Conventional Strategic Planning Without Scenarios

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Note: This paper summarizes conventional strategic planning using the use of scenarios, in essence, assuming the future is either predictable or just like the status quo. For issues and concerns with this process, and ways of using contextually-specific strategic planning, see Nailing Strategy to Your Business Tree (Chaudron, 2008)

What is a strategic plan?

Strategic planning has acquired a variety of definitions and implementations since it was first introduced into the business world. However, by addressing the common themes and underlying objectives of a strategic planning process, an organization can propel itself into the realm of success. So, first let's begin by utilizing one definition of a strategic plan and subsequently, apply it more broadly to understand its components.

Well, a strategic plan is essentially a plan or guide created by a business or organization to map out how it will reach goals, and set a foundation so the entire company knows what will happen and what is expected of them. Essentially, it provides a "recipe" or of how to achieve a stated vision, for the chosen target market, and how a company serves customers consistently, effectively and profitably every single time.

This guide or plan can also serve as a systematic, management tool for problem solving, market planning, product development and preparing business plans. [3][8] The goal is to integrate all aspects of the business's activities in a mutually supportive system. Therefore, every different department whether it is sales, marketing, the executive team or human resources, will be functioning according to this plan and working within this system. This allows for decisions and goals of each department to be proactive and streamlined with the main objectives of the organization.

In many instances, organizations will call upon skilled outside consultants or facilitators to assist with the process of developing a strategic plan. An independent facilitator managing the strategic planning process can assure everyone's participation and draw out all opinions.

Research has revealed that up to 70 percent of business strategies fail to get fully implemented [8]. The strategy planning process in many organizations is sometimes a dreaded event and is met with much reluctance from employees and/or executive teams. In addition, many times, the final result of process does not turn out positive and the business strategy fails to get implemented or is implemented in a form, which is quite different from the original intent [8]. Thus, the role of consultants and facilitators has become much more vital to organizations that want to create this type of plan to help align the strategy with the processes and objectives within the company.

Major Components of a Comprehensive Strategic Plan

As previously mentioned, strategic plans have been molded and altered in order to meet the needs of individual organizations. As a result, there are a variety of definitions that have risen to the surface. Many of the definitions have included different components of a strategic plan.

Those components can include:
1. Vision
2. Mission Statement
3. Statement of Corporate Values
4. Corporate Strengths & Corporate Weaknesses
5. Long-Term Goals and Short-Term Objectives. [9]

1. The vision of the company should contain a clear picture of what the organization will look like and how it will operate at a fixed point in time, either three or five years in the future. Within the vision, there exists a definition of its business, markets to be served, major competitors, products, corporate structure and operations. This vision also provides a clear target that the company is to be shooting for and attempting to hit. Without this critical piece organizations are unable to focus their efforts in a specific direction, thereby resulting unacceptable results.
The vision should resonate with all members of the organization and help them feel proud, excited, and part of something much bigger than themselves. A vision should stretch the organization's capabilities and image of itself. It gives shape and direction to the organization's future. Visions range in length from a couple of words to several pages. I recommend shorter vision statements because people will tend to remember their shorter organizational vision [7].

2. The mission statement is a concise statement that answers four questions about what business the company is in, markets served, and how the company provides value to the marketplace. It is the Statement used most often in response to the question, "What does your Company do? [9]"

3. The statement of values represents a precise statement of the company's beliefs, or guiding principles. These values can include issues like integrity, product quality, customer relations, employee performance and accountability and financial management. Value statements are grounded in values and define how people want to behave with each other in the organization. They are statements about how the organization will value customers, suppliers, and the internal community [9].
Value statements describe actions which are the living enactment of the fundamental values held by most individuals within the organization. The values of each of the individuals in your workplace, along with their experience, upbringing, and so on, meld together to form your corporate culture. The values of your senior leaders are especially important in the development of your culture. These leaders have a lot of power in your organization to set the course and environment and they have selected the staff for your workplace [9].

4. The strengths and weaknesses of an organization should also be included in a strategic plan. One way of determining such strengths and weaknesses is to conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats). Once this step is completed, an organization is able to leverage strengths and develop any weak areas within the company. [7]

5. Short-term objectives and long-term goals should be the final component of a strategic plan. Organizations must delineate exactly what they are working towards, both in near future and many years down the road. This helps to set the focus upon measurable outcomes as well as convince those in the organization that there is a purpose for this strategic plan.

Goals or objectives should be SMART: specific, measurable, achievable, realistic and time-based. Once you have enabled strategy accomplishment through setting SMART goals, you will want to develop action plans to accomplish each goal. Make action plans as detailed as you need them to be and integrate the individual steps into your planning system. While the origin of SMART goals and objectives has still not been determined, but they are still widely used within organizations and consulting firms to this day.

The cause-and-effect relationships between objectives can be represented as a map with arrows indicating the relationship, or as a tree, where the hierarchy represents the relationship. Often the map is used to summarize the relationships visually, and a matrix is used to add detail. An example of this can be seen in Figure 1 [4].

Taken from Malan & Bredemeyer (2003)and originally adapted from Kaplan & Norton (2001)

Strategy Scorecard

The Balanced Scorecard has become a commonly used tool for demonstrating business strategy. Essentially, a balanced scorecard links strategic objectives and measures that allow the business to ascertain whether it is on course to achieve its objectives. Some authors assert that balanced scorecards allow an organization to advance its thinking and not get stuck relying solely upon traditional indicators like profit to determine whether or not it is meeting its goals [2]. Furthermore, scorecards give organizations a way of seeing signals of their unmet goals or deterrence from their objectives. [6] An example of a balanced scorecard can be seen in Figure 2 [4].

[1] Kaplan, R. & Norton, D. (2001). The Strategy-focused Organization: How Balanced Scorecard Companies thrive in the new business environment., Harvard Business School Press: Massachusetts.
[2] Kaplan, R. & Norton, D. (1996). The Balanced Scorecard: Measures which drive performance, Harvard Business Review
[3] Kono, T. (1994). Changing a Company's Strategy and Culture. Long Range Planning, 27(5), 85-97.
[4] Malan, R. & Bredemeyer, D. (2003). The business strategy process. Retrieved from the World Wide Web:
[5] Mctague, M. (2008, October). The Seven Deadly Sins of Strategic Planning. Equities, 57(7), 21-21. Retrieved October 29, 2008, from Business Source Complete database.
[6] Narrett, Z. (2008, August). Keeping Score. American Gas, 90(7), 22-25. Retrieved October 29, 2008, from Business Source Complete database.
[7] Palmatier, G. (2008). Strategic planning: An executive's aid for strategic thinking, development and deployment.Outsourced Logistics, 1(5), 30-33.
[8] Prospectus Strategy Consultants. (2003). The seven deadly sins of strategy implementation. Retrieved October 28, 2008 from the World Wide Web: