By M. Dana Baldwin, Senior Consultant
In a recent issue of The Wall Street Journal, an article forecasts the end of Strategic Planning – again. In the article, the efficacy of strategic planning is questioned in some depth. Instead of utilizing strategic planning properly, the article suggests that flexibility and responsiveness will be enhanced by reacting to the market place because of the fast moving nature of today’s market place.
In reality, if a company follows the Simplified Strategic Planning process that we have espoused for nearly 30 years, the company actually enhances the flexibility and responsiveness that the article implies can only be achieved with these “new” processes.
Let’s examine the elements of strategic planning to be sure we fully understand the implications of the process. First: In order to start effectively, a company must know where it currently is positioned in the market place. We will examine our markets – customers and products/services they buy. We will analyze our competition to see where they are strong and where they are weak. We will look at the technologies involved in making or providing our products and services, those involved in the internal processes within our company, like IT, and where applicable, the technologies utilized in our actual products or services themselves. We will look into our suppliers, both people and materials or services which we buy. We will analyze the effects of the parts of the economy which affect our business and we will determine what role regulations, both governmental and industry-approved, play in our business. All of this is done looking at today’s situation and at the recent history of the company in order to have a good understanding of where we are starting our planning from.
We will look inside the company to be sure we have strong financial reporting systems and processes, and we will seek to track the metrics of our performance. The goal of this tracking of metrics is to help us determine trends in the areas of finance, customers, internal measures, and innovation and learning. We will also look at our strengths and weaknesses to learn what we should emphasize and what we should avoid or change. Finally, we will determine our Strategic Competency – our sustainable competitive advantage — to verify what we must do to build our business (rework) most effectively. Having done all this, we will understand where we stand in our markets relative to what customers want and need, and relative to our competition. We will understand how we compete and the basis for that competitive advantage we will seek to exploit.
Only after establishing where we are and our strengths, can we begin to develop strategies to effectively compete. By skipping this first part of a good strategic planning process, a company could well miss what the true basis for competing effectively is – for that particular company – and could misconstrue what strategies will be effective in the markets they are competing in. Without going through the basics, which really do not take all that much time, considering the good that can arise from doing them, the choices the company may make could lead them astray, and could make them less competitive or, even worse, headed in the wrong direction. There is no substitute for pursuing an effective strategic planning process which will lead to good strategies for penetrating and exploiting the market places in which you are competing. The process does not have to be lengthy, it can be done quickly enough to be responsive to the changes that are happening in our rapidly evolving markets, and once done, can be revised very quickly should the need arise.
M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at email@example.com.
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