The information presented will discuss some form of strategic planning models available in organizations today. To set off the discussion, it is relevant to understand what strategic planning is and its importance within an organization. To begin with, an illustration of a scene may help clarify the process; consider a traveler on a journey who, after much fatigued with his journey, stops by the roadside to rest. As the traveler is resting, he hears a conversation in the distance between two men who appear to be approaching the same spot on the road where he is resting.
The traveler smiles at his good fortune. It appears he was lost and now has an opportunity to seek directions. On reaching his location, he stops the passers-by and asks for directions upon which the men inquire where he is headed. The traveler is confused, probably due to a foreign country, and replies he doesn’t know where he is going, upon which the men answer, therefore it doesn’t matter which direction you travel.
Most organizations have some form of a plan for the future that can be implemented through SWOT analysis. This plan is what this report refers to as a strategic plan. However, like the traveler in the illustration, the organization must keep tabs on the progress it makes in the execution of the plan, or the plan becomes useless, and the organization appears lost. Reports indicate most organizations have plans which are poor both in concept and execution. An effective plan should affect daily decision-making and provide a template to evaluate the decision-making process. The role of strategic planning is often viewed as an exercise to be carried out by senior management, and it is considered to be distant from the daily operations of a company.
To move a step further, planning can be defined as the process of selecting or identifying objectives and selection of the most suitable methods of achieving these objectives. A strategic plan, therefore, can be taken as the process by which the senior officials of an organization visualize its future and the steps identified to be necessary to attain that future. This definition suggests that strategic planning thus can not be distant from daily operations seeing that it is these changes in operations that should guide the organization to the envisioned future.
For example, a small bakery with a plan to one day become the largest bakery in the region must begin to maintain high production standards and quality long before it achieves this goal. In the next section, the report will briefly discuss some strategic planning models in use in modern organizations. Among the models discussed include SWOT analysis, competition-based techniques, and goals-based techniques.
Essential Points to Consider when Developing an Organizational Strategy
The main reason behind the need to have a Strategic plan lies in the fact that the world as we know it has changed and indeed done so at a rapid rate. To illustrate, let us revisit some facts from the recent past. In the late 80s, continuing till the mid-90s, the wall dividing East and West Germany, the Berlin Wall, gradually fell and became a thing of the past. For years prior to this, even the world had been polarized between the two main powers, namely, the capitalists and communists. In an interview with various world leaders in the United States, there was unanimous agreement that by the end of the 80s no one could have predicted the end of the cold war would come so soon and conclusively. Considering that these world leaders were unable to predict events that were less than four years away, how much more important is it for an organization with much less foresight.
In the years following 2000, the US Securities and Exchange Commission would suffer from one scandal after another owing to mismanagement with huge corporations within the US. The most popular of these scandals involved Enron. The company, together with their auditors Arthur Anderson, had colluded to defraud their clients of colossal sums, and the result was the closure of the auditing firm, large fines to the executives of these corporations, and major losses for the stakeholders. Whereas the financial collapse of these financial institutions was due to unethical conduct, it can also be attributed to a lack of a proper strategic plan.
The executives, with a view to maintaining their organization’s competitive edge, chose to practice unethical business practices. Indeed, the two examples illustrated above are just a few of the many changes that have been a part of business and society within the past 20 years. Society has witnessed a diverse range of changes and more promise to come in the future; it is for these reasons that preparation through strategic planning is essential. As mentioned in the introductory section, strategic planning involves making preparations that will assist an organization meets its long-term goals.
The process followed to achieve this included assessing the goals and developing actions that are consistent with the achievement of these goals. It can therefore be assumed that the process of strategic planning and management are very closely related. As an organization begins along the path of strategic planning, it is essential that the leaders of the organization can help the whole organization in visualizing the future. To illustrate the importance of visionary leadership, take the example of James D. Robinson III, President of American Express.
In the early years of the company’s existence, he argued that Amex must become the financial service organization of choice, especially with regards to travelers. Another example of visionary leadership is exhibited in the case of Steven Jobs, founder of Apple Computers. This man once said in reference to the emerging information or computer age, there is something going on here, something that is changing the world, and this is the center. In the years that would follow, these leaders would guide their organizations through the motions through which they have realized their dreams and also emerged as forerunners in their various categories of business.
In the course of our review of literature, one author selected quotes from the renowned Chinese philosopher Sin Tzu. In this description, it is said that strategy refers to a process where we judge our opponents to establish and concentrate on one’s individual strength and win the people. Taking this advice into a business perspective, strategic plans are successful when they best understand the prevailing business environment and the opponents. Significant thoughts in the environment include production costs, customer expectations, and reliable suppliers, among others.
Furthermore, strategic planning involves building an overwhelming strength. This can be achieved through increased communication with customers and suppliers to help develop and create brand integrity. In addition to this, increased marketing is useful and increased communication within the organization. Though the context in which Sin Tzu often spoke related to war, his theories are just as useful in business. It is crucial that all the little steps involved in achieving organizational goals are carried out for any lasting success to be attained.
A Strategic plan is a guideline that is meant to help the organization realize future goals and attain success. However, the failure to adhere to the plan or meet specific objectives for the onset are some reasons that even such a plan may not help the organization. Some common pitfalls identified in the preparation of Strategic plans include the inability of a board to execute the plans once they have been developed. This case is especially true in organizations that are operated on a non-profit basis. It is common in non-profit organizations for the top-most management to consist of a board or committee. The members of these boards or committees often represent varied interests, and as a result, it may be difficult to get them to agree on the relevance and execution of a strategic plan.
Another common pitfall that non-profit organizations often fall prey to is the misconception that they do not need strategic plans seeing that they are primarily concerned with the poor or other social services. This is an unfortunate misconception, especially since the fact that strategic planning is mostly practiced within business does not mean that the concept is purely business-oriented. A strategic plan is more about gradually reaching goals. Therefore, if organizational goals are to reach the maximum number of people possible in alleviating a certain social dilemma, the strategic plan can assist in reaching this noble goal. Instead of laying emphasis on profitability, non-profit organizations may want to lay increased emphasis on service provision and impact on the ground.
Another of the pitfalls associated, especially with non-profit organizations, is the lack of access and cooperation from the committee or board. It is common within non-profit organizations for members to be deeply immersed in various tasks. The end result is tasks that appear to have a secondary priority, such as strategic planning, can be left pending for very long durations. This causes a serious delay in the initial analysis stages and eventually will cause serious problems within the organization. As earlier noted, the strategic plan needs to be supported, especially by the senior officials within the organization. The delays that characterize non-profit organization procedure may send a tone of disinterest in the whole idea to the staff. Once the staff is unsure of the commitment to the process, it is likely that their commitment to the execution of the plan will wane, thus producing little if any results.
Despite the relative lack of interest among non-profit organizations, it has been reported that they stand to gain immensely from strategic planning. Among the benefits that they gain in the process include; provides the organization an opportunity to look into means to improve; allows the organization that operates in a non-profit environment to examine its competitors; provides an opportunity to assess the changes in the legislative environment; useful in helping to craft an organizational culture.
Within a non-profit organization, it is common to find that owing to the importance of the tasks done on a daily basis, the management within the organization itself is poor. Strategic planning allows the organization to realize such weaknesses despite excellent performance in professional circles. It is hoped that this will lead to an overall improvement, thus, carry the organization even further than earlier perceived.
In conclusion, it would appear as if the past 25 years have seen the international business community grow and wane in its interest in the issue of strategic planning. This situation has not changed the reality, which suggests the role of strategic planning is still very essential and seems to be growing in importance with the fast-changing times of today. The role of information technology in business is increasing as days go by, and there is no telling which aspect of the business is going to fall prey next. It is already evident in over-the-counter sales where a new significant threat in the face of web purchases has already emerged.
The implications of the current situation call for seriousness with regard to the future. Looking back to the assessment of SWOT analysis, it was revealed that a proper and clear assessment of opportunities and threats is important for the organization’s strategic plan to succeed. The fact that new threats are emerging and are likely to continue playing a role in business suggests each and every player needs to readdress their position in the industry. What is emerging is that strategic planning is not an aspect that can be followed at times and ignored by others.
This is a path that requires constant dedication. For the organizations that have been continuing with their plans, it has been reported that placing less focus on the process and more on creativity is likely to attain better results. Another valuable piece of advice is that organizations should stay wary and not be derailed by “the next big thing” concepts. The organization’s strategic plan should not be left to go, of course, owing to the implications of a new concept. Time lost may never be regained in this case.