Strategic planning enables businesses and leaders to have clear objectives and formulate a plan to achieve them. Companies who undertake strategic planning have a better understanding of where the industry currently stands and what changes it can implement to reach its goals.
At the outset, the management or leadership committee (or organisation management) need to devise a plan for strategic planning. The program should identify who will be involved and include a schedule of dates for critical events. Strategic planning requires the involvement of a lot of people, and therefore there is a need for coordination. Developing and the communicating a schedule of dates upon which essential planning events occur is necessary to get people on board. Some thought should be given to obtaining the services of an independent facilitator, preferably with experience in strategic planning. Feedback from customers is an essential input into the strategic planning process. Valuable information can be learned about the organisation’s programs, services and events.
The Strategic Planning Process for leaders
Companies use strategy models to improve operations and meet their goals. Different models can be used. Companies will use these but adjust them for their own needs. I’m going to look at three models used, see the overviews taken from management help.
Organic Strategic Planning
The conventional model is considered by some leaders to be too confining and linear. They believe that approach to planning too often produces a long sequence of orderly activities to do as if organisations will remain static and predictable while all of those activities are underway. Other people believe that organisations are robust and dynamic systems that are always changing, so a plan produced from conventional planning might quickly become obsolete. That is true, primarily if preparation is meant to achieve a very long-term vision for many people, for example, for a community or even generations of people. The organic model is based on the premise that everyone working together toward the vision best achieves the long-term vision, but with each person regularly doing whatever actions that he or she periodically decides to do toward that vision.
Issues-Based Strategic Planning and Leadership
This model works best for organisations that have insufficient resources, several current and significant issues to address, little success in achieving ambitious goals, and minimal buy-in to strategic planning. Using the conventional model of a strategic plan for these organisations is a bit like focusing on the vision of running a marathon and on deciding the detailed route and milestones — while concurrently having heart problems, severe feet and no running clothes.
At BRITEthink, we think out of the two models above, the most apparent model and one that is probably used in every organisation are goal-based models as it can be simplistic and the goals can be very easily recognised and decided. Where issue-based and Organic strategies can be more intensive models to use. Saying this though Each one is used to organisations and where they would like to progress to whether in the short term (where goal-based modelling can be used) to more long-term(where issue-based and Organic modelling may be best suited).
Many Internal and external elements can impact the leadership of strategic planning in business. They can alter or stop planning altogether depending on their impact on the plan.
Here are some internal factors that the leadership needs to be aware of:
• Financial resources like funding, investment opportunities and sources of income.
• Physical resources like company’s location, equipment, and facilities
• Human resources like employees, target audiences, and volunteers
• Access to natural resources, patents, copyrights, and trademarks
• Current processes like employee programs, software systems, and department hierarchies
External factors for the leadership team to think about:
• Markets (customers): such as who the customers are and what they believe are critical to capturing market share. Understanding the needs and preferences of the markets is needed in providing something that will have a demand.
• Competition: Knowing who else is competing and how they are strategically poised is also key to success. Technology: Technological trajectories are also highly relevant to success. Does the manufacturing process of the product have new technologies which are more efficient? Has a disruptive technology filled the need that was currently being filled?
• Supplier markets: Suppliers have great power as they control the necessary inputs to an organisation’s operational process. Labour markets: Acquiring key talent and satisfying employees (relative to the competition) is critical to success. This requires an understanding of unions and labour laws in regions of operation.
• The economy: Economic recessions and booms can change spending habits drastically, though not always as one might expect. While most industries suffer during the recession, some industries thrive. Iessentialrtant to know which economic factors are opportunities and which are threats.
The regulatory environment: Environmental regulations, import/export tariffs, corporate taxes, and other regulatory concerns can poise high costs on an organisation.
Strategy and Risk Management
Risks to planning cause business to include Risk Management within their planning, this can ensure they accommodate such problems so if they do occur, then their plans can continue to take place. With internal factors, you can control many of them. Some factors, such as your business’s reputation, image and creditworthiness, are a result of the way you run your business. Other factors, such as your organisation’s management structure and staffing. Changing internal factors usually involves some indirect costs, such as lost productivity while new employees are trained, some direct costs, such as a penalty for terminating a lease before it expires.
External factors can sometimes be out of the business control. Lending conditions in the banking market. You may require extra money to get a plan up and running but of interest rates are too high the cost could change over the time of planning. Market conditions obviously impact upon planning for business, business is not going to risk entering new markets if they know of any problems.
There are numerous ways companies and the leadership team will position itself to outperform other. A few examples could be, I have looked at examples of this which are more private business compared to the public sector. These include:
Cost Control – Companies that control their costs can position themselves better as Wise control of business costs will help improve profitability, grow during good times, and better survive the bad times
Marker Leadership – Market leadership is usually understood regarding the position of a given company within an industry or market. It could be measured by volume of sales or share value. An example could be Coca-Cola being a Market leader as its sells more coke than Pepsi.
Technology – Private companies and the leaders who use more or the most up to date technology can position them self better in the marketplace; Technology can provide its business with more effective and efficient ways of producing goods. It can give crucial market data to enable companies to analyse and target their customers.
Global Issues for Leadership when Strategic Planning
The global issues for most leadership teams are one of the most significant external factors that affect a company and will impact on their strategic plan. We are in a world where many political and economic issues are now changing the public services in the UK. and across the world.
The UK government’s trade policy can affect your business by making it easier or more challenging to trade across international borders. With Brexit, trade with EU in the future could change dramatically. Trade policy changes may and can include the imposition of import tariffs, quotas on imports and exports of certain goods, and subsidies for local producers to support them against international competition. Governments often enter into bilateral trade agreements with other countries, with the aim of reducing tariffs and barriers to business and establishing a free trade area or common market. This can be helpful to some companies, but can also lead to increased competition from abroad. Barriers may also be raised in the form of trade sanctions or an embargo against another country. Planning for the unknown makes good strategic as well as financial sense, where economic indicators alone are no longer sufficient to predict future market trends. ‘Expect the unexpected’ is now a vital part of the strategy of all organisations where the more significant openness of markets, capital flows and movements of people bring with them risks as well as benefits.
Contingency Planning in Strategy and Leadership
Most companies and the leadership team within them will have a contingency plan which will detail how it reacts and responds to environmental factors, is essential to ensure business continues to survive and get through a crisis or disruptive event. This is a plan that would be used for planning for the future and present date occurrences. Disasters and serious incidents such as flooding, fire, or the death of a key employee. These are all environmental effects that without planning for could bring down the business.
You need to consider three types of risk when making your contingency plans:
A major disaster that immediately prevents regular business.
A gradually worsening situation that makes it difficult to operate normally.
A series of small events happening simultaneously.
As a manager or leader, within the public sector. It is important that I manage and develop each risk in order of probability and terms of the severity of the impact it will have on your business. This will help you assess your individual business’s needs: Decide who will be affected in each eventuality and how. List all the people and organisations that you will need to contact in the event of a severe incident – e.g. your staff, your customers, your bank, your insurers and your suppliers. Your list should contain relevant contact details wherever possible.
Your contingency plan will need to cover several stages – what will happen in the immediate aftermath of a severe incident, how your business will continue and how it will get back to full strength.
Your plan should set out the order in which business functions will be resumed and who will be responsible for doing what.You may need to make more than one contingency plan to cover different risks. For example, you might need a specific recovery plan for disruptions to IT and telephony.
Plans should contain up-to-date details of anyone who will need to be contacted if a serious incident happens, as well as details of plumbers, electricians, etc. You may also want to nominate someone as a spokesperson or keep the details of a PR company in case your business is caught up in an incident that attracts media attention.
Testing your contingency plans.