Determine direction
Few companies have clear core statements about what they are and wish to become. If they do, the content of these statements are often not living ideas and are not widely know within the company.
Ideally the direction of an organisation should flow from a scenario conversation exercise. However, if core statements exist, review them with your team. Make them part of your team's thinking.
The aim of this page is to briefly state what a Strategic Plan is.
Contact ABPLAN and we will assist you in installing a six-stage approach of developing and executing strategy starting with scenario planning.
Three main elements of a strategic plan
- Mission: "A concise, internally focused statement of the reason for the organization's existence, the basic purpose towards which its activities are directed and the values that guide employees' activities. The mission should also describe how the organization expects to compete and deliver value to customers." (Kaplan and Norton's Strategy Maps.) It should inform the team about the overall direction they have come together to pursue.
- Vision: "A concise statement that defines the mid- to long-term (three to ten-year) goals of the organization. The vision should be external and market-oriented and should express - often in colorful or "visionary" terms - how the organization wants to be perceived by the world."
Peter Drucker: "What should our business be?"
A good vision creates exitement to achieve a nearly impossible outcome within a specific time span.
On 25 May 1961, President John F Kennedy galvanised the USA's scientific community into action with this vision:"I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth."
ABPLAN assists its clients, after a scenario conversation workshop, to develop three strategic themes, and three "Wildly Important Goals (WIGs)", which define the outcomes that need to be achieved within a specific time span and to which all participants commit themselves to achieving. The three WIGs provide substance to the vision statement.
We do not leave matters open-ended. We assist clients in developing measurable outcomes and clear targets at three levels of objectives: Mission, vision and at the normal project level objectives.
- Core values relate to company's culture and express "the way we do things around here". Culture and values guide your organisation's activities. They clarify what you stand for and believe in and prescribe the attitude and behaviour expected from its members. Some companies also explicitly list forbidden conduct such as "bribery, harrasment, and conflict of interest".
These three statements and direction which is clarified with three strategic themes and three Wildly Important Goals (WIGs) are the core of your Strategic Plan. If well-formulated, these statements will motivate and energize you and your team and galvanise all into action. Your team should feel proud of this brief document and its content. Its members should feel eager to initiate whatever needs to be done next.
Strategic Plan
Strategic planning
Henry Mintzberg, author of The Rise and Fall of Strategic Planning, points out that strategic planning is an oxymoron. Strategy is one thing; planning quite another. He is of the opinion that only 10% of actions arise out of their strategic planning (realised strategy). The source of the other 90% of what companies do, Mintzberg calls "emergent strategy". This describes the series of ad-hoc activities, reactions, decisions, and choices that managers make in response to daily pressures, without direct referral to any overarching strategic concept. Taken together, they amount to the real strategy.
Mintzberg describes a situation which we recognize. Very often decisions are made on strategic issues which are not precisely covered in a Strategic Plan. Nor can such decisions wait until the next monthly strategy meeting. Take care not to confuse "strategy" with "tactics".
Strategic direction does not change that often. The importance of having a Strategic Plan, a few strategic themes and WIGs, which together provide clear direction, cannot be over-emphasised. These strategic beacons, once they become part of your thinking, influence every decision and also those that need to be made quickly when new opportunities or threats present themselves. Any great organisation has strategic, direction-giving points of reference in place.
Michael Porter, a recognized leader in the field of strategy, observed "that strategy is about selecting the set of activities in which an organisation will excel to create a sustainable difference in the marketplace".
From strategic planning to operational planning
Convert the strategic plan into a detailed high-level strategic cum operational plan, which is also a performance management system. All my clients and I use the Balanced Scorecard (BSC). And then you have to execute, track and measure performance.
I used, over a span of 22 years, a Management by Objectives approach (launched by Peter Drucker) but switched to the Balanced Scorecard. The segmentation which its four perspectives and their sub-headings require, is superb. The BSC obliges one to think about a range of issues which many companies habitually ignore.
This superb approach took the business world by storm since 1992. The BSC was developed by Robert S. Kaplan of Harvard University and David P. Norton, president of a major consultancy company. It was first described in the Harvard Business Review (January-February issue 1992) and subsequently in five major publications by them. Many other authors have produced publications concerning the use of the Balanced Scorecard.
Linking strategy to operations
Kaplan and Norton in The Execution Premium (2008), propagate a six-stage approach in developing and executing strategy which they call a closed-loop management system:
1. Develop the strategy. What is the business are we in, and why? (This is covered by the first two questions of scenario planning and defined in the last: What is the meaning of winning?)
2. Determine the strategy and outcomes. What are the key issues which you face in your business and with a classic SWOT analysis determine the internal attributes and the external factors which will help or hinder your company in the achievement of its vision. The use of a few additional tools should also be considered. (This is also covered by scenario planning.)
3. Align the organisation, its units and its people with the strategy. (Scenario conversations ensure alignment.)
3.1 Translate the strategy into the major objectives and measures of a Strategic Plan - using two Strategy Maps and the Balanced Scorecard approach.
4. Plan operations and how to improve key processes.
These four stages are followed by the execution of initiatives.
5. Monitor and learn - by analyzing results and their metrics in separate strategic and operational reviews.
6. Test and adapt the strategy
Contact ABPLAN
ABPLAN has taken numerous companies and organisations of every size and description through the process of a scenario conversation, of developing Strategic Plans and Balanced Scorecards and in installing a planning and execution system Contact us.
For a brief overview about the practical meaning of the much-heralded Balanced Scorecard (BSC), read further, starting with Strategy Maps. I kept the jargon low.
Next go to strategy maps as the strategic plan is translated into strategic themes and objectives which are depicted on two types of Strategy Maps.
You need to plan and execute your strategic planning workshops carefully. Please visit workshops.
For details of Kaplan and Norton's latest important publication, the Execution Premium - Linking Strategy to Operations for Competitive Advantage, visit worth reading.
Last modified: 08-06-2010
Client Quote
"Foci lives creative styling of major functions and events. Albert brought it home to us that strategic planning is thought and idea styling. And he introduced us to project planning as an operational planning and communication tool.
Our clients are delighted with our meticulous approach. Our young, motivated and committed staff members are running huge projects.
We know where we are going and how to achieve it."
Chris van Niekerk, Foci Function Concepts