Key Elements of Strategic Planning

At various points in its life, the senior management of any organisation should take time off from the day to day pressures of running their business and seek to plan where the business is going, and how it should develop over the next few years (five is the commonest timescale chosen).

Sometimes this planning is caused by external pressures such as:

- banks, requiring financial forecasts to support lending;

- venture capitalists, in support of major funding;

- pressures from shareholders;

- risk of takeover;

- the need for major expenditure.

In the remainder of this document we aim to identify the different types of plan and their purpose, and explain the work involved in producing a Strategic Business Plan, sometimes referred to as a Corporate Strategy.

A few key Points

The following key points about Strategic Business Planning may form a simple basis for placing the subject in context. The plan:

- assesses the current position of the organisation, determining where it should be in the future, and planning the route between those two positions;

- provides an opportunity to ask questions about the way that the organisation functions, sometimes for the first time in years, without the overtones of implied criticism;

- provides a base on which other decisions can be made, such as what computer systems are needed, what training should be provided, and what investments should be made;

- provides an opportunity to involve the workforce in planning their future;

- should not be a major problem for well-run organisations, provided that they are prepared to seek and take advice;

- is a topic which we know well. Why not ask us to help you?

Different types of Business Plan

There are three main types of Business Plan:

- Forward Projections;

- Fund-Raising;

- Strategic Planning.

The differences are discussed on our web-page Types of Business Plan.

The remainder of this document is concerned with the preparation of a Strategic Business Plan.

Corporate Strategy

A number of organisations insist on having Corporate Strategies. This is just another name for a Strategic Business Plan.

Mission Statement

Nowadays, most major corporations feel naked without a Mission Statement. It is usually little more than the Aims and Objectives of an organisation, phrased in such a way that nobody can disagree with them, and distributed widely so that everybody knows that the organisation knows what it is doing. Unfortunately, some organisations have not progressed beyond this stage to actually planning their future.

We would recommend that a mission statement should:

- be produced only when the organisation has identified its future strategy and the steps needed to achieve it;

- have clear objectives, not obscure generalities;

- not clash with any Quality Policy Statement that the organisation already possesses;

- be reviewed whenever the strategic business plan is reviewed;

- NOT be treated as Holy Writ.

'Do Wells'

Some consultancies suggest that organisations produce lists of things that they do well. They may also require other lists - 'Do Wrongs' et cetera. In producing a Strategic Business Plan we do not produce lists with such titles, but they could be produced by summarizing the strengths and weaknesses parts of the SWOT analysis (see Assessment of Current Position).

Project Objectives and Benefits

Before undertaking a Strategic Business Planning exercise, you should clearly identify your objectives in undertaking this work and the benefits, which you hope to achieve.

Typically, the objectives may include reviewing your current management structure, sales focus or, more generally, handling a particular growth target. The benefits can be as general as survival, through intangibles, such as improved workforce relations, to the strictly financial, such as improved profitability.

All such objectives and projected benefits should be identified beforehand and kept in mind throughout the process as they should be part of the objectives (see Assessment of Objectives) and influence the strategic options (see Analysis of Strategic Options).