6 Features of Effective Strategic Planning
Strategic planning is a fundamental pillar of success. Organisations are increasing their use of strategic planning software to adapt to evolving and increasingly complex environments
Strategic planning allows an organisation to understand its current day performance and most important its future pathway. This is acheived by maintaining a focus on outcomes whilst considering risks and opportunities.
Strategic planning focuses the organisations strengths and resources on important and high priority opportunities whilst addressing its weaknesses and threats.
Most importantly strategic planning creates alignment of the internal environment with the external environment. Financial resources with non- financial resources. Short-term plans with long- term plans. And organisational performance with staff performance.
There is no right or wrong option when it comes to selecting a strategic planning model for your organisation. The most effective results are achieved by aligning the model with the nature of your business, your mission and core values. Strategic planning models available include:
- Bottom-Up Approach where where strategy is formulated at lower levels and aggregated at the upper level
- Top-Down Approach where strategy is formulated at upper-level executives and distributed down through the organisation
- Interactive Approach where strategy is formulated by combining bottom-up and top-down methods. Higher level executives develop strategic plans with lower level management knowledge of specific situations
- Dual-Level Approach where strategy is seperately formulated at upper and lower levels. A review undertaken by upper level executives across all plans to ensure consistency and alignment
Below are some of the key features of effective strategic planning.
1. Providing Clarity, Direction & Focus
A strategic plan is essential for communicating the organisations vision to investors, stakeholders, and employees. It illustrates the activities that will take place to realise a vision. A strategic plan provides the guidance and principles required for effective strategic planning.
Strategic planning is a process that examines the internal and external environment. It allows objectives, results, actions and performance indicators to be established that provide an organisation direction and cohesion. Strategic planning assists organisations to understand purpose and forecast the future. It allows threats and opportunities to be exploited, given the strengths and weaknesses of the organisation.
Strategic planning allows organisations to define the resources required for it to be sustainable irrespective of unexpected changes in the environment. The process involves a systematic approach for reviewing progress and making key decisions that will determine an organisations ultimate success.
An effective strategic planning process allows managers to focus priority on key activities necessary for success and fending off distractions. skefto Strategic Planning Software provides clarity, direction and focus through a simple, integrated, actionable and measurable planning process.
2. Driving Organisational Alignment
A strategic plan provides a platform for change, allowing staff to assess the resources they require to achieve results. Involving staff in the strategic planning process ensures alignment of organisational strategy and day to day activities. This results in employees making decisions within the context of organisational goals.
A direct relationship exists between effective strategic planning and an organisation achieving optimum performance. Organisational performance directly depends on the level of performance of staff. In turn staff performance is influenced by their ability to formulate and execute their plans. Effective strategic planning:
- Firstly correlates staff skills with their responsibilities enabling a higher rate of success, reward, motivation and a sense of accomplishment
- Secondly increases levels of productivity by focussing on effective and efficient implementation of the most important activities
- Thirdly surfaces anomalies and is used to troubleshoot issues through constant collaboration and maintaining a period review cycle
- Further provides support for management for the implementation of initiatives, issues management and risk mitigation
- Moreover aligns staff performance with organisational outcomes
A strategic plan should consider the skills, knowledge, abilities, limitations and concerns of staff. An alignment of staff characteristics and organisational outcomes is paramount to ensure maximum performance.
skefto Strategic Planning Software supports complete organisational alignment. Vertical alignment through a cascading plan structure and horizontal through linking selected items across plans. As links are created, relationships can be defined by users providing context on how items operate in tandem. skefto links organisational & staff performance and allows management across all levels to monitor outcomes for activities emanating from their business areas.
3. Supporting Continuous Improvement & Flexibility
Strategic planning influences our sustainable future providing the means to adapt to environmental changes. Strategic planning is a continuous process that underpins growth, decision making and changes required to achieve organisational outcomes. Strategy execution should be monitored through a set of performance measures and adjusted as needed. Monitoring consists of:
- Firstly defining performance measures
- Secondly establishing baselines and targets
- Thirdly defining the frequency of reporting against performance indicators
- Then recording results against performance indicators
- Comparing current results to previous ones, standards and industry benchmarks
- Moreover making necessary changes as required
A strategic plan is not a set-and-forget instrument. An effective strategic planning process gives life to a strategic plan whilst the plan informs decision making. Reviewing a strategic plan is critical to success. It allows new opportunities, issues and risk to be identified and managed, keeping the plan current.
skefto Strategic Planning Software supports a ‘Plan-Do-Check-Act’ cycle for implementation continuous improvement:
- Firstly, Plan – analyse and establish continuous improvement objectives and planned actions. Determine resources required to deliver positive outcomes
- Seconly, Do – assign responsibility and dates for the implementation of continuous improvement actions. skefto supports a system of collaboration enabling a team-based approach for the delivery of continuous improvement. System event triggers and automations ensure individuals and teams are instantly notified of their responsibilities at the right time
- Thirdly, Check – a review processes allows periodic checkpoints to be established for evaluating that continuous improvements are delivering expected positive outcomes. Key performance indicators can provide a more quantitative measure of performance against a continuous improvement
- Finally, Act – if a continuous improvement has delivered the expected outcomes further actions (e.g. new processes, education & training, communication) are able to be recorded and delivered. Where a continuous improvement has not delivered the expected outcomes changes may need to be made and the cycle run again
4. Enabling Growth & Competitive Advantage
Global expansion and technology has resulted in increasingly competitive environments. Organisations are gaining competitive advantage by using technology to predict the future. This enables the delivery of products and services around the globe with high velocity and efficiency.
Strategic planning allows organisations to scan the market, understand our strengths and weaknesses of competitors. It allows us to identify and implement opportunities and anticipate threats that need to be mitigated.
A strategic plan developed using robust planning processes allows operations to be optimised and focussed on activities which result in growth. Effective strategic planning leads to high performance, directly influencing increased stakeholder confidence and investment. Outside parties will only invest in an organisation when it can demonstrate sustained performance and present a picture for the future.
Use of skefto Strategic Planning Software allows a competitive advantage to be established through clear design and execution of strategy. skefto supports performance tracking against internal criteria, sector benchmarks and customer expectations.
5. Seizing Opportunities & Mitigating Risks
A well-designed strategic plan will dictate how your organisation responds to opportunities and threats. A strategic plan sets out priorities for high yielding opportunities as well as surfacing risks and issues that threaten organisational outcomes. A strategic plan provides a lens into our future business state and sets control over our destiny through development of strategies. It allows us to seize opportunities and establish a framework to identify and manage issues and risks.
Inevitably during strategy execution issues and risks will arise. Our ability to quickly identify and manage issues and risks directly correlates with the achievement of our goals. skefto Strategic Planning Software allows strategists to rapdily understanding and act upon threats and opportunities.
6. Following a Structured Process
Whilst many methodologies exist (e.g. OKR, MBO, SMART etc) for strategy formulation a range of consistent underlying principles generally exist. These include:
- Firstly setting of mission, vision, goals & objectives – defines our existance, purpose, customers and where we see ourselves in the future
- Secondly, scanning the environment – involves us analysing the external environment to determine opportunities and threats
- Thirdly formulation the strategy – defines strategies to match strengths with opportunities, whilst addressing weaknesses and external threats
- Executing the strategy – involves establishing budgets, defining resource strategies, developing procedures and implementing actions and to achieve our goals and objectives
- Moreover evaluating and controlling – involves periodic review and monitoring of performance. Resultantly plans are adjusted to ensure initiatives are on track and issues are managed
skefto allows organisations to develop plans which are clear, actionable and measurable. It provides a platform for monitoring, reporting and measuring performance against targets and benchmarks. skefto also facilitates plan reviews allowing for adjustment when performance waivers or new opportunities arise.