All the organizations should have a proper planning strategy to survive in the uncertain and turbulent business environment. Proper strategic planning involves predicting the future properly and identifying the areas of improvement to expand in the future…
It is a process of identifying where we are right now and where we want to see ourselves in the future. Based on that, the proper strategy is finalized.
The Definition is given by famous Management consultant Peter Dreucker; “Strategic planning is the continuous process of making present entrepreneurial decisions systematically and with the greatest knowledge of their futurity; organizing systematically the efforts need to carry out these decisions; and measuring the results of these sections against the expectations through organized, systematic feedback.”
Should have an achievable goal or target
Should match with the company mission, vision and objective
Should consist of creative thinking, proper analysis and applied analytical skills
Should lay the long term foundation for the Organization
Should be flexible enough to be changed with the change in the market condition
Should be reviewed after certain intervals to improve effectiveness
Need for Strategic Planning
To Identify the Best way to the Achieve the Goal and objective of an Organization
To maintain long term good relationship with the customers and others associated with its business
To make the organization competitive in the market place
To tackle crisis times effectively with proper strategic planning
To plan for proper role division inside the organization
Types of Plans
Strategic plans are finalized based on three levels
Steps followed to prepare an effective strategic plan for an organization
1. Analyzing and Establishing the Objectives
First finalize the objective and goal of the organization
Match the opportunities with the company vision, mission and objective to make it justified for the organization
Analysis the strength and weakness of the organizations which can be used to finalize the objective of the strategy. SWOT Analysis can be used to identify the same.
For external cases use the SWOT Analysis to identify the Opportunities and Threats as well.
Check with various departments about the feasibility of the objective to make sure all the departments are in the same position to achieve the goal
Measure the goal in terms of cost, effort, expected profit etc.
2. Identifying the Internal and External factors
After establishing the objective it is important to analyze environmental factors which will help to derive the proper strategy
It will include both internal factors (such as policies, employees, raw material availability, Location, Suppliers etc) and the external factors (such as Political, Economic, Social and Technological factors). PEST Analysiscan be used to analyze the external factors.
The effects of these factors must be formulated for both in worst case and in best case scenarios
Restrict the assumptions made here as a part of environmental analysis to make it more effective. Large number of assumptions can dilute its effectiveness.
3. Identify the appropriate alternative
Identify the best possible alternative paths considering the environmental analysis to achieve the desired goal and objective
Evaluate all the plans based on the positive and negative effects on the organization if any plan is chosen
Then select the most appropriate alternative, among the short listed alternatives
Select the plan which seems to be more reliable and closer to the objective for further activities.
Select the back up plans as well which can be used in crisis or adverse situation. Back up plans help in the uncertain and unpredictable future.
4. Implement and Review the Plans
Share the plans with the top management for necessary review.
Share the plans with all the departments to get formal approval from all the respective departments.
This will help in the smooth progress of the plan and will avoid unwanted confusions and deviations from the structured plan.
It will also help to improve the effectiveness and productivity as it involves all the key employees and department of the organization.
Divide the responsibilities among the key employees based on the best alternatives
The implemented plan requires constant checks or reviews. These kinds of reviews are completed to ensure the smooth progress of the best alternative towards the desired goal or objective
Change the plan if required based on the review and progress.
Communicate all the employees for any slight change in the plan
5. Monitor constant progress
A check list can be prepared to ensure the effectiveness and track the progress of the plan
Check lists also help for necessary improvement if required.
Contents of the check list could vary as per the plan to which it is used, but the aim is to ensure the relevance of the completed jobs with the stated objective.
Use different other available tools to monitor the progress of a plan after regular intervals.
Impacts of proper planning
Following are the some of the major impacts of the strategic planning
It increases the productivity of an Organization and improves efficiency through proper planning
It results in the desired outcome, which is fixed at the beginning and obtained at the end as a result
Since the processes are pre-defined and well-planned in advance, actions based on these plans could be faster and easier
Increases involvement of its employees towards the desired outcome.
Strategic planning helps in certain critical situations where the Organization can utilize the alternative plan option without being much worried
The environmental factors that considered during the planning phase are subjected to change due to various reasons. A change in the environment will also affect the progress of the plan which in turn impacts the Organization.
Moreover strategic planning is very much important to achieve the desired goal and objective utilizing all the available information and resources in the best possible way.