Effective Strategic Planning

Effective Strategic Planning

There are a number of well-known models for strategic planning, with various terminologies supporting these models.  Any of these models can be employed successfully.  Independent of model and terminology, effective strategic planning requires three core components: Vision, strategy, and execution.  These core components are not always treated with equal weight within the strategic planning process.  De-emphasizing any one of these components reduces the chance of realizing successful strategic outcomes.  Analysis and measurement are important aspects of the planning process.  They should be considered continuous information gathering processes that transcend each of our core components described above.  High quality analysis and measurement enable good decision making across the planning lifecycle.

Clarity and Simplicity

It is important to start with clear definitions of the organization’s planning approach, including how elements of the model fit together.  Below is a good example of a well-defined model and lexicon. Any variety of changes to terminology, definition, and linkage are acceptable as long as they are well defined in simple and understandable language.  It is very important to ensure each of the core components are equally represented.

What we are striving toward: Vision defines how management sees the organization currently, and in the future.  This, in turn, defines the long-term organizational goals, and determines where to direct its efforts.  Objectives are shorter-term measurements of performance on the path to achieving these goals.

In the above figure, we have developed a clear approach for defining what the organization will attempt to accomplish.  Different strategic planning models use different terms and definitions, but the core elements of any given planning model should have similar relationships. Some organizations use the terms goals and objectives interchangeably.  While independent to the specific terms used, it is important to avoid confusion within the organization.  It is suggested that an organization strive to be unambiguous. The example definition used above provides iterative levels of refinement and specificity to what the organization wants to achieve.

How we will get there:  Strategies are the principle means by which the organization will direct action to achieve the vision.  This includes addressing and overcoming the challenges faced by the organization. Strategic initiatives represent the implementation of these strategies, while providing the tactical steps to achieve goals and objectives.  Projects execute the initiatives.

Regardless of the specific terms used, it is important to understand that each definition is a continuous refinement of the previous.  In this example, the definitions move from high-level strategy to individual projects that have a defined scope and resource requirement. 

Effective strategic planning refines the vision for where the organization is going (or not going).  It provides focus and direction for how the organization intends to achieve its vision, while managing the implementation of its plan.  To be successful, the strategic plan clearly defines what needs to be done and how it will be accomplished.  It then provides oversight of the execution.  The implementation of the strategic plan must be well managed to ensure a return on the investment made in the plan design.  Performance is measured along the way, providing an indication of risk when performance lags.  If risk is identified early enough, mitigation strategies can be implemented before impact to the plan is realized.

Individual strategies are plans for how the organization will get from its current state to its envisioned future state in the face of uncertainty and resistance. Initiatives define how individual strategies are to be implemented.  One or more initiatives will be identified to implement a given strategy.  Individual projects are then created to execute a given initiative.  Some initiatives may only require one project while others will require multiple projects over time.  If an initiative requires more than one project, then a program management plan can be used to better to manage the integration and dependencies of its projects. 

Strategy Management Provides Oversight to Broad Set of Disciplines

Traditional project management may be required for individual initiatives or projects depending on scope, complexity, and level of resources required.  Regardless of the level of discipline required, all projects require oversight.  Project oversight should manage toward specific milestones and employ risk management. All projects should report status and health regularly.  The reason for this is two-fold.  First, by managing project milestones and risks it helps the implementation team focus on what needs to be done, ensuring progress.  Second, the earliest indicator of strategic plan risk, is the health of implementation projects that create strategic outcomes.  A project at risk is an early indicator that the projected outcome is also at risk.  Management must extend from planning to execution to be effective.

Strategy Specifies The How, It Does Not Reiterate The What

Many organizations skip the important step of defining the individual strategy, which is a mistake. Additionally, some organizations replace strategy with terms like aims, aspirations, and strategic themes.  It is important to recognize that these are visionary in nature.  They can be very useful refinement of the broad organizational vision, but these terms are not equivalent to strategies.  Remember that strategies specify how an organization will achieve its vision.  If you have read a strategy and do not see how it can be implemented, it is not a good strategy.  For example, “To become the market leader in…” is visionary in nature, as it does not state how the organization intends to become the market leader.  A better strategy might be “To become the regional leader in cancer care through a strategic partnership with M.D. Anderson Cancer Institute.”

Understanding Dependencies

Regardless of your planning approach, it is critical that you clearly define the structure of your plan.  Structure includes the different pieces of the plan and how they fit together during the design process.  This includes the development and maintenance of linkages and dependencies between the various strategic items used in the chosen strategic approach.

In the image to the left, we can see the linkages and dependencies defined for this example model. 

  • Visiondrives strategy and goals
  • Strategiesachieve goals
  • Initiativesimplement strategies
  • Projectsexecute initiatives
  • Goalsdrive objectives
  • Objectivesmeasure performance for
    • Strategies
    • Initiatives
    • Projects

Furthermore, objectives are aligned with individual goals and measure performance of the individual strategy execution.  If using a balanced scorecard (strategy map), goals have perspectives and are linked across these perspectives.  Objectives are linked to individual goals and measure plan performance.

If using a scenario-based planning approach, then objectives also become triggers for analysis and review of emerging trends.  This analysis may trigger a shift in scenario focus. 

Strategy management provides models and processes to capture the linkages and manage the dependencies.  Risk can be traced between initiatives being executed and the strategy the initiative implements.  This is also true for tracing a goal’s performance using objective measures and by monitoring the health of the strategies and initiatives that are meant to achieve the organizational goal.

Once a strategic plan structure is defined, it is important to establish the relationship between the various elements of the actual model.  Most planning approaches fail to define clear lines of dependencies between these various elements of their model, losing the ability to effectively manage the plan.  The plan becomes simply a series of piece-parts that are executed individually. Executing the strategic plan as a set of individual parts is one of the primary causes of failed implementation. Without maintaining dependencies between strategic plan elements, it is near impossible to effectively manage the strategic plan.

After providing a clear and concise definition of the terms used in the plan design, the organization should provide a more detailed description of how these terms interrelate and how they are managed holistically – vs independently.

Strategy Management Can Help

An organization can manage the overall risk of the plan, by creating and managing the individual dependencies of all strategy items.  Strategy management provides focus on the transition points between strategy design, prioritization, and execution, as well as the tools to effectively implement each phase.  Strategy management allows organizations to make better decisions during the strategic planning lifecycle, because they can better understand the impact to the overall plan. This includes the prioritization and impact assessment of ad hoc or off cycle events as they materialize.  Through these dependencies, the impact of any one strategy element can easily be traced to the health and status of the overall plan.

To succeed in designing and executing your strategic plan, an integrated strategy management approach is encouraged.  Implementation of a strategic management tool doesn’t need to be difficult.  OntoReason has created a tool that provides the features that you need and can be            to how you can start providing strategic management in your organization.

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