Strategic Planning – the Why, What and How

  • Strategic Planning – the Why, What and How

    Strategic Planning – the Why, What and How

    What you will learn:

     

    I was recently asked about strategic planning, in particular about the process – how long should a typical Strategic Plan be? How flexible should it be? Why do it at all?

     

    The answer to these questions closely relates to the assets or capabilities that a business possesses, being the source of an organisation’s competitive advantage in the marketplace.

     

    New Sam Wilko Advisory Blog by Peter Wilkinson

     

    I was recently asked about strategic planning, in particular about the process – how long should a typical Strategic Plan be? How flexible should it be? Why do it at all?

     

    The answer to these questions closely relates to the assets or capabilities that a business possesses (or seeks to get hold of) being the source of an organisation’s competitive advantage in the marketplace. “Capabilities – how to find them and how to build them in your organisation” looks further at what these assets or capabilities are. Strategic planning is all about maximising the value that the business extracts from its assets and capabilities.

     

    We can consider the strategic planning process in more detail with the help of an excellent article by Andrew Ellis published in Engineers Australia titled” Hallmarks of Great Strategic Planning” (let me know if you would like a copy of this – more than happy to oblige!).

     

    In it Andrew lists eight hallmarks of great strategic planning which I’ve summarised:

     

    1. Strategy should be revisited regularly (typically annually) and should have a systematic process at its core;
    2. Strategy should be explicitly linked to the organisation’s budget;
    3. “White Papers” – in effect detailed analysis of new ideas/investments/expansion opportunities – should be used when and where appropriate;
    4. A template should be applied universally across the business, thus enabling strategy to be developed in a consistent, organisation-wide manner;
    5. The strategic planning process should have flexibility, for instance to adapt to a short-term turnaround if needed;
    6. Sufficient time should be scheduled – across multiple sessions if needed – to digest major issues;
    7. Some strategic planning should be carried out in a different environment to “business as usual” to stimulate free thinking; and
    8. The resulting Strategic Plan should be focused and concise.

     

    To this list I would add that the strategic plan needs to have a horizon that aligns with the length of the industry cycle, the life of the strategic assets owned by the business and the maturity of the organisation. In this sense, a mining firm with multiple resources typically of 30+year lives (think BHP-Billiton) would apply a much longer planning horizon than a technology-based startup looking to capture market share with its “killer” app.

     

    Is there an additional item you would add to the list? Let me know – always happy to engage with the people out there using the knowledge to make a difference!

     

     

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