individual and group commitment to the goals of the enterprise.
- Clear systems and processes are in place to utilize the knowledge of the most relevant and useful people in the organization to deliver high levels of quality and service to external customers.
Let’s look at each of these in more detail.
FINANCE: This means that an on-going and dynamic planning and resourcing process is in place to maintain and grow income (and profitability) and effectively control organizational costs. The two sub categories of Finance which impact on Strategy are:
- Revenue Growth: The extent to which specific plans are in place to maintain prevailing organizational revenue and to initiate activities or projects that are capable of creating new income (and greater profitability).
- Cost Control: The extent to which the organization has clear, well designed and widely effective systems of cost reporting and control at every level in the enterprise.
ASSETS : This means that a comprehensive system is in place to maximize the utilization of existing or new assets (whether they are tangible or intangible). The two sub categories of Assets which impact on Strategy are:
- Purchasing: The extent to which the acquisition of any new assets are purchased according to appropriate needs and standards and a clear understanding exists about how they are to be deployed.
- Utilization: The extent to which time and effort is focused on making sure that people in the organization have specific plans and targets in place to optimize the utilization of all key assets in the enterprise.
CONTROLS: This means that well-designed and documented control methods and risk management processes are in place to ensure that the whole organization performs efficiently and effectively at all times. The two sub categories of Controls which impact on Strategy are::
- Documentation: The extent to which the key processes of the enterprise are effectively documented to ensure that they perform consistently and to a high standard.
- Risk management: The extent to which a system is in place to assess and manage organizational risk and to audit the processes and actions of people in the enterprise in order to ensure that areas for change can be quickly and efficiently identified and dealt with.
PEOPLE: This means that well-developed and constantly evolving plans are in place to ensure that people are appropriately organized, given adequate resources to do their job and feel motivated and committed to perform to the best of their ability. The two sub categories of People which impact on Strategy are:
- Organization: The extent to which people are appropriately organized and resourced to achieve the on-going goals of the enterprise, both individually and collectively.
- Involvement: The extent to which a range of plans and programs are in place to encourage individual and collective involvement in the key goals of the enterprise and to maximize people’s overall levels of motivation and commitment.
SYSTEMS: This means that sound systems and processes are in place to ensure that the enterprise can efficiently and effectively provide the quality and service expected by its customers. The two sub categories of Systems which impact on Strategy are:
- Quality/Customer focus: The extent to which the needs of customers, and their on-going quality requirements, are reflected in the design of the key delivery systems and processes of the whole enterprise.
- Knowledge/Data: The extent to which the enterprise actively appreciates the intrinsic knowledge of employees within the entire organization and is able to successfully protect and apply this knowledge appropriately.
A strategic planning model or review framework can help organizations of all sizes and types to think about whether they are on the right track. The five cluster categories described above (and the two sub-categories under each of these) are a useful model on which to draw.