Without an effective strategic plan, you are heading nowhere

The strategic plan is a document prepared by the internal key stakeholders of an organization that communicates the long-term vision, mission, priorities, goals and aspirations, and the strategies, actions, resources, and time horizon necessary to achieve the goals so that the organization can move to the desired future state. The internal key stakeholders involved in strategic planning include the owners, directors, senior management, managers, and staff.

Why engage in strategic planning?

Strategic planning is important for an organization because it shows the strategic direction and the purpose for its existence and the plan to achieve the purpose.

The specific reasons for engaging in the strategic plan include the following among others;

1. Provides clarity, strategic direction, and focus for the benefit of stakeholders;
2. Specifies priority areas, goals, actions, resources, and time horizon to guide staff in execution;
3. Promotes ownership of the strategy because everyone participates in its formulation;
4. It promotes accountability at all levels;
5. It promotes the open exchange of ideas by the stakeholders;
6. It is a mechanism for communicating what has to be done to achieve business sustainability in the short, medium, and long term and
7. It provides key performance indicators (KPIs) to measure deliverables.

Highlights in the strategy of an organization

The strategic document highlights the following key issues;

Vision statement

The directors and senior leadership outline the long-term goals and aspirations of the organization and its desired impact on the community to make it easy for management and staff to walk the journey.

Mission statement

The directors, management, and staff together develop the mission statement. The mission statement outlines what the organization does and what it stands for in pursuance of the vision.

Long–term goals

The strategic plan outlines long-term goals or the desired result that will be achieved in the year or more.

Strategic priority

The strategic plan outlines strategic priority that is the values that will guide management and staff in achieving the goals.

Actions

These are things to be done to achieve the goals of an organization.

Resources for implementation

To implement a strategy an organization needs the following resources among others;

1. Human resources for planning and execution;
2. Adequate financial and other resources;
3. Adequacy of time to implement the strategy;
4. Clear organization structure;
5. Effective tools and systems and
6. Right organization culture.

Steps in strategic formulation

The following are the steps in the strategy formulation process;

1. Current state analysis is to create a starting point for formulating a strategy;
2. SWOT analysis is a tool for analyzing the strengths, weaknesses, opportunities, and threats of an organization to formulate an effective strategy for the future.;
3. Development of strategic direction;
4. Create strategic priorities;
5. Develop Goals and Objectives;
6. Define key performing indicators, set timelines, and track mechanisms for progress;
7. Publish a strategic plan
8. Develop a strategy implementation plan and
9. Strategy review.

The strategy planning tools

There are several strategic planning tools you can choose from and the following are some of them;

1. SWOT analysis;
2. Porter’s five forces;
3. PESTLE analysis;
4. Forecasting;

The critical success factors (CSF) in strategy development

The critical success factors (CSFs) also known as key result areas(KRAs) are areas of the organization that are vital for the success of the strategy. The CSFs will depend on the sector and the business the organization is in and may include the following among others;

1. Strategic focus;
2. Competitive advantage in the chosen area;
3. Human resources;
4. Finances and other resources;
5. Connection with the customers

Why do strategic plans fail to achieve their goals?

The strategic plan may fail to achieve the goals because of several reasons and the following are some of them;

1. Lack of strategic focus;
2. Shallow current state analysis resulting in inadequate information and poorly designed strategy;
3. Inadequate financial resources;
4. Lack of ownership of the strategy by the staff;
5. Inadequate staffing;
6. Slow to implement the plan resulting in the being overtaken by unforeseen circumstances;
7. Failure of monitoring process; and
8. Lack of flexibility in the strategy.

Emerging trends impacting strategy formulation

The business world is faced with constant and unpredictable changes that are causing new developments in the market affecting the business environment and the strategy formulation.  This calls for the board and management to consider new ways of doing things if their organization has to survive. The following are the emerging trends that one has to consider when developing the strategy;

1. Working from home as a result of the Covid-19 epidemic;
2. Artificial intelligence to replace human beings;
3. Business outsourcing to exploit economies of scale and take advantage of the skills not locally available;
4. E-commerce that is doing business over an electronic network;
5. Franchising is the right to make goods or offer services using the name of another business;
6. Environment, social, and governance reporting and
7. Rapid growth in information technology.

There is a need therefore to include some degree of flexibility in the strategy to make adjustments possible when unpredictable changes do occur.

Conclusion