6 Features of Effective Strategic Planning
Strategic planning is a fundamental pillar of an organisation’s success, allowing us 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 by maintaining a focus on the achievement of outcomes whilst considering risks and opportunities. Strategic planning focuses the organisation strengths and resources on important and high-priority opportunities whilst contributing towards plans which address weaknesses and threats. Most importantly strategic planning creates alignment of an organisation’s 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 selection closely 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 disseminated 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 independently formulated at upper and lower levels with 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 and how strategic planning software supports the organisational strategy, planning and performance.
1. Providing Clarity, Direction & Focus
A strategic plan is essential for communicating the organisations vision to investors, stakeholders, and employees, illustrating 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 allowing objectives, results, actions and performance indicators to be established that provide an organisation direction and cohesion. It assists an organisation to firstly understand its purpose and forecast its future, allowing for threats and opportunities to be exploited, given the strengths and weaknesses of the organisation.
Strategic planning allows an organisation to define the structure, resources and financial models required to ensure its sustainability irrespective of unexpected changes in the environment. The process involves a systematic and recursive approach to reviewing progress and performance and making key decisions that will determine an organisations ultimate success.
An effective strategic planning process allows managers to focus on prioritising key activities necessary for success and equally as important empowers them to fend 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 operational activities and that employees are making decisions within the context of organisational goals.
A direct relationship exists between effective strategic planning and an organisation achieving optimum performance. In turn organisational performance directly depends on the level of performance of staff which significantly influenced by their ability to formulate and execute their plans. Effective strategic planning:
- Correlates of staff skills with their responsibilities enabling a higher rate of success, reward, motivation and a sense of accomplishment
- Increases levels of productivity by keeping staff focussed on the most important activities and how these are able to be implemented effectively and efficiently
- Surfaces inconsistencies and troubleshoot issues through constant collaboration and maintaining a period review cycle
- Provides support for management for the implementation of initiatives, issues management and risk mitigation
- Influences staff performance, aligning 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 linking. Vertically through a cascading plan structure and horizontally through the linking of 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 an organisation’s long term sustainability by providing the means to adapt to environmental changes. Strategic planning is a continuous process that underpins growth, decisions making and operational changes required to achieve organisational outcomes. The implementation of strategy should be monitored through a set of performance measures and adjustments made as needed. Monitoring consists of the following steps:
- Defining performance indicators to be measured
- Defining a baseline and target values for performance indicators
- Defining the frequency of reporting against performance indicators
- Recording results against performance indicators
- Comparing current results to previous ones, standards and industry benchmarks
- 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:
- Plan – analyse issues, feedback and other input to establish continuous improvement objectives and planned actions. Determine resources required to deliver positive outcomes
- 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
- Check – a review processes allows periodic checkpoints to be established for evaluating that a continuous improvement is delivering expected positive outcomes whilst key performance indicators can provide a more quantitative measure of performance against a continuous improvement
Act – if a continuous improvement has delivered the expected outcomes further actions to embed new processes, deliver education and training, and communicate the continuous improvement, are able to be recorded and delivered. However, should the continuous improvement not be delivering the expected outcomes changes may need to be made and the ‘Plan-Do-Check-Act’ cycle run again
4. Enabling Growth & Competitive Advantage
Globalisation and technology has resulted in increasingly competitive environments. Organisations are gaining competitive advantage by using technology to predict the future and deliver products and services around the globe with high velocity and efficiency. Strategic planning allows organisations to scan the market, understand strengths and weaknesses of competitors, identify opportunities for delivering innovative products and services and anticipating threats that should be mitigated to minimise their impact.
A documented strategic plan documented with a robust planning process allows businesses to optimise their operations and pinpoint their focus on activities which will most likely increase their revenue and profits. Effective strategic planning leads to high performance, directly influencing increased stakeholder confidence and investment. Outside parties will only invest in an organisation on the basis it can demonstrate continuous performance and can present a picture of the future. Utilisation of strategic planning software such as skefto allows a competitive advantage to be established through clear design and execution of strategy, through to tracking performance 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 prioritises 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 allowing us to gain control over our destiny through development of strategies to seize opportunities and establishment of 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. An effective strategic planning process allows nuances and intricacies of issues and risks to be articulated and control strategies developed to mitigate their impact and likelihood of occurring. skefto provides users access to sharper and more concise information that allow strategists to gain a rapid understanding on threats, opportunities and the trajectory of organisational performance.
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:
- Setting of mission, vision, goals & objectives – defines why we exist, our purpose, our customers and where we see ourselves in the future
- Environmental scanning – involves us analysing the external environment to determine opportunities and threats
- Strategy formulation – given the information from the environmental scan we create strategies to match our strengths with opportunities, while addressing our weaknesses and external threats
- Strategy execution – involves establishing budgets, defining resource strategies, developing procedures and implementing actions and to achieve our goals and objectives
- Evaluation and control – involves periodic review and monitoring of our performance and making the adjustments necessary to ensure initiatives are on track and that issues are managed
skefto strategic planning software allows organisations to develop plans which are clear, actionable and measurable, providing a platform for monitoring and reporting on performance. skefto allows performance to be measured against targets and benchmarks as well as facilitating a review process which allows plans to be adjusted when performance waivers or new opportunities arise.