|
EYE ON THE TARGET
Why wait only to discover in hindsight what you could have known
in foresight? Strategic planning helps your organization attain
its objectives by putting long-term thinking at the front of every
plan.
SAMIR YOUNIS
HR & Management Consultant
AmCham Egypt
www.amcham.org.eg/CDC
Strategic planning is the art of formulating, developing, implementing
and evaluating cross-functional decisions that enable an organization
to achieve its objectives. It integrates the major business units
to enable and achieve organizational success, and helps to position
an organization for the long term. A good strategic plan should
answers three main questions:
- Where is the company now?
- Where does the company want to go?
- How will the company get there?
Strategic planning is cascaded from the highest level of the organization
until it reaches the lowest levels. It starts with broad guidelines
at the top level of the corporate structure and ends with specific
targets at the lower levels. Let’s take a look at how it works.
The first stage is the formulation of the vision statement, which
paints a picture of the ideal organization in the future; the mission
statement, which clearly defines the organization’s purpose
for existing and should include motivational words for those within
the organization; and a definition of the organization’s values.
This stage is important because it sets the scene by identifying
in broad terms the direction for the organization in the coming
five years, as well as the organizational behavior and ethics that
will help the organization reach its goal.
The second stage is developing the strategy itself. To achieve this,
the organization must do the following:
1. Conduct an internal strengths and weaknesses and external opportunities
and threats analysis, better known as a “SWOT” analysis.
The benefit of this analysis is that it enables the organization
to focus in on its strengths and the opportunities of the market
(existing ones or ones that will exist) in order to capitalize on
them. It also identifies ways to overcome internal weaknesses and
external threats that might negatively impact performance.
2. Establish long-term objectives spanning three to five years.
These objectives provide a more specific explanation of the mission
statement, give employees direction, create compatible views and
establish evaluation measures. In short, they give everyone in the
organization a tangible series of goals towards which they are working
and ways by which they can evaluate them.
3. Another important step at this stage is to identify strategies
or action plans that explain how the long-term objectives will be
achieved. These action plans are composed at three different levels
– the corporate level, the unit level and the functional level.
The action plans become more specific with each descending level.
The third stage is the implementation stage of the strategy where
the following takes place:
1. Establishing short-term objectives that span up to one year.
The benefit of having short-term objectives is that they become
the guidelines based on which resources are allocated. They become
the measure for monitoring the achievement of long-term objectives
and facilitate any needed modifications to the long-term objectives
at an early stage.
2. Developing vital actions to help achieve the short-term objectives.
This is done at the unit and functional levels. In other words,
these are the very specific steps that every unit, department and
individual will take in order to achieve the short-term objectives.
3. Allocating resources. It’s vital to allocate resources to
achieve the short-term objectives because this prioritizes activities
according to their importance. Resources include financial (i.e.
budget allocation), physical (i.e. equipment, locations, transportation,
etc.), human and technological (i.e. computers, mobiles, etc.)
4. Motivating employees. This is crucial to the success of the plan.
The answer to the question “what’s in it for me?”
is what will motivate or demotivate employees. The human resources
department plays a vital and important role by outlining the benefits
that employees will receive if the plan is successfully implemented.
Examples of motivation are incentives, awards, trips and bonuses
at the individual, team and organizational levels.
The fourth stage is evaluating the strategy, which includes the
following:
1. Strategy review. Reviewing the strategy is vital for the success
of the strategic plan because it provides an early warning for problems
that could crop up in the future. The review phase is incorporated
into the process from the very beginning, allowing the plan to be
flexible and adaptive to any unexpected changes.
2. Measuring performance. This step assesses the actual performance
in relation to the forecast in the original plan. Areas to measure
are the sales figures, profit, productivity, return on investment
(ROI), profit margins, etc.
3. Corrective action. Should the performance measure show that the
actual results fell short of the plan then corrective action can
help put the organization back on track. Corrective action may include:
- Revising initial objectives
- Establishing updated objectives
- Allocating resources differently
- Finding new ways to motivate people
In summary, strategic planning enables the organization to recognize
the challenges and potential obstacles it will face. By identifying
them early, it can find adequate solutions. Moreover, strategic
planning is a prerequisite for getting the organization to where
it wants to be.
Submit
your comment
Top
|
