Magazine article Ivey Business Journal Online

Strategic Planning: A Roadmap to Success

Magazine article Ivey Business Journal Online

Strategic Planning: A Roadmap to Success

Article excerpt

Strategic Planning is among the most widely used and perhaps among the most abused management terminology in modern day business. If one were to ask the CEO of any large organization why Strategic Planning is needed, the responses would be varied:

Resources are finite and we need to have clear line-of-sight towards how and why we allocate our resources and to what end...

We need a structured process for highlighting opportunities / risks in order to sustain and accelerate the growth momentum..

We need to have a defined game-plan for taking on the competition...

And the list would go on.

STRATEGIC PLANNING

The question that one needs to ask is "What exactly is meant by strategic"? There are hundreds of books written on this subject and its use in business is nothing new, therefore Strategic Planning should be relatively simple, right? Surprising though it may sound, it's hardly that simple and this article attempts to showcase, from a practitioner's perspective, some of the pitfalls and misconceptions that abound in the strategic planning process. Note that this article is designed to touch upon the process that is used for strategic planning in a corporate setting about which little has been written, rather than the tools that are needed to crafta strategy about which sufficient literature already exists.

Let's look at an example. What is common in the following statements?

* Our strategy is to be a low cost organization

* We are pursuing a global strategy

* Our strategy is to provide unparalleled customer service

* Our strategy is to be a "first-mover"

* Our strategy is to grow by making selective acquisitions

The only thing common in the above is that none of them is a "strategy"!

(Source- Academy of Management Executives 2001 Vol. 15)

Now let's take a step back and figure out why none of the above is a strategy.

Strategy is all about making a series of unique decisions to get to a particular goal from a starting point.

Note the emphasis on the words "series", "unique decisions", "particular". Now take another look at the above statements? Are they really decisions, or are they merely an articulation of statement of intent that's important for their respective organizations? Which organization doesn't want to lower its costs? Who doesn't want to offer great customer service? Wouldn't your competitors in the same industry say similar things about their intent? The point that is being made here is that while the above may be very critical for an organization, they are not "strategic". These are things that would need to be done regardless of your strategy. The key is that no decision is needed here. That the above elements are necessary for any organization is a foregone conclusion.

THEN WHAT EXACTLY IS STRATEGIC?

The framework shown below is a good starting point. Note that all the questions pertain to "decisions". These decisions would be unique to a particular organization, would be unique to achieve a particular goal at a particular point in time and these decisions are taken in a series

The key question that practitioners often face is what is the process that is used to answer the above questions? While traditional academic learning provides aspiring strategists with the tools to analyze industries, often there isn't enough literature around the "process" that is used for strategy creation. The following framework is one such attempt to throw some light on the process that can be followed by practicing strategic planners in order to craftthe strategies of their respective organizations.

THE STRATEGIC PLANNING PROCESS - A FRAMEWORK

Boundary Conditions and Specification of decision criteria

This is the first stage in the planning process. It is the job of the Office of Strategy Management to get clarity on the boundary conditions / scope and on the decision criteria upfront, before the commencement of the planning cycle. …

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