Dada Adefolami:
“However, strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy.”
By Dada Adefolami.
Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.
Managing strategy, higher education institutions are under increasing pressure to produce corporate and strategic plans, both for external audiences and for the internal purposes of setting and achieving goals. They are significantly dependent upon public investment and the expectations of public bodies as well as upon a fast-changing market for their products and services. However, strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management.
MANAGING STRATEGY applied as a process and how to deal with implementation.
Strategy needs to be managed as a staged process – see table below. The first stage is one of diagnosing the current position – quite separate from that of option generation. This separation is crucial, as otherwise managers will be trying to do too many different things –analytical and creative – all at the same time; the result being a mess.
STRATEGIC PLANNING PROCESS
1 Current position SWOT
PEST
Five forces
Vision and objectives
Competitive bench-marking
2 Future options Cunning plan / checklists
GAP analysis
Strategic option grid
3 Strategic breakthroughs Value and cost drivers
4 Implementation Difficulty over time
5 Control and learning
Can select from those options a small number of options – maybe as little as 3 – that are true ‘strategic breakthroughs’ to implement in this period, or ‘strategic decisions that will have a major impact on competitive position or capability or both, and on financial performance’.
If these breakthroughs are too numerous, there will be a lack of critical mass of resources, effort and attention.
Implementation is a separate cycle of strategic thinking (stage 4) where we are scoping strategic projects, doing detailed planning, business cases, the financials, planning change, gaining support and mobilising. This is still the land of strategic thinking.
Final stage, control and learning, is not just about monitoring the operational and financial metrics, but also progress against strategic milestones. CEO/ CFO will play a very big part in this to ensure that it doesn’t get too tactical. This is also a learning process too, reflecting on what is/isn’t working in implementation and why, and adjusting it, and also continuing to learn about changing environment. This is a very organic, living process and this may not work well if there is too much emphasis on metrics and control.
Turning to number 3, implementation, be warned this is often the graveyard of strategy. Here: performance = quality of strategy x quality of implementation x timing. This explains if messed up in implementation, the result can be so poor.
Timing is also very important too, as the external and internal timings need to be right, so some strategies might get accelerated and some delayed.
To get implementation right requires the following:
1. Project managing of strategic breakthroughs
2. Robust business cases
3. Change management issues thought through and managed
4. Appropriate strategic milestones and metrics frameworks in place
5. Strategy implementation techniques used well.
Strategic breakthroughs, like entering a new market or a new distribution channel, are complex and may impact different parts of the organisation.
Therefore, to project manage mean that instead of relying on busy operational managers to do it, some managers are full-time project managers instead. Project managing business projects, especially those involving a lot of change, is a different thing to managing technical projects, and demands a more fluid approach.
There is a lot more work on business cases and on the broader long-term financial projections of revenues and costs. This involves looking at the value and cost drivers of each of these, the key assumptions, and evaluating these qualitatively and quantitatively, and producing influential and resilient business cases and incremental cash flows by strategic project. This is interesting work for the chief Finance Officer.
Change management can be addressed by taking the key shifts between the present and the future and doing an extended ‘gap analysis’ of these, or ‘from-to’ analysis.
Here split out the key shifts of ‘from-to’s’ and score how far from the old to the new we are, perhaps on a 1-to-5 scale, use by analysing the key shifts as:
1. strategy
2. systems
3. skills
4. structure
5. Style.
All the usual softer issues need to be thought through in terms of buy-in, culture change, structure change, team building/rebuilding, etc. It is well known that in a major change some individuals and teams will move through the transition phases of change at different speeds and, in the course of this, performance can dip. This effect is magnified if done badly – for example if an acquisition is integrated badly.
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