At a Glance
- No human being can possibly predict the future, let alone control it
- It is important to plan for the future and how to do it right when your organisation encounters problems
- A good strategic plan strikes the right balance between what the organisation can do and what it wants to do
A business plan is an essential tool for any business, whether it is a new venture or an expansion. It plays an important role in enhancing internal operations and preparing for unforeseen challenges, ensuring that the business sails well even in the most difficult circumstances.
Beyond the business plan is strategic planning. Strategic planning maps out the course or direction your business will take in the coming year and the activities or initiatives needed to achieve those goals.
While a business plan primarily focuses on specific programmes, products, or services, a strategic plan includes the entire organisation or concentrates on critical functions such as departments or divisions.
When you embark on strategic planning, it forces you to consider the following questions:
- Why does our organisation exist?
- What are the primary objectives we want to achieve?
- What resources do we need to ensure a successful future?
By having answers to these questions, your organisation can develop a strategic plan that identifies key priorities, allocates human resources effectively, and aligns stakeholders to ensure the achievement of your goals.
Why should I bother with strategic planning?
You might think, “My business is doing well. Why bother with a strategic plan?” As the influential management thinker, Peter F. Drucker once said, “No human being can possibly predict the future, let alone control it”, it is, therefore, important to plan for the future and how to do it right if your organisation encounters problems.
Developing a strategic plan forces an organisation to think of the future. In the current volatile marketplace, simply reacting to the present is no longer enough to sustain growth. Strategic planning throws you into the deep end, formulating measures to manoeuvre market shifts, and changing consumer preferences. Instead of a reactive mindset, companies need to adopt a proactive approach to stay ahead of the curve.
Strategic planning is an effective tool for a business to address key issues at a macro level, as this approach prevents the short-term fixes that can result from a lack of strategic foresight. In addition, having a strategic plan in place improves business performance as it serves as a framework for setting performance metrics, with review processes in place to ensure that initiatives are contributing to predefined goals.
Indeed, studies and journals have reported that an organisation’s chances of success double when it has either a strategic plan or a business plan. Up to 71% of fast-growing companies have strategic plans, business plans, or similar long-term planning tools, according to a study of 65 fast growing family firms.
A.B.C.D.E
A good strategic plan creates the right balance between what the organisation can do and what it wants to do. It should also serve as a blueprint to guide decision making at lower levels – operational, tactical, individual.
If you have decided to start strategic planning or are looking to improve and update your existing strategic plan, the ABCDE of strategic planning model provides a framework for organising your thoughts, plans, and ideas, step-by-step.
Where are we now?
1. A for Assessment
This phase requires analytical thinking and must be specific. As you embark on this journey, be honest about the organisation’s weaknesses. What are some of the obvious problems? Could it be poor leadership, an unskilled workforce, outdated technology or traditional practices, insufficient resources, or poor product quality?
You need to examine both the internal and external dynamics of your organisation.
- Internal assessment: Examine the organisation’s assets, resources, people, work culture, existing systems, and suppliers. Recognising the weakness is the first step in addressing it.
- External assessment: Focus on the broader context in which the organisation operates, analysing factors such as market dynamics, social trends, emerging technologies, the regulatory environment, and current economic cycles.
2. B for Baseline
This stage puts everything about the organisation into a single context for compatibility and planning. Start by breaking down your organisational profile into distinct segments such as operating environment, business relationships, and key performance categories. From here, conduct a gap analysis based on the organisational profile and the challenges identified using a scenario-based approach. The baseline provides the foundation for informed decision-making and targeted action plans.
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Where do we want to be?
3. C for Components
The key components of your business strategy are your mission, values, and goals. These define your organisation’s purpose, direction, and desired outcomes and are complemented by an action plan that details specific objectives and initiatives.
Strategic planning is not a one-off exercise. Its progress should be evaluated from time to time. Review and measure performance to ensure it is at the desired level.
How will we do it?
4. D for Down to detail
At this point, it is time to develop an action plan detailing the steps that will be taken to achieve the objectives. This should be supported by an action plan, describing who does what and when it will and should be completed. Identify the resources required for success, including people, time, financial investment, and physical resources such as technology and facilities.
How are we doing?
5. E for Evaluate
Continuous feedback is essential. Use a balanced scorecard framework to help you organise and report on actionable components. The scorecard provides a big-picture perspective and considers the cause-and-effect relationships that affect your performance. As you manage the execution of your strategy, the scorecard provides focus and accountability.
One size doesn’t fit all
There is no perfect strategic planning process, or model, that can be used in the same way in every organisation. Each organisation needs to customise the best approach to suit the culture of its people, taking into consideration the current situation in and around the organisation, and the purpose of its planning.
Our strategic planning process adopts a scenario-based approach, incorporating outliers by diverging before converging. Working closely with our clients, our consultants look for anomalies and explore uncertainties to translate them into a workable strategy. We work with you to analyse areas where your business can improve its strategy across the value chain.
Are you looking for measurable results and sustainable growth through strategic planning?
