Understanding Strategic Planning

There is no organization that exists in a static environment. Organizations have to adapt to varying internal and external environments. While planning for the present operations and outcomes of the organization, management should be objective about the future. Firms must visualize how the future environment will look like and how their performance and outcome. Envisioning the future is simply not enough. Proper measures must be placed to enhance the organization’s progress towards the imagined future. Organizations need to plan ahead, and plans must be strategic to meet the organization’s objective now and in the future.

Akinyele & Fasogbon (2007), states that strategic planning is a subset of underlying processes that are intended to create or manipulate a situation so as to have a favorable outcome for a company. Strategic planning provides overall direction for the operation of the organization in sections such as finance, projects, marketing and human resources. Strategic planning is the process of using systematic criteria and rigorous investigation to formulate, implement and control organization’s performance (Higgins and Vincze, 1993; Mintzberg, 1994; Pearce and Robinson, 1994). In strategic planning, organizations envision the future and develops the necessary procedures ad operations to influence and achieve that future.

Ansoff (1991) argues that the major purpose of strategic planning is the promotion of the process of adaptive thinking or simply thinking about how to attain and maintain an organization environment alignment. Firms stand to derive considerable benefits from adaptive thinking especially if they can have good integration and control of the strategic plan. According to Evered (2000), the term strategic planning can have broad and narrow use. It entails the definition of the purpose, objectives and goals in the broad perspective as well as means for achieving the objectives. When looked at from the narrow perspective, strategic planning concerns the approach to manage operations in the organizations. Bozeman (2003), looks at strategic planning as a product of changes in policies and priorities in an organization. Hence, strategic planning may be defined broadly and narrowly Eadie (2004).

The strategic planning process begins with an assessment of the current economic situation (Akinyele & Fasogbon, 2007). They suggest that companies should first examine factors from outside that can affect their performance. The use of the strategic planning tool will thus help organizations find the best future and the best path to reach that destination (Berry 1997). Schmenner (1995), says that organizations need to think constantly strategically about what is going on. Being open-minded about what is going on in the organization’s environment is crucial to strategic planning. Firms have to have a clear picture of the environment they are operating in so that they can have a good vision of the future. Organizations use strategic planning to determine the path that they can use appropriately to achieve their goals in the future.

Strategic planning not only helps an organization to determine where it is going in the future, but most importantly how it will get there. It  shows the measures that the organization will use to know if it has gotten there. The way that the organization’s strategic plan is developed depends on factors such as; organizational leadership, culture, environmental complexity, size and expertise of the planners. A goal-based plan is favored by most organizations including non-profit organizations. The plan focuses on the organization’s mission, objectives, measures to achieve the objectives and action planning. An effective strategic plan should articulate specific goals and describe the action steps and resources needed to accomplish them.

Strategic management is a continuous process that entails planning, monitoring, analysis, and, assessment of an organization’s activities that are designed to meet the desired objectives. Having a strategic plan helps management to ensure a strong competitive position in the market and thus meet the desired outcome. Through strategic planning, management can adapt to the ever changing environment. It is through planning that an organization can keep ahead of the competitors by designing strategies that fit in the changing environment.  There is a particular emphasis on a clear analysis of the organization’s internal and external environment. The design of objectives is in a way that is consistent with the changing environment. Strategic planning is thus a continuous process and should be reviewed from time to time to ensure that changes in the environment are being accommodated in the management of the organization.

A high performing organization should be results-oriented as well as performance-conscious. The organization thus require a continuous assessment of their performance to determine the extent of objective achievement. Good strategic managers should anticipate future environmental factors that could affect the organization. Strategic management is highly involved in the implementation of the chosen strategies and strives to make them work as planned. Management should be aware of the requirements for strategy implementation. Strategic managers are action-oriented and strategic thinkers. Managers should keep an open eye on customers’ needs, new opportunities and competitive positioning and control internal operations. Managers have the responsibilities of shaping the organization’s long-term direction and formulate a coherent strategic action plan that produces competitive advantage.

Strategic management has different components that must be undertaken to ensure achievement of that the visions of the organizations in the future. In strategic management, the definition of the vision and mission statements is important as it provides a clear and concise direction of the organization. Organizations must establish strategic objectives and performance targets. The management should formulate a strategy to achieve objectives set and targeted results. The next function of the management entails implementation and execution of the chosen strategic plan. Finally, strategic management also entails the evaluation of performance and making corrective adjustments in strategy in light of experience, changing conditions and new ideas and opportunities.

Strategic plans are comprehensive documents. They cover all aspects of an organization’s work.  It should contain a mission statement that expresses the organization’s purpose. The vision statement should describe the organization’s desired future state. The vision of an organization projects the future by describing the program to be undertaken, budget and even the staff size and composition. Nonprofit organizations should understand that a strategic plan cannot succeed unless there is a clear vision of how the organization will look like at a specific point in the future. The vision statement for an organization should be explicit and concise.

Simply, Strategic planning is a management tool. The use of this tool is to help an organization to perform better in the future. Strategic planning helps the organization to focus its resources and ensure that members of the organization work towards the same goals. It also enables assessment and adjustment of the organization’s direction in response to a changing environment. John Bryson (1988), asserts that strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide an organization. It describes what the organization does, and why it does it with a focus on the future.

Strategic management and action are increasingly important to the continued viability and effectiveness of non-profit organizations. Bryson (1988), states that without strategic planning, it is unlikely that non-profit organizations will overcome successfully the numerous challenges that they face. The strategic planning is designed to help non-profit organizations or any other organization to respond effectively to their new situations.

Studies show that organizational performance and survival is a function of strategic planning. Organizations should thus accord priority to the elements of strategic planning. Attention should be accorded to documenting mission statement, the vision of the organization and establishment of organization’s core values. Strategic planning also involves setting realistic goals, establishing long-term objectives and developing an action plan for implementation and adequate follow-up. Organizations should make an adequate environmental analysis as it affects strategic planning intensity.

How Organizations should proceed in Implementing Strategic Plan and Management

Decision makers follow a structured process that help them identify and plan strategically issues that their organizations faces. These eight steps outlined below help an organization to plan and manage the organization strategically.

1. Agreement concerning strategic planning: before the organization embarks on the actual planning, management develops an initial agreement about the need for planning. The agreement covers the purpose of the effort. It agreement also highlights the preferred steps in the process. A strategic planning committee is formed. The roles of the planning committee and their functions are outlined. Necessary resources required for the process are availed to the committee.
2. Identification and Clarification of Mandates: in this step, the purpose is to identify and clarify imposed mandates placed on the organization. Mandates for public and non-profit organizations include contained legislation, regulations, charters and articles of incorporation. Identification of the mandates helps organizations to know what pursuits are allowed.
3. Developing Mission and Values: Organization missions provides social justification for their existence. Organizations should develop missions and values that are consistent with their mandate. It is important that the organization to set missions that are realistic and that cut above those of the competitors. An organization should complete a stakeholder analysis prior to the development of the mission statement. Analysis of the stakeholders’ analysis helps to develop a mission statement that takes considerations of stakeholders interests.
4. Assessment of the External Environment: External environmental analysis helps organizations to identify the major opportunities and threat that the organization faces. In this analysis, the organization examines the political, economic, social, and technological events and trends in its environment. The organization also considers the nature and status of various stakeholders such as clientele, competitors, and collaborators.
5. Assessment of the Internal Environment: Internal environment assessment helps organizations to identify its strengths, as well as its weaknesses. In the internal analysis, the organization examines its resources, processes and performance. Organizations use proper documents to assess their resources, processes, and performances. Through this analysis, the organizations determine how effective they are and the methods they can use to increase their performance now and in the future.
6. Identification of the Strategic Issue: An effective strategy builds on the strengths of the organization and takes advantage of the opportunities. An effective strategy also tries to minimize and overcome its weaknesses and threats. Organization’s strategic issues are fundamental policy questions that affect its mandate, mission, values, products, clients, financing, management and organizational design. Addressing the strategic issue helps the organization to overcome threats and capitalize on an important opportunity. Strategic issues help organizations to embody conflicts. The conflicts may be over ends, means, philosophy, location, time, and who might be affected by issues. The planning committee makes a list of the issues that might cause conflict and evaluate why they are strategic to the organization. The responsibility of the organization is to state the consequences of failure to address those issues. Reviewing the consequences informs judgments of the importance of the various issues. Identification of the strategic issues helps organizations to determine what is most important for the effectiveness, prosperity and survival of the organization while providing useful advice on achieving the aims.
7. Development of the Strategy: Bryson (1988), asserts that a strategy is a pattern of purpose, policies, actions, programs, and decisions on resource allocation that define an organization. Strategies are developed to deal with the strategic issues identified in the organization. Development of the strategy starts with the identification of alternatives for resolving the strategic issues. The planning team then enumerates the barriers to achieving those alternatives. The planning team is responsible for drafting a strategy that is workable, acceptable to stakeholders, ethical and legal. The strategy should also agree with the organization’s philosophy and core values.
8. Describing the Future of the Organization: this final steps involves describing what the organization will look like if it successfully implements its strategies. In the description, the organization defines its mission, basic strategies, performance criteria, decision rules and ethical standards expected of employees.

After the strategy formulation process, the organization then embarks on the implementation of the set strategies. The final step involves the evaluation of results to review the performance of the organization.

Benefits of Strategic Planning

Strategic planning helps organizations to act and think strategically so that they can remain relevant and competitive in the market. The strategic plans also help the organizations to clarify their future direction. Organizations can follow a clear path that will enable them achieve their desired future outcomes. Strategic planning has also been proven to be a useful tool in solving the major organizational problems. Planning also helps organizations to improve performance now and in the future. Most importantly, strategic planning helps organizations to deal effectively with changing environments.

 
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