Steps Towards Effective Strategic Planning

Strategic planning is an essential management function.  It brings together key organisational resources to achieve long term objectives.  Typically, strategic planning has three phases (1) information analysis, (2) strategy development and (3) strategy implementation. Here is a road map of key activities to help you through the strategic planning process.

Know your market & product         

·          Know your environment and key trends.  Understand your product, its attributes and benefits.

Reflect on your position     

·          What can you learn from recent economic events, competitors, suppliers and clients?

Develop a vision/mission   

·          Define what you want to achieve - market leader, segment leader, lowest price, best quality.

·          What will success look like? e.g. ROE, market share %.

Identify the critical success factors          

·          Identify the key factors that will help achieve the vision e.g. qualified staff, lower overheads.

·          For each Critical Success Factor, assign responsibilities and timeframes to people.

Know your key stakeholders         

·          Identify key people/groups you need to influence or could influence you.

Work on your strengths and weaknesses; consider all opportunities and threats (SWOT)        

·          Identifying strengths you can capitalise on and strengths your competitors don't have.

·          Your competitors may target your weaknesses.  Identify weaknesses and develop plans to overcome them...very quickly.

·          Identify and prioritize all opportunities available. 

·          Ensure you utilise your existing strategic resources.

·          Identify potential external threats and find ways to overcome or reduce their impact.

Understand your strategic resources      

·          Strategic resources can give you an edge.  Identify these resources and capitalise on them.

·          Use the seven "S's" to assist - Strategy, Structure, Systems, Staff, Skills, Style, Shared Values.

Prepare an action plan/project plan

·          A strategy can only be achieved through people, good planning and regular monitoring.

·          Ongoing communication of progress to stakeholders is critical.

·          Ensure that people are accountable for their role in the strategy - What, When, Who.

Consider risk management

·          Identify potential threats that could have an adverse or catastrophic impact.

·          Identify strategies to reduce these risks.

·          Perform sensitivity analysis on financials.

·          Assess impact of delays and other risks on strategy viability.

Prepare a financial plan

·          Define target financial returns (ROE, Sales, EBIT etc).

·          Identify major cost drivers & cost assumptions.

·          Establish pricing strategy & revenue assumptions.

·          Prepare P&L budget, capital budget & cashflow forecast.  Perform sensitivity analysis.

·          Establish appropriate Key Performance Indicators.

·          Ensure that financial benefits from strategic initiatives are driven into the budgets.

Develop a marketing plan  

·          Ensure marketing efforts are aligned to pricing strategy/assumptions in plan.

·          Identify marketing objectives & key success factors.

·          Define target customers/segments.

·          Position or reposition product in the market.

·          Implement appropriate promotional strategies.

Manage implementation

·          Project management is a key requirement to successful strategy implementation.

·          Identify milestones and track progress regularly.

·          Consider use of external experts to support strategic and change management initiatives.